~~(Registrant’s telephone number,~~Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

This Quarterly Report on Form 10-Q contains forward‑looking statements relating to future events and our future performance within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Stockholders are cautioned that such statements involve risks and uncertainties, including: we may not be able to successfully market Inbrija or any other products under development; risks associated with complex, regulated manufacturing processes for pharmaceuticals, which could affect whether we have sufficient commercial supply of Inbrija to meet market demand; third party payers (including governmental agencies) may not reimburse for the use of Inbrija or our other products at acceptable rates or at all and may impose restrictive prior authorization requirements that limit or block prescriptions; competition for Inbrija, Ampyra and other products we may develop and market in the future, including increasing competition and accompanying loss of revenues in the U.S. from generic versions of Ampyra (dalfampridine) following our loss of patent exclusivity; the ability to realize the benefits anticipated from acquisitions, among other reasons because acquired development programs are generally subject to all the risks inherent in the drug development process and our knowledge of the risks specifically relevant to acquired programs generally improves over time; we may need to raise additional funds to finance our operations and may not be able to do so on acceptable terms; ~~increasing competition and accompanying loss of revenues in the U.S. from generic versions of Ampyra (dalfampridine) following our loss of patent exclusivity;~~ the risk of unfavorable results from future studies of Inbrija (levodopa inhalation powder) or from our other research and development programs, or any other acquired or in-licensed programs; we may not be able to complete development of, obtain regulatory approval for, or successfully market Inbrija or any other products under development; risks associated with complex, regulated manufacturing processes for pharmaceuticals, which could affect whether we have sufficient commercial supply of Inbrija to meet market demand, if it receives regulatory approval; third party payers (including governmental agencies) may not reimburse for the use of Ampyra, Inbrija or our other products at acceptable rates or at all and may impose restrictive prior authorization requirements that limit or block prescriptions; the occurrence of adverse safety events with our products; the outcome (by judgment or settlement) and costs of legal, administrative or regulatory proceedings, investigations or inspections, including, without limitation, collective, representative or class action ~~litigation; competition;~~litigation; failure to protect our intellectual property, to defend against the intellectual property claims of others or to obtain third party intellectual property licenses needed for the commercialization of our products; and failure to comply with regulatory requirements could result in adverse action by regulatory agencies. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which we operate and management’s beliefs and assumptions. All statements, other than statements of historical facts, included in this report regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make, and investors should not place undue reliance on these statements. In addition to the risks and uncertainties described above, we have included important factors in the cautionary statements included in this report and in our Annual Report on Form 10-K ~~as amended by Amendment No.1 on Form 10-K/A,~~ for the year ended December 31, ~~2017,~~2018, particularly in the “Risk Factors” section (as updated by the disclosures in our subsequent quarterly reports, including this report), that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make. Forward-looking statements in this report are made only as of the date hereof, and we do not assume any obligation to publicly update any forward-looking statements as a result of developments occurring after the date of this report.

We and our subsidiaries own several registered trademarks in the U.S. and in other countries. These registered trademarks include, in the U.S., the marks “Acorda Therapeutics,” our stylized Acorda Therapeutics logo, “Biotie Therapies,” “Ampyra,” “Inbrija,” and “ARCUS.” Also, our mark “Fampyra” is a registered mark in the European Community Trademark Office and we have registrations or pending applications for this mark in other jurisdictions. Our trademark portfolio also includes several registered trademarks and pending trademark applications ~~(e.g., “Inbrija”)~~ in the U.S. and worldwide for potential product names or for disease awareness activities. Third party trademarks, trade names, and service marks used in this report are the property of their respective owners.

(In thousands, except share data)	September 30, 2018			December 31, 2017			September 30, 2019			December 31, 2018
	(unaudited)						(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	321,011		$	307,068		$	119,521		$	293,564
Restricted cash		365			410			387			532
Short term investments		139,935			—			133,636			151,989
Trade accounts receivable, net of allowances of $2,336 and $845, as of September 30, 2018 and December 31, 2017, respectively		51,461			81,403
Trade accounts receivable, net of allowances of $886 and $2,681, as of September 30, 2019 and December 31, 2018, respectively								17,553			23,430
Prepaid expenses		16,221			13,333			11,839			19,384
Finished goods inventory held by the Company		10,800			37,501
Inventory, net								27,396			29,014
Other current assets		6,802			1,983			4,005			10,194
Total current assets		546,595			441,698			314,337			528,107
Property and equipment, net of accumulated depreciation		52,061			36,669			130,585			60,519
Goodwill		283,435			286,611			—			282,059
Intangible assets, net of accumulated amortization		428,575			430,603			410,023			428,570
Non-current portion of deferred cost of license revenue		—			1,638
Right of use assets								24,675			—
Other assets		419			750			293			411
Total assets	$	1,311,085		$	1,197,969		$	879,913		$	1,299,666
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	29,554		$	27,367		$	26,777		$	48,859
Accrued expenses and other current liabilities		97,816			100,128			43,235			76,882
Current portion of deferred license revenue		—			9,057
Current portion of acquired contingent consideration								3,887			4,914
Current portion of lease liabilities								7,696			—
Current portion of loans payable		624			645			587			616
Current portion of liability related to sale of future royalties		7,714			6,763			9,811			8,985
Total current liabilities		135,708			143,960			91,993			140,256
Convertible senior notes (due 2021)		316,160			308,805			326,381			318,670
Non-current portion of acquired contingent consideration		131,229			112,722			107,313			163,086
Non-current portion of deferred license revenue		—			23,398
Non-current portion of lease liabilities								24,393			—
Non-current portion of loans payable		24,673			25,670			24,518			24,470
Deferred tax liability		70,656			22,459			2,804			7,483
Non-current portion of liability related to sale of future royalties		24,251			29,025			16,437			21,731
Other non-current liabilities		9,783			11,943			4,732			11,987
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value. Authorized 20,000,000 shares at September 30, 2018 and December 31, 2017; no shares issued as of September 30, 2018 and December 31, 2017, respectively		—			—
Common stock, $0.001 par value. Authorized 80,000,000 shares at September 30, 2018 and December 31, 2017; issued 47,310,300 and 46,441,428 shares, including those held in treasury, as of September 30, 2018 and December 31, 2017, respectively		47			46
Treasury stock at cost (79,275 shares at September 30, 2018 and 16,151 shares at December 31, 2017)		(1,976	)		(389	)
Preferred stock, $0.001 par value. Authorized 20,000,000 shares at September 30, 2019 and December 31, 2018; 0 shares issued as of September 30, 2019 and December 31, 2018, respectively								—			—
Common stock, $0.001 par value. Authorized 80,000,000 shares at September 30, 2019 and December 31, 2018; issued 47,539,910 and 47,508,505 shares, including those held in treasury, as of September 30, 2019 and December 31, 2018, respectively								48			48
Treasury stock at cost (29,304 shares at September 30, 2019 and 87,737 shares at December 31, 2018)								(638	)		(2,133	)
Additional paid-in capital		999,880			968,580			1,015,037			1,005,105
Accumulated deficit		(403,439	)		(455,108	)		(732,469	)		(393,843	)
Accumulated other comprehensive income		4,113			6,858
Accumulated other comprehensive (loss) income								(636	)		2,806
Total stockholders’ equity		598,625			519,987			281,342			611,983
Total liabilities and stockholders’ equity	$	1,311,085		$	1,197,969		$	879,913		$	1,299,666

(In thousands, except per share data)	Three-month period ended September 30, 2018			Three-month period ended September 30, 2017			Nine-month period ended September 30, 2018			Nine-month period ended September 30, 2017			Three-month period ended September 30, 2019			Three-month period ended September 30, 2018			Nine-month period ended September 30, 2019			Nine-month period ended September 30, 2018
Revenues:
Net product revenues	$	139,973		$	134,357		$	393,388		$	379,705		$	44,800		$	139,973		$	133,325		$	393,388
Royalty revenues		2,841			4,444			8,893			13,391			2,922			2,841			8,586			8,893
License revenue		—			2,264			—			6,793
Total net revenues		142,814			141,065			402,281			399,889			47,722			142,814			141,911			402,281
Costs and expenses:
Cost of sales		25,391			29,992			77,834			84,840			7,986			25,152			26,183			76,164
Cost of license revenue		—			159			—			476
Research and development		22,855			33,286			79,325			130,963			16,073			22,855			51,060			79,325
Selling, general and administrative		43,571			40,741			135,435			142,100			48,702			43,571			151,622			135,435
Asset impairment		—			39,446			—			39,446
Goodwill impairment														277,561			—			277,561			—
Amortization of intangible assets														7,692			239			17,945			1,670
Changes in fair value of acquired contingent consideration		22,700			(400	)		21,900			16,800			(50,942	)		22,700			(56,342	)		21,900
Total operating expenses		114,517			143,224			314,494			414,625			307,072			114,517			468,029			314,494
Operating income (loss)		28,297			(2,159	)		87,787			(14,736	)
Operating (loss) income														(259,350	)		28,297			(326,118	)		87,787
Other (expense) income, net:
Interest and amortization of debt discount expense		(5,415	)		(4,180	)		(16,326	)		(13,783	)		(4,500	)		(5,415	)		(16,302	)		(16,326	)
Interest income		1,176			30			2,412			103			333			1,176			3,327			2,412
Realized loss on foreign currency transactions		(1	)		(18	)		(8	)		(458	)		(1	)		(1	)		(17	)		(8	)
Other income		—			—			24			—			—			—			—			24
Total other expense, net		(4,240	)		(4,168	)		(13,898	)		(14,138	)		(4,168	)		(4,240	)		(12,992	)		(13,898	)
Income (loss) before taxes		24,057			(6,327	)		73,889			(28,874	)
Provision for income taxes		(37,968	)		(18,868	)		(49,802	)		(23,421	)
(Loss) income before taxes														(263,518	)		24,057			(339,110	)		73,889
Benefit from (Provision for) income taxes														(17	)		(37,968	)		484			(49,802	)
Net (loss) income	$	(13,911	)	$	(25,195	)	$	24,087		$	(52,295	)	$	(263,535	)	$	(13,911	)	$	(338,626	)	$	24,087

Net (loss) income per share—basic	$	(0.29	)	$	(0.55	)	$	0.51		$	(1.14	)	$	(5.55	)	$	(0.29	)	$	(7.13	)	$	0.51
Net (loss) income per share—diluted	$	(0.29	)	$	(0.55	)	$	0.51		$	(1.14	)	$	(5.55	)	$	(0.29	)	$	(7.13	)	$	0.51
Weighted average common shares outstanding used in computing net (loss) income per share—basic		47,184			46,002			46,840			45,918			47,511			47,184			47,491			46,840
Weighted average common shares outstanding used in computing net (loss) income per share—diluted		47,184			46,002			47,251			45,918			47,511			47,184			47,491			47,251

(In thousands)

Nine-month period ended September 30, 2018

Nine-month period ended September 30, 2017

Cash flows from operating activities:

Net income (loss)

$
24,087

$
(52,295
)
Adjustments to reconcile net income (loss) to net cash provided by
   operating activities:

Share-based compensation expense

16,246

25,264

Amortization of net premiums and discounts on investments

(807
)

—

Amortization of debt discount and debt issuance costs

11,917

8,918

Depreciation and amortization expense

9,118

17,484

Change in acquired contingent consideration obligation

21,900

16,800

Unrealized foreign currency transaction loss

—

247

Intangible asset impairment

—

39,446

Non-cash royalty revenue

(7,826
)

—

Deferred tax provision

42,565

16,746

Changes in assets and liabilities:

Decrease (increase)  in accounts receivable

29,942

(1,505
)
(Increase) decrease in prepaid expenses and other current assets

(5,319
)

1,614

Decrease in inventory

26,701

3,266

Decrease in non-current portion of deferred cost of license revenue

—

476

Decrease (increase) in other assets

25

(3,610
)
Decrease in accounts payable, accrued expenses and other current
   liabilities

(5,508
)

(29,557
)
Decrease in non-current portion of deferred license revenue

—

(6,793
)
Increase in other non-current liabilities

90

102

Net cash provided by operating activities

163,131

36,603

Cash flows from investing activities:

Purchases of property and equipment

(22,548
)

(10,370
)
Purchases of intangible assets

(375
)

(294
)
Purchases of investments

(191,652
)

—

Proceeds from maturities of investments

52,539

—

Net cash used in investing activities

(162,036
)

(10,664
)
Cash flows from financing activities:

Proceeds from issuance of common stock and option exercises

14,978

7,001

Refund of deposit for purchase of noncontrolling interest

—

2,722

Purchase of treasury stock

(1,587
)

(60
)
Repayment of loans payable

(656
)

(2,409
)
Net cash provided by financing activities

12,735

7,254

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(238
)

1,060

Net increase in cash, cash equivalents and restricted cash

13,592

34,253

Cash, cash equivalents and restricted cash at beginning of period

308,039

158,871

Cash, cash equivalents and restricted cash at end of period

$
321,631

$
193,124

Supplemental disclosure:

Cash paid for interest

$
3,045

$
3,047

Cash paid for taxes

16,665

11,363

	Common stock
(In thousands)	Number of shares			Par value		Treasury stock			Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive income			Total stockholders equity
Balance at December 31, 2018		47,508		$	48	$	(2,133	)	$	1,005,105		$	(393,843	)	$	2,806		$	611,983
Compensation expense for issuance of stock options to employees		—			—		—			2,745			—			—			2,745
Compensation expense for issuance of restricted stock to employees		49			—		—			922			—			—			922
Exercise of stock options		2			—		—			24			—			—			24
Purchase of Treasury Stock		4			—		(52	)		—			—			—			(52	)
Other comprehensive loss, net of tax		—			—		—			—			—			(1,431	)		(1,431	)
Net loss		—			—		—			—			(47,605	)		—			(47,605	)
Balance at March 31, 2019		47,563		$	48	$	(2,185	)	$	1,008,796		$	(441,448	)	$	1,375		$	566,586
Compensation expense for issuance of stock options to employees		—			—		—			3,180			—			—			3,180
Compensation expense for issuance of restricted stock to employees	34				—		—			1,354			—			—			1,354
Adjustments to Treasury Stock		(65	)		—		1,586			(1,586	)		—			—			—
Purchase of Treasury Stock		3			—		(39	)		—			—			—			(39	)
Other comprehensive income, net of tax		—			—		—			—			—			1,242			1,242
Net loss		—			—		—			—			(27,486	)		—			(27,486	)
Balance at June 30, 2019		47,535		$	48	$	(638	)	$	1,011,744		$	(468,934	)	$	2,617		$	544,837
Compensation expense for issuance of stock options to employees		—			—		—			2,057			—			—			2,057
Compensation expense for issuance of restricted stock to employees		5			—		—			1,236			—			—			1,236
Other comprehensive loss, net of tax		—			—		—			—			—			(3,253	)		(3,253	)
Net loss		—			—		—			—			(263,535	)		—			(263,535	)
Balance at September 30, 2019		47,540		$	48	$	(638	)	$	1,015,037		$	(732,469	)	$	(636	)	$	281,342

	Common stock
(In thousands)	Number of shares		Par value		Treasury stock			Additional paid-in capital		Accumulated deficit			Accumulated other comprehensive income			Total stockholders equity
Balance at December 31, 2017		46,441	$	46	$	(389	)	$	968,580	$	(455,108	)	$	6,858		$	519,987
Adjustment to accumulated deficit (pursuant to adoption of ASU 2014-09)		—		—		—			—		27,582			—			27,582
Compensation expense for issuance of stock options to employees		—		—		—			4,095		—			—			4,095
Compensation expense for issuance of restricted stock to employees		100		—		—			1,840		—			—			1,840
Exercise of stock options		137		1					3,366		—			—			3,367
Purchase of Treasury Stock		47				(1,202	)		—		—			—			(1,202	)
Other comprehensive income, net of tax		—		—		—			—		—			2,455			2,455
Net loss		—		—		—			—		(8,199	)		—			(8,199	)
Balance at March 31, 2018		46,725	$	47	$	(1,591	)	$	977,881	$	(435,725	)	$	9,313		$	549,925
Compensation expense for issuance of stock options to employees		—		—		—			3,797		—			—			3,797
Compensation expense for issuance of restricted stock to employees	16			—		—			1,457		—			—			1,457
Exercise of stock options	458			—		—			10,157		—			—			10,157
Purchase of Treasury Stock		24		—		(385	)		—		—			—			(385	)
Other comprehensive loss, net of tax		—		—		—			—		—			(4,514	)		(4,514	)
Net income		—		—		—			—		46,197			—			46,197
Balance at June 30, 2018		47,223	$	47	$	(1,976	)	$	993,292	$	(389,528	)	$	4,799		$	606,634
Compensation expense for issuance of stock options to employees		—		—		—			3,866		—			—			3,866
Compensation expense for issuance of restricted stock to employees		5		—		—			1,269		—			—			1,269
Exercise of stock options		82		—		—			1,454		—			—			1,454
Other comprehensive loss, net of tax		—		—		—			—		—			(686	)		(686	)
Net loss		—		—		—			—		(13,911	)		—			(13,911	)
Balance at September 30, 2018		47,310	$	47	$	(1,976	)	$	999,880	$	(403,439	)	$	4,113		$	598,625

(In thousands)	Nine-month period ended September 30, 2019			Nine-month period ended September 30, 2018
Cash flows from operating activities:
Net (loss) income	$	(338,626	)	$	24,087
Adjustments to reconcile (net loss) income to net cash (used in) provided by operating activities:
Share-based compensation expense		11,494			16,246
Amortization of net premiums and discounts on investments		(1,325	)		(807	)
Amortization of debt discount and debt issuance costs		12,202			11,917
Depreciation and amortization expense		24,697			9,118
Goodwill impairment		277,561			—
Change in acquired contingent consideration obligation		(56,342	)		21,900
Non-cash royalty revenue		(7,556	)		(7,826	)
Deferred tax (benefit) provision		(3,667	)		42,565
Changes in assets and liabilities:
Decrease in accounts receivable		5,877			29,942
Decrease (increase) in prepaid expenses and other current assets		13,725			(5,319	)
Decrease in inventory		1,619			26,701
Decrease in other assets		—			25
Decrease in accounts payable, accrued expenses and other current liabilities		(56,141	)		(5,508	)
(Decrease) increase in other non-current liabilities		(256	)		90
Net cash (used in) provided by operating activities		(116,738	)		163,131
Cash flows from investing activities:
Purchases of property and equipment		(76,414	)		(22,548	)
Purchases of intangible assets		—			(375	)
Purchases of investments		(171,431	)		(191,652	)
Proceeds from maturities of investments		191,342			52,539
Net cash used in investing activities		(56,503	)		(162,036	)
Cash flows from financing activities:
Proceeds from issuance of common stock and option exercises		24			14,978
Purchase of treasury stock		(91	)		(1,587	)
Repayment of loans payable		(614	)		(656	)
Net cash (used in) provided by financing activities		(681	)		12,735
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(265	)		(238	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(174,187	)		13,592
Cash, cash equivalents and restricted cash at beginning of period		294,351			308,039
Cash, cash equivalents and restricted cash at end of period	$	120,164		$	321,631
Supplemental disclosure:
Cash paid for interest	$	3,037		$	3,045
Cash paid for taxes		2,562			16,665

Acorda Therapeutics, Inc. (“Acorda” or the “Company”) is a biopharmaceutical company focused on developing therapies that restore function and improve the lives of people with neurological disorders.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information, Accounting Standards Codification (ASC) Topic 270-10 and with the instructions to Form 10-Q. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, all adjustments considered necessary for a fair presentation have been included in the interim periods presented and all adjustments are of a normal recurring nature. The Company has evaluated subsequent events through the date of this filing. Operating results for the three and nine-month periods ended September 30, ~~2018~~2019 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2018.~~2019. When used in these notes, the terms “Acorda” or “the Company” mean Acorda Therapeutics, Inc. The December 31, ~~2017~~2018 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. You should read these unaudited interim condensed consolidated financial statements in conjunction with the consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K, ~~as amended by Amendment No. 1 on Form 10-K/A,~~ for the year ended December 31, ~~2017.~~2018.

Certain reclassifications were made to prior period amounts in the consolidated financial statements ~~and accompanying notes~~ to conform ~~with~~to the current year ~~presentation due to the adoption of~~ ~~ASU 2016-18 “Statement of Cash Flows” and Topic 230: Restricted Cash. See Note 2.~~presentation.

Our ~~critical~~significant accounting policies are detailed in our Annual Report on Form 10-K ~~as amended by Amendment No. 1 on Form 10-K/A,~~ for the year ended December 31, ~~2017.~~2018. Effective January 1, ~~2018,~~2019, the Company adopted ASU ~~2014-09,~~ 2016-02, “~~Revenue from Contracts with Customers”~~Leases” (Topic ~~606)~~842), ASU ~~2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”~~2018-05, “Income Taxes” (Topic 740),ASU ~~2016-15~~ 2018-09,“~~Statement of Cash Flows” (Topic 230): Classification of Certain Cash Receipts and Cash Payments,~~ ~~ASU 2016-18 “Statement of Cash Flows” (Topic 230):~~ ~~Restricted Cash, ASU 2017-01, “Business Combinations” (Topic 805): Clarifying the Definition of a Business,~~Codification Improvements” and ASU ~~2017-09, “Compensation~~2018-02, “Income Statement—Reporting Comprehensive Income” (Topic 220). Effective April 1, 2019, the Company adopted ASU 2017-04, “Intangibles – ~~Stock Compensation”~~Goodwill and Other” (Topic ~~718): Scope of Modification Accounting and ASU 2017-01~~350). Other than the adoption of the new accounting guidance, our ~~critical~~significant accounting policies have not changed materially from December 31, ~~2017.~~2018.

~~On January 1, 2018, we adopted~~The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the ~~new accounting standard ASC 606, “Revenue from Contracts with Customers” (Topic 606) (“ASC 606”) and~~statement of financial position that sum to the ~~related amendments to all contracts with customers that were not completed as~~total of the ~~date~~same amounts shown in the statement of adoption using the modified retrospective method. ASC 606 supersedes prior revenue guidance under ASC 605 “Revenue Recognition” (“ASC 605”) and requires entities to recognize revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expectscash flows:

Amounts included in restricted cash represent those amounts required to be ~~entitled in exchange for those goods or services. The Company completed its assessment of the new guidance and evaluated the new requirements as applied~~set aside to its existing revenue contracts not completed as of the date of initial application. As a result of the assessment, with the exception of the changes to our recognition of license revenue as further described below, the Company determined that adoption of the new standard did not have a significant impact on its revenue recognition methodology. In accordance with ASC 606, the Company recognizes revenue when the customer obtains control of a promised good or service, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the good or service.

~~The Company determined that the revenue recognition methodology for the deferred license revenue changed as a result of the adoption of ASC 606.~~ License revenue recorded by the Company prior to January 1, 2018 related exclusively to the recognition of the upfront payment received from Biogen upon the execution of the License and Collaboration agreement

~~that granted Biogen an exclusive non sub-licensable license to sell Fampyra outside of the U.S. License revenue recorded prior to January 1, 2018 was recognized under ASC 605 on a pro rata basis as~~cover the Company’s self-funded employee health insurance. Restricted cash included in other assets on the statement of financial position relates to cash collateralized standby letters of credit in connection with obligations ~~were satisfied throughout the duration of the license and collaboration agreement. As of January 1, 2018, the Company adopted ASC 606~~under facility leases, which ~~changed the Company’s determination of its distinct performance obligations resulting~~is included with other assets in an acceleration of the recognition of the revenue in the arrangement. The material performance obligations were completed prior to January 1, 2018, and as a result, the Company recognized its previously deferred revenue as a cumulative effect adjustment ~~of $27.6 million within the accumulated deficit on~~ the consolidated balance sheet asdue to the long-term nature of ~~January 1, 2018.~~the letters of credit.

The ~~cumulative effect~~major classes of ~~applying ASC 606 to the company’s consolidated balance sheet was~~inventory were as follows:

~~The impact of the adoption of ASC 606 on the Company’s consolidated balance sheet as of September 30, 2018 was as follows:~~

~~The impact of the adoption of ASC 606 on the Company’s consolidated statement of operations for the three-month period ended September 30, 2018 was as follows:~~

~~The impact of the adoption of ASC 606 on the Company’s consolidated statement of operations for the nine-month period ended September 30, 2018 was as follows:~~

~~ASC 606 did not have an aggregate impact on the Company’s net cash provided by operating activities.~~

ASC 606 outlines a five-step process for recognizing revenue from contracts with customers: i) identify the contract with the customer, ii) identify the performance obligations in the contract, (iii) determine the transaction price, iv) allocate the transaction price to the separate performance obligations in the contract, and (v) recognize revenue associated with the performance obligations as they are satisfied.

The Company ~~only applies~~reviews inventory, including inventory purchase commitments, for slow moving or obsolete amounts based on expected product sales volume and provides reserves against the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606, the Company determines the performance obligations that are distinct. The Company recognizes as revenues thecarrying amount of ~~the transaction price that is allocated to each respective performance obligation when the performance obligation is satisfied or~~inventory as ~~it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon receipt of the product by the customer.~~appropriate.

ASC 606 requires entities to record a contract asset when a performance obligation has been satisfied or partially satisfied, but the amount of consideration has not yet been received because the receipt of the consideration is conditioned on something other than the passage of time. ASC 606 also requires an entity to present a revenue contract as a contract liability in instances when a customer pays consideration, or an entity has a right to an amount of consideration that is unconditional (e.g. receivable), before the entity transfers a good or service to the customer.

We currently do not have any contract assets. We recognize contract liabilities when a customer pays an upfront deposit upon contract execution for future obligations to be performed by us. As of September 30, 2018, we had a contract liability in the amount of $5.5 million which reflects an upfront deposit paid by a customer upon contract execution for future obligations to be performed by us. The amount is currently reported in accrued expenses and other current liabilities in the Balance Sheet. If the contract is canceled, these upfront deposits are refundable only if certain obligations have not been performed by us. We did not have any contract liability as of December 31, 2017.

Net revenue from product sales is recognized at the transaction price when the customer obtains control of the Company’s products, which occurs at a point in time, typically upon receipt of the product by the customer. The Company’s products are sold primarily to a network of specialty providers which are contractually obligated to hold no more than an agreed upon number of days of inventory. ~~The Company’s payment terms are between 30 to 35 days.~~

~~The Company’s net revenues represent total revenues adjusted for discounts and allowances, including estimated~~ ~~cash discounts, chargebacks, rebates, returns,~~ copay assistance, data fees and wholesaler fees for services. These adjustments represent variable consideration under ASC 606 and are recorded for the Company’s estimate of cash consideration expected to be given by the Company to a customer that is presumed to be a reduction of the transaction price of the Company’s products and, therefore, are characterized as a reduction of revenue. These adjustments are established by management as its best estimate based on available information and will be adjusted to reflect known changes in the factors that impact such allowances. Adjustments for variable consideration are determined based on the contractual terms with customers, historical trends, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for the product and anticipated introduction of competitive products.

Revenue from product sales are recorded at the transaction price, which includes estimates for discounts and allowances for which reserves are established and includes cash discounts, chargebacks, rebates, returns, ~~copay assistance, data fees and wholesaler fees for services. Actual~~ discounts and allowances are recorded following shipment of product and the appropriate reserves are credited. These reserves are classified as reductions of accounts receivable (if the amount is payable to the Customer and right of offset exists) or a current liability (if the amount is payable to a party other than a Customer). These allowances are established by management as its best estimate based on historical experience and data points available and are adjusted to reflect known changes in the factors that impact such reserves. Allowances for customer credits, chargebacks, rebates, data fees and wholesaler fees for services, returns, and discounts are established based on contractual terms with customers and analyses of historical usage of these items. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known.~~The nature of our allowances and accruals requiring critical estimates, and the specific considerations it uses in estimating their amounts are as follows:~~

~~Government Chargebacks and Rebates:~~ ~~We contract for Medicaid and other U.S. Federal government programs to allow for our products to remain eligible for reimbursement under these programs.~~ ~~For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom the Company will owe an additional liability under the Medicare Part D program.~~ Based upon our contracts and the most recent experience with respect to sales through each of these channels, we provide an allowance for chargebacks and rebates. We monitor the sales trends and adjust the chargeback and rebate percentages on a regular basis to reflect the most recent chargebacks and rebate experience. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period.

~~Managed Care Contract Rebates:~~ We contract with various managed care organizations including health insurance companies and pharmacy benefit managers. These contracts stipulate that rebates and, in some cases, administrative fees, are paid to these organizations provided our product is placed on a specific tier on the organization’s drug formulary. Based upon our contracts and the most recent experience with respect to sales through managed care channels, we provide an allowance for managed care contract rebates. We monitor the sales trends and adjust the allowance on a regular basis to reflect the most recent rebate experience. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period.

~~Copay Mitigation Rebates:~~ We offer copay mitigation to commercially insured patients who have coverage for our products (in accordance with applicable law) and are responsible for a cost share. Based upon our contracts and the most recent experience with respect to actual copay assistance provided, we provide an allowance for copay

~~mitigation rebates. We monitor the sales trends and adjust the rebate percentages on a regular basis to reflect the most recent rebate experience.~~

~~Cash Discounts:~~ We sell directly to companies in our distribution network, which primarily includes specialty pharmacies and ASD Specialty Healthcare, Inc. We generally provide invoice discounts for prompt payment for our products. We estimate our cash discounts based on the terms offered to our customers. Discounts are estimated based on rates that are explicitly stated in the Company’s contracts as it is expected they will take the discount and are recorded as a reduction of revenue at the time of product shipment when product revenue is recognized. We adjust estimates based on actual activity as necessary.

~~Product Returns:~~We either offer customers no return except for products damaged in shipping or consistent with industry practice, a limited right of return based on the product’s expiration date. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. ~~The~~ ~~company currently estimates product return liabilities using historical sales information and inventory remaining in the distribution channel.~~

~~Data Fees and Fees for Services Payable to Specialty Pharmacies:~~ We have contracted with certain specialty pharmacies to obtain transactional data related to our products in order to develop a better understanding of our selling channel as well as patient activity and utilization by the Medicaid program and other government agencies and managed care organizations. We pay a variable fee to the specialty pharmacies to provide us the data. We also pay the specialty pharmacies a fee in exchange for providing distribution and inventory management services, including the provision of inventory management data to the Company. We estimate our fee for service accruals and allowances based on sales to each specialty pharmacy and the applicable contracted rate.

Royalty revenue recorded by the Company relates exclusively to the Company’s License and Collaboration agreement with Biogen which provides for ongoing royalties based on sales of Fampyra outside of the U.S. The Company recognizes revenue for royalties under ASC 606, which provides revenue recognition constraints by requiring the recognition of revenue at the later of the following: 1) sale or usage of the products or 2) satisfaction of the performance obligations. The Company has satisfied its performance obligations and therefore recognizes royalty revenue when the sales to which the royalties relate are completed.

Milestone revenue relates to the License and Collaboration agreement with Biogen which provides for milestone payments for the achievement of certain regulatory and sales milestones during the term of the agreement. Regulatory milestones are contingent upon the approval of Fampyra for new indications outside of the U.S. Sales milestones are contingent upon the achievement of certain net sales targets for Fampyra sales outside of the U.S. The Company recognizes milestone revenue under ASC 606, which provides constraints for entities to recognize milestone revenue which is deemed to be variable by requiring the Company to estimate the amount of consideration to which it is entitled in exchange for transferring the promised goods or services to a customer. The Company recognizes an estimate of revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the milestone is achieved. For regulatory milestones, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. ~~For sales-based milestones, the Company recognizes revenue upon the achievement of the specific sale milestones.~~

~~The following table disaggregates our revenue by major source (in thousands):~~

The functional currency of operations outside the United States of America is deemed to be the currency of the local country, unless otherwise determined that the United States dollar would serve as a more appropriate functional currency given the economic operations of the entity. Accordingly, the assets and liabilities of the Company’s foreign subsidiary, Biotie, are translated into United States dollars using the period-end exchange rate; income and expense items are translated using the average exchange rate during the period; and equity transactions are translated at historical rates. Cumulative translation adjustments are reflected as a separate component of equity. Foreign currency transaction losses and gains are recognized in the period incurred and are reported as other (expense) income, net in the statement of operations.

The Company is managed and operated as ~~one~~1 business which is focused on developing therapies that restore function and improve the lives of people with neurological disorders. The entire business is managed by a single management team that reports to the Chief Executive Officer. The Company does not operate separate lines of business with respect to any of its products or product candidates and the Company does not prepare discrete financial information with respect to separate products or product candidates or by location. Accordingly, the Company views its business as ~~one~~1 reportable operating segment. Net product revenues reported ~~to date~~ are derived from the sales of ~~Ampyra and Qutenza~~Inbrija in the U.S. for the three and nine-month periods ended September 30, 2019 and from the sales of Ampyra in the U.S. for the three and nine-month periods ended September 30, 2019 and 2018.

Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired in a business combination accounted for using the acquisition method of accounting. Goodwill is not amortized and is subject to impairment testing on an annual basis or when a triggering event occurs that may indicate the carrying value of the goodwill is impaired. We perform our impairment testing at the reporting level where we have determined that we have a single reporting unit and operating segment. The impairment test for goodwill uses an approach which compares the estimated fair value of the reporting unit including goodwill to its carrying value. If the carrying value of the reporting unit exceeds the estimated fair value of the reporting unit, an impairment loss is recognized in an amount equal to the excess of the carrying value over the estimated fair value.

Subsequent events are defined as those events or transactions that occur after the balance sheet date, but before the financial statements are filed with the Securities and Exchange Commission. The Company completed an evaluation of the impact of any subsequent events through the date these financial statements were issued, and determined the following subsequent ~~events~~event that required disclosure in these financial statements.

On October ~~30, 2018,~~23, 2019, we ~~sold~~announced a corporate restructuring to reduce costs and focus our ~~Qutenza assets~~resources on the commercial launch of Inbrija, which is our key strategic priority for the remainder of 2019. As part of the restructuring, we are reducing headcount by approximately 25% through a reduction in force. The majority of the reduction took place in the fourth quarter of 2019 immediately after the announcement, and ~~NP-1998 development program. Qutenza is a dermal patch containing 8% prescription strength capsaicin~~ the ~~effects of which can last up to three months and is approved~~remainder will be completed by the ~~FDA for the management~~first quarter of neuropathic pain associated with post-herpetic neuralgia, also known as post-shingles pain. NP-1998 is a Phase 3 ready, 20% prescription strength capsaicin topical solution that we were previously assessing for the treatment of neuropathic pain. Under the asset purchase agreement, the buyer made aggregate cash payments to us of approximately $7.9 million for the assets.2020.

As noted above, in May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (Topic 606). This new standard replaced all previous U.S. GAAP guidance on this topic and eliminated all industry-specific guidance. The new standard requires the application of a five-step model to determine the amount and timing of revenue to be recognized. The underlying principle is that revenue is to be recognized for the transfer of goods or services to customers that reflects the amount of consideration that the Company expects to be entitled to in exchange for those goods or services. The Company adopted the new standard effective January 1, 2018 using the modified retrospective transition method. See discussion of the adoption above in ~~Revenue Recognition~~.

In November 2016, the FASB issued ASU 2016-18 “Statement of Cash Flows” (Topic 230); Restricted Cash (ASU 2016-18), which defines new requirements for the presentation of restricted cash and restricted cash equivalents in the

~~statement of cash flows. The amendments in this ASU require retrospective application to each period presented.~~ The Company adopted this guidance effective January 1, 2018 retrospectively. This ASU requires the entities to present statement of cash flows in a manner such that it reconciles beginning and ending totals of cash, cash equivalents, restricted cash or restricted cash equivalents. Also, when cash, cash equivalents, restricted cash or restricted cash equivalents are presented in more than one line item within the statement of financial position, an entity should, for each period that a statement of financial position is presented, present on the face of the statement of cash flows or disclose in the notes to the financial statements, the line items and amounts of cash, cash equivalents, and restricted cash or restricted cash equivalents reported within the statement of financial position. The amounts, disaggregated by the line item in which they appear within the statement of financial position, shall sum to the total amount of cash, cash equivalents, and restricted cash or restricted cash equivalents at the end of the corresponding period shown in the statement of cash flows.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same amounts shown in the statement of cash flows:

Amounts included in restricted cash represent those amounts required to be set aside to cover the Company’s self-funded employee health insurance. Restricted cash included in other assets on the statement of financial position relates to cash collateralized standby letters of credit in connection with obligations under facility leases, which is included with other assets in the consolidated balance sheet due to the long-term nature of the letters of credit.

In June 2018, the FASB issued ASU 2018-07, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. Currently, share-based payment arrangements with employees are accounted for under ASC 718, while nonemployee share-based payments issued for goods and services are accounted for under ASC 505-50. ASC 505-50, before the amendments, differed significantly from ASC 718. However, FASB concluded that awards granted to employees are economically similar to awards granted to nonemployees and therefore two different accounting models were not justified. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods therein with early adoption permitted. The Company early adopted this guidance beginning April 1, 2018. The adoption of this guidance did not have an impact on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases” ~~(Topic 842)~~Topic 842, which amends the guidance in former ASC Topic 840, Leases. The ~~main objective of this update is to increase~~new standard increases transparency and comparability ~~among organizations~~most significantly by ~~recognizing lease~~requiring the recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet ~~and disclosing key information about leasing arrangements.~~ Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize an ROU asset and lease liability on the balance sheet for all leases ~~with a term~~ longer than 12 months. ~~Leases~~Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. For lessees, leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

~~This ASU is~~The Company adopted the new lease guidance effective ~~for the Company on~~ January 1, ~~2019.~~ ~~We expect to adopt~~2019 using the ~~new standard on its effective date. A~~ modified retrospective transition approach, ~~is required,~~ applying the new standard to all of its leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. We expect to adopt the new standard on January 1, 2019 and useapplication which is the effective date ~~as our date~~ of ~~initial application.~~adoption. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.

~~The new standard provides a number of optional practical expedients in transition.~~ We ~~expect to elect~~elected the ~~‘package~~package of practical ~~expedients’,~~expedients which permits us to not to reassess ~~under~~(1) whether any expired or existing contracts are or contain leases, (2) the ~~new standard our prior conclusions about~~ lease classification for any

~~identification, lease classification~~expired or existing leases, and (3) any initial direct ~~costs.~~costs for any existing leases as of the effective date. We dodid not ~~expect to~~ elect the ~~use-of-hindsight or the~~hindsight practical expedient ~~pertaining~~which permits entities to ~~land easements;~~use hindsight in determining the ~~latter not being applicable to us.~~

~~While we continue to assess all~~lease term and assessing impairment. The adoption of the ~~effects~~lease standard did not change our previously reported consolidated statements of ~~adoption, we currently believe the most significant effects relate to (1) the recognition of new ROU assets~~operations and ~~lease liabilities on our balance sheet for our real estate operating leases and (2) providing significant new disclosures for our leasing activities. While we continue to assess our contracts, we do~~did not expect a significant change in our leasing activities between now and adoption. The new standard also provides practical expedients for an entity’s ongoing accounting. We currently expect to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also currently expect to elect the practical expedient to not separate lease and non-lease components for all of our leases.

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other” (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). This new standard simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017-04 allows for prospective application and is effective for fiscal years beginning after December 15, 2019, and interim periods therein with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating whether it will adopt this guidance early. The Company does not expect the adoption of this guidance to have a significant impact on its consolidated financial statements.

In February 2018, the FASB issued ASU 2018-02, ‘Income Statement—Reporting Comprehensive Income’ (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02). This new standard provides entities with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. ASC 740-10-35-4 requires that deferred tax assets and liabilities should be adjusted to account for any changes in tax laws or rates within the period that the enactment of these changes occurs and any adjustments to flow through income from continuing operations. Since the adjustments due to the Tax Cuts and Jobs Act are required to flow through income from continuing operations, the tax effects of items within accumulated other comprehensive income known now as “stranded tax effects,” do not reflect the appropriate tax rate. As such, FASB issued ASU 2018-02, in order to address these stranded income tax effects. The new standard requires entities to disclose the following:

The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact it may have on its consolidated financial statements.

In March 2018, the FASB issued ASU 2018-05, “Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118’. The ASU adds seven paragraphs to ASC 740, Income Taxes, that contain SEC guidance related to SAB 118 (codified as SEC SAB Topic 5.EE, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act”), which provides guidance for companies that are not able to complete their accounting for the income tax effects of the Tax Cuts and Jobs Act in the period of enactment which is the period that includes December 22, 2017. The measurement period should not extend beyond one year from the enactment date. ~~The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements.~~

In July 2018, the FASB issued ASU 2018-09, “Codification Improvements.” The ASU’s amendments clarify, correct errors in, or make minor improvements to a variety of ASC topics. The changes in ASU 2018-09 are not expected to have a significant effect on current accounting practices. Some of the amendments in this update do not require transition guidance and will be effective upon issuance of this update. However, many of the amendments in this update do have transition guidance with effective dates for annual periods beginning after December 15, 2018, for public business entities. ~~The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements.~~

~~In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement (Topic 820): “Disclosure Framework—Changes to the Discl~~osure Requirements for Fair Value Measurement.” The amendment in this ASU eliminate, add and modify certain disclosure requirements for fair value measurements as part of its disclosure framework project. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value

~~hierarchy, but public business entities will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements.~~ The ASU is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact it may have on its consolidated financial statements.

~~In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred~~result in a ~~Cloud Computing Arrangement That Is a Service Contract.” The ASU clarifies certain aspects of ASU 2015-05, “Customer’s Accounting~~cumulative catch-up adjustment to opening equity. See Note 12 for Fees Paid in a Cloud Computing Arrangement,” which was issued in April 2015. Specifically, the ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).” The ASU is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact it may have on its consolidated financial statements.further information.

In August 2018, the Securities Exchange Commission (“SEC”) adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The Company ~~anticipates~~adopted the rule in the three-month period ended March 31, 2019 and included its first presentation of changes in stockholders’ equity ~~as required under the new SEC guidance will be included~~ in its Form 10-Q for the three-month period ended March 31, 2019.

In February 2018, the FASB issued ASU 2018-02, “Income Statement—Reporting Comprehensive Income” (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02). This new standard provides entities with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. The reclassification is the difference between the amount previously recorded in other comprehensive income at the historical U.S. federal tax rate that remains in accumulated other comprehensive loss at the time the Act was effective and the amount that would have been recorded using the newly enacted rate. This guidance became effective in Q1 2019; however, the Company did not elect to make the optional reclassification.

In July 2018, the FASB issued ASU 2018-09, “Codification Improvements.” The ASU’s amendments clarify, correct errors in, or make minor improvements to a variety of ASC topics. The changes in ASU 2018-09 are not expected to have a significant effect on current accounting practices. Some of the amendments in this update do not require transition guidance and will be effective upon issuance of this update. However, many of the amendments in this update do have transition guidance with effective dates for annual periods beginning after December 15, 2018, for public business entities. The ASU became effective in Q1 2019. The ASU did not have a significant impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other” (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). This new standard simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017-04 allows for prospective application and is effective for fiscal years beginning after December 15, 2019, and interim periods therein with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this guidance on April 1, 2019. The ASU did not have an impact upon adoption on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequently amended by ASU 2019-04 and ASU 2019-05 which introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. This new standard amends the current guidance on the impairment of financial instruments. The ASU adds to U.S. GAAP an impairment model known as current expected credit loss (CECL) model that is based on expected losses rather than incurred losses. Under the new guidance, an entity will recognize as an allowance its estimate of expected credit losses. The ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements and will adopt the guidance when effective.

In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement (Topic 820): “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” The amendment in this ASU eliminate, add and modify certain disclosure requirements for fair value measurements as part of its disclosure framework project. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public business entities will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The ASU clarifies certain aspects of ASU 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” which was issued in April 2015. Specifically, the ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).” The ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements.

In November 2018, the FASB issued ASU 2018-18, Collaborative arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606. ASU 2018-18 clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer and precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. The ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements.

In accordance with ASC 606, the Company recognizes revenue when the customer obtains control of a promised good or service, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the good or service. ASC 606 outlines a five-step process for recognizing revenue from contracts with customers: i) identify the contract with the customer, ii) identify the performance obligations in the contract, iii) determine the transaction price, iv) allocate the transaction price to the separate performance obligations in the contract, and v) recognize revenue associated with the performance obligations as they are satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606, the Company determines the performance obligations that are distinct. The Company recognizes as revenue the amount of the transaction price that is allocated to each respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon receipt of the product by the customer.

During the three‑month periods ended September 30, ~~2018~~2019 and ~~2017,~~2018, the Company recognized share-based compensation expense of ~~$5.1~~$3.3 million and ~~$6.7~~$5.1 million, respectively. During the ~~nine‑month~~nine-month periods ended September 30,

2019 and 2018, ~~and 2017,~~ the Company recognized share-based compensation expense of ~~$16.3 million~~$11.5 and ~~$26.2~~$16.2 million, respectively. Activity in options and restricted stock during the nine-month period ended September 30, ~~2018~~2019 and related balances outstanding as of that date are reflected below. The weighted average fair value per share of options granted to employees for the three-month periods ended September 30, ~~2018~~2019 and ~~2017~~2018 were approximately $2.69 and $12.39, ~~and $9.46, respectively~~respectively. The weighted average fair value per share of options granted to employees for the nine-month periods ended September 30, ~~2018~~2019 and ~~2017~~2018 were approximately $6.49 and $12.81, ~~and $10.68,~~ respectively.

The following table summarizes share-based compensation expense included within the consolidated statements of operations:

A summary of share-based compensation activity for the nine-month period ended September 30, ~~2018~~2019 is presented below:

Number of
Shares
(In thousands)

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Term

Intrinsic
Value
(In thousands)

Balance at January 1, 2018

8,930

$
29.46

Granted

748

25.04

Cancelled

(595
)

28.07

Exercised

(721
)

20.78

Balance at September 30, 2018

8,362

$
29.91

5.6

$
2,163

Vested and expected to vest at
September 30, 2018

8,328

$
29.93

5.6

$
2,159

Vested and exercisable at
September 30, 2018

6,763

$
30.52

5.0

$
1,857

	Number of Shares (In thousands)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Intrinsic Value (In thousands)
Balance at January 1, 2019		8,194		$	29.81
Granted		640			12.16
Cancelled		(494	)		24.83
Exercised		(2	)		16.00
Balance at September 30, 2019		8,339		$	28.76		4.8	$	—
Vested and expected to vest at September 30, 2019		8,316		$	28.79		4.8	$	—
Vested and exercisable at September 30, 2019		7,165		$	30.23		4.2	$	—

Unrecognized compensation cost for unvested stock options, restricted stock awards and performance stock units as of September 30, ~~2018~~2019 totaled ~~$24.3~~$17.1 million and is expected to be recognized over a weighted average period of approximately ~~1.7~~2.1 years.

~~The Company did not repurchase shares of common stock during~~During the ~~thee-month~~three‑month period ended September 30, ~~2018.~~2019, the Company did 0t make any repurchases of shares. During the nine‑month period ended September 30, ~~2018,~~2019, the Company repurchased ~~63,124~~7,360 shares of common stock at an average price of ~~$25.15~~$12.31 per share or approximately ~~$1.6 million.~~$91 thousand. The share repurchase consists primarily of common stock tendered to cover tax liabilities in connection with the vesting of restricted stock awards and common stock withheld to cover ~~the~~

tax ~~liability~~liabilities in connection with the settlement of vested restricted stock units ~~and stock options that were exercised~~ in the nine-month period ended September 30, ~~2018.~~2019.

The following table sets forth the computation of basic and diluted ~~earnings~~ (loss) income per share for the three and nine-month periods ended September 30, ~~2018~~2019 and ~~2017:~~2018:

(In thousands, except per share data)	Three-month period ended September 30, 2018			Three-month period ended September 30, 2017			Nine-month period ended September 30, 2018		Nine-month period ended September 30, 2017			Three-month period ended September 30, 2019			Three-month period ended September 30, 2018			Nine-month period ended September 30, 2019			Nine-month period ended September 30, 2018
Basic and diluted
Net (loss) income	$	(13,911	)	$	(25,195	)	$	24,087	$	(52,295	)	$	(263,535	)	$	(13,911	)	$	(338,626	)	$	24,087
Weighted average common shares outstanding used in computing net (loss) income per share—basic		47,184			46,002			46,840		45,918			47,511			47,184			47,491			46,840
Plus: net effect of dilutive stock options and restricted common shares		—			—			411		—			—			—			—			411
Weighted average common shares outstanding used in computing net (loss) income per share—diluted		47,184			46,002			47,251		45,918			47,511			47,184			47,491			47,251
Net (loss) income per share—basic	$	(0.29	)	$	(0.55	)	$	0.51	$	(1.14	)	$	(5.55	)	$	(0.29	)	$	(7.13	)	$	0.51
Net (loss) income per share—diluted	$	(0.29	)	$	(0.55	)	$	0.51	$	(1.14	)	$	(5.55	)	$	(0.29	)	$	(7.13	)	$	0.51

Securities that could potentially be dilutive are excluded from the computation of diluted ~~earnings~~loss per share when a loss from continuing operations exists or when the exercise price exceeds the average closing price of the Company’s common stock during the period, because their inclusion would result in an anti-dilutive effect on per share amounts.

The following amounts were not included in the calculation of net ~~(loss) income~~loss per diluted share because their effects were anti-dilutive:

Performance share units are excluded from the calculation of net loss per diluted share as the performance criteria has not been met for the three and nine-month periods ended September 30, 2019.Additionally, the impact of the convertible ~~debt~~senior notes was determined to be anti-dilutive and excluded from the calculation of net ~~(loss) income~~loss per diluted share for the three and nine-month periods ended September 30, ~~2018~~2019 and ~~2017.~~2018.

The Company’s effective income tax rate differs from the U.S. statutory rate principally due to state taxes, ~~Federal research and development tax credits,~~ jurisdictions with pretax losses for which no tax benefit can be recognized, changes in the valuation allowance and the effects of share based compensation which are recorded discretely in the quarters in which they occur.

For the three-month periods ended September 30, ~~2018~~2019 and ~~2017,~~2018, the Company recorded a provision of ~~$38.0~~$0.02 million and ~~$18.9~~$38.0 million for income taxes, respectively. The effective income tax rates for the Company for the three-month periods ended September 30, 2019 and 2018 were 0% and ~~2017 were~~ 157.8% ~~and (298.2%)~~, respectively. The variance in the effective tax rates for the three-month period ended September 30, ~~2018~~2019 as compared to the three-month period ended September 30, ~~2017~~2018 was due primarily to differences in pre-tax book ~~income~~loss between the periods, ~~the decrease in the Federal statutory~~goodwill impairment for which no tax ~~rate as a result of tax reform,~~benefit is recognized, the valuation allowance recorded on deferred tax assets for which no tax benefit can be recognized, state taxes, and the reduction in the research & development tax credit.

For the nine-month periods ended September 30, ~~2018~~2019 and ~~2017,~~2018, the Company recorded a benefit of $0.5 million and a provision of $49.8 ~~million and $23.4~~ million for income taxes, respectively. The effective income tax rates for the Company for the nine-month

periods ended September 30, 2019 and 2018 were 0.14% and ~~2017 were~~ 67.4% ~~and (81.1%)~~, respectively. The variance in the effective tax rates for the nine-month period ended September 30, ~~2018~~2019 as compared to the nine-month period ended September 30, ~~2017~~2018 was due primarily to differences in pre-tax book (loss) income between the periods, ~~the decrease in the Federal statutory~~goodwill impairment for which no tax ~~rate as a result of tax reform,~~benefit is recognized, the valuation allowance recorded on deferred tax assets for which no tax benefit can be recognized, state taxes, and the reduction in the research & development tax credit.

The Company continues to evaluate the realizability of its deferred tax assets ~~and liabilities~~ on a quarterly basis and will adjust such amounts in light of changing facts and circumstances including, but not limited to, future projections of taxable income, tax legislation, rulings by relevant tax authorities, the progress of ongoing tax audits and the regulatory approval of products currently under development. Any changes to the valuation allowance or deferred tax assets and liabilities in the future would impact the Company's income taxes.

The Tax Cuts and Jobs Act of 2017 (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. Federal corporate tax rate from 35% to 21% effective for tax years beginning after December 31, 2017, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred and includes a variety of other changes.

On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. For the three and nine-month periods ended September 30, 2018, the Company has not completed its accounting for the tax effects of the enactment of the Act; however, in certain cases, we have made a reasonable estimate of the effects on our existing deferred tax balances. In other cases, we have not been able to make a reasonable estimate and continue to account for those items based on our existing accounting under ASC 740, Income Taxes, and the provisions of the tax laws that were in effect immediately prior to the enactment. T~~he Company has not obtained additional information affecting the provisional amounts initially recorded.~~ The Company did not record a provision related to the one-time transition tax on mandatory repatriation of undistributed foreign earnings and profits per the Act, since a preliminary analysis has determined that there is no accumulated earnings and profits.

Additional work is still necessary for a more detailed analysis of the Company's deferred tax assets and liabilities and its historical foreign earnings as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in the three-month period ending December 31, 2018 when the analysis is complete. The Company did not make any adjustments in the nine-month period ended September 30, 2018.

~~The Internal Revenue Service completed its examination of the Company’s U.S. income tax return for 2015 in the second quarter of 2018 with no material impact.~~

The Internal Revenue Service commenced its examination of the Company’s wholly-owned subsidiary, Biotie Therapies, Inc.’s, U.S. income tax return for the short period ended December 31, 2016 in the third quarter of 2018. ~~There~~The audit has been substantially completed, and the IRS has proposed an adjustment that we do not believe would have ~~been no proposed adjustments at this stage of~~a material impact on the ~~examination.~~

The New York State Department of Tax commenced an examination of the Company’s income tax returns for the years ~~2014-2016.~~ 2014-2016 in the third quarter of 2018.There have been no proposed adjustments at this stage of the examination.

The following table represents a summary of activities in goodwill from December 31, 2018 through September 30, 2019:

At September 30, 2019 and December 31, 2018, the Company had $0.0 million and $282.1 million of goodwill, respectively. In connection with the Company's review of the recoverability of its goodwill for the three month period ended September 30, 2019, the Company determined that a triggering event occurred due to the decline in the trading price of the Company's common stock at and around the end of the third quarter of 2019 and related decrease in the Company's market capitalization. Given this circumstance, the Company performed a quantitative goodwill impairment test. Based on the results of its impairment test, the Company recorded an impairment charge of $277.6 million which was the carrying amount of its goodwill immediately before the charge. Refer to Note 2 for the discussion of the impairment charge.

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, ~~2018~~2019 and December 31, ~~2017~~2018 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates, exchange rates and yield curves. Fair values determined by Level 3 inputs utilize unobservable data points for the asset or liability. The Company’s Level 1 assets consist of ~~time deposits and~~ investments in a Treasury money market ~~fund.~~fund and U.S. government securities. The Company’s level 2 assets consist of investments in corporate bonds, ~~and~~ commercial paper and U.S. government securities which are categorized as short-term investments for investments with original maturities between three months and one year. The Company’s Level 3 liabilities represent acquired contingent consideration related to the acquisition of Civitas and are valued using a probability weighted discounted cash flow valuation approach. No changes in valuation techniques occurred during the three or nine-month periods ended September 30, ~~2018.~~2019. The estimated fair values of all of our financial instruments approximate their carrying values at September 30, ~~2018,~~2019, except for the fair value of the Company’s convertible senior notes, which was approximately ~~$298.4~~$264.3 million as of September 30, ~~2018.~~2019. The Company estimates the fair value of its notes utilizing market quotations for the debt (Level 2).

(In thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
September 30, 2018
September 30, 2019
Assets Carried at Fair Value:
Cash equivalents	$	20,729	$	—	$	—
Short-term investments		—		139,935		—
Money market funds							$	28,899	$	—	$	—
U.S. government securities								2,500		13,246		—
Commercial paper								—		49,054		—
Corporate bonds								—		71,336		—
Liabilities Carried at Fair Value:
Acquired contingent consideration		—		—		134,900		—		—		111,200
December 31, 2017
December 31, 2018
Assets Carried at Fair Value:
Cash equivalents	$	9,163	$	—	$	—
Money market funds							$	9,586	$	—	$	—
Commercial paper								—		47,108		—
Corporate bonds								—		104,881		—
Liabilities Carried at Fair Value:
Acquired contingent consideration		—		—		113,000		—		—		168,000

The following table presents additional information about liabilities measured at fair value on a recurring basis and for which the Company utilizes Level 3 inputs to determine fair value.

The acquired contingent consideration is classified as a Level 3 liability as its valuation requires substantial judgment and estimation of factors that are not currently observable in the market. If different assumptions were used for the various inputs to the valuation approach, including but not limited to, assumptions involving probability adjusted sales estimates for Inbrija and ~~CVT-427 and~~the estimated discount rates, the estimated fair value could be significantly higher or lower than the fair value determined.

The Company has determined that all of its investments are classified as available-for-sale. Available-for-sale debt securities are carried at fair value with interest on these investments included in interest income and are recorded based on quoted market prices. Available-for-sale investments consisted of the following at September 30, ~~2018:~~2019 and December 31, 2018, respectively:

			Gross		Gross			Estimated				Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
(In thousands)	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
Short Term Investments	$	139,977	$	4	$	(46	)	$	139,935


September 30, 2019
Commercial Paper										$	49,041	$	24	$	(11	)	$	49,054
Corporate Bonds											71,241		104		(9	)		71,336
U.S. government securities											13,250		—		(4	)		13,246
Total Short-term investments										$	133,532	$	128	$	(24	)	$	133,636
December 31, 2018
Commercial Paper										$	47,149	$	—	$	(41	)	$	47,108
Corporate Bonds											104,965		6		(90	)		104,881
Total Short-term investments										$	152,114	$	6	$	(131	)	$	151,989

Short-term investments with maturities of three months or less from date of purchase have been classified as cash equivalents, and amounted to approximately ~~$20.7~~$31.4 million and $9.6 million as of September 30, ~~2018.~~2019 and December 31, 2018, respectively. Short-term investments have original maturities of greater than 3 months but less than 1 year and amounted to approximately ~~$139.9~~$133.6 million and $152.0 million as of September 30, ~~2018.~~2019 and December 31, 2018, respectively. The aggregate fair value of short-term investments in an unrealized loss position amounted to approximately ~~$104.9~~$48.7 million as of September 30, ~~2018. The Company held no short-term investments at December 31, 2017.~~2019. Short-term investments at September 30, ~~2018~~2019 primarily consisted of high-grade commercial paper, corporate bonds and ~~corporate bonds.~~U.S. government securities. Long-term investments have original maturities of greater than 1 year. There were no0 investments classified as long-term at September 30, ~~2018~~2019 or December 31, ~~2017.~~2018. The Company has determined that there were no other-than-temporary declines in the fair values of its investments as of September 30, ~~2018~~2019 as the Company does not intend to sell its investments and it is not more likely than not that the Company will be required to sell its investments prior to the recovery of its amortized cost basis.

Unrealized holding gains and losses, which relate to debt instruments, are reported within accumulated other comprehensive income (AOCI) in the statements of comprehensive income. The changes in AOCI associated with the unrealized holding ~~losses~~gains on available-for-sale investments during the nine-month period ended September 30, ~~2018,~~2019, were as follows (in thousands):

As of October 1, 2017, the Company completed a royalty purchase agreement with HealthCare Royalty Partners, or HCRP (“Royalty Agreement”). In exchange for the payment of $40 million to the Company, HCRP obtained the right to receive Fampyra royalties payable by Biogen under the License and Collaboration Agreement between the Company and Biogen, up to an agreed upon threshold of royalties. When this threshold is met, if ever, the Fampyra royalties will revert

back to the Company and the Company will continue to receive the Fampyra royalties from Biogen until the revenue stream ends. The transaction does not include potential future milestones to be paid.

The Company maintained the rights under the license and collaboration agreement with Biogen, therefore, the Royalty Agreement has been accounted for as a liability that will be amortized using the effective interest method over the life of the arrangement, in accordance with the relevant accounting guidance. The Company recorded the receipt of the $40 million payment from HCRP and established a corresponding liability in the amount of $40 million, net of transaction costs of approximately $2.2 million. The net liability is classified between the current and non-current portion of liability related to the sale of future royalties in the consolidated balance sheets based on the recognition of the interest and principal payments to be received by HCRP in the next 12 months from the financial statement reporting date. The total net royalties to be paid, less the net proceeds received will be recorded to interest expense using the effective interest method over the life of the Royalty Agreement. The Company will estimate the payments to be made to HCRP over the term of the Agreement based on forecasted royalties and will calculate the interest rate required to discount such payments back to the liability balance. Over the course of the Royalty Agreement, the actual interest rate will be affected by the amount and timing of net royalty revenue recognized and changes in forecasted revenue. On a quarterly basis, the Company will reassess the effective interest rate and adjust the rate prospectively as necessary.

The ~~Company recognized non-cash royalty revenue of approximately $2.5 million, non-cash interest expense of approximately $1.1 million and debt discount amortization costs of approximately $0.2 million~~following table shows the activity within the liability account for ~~the three-month period ended~~ September 30, ~~2018. The Company recognized non-cash royalty revenue of approximately $7.8 million, non-cash interest expense of approximately $3.4 million~~2019 and debt discount amortization costs of approximately $0.6 million for the nine-month period ended September 30, 2018. The interest and debt discount amortization expense is reflected as interest and amortization of debt discount expense in the Statement of Operations.December 31, 2018, respectively:

On June 17, 2014, the Company issued $345 million aggregate principal amount of 1.75% Convertible Senior Notes due 2021 (the Notes) in an underwritten public offering. The net proceeds from the offering were $337.5 million after deducting the Underwriter’s discount and offering expenses paid by the Company.

The Notes are convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, under certain circumstances as outlined in the indenture, based on an initial conversion rate, subject to adjustment, of 23.4968 shares per $1,000 principal amount of Notes (representing an initial conversion price of approximately $42.56 per share).

~~The Company may not redeem the Notes prior to June 20, 2017.~~ The Company may redeem for cash all or part of the Notes, at the Company’s option, ~~on or~~ after June 20, 2017, under certain circumstances as outlined in the indenture.

The Company pays 1.75% interest per annum on the principal amount of the Notes, payable semiannually in arrears in cash on June 15 and December 15 of each year. The Notes will mature on June 15, 2021.

If the Company undergoes a “fundamental change” (as defined in the Indenture), subject to certain conditions, holders may require the Company to repurchase for cash all or part of their Notes in principal amounts of $1,000 or an integral multiple thereof. The Indenture contains customary terms and covenants and events of default. If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company) occurs and is continuing, the Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding Notes by notice to the Company and the Trustee, may declare 100% of the principal of and accrued and unpaid interest, if any, on all the Notes to be due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be

due and payable immediately. Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving the Company, 100% of the principal and accrued and unpaid interest, if any, on all of the Notes will become due and payable automatically. Notwithstanding the foregoing, the Indenture provides that, to the extent the Company elects and for up to 270 days, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right to receive additional interest on the Notes.

The Notes will be senior unsecured obligations and will rank equally with all of the Company’s existing and future senior debt and senior to any of the Company’s subordinated debt. The Notes will be structurally subordinated to all existing or future indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries and will be effectively subordinated to the Company’s existing or future secured indebtedness to the extent of the value of the collateral. The Indenture does not limit the amount of debt that the Company or its subsidiaries may incur.

In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Notes as a whole. The equity component is not re-measured as long as it continues to meet the conditions for equity classification.

The outstanding note balance as of September 30, ~~2018~~2019 and December 31, ~~2017~~2018 consisted of the following:

In connection with the issuance of the Notes, the Company incurred approximately $7.5 million of debt issuance costs, which primarily consisted of underwriting, legal and other professional fees, and allocated these costs to the liability and equity components based on the allocation of the proceeds. Of the total $7.5 million of debt issuance costs, $1.3 million were allocated to the equity component and recorded as a reduction to additional paid-in capital and $6.2 million were allocated to the liability component and recorded as a reduction in the carrying amount of the debt liability on the balance sheet. The portion allocated to the liability component is amortized to interest expense over the expected life of the Notes using the effective interest method.

As of September 30, ~~2018,~~2019, the remaining contractual life of the Notes is approximately ~~2.75~~2 years. The effective interest rate on the liability component was approximately 4.8% for the period from the date of issuance through September 30, ~~2018.~~2019.

The following table sets forth total interest expense recognized related to the Notes for the three and ~~nine months~~nine-month periods ended September 30, ~~2018~~2019 and ~~2017:~~2018:

~~(10)~~In February 2016, the FASB issued ASU 2016-02, “Leases” Topic 842, which amends the guidance in former ASC Topic 840, Leases. The new standard increases transparency and comparability most significantly by requiring the recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all leases longer than 12 months. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. For lessees, leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The Company adopted the new lease guidance effective January 1, 2019 using the modified retrospective transition approach, applying the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. We elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity. The adoption of the new guidance resulted in the recognition of ROU assets of $28.0 million and lease liabilities of $35.1 million at January 1, 2019. The difference between the ROU assets and the lease liabilities is primarily due to unamortized initial direct costs, lease incentives and deferred rent related to the Company’s operating leases at December 31, 2018.

The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In calculating the present value of the lease payments, the Company elected to utilize its incremental borrowing rate based on the remaining lease terms as of the January 1, 2019 adoption date.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred, if any. Our leases have remaining lease terms of 2 years to 8 years, some of which include options to extend the lease term for up to 15 years, and some of which include options to terminate the lease within 2 years.

The Company has elected the practical expedient to combine lease and non-lease components as a single component. The lease expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the balance sheet as right-of-use assets, current operating lease liabilities and non-current operating lease liabilities.

The new standard also provides practical expedients and certain exemptions for an entity’s ongoing accounting. We have elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases where the initial lease term is one year or less or for which the ROU asset at inception is deemed immaterial, we will not recognize ROU assets or lease liabilities. Those leases are expensed on a straight line basis over the term of the lease.

We lease certain office space, manufacturing and warehouse space under arrangements classified as leases under ASC 842. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Most leases include one or more options to renew, with renewal options ranging from 5 to 15 years. The exercise of lease renewal options is at our sole discretion. One of our leases also includes an option to early terminate the lease within 2 years.

In June 2011, the Company entered into a 15-year lease for an aggregate of approximately 138,000 square feet of office and laboratory space in Ardsley, New York. In 2014, the Company exercised its option to expand into an additional 25,405 square feet of office space, which the Company occupied in January 2015. The Company has options to extend the term of the lease for 3 additional five-year periods, and the Company has an option to terminate the lease after 10 years subject to payment of an early termination fee. Also, the Company has a right of first refusal until mid-2020 to lease up to approximately 95,000 additional square feet of space in additional buildings at the same location. The Company’s extension, early termination, and expansion rights are subject to specified terms and conditions, including specified time periods when they must be exercised, and are also subject to limitations including that the Company not be in default under the lease.

The Ardsley lease provides for monthly payments of rent during the lease term. These payments consist of base rent, which takes into account the costs of the facility improvements funded by the facility owner prior to the Company’s occupancy, and additional rent covering customary items such as charges for utilities, taxes, operating expenses, and other facility fees and charges. The base rent is currently $4.7 million per year, which reflects an annual 2.5% escalation factor.

Through our Civitas subsidiary, we lease a manufacturing facility in Chelsea, Massachusetts with commercial-scale capabilities. The approximately 90,000 square foot facility also includes office and laboratory space. Civitas leases this facility from North River Everett Ave, LLC pursuant to a lease with a term that expires on December 31, 2025, and Civitas has 2 additional extension options of five years each. The base rent under the lease is currently $1.6 million per year, which reflects an annual escalation factor of 2.5% as well as an amendment to the lease to add additional property at the Chelsea, Massachusetts site as further described below.

In 2017, the Company’s Civitas subsidiary amended its existing Chelsea, Massachusetts lease. The amendment added expansion property located in Chelsea, Massachusetts next to the existing facility. The additional property includes land being used for parking and a free-standing warehouse building on the same site. The base rent for the additional property under the lease included in the rent number above, is currently $0.5 million per year with an annual escalation factor of 3.0%.

In 2018, the Company initiated a renovation and expansion of a building within the Chelsea manufacturing facility that will increase the size of the facility to approximately 95,000 square feet. The project will add a new manufacturing production line for Inbrija and other ARCUS products that has greater capacity than the existing manufacturing line, and it will create additional warehousing space for manufactured product. Pursuant to a 2018 lease amendment that enabled the renovation and expansion, upon completion of the project, annual rent under the lease will increase to $1.7 million. Construction of the project was substantially completed in October 2019, but it will take additional time to obtain the FDA approval needed to use the new production line for commercial manufacturing. All costs to renovate and expand the facility are borne by the Company, therefore, the lease for that building is accounted for as a build to suit lease.

In October 2016, we entered into a 10-year lease agreement with a term commencing January 1, 2017, for approximately 26,000 square feet of lab and office space in Waltham, MA. The lease provides for monthly rental payments over the lease term. The base rent under the lease is currently $1.1 million per year.

Our leases have remaining lease terms of 2 years to 8 years which assumes exercise of the early termination of our Ardsley, NY lease. We do not include any renewal options in our lease terms when calculating our lease liabilities as we are not reasonably certain that we will exercise these options. One of our leases includes the early termination option in the lease

term when calculating the lease liability. The weighted-average remaining lease term for our operating leases was 5 years at September 30, 2019. The weighted-average discount rate was 7.13% at September 30, 2019.

ROU assets and lease liabilities related to our operating leases are as follows:

We have lease agreements that contain both lease and non-lease components. We account for lease components together with non-lease components (e.g., common-area maintenance). The components of lease costs were as follows:

Future minimum commitments under all non-cancelable operating leases are as follows:

Supplemental cash flow information and non-cash activity related to our operating leases are as follows:

The Company is currently party to various legal proceedings which are principally patent litigation matters. The Company has assessed such legal proceedings and does not believe that it is probable that a liability has been incurred or that

the amount of any potential liability or range of losses can be reasonably estimated. As a result, the Company did not record any loss contingencies for any of these matters. Litigation expenses are expensed as incurred.

Item 2.2. Management’s Discussion and Analysis ofof Financial Condition and Results of Operations

The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q.

We are a biopharmaceutical company focused on developing therapies that restore function and improve the lives of people with neurological disorders. We market Inbrija (levodopa inhalation powder), ~~our most advanced development program,~~which is ~~an investigational inhaled formulation of levodopa~~approved in the U.S. for ~~symptoms~~intermittent treatment of OFF episodes, also known as OFF periods, ~~for~~in people with Parkinson’s ~~on a~~disease treated with carbidopa/~~levodopa regimen.~~levodopa. Inbrija is for on-demand use and utilizes our ~~innovative~~ ARCUS pulmonary delivery system, a technology platform designed to deliver medication through inhalation that we believe has potential ~~applications~~to be used in ~~multiple disease areas.~~the development of a variety of inhaled medicines. We also market branded Ampyra (dalfampridine) Extended Release Tablets, 10 ~~mg, as well as an authorized generic version of Ampyra marketed through Mylan AG.~~mg.

~~In February 2018, our~~Our New Drug Application, or NDA, for Inbrija was ~~accepted for filing~~approved by the U.S. Food and Drug Administration, or FDA, on December 21, 2018. The approval is for a single dose of 84 mg, with no titration required. Inbrija became commercially available in the U.S. on February 28, 2019. Inbrija is marketed in the U.S. through our own specialty sales force and ~~the FDA set~~commercial infrastructure, and is being distributed primarily through a ~~goal date~~network of specialty pharmacies. Our sales representatives are targeting approximately 10,000 healthcare providers, currently focusing on a priority list of approximately 2,000 physicians who are high volume prescribers of levodopa/carbidopa. As of October ~~5, 2018, under~~30, 2019, Inbrija is available in the ~~Prescription Drug User Fee Act, or PDUFA,~~U.S. without the need for ~~review~~a medical exception for approximately 66% of commercial and 25% of Medicare plan lives. Our Inbrija launch activities have thus far been focused on physician awareness and market access. As we enter our next phase of the ~~NDA. On September 13, 2018~~launch, we ~~announced that the FDA extended the PDUFA date to January 5, 2019. This extension is related to recent submissions that we made in response to requests from the FDA for additional information~~will be maintaining these efforts while increasing focus on ~~chemistry, manufacturing and controls (CMC). The FDA determined that these submissions constitute a major amendment and will take additional time to review.~~ ~~Our commercial preparations for the potential launch of Inbrija continue, including sales force training and education, managed care discussions, market research, disease state~~patient awareness and ~~social media initiatives.~~education. We ~~are progressing development of a pricing strategy and analyzing expected product margins, which we plan to finalize near launch, if Inbrija is approved. We are projecting~~project that ~~if approved,~~ annual peak net revenue of Inbrija in the U.S. alone could exceed $800 million.We have received letters from the FDA regarding the FDA’s pre-approval inspections of our Chelsea, Massachusetts manufacturing facility and the Inbrija inhaler device manufacturer's facility, indicating

On September 24, 2019, we announced that the ~~FDA’s inspections of these facilities are successfully closed, without need for any further action by the FDA.~~

~~We are seeking approval to market Inbrija in the~~ European ~~Union, and accordingly we filed a~~Commission, or EC, approved our Marketing Authorization Application, or MAA, ~~with~~for Inbrija 33 mg inhalation powder, hard capsules. Under the MAA, Inbrija is indicated in the European ~~Medicines Agency,~~Union, or ~~EMA,~~EU, for the intermittent treatment of episodic motor fluctuations (OFF episodes) in ~~March 2018. In May 2018, we announced that~~adult patients with Parkinson’s disease treated with a levodopa/dopa-decarboxylase inhibitor. The MAA approves Inbrija for use in the ~~EMA completed formal validation~~28 countries of the ~~MAA for Inbrija,~~EU, as well as Iceland, Norway and that the review of the MAA will be according to standard timelines, with an opinion of the Committee for Medicinal Products for Human Use, or CHMP, expected within 210 days of the May 24, 2018 validation notification date (plus any clock-stops to provide answers to questions which may arise during the review). After the adoption of a CHMP opinion, a final decision regarding the MAA is carried out by the European Commission.Liechtenstein. We are in discussions with potential partners regarding the distribution of Inbrija outside of the U.S., with potential partners in Europe and Japan.

We ~~currently derive~~have been engaged in litigation with generic drug manufacturers relating to certain Ampyra patents, which is further described below and in Part II, Item 1 of this report. In 2017, a U.S. District Court issued a ruling that upheld our Ampyra Orange Book-listed patent that expired on July 30, 2018, but invalidated other Ampyra patents that were set to expire between 2025 and 2027. In September 2018, a U.S. Court of Appeals upheld this decision, and in October 2019, the U.S. Supreme Court denied our petition for certiorari requesting review of the case. As a result, our patent exclusivity with respect to Ampyra terminated on July 30, 2018, and we have experienced a significant decline in Ampyra sales due to competition from generic versions of Ampyra that have been marketed since the Court of Appeals decision. Additional manufacturers may market generic versions of Ampyra, and we expect our Ampyra sales will continue to decline over time.

On October 23, 2019, we announced a corporate restructuring to reduce costs and focus our resources on the commercial launch of Inbrija, which is our key strategic priority for the remainder of 2019. As part of the restructuring, we are reducing headcount by approximately 25% through a reduction in force. The majority of the reduction took place in the fourth quarter of 2019 immediately after the announcement, and the remainder will be completed by the first quarter of 2020. We expect to realize estimated annualized cost savings related to headcount reduction of approximately $21.0 million, beginning in the second quarter of 2020. We estimate that we will incur approximately $8.0 million of pre-tax charges, substantially all of which will be cash expenditures, for severance and other employee separation related costs in the fourth quarter of 2019 and the first quarter of 2020. As a result of the restructuring, we reduced our 2019 operating expense projections, as further described below under Financial Guidance for 2019 and 2020.

As of September 30, 2019, we had cash, cash equivalents and short-term investments of approximately $253.2 million, and we expect our 2019 year-end balance to be greater than $225 million. We have $345 million of convertible senior notes due in 2021 with a conversion price of $42.56. We have engaged an advisor to assist us in addressing this debt, a top priority in addition to our focus on the Inbrija launch.

Inbrija (levodopa inhalation powder) is the first and only inhaled levodopa, or L-dopa, for intermittent treatment of OFF episodes, also known as OFF periods, in people with Parkinson’s disease treated with carbidopa/levodopa regimen. Our New Drug Application, or NDA, for Inbrija was approved by the U.S. Food and Drug Administration, or FDA, on December 21, 2018. The approval is for a single dose of 84 mg, with no titration required. Inbrija became commercially available in the U.S. on February 28, 2019.As of October 30, 2019, Inbrija is available in the U.S. without the need for a medical exception for approximately 66% of commercial and 25% of Medicare plan lives. Net revenue for Inbrija was $4.9 million for the quarter ended September 30, 2019. We project that annual peak net revenue of Inbrija in the U.S. alone could exceed $800 million.

On September 24, 2019, we announced that the European Commission, or EC, approved our Marketing Authorization Application, or MAA, for Inbrija 33 mg inhalation powder, hard capsules. Under the MAA, Inbrija is indicated in the EU for the intermittent treatment of episodic motor fluctuations (OFF episodes) in adult patients with Parkinson’s disease treated with a levodopa/dopa-decarboxylase inhibitor. The MAA approves Inbrija for use in the 28 countries of the EU, as well as Iceland, Norway and Liechtenstein. We are in discussions with potential partners regarding the distribution of Inbrija outside of the U.S., with potential partners in Europe and Japan.

Inbrija is marketed in the U.S. through our own specialty sales force and commercial infrastructure, and is distributed in the U.S. primarily through a network of specialty pharmacies. We believe we have built a leading neuro-specialty sales and marketing team through our commercialization of Ampyra, and that our commercial sale of Inbrija in the U.S. will benefit from the ~~sale~~experiences and capabilities of ~~Ampyra.~~ this team. We currently have approximately 90 sales representatives as well as established teams of Medical Science Liaisons, Regional Reimbursement Directors, and Market Access Account Directors who provide information to payers and physicians on our marketed products; a National Trade Account Director who works with our network of specialty pharmacies for Inbrija; and Market Development Managers who work collaboratively with field teams and corporate personnel to assist in the execution of the Company’s strategic initiatives. Our sales representatives are targeting approximately 10,000 healthcare providers, currently focusing on a priority list of approximately 2,000 physicians who are high volume prescribers of levodopa/carbidopa. Our Inbrija launch activities have thus far been focused on physician awareness and market access. As we enter our next phase of the launch, we will be maintaining these efforts while increasing focus on patient awareness and education.

In January 2019, we established Prescription Support Services, which we sometimes refer to as the Inbrija hub, a service provided by Acorda which is designed to help patients navigate their insurance coverage and offer reimbursement support services, when appropriate. Services fall into one of these four categories: insurance verification, to research patient insurance benefits and confirm insurance coverage; prior authorization support, to identify prior authorization requirements; appeals support; and assistance identifying which specialty pharmacy a patient will utilize based on their insurance coverage. For patients that may need assistance paying for their medication, Prescription Support Services offers several support options, including: a program that provides no cost medication to patients who meet specific program eligibility requirements; co-pay support, which may help commercially insured (non-government funded) patients lower their out-of-pocket costs; and a bridge program, for federally-insured patients who experience a delay in coverage determination. We have implemented a no-cost sample program, available at physician offices, to enable patients and their physicians to assess the value of Inbrija before the patient has to incur out-of-pocket co-pay or co-insurance costs. In addition, we have implemented a free trial program, available through the Inbrija hub, for commercially insured patients who cannot access the free samples because of offices and institutions that have policies that prohibit samples.

Parkinson’s disease is a progressive neurodegenerative disorder resulting from the gradual loss of certain neurons in the brain. These neurons are responsible for producing dopamine and that loss causes a range of symptoms including impaired movement, muscle stiffness and tremors. The standard baseline treatment of Parkinson’s disease is oral carbidopa/levodopa, but oral medication can be associated with wide variability in the timing and amount of absorption and there are significant challenges in creating a regimen that consistently maintains therapeutic effects. As Parkinson’s progresses, people are likely to experience OFF periods, which are characterized by the return of Parkinson’s symptoms that result from low levels of dopamine between doses oral carbidopa/levodopa. OFF periods are often highly disruptive to people with Parkinson’s. Approximately one million people in the U.S. and 1.2 million Europeans are diagnosed with Parkinson’s; it is estimated that approximately 40% of people with Parkinson’s in the U.S. experience OFF periods.

Inbrija is for on-demand use and utilizes our ARCUS platform for inhaled therapeutics. ARCUS is a dry-powder pulmonary drug delivery technology that we believe has potential to be used in the development of a variety of inhaled medicines. The ARCUS platform allows systemic delivery of medication through inhalation, by transforming molecules into a light, porous dry powder. This allows delivery of substantially higher doses of medication than can be delivered via

conventional dry powder technologies. We acquired the ARCUS technology platform as part of our 2014 acquisition of Civitas Therapeutics. We have worldwide rights to our ARCUS drug delivery technology, which is protected by extensive know-how and trade secrets and various U.S. and foreign patents, including patents that protect the Inbrija dry powder capsules beyond 2030. We have several patents listed in the Orange Book for Inbrija, including patents expiring between 2022 and 2032, and Inbrija is entitled to three years of data exclusivity, through December 2021, as posted in the Orange book.

FDA and European Commission approvals of Inbrija were based on a clinical program that included approximately 900 people with Parkinson’s on a carbidopa/levodopa regimen experiencing OFF periods. The Phase 3 pivotal trial for Inbrija – SPAN-PD – was a 12-week, randomized, placebo controlled, double blind study evaluating the effectiveness of Inbrija in patients with mild to moderate Parkinson’s experiencing OFF periods. In January 2019, we announced that The Lancet Neurology published results from the SPAN-PD clinical trial.

The SPAN-PD trial met its primary endpoint, with patients showing a statistically significant improvement in motor function at the week 12 visit, as measured by a reduction in Unified Parkinson’s Disease Rating Scale (UPDRS) Part III score for Inbrija 84 mg (n=114) compared to placebo (n=112) at 30 minutes post-dose (-9.83 points and -5.91 points respectively; p=0.009). Onset of action was seen as early as 10 minutes. Maintenance of effect continued to 60 minutes post-dose, which is the longest time point assessed in the trial. UPDRS III is a validated scale, which measures Parkinson’s disease motor impairment.

The most common adverse reactions with Inbrija (at least 5% and greater than placebo) in the pivotal trial were cough (15% vs. 2%), upper respiratory tract infection (6% vs. 3%), nausea (5% vs. 3%) and discolored sputum (5% vs. 0%).

Inbrija was also studied in a Phase 3 long-term, active-controlled, randomized, open-label study (N=398) assessing safety and tolerability over one year. This study showed the average reduction in FEV1 (forced expiratory volume in 1 second) from baseline was the same (-0.1 L) for the Inbrija and observational cohorts. Patients with chronic obstructive pulmonary disease (COPD), asthma, or other chronic respiratory disease within the last five years were excluded from this study.

Inbrija is not to be used by patients who take or have taken a nonselective monoamine oxidase inhibitor such as phenelzine or tranylcypromine within the last two weeks.

Ampyra was approved by the FDA in January 2010 to improve walking in adults with multiple sclerosis. To our knowledge, Ampyra is the first drug approved for this indication. Efficacy was shown in people with all four major types of MS (relapsing remitting, secondary progressive, progressive relapsing and primary progressive). Net revenue for Ampyra was $37.6 million for the quarter ended September 30, 2019 and $137.8 million for the quarter ended September 30, 2018.

Ampyra is marketed in the U.S. through our own specialty sales force and commercial infrastructure, and is distributed in the U.S. primarily through a network of specialty pharmacies which deliver the medication to patients by mail. We have contracted with a third party organization with extensive experience in coordinating patient benefits to run Ampyra Patient Support Services, or APSS, a dedicated resource that coordinates the prescription process among healthcare providers, people with multiple sclerosis, and insurance carriers. We have a 60-day free trial program that provides eligible patients with two months of Ampyra at no cost. We are evaluating the level of our continuing investment in certain Ampyra sales and marketing programs, including our free trial program and APSS, due to the introduction of generic competition and corresponding decline in Ampyra sales.

We have been engaged in litigation with certain generic drug manufacturers relating to our five initial Orange Book-listed Ampyra patents. In 2017, the United States District Court for the District of Delaware (the “District Court”) issued a ruling that upheld our Ampyra Orange Book-listed patent that expired on July 30, 2018, but invalidated our four other Orange Book-listed patents pertaining to Ampyra that were set to expire between 2025 and 2027. Under this decision, our patent exclusivity with respect to Ampyra terminated on July 30, 2018. We appealed the District Court decision to the United

States Court of Appeals for the Federal Circuit (the “Federal Circuit”), which issued a ruling onin September ~~10,~~ 2018 upholding the District Court’s decision (the “Appellate Decision”). In ~~October 2018, we filed a~~January 2019, the Federal Circuit denied our petition for rehearing en ~~banc~~ ~~regarding~~banc. In October 2019, the ~~Appellate Decision at~~U.S. Supreme Court denied our petition for certiorari requesting review of the ~~Federal Circuit, which subsequently invited the generic drug manufacturers to respond to our petition.~~case. This litigation is discussed in further detail in Part II, Item 1 of this report. We ~~are experiencing~~have experienced a ~~rapid and~~ significant decline in Ampyra sales due to competition from generic versions of Ampyra that are being marketed following the Appellate ~~Decision, including our own authorized generic version being marketed by Mylan AG. We expect that additional~~Decision. Additional manufacturers ~~will~~may market generic versions of Ampyra, ~~which may accelerate the decline in Ampyra sales.~~

As ~~of September 30, 2018, we had cash, cash equivalents and short-term investments of approximately $460.9 million~~ and we are projecting a 2018 year-end cash balance in excess of $400.0 million. We have $345 million of convertible senior notes due in 2021 with a conversion price of $42.56. We believe that we are sufficiently capitalized to fund operations through the launch of Inbrija in the U.S., pending approval from the FDA.

~~On October 30, 2018, we sold our Qutenza assets and NP-1998 development program.~~ Qutenza is a dermal patch containing 8% prescription strength capsaicin the effects of which can last up to three months and is approved by the FDA for the management of neuropathic pain associated with post-herpetic neuralgia, also known as post-shingles pain. NP-1998 is a Phase 3 ready, 20% prescription strength capsaicin topical solution that we were previously assessing for the treatment of neuropathic pain. Under the asset purchase agreement, the buyer made aggregate cash payments to us of approximately $7.9 million for the assets and we are entitled to receive up to an additional $35.0 million in cash based on achievement of specified U.S. sales milestones for Qutenza and, if it receives FDA approval, NP-1998.

Ampyra was approved by the FDA in January 2010 to improve walking in adults with MS. To our knowledge, Ampyra is the first drug approved for this indication. Efficacy was shown in people with all four major types of MS (relapsing remitting, secondary progressive, progressive relapsing and primary progressive). Net revenue for Ampyra was $137.8 million for the three-month period ended September 30, 2018 and $132.6 million for the three-month period ended September 30, 2017.

~~We have been engaged in litigation with certain generic drug manufacturers relating to our five initial Orange Book-listed Ampyra patents.~~ ~~In 2017, the United States District Court for the District of Delaware (the “District Court”) issued a ruling that upheld~~expect our Ampyra ~~Orange Book-listed patent that expired on July 30, 2018, but invalidated our four other Orange Book-listed patents pertaining~~sales will continue to Ampyra that were set to expire between 2025 and 2027. Under this decision, our patent exclusivity with respect to Ampyra terminated on July 30, 2018. We appealed the District Court decision to the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”), which issued a ruling on September 10, 2018 upholding the District Court’s decision (the “Appellate Decision”). In October 2018, we filed a petition for rehearing ~~en banc~~ ~~regarding the Appellate Decision at the Federal Circuit, which subsequently invited the generic drug manufacturers to respond to our petition. This~~ ~~litigation is discussed in further detail in Part II, Item 1 of this report. We are experiencing a rapid and significant~~ decline in Ampyra sales due to competition from generic versions of Ampyra that are being marketed following the Appellate Decision, including our own authorized generic version being marketed by Mylan AG. Mylan announced the launch of the authorized generic in mid-September 2018. We expect that additional manufacturers will market generic versions of Ampyra, which may accelerate the decline in Ampyra sales.

Ampyra is marketed in the U.S. through our own specialty sales force and commercial infrastructure. We currently have approximately 90 sales representatives in the field calling on a priority target list of approximately 7,000 physicians. We also have established teams of Medical Science Liaisons, Regional Reimbursement Directors, and Market Access Account Directors who provide information and assistance to payers and physicians on Ampyra; a National Trade Account Director who works with our limited network of specialty pharmacies; and Market Development Managers who work collaboratively with field teams and corporate personnel to assist in the execution of the Company’s strategic initiatives. We have a 60-day free trial program that provides eligible patients with two months of Ampyra at no cost.

Ampyra is distributed in the U.S. primarily through a limited network of specialty pharmacy providers, which deliver the medication to patients by mail, and ASD Specialty Healthcare, Inc. (an AmerisourceBergen affiliate), which distributes Ampyra to the U.S. Bureau of Prisons, the U.S. Department of Defense, the U.S. Department of Veterans Affairs, or VA, and other federal agencies. We have contracted with a third party organization with extensive experience in coordinating patient benefits to run Ampyra Patient Support Services, or APSS, a dedicated resource that coordinates the prescription process among healthcare providers, people with MS, and insurance carriers. We recently established relationships with six new pharmacies through which Ampyra is available, each of which is either affiliated with an integrated health delivery network or an academic medical center. These pharmacies are not part of our specialty pharmacy network, but rather receive prescriptions for Ampyra directly from prescribers without first being routed through APSS.over time.

Ampyra is marketed as Fampyra outside the U.S. by Biogen International GmbH, or Biogen, under a license and collaboration agreement that we entered into in June 2009. Fampyra has been approved in a number of countries across Europe, Asia and the Americas. Under our agreement with Biogen, we are entitled to receive double-digit tiered royalties on sales of Fampyra and we are also entitled to receive additional payments based on achievement of certain regulatory and sales milestones. We received a $25 million milestone payment from Biogen in 2011, which was triggered by Biogen’s receipt of conditional approval from the European Commission for Fampyra. The next expected milestone payment would be $15 million, due when ex-U.S. net sales exceed $100 million over four consecutive quarters. In November 2017, we announced a $40 million Fampyra royalty monetization transaction with HealthCare Royalty Partners, or HCRP. In return for the payment to us, HCRP obtained the right to receive these Fampyra royalties up to an agreed-upon threshold. Until this threshold is met, if ever, we will not receive Fampyra royalties although we have retained the right to receive any potential future milestone payments, described above. The HCRP transaction is accounted for as a liability, as described in Note 810 to our Consolidated Financial Statements included in this report.

Six issued Ampyra patents have been listed in the Orange Book. The five initial Orange Book-listed patents have been the subject of litigation with certain generic drug manufacturers, as described above. In connection with the litigation, our Orange Book-listed patent that expired on July 30, 2018, was upheld, but four other Ampyra patents set to expire between 2025 and 2027 were invalidated. We have filed a request to have these four patents delisted from the Orange Book. The litigation is discussed in further detail in Part II, Item 1 of this report.

The sixth Orange Book-listed patent (U.S. Patent No. 9,918,973), set to expire in 2024, was more recently issued and was not involved in the ~~litigation, was issued more recently and was listed in~~litigation. We have filed a request to have this patent delisted from the Orange Book in April 2018. The sixth Orange Book-listed patent is U.S. Patent No. 9,918,973, the claims of which relate to methods of increasing walking speed in patients with MS by administering 10 mg of sustained release 4-aminopyridine (dalfampridine) twice daily. This patent will expire in 2024.Book. We note that this patent ~~does~~did not entitle us to any additional statutory stay of approval under the Hatch-Waxman Act against the generic drug manufacturers that ~~are~~were involved in the patent litigation described in this report.

In 2011, the European Patent Office, or EPO, granted EP 1732548, with claims relating to, among other things, use of a sustained release aminopyridine composition, such as dalfampridine (known under the trade name Fampyra in the European Union), to increase walking speed. In March 2012, Synthon B.V. and neuraxpharm Arzneimittel GmBH filed oppositions with the EPO challenging the EP 1732548 patent. We defended the patent, and in December 2013, we announced that the EPO Opposition Division upheld amended claims in this patent covering a sustained release formulation of dalfampridine for increasing walking in patients with MS through twice daily dosing at 10 mg. Both Synthon B.V. and neuraxpharm Arzneimittel GmBH have appealed the decision. In December 2013, Synthon B.V., neuraxpharm Arzneimittel GmBH and Actavis Group PTC EHF filed oppositions with the EPO challenging our EP 2377536 patent, which is a divisional of the EP 1732548 patent. In February 2016, the EPO Opposition Division rendered a decision that revoked the EP 2377536 patent. We ~~believe the claims of this patent are valid and we have~~ appealed the decision. In the Appeal Hearings in September 2019, the European Technical Board of Appeals upheld claims covering Fampyra in both the EP 1732548 patent and the EP 2377536 patent. Both European patents ~~if upheld as valid,~~ are set to expire in 2025, absent any additional exclusivity granted based on regulatory review timelines. In June 2019, the EPO granted EP 2460521, which is a divisional of the EP 2377536 patent. The EP 2460521 patent may be opposed by a third party within nine months of the date of grant. This patent is also set to expire in 2025. Fampyra also has 10 years of market exclusivity in the European Union that is set to expire in 2021.

We have a pipeline of novel neurological therapies addressing a range of disorders, including Parkinson’s disease and MS. Inbrija (levodopa inhalation powder) is our most advanced development program and our highest priority. This program and the other programs in our pipeline are described below.

Inbrija is a self-administered, inhaled formulation of levodopa, or L-dopa, for the treatment of OFF periods in people with Parkinson’s disease who are taking a carbidopa/levodopa regimen. Parkinson’s disease is a progressive neurodegenerative disorder resulting from the gradual loss of certain neurons in the brain responsible for producing dopamine. The disease causes a range of symptoms such as impaired ability to move, muscle stiffness and tremor. The standard of care for the treatment of Parkinson’s disease is oral carbidopa/levodopa, but oral medication can be associated with wide variability in the timing and amount of absorption and there are significant challenges in creating a regimen that consistently maintains therapeutic effects as Parkinson’s disease progresses. The re-emergence of symptoms is referred to as an OFF period, and despite optimized regimens with current therapeutic options and strategies, OFF periods remain one of the most challenging aspects of the disease.

Inbrija delivers a precise dose of dry-powder formulation of L-dopa to the lung using a breath-actuated proprietary inhaler. Oral medication can be associated with slow and variable onset of action, as the medicine is absorbed through the gastrointestinal (digestive) tract before reaching the brain. Inhaled treatments enter the body through the lungs and reach the brain shortly thereafter, bypassing the digestive system. Inbrija is based on our proprietary ARCUS platform, a dry-powder pulmonary drug delivery technology that we believe has potential applications in multiple disease areas. A key feature of our ARCUS technology is the large porous particles that allow for consistent and precise delivery of significantly larger doses of medication than are possible with conventional dry powder pulmonary systems. This in turn provides the potential for pulmonary delivery of a much wider variety of pharmaceutical agents. We have worldwide rights to our ARCUS drug delivery technology, which is protected by extensive know-how and trade secrets and various U.S. and foreign patents, including patents that protect the Inbrija dry powder capsules beyond 2030.

In 2016, we completed a Phase 3 efficacy and safety clinical trial of Inbrija for the treatment of OFF periods in Parkinson’s disease. In February 2017, we announced efficacy and safety data from this clinical trial, showing a statistically significant improvement in motor function in people with Parkinson’s experiencing OFF periods. The clinical trial had three arms: Inbrija 84 mg and 60 mg doses (equivalent to 50 mg and 35 mg fine particle doses, respectively), and placebo. The trial met its primary outcome measure of improvement in motor function as measured by the Unified Parkinson’s Disease Rating Scale-Part 3 (UPDRS Part III) in people with Parkinson’s experiencing OFF periods. UPDRS III is a validated scale, which measures Parkinson’s disease motor impairment. The primary endpoint was measured at 30 minutes post-treatment for the 84 mg dose at the 12-week visit. UPDRS Part III change was -9.83 compared to -5.91 for placebo with a p value of 0.009. The magnitude of Inbrija’s benefit versus baseline was consistent with the data from the prior Phase 2b clinical trial, further described below, and represents a statistically significant, clinically meaningful improvement in motor function. The placebo-adjusted difference was lower in the Phase 3 clinical trial than the Phase 2b clinical trial but still represented a clinically important difference. ~~In June 2017, we announced additional data from the Inbrija Phase 3 efficacy and safety trial at the International Congress of Parkinson’s Disease and Movement Disorders (MDS).~~ The secondary endpoints of achievement of an ON state with maintenance through 60 minutes (statistically significant), Patient Global Impression of Change (PGIC), and reduction in UPDRS III score at 10 minutes were supportive of the primary endpoint result.

~~The safety profile of Inbrija in the trial was consistent with that observed in a prior Phase 2b clinical trial:~~

Results from a separate Phase 3 study to assess the long-term safety profile of Inbrija in people with Parkinson’s showed no statistical difference in pulmonary function between the group receiving Inbrija and an observational control group. These results are consistent with the previously reported Phase 2b and Phase 3 clinical trials. In March 2017, we announced results from separate clinical studies that assessed the safety profile of Inbrija in people with asthma, smokers and early morning OFF.

In February 2018, our Inbrija NDA was accepted for filing by the FDA, and the FDA set a goal date of October 5, 2018, under the Prescription Drug User Fee Act, or PDUFA, for review of the NDA. On September 13, 2018, we announced that the FDA extended the PDUFA date to January 5, 2019. This extension is related to recent submissions we made in response to requests from the FDA for additional information on chemistry, manufacturing and controls (CMC). The FDA determined that these submissions constitute a major amendment and will take additional time to review.

The NDA was submitted under section 505(b)(2) of the Food Drug and Cosmetic Act, referencing data from the branded L-dopa product Sinemet®. We believe the Phase 3 efficacy and safety clinical trial, combined with data from additional Phase 3 long-term safety studies and supported by existing Phase 2b data, are sufficient for the NDA filing. Our commercial preparations for the launch of Inbrija continue, including sales force training and education, managed care discussions, market research, disease state awareness and social media initiatives. We are progressing development of a pricing strategy and analyzing expected product margins, which we plan to finalize near launch, if Inbrija is approved. We believe we have built a leading neuro-specialty sales and marketing team through our commercialization of Ampyra, and that our launch of Inbrija in the U.S., if approved, will benefit from the experiences and capabilities of this team. We are projecting that, if approved, annual peak net revenue of Inbrija in the U.S. alone could exceed $800 million. We have received letters from the FDA regarding the FDA’s pre-approval inspections of our Chelsea, Massachusetts manufacturing facility and the Inbrija inhaler device manufacturer's facility, indicating that the FDA’s inspections of these facilities are successfully closed, without need for any further action by the FDA.

We are seeking approval to market Inbrija in the European Union, and accordingly we filed a Marketing Authorization Application, or MAA, with the European Medicines Agency, or EMA, in March 2018. In May 2018, we announced that the EMA completed formal validation of the MAA for Inbrija, and that the review of the MAA will be according to standard timelines, with an opinion of the Committee for Medicinal Products for Human Use, or CHMP, expected within 210 days of the May 24, 2018 validation notification date (plus any clock-stops to provide answers to questions which may arise during the review). After the adoption of a CHMP opinion, a final decision regarding the MAA is carried out by the European Commission. We are in discussions with potential partners regarding Inbrija outside of the U.S.

In April 2018, we presented new Inbrija data from four accepted abstracts during two oral platform presentations at the American Academy of Neurology Annual Meeting. These presentations included a safety assessment in early morning OFF symptoms in patients with Parkinson’s disease and long-term pulmonary safety and efficacy of inhaled levodopa in Parkinson’s disease.

~~In addition to Inbrija (levodopa inhalation powder), discussed above, our strategic priorities include~~We have been exploring opportunities for other proprietary products in which inhaled delivery of medicine using our ARCUS drug delivery technology can provide a significant therapeutic benefit to patients. ~~Disorders of the~~We believe there are potential opportunities with central nervous system, or CNS, ~~in addition to Parkinson’s disease, may be addressed by~~as well as non-CNS, disorders.

Our ARCUS ~~products with the delivery of active agents to the CNS with rapid onset and reduced systemic exposure. We are also considering non-CNS opportunities for ARCUS.~~

~~CVT-427 is our most advanced ARCUS~~development has been focused on a program other than Inbrija, and one of our strategic priorities. CVT-427 is an inhaled triptan (zolmitriptan) intended for acute treatment of migraine by using the ARCUS drug delivery technology. Triptans are the class of drug most commonly prescribed for acute treatment of migraine. ~~Oral triptans, which account~~Existing oral therapies for ~~the majority of all triptan doses,~~migraine can be associated with slow onset of action and gastrointestinal challenges. ~~The slow onset of action, usually 30 minutes or longer, can result in poor response rates.~~ Patients cite the need for rapid relief from migraine symptoms as their most desired medication attribute. Additionally, individuals with migraine may suffer from nausea and delayed gastric emptying which further impact the consistency and efficacy of the oral route of administration. ~~Triptans delivered subcutaneously (injection) provide~~We have been evaluating therapeutic candidates for their suitability to move forward with this program. Due to the ~~most rapid onset~~restructuring described above and associated cost-cutting measures, we have deferred consideration of ~~action, but are not convenient for patients. Many triptans~~

are also available in nasally delivered formulations. However, based on available data, we believe that nasally delivered triptans generally have an onset of action similar to orally administered triptans.

In December 2015, we initiated and completed a Phase 1 safety/tolerability and pharmacokinetic clinical trial of CVT-427 for acute treatment of migraine. In June 2016, at the 58th Annual Scientific Meeting of the American Headache Society, we presented pharmacokinetic data from the Phase 1 trial which showed increased bioavailability and faster absorption compared to oral and nasal administration of the same active ingredient in healthy adults. In particular, the data showed that CVT-427 had a median Tmax of about 12 minutes for all dose levels compared to 1.5 hours for the oral tablet and 3.0 hours for the nasal spray. There were no serious adverse events, dose-limiting toxicities, evidence of bronchoconstriction or discontinuations due to adverse events reportedfurther investment in this ~~study. The most commonly reported treatment-emergent adverse events were cough, chest discomfort, headache, and feeling hot. Apart from cough, single dose CVT-427 tolerability was generally consistent~~program pending additional progress with the ~~known safety profile of zolmitriptan.~~ In December 2016, we completed a special population study to evaluate safe inhalation of CVT-427 in people with asthma and in smokers. Some subjects showed evidence of acute, reversible bronchoconstriction, post-inhalation. We plan to accelerate work on reformulating to move the program forward as a strategic priority, subject attaining approval for and launching Inbrija ~~in the U.S.~~launch.

In July 2015, the Bill & Melinda Gates Foundation awarded us a $1.4 million grant to support the development of a formulation and delivery system for a dry powder version of lung surfactant, a treatment for neonatal respiratory distress syndrome, or nRDS. In collaboration with the Massachusetts Institute of Technology, we developed a ~~novel~~ formulation and delivery device based on our proprietary ARCUS drug delivery technology. nRDS is a condition affecting prematurely born infants in which their lungs are underdeveloped and thus lack a sufficient amount of lung surfactant. It can be fatal, or lead to severe, chronic health issues caused by a lack of oxygen getting to the baby’s brain and other organs. Delivering liquid surfactant to the lungs via intubation is the standard of care. We believe that our formulation and delivery system may present a more practical alternative for use in developing areas of the world, where intubation poses numerous problems. Based on recent achievement of pre-clinical proof of concept, the foundation has expanded the funding to include pre-IND development. This program is not aimed at developing a commercial product, but our work on this program (funding for which has not been impacted by the restructuring) could potentially generate information that is useful for adapting the ARCUS drug delivery technology to commercial pediatric uses.

~~We are also beginning to formulate potential ARCUS products for two different rare lung diseases.~~

~~Following is a description of our~~Our other research and development programs include rHIgM22 and Cimaglermin alpha. rHIgM22 is a remyelinating antibody that is a potential therapeutic for multiple sclerosis. Data from a Phase 1 safety and tolerability trial showed that a single dose of rHIgM22 was not associated with any safety signals. The study was not powered to show efficacy and exploratory measures showed no difference between the treatment groups. Cimaglermin alfa is a member of the neuregulin growth factor family, and has been shown to promote recovery after neurological injury, as well as enhance heart function in animal models of heart failure. We initiated a Phase 1b clinical trial assessing three doses of cimaglermin in people with heart failure, but discontinued enrollment and then received an FDA clinical hold based on the occurrence of a case of hepatotoxicity (liver injury). The FDA clinical hold was lifted after we presented additional data on the hepatotoxicity, but we have not since restarted any clinical study of cimaglermin. We are considering next steps for these programs, which could include potential partnering or out-licensing, but due to the restructuring described above and associated cost-cutting measures, we have deferred consideration of any further investment pending additional progress with the Inbrija launch.

We were previously developing SYN120 and BTT1023, but have no current plans to further invest in these programs.

We are providing the following guidance with respect to our ~~2018~~2019 financial ~~performance:~~

~~We have increased~~ our ~~projected 2018 year-end cash balance from our prior guidance of more than $300 million to more than $400 million.~~2020 financial performance:

The projected ~~range~~ranges of R&D and SG&A expenses in ~~2018~~2019 and 2020 are provided on a non-GAAP basis, as both ~~excluding~~exclude restructuring costs and share-based compensation charges. Due to the forward looking nature of this information, the amount of compensation charges ~~and benefits~~ needed to reconcile these measures to the most directly comparable GAAP financial measures is dependent on future changes in the market price of our common stock and is not available at this time. Non-GAAP financial measures are not an alternative for financial measures prepared in accordance with GAAP. However, we believe the presentation of these non-GAAP financial measures, when viewed in conjunction with ~~actual~~ GAAP results, provides investors with a more meaningful understanding of our projected operating performance because they exclude (i) expenses that pertain to non-routine restructuring events, and (ii) non-cash charges that are substantially dependent on changes in the market price of our common stock. We believe these non-GAAP financial measures help indicate underlying trends in our business, and are important in comparing current results with prior period results and understanding expected operating performance. Also, our management uses these non-GAAP financial measures to establish budgets and operational goals, and to manage our business and to evaluate its performance.

Three-Month Period Ended September 30, ~~2018~~2019 Compared to September 30, ~~2017~~2018

We recognize product sales of ~~Ampyra~~Inbrija following receipt of product by companies in our distribution network, which primarily includes specialty pharmacy providers and ASD Specialty Healthcare, Inc. We recognized net revenue from the sale of Inbrija of $4.9 million for the three-month period ended September 30, 2019.

We recognize product sales of Ampyra following receipt of product by companies in our distribution network, which primarily includes specialty pharmacy providers. We recognized net revenue from the sale of Ampyra of ~~$137.8~~$37.6 million and ~~$132.6~~$137.8 million for the three-month periods ended September 30, 2019 and 2018, ~~and 2017,~~ respectively, ~~an increase~~a decrease of ~~$5.2~~$100.2 million, or ~~3.9%~~73%. The net revenue ~~increase is~~decrease comprised decreased net volume of ~~net price increases, net of~~$100.3 million partially offset by discount and allowance adjustments of ~~$7.3 million offset by decreased net volume of $2.1 million. Effective January 1 and July 1, 2018, we increased our list sale price to our customers by 9.5%.~~

Discounts and allowances which are included as an offset in net revenue consist of allowances for customer credits, including estimated chargebacks, rebates and discounts. Discounts and allowances are recorded following shipment of Ampyra tablets to our customers. Adjustments are recorded for estimated chargebacks, rebates, and discounts. Discounts and allowances also consist of discounts provided to Medicare beneficiaries whose prescription drug costs cause them to be subject to the Medicare Part D coverage gap (i.e., the “donut hole”). Payment of coverage gap discounts is required under the Affordable Care Act, the health care reform legislation enacted in 2010. Discounts and allowances may increase as a percentage of sales as we enter into managed care contracts in the future.

We recognized net revenue from the sale of other products of $2.2 million for the three-month period ended September 30, 2018, as compared to $1.8 million for the three-month period ended September 30, 2017, an increase of $0.4$0.1 million.

Discounts and allowances which are included as an offset in net revenue consist of allowances for customer credits, including estimated chargebacks, rebates, returns and discounts.

~~We recognized $2.8 million and $3.1 million in royalty revenue for the three-month periods ended September 30, 2018 and 2017, respectively related to ex-U.S. sales of Fampyra by Biogen.~~

We recognized $0.5 million and $0.8 million in royalty revenue for the three-month period ended September 30, 2017, related to the authorized generic sale of Zanaflex Capsules and Selincro, respectively. We sold Zanaflex and monetized Selincro in fiscal 2017.

~~We recognized $2.3 million in license revenue for the three-month period ended September 30, 2017, related to the $110.0 million received from Biogen in 2009 as part of our collaboration agreement.~~ As of January 1, 2018, we adopted ASC 606 “Revenue from Contracts with Customers” (“ASC 606). Under ASC 606, revenue related to the upfront payment is recognized at a point in time rather than over time. As a result of adopting ASC 606, we recognized the remaining deferred revenue as of January 1, 2018 as a cumulative effect adjustment to the accumulated deficit on the consolidated balance sheet as of January 1, 2018.

We recorded cost of sales of $25.4 million for the three-month period ended September 30, 2018 as compared to $30.0 million for the three-month period ended September 30, 2017. Cost of sales for the three-month period ended September 30, 2018 consisted primarily of $23.1 million in inventory costs related to recognized revenues, $1.7 million in royalty fees based on net product shipments, $0.2 million for costs related to the amortization of intangible assets and $0.2 million for costs related to sales of the authorized generic version of Ampyra. Cost of sales for the three-month period ended September 30, 2017 consisted primarily of $22.8 million in inventory costs related to recognized revenues, $3.0 million in royalty fees based on net product shipments, $2.4 million for costs related to Selincro, $0.9 million related to the cost of Zanaflex Capsules authorized generic product sold and $0.7 million related to the amortization of intangible assets.

We recorded cost of license revenue of $0.2 million for the three-month period ended September 30, 2017. Cost of license revenue represented the recognition of a portion of the deferred $7.7 million paid to Alkermes in 2009 in connection with the $110.0 million received from Biogen as a result of our collaboration agreement. As of January 1, 2018, we adopted ASC 606 “Revenue from Contracts with Customers” (“ASC 606). As a result of adopting ASC 606, we recognized the remaining deferred cost of license revenue as of January 1, 2018 as a cumulative effect adjustment to the accumulated deficit on the consolidated balance sheet as of January 1, 2018.

Research and development expenses for the three-month period ended September 30, 2018 were $22.9 million as compared to $33.3 million for the three-month period ended September 30, 2017, a decrease of approximately $10.4 million, or 31%. The decrease was due primarily to reductions in spending of $11.6 million due to the termination of tozadenant development program and $0.8 million in reduced spending for certain other programs partially offset by an increase of $1.9 million related to manufacturing cost in preparation for the upcoming Inbrija launch.

Sales and marketing expenses for the three-month period ended September 30, 2018 were $22.7 million compared to $20.8 million for the three-month period ended September 30, 2017, an increase of approximately $1.9 million, or 9.1%. The increase was attributable to an increase in overall salaries and benefits of $1.1 million, an increase in marketing related spending of $0.5 million and an increase in other selling related expenses of $0.3 million.

General and administrative expenses for the three-month period ended September 30, 2018 were $20.9 million compared to $20.0 million for the three-month period ended September 30, 2017, an increase of approximately $0.9 million, or 4.5%. This increase was primarily due to an increase in legal costs of $0.9 million and certain other costs of $0.5 million, partially offset by a decrease in salaries and benefits related costs of $0.4 million.

We recognized an asset impairment charge of $39.4 million in the three-month period ended September 30, 2017 related to our intangible asset for Selincro. We reviewed the intangible asset for impairment due to a downward revision to the projected royalty revenue we expect to receive. As a result of the review, we determined that the carrying value of the asset was greater than the estimated fair market value as of September 30, 2017. We did not recognize any asset impairment charge in the three-month period ended September 30, 2018.

As a result of the original Civitas spin out of Alkermes, part of the consideration to Alkermes was a future royalty to be paid to Alkermes on Civitas products. Acorda acquired this contingent consideration as part of the Civitas acquisition. The fair value of that future royalty is assessed quarterly. We recorded expense pertaining to changes in the fair-value of acquired contingent consideration of $22.7 million for the three-month period ended September 30, 2018 as compared to an income of $0.4 million for the three-month period ended September 30, 2017. Changes in the fair-value of the acquired contingent consideration were due to the re-calculation of discounted cash flows for the passage of time and changes to certain other estimated assumptions.

Other expense, net was $4.2 million for the three-month periods ended September 30, 2018 and September 30, 2017. This was due primarily to an increase in interest income of $1.0 million offset by an increase in interest and amortization of debt discount expense of $1.2 million.

For the three-month periods ended September 30, 2018 and 2017, the Company recorded a $38.0 million and $18.9 million provision for income taxes, respectively. The effective income tax rates for the Company for the three-month periods ended September 30, 2018 and 2017 were 157.8% and (298.2%), respectively. The variance in the effective tax rates for the three-month period ended September 30, 2018 as compared to the three-month period ended September 30, 2017 was due primarily to differences in pre-tax book income between the periods, the decrease in the federal statutory tax rate as a result of tax reform, the valuation allowance recorded on deferred tax assets for which no tax benefit can be recognized, state taxes, and the reduction in the research and development tax credit.

~~The Company continues to evaluate the realizability of its deferred tax assets and liabilities on a quarterly basis and will adjust such amounts in light of changing facts and circumstances in~~cluding, but not limited to, future projections of taxable income, tax legislation, rulings by relevant tax authorities, the progress of ongoing tax audits and the regulatory approval of products currently under development. Any changes to the valuation allowance or deferred tax assets and liabilities in the future would impact the Company's income taxes.

We recognize product sales of Ampyra following receipt of product by companies in distribution network, which primarily includes specialty pharmacy providers and ASD Specialty Healthcare, Inc. We recognized net revenue from the sale of Ampyra of $390.9 million and $376.1 million for the nine-month periods ended September 30, 2018 and 2017, respectively, an increase of $14.8 million, or 4%. The net revenue increase is comprised of net price increases, net of discount and allowance adjustments of $20.2 million, offset by decreased net volume of $5.4 million. Effective January 1 and July 1, 2018, we increased our list sale price to our customers by 9.5%.

~~Discounts and allowances which are included as an offset in net revenue consist of allowances for customer credits, including estimated chargebacks, rebates and discounts.~~ Discounts and allowances are recorded following shipment of ~~Ampyra tablets~~our products to our customers. Adjustments are recorded for estimated chargebacks, rebates, and discounts. Discounts and allowances also consist of discounts provided to Medicare beneficiaries whose prescription drug costs cause them to be subject to the Medicare Part D coverage gap (i.e., the “donut hole”). Payment of coverage gap discounts is required under the Affordable Care Act, the health care reform legislation enacted in 2010. Discounts and allowances may increase as a percentage of sales as we enter into managed care contracts in the future.

We recognized net revenue from the sale of other products of ~~$2.5~~$2.3 million for the ~~nine-month~~three-month period ended September 30, ~~2018,~~2019 as compared to ~~$3.6~~$2.2 million for the ~~nine-month~~three-month period ended September 30, ~~2017, a decrease of $1.1 million. The decrease was due primarily to the sale of Zanaflex assets in fiscal 2017.~~2018.

~~Discounts and allowances, which are included as an offset in net revenue, consist of allowances for customer credits, including estimated chargebacks, rebates, returns and discounts.~~

We recognized ~~$8.9~~$2.9 million and ~~$8.5~~$2.8 million in royalty revenue for the ~~nine-month~~three-month periods ended September 30, ~~2018~~2019 and ~~2017,~~2018, respectively, related to ex-U.S. sales of Fampyra by Biogen.

We recognized $2.6 million and $2.3 million in royalty revenue for the nine-month period ended September 30, 2017, related to the authorized generic sale of Zanaflex Capsules and Selincro, respectively. We sold Zanaflex and monetized Selincro in fiscal 2017.

~~We recognized $6.8 million in license revenue for the nine-month period ended September 30, 2017, related to the $110.0 million received from Biogen in 2009 as part of our collaboration agreement.~~ As of January 1, 2018, we adopted ASC 606 “Revenue from Contracts with Customers” (“ASC 606). Under ASC 606, revenue related to the upfront payment is recognized at a point in time rather than over time. As a result of adopting ASC 606, we recognized the remaining deferred revenue as of January 1, 2018 as a cumulative effect adjustment to the accumulated deficit on the consolidated balance sheet as of January 1, 2018.

We recorded cost of sales of ~~$77.8~~$8.0 million for the ~~nine-month~~three-month period ended September 30, ~~2018~~2019 as compared to ~~$84.8~~$25.2 million for the ~~nine-month~~three-month period ended September 30, ~~2017.~~2018. Cost of sales for the ~~nine-month~~three-month period ended September 30, ~~2018~~2019 consisted primarily of ~~$68.2~~$7.2 million in inventory costs related to recognized revenues, ~~$7.5~~$0.2 million in royalty fees based on net product shipments ~~$1.6~~and $0.5 million for costs related to sales of the ~~amortization~~authorized generic version of ~~intangible assets~~Ampyra. Cost of sales for the three-month period ended September 30, 2018 consisted primarily of $23.1 million in inventory costs related to recognized revenues, $1.7 million in royalty fees based on net product shipments and $0.2 million for costs related to sales of the authorized generic version of Ampyra. Cost of sales for inventory manufactured pre-launch for Inbrija was not recorded for the ~~nine-month~~three-month period ended September 30, ~~2017 consisted primarily~~2019, since the inventory manufactured prior to the FDA approval was expensed as research and development expense as incurred and was combined with other research and development expenses in 2018.

Amortization of $66.0 million in inventory costs related to recognized revenues, $8.5 million in royalty fees based on net product shipments, costs related to Selincro of $6.9 million, the cost of Zanaflex Capsules authorized generic product sold of $1.6 million and 1.6 million related to theintangibles

~~We recorded cost of license revenue of $0.5~~$7.7 million for the ~~nine-month~~three-month period ended September 30, ~~2017. Cost of license revenue represented~~2019 as compared to $0.2 million related to Ampyra for the ~~recognition of a portion of the deferred $7.7 million paid to Alkermes in 2009 in connection with the $110.0 million received from Biogen as a result of our collaboration agreement.~~ As of January 1, 2018, we adopted ASC 606 “Revenue from Contracts with Customers” (“ASC 606). As a result of adopting ASC 606, we recognized the remaining deferred cost of license revenue as of January 1, 2018 as a cumulative effect adjustment to the accumulated deficit on the consolidated balance sheet as of January 1,three-month period ended September 30, 2018.

Research and development expenses for the ~~nine-month~~three-month period ended September 30, 2019 were $16.1 million as compared to $22.9 million for the three-month period ended September 30, 2018, ~~were $79.3 million as compared to $131.0 million for the nine-month period ended September 30, 2017,~~ a decrease of approximately ~~$51.7~~$6.8 million, or ~~39.5%~~30%. The decrease was due primarily to reductions in spending of ~~$26.8~~$5.5 million due to the ~~termination~~commercialization of ~~the tozadenant development program, $6.8 million primarily for~~ Inbrija, ~~as the clinical trials for Inbrija are winding down, $4.4 million for Ampyra life cycle management program, $6.7 million for~~and decreases in overall salaries and benefits ~~related costs, $4.3 million decrease in restructuring costs~~ and ~~$2.4 million for~~ certain other ~~programs.~~programs of $1.5 million, partially offset by other programs of $0.2 million.

Sales and marketing expenses for the ~~nine-month~~three-month period ended September 30, 2019 were $27.5 million compared to $22.7 million for the three-month period ended September 30, 2018, ~~were $68.7 million compared to $71.8 million for the nine-month period ended September 30, 2017, a decrease~~an increase of approximately ~~$3.1~~$4.8 million, or ~~4.3%~~21.1%. The ~~decrease~~increase was attributable primarily to ~~a decrease~~an increase in marketing related spending of ~~$3.7~~$7.4 million due to launch activities for Inbrija, partially offset by ~~an increase~~a decrease in overall salaries and benefits of ~~$0.8 million.~~$1.5 million and a decrease in spending of $1.0 million for marketing related cost of Ampyra.

General and administrative expenses for the ~~nine-month~~three-month period ended September 30, 2019 were $21.2 million compared to $20.9 million for the three-month period ended September 30, 2018, ~~were $66.7~~an increase of approximately $0.2 million, ~~compared~~or 1.0%. The increase was primarily due to ~~$70.3~~an increase in costs related to medical affairs of $0.4 million and launch activities for Inbrija of $1.3 million. This was partially offset by a decrease in legal costs and certain other costs of $1.5 million.

We recognized a goodwill impairment charge of $277.6 million in the ~~nine-month~~three-month period ended September 30, ~~2017,~~2019. During the third quarter of 2019, we experienced a ~~decrease of approximately $3.6 million, or 5.1%. This decrease was primarily due to a decrease~~significant decline in ~~restructuring costs of $2.0 million, a decrease in salaries and benefits related costs of $2.4 million, partially offset by an increase in legal and other related cost of $0.6 million.~~

~~We recognized an asset impairment charge of $39.4 million in~~our stock price that reduced the ~~nine-month period ended September 30, 2017 related to our intangible asset for Selincro. We reviewed~~market capitalization below the ~~intangible asset for impairment due to a downward revision to the projected royalty revenue we expect to receive. As a result~~carrying value of the ~~review,~~Company. We performed a quantitative assessment and after completing the assessment during the third quarter of 2019, we ~~determined~~concluded that the carrying value of the ~~asset was greater than the~~Company exceeded its estimated fair ~~market~~ value as of September 30, ~~2017.~~ 2019 and therefore, the goodwill was fully impaired. We did not recognize ~~an asset~~any goodwill impairment charge in the ~~nine-month~~three-month period ended September 30, 2018.

As a result of the original Civitas spin out of Alkermes, part of the consideration to Alkermes was a future royalty to be paid to Alkermes on Civitas products. Acorda acquired this contingent consideration as part of the Civitas acquisition. The fair value of ~~that~~those future ~~royalty~~royalties is assessed quarterly. We recorded ~~expense~~income pertaining to changes in the fair-value of acquired contingent consideration of ~~$21.9~~$50.9 million for the ~~nine-month~~three-month period ended September 30, ~~2018~~2019 as compared to an expense of ~~$16.8~~$22.7 million for the ~~nine-month~~three-month period ended September 30, ~~2017. Changes~~2018. The changes in the fair-value of the acquired contingent

consideration were due to the re-calculation of discounted cash flows for the passage of time and ~~changes~~updates to certain other estimated assumptions.

Other expense, net was ~~$13.9~~$4.2 million for the nine-month period ended September 30, 2018 compared to other expense of $14.1 million for the nine-month period ended September 30, 2017, a decrease in expense of $0.2 million. The decrease was due primarily to an increase in interest income of approximately $2.3 million and a decrease in realized losses on foreign currency exchange of approximately $0.4 million partially offset by an increase in interest and amortization of debt discount expense of $2.5 million.

~~For the nine-month~~three-month periods ended September 30, ~~2018~~2019 and ~~2017,~~2018.

For the three-month periods ended September 30, 2019 and 2018, the Company recorded a ~~$49.8~~provision of $0.02 million and ~~$23.4~~$38.0 million ~~provision~~ for income taxes, respectively. The effective income tax rates for the Company for the ~~nine-month~~three-month periods ended September 30, 2019 and 2018 were 0% and ~~2017 were 67.4% and (81.1%)~~157.8%, respectively. The variance in the effective tax rates for the ~~nine-month~~three-month period ended September 30, ~~2018~~2019 as compared to the ~~nine-month~~three-month period ended September 30, ~~2017~~2018 was due primarily to differences in pre-tax book income between the periods, ~~the decrease in the federal statutory~~goodwill impairment for which no tax ~~rate as a result of tax reform,~~benefit is recognized, the valuation allowance recorded on deferred tax assets for which no tax benefit can be recognized, state taxes, and the reduction in the research and development tax credit.

We recognize product sales of Inbrija following receipt of product by companies in our distribution network, which primarily includes specialty pharmacy providers and ASD Specialty Healthcare, Inc. We recognized net revenue from the sale of Inbrija of $9.2 million for the nine-month period ended September 30, 2019.

Discounts and allowances which are included as an offset in net revenue consist of allowances for customer credits, including estimated chargebacks, rebates, returns and discounts. Discounts and allowances are recorded following shipment of our products to our customers. Adjustments are recorded for estimated chargebacks, rebates, and discounts. Discounts and allowances also consist of discounts provided to Medicare beneficiaries whose prescription drug costs cause them to be subject to the Medicare Part D coverage gap (i.e., the “donut hole”). Payment of coverage gap discounts is required under the

Affordable Care Act, the health care reform legislation enacted in 2010. Discounts and allowances may increase as a percentage of sales as we enter into managed care contracts in the future.

We recognized net revenue from the sale of other products of $1.8 million for the nine-month period ended September 30, 2019 as compared to $2.5 million for the nine-month period ended September 30, 2018.

We recognized $8.6 million and $8.9 million in royalty revenue for the nine-month periods ended September 30, 2019 and 2018, respectively related to ex-U.S. sales of Fampyra by Biogen.

We recorded cost of sales of $26.2 million for the nine-month period ended September 30, 2019 as compared to $76.2 million for the nine-month period ended September 30, 2018. Cost of sales for the nine-month period ended September 30, 2019 consisted primarily of $24.9 million in inventory costs related to recognized revenues, $0.7 million in royalty fees based on net product shipments and $0.5 million for costs related to sales of the authorized generic version of Ampyra. Cost of sales for the nine-month period ended September 30, 2018 consisted primarily of $68.2 million in inventory costs related to recognized revenues, $7.5 million in royalty fees based on net product shipments and $0.2 million for costs related to sales of the authorized generic version of Ampyra. Cost of sales for inventory manufactured pre-launch for Inbrija was not recorded for the nine-month period ended September 30, 2019, since the inventory manufactured prior to the FDA approval was expensed as research and development expense as incurred and was combined with other research and development expenses in 2018.

We recorded amortization of intangible asset related to Inbrija of $17.9 million for the nine-month period ended September 30, 2019 as compared to $1.7 million related to Ampyra for the nine-month period ended September 30, 2018.

Research and development expenses for the nine-month period ended September 30, 2019 were $51.1 million as compared to $79.3 million for the nine-month period ended September 30, 2018, a decrease of approximately $28.2 million, or 35.6%. The decrease was due primarily to reductions in spending of $9.4 million due to the termination of the tozadenant development program, reductions in spending of $12.0 million due to the commercialization of Inbrija, and decreases in overall salaries and benefits and certain other programs of $6.8 million.

Sales and marketing expenses for the nine-month period ended September 30, 2019 were $86.3 million compared to $68.7 million for the nine-month period ended September 30, 2018, an increase of approximately $17.6 million, or 25.6%. The increase was attributable primarily to an increase in marketing related spending of $22.9 million due to launch activities for Inbrija, partially offset by a decrease in overall salaries and benefits of $2.3 million and a decrease in spending related to marketing for Ampyra of $3.0 million.

General and administrative expenses for the nine-month period ended September 30, 2019 were $65.3 million compared to $66.7 million for the nine-month period ended September 30, 2018, a decrease of approximately $1.4 million, or 2.0%. The decrease was primarily due to a reduction in salaries and benefits related costs of $2.1 million, business development costs of $1.8 million and legal costs and certain other costs of $2.6 million, partially offset by an increase in spending related of launch activities of $2.8 million and costs related to medical affairs of $2.2 million.

We recognized a goodwill impairment charge of $277.6 million in the nine-month period ended September 30, 2019. During the third quarter of 2019, we experienced a significant decline in our stock price that reduced the market capitalization below the carrying value of the Company. We performed a quantitative assessment and after completing the assessment during the third quarter of 2019, we concluded that the carrying value of the Company exceeded its estimated fair value as of September 30, 2019 and therefore, the goodwill was fully impaired. We did not recognize any goodwill impairment charge in the nine-month period ended September 30, 2018.

As a result of the original Civitas spin out of Alkermes, part of the consideration to Alkermes was a future royalty to be paid to Alkermes on Civitas products. Acorda acquired this contingent consideration as part of the Civitas acquisition. The fair value of those future royalties is assessed quarterly. We recorded income pertaining to changes in the fair-value of acquired contingent consideration of $56.3 million for the nine-month period ended September 30, 2019 as compared to an expense of $21.9 million for the nine-month period ended September 30, 2018. The changes in the fair-value of the acquired contingent consideration were primarily due to the re-calculation of discounted cash flows for the passage of time and updates to certain other estimated assumptions.

Other expense, net was $13.0 million for the nine-month period ended September 30, 2019 as compared to $13.9 million for the three month period ended September 30, 2018. This was due primarily to an increase in interest income of $0.8 million.

For the nine-month periods ended September 30, 2019 and 2018, the Company recorded a $0.5 million benefit and a $49.8 million provision for income taxes, respectively. The effective income tax rates for the Company for the nine-month periods ended September 30, 2019 and 2018 were 0.14% and 67.4%, respectively. The variance in the effective tax rates for the nine-month period ended September 30, 2019 as compared to the nine-month period ended September 30, 2018 was due primarily to differences in pre-tax book income between the periods, goodwill impairment for which no tax benefit is recognized, the valuation allowance recorded on deferred tax assets for which no tax benefit can be recognized, state taxes, and the reduction in the research and development tax credit.

The Company continues to evaluate the realizability of its deferred tax assets on a quarterly basis and will adjust such amounts in light of changing facts and circumstances including, but not limited to, future projections of taxable income, tax legislation, rulings by relevant tax authorities, the progress of ongoing tax audits and the regulatory approval of products currently under development. Any changes to the valuation allowance or deferred tax assets and liabilities in the future would impact the Company's income taxes

Since our inception, we have financed our operations primarily through private placements and public offerings of our common stock and preferred stock, ~~a convertible debt offering,~~ payments received under our collaboration and licensing agreements, sales of Ampyra, Fampyra, Zanaflex and Qutenza, and, to a lesser extent, from loans, government and non-government grants and other financing arrangements. We expect sales of Inbrija to become a source of financing for our operations.

At September 30, ~~2018,~~2019, we had ~~$460.9~~$253.2 million of cash, cash equivalents and short-term investments, compared to ~~$307.1~~$445.6 million at December 31, ~~2017.~~2018. We expect that our existing cash and cash flows from operations will be sufficient to fund our ongoing operations over the next 12 months from the financial statement filing date.

~~In April 2017, following a Federal District Court’s decision which invalidated certain of~~ As discussed in greater detail below, the Company’s patents relating to Ampyra, we implemented a corporate restructuring to reduce our cost structure and focus our resources on our most important and valuable initiatives, including our Inbrija development program and maximizing Ampyra value. As part of this restructuring, we reduced headcount by approximately 20%. The majority of the reduction was completed in April 2017. We believe that the operating expense reductions from the restructuring, as well as additional expense reductions due to the terminationprincipal of our ~~tozadenant development program~~Convertible Senior Notes due 2021 becomes due and payable in ~~November 2017, will enable us~~June 2021. We intend to ~~fund operations through the launch~~opportunistically repurchase or refinance such indebtedness prior to maturity, which may include issuance of ~~Inbrija, pending approval from the FDA. However, there can be no guarantee that we will have sufficient funding to do so. We may need to seek additional~~new debt or equity, privately negotiated exchange transactions and/or debt financing or strategic collaborations to complete our product development activities, and could require substantial funding to commercialize any products that we successfully develop. We may not be able to raise additional capital on favorable terms, or at all.open-market repurchases.

Our future capital requirements will depend on a number of factors, including the amount of revenue generated from sales of ~~Ampyra, the time of approval (if ever)~~Inbrija and ~~launch of Inbrija,~~Ampyra, the continued progress of our research and development activities, the amount and timing of milestone or other payments payable under collaboration, license and acquisition agreements, the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims and other intellectual property rights, and capital required or used for future acquisitions or to in-license new products and compounds including the development costs relating to those products or compounds. To the extent our capital resources are insufficient to meet future operating requirements we will need to raise additional capital, reduce planned expenditures, or incur

indebtedness to fund our operations. If we require additional financing in the future, we cannot assure you that it will be available to us on favorable terms, or at all.

In June 2014, the Company entered into an underwriting agreement (the Underwriting Agreement) with J.P. Morgan Securities LLC (the Underwriter) relating to the issuance by the Company of $345 million aggregate principal amount of 1.75% Convertible Senior Notes due 2021 (the Notes) in an underwritten public offering pursuant to the Company’s Registration Statement on Form S-3 (the Registration Statement) and a related preliminary and final prospectus supplement, filed with the Securities and Exchange Commission (the Offering). The net proceeds from the offering, after deducting the Underwriter’s discount and the offering expenses paid by the Company, were approximately $337.5 million.

The Notes are governed by the terms of an indenture, dated as of June 23, 2014 (the Base Indenture) and the first supplemental indenture, dated as of June 23, 2014 (the Supplemental Indenture, and together with the Base Indenture, the Indenture), each between the Company and Wilmington Trust, National Association, as trustee (the Trustee). The Notes will be convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, based on an initial conversion rate, subject to adjustment, of 23.4968 shares per $1,000 principal amount of Notes (which represents an initial conversion price of approximately $42.56 per share), only in the following circumstances and to the following extent: (1) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (2) during any calendar quarter commencing after the calendar quarter ending on September 30, 2014 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (3) if the Company calls any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; (4) upon the occurrence of specified events described in the Indenture; and (5) at any time on or after December 15, 2020 through the second scheduled trading day immediately preceding the maturity date. As of September 30, ~~2018,~~2019, the Notes did not meet the criteria to be convertible.

The Company may redeem for cash, all or part of the Notes, at the Company’s option, ~~on or~~ after June 20, 2017 if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending within five trading days prior to the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

The Company will pay 1.75% interest per annum on the principal amount of the Notes, payable semiannually in arrears in cash on June 15 and December 15 of each year.

If the Company undergoes a “fundamental change” (as defined in the Indenture), subject to certain conditions, holders may require the Company to repurchase for cash all or part of their Notes in principal amounts of $1,000 or an integral multiple thereof. The fundamental change repurchase price will be equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. If a make-whole fundamental change, as described in the Indenture, occurs and a holder elects to convert its Notes in connection with such make-whole fundamental change, such holder may be entitled to an increase in the conversion rate as described in the Indenture.

The Indenture contains customary terms and covenants and events of default. If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company) occurs and is continuing, the Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding Notes by notice to the Company and the Trustee, may declare 100% of the principal of and accrued and unpaid interest, if any, on all the Notes to be due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately. Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving the Company,

100% of the principal and accrued and unpaid interest, if any, on all of the Notes will become due and payable automatically. Notwithstanding the foregoing, the Indenture provides that, to the extent the Company elects and for up to 270 days, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right to receive additional interest on the Notes.

In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Notes as a whole. The excess of the principal amount of the liability component over its carrying amount, referred to as the debt discount, is amortized to interest expense over the seven-year term of the Notes using the effective interest method. The equity component is not re-measured as long as it continues to meet the conditions for equity classification.

Our outstanding note balances as of September 30, ~~2018~~2019 consisted of the following:

~~The Non-Convertible Capital Loans (“Tekes Loans”) which~~Non-convertible capital loans were granted ~~to Biotie~~ by ~~Tekes, a Finnish Funding Agency for Technology and Innovation, had a~~Business Finland (formerly Tekes), with an adjusted acquisition-date fair value of $20.5 million (€18.2 million) ~~at the date of acquisition. The Tekes loans have~~and a carrying value of ~~approximately $23.4~~$24.0 million as of September 30, ~~2018.~~2019. The ~~Tekes Loans consist~~loans are composed of fourteen non-convertible loans. The loans ~~that~~ bear interest based on the greater of 3% or the base rate set by Finland’s Ministry of Finance minus one (1) percentage point. The maturity dates for these loans range from eight to ten years from the date of issuance, however, according to certain terms and conditions of the loans, ~~Biotie~~the Company may repay the principal and accrued and unpaid interest of the loans only when the consolidated retained earnings of Biotie is sufficient to fully repay the loans.

~~The~~ Research and Development Loans (“R&D Loans”) ~~which~~ were granted ~~to Biotie~~ by ~~Tekes had a~~Business Finland with an acquisition-date fair value of $2.9 million (€2.6 million) ~~at the date of acquisition. The R&D Loans have~~and a carrying value of ~~approximately $1.9~~$1.2 million as of September 30, ~~2018.~~2019. The R&D Loans bear interest based on the greater of 1% or the base rate set by Finland’s Ministry of Finance minus three (3) percentage points. The ~~principal on~~repayment of these loans began in January 2017. The loan principal will be paid in ~~five~~ equal annual installments ~~beginning in 2017 through~~over a 5 year period, ending January 2021.

At September 30, ~~2018,~~2019, cash, cash equivalents and short-term investment were approximately ~~$460.9~~$253.2 million, as compared to ~~$307.1~~$445.6 million at December 31, ~~2017.~~2018. Our cash equivalents consist of highly liquid investments with original maturities of three months or less at date of purchase and consist of ~~time deposits and~~ investments in a Treasury money market ~~funds.~~fund. Our short term investments consist of high-grade corporate debt securities, ~~and~~ commercial paper and U.S. government securities with original maturities of twelve months or less at date of purchase. Also, we maintain cash balances with financial institutions in excess of insured limits. We do not anticipate any losses with respect to such cash balances.

Net cash ~~provided by~~used in operations was ~~$163.1~~$116.7 million for the nine-month period ending September 30, ~~2018.~~2019. Cash ~~provided~~used by operations for the nine-month period ended September 30, ~~2018~~2019 was primarily due to net ~~income~~loss of ~~$24.1~~$338.6 million, ~~a decrease in accounts receivable~~non-cash royalty revenue of ~~$29.9~~$7.6 million, deferred tax benefit of $3.7 million, a change in contingent consideration liability of ~~$21.9~~$56.3 million, amortization of net premiums and discounts on investments of $1.3 million and a decrease in accounts payable and accrued expenses of $56.1 million. This was offset by a goodwill impairment charge of $277.6 million, a decrease in accounts receivable of $5.9 million, stock compensation expense of ~~$16.2~~$11.5 million, depreciation and amortization of ~~$9.1~~$24.7 million, a decrease in inventory of $1.6 million, amortization of debt discount and debt issuance costs of ~~$11.9 million, deferred tax provision of $42.6~~$12.2 million, and a decrease in ~~inventory of $26.7 million. This was partially offset by a decrease in accounts payable~~other prepaid expenses and ~~accrued expenses of $5.5 million, non-cash royalty revenue of $7.8 million, and an increase in~~ other current assets of ~~$5.3~~$13.7 million

Net cash used in investing activities for the nine-month period ended September 30, ~~2018~~2019 was ~~$162.0~~$56.5 million, which was due primarily to purchases of short-term investments and property and equipment of ~~$191.7~~$171.4 million and ~~$22.5~~$76.4 million, respectively. This was partially offset by proceeds from maturities of investments of ~~$52.5~~$191.3 million.

Net cash ~~provided by~~used in financing activities for the nine-month period ended September 30, ~~2018~~2019 was ~~$12.7~~$0.7 million, which was primarily due to ~~$15.0 million in net proceeds from~~ the ~~issuance of common stock and stock option exercises, partially offset by the repurchase of treasury stock of $1.6 million and~~ repayment of loans payable of ~~$0.7~~$0.6 million and purchases of treasury stock of $0.1 million.

A summary of our minimum contractual obligations related to our material outstanding contractual commitments is included in Note 14 of our Annual report on Form 10-K ~~as amended by Amendment No. 1 on Form 10-K/A,~~ for the year ended December 31, ~~2017.~~2018. Our long-term contractual obligations include commitments and estimated purchase obligations entered into in the normal course of business.

Under certain agreements, we are required to pay royalties or license fees and milestones for the use of technologies and products in our R&D activities and in the commercialization of products. The amount and timing of any of the foregoing payments are not known due to the uncertainty surrounding the successful research, development and commercialization of the products. During the nine-month period ended September 30, ~~2018,~~2019, commitments related to the purchase of inventory ~~increased~~decreased as compared to December 31, ~~2017.~~2018. As of September 30, ~~2018,~~2019, we have inventory-related purchase commitments totaling approximately ~~$30.4~~$2.0 million.

Our critical accounting policies are detailed in our Annual Report on Form 10-K ~~as amended by Amendment No. 1 on Form 10-K/A,~~ for the year ended December 31, ~~2017.~~2018. As of September 30, ~~2018,~~2019, with the exception of the adoption of ASU ~~2014-09, “Revenue from Contracts with Customers”~~2016-02, “Leases” (Topic ~~606)~~842), ASU ~~2016-15~~2018-05, “Income Taxes” (Topic 740), ASU 2018-09, “Codification Improvements”, ASU 2017-04, “Intangibles – Goodwill and Other” (Topic 350) and ASU ~~2016-18 “Statement of Cash Flows”~~2018-02, “Income Statement—Reporting Comprehensive Income” (Topic ~~230)~~220), ASU 2017-09, “Compensation – Stock Compensation” (Topic 718): Scope of Modification Accounting and ASU 2017-01, and “Business Combinations” (Topic 805): Clarifying the Definition of a Business, our critical accounting policies have not changed materially from December 31, ~~2017.~~2018.

During the second quarter of 2019, we experienced a significant decline in our stock price that reduced the market capitalization below the carrying value of the Company. This circumstance required the Company to perform a quantitative assessment to assess the value of the goodwill for impairment. The Company performed an assessment of the goodwill and concluded that there was no impairment. During the third quarter of 2019, we experienced a further significant decline in our stock price that reduced the market capitalization further below the carrying value of the Company. The Company performed a quantitative assessment of the goodwill and concluded that there was an impairment to the goodwill. The Company utilized the income approach in the goodwill assessment process. The determination of the fair value of the reporting unit requires us to make significant estimates and assumptions. This valuation approach considers a number of factors that include, but are not limited to, prospective financial information, growth rates, terminal value, and discount rates and require us to make certain assumptions and estimates. When performing our income approach, we incorporate the use of projected financial information and a discount rate that are developed based on certain assumptions. Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates. The Company then corroborates the reasonableness of the total fair value of the reporting unit by reconciling the aggregate fair value of the reporting unit to the Company’s total market capitalization adjusted to include an estimated control premium. The estimated control premium is derived from reviewing observable transactions involving the purchase of controlling interests in comparable companies. The market capitalization is calculated using the relevant shares outstanding and the closing stock price at the test date. After completing our impairment assessment during the third quarter of 2019, we concluded that the carrying value of the Company exceeded its estimated fair value as of September 30, 2019 and therefore, the goodwill was fully impaired. The Company recorded an impairment charge of $277.6 million for the three and nine month periods ended September 30, 2019 in the statement of operations.

The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful lives of its long-lived assets, including identifiable intangible assets subject to amortization and property plant and equipment, may warrant revision or that the carrying value of the assets may be impaired. Factors the Company considers important that could trigger an impairment review include significant changes in the use of any assets, changes in historical trends in operating performance, changes in projected operating performance, stock price, loss of a major customer and significant negative economic trends. The decline in the trading price of the Company's common stock during the quarter ended September 30, 2019 and related decrease in the Company's market capitalization was determined to be a triggering event in connection with the Company's review of the recoverability of its long-lived assets for the three-month period ended September 30, 2019. The Company performed a recoverability test during the third quarter of fiscal 2019 using the undiscounted cash flows, which are the sum of the future undiscounted cash flows expected to be derived from the direct use of the long-lived assets to the carrying value of the long-lived assets. Estimates of future cash flows were based on the Company’s own assumptions about its own use of the long-lived assets. The cash flow estimation period was based on the long-lived assets’ estimated remaining useful life to the Company. After performing the recoverability test, the Company determined that the undiscounted cash flows exceeded the carrying value and the long-lived assets were not impaired. Changes in these assumptions and resulting valuations or further declines in our stock price could result in future long-lived asset impairment charges. Management will continue to monitor any changes in circumstances for indicators of impairment. Any write‑downs are treated as permanent reductions in the carrying amount of the assets.

Our financial instruments consist of cash equivalents, short-term investments, convertible senior notes, non-convertible capital loans, research and development loans and accounts payable. The estimated fair values of all of our financial

instruments approximate their carrying values at September 30, ~~2018,~~2019, except for the fair value of the Company’s convertible senior notes which was approximately ~~$298.4~~$264.3 million as of September 30, ~~2018.~~2019.

We have cash equivalents and short-term investments at September 30, ~~2018,~~2019, which are exposed to the impact of interest rate changes and our interest income fluctuates as our interest rates change. Due to the nature of our investments in money market funds, high-grade corporate bonds, ~~and~~ commercial paper and U.S. government securities, the carrying value of our cash equivalents and ~~short-~~

~~term~~short-term investments approximate their fair value at September 30, ~~2018.~~2019. At September 30, ~~2018,~~2019, we held ~~$460.9~~$253.2 million in cash, cash equivalents and short-term investments which had an average interest rate of approximately ~~1.9%~~2.4%.

We maintain an investment portfolio in accordance with our investment policy. The primary objective of our investment policy is to preserve principal, maintain proper liquidity and to meet operating needs. Although our investments are subject to credit risk, our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure from any single issue, issuer or type of investment. Our investments are also subject to interest rate risk and will decrease in value if market interest rates increase. However, interest rate risk is mitigated due to the conservative nature and relatively short duration of our investments.

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the Exchange Act) we carried out an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the third quarter of ~~2018,~~2019, the period covered by this report. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief, Business Operations and Principal Accounting Officer. Based on that evaluation, these officers have concluded that, as of September 30, ~~2018,~~2019, our disclosure controls and procedures were effective to achieve their stated purpose.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations, and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief, Business Operations and Principal Accounting Officer, as appropriate, to allow timely decisions regarding disclosure.

In connection with the evaluation required by Exchange Act Rule 13a-15(d), our management, including our Chief Executive Officer and Chief, Business Operations and Principal Accounting Officer, concluded that there were no changes in our internal control over financial reporting during the quarter ended September 30, ~~2018,~~2019, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Beginning January 1, ~~2018,~~2019, we implemented ASC ~~606~~842 - ~~Revenue from Contracts with Customers~~Leases. As a result of our implementation of ASC ~~606,~~842, in the first quarter of 2019 we enhanced our control documentation related to revenue, although, with the exception of the adjustments to the recognition of our license revenue, the adoption of ASC 606 did not have a significant impact on our results of operations, cash flows, or financial position.lease accounting. The enhancements included ~~revisions to our revenue recognition policy to apply the five-step model provided for in ASC 606 and other~~ documentation enhancements to support ongoing monitoring activities in order to provide reasonable assurance regarding the fair presentation of our consolidated financial statements and related disclosures.

Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

~~Overview.~~ ~~As further described below, we~~We have been engaged in litigation with certain generic drug manufacturers relating to our five initial Orange Book-listed Ampyra patents. We filed lawsuits against these generic drug manufacturers in response to their submitting Abbreviated New Drug Applications, or ANDAs, to the FDA seeking marketing approval for generic versions of Ampyra (dalfampridine) Extended Release Tablets, 10mg. As previously reported, we settled with some, but not all, of these companies. In March 2017, the U.S. District Court for the District of Delaware (the “District Court”) rendered a decision from a bench trial held in September 2016. The District Court upheld our Ampyra Orange Book-listed patent that expired in July 2018, but invalidated the four other Orange Book-listed patents pertaining to Ampyra that ~~are~~were the subject of the litigation that were set to expire between 2025 and 2027. We appealed the decision on the four invalidated patents to the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”), which issued a ruling on September 10, 2018 upholding the District Court’s decision (the “Appellate Decision”). In ~~October 2018, we filed a~~January 2019, the Federal Circuit denied our petition for rehearing en ~~banc~~ ~~regarding~~banc. On October 7, 2019, the ~~Appellate Decision at the Federal Circuit, which subsequently invited the generic drug manufacturers to respond to~~U.S. Supreme Court denied our petition.

A sixth Ampyra patent was recently issued and listed in the Orange Book. We note that this patent does not entitle us to any additional statutory stay of approval under the Hatch-Waxman Act against the generic drug manufacturers that are involved in the patent litigation.

~~First ANDA Filers.~~ In June and July of 2014, we received separate Paragraph IV Certification Notices from Accord Healthcare, Inc. (“Accord”), Actavis Laboratories FL, Inc. ("Actavis"), Alkem Laboratories Ltd. and its affiliate Ascend Laboratories, LLC ("Alkem"), Apotex Inc. (“Apotex”), Aurobindo Pharma Ltd. ("Aurobindo"), Mylan Pharmaceuticals Inc. (“Mylan”), Roxane Laboratories, Inc., and Teva Pharmaceuticals USA, Inc., advising that each of these companies had submitted an ANDA to the FDA seeking marketing approval for ~~generic versions of Ampyra (dalfampridine) Extended Release Tablets, 10 mg. The ANDA filers challenged the validity~~certiorari requesting review of the five initial Orange Book-listed patents for Ampyra, and they also asserted that generic versions of their products do not infringe certain claims of these patents. In response to the filing of these ANDAs, in July 2014, we filed lawsuits against these generic drug manufacturers and certain affiliates in the District Court asserting infringement of our U.S. Patent Nos. 5,540,938, 8,007,826, 8,354,437, 8,440,703, and 8,663,685. Requested judicial remedies included recovery of litigation costs and injunctive relief, including a request that the effective date of any FDA approval for these generic companies to make, use, offer for sale, sell, market, distribute, or import the proposed generic products be no earlier than the dates on which the Ampyra Orange Book-listed patents expire, or any later expiration of exclusivity to which we are or become entitled. These lawsuits with the ANDA filers were consolidated into a single case.

~~A bench trial was completed in September 2016, and the District Court issued a decision in March 2017. The District Court upheld~~ U.S. Patent No. 5,540,938 (the ‘938 patent), which expired on July 30, 2018, but invalidated U.S. Patent Nos. 8,663,685, 8,007,826, 8,440,703, and 8,354,437. In May 2017, we appealed the ruling on these patents to the Federal Circuit. The Federal Circuit issued a decision on September 10, 2018 upholding the District Court’s decision. We are experiencing a rapid and significant decline in Ampyra sales due to competition from generic versions of Ampyra that are being marketed following the decision of the Federal Circuit, including our own authorized generic version being marketed by Mylan AG. Mylan announced the U.S. launch of the authorized generic in mid-September 2018. We expect that additional manufacturers will market generic versions of Ampyra, which may accelerate the decline in Ampyra sales. ~~In October 2018, we filed a petition for rehearing~~ ~~en banc~~ ~~regarding the Appellate Decision at the Federal Circuit, which subsequently invited the generic drug manufacturers to respond to our petition.~~

As previously reported, prior to the 2017 District Court decision, we entered into settlement agreements with Accord, Actavis, Alkem, Apotex and Aurobindo (and certain affiliates). More recently, in August 2018, we reported a conditioned settlement agreement with Mylan.

~~Second ANDA Filers.~~ In 2015 and 2017, we received Paragraph IV Certification Notices from Sun Pharmaceutical Industries Limited, Sun Pharmaceuticals Industries Inc., Par Pharmaceutical, Inc., and Micro Labs Ltd. advising that each of these companies had submitted ANDAs to the FDA seeking marketing approval for generic versions of Ampyra (dalfampridine) Extended Release Tablets, 10 mg. These ANDA filers challenged the validity of four of the five initial

Orange Book-listed patents for Ampyra, and did not file against our U.S. Patent No. 5,540,938, and also asserted that generic versions of their products may not infringe certain claims of these patents. In response to the filing of the ANDAs, as previously reported, we filed lawsuits against these companies that were subsequently settled.

Item 1 of Part II of our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2019, and June 30, ~~2018,~~2019, include prior updates to the legal proceedings described above.

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, Item 1A. Risk Factors, in our Annual Report on Form 10-K ~~as amended by Amendment No. 1 on Form 10-K/A~~ for the year ended December 31, ~~2017,~~2018, as updated in our Quarterly Reports subsequently filed during the current fiscal year, all of which could materially affect our business, financial condition or future results. These risks are not the only risks facing our C ~~ompany.~~Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. Following is the restated text of certain risk factors to report changes since our publication of risk factors in our 2017 Annual Report on Form 10-K, as amended by Amendment No. 1 on Form 10-K/A and our updates in subsequent Quarterly Reports on Form 10-Q.

We have a history of operating losses and may not be able to achieve or sustain profitability in the future; we are and will remain substantially dependent on revenues from the sale of Ampyra, which are rapidly and significantly declining due to generic competition, unless and until we obtain marketing approval for, and can commercially launch, Inbrija (levodopa inhalation powder).

We have been highly dependent on the sales of Ampyra in the U.S. and derive substantially all of our revenue from the sale of Ampyra. Our Orange Book-listed patents have been the subject of litigation with certain generic drug manufacturers, who submitted Abbreviated New Drug Applications, or ANDAs, to the FDA seeking marketing approval for generic versions of Ampyra (dalfampridine) Extended Release Tablets, 10mg. In 2017, the United States District Court for the District of Delaware (the “District Court”) issued a ruling upholding our Ampyra Orange Book-listed patent that expired on July 30, 2018, but invalidating our four other Orange Book-listed patents pertaining to Ampyra set to expire between 2025 and 2027. Under this ruling, our patent exclusivity with respect to Ampyra terminated on July 30, 2018. We appealed the decision on the four invalidated patents to the United States Court of Appeals for the Federal Circuit, which issued a ruling on September 10, 2018 upholding the District Court’s decision (the “Appellate Decision”). We are experiencing a rapid and significant decline in Ampyra sales due to competition from generic versions of Ampyra that are being marketed following the Appellate Decision. We expect that additional manufacturers will market generic versions of Ampyra, which may accelerate the decline in Ampyra sales.

As of September 30, 2018, we had an accumulated deficit of approximately $403.4 million. We had net losses of $223.4 million for the year ended December 31, 2017 and $34.6 million for the year ended December 31, 2016. ~~Our prospects for achieving and sustaining profitability in the future will depend primarily on how successful we are in:~~

If we are not successful in executing our business plan, we may not achieve or sustain profitability and even if we do so, we may not meet sales expectations. Also, even if we are successful in executing our business plan, our profitability may

fluctuate from period to period due to our level of investments in sales and marketing, research and development, and product and product candidate acquisitions. For example, in 2018 and 2019 we expect to invest a significant amount to support our most advanced program, Inbrija.

~~Our restructuring may not adequately reduce our expenses, and we may encounter difficulties associated with the related organizational change.~~

In April 2017, following a decision by the United States District Court for the District of Delaware to invalidate certain patents relating to Ampyra, which has been upheld by the Court of Appeals for the Federal Circuit, (the “Federal Circuit”), we implemented a corporate restructuring to reduce our cost structure and focus our resources on Inbrija (levodopa inhalation powder) and our other strategic priorities. As part of this restructuring, we reduced headcount by approximately 20%. If our restructuring does not adequately reduce our expenses, further restructuring activities may be required in the future. In any event, the benefits of the restructuring are not expected to offset the loss of revenues from decreased long-term Ampyra sales following the invalidation of our patents. We are experiencing a rapid and significant decline in revenues due to competition from generic versions of Ampyra that are being marketed following the decision of the Federal Circuit. We expect that additional manufacturers will market generic versions of Ampyra, which may accelerate the decline in revenues.

~~Our~~ ~~restructuring~~ may have other unintended consequences as well, including, for example, making it more difficult for us to attract and retain highly skilled personnel in a competitive environment. We may also experience operational disruptions from our reduction in personnel. The loss of key personnel such as regulatory or manufacturing functions could disrupt our operations and sales force attrition could harm our ability to maintain Ampyra sales and, if we obtain FDA approval for Inbrija, commercialize that product.

Our research, development, preclinical and clinical trial activities, as well as the manufacture and marketing of any products that we have developed or in the future may successfully develop, are subject to an extensive regulatory approval process by the FDA and other regulatory agencies abroad.

In order to conduct clinical trials to obtain FDA approval to commercialize any drug or biological product candidate, an investigational new drug, or IND, application must first be submitted to the FDA and must become effective before clinical trials may begin. Subsequently, if the product candidate is regulated as a drug, a new drug application, or NDA, must be submitted to the FDA and approved before commercial marketing may begin. The NDA must include the results of adequate and well-controlled clinical trials demonstrating, among other things, that the product candidate is safe and effective for use in humans for each target indication. If the product candidate, such as an antibody, is regulated as a biologic, a biologic license application, or BLA, must be submitted and approved before commercial marketing may begin. Extensive submissions of preclinical and clinical trial data are required to demonstrate the safety, potency and purity for each intended use. The FDA may refuse to accept our regulatory submissions for filing if they are incomplete. For example, in August 2017, we received a “Refuse to File,” or RTF, letter from the FDA regarding the NDA we had submitted in June 2017 for Inbrija (levodopa inhalation powder), to treat symptoms of OFF periods in people with Parkinson's disease taking a carbidopa/levodopa regimen. The FDA specified two reasons for the RTF: first, the date when the manufacturing site would be ready for inspection, and second, a question regarding the submission of the drug master production record. The FDA also requested that we submit additional information when we resubmit the NDA, though this was not part of the basis for the RTF. We resubmitted the Inbrija NDA in December 2017. In February 2018, the resubmitted NDA was accepted for filing by the FDA, and under the Prescription Drug User Fee Act, or PDUFA, the FDA set a goal date of October 5, 2018 for its review of the NDA. On September 13, 2018, we announced that the FDA extended the PDUFA date to January 5, 2019. ~~Of the large number of drugs in development, only a small percentage result in the submission of an NDA or BLA to the FDA, and even fewer are approved for commercialization.~~

The process of obtaining required regulatory approvals for drugs is lengthy, expensive and uncertain. Any regulatory approvals may be for fewer or narrower indications than we request, may include distribution restrictions, or may be conditioned on burdensome post-approval study or other requirements, including the requirement that we institute and follow a special risk evaluation and mitigation strategy, or REMS, to monitor and manage potential safety issues, all of which may eliminate or reduce the drug's market potential. Additional adverse events that could impact commercial success, or even continued regulatory approval, might emerge with more extensive post-approval patient use. Investigational products, such as Inbrija, are regulated as combination products and require that we satisfy FDA that both the drug and device component of the products satisfy FDA requirements. Failure to satisfy the FDA’s requirements for either the drug or device component of Inbrija or other such combination products could delay approval of these products or result in these products not receiving FDA approval.

Any product for which we currently have or may in the future obtain marketing approval is subject to continual post-approval requirements including, among other things, record-keeping and reporting requirements, packaging and labeling requirements, requirements for reporting adverse drug experiences, import/export controls, restrictions on advertising and promotion, cGMP requirements as well as any other requirements imposed by the applicants NDA or BLA. All of our products and operations are subject to periodic inspections by the FDA and other regulatory bodies. Regulatory approval of a product may be subject to limitations on the indicated uses for which the product may be marketed or to other restrictive conditions of approval that limit our ability to promote, sell or distribute a product. Furthermore, any approval may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product. Post-market evaluation of a product could result in marketing restrictions or withdrawal from the market.

We may fail to comply with existing legal or regulatory requirements or be slow to adapt, or be unable to adapt, to new legal or regulatory requirements. We may encounter problems with our manufacturing processes, and we may discover previously unknown problems with our products. These circumstances could result in:

In addition, we are subject to regulation under other state and federal laws, including requirements regarding occupational safety, laboratory practices, environmental protection and hazardous substance control, controlled substances and we may be subject to other local, state, federal and foreign regulations. We cannot predict the impact of those regulations on us, although they could impose significant restrictions on our business and we may have to incur additional expenses to comply with them.

If our competitors develop and market products that are more effective, safer or more convenient than our approved products, or obtain marketing approval before we obtain approval of future products, our commercial opportunity will be reduced or eliminated.

Competition in the pharmaceutical and biotechnology industries is intense and is expected to increase. Many biotechnology and pharmaceutical companies, as well as academic laboratories, are involved in research and/or product development for various neurological conditions, including Parkinson’s disease, or PD, and multiple sclerosis, or MS.

Our competitors may succeed in developing products that are more effective, safer or more convenient than our products or the ones we have under development or that render our approved or proposed products or technologies noncompetitive or obsolete. In addition, our competitors may achieve product commercialization before we do. If any of our competitors develops a product that is more effective, safer or more convenient for patients, or is able to obtain FDA approval for commercialization before we do, we may not be able to achieve market acceptance for our products, which would harm our ability to generate revenues and recover the substantial development costs we have incurred and will continue to incur.

Our products may be subject to competition from lower-priced versions of such products and competing products imported into the U.S. from Canada, Mexico and other countries where there are government price controls or other market dynamics that cause the products to be priced lower.

~~Ampyra.~~ ~~Ampyra has become subject to competition from generic drug manufacturers.~~ In 2017, in litigation with certain generic drug manufacturers, the United States District Court for the District of Delaware (the “District Court”) issued a ruling upholding our Ampyra Orange Book-listed patent that expired on July 30, 2018, but invalidating four other Orange Book-listed patents that were set to expire between 2025 and 2027. Under this ruling, our patent exclusivity with respect to Ampyra terminated on July 30, 2018. The United States Court of Appeals for the Federal Circuit issued a ruling on September 10, 2018 upholding the District Court’s decision (the “Appellate Decision”).We are experiencing a rapid and significant decline in Ampyra sales due to competition from generic versions of Ampyra that are being marketed following the Appellate Decision. We expect that additional manufacturers will market generic versions of Ampyra, which may accelerate the decline in Ampyra sales.~~Our~~ ~~litigation with the generic drug manufacturers is described in further detail in Part II, Item I of this report.~~

In addition to competition from generic versions of Ampyra, we are aware of other companies developing products that may compete with Ampyra. These include Adamas Pharmaceuticals, Inc., which is developing ADS-5102 (amantadine hydrochloride) for patients with MS who have walking impairment, and Catalyst Pharmaceuticals, Inc., which is developing a 3,4-diaminopyridine product, licensed from Biomarin. Furthermore, several companies are engaged in developing products that include novel immune system approaches and cell therapy approaches to remyelination for the treatment of people with MS. These programs are in early stages of development and may compete in the future with Ampyra or some of our product candidates. In addition, in certain circumstances, pharmacists are not prohibited from formulating certain drug compounds to fill prescriptions on an individual patient basis, which is referred to as compounding. We are aware that at present compounded dalfampridine is used by some people with MS and it is possible that some people will want to continue to use compounded formulations even though Ampyra is commercially available.

~~Inbrija (levodopa inhalation powder)~~. If approved for the treatment of OFF periods, (re-emergence of symptoms) Inbrija would compete against on-demand therapies that aim to specifically address Parkinson’s disease symptoms. Apokyn, an injectable formulation of apomorphine, is approved for the treatment of OFF periods. Apokyn was approved for this use in the U.S. in 2004 and in Europe in 1993. Also, Sunovion Pharmaceuticals Inc. is developing a sublingual, or under the tongue, formulation of apomorphine. This program is in Phase 3 clinical development and could potentially be commercially launched ahead of Inbrija. In January 2018, Sunovion announced positive topline results from their pivotal Phase 3 study ~~for this program. In March 2018, Sunovion submitted~~ ~~a New Drug Application, or NDA,~~ ~~to the FDA, and in June 2018 they reported that the FDA accepted the NDA and that the expected action date by the FDA under the Prescription Drug User Fee Act is January 29, 2019~~.

The standard of care for the treatment of Parkinson’s disease is oral carbidopa/levodopa, but oral medication can be associated with wide variability in the timing and the amount of absorption and there are significant challenges in creating a regimen that consistently maintains therapeutic effects as Parkinson’s disease progresses. Inbrija may face competition from therapies that can limit the occurrence of OFF periods. Approaches to achieve consistent levodopa plasma concentrations include new formulations of carbidopa/levodopa, such as extended-release and intestinal infusions, and therapies that prolong the effect of levodopa. Amneal Pharmaceuticals, Inc. (formerly Impax Laboratories) has received FDA approval for RYTARY, an extended-release formulation of oral carbidopa/levodopa, and extended release formulations of oral and patch carbidopa/levodopa are being developed by others including Intec Pharma and Mitsubishi Tanabe Pharma Corporation. Also, Abbvie Inc. has developed a continuous administration of a gel-containing levodopa through a tube that is surgically implanted into the intestine. This therapy, known as Duopa, has been approved by the FDA and is approved in the EU.

One or more of our competitors may utilize their expertise in pulmonary delivery of drugs to develop and obtain approval for pulmonary delivery products that may compete with Inbrija and any other of our other ARCUS drug delivery technology product candidates. These competitors may include smaller companies such as Alexza Pharmaceuticals, Inc.,

MannKind Corporation, Pulmatrix, Inc. and Vectura Group plc and larger companies such as Allergan, Inc., GlaxoSmithKline plc and Novartis AG. If approved, our product candidates may face competition in the target commercial areas.

~~Our operations could be curtailed if we are unable to obtain any necessary additional financing on favorable terms or at all.~~

~~As of September 30, 2018,~~ we had approximately $460.9 million in cash and cash equivalents. We have product candidates in various stages of development, and each will require significant further investment to develop, test and obtain regulatory approval prior to commercialization. In connection with our corporate restructuring announced in 2017, we are focusing our resources on Inbrija (levodopa inhalation powder) and other strategic priorities. While we believe that the cost savings from the restructuring and subsequent operating expense reductions, as well as the cost savings from the discontinuation of our tozadenant program, will enable us to fund operations through the commercial launch of Inbrija, if approved by the FDA, there can be no guarantee that we will have sufficient funding to do so. We are experiencing a rapid and significant decline in Ampyra revenue due to the marketing of generic versions of Ampyra following the September 10, 2018 decision of the United States Court of Appeals for the Federal Circuit which upheld the United States District Court for the District of Delaware’s decision to invalidate certain Ampyra patents. We expect that additional manufacturers will market generic versions of Ampyra, which may accelerate the decline in Ampyra sales. Also, on September 13, 2018, we announced that the FDA extended the PDUFA goal date for its review of the NDA of Inbrija from October 5, 2018 to January 5, 2019. If there are further delays in the approval of Inbrija, or it fails to receive FDA approval, we may need to seek additional equity or debt financing or strategic collaborations to complete our product development activities, and could require substantial funding to commercialize any products that we successfully develop. We may not be able to raise additional capital on favorable terms or at all.

To the extent that we are able to raise additional capital through the sale of equity securities, the issuance of those securities would result in dilution to our stockholders. Holders of such new equity securities may also have rights, preference or privileges that are senior to yours. If additional capital is raised through the incurrence of indebtedness, we may become subject to various restrictions and covenants that could limit our ability to respond to market conditions, provide for unanticipated capital investments or take advantage of business opportunities. To the extent funding is raised through collaborations or intellectual property-based financings, we may be required to give up some or all of the rights and related intellectual property to one or more of our products, product candidates or preclinical programs. If we are unable to obtain sufficient financing on favorable terms when and if needed, we may be required to reduce, defer or discontinue one or more of our product development programs or devote fewer resources to marketing Ampyra or our other commercial products.

~~Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.~~

Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including our convertible senior notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. For example, we are experiencing a rapid and significant decline in Ampyra revenue due to the marketing of generic versions of Ampyra following the September 2018 decision of the United States Court of Appeals for the Federal Circuit to uphold the United States District Court for the District of Delaware’s decision to invalidate certain Ampyra patents. We expect that additional manufacturers will market generic versions of Ampyra, which may accelerate the decline in Ampyra sales. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

~~Our inability to attract and retain key management and other personnel, or maintain access to expert advisors, may hinder our ability to execute our business plan.~~

We are highly dependent on the services of Dr. Ron Cohen, our President and Chief Executive Officer, as well as the other principal members of our management and scientific, regulatory, manufacturing and commercial personnel. Our success depends in large part upon our ability to attract and retain highly qualified personnel with the knowledge and experience needed for these and other areas of our business. We face intense competition in our hiring efforts with other

pharmaceutical and biotechnology companies, as well as universities and nonprofit research organizations, and we may have to pay higher salaries to attract and retain qualified personnel. In addition, the discontinuation of our tozadenant program, ~~the~~ United States District Court for the District of Delaware’s decision to invalidate certain Ampyra patents (which has been upheld by the United States Court of Appeals for the Federal Circuit), and our 2017 reduction in force may impede our ability to attract and retain highly qualified personnel. We do not maintain "key man" life insurance policies on the lives of our officers, directors or employees. The loss of one or more of our key employees, or our inability to attract additional qualified personnel, could substantially impair our ability to implement our business plan, particularly our efforts to obtain regulatory approval for, and if approved, manufacture and successfully launch Inbrija.

We also have scientific, medical, clinical, marketing and other advisors who assist us in our research and development, clinical, and commercial strategies. These advisors are not our employees and may have commitments to, or consulting or advisory contracts with, other entities that may limit their availability to us. Similarly, they may have arrangements with other companies to assist in the development and commercialization of products that may compete with ours.

~~If we cannot protect, maintain and, if necessary, enforce our intellectual property, our ability to develop and commercialize our products will be severely limited.~~

Our success will depend in part on our and our licensors' ability to obtain, maintain and enforce patent and trademark protection for the technologies, compounds and products, if any, resulting from our licenses and research and development programs. Without protection for the intellectual property we use or intend to use, other companies could offer substantially identical products for sale without incurring the sizable discovery, research, development and licensing costs that we have incurred. Our ability to recover these expenditures and realize profits upon the sale of products could be diminished.

We have patent portfolios relating to Ampyra/aminopyridines, Inbrija (levodopa inhalation powder), CVT-427 and our ARCUS drug delivery technology, SYN120, BTT1023, cimaglermin alfa/neuregulins, remyelinating antibodies/antibodies relating to nervous system disorders, Qutenza and NP-1998/topical capsaicin formulations, comprised of both our own and in-licensed patents and patent applications. For some of our proprietary technologies, for example our ARCUS drug delivery technology, we rely on a combination of patents, trade secret protection and confidentiality agreements to protect our intellectual property rights. Our intellectual property also includes copyrights and a portfolio of trademarks.

The process of obtaining patents and trademarks can be time consuming and expensive with no certainty of success. Even if we spend the necessary time and money, a patent or trademark may not issue, it may not issue in a timely manner, or it may not have sufficient scope or strength to protect the technology it was intended to protect or to provide us with any commercial advantage. We may never be certain that we were the first to develop the technology or that we were the first to file a patent application for the particular technology because patent applications are confidential until they are published, and publications in the scientific or patent literature lag behind actual discoveries. The degree of future protection for our proprietary rights will remain uncertain if our pending patent applications are not allowed or issued for any reason or if we are unable to develop additional proprietary technologies that are patentable. Furthermore, third parties may independently develop similar or alternative technologies, duplicate some or all of our technologies, design around our patented technologies or challenge our issued patents or trademarks or the patents or trademarks of our licensors.

For example, in 2014 and 2015, several generic drug manufacturers filed Abbreviated New Drug Applications, or ANDAs, for generic versions of Ampyra to the FDA and challenged the Orange Book-listed patents that protected the Ampyra franchise. As such, to protect our intellectual property rights we filed lawsuits against the ANDA filers (other than those with whom we settled), which were consolidated into a single case, asserting the challenged Orange Book-listed patents against these generic drug manufacturers. In March 2017, the United States District Court for the District of Delaware (the “District Court”) issued a ruling upholding our Ampyra Orange Book-listed patent that expired on July 30, 2018, but invalidating four other Orange Book-listed patents pertaining to Ampyra set to expire between 2025 and 2027. In September 2018, the United States Court of Appeals for the Federal Circuit issued a ruling upholding the District Court’s decision (the “Appellate Decision”). We are experiencing a rapid and significant decline in Ampyra sales due to competition from generic versions of Ampyra that are being marketed following the Appellate Decision. We expect that additional manufacturers will market generic versions of Ampyra, which may accelerate the decline in Ampyra sales.

Also, the validity of our patents can be challenged by third parties pursuant to procedures introduced by American Invents Act, specifically inter partes review and/or post grant review before the U.S. Patent and Trademark Office. For

example, in February 2015, a hedge fund (acting with affiliated entities and individuals and proceeding under the name of the Coalition for Affordable Drugs) filed two separate inter partes review (IPR) petitions with the U.S. Patent and Trademark Office, challenging two of our Ampyra Orange Book-listed patents. The U.S. Patent and Trademark Office Patent Trials and Appeals Board, or PTAB, chose not to institute inter partes review of these patents. The hedge fund filed motions for reconsideration requesting that the denial to institute these two IPRs be reversed, but the motions were denied in April 2016. In addition, in September 2015 the same hedge fund filed four additional IPR petitions challenging four of our Orange Book-listed patents, including two of the same patents that were the subject of the February 2015 IPR petitions. We opposed the requests to institute these IPRs, but in March 2016 the PTAB decided to institute the IPR proceedings on all four patents. In March 2017 the PTAB issued a ruling and upheld all four of the challenged patents. The ruling has become final, as the hedge fund did not appeal the ruling before the May 2017 appeal deadline. However, the PTAB decision does not prevent parties from filing additional IPR petitions challenging our patents. Also, the PTAB’s decision does not affect the District Court’s decision invalidating the four patents in the ANDA litigation described above.

Patent litigation, IPR proceedings, and other legal proceedings involve complex legal and factual questions. We need to devote significant resources to the existing ANDA and IPR legal proceedings, and we may need to devote significant resources to other legal proceedings that arise in the future. If we are not successful, we could lose some or all of our Orange Book listed patents and our business could be materially harmed. We can provide no assurance concerning the duration or the outcome of any such lawsuits and legal proceedings.

We may initiate actions to protect our intellectual property (including, for example, in connection with the filing of an ANDA as described above) and in any litigation in which our intellectual property or our licensors' intellectual property is asserted, a court may determine that the intellectual property is invalid or unenforceable. Even if the validity or enforceability of that intellectual property is upheld by a court, a court may not prevent alleged infringement on the grounds that such activity is not covered by, for example, the patent claims. In addition, effective intellectual property enforcement may be unavailable or limited in some foreign countries for a variety of legal and public policy reasons. From time to time we may receive notices from third parties alleging infringement of their intellectual property rights. Any litigation, whether to enforce our rights to use our or our licensors' patents or to defend against allegations that we infringe third party rights, would be costly, time consuming, and may distract management from other important tasks.

As is commonplace in the biotechnology and pharmaceutical industry, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors. To the extent our employees are involved in areas that are similar to those areas in which they were involved at their former employers, we may be subject to claims that such employees and/or we have inadvertently or otherwise used or disclosed the alleged trade secrets or other proprietary information of the former employers. Litigation may be necessary to defend against such claims, which could result in substantial costs and be a distraction to management and which could have an adverse effect on us, even if we are successful in defending such claims.

We also rely in our business on trade secrets, know-how and other proprietary information. We seek to protect this information, in part, through the use of confidentiality agreements with employees, consultants, collaborators, advisors and others. Nonetheless, those agreements may not provide adequate protection for our trade secrets, know-how or other proprietary information and prevent their unauthorized use or disclosure. To the extent that consultants, collaborators, key employees or other third parties apply technological information independently developed by them or by others to our proposed products, joint ownership may result, which could undermine the value of the intellectual property to us or disputes may arise as to the proprietary rights to such information which may not be resolved in our favor. The risk that other parties may breach confidentiality agreements or that our trade secrets become known or independently discovered by competitors, could harm us by enabling our competitors, who may have greater experience and financial resources, to copy or use our trade secrets and other proprietary information in the advancement of their products, methods or technologies. Policing unauthorized use of our or our licensors' intellectual property is difficult, expensive and time-consuming, and we may be unable to determine the extent of any unauthorized use. Adequate remedies may not exist in the event of unauthorized use or disclosure.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

420 Saw Mill River Road, Ardsley, New York		10502
(Address of principal executive offices)		(Zip Code)

	Title of each class		Trading Symbol		Name of each exchange on which registered
	Common Stock $0.001 par value		ACOR		Nasdaq Global Market

			Page
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements		1
	Consolidated Balance Sheets as of September 30, ~~2018~~2019 (unaudited) and December 31, ~~2017~~2018		1
	Consolidated Statements of Operations (unaudited) for the Three and Nine-month Periods Ended September 30, ~~2018~~2019 and ~~2017~~2018		2
	Consolidated Statements of Comprehensive (Loss) Income ~~(Loss)~~ (unaudited) for the Three and Nine-month Periods Ended September 30, ~~2018~~2019 and ~~2017~~2018		3
	Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the Three and Nine-month Periods Ended September 30, 2019 and 2018		4
	Consolidated Statements of Cash Flows (unaudited) for the Nine-month Periods Ended September 30, ~~2018~~2019 and ~~2017~~2018		46
	Notes to Consolidated Financial Statements (unaudited)		57
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		35
Item 4.	Controls and Procedures		36
~~Item 4.~~		~~Controls and Procedures~~		37
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings		37
Item 1A.	Risk Factors		37
Item 6.	Exhibits		38
~~Item 1A.~~	~~Risk Factors~~		39
~~Item 6.~~	~~Exhibits~~		46
Signatures			4739

(In thousands)	Balance as of September 30, 2018 Prior to Adoption of ASC 606			Net Adjustments			Balance as of September 30, 2018 as Reported Under ASC 606
Assets
Other current assets	$	7,436		$	(634	)	$	6,802
Non-current portion of deferred cost of license revenue		1,161			(1,161	)		—
Total Assets	$	1,312,880		$	(1,795	)	$	1,311,085

Liabilities and Stockholders’ Equity
Current portion of deferred license revenue	$	9,057		$	(9,057	)	$	—
Non-current portion of deferred license revenue		16,606			(16,606	)		—
Deferred tax liability		68,056			2,600			70,656
Accumulated deficit		(424,707	)		21,268			(403,439	)
Total liabilities and stockholders' equity	$	1,312,880		$	(1,795	)	$	1,311,085

(In thousands)	Nine-Month Period Ended September 30, 2018 Balance Prior to Adoption of ASC 606		Effect of Change			Nine-Month Period Ended September 30, 2018 Balance as Reported Under ASC 606
License revenue	$	6,792	$	(6,792	)	$	—
Cost of license revenue		477		(477	)		—
Operating income (loss)	$	94,102	$	(6,315	)	$	87,787

Net income (loss)	$	30,402	$	(6,315	)	$	24,087
Net income (loss) per share—basic	$	0.65	$	(0.14	)	$	0.51
Net income (loss) per share—diluted	$	0.64	$	(0.13	)	$	0.51

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Small reporting company	☐
Emerging growth company	☐

(In thousands)	Balance as of December 31, 2017			Net Adjustments			Balance as of January 1, 2018
Assets
Other current assets	$	1,983		$	(634	)	$	1,349
Non-current portion of deferred cost of license revenue		1,638			(1,638	)		—
Total Assets	$	1,197,969		$	(2,272	)	$	1,195,697

Liabilities and Stockholders’ Equity
Current portion of deferred license revenue	$	9,057		$	(9,057	)	$	—
Non-current portion of deferred license revenue		23,398			(23,398	)		—
Deferred tax liability		22,459			2,600			25,059
Accumulated deficit		(455,108	)		27,583			(427,525	)
Total liabilities and stockholders' equity	$	1,197,969		$	(2,272	)	$	1,195,697

	For the three-month period ended September 30,				For the nine-month period ended September 30,				For the three-month period ended September 30,				For the nine-month period ended September 30,
(In millions)	2018		2017		2018		2017
(In thousands)									2019		2018		2019		2018
Research and development expense	$	1.1	$	2.0	$	4.4	$	8.4	$	719	$	1,112	$	2,203	$	4,336
Selling, general and administrative expense		4.0		4.7		11.9		17.8		2,424		4,023		8,785		11,910
Cost of Sales										149		—		505		—
Total	$	5.1	$	6.7	$	16.3	$	26.2	$	3,292	$	5,135	$	11,493	$	16,246

(In thousands)
Restricted Stock and Performance Stock Units	Number of Shares
Nonvested at January 1, ~~2018~~2019		~~697~~231
Granted		~~(148~~628	)
Vested		—(96	)
Forfeited		(~~127~~52	)
Nonvested at September 30, ~~2018~~2019		~~422~~711

(In thousands)	Net Unrealized Gains (Losses) on Marketable Securities
Balance at December 31, 2017	$	—
Other comprehensive loss before reclassifications		(42	)
Amounts reclassified from accumulated other comprehensive income		—
Net current period other comprehensive loss		(42	)
Balance at September 30, 2018	$	(42	)

(In thousands)	Balance Sheet Classification	September 30, 2019
Right-of-use assets	Right of use assets	$	24,675
Current lease liabilities	Current portion of lease liabilities		7,696
Non-current lease liabilities	Non-current portion of lease liabilities		24,393

(In thousands)
2019 (excluding the nine months ended Sep 30, 2019)	$	1,902
2020		7,746
2021		7,935
2022		9,972
2023		3,043
Later years		7,666
Total lease payments		38,264
Less: Imputed interest		(6,175	)
Present value of lease liabilities	$	32,089

(In thousands)	Nine-month period ended September 30, 2019
Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	$	5,605
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	770

(In thousands)	September 30, 2018			September 30, 2019
Liability component:
Principal	$	345,000		$	345,000
Less: debt discount and debt issuance costs, net		(28,840	)		(18,619	)
Net carrying amount	$	316,160		$	326,381
Equity component	$	61,195		$	61,195

Exhibit No.		Description
10.1*		Amendment to December 19, 2005 Employment Agreement, dated August 13, 2019, by and between the Registrant and David Lawrence.
10.2*		Amendment to December 19, 2005 Employment Agreement, dated August 13, 2019, by and between the Registrant and Jane Wasman.
31.1		Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2		Certification by the Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1		Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification by the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File, formatted in Inline XBRL (included in Exhibit 101).

	Acorda Therapeutics, Inc.

	By:	/s/ Ron Cohen
Date: November ~~6, 2018~~7, 2019		Ron Cohen, M.D. President, Chief Executive Officer and Director

	By:	/s/ David Lawrence
Date: November ~~6, 2018~~7, 2019		David Lawrence Chief, Business Operations and Principal Accounting Officer