DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 27, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | IMPAX LABORATORIES INC | |
Trading Symbol | ipxl | |
Entity Central Index Key | 1,003,642 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 74,113,674 | |
Entity Current Reporting Status | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 157,658 | $ 180,133 |
Accounts receivable, net | 242,020 | 257,368 |
Inventory, net | 172,786 | 175,230 |
Prepaid expenses and other current assets | 60,734 | 18,410 |
Total current assets | 633,198 | 631,141 |
Property, plant and equipment, net | 223,192 | 233,372 |
Intangible assets, net | 510,067 | 620,466 |
Goodwill | 207,329 | 207,329 |
Deferred income taxes, net | 17,090 | 69,866 |
Other non-current assets | 58,278 | 60,844 |
Total assets | 1,649,154 | 1,823,018 |
Current liabilities: | ||
Accounts payable | 53,708 | 58,952 |
Accrued expenses | 252,494 | 244,653 |
Current portion of contingent consideration | 25,000 | 0 |
Current portion of long-term debt, net | 17,836 | 17,719 |
Total current liabilities | 349,038 | 321,324 |
Long-term debt, net | 767,935 | 813,545 |
Deferred income taxes | 1,950 | 0 |
Other non-current liabilities | 48,300 | 64,175 |
Total liabilities | 1,167,223 | 1,199,044 |
Commitments and contingencies (Notes 19 and 20) | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, 2,000,000 shares authorized; No shares issued or outstanding at September 30, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.01 par value, 150,000,000 shares authorized; 74,407,135 issued and 74,163,406 outstanding shares at September 30, 2017; 73,948,340 issued and 73,704,611 outstanding shares at December 31, 2016 | 744 | 739 |
Treasury stock at cost: 243,729 shares at September 30, 2017 and December 31, 2016 | (2,157) | (2,157) |
Additional paid-in capital | 554,252 | 535,056 |
(Accumulated deficit) retained earnings | (71,376) | 98,192 |
Accumulated other comprehensive income (loss) | 468 | (7,856) |
Total stockholders’ equity | 481,931 | 623,974 |
Total liabilities and stockholders’ equity | $ 1,649,154 | $ 1,823,018 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 74,407,135 | 73,948,340 |
Common stock, shares outstanding (in shares) | 74,163,406 | 73,704,611 |
Treasury stock at cost, shares (in shares) | 243,729 | 243,729 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Total revenues | $ 206,392 | $ 227,909 | $ 592,877 | $ 626,007 |
Cost of revenues | 158,736 | 136,873 | 408,644 | 357,852 |
Cost of revenues impairment charges | 13,623 | 256,462 | 52,903 | 258,007 |
Gross profit (loss) | 34,033 | (165,426) | 131,330 | 10,148 |
Operating expenses: | ||||
Selling, general and administrative | 53,585 | 55,038 | 152,255 | 144,244 |
Research and development | 15,821 | 20,115 | 65,157 | 59,937 |
In-process research and development impairment charges | 0 | 28,770 | 6,079 | 29,716 |
Patent litigation | 1,640 | 3,279 | 3,882 | 6,527 |
Total operating expenses | 71,046 | 107,202 | 227,373 | 240,424 |
Loss from operations | (37,013) | (272,628) | (96,043) | (230,276) |
Other income (expense): | ||||
Interest expense | (13,636) | (11,089) | (40,385) | (27,874) |
Interest income | 336 | 222 | 645 | 895 |
Reserve for Turing receivable | 0 | 0 | (2,670) | (48,043) |
Gain on sale of intangible assets | 0 | 0 | 11,850 | 0 |
Gain (loss) on disposal of property, plant and equipment | 4,708 | (33) | 4,963 | 111 |
Loss on debt extinguishment | 0 | 0 | (1,215) | 0 |
Change in fair value of contingent consideration | (6,333) | 0 | (7,075) | 0 |
Fixed asset impairment charges | (828) | (134) | (3,022) | (134) |
Other, net | 352 | (206) | (7,929) | 9 |
(Loss) income before income taxes | (52,414) | (283,868) | (140,881) | (305,312) |
(Benefit from) provision for income taxes | (3,045) | (104,531) | 27,336 | (112,866) |
Net loss | $ (49,369) | $ (179,337) | $ (168,217) | $ (192,446) |
Net loss per common share: | ||||
Basic (in dollars per share) | $ (0.69) | $ (2.51) | $ (2.34) | $ (2.71) |
Diluted (in dollars per share) | $ (0.69) | $ (2.51) | $ (2.34) | $ (2.71) |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 71,924,592 | 71,331,247 | 71,775,537 | 71,033,346 |
Diluted (in shares) | 71,924,592 | 71,331,247 | 71,775,537 | 71,033,346 |
Impax Generics, net | ||||
Revenues: | ||||
Total revenues | $ 151,098 | $ 175,320 | $ 436,134 | $ 467,094 |
Cost of revenues | 141,133 | 115,020 | 355,375 | 307,936 |
Cost of revenues impairment charges | 13,623 | 256,462 | 52,903 | 258,007 |
Operating expenses: | ||||
Research and development | 12,241 | 15,375 | 50,632 | 46,113 |
In-process research and development impairment charges | 15,543 | 6,079 | 16,489 | |
Patent litigation | 28 | 147 | 715 | 416 |
Impax Specialty Pharma, net | ||||
Revenues: | ||||
Total revenues | 55,294 | 52,589 | 156,743 | 158,913 |
Cost of revenues | 17,603 | 21,853 | 53,269 | 49,916 |
Cost of revenues impairment charges | 0 | 0 | 0 | 0 |
Operating expenses: | ||||
Research and development | 3,580 | 4,740 | 14,525 | 13,824 |
In-process research and development impairment charges | 13,227 | 0 | 13,227 | |
Patent litigation | $ 1,612 | $ 3,132 | $ 3,167 | $ 6,111 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net Income (Loss) Attributable to Parent | ||||
Net loss | $ (49,369) | $ (179,337) | $ (168,217) | $ (192,446) |
Other comprehensive loss component: | ||||
Currency translation adjustment | (104) | 3,687 | 8,324 | 6,660 |
Comprehensive loss | $ (49,473) | $ (175,650) | $ (159,893) | $ (185,786) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (168,217) | $ (192,446) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 85,378 | 63,101 |
Non-cash interest expense | 19,289 | 16,604 |
Share-based compensation expense | 19,672 | 23,375 |
Deferred income taxes, net and uncertain tax positions | 53,626 | (94,703) |
Intangible asset impairment charges | 58,982 | 287,723 |
Reserve for Turing receivable | 2,670 | 48,043 |
Gain on sale of intangible assets | (11,850) | 0 |
Gain on disposal of property, plant and equipment | (4,963) | (111) |
Loss on debt extinguishment | 1,215 | 0 |
Change in fair value of contingent consideration | 7,075 | 0 |
Fixed asset impairment charges | 3,022 | 134 |
Other | (1,018) | 0 |
Changes in certain assets and liabilities: | ||
Accounts receivable | 12,678 | 36,818 |
Inventory | 3,799 | (35,745) |
Prepaid expenses and other assets | (42,848) | (42,655) |
Accounts payable and accrued expenses | 5,140 | (8,360) |
Other liabilities | 3,159 | 2,279 |
Net cash provided by operating activities | 46,809 | 104,057 |
Cash flows from investing activities: | ||
Payment for business acquisition | 0 | (585,800) |
Purchases of property, plant and equipment | (24,177) | (31,860) |
Proceeds from sales of property, plant and equipment | 9,105 | 1,346 |
Proceeds from sale of intangible assets | 11,850 | 0 |
Proceeds from cash surrender value of life insurance policy | 529 | 0 |
Payments for licensing agreements | 0 | (3,500) |
Proceeds from repayment of Tolmar loan | 0 | 15,000 |
Net cash used in investing activities | (2,693) | (604,814) |
Cash flows from financing activities: | ||
Proceeds from issuance of term loan | 0 | 400,000 |
Repayment of term loan | (65,000) | 0 |
Payment of deferred financing fees | (818) | (11,867) |
Payment of withholding taxes related to restricted stock awards | (2,668) | (5,782) |
Proceeds from exercises of stock options and ESPP | 847 | 9,137 |
Net cash (used in) provided by financing activities | (67,639) | 391,488 |
Effect of exchange rate changes on cash and cash equivalents | 1,048 | 1,041 |
Net decrease in cash and cash equivalents | (22,475) | (108,228) |
Cash and cash equivalents, beginning of period | 180,133 | 340,351 |
Cash and cash equivalents, end of period | 157,658 | 232,123 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 17,938 | 8,206 |
Cash paid for income taxes | 3,524 | 23,136 |
Supplemental disclosure of non-cash investing activity: | ||
Fair value of contingent consideration issued in business acquisition | $ 0 | $ 30,100 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Impax Laboratories, Inc. (“Impax” or the “Company”) is a specialty pharmaceutical company that focuses on developing, manufacturing, marketing and distributing generic and branded pharmaceutical products. The Company has two reportable segments, referred to as “Impax Generics” and “Impax Specialty Pharma.” The Impax Generics division focuses on a broad range of therapeutic areas, including products having technically challenging drug-delivery mechanisms or unique product formulations. In addition to developing solid oral dosage products, the Impax Generics division’s portfolio includes alternative dosage form products, primarily through alliance and collaboration agreements with third parties. The Company’s Impax Specialty Pharma division is focused on the development and promotion, through the Company’s specialty sales force, of proprietary branded pharmaceutical products for the treatment of central nervous system (“CNS”) disorders and other select specialty segments. Operating and Reporting Structure The Company currently operates in two divisions: the Impax Generics division and the Impax Specialty Pharma division. The Impax Generics division includes the Company’s legacy Global Pharmaceuticals business as well as the acquired businesses of CorePharma, LLC ("CorePharma") and Lineage Therapeutics, Inc. ("Lineage") from the Company's acquisition of Tower Holdings, Inc. ("Tower") and its subsidiaries on March 9, 2015 (the "Tower Acquisition"). The Impax Specialty Pharma division includes the legacy Impax Pharmaceuticals business as well as the acquired business of Amedra Pharmaceuticals, LLC ("Amedra") from the Tower Acquisition. Impax Generics develops, manufactures, sells, and distributes generic pharmaceutical products primarily through the following four sales channels: the “Impax Generics” sales channel, for generic pharmaceutical prescription products the Company sells directly to wholesalers, large retail drug chains, and others; the “Private Label” sales channel, for generic pharmaceutical over-the-counter (“OTC”) and prescription products the Company sells to unrelated third-party customers who, in turn, sell the product to third parties under their own label; the “Rx Partner” sales channel, for generic prescription products sold through unrelated third-party pharmaceutical entities under their own label pursuant to alliance agreements; and the “OTC Partner” sales channel, for generic pharmaceutical OTC products sold through unrelated third-party pharmaceutical entities under their own labels pursuant to alliance and supply agreements. Revenues from generic products are reported under the caption "Impax Generics, net." Impax Specialty Pharma is engaged in the development, sale and distribution of proprietary brand pharmaceutical products that the Company believes represent improvements to already-approved pharmaceutical products addressing CNS disorders and other select specialty segments. Impax Specialty Pharma currently has one internally developed branded pharmaceutical product, Rytary® (IPX066), an extended release oral capsule formulation of carbidopa-levodopa for the treatment of Parkinson’s disease, post-encephalitic parkinsonism, and parkinsonism that may follow carbon monoxide intoxication and/or manganese intoxication, which was approved by the FDA on January 7, 2015 and which the Company began marketing in the United States in April 2015. The Company received marketing authorization from the European Commission for Numient® (the brand name of IPX066 outside of the United States) during the fourth quarter of fiscal year 2015. In addition to Rytary®, Impax Specialty Pharma is also currently engaged in the sale and distribution of four other branded products; the more significant include Zomig® (zolmitriptan) products, indicated for the treatment of migraine headaches, under the terms of a Distribution, License, Development and Supply Agreement with AstraZeneca UK Limited (“AstraZeneca”) in the United States and in certain U.S. territories (the "AZ Agreement"), and Emverm® (mebendazole) 100 mg chewable tablets, indicated for the treatment of pinworm, whipworm, common roundworm, common hookworm, and American hookworm in single or mixed infections. Revenues from branded products are reported under the caption “Impax Specialty Pharma, net.” Impax Specialty Pharma also has a number of product candidates that are in varying stages of development. See “Note 21. Segment Information,” for financial information about our segments for the three and nine months ended September 30, 2017 and 2016 . Operating Locations The Company owns and/or leases facilities in California, Pennsylvania, New Jersey and Taiwan, Republic of China (“R.O.C.”). In California, the Company utilizes a combination of owned and leased facilities mainly located in Hayward. The Company’s primary properties in California consist of a leased office building used as the Company’s corporate headquarters, in addition to four properties it owns, including a research and development center facility and a manufacturing facility. Additionally, the Company leases two facilities in Hayward, utilized for additional research and development, equipment storage and quality assurance support. In Pennsylvania, the Company leases office space for sales and marketing, finance, and administrative personnel in Fort Washington. In New Jersey, the Company leases manufacturing, packaging, research and development and warehousing facilities in Middlesex and office space in Bridgewater. Outside the United States, in Taiwan, R.O.C., the Company owns a manufacturing facility. Management Changes On March 27, 2017, the Company announced that its Board of Directors had appointed Paul M. Bisaro as President and Chief Executive Officer and as a director of the Company, effective as of March 27, 2017. Mr. Bisaro succeeded J. Kevin Buchi, a member of the Company's Board of Directors, who served as the Company's Interim President and Chief Executive Officer beginning from December 19, 2016 following G. Frederick Wilkinson's separation from the Company as described below. Mr. Buchi currently remains a member of the Company's Board of Directors. In connection with his appointment as President and Chief Executive Officer, Mr. Bisaro and the Company entered into an Employment Agreement dated March 24, 2017 (the “Employment Agreement”). The initial term of the Employment Agreement expires on March 27, 2019, unless further extended or earlier terminated, and automatically renews for single one -year periods unless either party provides a written notice of non-renewal at least 90 days prior to the end of the applicable term or unless it is terminated earlier. On December 20, 2016, the Company announced that G. Frederick Wilkinson and the Company had mutually agreed that Mr. Wilkinson would separate from his positions as President and Chief Executive Officer and resign as a member of its Board of Directors, effective December 19, 2016. In connection with his separation from the Company, Mr. Wilkinson and the Company entered into a General Release and Waiver dated as of December 19, 2016 (the “General Release and Waiver”). Pursuant to the General Release and Waiver, the Company provided Mr. Wilkinson with certain termination benefits and payments. The Company recorded $5.4 million in costs associated with Mr. Wilkinson’s separation in the year ended December 31, 2016, comprised of $4.9 million of separation pay and benefits and $0.5 million of expense related to the accelerated vesting of certain of Mr. Wilkinson’s outstanding stock options and restricted stock awards pursuant to the terms of the General Release and Waiver. |
BUSINESS ACQUISITION
BUSINESS ACQUISITION | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITION | BUSINESS ACQUISITION Teva Transaction On August 3, 2016, the Company completed its previously announced acquisition of (A) certain assets related to (i) 15 then currently marketed generic pharmaceutical products, (ii) one then approved generic product and two then tentatively approved strengths of a then currently marketed product, which at the time of the closing had not yet launched, (iii) one pipeline generic product and one pipeline strength of a then currently marketed product, which at the time of the closing were pending approval by the FDA and (iv) one generic product then under development, and (B) the return to the Company of its full commercial rights to its pending ANDA for the generic equivalent to Concerta® (methylphenidate hydrochloride), a product the Company previously partnered with Teva Pharmaceuticals USA, Inc. (“Teva USA”) (collectively, the products and pipeline products and the assets related thereto in (A) and (B), the “Acquired Product Lines” and the transactions related thereto the “Teva Transaction”), pursuant to (x) an Asset Purchase Agreement, dated as of June 20, 2016, as amended on June 30, 2016, with Teva Pharmaceutical Industries Ltd. (“Teva”), acting directly or through its affiliates (the “Teva APA”), (y) an Asset Purchase Agreement, dated as of June 20, 2016, as amended on June 30, 2016, with affiliates of Allergan plc (“Allergan”), (the “Allergan APA” and collectively with the Teva APA, the "APAs"), and (z) a Termination Agreement, dated as of June 20, 2016, between the Company and Teva USA, terminating each party’s rights and obligations with respect to methylphenidate hydrochloride under the Strategic Alliance Agreement, dated June 27, 2001, as amended between the Company and Teva USA. The aggregate purchase price for the Acquired Product Lines pursuant to the terms of the Teva APA and the Allergan APA, including the upfront payment to Teva in accordance with the Termination Agreement, was $585.8 million in cash at closing. The Company is also obligated to make future payments to Teva of up to $40.0 million under the terms of the Termination Agreement, payable upon the achievement of specified commercialization events related to methylphenidate hydrochloride. Refer to "Note 23. Subsequent Events" for further details related to the Company's methylphenidate hydrochloride product. The Teva Transaction was part of the divestiture process mandated by the Federal Trade Commission in connection with the acquisition by Teva of the U.S. generics business of Allergan. The Company financed the Teva Transaction utilizing cash on hand and $400.0 million , the full amount of borrowing available, from its Term Loan Facility with Royal Bank of Canada, as discussed in "Note 12. Debt." The Company has incurred total acquisition-related costs of $4.0 million for the Teva Transaction, largely during the second and third quarters of 2016, and of which minimal amounts and $0.3 million were incurred during the three and nine months ended September 30, 2017 , respectively, and $1.7 million and $2.9 million were incurred during the three and nine months ended September 30, 2016 , respectively. The acquisition of the foregoing currently marketed and pipeline products fit with the Company’s strategic priorities of maximizing its Generics Division’s platform and optimizing research and development opportunities. Through the Teva Transaction, the Company expanded its portfolio of difficult-to-manufacture or limited-competition products and maximize utilization of its existing manufacturing facilities in Hayward, California and Taiwan. As part of the closing of the Teva Transaction, the Company, Teva and Allergan agreed to certain transition related services pursuant to which the Company agreed to manage the payment process for certain commercial chargebacks and rebates on behalf of Teva and Allergan related to products each of Teva and Allergan sold into the channel prior to the closing date. On August 18, 2016, the Company received a payment totaling $42.4 million from Teva and Allergan, which represented their combined estimate of the amount of commercial chargebacks and rebates to be paid by the Company on their behalf to wholesalers who purchased products from Teva and Allergan prior to the closing. Pursuant to the agreed upon transition services, Teva and Allergan are obligated to reimburse the Company for additional payments related to chargebacks and rebates made on their behalf in excess of the $42.4 million . If the total payments made by the Company on behalf of Teva and Allergan are less than $42.4 million , the Company is obligated to refund the difference to Teva and/or Allergan. As of September 30, 2017 , the Company had paid $29.1 million related to chargebacks and rebates on behalf of Teva and Allergan as described above and $13.3 million remained in accrued expenses on the consolidated balance sheet. Purchase Accounting and Consideration Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 805, Business Combinations ("ASC 805") defines a business as consisting of inputs and processes applied to those inputs that have the ability to create outputs. The Company has determined that the Acquired Product Lines meet the definition of a business and, accordingly, has accounted for the Teva Transaction as a business combination under the acquisition method of accounting. The following is an estimate of the purchase price for the Teva Transaction as of the closing date of August 3, 2016 (in thousands): Estimated Fair Value Purchase price per the APAs $ 575,800 Upfront payment pursuant to Termination Agreement 10,000 Total cash consideration 585,800 Fair value of contingent consideration pursuant to Termination Agreement (1) 30,100 Total consideration transferred $ 615,900 (1) The contingent consideration arrangement pursuant to the Termination Agreement potentially requires the Company to pay up to $40.0 million of additional consideration to Teva upon the achievement of specified commercialization events related to methylphenidate hydrochloride. The $30.1 million fair value of the potential contingent consideration payments recognized on the acquisition date was estimated by applying a probability-weighted expected return methodology. Recognition and Measurement of Assets Acquired at Fair Value The Company has allocated the purchase price for the Teva Transaction based upon the estimated fair value of the assets acquired at the date of acquisition. The following is an estimate of the fair value of the intangible and tangible assets acquired in connection with the Teva Transaction on the closing date of August 3, 2016 (in thousands): Estimated Fair Value Intangible assets $ 613,032 Inventory - raw materials 2,868 Total assets acquired $ 615,900 Intangible Assets The following identifies the Company’s allocations of purchase price to intangible assets, including the weighted-average amortization period, in total and by major intangible asset class as of the closing date (in thousands): Estimated Fair Value Weighted-Average Estimated Useful Life Marketed product rights $ 455,529 19 years Acquired IPR&D product rights (1) 157,503 n/a Total intangible assets $ 613,032 (1) "IPR&D" refers to the Company's in-process research and development product rights. Pursuant to the Termination Agreement, Teva returned to the Company its full commercial rights to its pending ANDA for the generic equivalent to Concerta ® (methylphenidate hydrochloride), a product the Company previously partnered with Teva USA under a Strategic Alliance Agreement dated June 27, 2001, as amended. As a result, the Company recognized an intangible asset of $78.9 million related to the reacquired IPR&D. The Company engaged a third-party valuation specialist to measure the value of the reacquired product right using a discounted cash flow analysis. The asset was determined to be indefinite-lived based on the market participant methodology prescribed in ASC 805. The estimated fair value of the in-process research and development and identifiable intangible assets was determined using the “income approach,” which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. The assumptions, including the expected projected cash flows, utilized in the purchase price allocation and in determining the purchase price were based on management's best estimates as of the closing date of the Teva Transaction on August 3, 2016. Some of the more significant assumptions inherent in the development of those asset valuations include the estimated net cash flows for each year for each asset or product (including net revenues, cost of sales, research and development costs, selling and marketing costs and working capital / contributory asset charges), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, the potential regulatory and commercial success risks, competitive trends impacting the asset and each cash flow stream, as well as other factors. The discount rate used to arrive at the present value at the closing date of the intangible assets was 6.7% . No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change. For these and other reasons, actual results may vary significantly from estimated results. During the third and fourth quarters of 2016, the Company recognized impairment charges of $251.0 million and $57.4 million , respectively, related to the intangible assets from the Teva Transaction. During the first and third quarters of 2017, the Company recognized impairment charges of $41.8 million and $13.6 million , respectively, related to the intangible assets from the Teva Transaction as described in "Note 10. Intangible Assets and Goodwill." Unaudited Pro Forma Results of Operations The unaudited pro forma combined results of operations for the three and nine months ended September 30, 2016 (assuming the closing of the Teva Transaction occurred on January 1, 2015) are as follows (in thousands): Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Total revenues $ 242,647 $ 729,171 Net loss (177,379 ) (167,505 ) The pro forma adjustments reflected herein include only those adjustments that are directly attributable to the Teva Transaction, factually supportable and expected to have a continuing impact on the Company. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the actual results of operations had the closing of the Teva Transaction taken place on January 1, 2015. Furthermore, the pro forma results do not purport to project the future results of operations of the Company. The unaudited pro forma information reflects primarily the following adjustments: • Adjustments to amortization expense related to identifiable intangible assets acquired; • Adjustments to interest expense to reflect the Company's Term Loan Facility (described in “Note 12. Debt”); and • Adjustments to selling, general and administrative expense related to transaction costs directly attributable to the transaction including the elimination of $1.7 million and $2.9 million in the pro forma results for both the three and nine months ended September 30, 2016 , respectively. All of the items above were adjusted for the applicable tax impact. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Interim Financial Statements The accompanying unaudited interim consolidated financial statements have been prepared from the books and records of the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and Rule 10-01 of Regulation S-X promulgated by the United States Securities and Exchange Commission (“SEC”), which permit reduced disclosures for interim periods. All adjustments necessary for a fair presentation of the accompanying balance sheets and statements of operations, comprehensive loss, and cash flows have been made. Although these interim consolidated financial statements do not include all of the information and footnotes required for complete annual financial statements, management believes the disclosures are adequate to make the information presented not misleading. Unaudited interim results of operations and cash flows are not necessarily indicative of the results that may be expected for the full year. Unaudited interim consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 , as filed with the SEC, wherein a more complete discussion of significant accounting policies and certain other information can be found. Principles of Consolidation The Company's unaudited interim consolidated financial statements include the accounts of the operating parent company, Impax Laboratories, Inc., its wholly owned subsidiaries, including Impax Laboratories USA, LLC, Impax Laboratories (Taiwan), Inc., ThoRx Laboratories, Inc., Impax International Holdings, Inc., Impax Holdings, LLC, Impax Laboratories (Netherlands) C.V., Impax Laboratories (Netherlands) B.V., Impax Laboratories Ireland Limited, Lineage and Tower, including operating subsidiaries CorePharma, Amedra Pharmaceuticals, Mountain LLC and Trail Services, Inc., in addition to an equity investment in Prohealth Biotech (Taiwan), Inc. (“Prohealth”), in which the Company held a 57.54% majority ownership interest at September 30, 2017 . All significant intercompany accounts and transactions have been eliminated. Foreign Currency Translation The Company translates the assets and liabilities of the Taiwan dollar functional currency of its majority-owned affiliate Prohealth and its wholly-owned subsidiary Impax Laboratories (Taiwan), Inc. into the U.S. dollar reporting currency using exchange rates in effect at the end of each reporting period. The revenues and expenses of these entities are translated using an average of the rates in effect during the reporting period. Gains and losses from these translations are recorded as currency translation adjustments included in the consolidated statements of comprehensive loss. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") and the rules and regulations of the U.S. Securities & Exchange Commission ("SEC") requires the use of estimates and assumptions, based on complex judgments considered reasonable, which affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant judgments are employed in estimates used in determining values of tangible and intangible assets, contingent consideration, legal contingencies, tax assets and tax liabilities, fair value of share-based compensation related to equity incentive awards issued to employees and directors, and estimates used in applying the Company’s revenue recognition policy, including those related to accrued chargebacks, rebates, product returns, Medicare, Medicaid, and other government rebate programs, shelf-stock adjustments, and the timing and amount of deferred and recognized revenue and deferred and amortized product manufacturing costs related to alliance and collaboration agreements. Actual results may differ from estimated results. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company's complete Summary of Significant Accounting Policies can be found in "Item 15. Exhibits and Financial Statement Schedules - Note 4. Summary of Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 , as filed with the SEC. Certain significant accounting policies have been repeated below. Revenue Recognition The Company recognizes revenue when the earnings process is complete, which under SEC Staff Accounting Bulletin No. 104, Topic No. 13, “Revenue Recognition” (“SAB 104”), is when revenue is realized or realizable and earned, there is persuasive evidence a revenue arrangement exists, delivery of goods or services has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. The Company accounts for material revenue arrangements which contain multiple deliverables in accordance with FASB ASC Topic 605-25, Revenue Recognition - Multiple-Element Arrangements ("ASC 605-25"), which addresses the determination of whether an arrangement involving multiple deliverables contains more than one unit of accounting. A delivered item within an arrangement is considered a separate unit of accounting only if both of the following criteria are met: • the delivered item has value to the customer on a stand-alone basis; and • if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor. Under ASC 605-25, if both of the criteria above are not met, then separate accounting for the individual deliverables is not appropriate. Revenue recognition for arrangements with multiple deliverables constituting a single unit of accounting is recognized generally over the greater of the term of the arrangement or the expected period of performance, either on a straight-line basis or on a modified proportional performance method. The Company accounts for milestones related to research and development activities in accordance with FASB ASC Topic 605-28, Revenue Recognition - Milestone Method ("ASC 605-28"). ASC Topic 605-28 allows for the recognition of consideration, which is contingent on the achievement of a substantive milestone, in its entirety in the period the milestone is achieved. A milestone is considered to be substantive if all of the following criteria are met: • the milestone is commensurate with either (1) the performance required to achieve the milestone or (2) the enhancement of the value of the delivered items resulting from the performance required to achieve the milestone; • the milestone relates solely to past performance; and • the milestone payment is reasonable relative to all of the deliverables and payment terms within the agreement. Impax Generics revenues, net and Impax Specialty Pharma revenues, net The Impax Generics revenues, net and Impax Specialty Pharma revenues, net include revenue recognized related to shipments of generic and branded pharmaceutical products to the Company’s customers, primarily drug wholesalers and retail chains. Gross sales revenue is recognized at the time title and risk of loss passes to the customer, which is generally when product is received by the customer. Net revenues may include deductions from the gross sales price related to estimates for chargebacks, rebates and administrative fees, distribution service fees, returns, shelf-stock adjustments, and other pricing adjustments. The Company records an estimate for these deductions in the same period when revenue is recognized. A description of each of these gross-to-net deductions follows. • Chargebacks The Company has agreements establishing contract prices for certain products with certain indirect customers, such as retail pharmacy chains, group purchasing organizations, managed care organizations, hospitals and government agencies who purchase products from drug wholesalers. The contract prices are lower than the prices the customer would otherwise pay to the wholesaler, and the price difference is referred to as a chargeback, which generally takes the form of a credit memo issued by the Company to reduce the invoiced gross selling price charged to the wholesaler. An estimated accrued provision for chargeback deductions is recognized at the time of product shipment. The primary factors considered when estimating the provision for chargebacks are the average historical chargeback credits given, the mix of products shipped, and the amount of inventory on hand at the major drug wholesalers with whom the Company does business. The Company also monitors actual chargebacks granted and compares them to the estimated provision for chargebacks to assess the reasonableness of the chargeback reserve at each quarterly balance sheet date. • Rebates and Administrative Fees The Company maintains various rebate and administrative fee programs with its customers in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. The rebates generally take the form of a credit memo to reduce the invoiced gross selling price charged to a customer for products shipped. An estimated accrued provision for rebate deductions is recognized at the time of product shipment. The primary factors the Company considers when estimating the provision for rebates are the average historical experience of aggregate credits issued, the mix of products shipped and the historical relationship of rebates as a percentage of total gross product sales, the contract terms and conditions of the various rebate programs in effect at the time of shipment, and the amount of inventory on hand at the major drug wholesalers with whom the Company does business. The Company also monitors actual rebates granted and compares them to the estimated provision for rebates to assess the reasonableness of the rebate reserve at each quarterly balance sheet date. • Distribution Service Fees The Company pays distribution service fees to several of its wholesaler customers related to sales of its Impax Products. The wholesalers are generally obligated to provide the Company with periodic outbound sales information as well as inventory levels of the Company’s Impax Products held in their warehouses. Additionally, the wholesalers have agreed to manage the variability of their purchases and inventory levels within specified days on hand limits. An accrued provision for distribution service fees is recognized at the time products are shipped to wholesalers. • Returns The Company allows its customers to return product if approved by authorized personnel in writing or by telephone with the lot number and expiration date accompanying any request and if such products are returned within six months prior to or until twelve months following, the product’s expiration date. The Company estimates and recognizes an accrued provision for product returns as a percentage of gross sales based upon historical experience. The product return reserve is estimated using a historical lag period, which is the time between when the product is sold and when it is ultimately returned, and estimated return rates which may be adjusted based on various assumptions including: changes to internal policies and procedures, business practices, commercial terms with customers, and the competitive position of each product; the amount of inventory in the wholesale and retail supply chain; the introduction of new products; and changes in market sales information. The Company also considers other factors, including significant market changes which may impact future expected returns and actual product returns. The Company monitors actual returns on a quarterly basis and may record specific provisions for returns it believes are not covered by historical percentages. • Shelf-Stock Adjustments Based upon competitive market conditions, the Company may reduce the selling price of certain Impax Generics division products. The Company may issue a credit against the sales amount to a customer based upon their remaining inventory of the product in question, provided the customer agrees to continue to make future purchases of product from the Company. This type of customer credit is referred to as a shelf-stock adjustment, which is the difference between the initial sales price and the revised lower sales price, multiplied by an estimate of the number of product units on hand at a given date. Decreases in selling prices are discretionary decisions made by the Company in response to market conditions, including estimated launch dates of competing products and declines in market price. The Company records an estimate for shelf-stock adjustments in the period it agrees to grant such a credit memo to a customer. • Cash Discounts The Company offers cash discounts to its customers, generally 2% to 3% of the gross selling price, as an incentive for paying within invoice terms, which generally range from 30 to 90 days. An estimate of cash discounts is recorded in the same period when revenue is recognized. • Medicaid and Other U.S. Government Pricing Programs As required by law, the Company provides a rebate on drugs dispensed under the Medicaid program, Medicare Part D, TRICARE, and other U.S. government pricing programs. The Company determines its estimated government rebate accrual primarily based on historical experience of claims submitted by the various states and other jurisdictions and any new information regarding changes in the various programs which may impact the Company’s estimate of government rebates. In determining the appropriate accrual amount, the Company considers historical payment rates and processing lag for outstanding claims and payments. The Company records estimates for government rebates as a deduction from gross sales, with a corresponding adjustment to accrued liabilities. • Rx Partner and OTC Partner The Rx Partner and OTC Partner contracts include revenue recognized under alliance and collaboration agreements between the Company and unrelated third-party pharmaceutical companies. The Company has entered into these alliance agreements to develop marketing and/or distribution relationships with its partners to fully leverage its technology platform. The Rx Partners and OTC Partners alliance agreements obligate the Company to deliver multiple goods and/or services over extended periods. Such deliverables include manufactured pharmaceutical products, exclusive and semi-exclusive marketing rights, distribution licenses, and research and development services. In exchange for these deliverables the Company receives payments from its agreement partners for product shipments and research and development services, and may also receive other payments including royalties, profit sharing payments, and upfront and periodic milestone payments. Revenue received from the alliance agreement partners for product shipments under these agreements is not subject to deductions for chargebacks, rebates, product returns, and other pricing adjustments. Royalty and profit sharing amounts the Company receives under these agreements are calculated by the respective agreement partner, with such royalty and profit share amounts generally based upon estimates of net product sales or gross profit which include estimates of deductions for chargebacks, rebates, product returns, and other adjustments the alliance agreement partners may negotiate with their respective customers. The Company records the agreement partner's adjustments to such estimated amounts in the period the agreement partner reports the amounts to the Company. The Company applies the updated guidance of ASC 605-25 to the Strategic Alliance Agreement, as amended, with Teva Pharmaceuticals USA, Inc., an affiliate of Teva Pharmaceutical Industries Limited (the “Teva Agreement”). The Company looks to the underlying delivery of goods and/or services which give rise to the payment of consideration under the Teva Agreement to determine the appropriate revenue recognition. The Company initially defers consideration received as a result of research and development-related activities performed under the Teva Agreement. The Company recognizes deferred revenue on a straight-line basis over the expected period of performance for such services. Consideration received as a result of the manufacture and delivery of products under the Teva Agreement is recognized at the time title and risk of loss passes to the customer, which is generally when product is received by Teva. The Company recognizes profit share revenue in the period earned. OTC Partner revenue is related to agreements with Pfizer, Inc., formerly Wyeth LLC (“Pfizer”) and L. Perrigo Company (“Perrigo”) with respect to the supply of the Company's over-the-counter pharmaceutical product Loratadine and Pseudoephedrine Sulfate 5 mg/129 mg 12-hour Extended Release Tablets (the "D12 Product"). The OTC Partner sales channel is no longer a core area of the business, and the over-the-counter pharmaceutical products the Company sells through this sales channel are older products which are now only sold to Pfizer and Perrigo. The Company is currently only required to manufacture the over-the-counter pharmaceutical products under its agreements with Pfizer and Perrigo. The Company recognizes profit share revenue in the period earned. During the quarter ended September 30, 2016, the Company sold the ANDAs for both the D12 Product and the Loratadine and Pseudoephedrine Sulfate 10 mg/240 mg 24-hour Extended Release Tablets, in addition to other specified assets, to Perrigo pursuant to an asset purchase agreement with Perrigo dated as of March 31, 2016 (the "Perrigo APA"). Under the terms of the Perrigo APA, the Company will also continue to supply the D-12 Product to Pfizer and Perrigo until the date that is the earliest of (i) the date Perrigo’s manufacturing facility is approved to manufacture the D-12 Product and (ii) December 31, 2017 (the "Supply End Date"). On the Supply End Date, the Company will assign and transfer its supply agreement with Pfizer in its entirety to Perrigo in accordance with the Perrigo APA. • Research Partner The Research Partner contract revenue results from development agreements the Company enters into with unrelated third-party pharmaceutical companies. The development agreements generally obligate the Company to provide research and development services over multiple periods. In exchange for this service, the Company generally receives upfront payments upon signing of each development agreement and is eligible to receive contingent milestone payments, payment of which is based upon the achievement of contractually specified events. Additionally, the Company may also receive royalty payments from the sale, if any, of a successfully developed and commercialized product under one of these development agreements. The Company recognizes revenue received from the achievement of contingent research and development milestones in the period such payment is earned. Royalty revenue, if any, will be recognized as current period revenue when earned. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, “ Revenue from Contracts with Customers ” (Topic 606), regarding the accounting for and disclosures of revenue recognition, with an effective date for annual and interim periods beginning after December 15, 2016. This update provides a single comprehensive model for accounting for revenue from contracts with customers. The model requires that revenue recognized reflect the actual consideration to which the entity expects to be entitled in exchange for the goods or services defined in the contract, including in situations with multiple performance obligations. In July 2015, the FASB issued ASU 2015-14, “ Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ,” which deferred the effective date of the previously issued revenue recognition guidance by one year. The guidance will be effective for annual and interim periods beginning after December 15, 2017. In April 2016 and May 2016, the FASB issued ASU 2016-10, " Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing " and ASU 2016-12, " Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ," respectively. Both of these updates provide improvements and clarification to the previously issued revenue recognition guidance. The new standard can be adopted using one of two methods: the full retrospective method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect of adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The Company will adopt the new revenue recognition standard in 2018 using the modified retrospective method. The new standard will result in additional revenue-related disclosures in the notes to the Company’s consolidated financial statements. The Company is currently finalizing the impact that adoption will have on its consolidated financial statements. The majority of the Company's revenue relates to the sale of finished products to various customers, and management does not currently believe that the adoption will have a material impact on these transactions. The Company is continuing to evaluate the impact on certain less significant transactions involving third-party collaborations and other arrangements, but does not currently believe it will have a material effect on the overall financial results. In addition, the new standard will require changes to the Company’s processes and controls to support additional disclosures; and the Company is in the process of identifying and designing such changes to processes and controls to ensure readiness. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): “ Simplifying the Measurement of Inventory ,” with guidance regarding the accounting for and measurement of inventory. The update requires that inventory measured using first-in, first-out ("FIFO") shall be measured at the lower of cost and net realizable value. When there is evidence that the net realizable value of inventory is lower than its cost, the difference shall be recognized as a loss in earnings in the period in which it occurs. The guidance is effective for annual and interim periods beginning after December 15, 2016. The Company adopted this guidance during the first quarter of 2017, and it did not have a material effect on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), with guidance regarding the accounting for and disclosure of leases. The update requires lessees to recognize all leases, including operating leases, with a term greater than 12 months on the balance sheet. This update also requires lessees and lessors to disclose key information about their leasing transactions. The guidance will be effective for annual and interim periods beginning after December 15, 2018. The Company is currently evaluating the effect that this guidance will have on its consolidated financial statements and related disclosures. The Company expects the implementation of this standard to have an impact on its consolidated financial statements and related disclosures as its aggregate future minimum lease payments were $30.2 million as of December 31, 2016 under its current portfolio of non-cancelable leases for land, office space, and manufacturing, warehouse and research and development facilities with various expiration dates between April 2017 and December 2027. The Company anticipates recognition of additional assets and corresponding liabilities related to these leases on its consolidated balance sheet. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): " Contingent Put and Call Options in Debt Instruments ," with guidance regarding the accounting for embedded derivatives related to debt contracts. The update clarifies that determining whether the economic characteristics of a put or call are clearly and closely related to its debt host requires only an assessment of the four-step decision sequence outlined in FASB ASC paragraph 815-15-25-24. The update also indicates that entities are not required to separately assess whether the contingency itself is clearly and closely related. The guidance is effective for annual and interim periods beginning after December 15, 2016. The Company adopted this guidance during the first quarter of 2017, and it did not have an effect on the Company's consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): " Improvements to Employee Share-Based Payment Accounting ," with guidance regarding the simplification of accounting for share-based payment award transactions. The update changes the accounting for such areas as the accounting and cash flow classification for excess tax benefits and deficiencies; forfeitures; and tax withholding requirements and cash flow classification. The guidance is effective for annual and interim periods beginning after December 15, 2016. The Company adopted the new guidance effective January 1, 2017 and elected to eliminate the use of a forfeiture rate estimate in the determination of share-based compensation expense for restricted stock awards using the modified retrospective transition method, which resulted in a $1.4 million charge to opening retained earnings for 2017. In addition, the Company is now presenting the cash paid for tax withholdings on stock options exercised and restricted stock awards vested retrospectively in cash flows from financing activities as opposed to the historical presentation in cash flows from operating activities. Excess tax benefits or deficiencies, historically recorded to additional paid-in capital, are recorded to income tax expense as they occur on a prospective basis. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): " Classification of Certain Cash Receipts and Cash Payments, " with guidance intended to reduce the diversity in practice regarding how certain cash receipts and cash payments are presented and classified within the statement of cash flows. The update addresses eight specific cash flow issues including debt prepayment or debt extinguishment costs, the settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies (COLIs) (including bank-owned life insurance policies (BOLIs)), distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. The guidance will be effective for annual and interim periods beginning after December 15, 2017. The Company is currently evaluating the effect that this guidance may have on its consolidated financial statements. In October 2016, the FASB issued ASU-2016-16, Income Taxes (Topic 740): " Intra-Entity Transfers of Assets Other Than Inventory, " with guidance intended to more faithfully represent the economics of intra-entity asset transfers. The update clarifies that entities must recognize the income tax consequences of intra-entity asset transfers, other than inventory, when the transfer occurs. The guidance will be effective for annual and interim periods beginning after December 15, 2017. The Company is currently evaluating the effect that this guidance may have on its consolidated financial statements. In January 2017, the FASB issued ASU-2017-01, Business Combinations (Topic 805): " Clarifying the Definition of a Business, " with guidance intended to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The update provides a screen to determine whether an integrated set of assets and activities constitute a business. If the screen is not met, it (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace the missing elements. The guidance will be effective for annual and interim periods beginning after December 15, 2017 and should be applied prospectively. The Company is currently evaluating the effect that this guidance may have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323), which add to and amend SEC paragraphs pursuant to the SEC Staff Announcements at the September 22, 2016 and November 17, 2016 Emerging Issues Task Force (EITF) meetings. The guidance provides additional disclosure requirements regarding the impact of recently issued accounting standards on the financial statements of a registrant when such standards are adopted in a future period. The Company adopted this guidance during the first quarter of 2017, and it did not have an effect on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU-2017-04, Intangibles - Goodwill and Other (Topic 350): " Simplifying the Test for Goodwill Impairment, " which removes the second step of the two-step goodwill impairment test. In order to reduce the cost and complexity of testing goodwill for impairment, entities are now only required to perform a one-step quantitative impairment test and to record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of a reporting unit to determine if the quantitative impairment test is necessary. Entities should apply the guidance on a prospective basis and disclose the nature of and reason for the change in accounting principle upon transition. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed after January 1, 2017. The Company adopted this guidance as of the first quarter of 2017, and it did not have an effect on the Company’s consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), which provides clarification regarding the scope of the asset derecognition guidance and accounting for partial sales of nonfinancial assets. The update defines an in substance nonfinancial asset and clarifies that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. All businesses and nonprofit activities within the scope of Subtopic 610-20 are excluded from the amendments in this update. This guidance will be effective for annual and interim periods beginning after December 15, 2017 and is required to be applied at the same time as ASU 2014-09 (described above) is applied. The guidance can be applied using one of two methods: the full retrospective method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect of adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The Company is currently evaluating the effect that this guidance may have on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): " Scope of Modification Accounting ," which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The guidance will be effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the effect that this guidance may have on its consolidated financial statements. |
FAIR VALUE MEASUREMENT AND FINA
FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS | FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS The carrying values of cash equivalents, accounts receivable, prepaid expenses and other current assets, and accounts payable in the Company’s consolidated balance sheets approximated their fair values as of September 30, 2017 and December 31, 2016 due to their short-term nature. Certain of the Company’s financial instruments are measured at fair value using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1 - Inputs are quoted prices for identical instruments in active markets. • Level 2 - Inputs are quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 - Inputs are unobservable and reflect the Company's own assumptions, based on the best information available, including the Company's own data. The carrying amounts and fair values of the Company’s financial instruments at September 30, 2017 and December 31, 2016 are indicated below (in thousands): As of September 30, 2017 Fair Value Measurement Based on Carrying Fair Value Quoted Prices in Active Markets Significant Significant Unobservable Assets Deferred Compensation Plan asset (1) $ 37,004 $ 37,004 $ — $ 37,004 $ — Liabilities Term Loan Facility due August 2021, current portion (2) $ 20,000 $ 20,000 $ — $ 20,000 $ — Term Loan Facility due August 2021, long-term portion (2) $ 310,000 $ 310,000 $ — $ 310,000 $ — 2% Convertible Senior Notes due June 2022 (3) $ 600,000 $ 542,586 $ 542,586 $ — $ — Deferred Compensation Plan liabilities (1) $ 31,746 $ 31,746 $ — $ 31,746 $ — Contingent consideration, current portion (4) $ 25,000 $ 25,000 $ — $ — $ 25,000 Contingent consideration, long-term portion (4) $ 13,123 $ 13,123 $ — $ — $ 13,123 As of December 31, 2016 Fair Value Measurement Based on Carrying Fair Value Quoted Prices in Active Markets Significant Significant Unobservable Assets Deferred Compensation Plan asset (1) $ 37,382 $ 37,382 $ — $ 37,382 $ — Liabilities Term Loan Facility due August 2021, current portion (2) $ 20,000 $ 20,000 $ — $ 20,000 $ — Term Loan Facility due August 2021, long-term portion (2) $ 375,000 $ 375,000 $ — $ 375,000 $ — 2% Convertible Senior Notes due June 2022 (3) $ 600,000 $ 469,800 $ 469,800 $ — $ — Deferred Compensation Plan liabilities (1) $ 28,582 $ 28,582 $ — $ 28,582 $ — Contingent consideration, long-term portion (4) $ 31,048 $ 31,048 $ — $ — $ 31,048 (1) The Deferred Compensation Plan liabilities are non-current liabilities recorded at the value of the amount owed to the plan participants, with changes in value recognized as compensation expense in the Company’s consolidated statements of operations. The calculation of the Deferred Compensation Plan obligation is derived from observable market data by reference to hypothetical investments selected by the participants and is included in the line items captioned “Other non-current liabilities” on the Company’s consolidated balance sheets. The Company invests participant contributions in corporate-owned life insurance (“COLI”) policies, for which the cash surrender value is included in the line item captioned “Other non-current assets” on the Company’s consolidated balance sheets. (2) The difference between the amount shown as the carrying value in the above tables and the amount shown on the Company’s consolidated balance sheets at September 30, 2017 and December 31, 2016 represents the unaccreted discount related to deferred debt issuance costs. (3) The difference between the amount shown as the carrying value in the above tables and the amount shown on the Company’s consolidated balance sheets at September 30, 2017 and December 31, 2016 represents the unaccreted discounts related to deferred debt issuance costs and bifurcation of the conversion feature of the notes. (4) The contingent consideration liability represents future consideration potentially payable to Teva upon the achievement of specified commercialization events related to methylphenidate hydrochloride in accordance with the Termination Agreement related to the Teva Transaction as described in "Note 2. Business Acquisition." A discounted cash flow valuation model was used to value the contingent consideration. The valuation is based on significant unobservable inputs, including the probability and timing of successful product launch, the expected number of product competitors as defined in the Termination Agreement in the market at the time of launch, and the expected number of such competitors in the market on the one-year launch anniversary date. The Company conducts a quarterly review of the underlying inputs and assumptions and significant changes in unobservable inputs could result in material changes to the contingent consideration liability. Due to the Company's expectation as of September 30, 2017 that the product launch would occur in the fourth quarter of 2017 and the then expected existence of two product competitors in the market at the time of launch, a 100% probability of payment was used to calculate the $25.0 million fair value of the $25.0 million contingent payment related to the product launch. As of September 30, 2017, the Company determined that it was 90% probable that the Company would be required to pay to Teva the $15.0 million contingent payment at the one-year product launch anniversary and based on the expected number of competitors in the market at such time in accordance with the terms of the Termination Agreement, resulting in the Company's determination of a $13.1 million fair value of the $15.0 million contingent payment as of September 30, 2017. The maximum aggregate amount in contingent consideration payments the Company could be expected to make to Teva in accordance with the Termination Agreement related to methylphenidate hydrochloride is $40.0 million . Refer to "Note 23. Subsequent Events" for further details related to the Company's methylphenidate hydrochloride product. The following table presents the changes in Level 3 instruments measured on a recurring basis for the nine months ended September 30, 2017 (in thousands): As of Change in As of Total contingent consideration $ 31,048 $ 7,075 $ 38,123 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE The composition of accounts receivable, net is as follows (in thousands): September 30, 2017 December 31, 2016 Gross accounts receivable (1) $ 580,874 $ 794,173 Less: Rebate reserve (149,271 ) (293,816 ) Less: Chargeback reserve (119,386 ) (151,978 ) Less: Distribution services reserve (7,956 ) (18,318 ) Less: Discount reserve (16,366 ) (17,957 ) Less: Uncollectible accounts reserve (2) (45,875 ) (54,736 ) Accounts receivable, net $ 242,020 $ 257,368 (1) Includes estimated $43.0 million and $40.3 million as of September 30, 2017 and December 31, 2016 , respectively, receivable due from Turing Pharmaceuticals AG ("Turing") for reimbursement of Daraprim® chargebacks and Medicaid rebate liabilities pursuant to an Asset Purchase Agreement between the Company and Turing dated August 7, 2015 (the "Turing APA"). In accordance with the terms of the Turing APA and in accordance with federal laws and regulations, the Company receives, and is initially responsible for processing and paying (subject to reimbursement by Turing), all chargebacks and rebates resulting from utilization by Medicaid, Medicare and other federal, state and local government programs, health plans and other health care providers for products sold under the Company's labeler code. Under the terms of the Turing APA, Turing is responsible for liabilities related to chargebacks and rebates that arise as a result of Turing's marketing or selling related activities in connection with Daraprim®. Refer to "Note 20. Legal and Regulatory Matters" for a description of the Company's suit against Turing related to, among other matters, Turing's failure to reimburse the Company for chargebacks and Medicaid rebate liabilities when due. (2) As a result of the uncertainty of collection from Turing that developed during the first quarter of 2016, the Company recorded a reserve of $48.0 million as of March 31, 2016, which represented the full amount of the estimated receivable due from Turing. During the fourth quarter of 2016, the Company received a $7.7 million payment from Turing. During the nine month period ended September 30, 2017, the Company increased the reserve balance by a net $2.7 million , consisting of a $3.6 million increase in the reserve resulting from additional Medicaid rebate claims received during the period and a $0.9 million reduction in the reserve resulting from payments received from Turing during the period. As of September 30, 2017, the $43.0 million estimated receivable due from Turing was fully reserved. A rollforward of the rebate and chargeback reserves activity for the nine months ended September 30, 2017 and the year ended December 31, 2016 is as follows (in thousands): Nine Months Ended Year Ended Rebate reserve September 30, 2017 December 31, 2016 Beginning balance $ 293,816 $ 265,229 Provision recorded during the period 498,104 756,774 Credits issued during the period (642,649 ) (728,187 ) Ending balance $ 149,271 $ 293,816 The payment mechanisms for rebates in the Impax Generics and Impax Specialty Pharma divisions are different, which impacts the location on the Company's consolidated balance sheets. Impax Generics rebates are classified as "Accounts receivable, net" on the Company's consolidated balance sheets. Impax Specialty Pharma rebates are classified as "Accrued expenses" on the Company's consolidated balance sheets. Nine Months Ended Year Ended Chargeback reserve September 30, 2017 December 31, 2016 Beginning balance $ 151,978 $ 102,630 Provision recorded during the period 899,587 1,011,400 Credits issued during the period (932,179 ) (962,052 ) Ending balance $ 119,386 $ 151,978 |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventory, net of carrying value reserves, as of September 30, 2017 and December 31, 2016 consisted of the following (in thousands): September 30, 2017 December 31, 2016 Raw materials $ 69,037 $ 53,808 Work in process 6,754 3,280 Finished goods 109,873 130,879 Total inventory 185,664 187,967 Less: Non-current inventory 12,878 12,737 Total inventory - current $ 172,786 $ 175,230 Inventory carrying value reserves were $85.9 million and $38.0 million at September 30, 2017 and December 31, 2016 , respectively. Included in the $85.9 million of inventory reserves at September 30, 2017 was a pre-launch product inventory reserve of $20.5 million , primarily related to colesevelam, recognized during the three month period ended September 30, 2017. The Company recognizes pre-launch inventories at the lower of its cost or the expected net selling price. Cost is determined using a standard cost method, which approximates actual cost, and assumes a FIFO flow of goods. Costs of unapproved products are the same as approved products and include materials, labor, quality control, and production overhead. When the Company concludes FDA approval is expected within approximately six months, the Company will generally begin to schedule manufacturing process validation studies as required by the FDA to demonstrate the production process can be scaled up to manufacture commercial batches. Consistent with industry practice, the Company may build quantities of pre-launch inventories of certain products pending required final FDA approval and/or resolution of patent infringement litigation, when, in the Company’s assessment, such action is appropriate to prepare for the anticipated commercial launch, FDA approval is expected in the near term, and/or the related litigation will be resolved in the Company’s favor. The capitalization of unapproved pre-launch inventory involves risks, including, among other items, FDA approval of product may not occur; approvals may require additional or different testing and/or specifications than used for unapproved inventory; and, in cases where the unapproved inventory is for a product subject to litigation, the litigation may not be resolved or settled in favor of the Company. If any of these risks were to materialize and the launch of the unapproved product delayed or prevented, then the net carrying value of unapproved inventory may be partially or fully reserved. Generally, the selling price of a generic pharmaceutical product is at discount from the corresponding brand product selling price. Typically, a generic drug is easily substituted for the corresponding branded product, and once a generic product is approved, the pre-launch inventory is typically sold within the subsequent three months . If the market prices become lower than the product inventory carrying costs, then the pre-launch inventory value is reduced to such lower market value. If the inventory produced exceeds the estimated market acceptance of the generic product and becomes short-dated, a carrying value reserve will be recorded. In all cases, the carrying value of the Company's pre-launch product inventory is lower than the respective estimated net selling prices. The carrying value of unapproved inventory less reserves was $35.3 million and $29.2 million at September 30, 2017 and December 31, 2016 , respectively. To the extent inventory is not scheduled to be utilized in the manufacturing process and/or sold within twelve months of the balance sheet date, it is included as a component of other non-current assets. Amounts classified as non-current inventory consist of raw materials, net of valuation reserves. Raw materials generally have a shelf life of approximately three to five years , while finished goods generally have a shelf life of approximately two years . |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, net of accumulated depreciation, consists of the following (in thousands): September 30, 2017 December 31, 2016 Land $ 3,500 $ 5,603 Buildings and improvements 190,828 174,303 Equipment 152,012 143,818 Office furniture and equipment 15,259 15,767 Construction-in-progress 46,632 50,191 Property, plant and equipment, gross 408,231 389,682 Less: Accumulated depreciation (185,039 ) (156,310 ) Property, plant and equipment, net $ 223,192 $ 233,372 Depreciation expense was $31.9 million and $21.8 million for the nine months ended September 30, 2017 and September 30, 2016 , respectively. Unpaid vendor invoices relating to purchases of property, plant and equipment of $1.1 million and $3.5 million , which were accrued as of September 30, 2017 and September 30, 2016 , respectively, have been excluded from the purchase of property, plant, and equipment and the change in accounts payable and accrued expenses in the Company’s consolidated statements of cash flows. During the second quarter of 2017, the Company entered into a Purchase and Sale Agreement with a third party buyer to sell a storage warehouse located in Hayward, California for a sale price of $9.4 million . As a result, the asset was classified as "held for sale" in accordance with ASC 360 - Property, Plant and Equipment ("ASC 360") as all the criteria under such section had been met and the Company ceased recognizing depreciation on the asset. The $4.1 million net book value of the warehouse was reclassified out of property, plant and equipment, net and was included in prepaid expenses and other current assets in the consolidated balance sheet as of June 30, 2017. During the three month period ended June 30, 2017, the Company received a $0.4 million non-refundable deposit from the buyer related to the warehouse sale, which was recognized as a gain on sale. During the three month period ended September 30, 2017, the Company completed the sale of the storage warehouse, received an additional payment of $8.5 million and recognized an additional $4.4 million of gain on the closing of sale. Taiwan Facility Accounting Included in the carrying value of property, plant and equipment, net in the Company's consolidated balance sheet is a manufacturing facility located in Taiwan, R.O.C. (the “Taiwan facility”), which had a net book value of $92.1 million as of September 30, 2017. In May 2017, the Company announced that it was reviewing strategic alternatives for its Taiwan facility, including a sale of the facility to a qualified buyer capable of reliably producing Rytary® in accordance with FDA requirements as the Company’s third party contract manufacturer (“CMO”) or, in the alternative, a closure of the facility following the completion of the technology transfer process to allow Rytary® to be manufactured either in the Company’s Hayward, California facility or at a CMO. Following this announcement, management completed an evaluation of the Taiwan facility in accordance with ASC 360 - Property, Plant and Equipment (“ASC 360”) to determine whether all of the “held for sale” criteria under subsection 360-10-45-9 had been met. Based upon the evaluation of the criteria, including management's assessment of whether it was probable that a sale to a qualified buyer could be completed within one year, the Taiwan facility was determined to be “held and used” as of May 31, 2017. Following the “held and used” determination, management next evaluated the Taiwan facility for recoverability. Recoverability of property is evaluated by a comparison of the carrying amount of an asset or asset group to the future net undiscounted cash flows expected to be generated by the asset or asset group. As the activities at the Taiwan facility are primarily focused on manufacturing Rytary®, which product represents the majority of the unit volume produced and cash flows generated, the Taiwan facility is included in the Impax Specialty Pharma asset group. Based upon the cash flows expected to be generated by the Impax Specialty Pharma asset group, management determined that there was no impairment of the asset group which includes the Taiwan facility as of May 31, 2017. As of May 31, 2017, the remaining useful life of the Taiwan facility was estimated to be two years, which is based on the estimated time required to complete the technology transfer process for Rytary® and reflects the new pattern of consumption of the expected benefits of the facility. The Company will recognize accelerated depreciation expense on a straight-line basis through May 31, 2019 to write the building and equipment associated with the Taiwan facility down to their estimated salvage values. The Company is currently continuing its efforts to sell the Taiwan facility to a qualified buyer, although the Company cannot provide any assurance that it will be able to identify such a buyer or that a sale of the Taiwan facility will be completed. Management will continue to assess the “held for sale” criteria, estimated remaining useful lives, and estimated salvage values and reevaluate as required when facts and circumstances related to the Taiwan facility change. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Intangible Assets The Company’s intangible assets include both finite lived and indefinite-lived assets. Finite lived intangible assets, consisting of marketed product rights and royalties received from product sales by the Company’s third party partners, are amortized over the estimated useful life of the asset based on the pattern in which the economic benefits are expected to be consumed or otherwise used up or, if that pattern is not readily determinable, on a straight-line basis. The remaining weighted-average amortization period for the Company's finite lived intangible assets not yet fully amortized is 6.7 years as of September 30, 2017 . Indefinite-lived intangible assets consist of acquired IPR&D product rights and acquired future royalty rights to be paid based on other companies’ net sales of products not yet approved. IPR&D assets acquired in a business combination are considered indefinite-lived until the completion or abandonment of the associated research and development efforts. Amortization over the estimated useful life will commence at the time of the respective product’s launch. If FDA approval to market the product is not obtained, the Company will immediately expense the related capitalized cost. Finite lived intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. All of the Company's indefinite-lived intangible assets are tested for impairment at least annually during the fourth quarter of the fiscal year, or more often if indicators of impairment are present. Impairment testing requires management to estimate the future undiscounted cash flows of an intangible asset using assumptions believed to be reasonable, but which are unpredictable and inherently uncertain. Actual future cash flows may differ from the estimates used in the impairment testing. The Company recognizes an impairment loss when and to the extent that the estimated fair value of an intangible asset is less than its carrying value. The following tables show the gross carrying values and accumulated amortization, where applicable, of the Company’s intangible assets by type for the Company’s consolidated balance sheets presented (in thousands): September 30, 2017 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Amortized intangible assets: Marketed product rights $ 473,971 $ (188,637 ) $ 285,334 Royalties 339 (339 ) — 474,310 (188,976 ) 285,334 Non-amortized intangible assets: Acquired IPR&D product rights 223,598 — 223,598 Acquired future royalty rights 1,135 — 1,135 224,733 — 224,733 Total intangible assets $ 699,043 $ (188,976 ) $ 510,067 December 31, 2016 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Amortized intangible assets: Marketed product rights $ 524,733 $ (139,245 ) $ 385,488 Royalties 339 (339 ) — 525,072 (139,584 ) 385,488 Non-amortized intangible assets: Acquired IPR&D product rights 232,576 — 232,576 Acquired future royalty rights 2,402 — 2,402 234,978 — 234,978 Total intangible assets $ 760,050 $ (139,584 ) $ 620,466 During the first quarter of 2017, the Company recognized a total of $45.4 million of intangible asset impairment charges, of which $39.3 million was recognized in cost of revenues impairment charges and $6.1 million was recognized in in-process research and development impairment charges on the Company's consolidated statement of operations. The $45.4 million impairment charge was almost entirely attributable to three products, two of which are currently marketed products and one of which is an IPR&D product, all acquired as part of the Teva Transaction. For the currently marketed products, the impairment charge was the result of continued significant price and volume erosion during the first quarter of 2017 without an offsetting increase in customer demand, resulting in significantly lower expected future cash flows. For the IPR&D product, the impairment charge was the result of increased estimated research and development expenses and a delay in the anticipated product launch due to a change in the regulatory strategy to secure FDA approval of such product. Also during the first quarter of 2017, the Company commercially launched a product acquired as IPR&D as part of the Teva Transaction and, as a result, transferred the $2.5 million asset value from non-amortized, indefinite-lived acquired IPR&D product rights to amortized, finite lived marketed product rights. This asset will be amortized over an estimated useful life of seven years based on the pattern of economic benefit expected to be realized through 2023. During the second quarter of 2017, the Company divested 29 ANDAs and one NDA for non-strategic approved generic products, the vast majority of which were not marketed, and all acquired as part of the Tower Acquisition, for gross proceeds of $12.0 million . No ne of these intangible assets had any net book value at the time of the sale. The Company incurred $0.1 million of legal expenses in connection with the divestiture, resulting in a net gain on sale of $11.9 million recognized in other income (expense) on the Company's consolidated statement of operations. During the third quarter of 2017, the Company commercially launched a product acquired as IPR&D as part of the Tower Acquisition and, as a result, transferred this asset with a $1.5 million value from non-amortized indefinite-lived acquired IPR&D product rights to amortized, finite lived marketed product rights. This asset will be amortized over an estimated useful life of 8.3 years based on the pattern of economic benefit expected to be realized through 2025. Also during the third quarter of 2017, the Company recognized a $13.6 million intangible asset impairment charge in cost of revenues impairment charges on the Company's consolidated statement of operations. The impairment charge was entirely attributable to one currently marketed product acquired as part of the Teva Transaction and was the result of continued price erosion, resulting in significantly lower expected future cash flows. The Company recognized amortization expense of $17.0 million and $51.5 million for the three and nine months ended September 30, 2017 , respectively, and $18.4 million and $39.6 million for the three and nine months ended September 30, 2016 , respectively, in cost of revenues in the consolidated statements of operations presented. Assuming no changes to the gross carrying amount of finite-lived intangible assets, amortization expense for fiscal years 2017 through 2021 is estimated to be in the range of $30.0 million to $68.4 million annually. Goodwill Goodwill had a carrying value on the Company's consolidated balance sheets of $207.3 million at both September 30, 2017 and December 31, 2016 . At September 30, 2017 , the Company attributed $147.6 million and $59.7 million to the Impax Generics division and the Impax Specialty Pharma division, respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES The following table sets forth the Company’s accrued expenses (in thousands): September 30, 2017 December 31, 2016 Payroll-related expenses $ 35,739 $ 37,986 Product returns 80,716 72,888 Accrued shelf stock 5,715 7,032 Government rebates 64,856 72,063 Legal and professional fees 13,619 8,395 Income taxes payable 3,152 — Interest payable 3,546 544 Estimated Teva and Allergan chargebacks and rebates (1) 13,277 14,813 Accrued profit sharing and royalty expenses 15,243 13,642 Other 16,631 17,290 Total accrued expenses $ 252,494 $ 244,653 (1) As discussed in "Note 2. Business Acquisition," pursuant to certain agreed upon transition related services by and among the Company, Teva and Allergan after the closing of the Teva Transaction, the Company agreed to manage the payment process for certain commercial chargebacks and rebates on behalf of Teva and Allergan related to products each of Teva and Allergan sold into the channel prior to the Company's acquisition of the products. On August 18, 2016, the Company received a payment totaling $42.4 million from Teva and Allergan, which represented their combined estimate of the amount of commercial chargebacks and rebates to be paid by the Company on their behalf to wholesalers who purchased products from Teva and Allergan prior to the closing. Pursuant to the agreed upon transition services, Teva and Allergan are obligated to reimburse the Company for additional payments related to chargebacks and rebates for products they sold into the channel prior to the closing and made on their behalf in excess of the $42.4 million . If the total payments made by the Company on behalf of Teva and Allergan are less than $42.4 million , the Company is obligated to refund the difference to Teva and/or Allergan. As of September 30, 2017 , the Company had paid $29.1 million related to chargebacks and rebates on behalf of Teva and/or Allergan as described above and $13.3 million remained in accrued expenses on the Company's consolidated balance sheet. Product Returns The Company maintains a return policy to allow customers to return product within specified guidelines. The Company estimates a provision for product returns as a percentage of gross sales based upon historical experience for sales made through its Impax Generics and Impax Specialty Pharma sales channels. Sales of product under the Private Label, Rx Partner and OTC Partner alliance, collaboration and supply agreements are not subject to returns. A rollforward of the return reserve activity for the nine months ended September 30, 2017 and the year ended December 31, 2016 is as follows (in thousands): Nine Months Ended Year Ended Returns reserve September 30, 2017 December 31, 2016 Beginning balance $ 72,888 $ 48,950 Provision related to sales recorded in the period 38,820 52,383 Credits issued during the period (30,992 ) (28,445 ) Ending balance $ 80,716 $ 72,888 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Royal Bank of Canada Credit Facilities On August 3, 2016, the Company entered into a restatement agreement with Royal Bank of Canada, as administrative agent, and the lenders and guarantors party thereto (the "Restatement Agreement"). The Restatement Agreement amends and restates the Company's existing Revolving Credit Facility Agreement (as amended and restated and amended to date, the "Amended and Restated Credit Agreement") to, among other things, (i) add a term loan feature to allow for the borrowing of up to $400.0 million of term loans (the "Term Loan Facility") by the Company in accordance with the terms of the Amended and Restated Credit Agreement, (ii) increase the aggregate principal amount of revolving loans permitted under the Amended and Restated Credit Agreement (the "Revolving Credit Facility," and, together with the Term Loan Facility, the "RBC Credit Facilities"), from $100.0 million to $200.0 million ; and (iii) extend the maturity date of the Revolving Credit Facility from August 4, 2020 to August 3, 2021. On March 27, 2017, the Company entered into Amendment No. 1 by and among the Company, Royal Bank of Canada, as administrative agent, and the lenders party thereto (the “Amendment”) to the Amended and Restated Credit Agreement. Borrowings under the Amended and Restated Credit Agreement will accrue interest at a rate equal to LIBOR or the base rate, plus an applicable margin. The applicable margin may be increased or reduced by 0.25% based on the Company's total net leverage ratio. Up to $12.5 million of the Revolving Credit Facility is available for issuance of letters of credit and any such letters of credit will reduce the amount available under the Revolving Credit Facility on a dollar-for-dollar basis. The Company is required to pay a commitment fee to the lenders on the average daily unused portion of the Revolving Credit Facility at 0.50% or 0.375% per annum, depending on the Company's total net leverage ratio. The Amended and Restated Credit Agreement contains certain negative covenants (subject to exceptions, materiality thresholds and other allowances) including, without limitation, negative covenants that limit the Company's and its restricted subsidiaries' ability to incur additional debt, guarantee other obligations, grant liens on assets, make loans, acquisitions or other investments, dispose of assets, make optional payments in connection with or modify certain debt instruments, pay dividends or make other payments on capital stock, engage in mergers or consolidations, enter into arrangements that restrict the Company's and its restricted subsidiaries' ability to pay dividends or grant liens, engage in transactions with affiliates, or change its fiscal year. Prior to the effective date of the Amendment on March 27, 2017, the Amended and Restated Credit Agreement also included a financial maintenance covenant whereby the Company must not permit its total net leverage ratio in any 12 -month period to exceed 5.00 :1.00, as tested at the end of each fiscal quarter. Effective as of March 27, 2017 and pursuant to the Amendment, the total net leverage ratio financial covenant was replaced with a new senior secured net leverage ratio financial covenant. Pursuant to the Amendment, the Company must not permit its senior secured net leverage ratio to exceed 2.50 :1.00 and the interest coverage ratio to be less than 3.00 :1.00, in each case in any 12 -month period, as tested at the end of each fiscal quarter. The Company was in compliance with all of its covenants under the Amended and Restated Credit Agreement as of September 30, 2017 . The Amended and Restated Credit Agreement contains events of default, including, without limitation (subject to customary grace periods and materiality thresholds), events of default upon (i) the failure to make payments pursuant to the terms of the Amended and Restated Credit Agreement, (ii) violation of covenants, (iii) incorrectness of representations and warranties, (iv) cross-default and cross-acceleration to other material indebtedness, (v) bankruptcy events, (vi) material monetary judgments (to the extent not covered by insurance), (vii) certain matters arising under the Employee Retirement Income Security Act of 1974, as amended, that could reasonably be expected to result in a material adverse effect, (viii) the actual or asserted invalidity of the documents governing the RBC Credit Facilities, any material guarantees or the security interests (including priority thereof) required under the Amended and Restated Credit Agreement and (ix) the occurrence of a change of control (as defined therein). Upon the occurrence of certain events of default, the obligations under the Amended and Restated Credit Agreement may be accelerated and any remaining commitments thereunder may be terminated. The full amount of proceeds from the Term Loan Facility of $400.0 million , along with $196.4 million of cash were used to finance the Teva Transaction (including transaction costs) at closing on August 3, 2016. As of September 30, 2017 , the full amount of the $200.0 million Revolving Credit Facility remains available to the Company for working capital and other general corporate purposes. In connection with the Term Loan Facility, the Company incurred $11.0 million of debt issuance costs for banking, legal and accounting fees and other expenses during the third quarter of 2016. In connection with the Amendment, the Company incurred $0.8 million of debt issuance costs for banking fees during the first quarter of 2017. These debt issuance costs were recorded on the Company's consolidated balance sheet as a reduction to the current and long-term portions of debt related to the Term Loan Facility. These deferred debt issuance costs will be accreted to interest expense over the term of the debt using the effective interest method. In connection with the increase in the aggregate principal amount of revolving loans permitted under the Revolving Credit Facility, the Company incurred $0.8 million of debt issuance costs for banking fees which were recorded as an asset with current and long-term portions on the Company's consolidated balance sheet. These deferred debt issuance costs, in addition to the $0.3 million balance remaining from the initial $100.0 million revolving credit facility, will be amortized to interest expense over the term of the Revolving Credit Facility using the straight-line method. For the three and nine months ended September 30, 2017 , the Company recognized $4.5 million and $13.1 million , respectively, of interest expense related to the Term Loan Facility, of which $3.9 million and $11.4 million , respectively, was cash and $0.6 million and $1.7 million , respectively, was non-cash accretion of the debt discount recorded for deferred debt issuance costs. For the period of August 3, 2016 through September 30, 2016 , the Company recognized $2.6 million of interest expense related to the Term Loan Facility, of which $2.2 million was cash and $0.4 million was non-cash accretion of the debt discount recorded for deferred debt issuance costs. As of September 30, 2017 , the Term Loan Facility had a carrying value of $322.0 million , of which $17.8 million is classified as current debt and $304.2 million is classified as long-term debt on the Company's consolidated balance sheets. The Term Loan Facility requires the Company to make quarterly principal payments of $5.0 million beginning from December 2016 through June 2021, and the remaining principal balance is due and payable in August 2021. As of September 30, 2017 , the outstanding principal amount for the Term Loan Facility was $330.0 million . Loss on Early Extinguishment of Debt - Voluntary Prepayment of $50.0 Million of Principal - RBC Term Loan Facility On February 28, 2017, the Company made a voluntary prepayment in the amount of $50.3 million under its Term Loan Facility, representing $50.0 million of principal amount and $0.3 million of accrued interest thereon. As a result of this voluntary prepayment, for the quarter ended March 31, 2017, the Company recorded a loss on early extinguishment of debt of $1.2 million to write-off a pro rated portion of the related unaccreted debt issuance costs. 2% Convertible Senior Notes due June 2022 On June 30, 2015, the Company issued an aggregate principal amount of $600.0 million of 2.00% Convertible Senior Notes due June 2022 (the “Notes”) in a private placement offering, which are the Company’s senior unsecured obligations. The Notes were issued pursuant to an Indenture dated June 30, 2015 (the “Indenture”) between the Company and Wilmington Trust, N.A. as trustee. The Indenture includes customary covenants and sets forth certain events of default after which the Notes may be due and payable immediately. The Notes will mature on June 15, 2022, unless earlier redeemed, repurchased or converted. The Notes bear interest at a rate of 2.00% per year, and interest is payable semiannually in arrears on June 15 and December 15 of each year, beginning from December 15, 2015. The conversion rate for the Notes is initially set at 15.7858 shares per $1,000 of principal amount, which is equivalent to an initial conversion price of $63.35 per share of the Company’s common stock. If a Make-Whole Fundamental Change (as defined in the Indenture) occurs or becomes effective prior to the maturity date and a holder elects to convert its Notes in connection with the Make-Whole Fundamental Change, the Company is obligated to increase the conversion rate for the Notes so surrendered by a number of additional shares of the Company’s common stock as prescribed in the Indenture. Additionally, the conversion rate is subject to adjustment in the event of an equity restructuring transaction such as a stock dividend, stock split, spinoff, rights offering, or recapitalization through a large, nonrecurring cash dividend (“standard antidilution provisions,” per FASB ASC 815-40, Contracts in Entity’s Own Equity ("ASC 815-40")). The Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding December 15, 2021 only under the following circumstances: (i) If during any calendar quarter commencing after the quarter ending September 30, 2015 (and only during such calendar quarter) the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than 130% of the conversion price on each applicable trading day; or (ii) If during the five business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 of principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last report sale price of the Company’s common stock and the conversion rate on each such trading day; or (iii) Upon the occurrence of corporate events specified in the Indenture. On or after December 15, 2021 until the close of business on the second scheduled trading day immediately preceding the maturity date, the holders may convert their Notes at any time, regardless of the foregoing circumstances. The Company may satisfy its conversion obligation by paying or delivering, as the case may be, 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 and in the manner and subject to the terms and conditions provided in the Indenture. Concurrently with the offering of the Notes and using a portion of the proceeds from the sale of the Notes, the Company entered into a series of convertible note hedge and warrant transactions (the “Note Hedge Transactions” and “Warrant Transactions”) which are designed to reduce the potential dilution to the Company’s stockholders and/or offset the cash payments the Company is required to make in excess of the principal amount upon conversion of the Notes. The Note Hedge Transactions and Warrant Transactions are separate transactions, in each case, entered into by the Company with a financial institution and are not part of the terms of the Notes. These transactions will not affect any holder’s rights under the Notes, and the holders of the Notes have no rights with respect to the Note Hedge Transactions and Warrant Transactions. See “Note 13. Stockholders’ Equity” for additional information. At the June 30, 2015 issuance date of the Notes, the Company did not have the necessary number of authorized but unissued shares of its common stock available to share-settle the conversion option of the Notes. Therefore, in accordance with guidance found in FASB ASC 470-20, Debt with Conversion and Other Options , and FASB ASC 815-15, Embedded Derivatives , the conversion option of the Notes was deemed an embedded derivative requiring bifurcation from the Notes (host contract) and separate accounting as a derivative liability. The fair value of the conversion option derivative liability at June 30, 2015 was $167.0 million , which was recorded as a reduction to the carrying value of the debt and will be accreted to interest expense over the term of the debt using the effective interest method. Although the Company subsequently amended the Company's Restated Certificate of Incorporation to increase the authorized number of shares of the Company’s common stock in December 2015, the debt discount remained and continues to be accreted to interest expense over the term of the debt. See “Note 13. Stockholders’ Equity” for additional information. In connection with the issuance of the Notes, the Company incurred $18.7 million of debt issuance costs for banking, legal and accounting fees and other expenses. This amount was also recorded on the Company’s balance sheet as a reduction to the carrying value of the debt and is being accreted to interest expense over the term of the debt using the effective interest method. For the three and nine months ended September 30, 2017 , the Company recognized $8.9 million and $26.4 million , respectively, of interest expense related to the Notes, of which $3.0 million and $9.0 million , respectively, was cash and $5.9 million and $17.4 million , respectively, was non-cash accretion of the debt discounts recorded. For the three and nine months ended September 30, 2016 , the Company recognized $8.5 million and $25.3 million , respectively, of interest expense related to the Notes, of which $3.0 million and $9.0 million , respectively, was cash and $5.5 million and $16.3 million , respectively, was non-cash accretion of the debt discounts recorded. As the Notes mature in 2022, they have been classified as long-term debt on the Company's consolidated balance sheets, with a carrying value of $463.8 million and $446.4 million as of September 30, 2017 and December 31, 2016 , respectively. Accrued interest payable on the Notes of $3.5 million as of September 30, 2017 and $0.5 million as of December 31, 2016 is included in accrued expenses on the Company's consolidated balance sheets. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Preferred Stock Pursuant to its Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), the Company is authorized to issue 2,000,000 shares of “blank check” preferred stock, $0.01 par value per share, which enables the Board of Directors, from time to time, to create one or more new series of preferred stock. Each series of preferred stock issued can have the rights, preferences, privileges and restrictions designated by the Board of Directors. The issuance of any new series of preferred stock could affect, among other things, the dividend, voting, and liquidation rights of the Company’s common stock. The Company had no preferred stock issued or outstanding as of September 30, 2017 and December 31, 2016 . Common Stock Pursuant to its Certificate of Incorporation, the Company is authorized to issue 150,000,000 shares of common stock, $0.01 par value per share, of which 74,407,135 shares have been issued and 74,163,406 shares were outstanding as of September 30, 2017 . In addition, the Company had reserved for issuance the following amounts of shares of its common stock for the purposes described below as of September 30, 2017 (in thousands): Shares issued 74,407 Stock options outstanding (1) 3,375 Conversion of Notes payable (2) 9,471 Warrants outstanding (see below) 9,471 Total shares of common stock issued and reserved for issuance 96,724 (1) See “Note 15. Share-based Compensation.” (2) See “Note 12. Debt.” Warrants As discussed in “Note 12. Debt,” on June 30, 2015, the Company entered into a series of Note Hedge Transactions and Warrant Transactions with a financial institution which are designed to reduce the potential dilution to the Company’s stockholders and/or offset the cash payments the Company is required to make in excess of the principal amount upon conversion of the Notes. Pursuant to the Warrant Transactions, the Company sold to a financial institution 9.47 million warrants to purchase the Company’s common stock, for which it received proceeds of $88.3 million . The warrants have an exercise price of $81.277 per share (subject to adjustment), are immediately exercisable, and have an expiration date of September 15, 2022. Additional Paid-in Capital Pursuant to the Note Hedge Transactions, the Company purchased from a financial institution 0.6 million call options on the Company's common stock, for which it paid consideration of $147.0 million . Each call option entitles the Company to purchase 15.7858 shares of the Company's common stock at an exercise price of $63.35 per share, is immediately exercisable, and has an expiration date of June 15, 2022, subject to earlier exercise. At the time of the Note Hedge Transactions, because of an insufficient number of authorized but unissued shares of the Company's common stock, these call options did not meet the criteria for equity classification under ASC 815-40 and were accounted for as a derivative asset. As of December 8, 2015, pursuant to the Company's amendment to its Certificate of Incorporation to increase the number of authorized shares of common stock, the call options purchased pursuant to the Note Hedge Transactions (formerly a derivative asset) and the conversion option of the Notes (formerly an embedded derivative liability) were reclassified to equity in additional paid-in capital. The net effect of the reclassification of these derivatives was a $21.0 million , net of tax, increase in additional paid-in capital reflected on the Company's December 31, 2015 consolidated balance sheet. Retained Earnings Effective January 1, 2017, the Company adopted ASU 2016-09 " Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting " and elected to eliminate the use of a forfeiture rate estimate in the determination of share-based compensation expense for restricted stock awards using the modified retrospective transition method. Adoption of the new guidance using this method resulted in a $1.4 million charge to opening retained earnings for 2017. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The Company's basic earnings per common share (“EPS”) is computed by dividing net income (loss) available to the Company’s common stockholders (as presented on the consolidated statements of operations) by the weighted-average number of shares of the Company’s common stock outstanding during the period. The Company’s restricted stock awards (non-vested shares) are issued and outstanding at the time of grant but are excluded from the Company’s computation of weighted-average shares outstanding in the determination of basic EPS until vesting occurs. For purposes of calculating diluted EPS, the denominator includes both the weighted-average number of shares of common stock outstanding and the number of common stock equivalents if the inclusion of such common stock equivalents would be dilutive. Dilutive common stock equivalents potentially include warrants, stock options and non-vested restricted stock awards using the treasury stock method and the number of shares of common stock issuable upon conversion of the Company’s outstanding convertible notes payable. In the case of the Company’s outstanding convertible notes payable, the diluted EPS calculation is further affected by an add-back of interest expense, net of tax, to the numerator under the assumption that the interest would not have been incurred if the convertible notes had been converted into common stock. The following is a reconciliation of basic and diluted net loss per share of common stock for the three and nine months ended September 30, 2017 and 2016 (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Basic Loss Per Common Share: Net loss $ (49,369 ) $ (179,337 ) $ (168,217 ) $ (192,446 ) Weighted-average common shares outstanding 71,925 71,331 71,776 71,033 Basic loss per share $ (0.69 ) $ (2.51 ) $ (2.34 ) $ (2.71 ) Diluted Loss Per Common Share: Net loss $ (49,369 ) $ (179,337 ) $ (168,217 ) $ (192,446 ) Add-back of interest expense on outstanding convertible notes payable, net of tax — (1) — (1) — (1) — (1) Adjusted net loss $ (49,369 ) $ (179,337 ) $ (168,217 ) $ (192,446 ) Weighted-average common shares outstanding 71,925 71,331 71,776 71,033 Weighted-average incremental shares related to assumed exercise of warrants and stock options, vesting of non-vested shares and ESPP share issuance — (2) — (3) — (2) — (3) Weighted-average incremental shares assuming conversion of outstanding notes payable — (1) — (1) — (1) — (1) Diluted weighted-average common shares outstanding 71,925 (2) 71,331 (3) 71,776 (2) 71,033 (3) Diluted loss per share $ (0.69 ) $ (2.51 ) $ (2.34 ) $ (2.71 ) (1) For the three and nine month periods ended September 30, 2017 and September 30, 2016 , the Company incurred a net loss, which cannot be diluted, so basic and diluted loss per common share were the same. Accordingly, there were no numerator or denominator adjustments related to the Company’s outstanding Notes. (2) For the three and nine month periods ended September 30, 2017 , the Company incurred a net loss, which cannot be diluted, so basic and diluted loss per common share were the same. As of September 30, 2017 , shares issuable but not included in the Company's calculation of diluted EPS, which could potentially dilute future earnings, include 9.47 million warrants outstanding, 9.47 million shares for conversion of outstanding Notes payable, 3.38 million stock options outstanding and 2.24 million non-vested restricted stock awards. (3) For the three and nine month periods ended September 30, 2016 , the Company incurred a net loss, which cannot be diluted, so basic and diluted loss per common share were the same. As of September 30, 2016 , shares issuable but not included in the Company's calculation of diluted EPS, which could potentially dilute future earnings, include 9.47 million warrants outstanding, 9.47 million shares for conversion of outstanding Notes payable, 2.47 million stock options outstanding and 2.60 million non-vested restricted stock awards. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The Company recognizes the grant date fair value of each option and share of restricted stock over its vesting period. Stock options and restricted stock awards are granted under the Company’s Fourth Amended and Restated 2002 Equity Incentive Plan (the “2002 Plan”) and generally vest over a four year period and, in the case of stock options, have a term of 10 years. Impax Laboratories, Inc. Fourth Amended and Restated 2002 Equity Incentive Plan ("2002 Plan") The aggregate number of shares of common stock authorized for issuance pursuant to the Company's 2002 Plan is 18,050,000 shares. There were 2,525,110 and 2,233,393 stock options outstanding as of September 30, 2017 and December 31, 2016 , respectively, and 2,241,442 and 2,160,127 non-vested restricted stock awards outstanding as of September 30, 2017 and December 31, 2016 , respectively, under the 2002 Plan. Impax Laboratories, Inc. 1999 Equity Incentive Plan ("1999 Plan") The aggregate number of shares of common stock authorized for issuance pursuant to the Company’s 1999 Plan is 5,000,000 shares. There were zero and 938 stock options outstanding as of September 30, 2017 and December 31, 2016 , respectively, under the 1999 Plan. The Company has ceased granting equity awards under the 1999 Plan. Awards Granted Out of Plan - CEO Inducement On March 27, 2017, the Company granted Paul M. Bisaro, its new President and Chief Executive Officer, an option to purchase 850,000 shares of the Company’s common stock pursuant to the terms of his Employment Agreement dated as of March 24, 2017 with the Company. The grant was made in accordance with NASDAQ’s employment inducement grant exemption and therefore was not granted under a stockholder approved plan. The grant is subject to the terms of an option agreement with Mr. Bisaro to evidence the award. There were 850,000 stock options outstanding related to this grant as of September 30, 2017 . The following table summarizes all of the Company's stock option activity for the current year through September 30, 2017 : Stock Options Number of Weighted- Outstanding at December 31, 2016 2,234,331 $ 22.67 Options granted 1,198,726 12.21 Options exercised (34,473 ) 9.70 Options forfeited (23,474 ) 27.05 Outstanding at September 30, 2017 3,375,110 $ 19.01 Options exercisable at September 30, 2017 1,820,971 $ 20.68 As of September 30, 2017 , stock options outstanding and exercisable had average remaining contractual lives of 6.96 years and 5.68 years, respectively. Also, as of September 30, 2017 , stock options outstanding and exercisable each had aggregate intrinsic values of $17.2 million and $7.5 million , respectively, and restricted stock awards outstanding had an aggregate intrinsic value of $45.5 million . As of September 30, 2017 , the Company estimated there were 2,987,961 stock options and 1,984,333 shares of restricted stock granted to employees and service providers which had vested or were expected to vest. The Company grants restricted stock to certain eligible employees as a component of its long-term incentive compensation program. The restricted stock award grants are made in accordance with the Company’s 2002 Plan and are issued and outstanding at the time of grant but are subject to forfeiture if the vesting conditions are not met. A summary of the non-vested restricted stock awards is as follows: Restricted Stock Awards Number of Weighted- Non-vested at December 31, 2016 2,160,127 $ 34.02 Granted 961,808 13.74 Vested (490,487 ) 35.66 Forfeited (390,006 ) 32.27 Non-vested at September 30, 2017 2,241,442 $ 25.30 Included in the 490,487 shares of restricted stock vested during the nine months ended September 30, 2017 are 189,125 shares with a weighted-average fair value of $14.12 per share that were withheld for income tax withholding purposes upon vesting of such awards from stockholders who elected to net share settle such tax withholding obligation. As of September 30, 2017 , the Company had 1,722,080 shares available for issuance of either stock options or restricted stock awards under the 2002 Plan. Although there were also 296,921 shares available for issuance under the 1999 Plan, the Company has ceased granting equity awards under this plan. Additionally, the Company had 1,507,789 shares available for issuance under its 2001 Non-Qualified Employee Stock Purchase Plan, as amended (“ESPP”). The Company's Board of Directors has determined that the final purchase period prior to December 31, 2017 will be the final purchase period under the ESPP, and the ESPP will be terminated thereafter. As of September 30, 2017 , the Company had total unrecognized share-based compensation expense, net of estimated forfeitures, of $52.6 million related to all of its share-based awards, which is expected to be recognized over a weighted average period of 1.8 years. The intrinsic value of options exercised during the nine months ended September 30, 2017 and 2016 was $0.2 million and $5.6 million , respectively. The total fair value of restricted stock which vested during the nine months ended September 30, 2017 and 2016 was $17.5 million and $16.4 million , respectively. The Company estimated the fair value of each stock option award on the grant date using the Black-Scholes option pricing model, wherein expected volatility is based on historical volatility of the Company’s common stock. The expected term calculation is based on the “simplified” method described in SAB No. 107, Share-Based Payment, and SAB No. 110, Share-Based Payment, as the result of the simplified method provides a reasonable estimate in comparison to actual experience. The risk-free interest rate is based on the U.S. Treasury yield at the date of grant for an instrument with a maturity that is commensurate with the expected term of the stock options. The dividend yield of zero is based on the fact that the Company has never paid cash dividends on its common stock, and has no present intention to pay cash dividends. Options granted under each of the above plans generally vest over four years and have a term of 10 years. The amount of share-based compensation expense recognized by the Company is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Cost of revenues $ 1,521 $ 1,331 $ 4,307 $ 4,579 Selling, general and administrative 3,930 5,070 11,443 14,537 Research and development 1,039 1,312 3,922 4,259 Total $ 6,490 $ 7,713 $ 19,672 $ 23,375 |
RESTRUCTURINGS
RESTRUCTURINGS | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURINGS | RESTRUCTURINGS Consolidation and Improvement Plan On May 10, 2017, the Company announced that it has initiated a series of actions designed to improve manufacturing and research and development ("R&D") efficiencies, capitalize on growth opportunities, improve profitability and mitigate current challenges. The actions include: • Consolidating all of Generic R&D, U.S. manufacturing and packing operations to its Hayward, California facility; • Continuing the previously announced closure of the Middlesex, New Jersey manufacturing site, which will now include the closure of the Middlesex Generic R&D site as further discussed below under "Middlesex, New Jersey Manufacturing and Packaging Operations" and "Middlesex, New Jersey Generic R&D"; • Reorganizing certain functions including quality, engineering and supply chain operations as further described below under "Technical Operations Reduction-in-Force"; • Reviewing strategic alternatives for the Company’s Taiwan facility, including a sale of the facility or, in the alternative, a closure of the facility as further described below under "Sale or Closure of Taiwan Facility" and above in "Note 9. Property, Plant and Equipment;" and • Rationalizing the generic portfolio to eliminate low-value products and streamline operations such as the Company's divestment during the second quarter of 2017 of 29 ANDAs and one NDA for approved non-strategic generic products, the vast majority of which were not marketed, and all acquired as part of the Tower Acquisition, as described above under "Note 10. Intangible Assets and Goodwill." By consolidating activities as outlined above, the Company expects to achieve cost savings and operating efficiency benefits while maintaining the infrastructure and expertise needed to capitalize on product and pipeline strengths. The Company currently expects to incur estimated charges for each initiative as described below. There are no charges currently expected to be incurred related to the rationalization of the generic product portfolio. Middlesex, New Jersey Manufacturing and Packaging Operations In March 2016, the Company's Board of Directors approved a plan of restructuring designed to reduce costs, improve operating efficiencies and enhance the Company's long-term competitive position by closing the Company's Middlesex, New Jersey manufacturing and packaging site and transferring the products and the functions performed there to the Company's other facilities or to third-party manufacturers. This plan will take up to two years from approval to complete. As a result of the restructuring, 215 positions were expected to be eliminated. Management currently estimates that through mid-2018, the Company will incur aggregate pre-tax charges in connection with this plan of $51.8 million , of which $40.4 million has been incurred through the third quarter of 2017 and the remainder will be incurred by the second quarter of 2018. The following is a summary of the total estimated charges to be incurred by major type of cost (in millions): Type of Cost Amount Expected to be Incurred Employee retention and severance payments $ 14.1 Technical transfer of products 11.2 Asset impairment and accelerated depreciation charges 24.4 Facilities lease terminations and asset retirement obligations 1.9 Legal and professional fees 0.2 Total estimated restructuring charges $ 51.8 Employee retention and severance payments are being accrued over the estimated service period. For the three and nine months ended September 30, 2017 , the Company recorded expense of $3.3 million and $12.4 million , respectively, to cost of revenues on the consolidated statement of operations. Additionally, the Company recorded $0.6 million and $0.9 million of expense to fixed asset impairment charges in other income (expense) on the consolidated statement of operations for the three and nine months ended September 30, 2017 , respectively. For the three and nine months ended September 30, 2016 , the Company recorded $13.9 million and $20.5 million , respectively, to cost of revenues on the consolidated statement of operations. A rollforward of the charges incurred for the nine months ended September 30, 2017 is as follows (in thousands): Balance as of Expensed/ Balance as of December 31, 2016 Accrued Expense Cash Payments Non-Cash Items September 30, 2017 Employee retention and severance payments $ 5,945 $ 4,165 $ (3,816 ) $ — $ 6,294 Technical transfer of products — 2,584 (2,584 ) — — Asset impairment and accelerated depreciation charges — 6,145 — (6,145 ) — Facilities lease terminations and asset retirement obligations 209 398 — — 607 Legal and professional fees — — — — — Total $ 6,154 $ 13,292 $ (6,400 ) $ (6,145 ) $ 6,901 Middlesex, New Jersey Generic R&D In May 2017, as part of its Consolidation and Improvement Plan, the Company announced its plan to close its Middlesex, New Jersey Generic R&D site and consolidate all Generic R&D activities to its Hayward, California facility. As a result, the Company eliminated a total of 31 positions in Middlesex, of which 15 positions will be rehired in the Hayward location as needed through the end of 2017. In connection with this Generic R&D consolidation, management currently estimates that the Company will incur aggregate pre-tax charges for employee termination benefits, program termination costs and accelerated depreciation charges of $3.4 million through the end of 2017. For the three and nine months ended September 30, 2017 , the Company recorded $0.3 million and $2.8 million of employee termination benefits and program termination costs, respectively, and minimal amounts and $0.4 million for accelerated depreciation charges, respectively, all to research and development on the consolidated statement of operations. As of September 30, 2017 , $2.0 million of employee termination benefits and program termination costs had been paid and $0.1 million of employee termination benefits were included in accrued expenses on the Company's consolidated balance sheet. Technical Operations Reduction-in-Force In March 2017, the Company's management determined that a reduction-in-force was necessary in the Company's technical operations group in order to achieve greater operational efficiencies and to further streamline the organization. At that time, the Company identified 18 positions for elimination, of which two employees will stay with the Company through the end of 2017. In June 2017, the Company identified three additional positions for elimination, for a total of 21 positions identified for elimination as of September 30, 2017. In connection with this reduction-in-force, management currently estimates that the Company will incur aggregate pre-tax charges for employee termination benefits and other associated costs of $2.8 million through the end of 2017. For the three and nine months ended September 30, 2017 , the Company recorded $0.3 million and $2.6 million , respectively, of employee termination benefits and other associated costs to cost of revenues on the consolidated statement of operations. As of September 30, 2017 , $2.1 million had been paid and $0.5 million of employee termination benefits were included in accrued expenses on the Company’s consolidated balance sheet. Sale or Closure of Taiwan Facility In May 2017, as part of its Consolidation and Improvement Plan, the Company announced that it was reviewing strategic alternatives for its Taiwan facility, including a sale of the facility to a qualified buyer capable of reliably producing Rytary® in accordance with FDA requirements as the Company’s CMO or, in the alternative, a closure of the facility following the completion of the technology transfer process to allow Rytary® to be manufactured either in the Company’s Hayward, California facility or at a CMO. The Company is currently continuing its efforts to sell the Taiwan facility to a qualified buyer, although the Company cannot provide any assurance that it will be able to identify such a buyer or that a sale of the Taiwan facility will be completed. It is not possible to reasonably determine the timing and scope of the aggregate pre-tax charges the Company will incur until such time as a definitive decision is reached regarding the sale or closure of the Taiwan facility. The closure of the facility represents the maximum possible charges the Company could incur related to a sale or closure of the facility. If the facility is closed, management currently estimates that through mid-2019 the Company will incur aggregate pre-tax charges in the range of $95.0 million to $105.0 million , primarily composed of accelerated depreciation expenses attributable to depreciating the building and equipment to their estimated salvage values over a revised estimated useful life of two years, as well as technology transfer costs. The Taiwan facility had a net book value of $92.1 million as of September 30, 2017 . |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. For the three and nine months ended September 30, 2017, however, the Company began using the discrete effective tax rate method to calculate taxes. The Company had determined that since small changes in estimated “ordinary” income (or loss) would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the three and nine months ended September 30, 2017. During the nine month periods ended September 30, 2017 and 2016 , the Company recognized an aggregate consolidated tax expense (benefit) of $27.3 million and $(112.9) million, respectively, for U.S. domestic and foreign income taxes. The effective tax rates for the nine month periods ended September 30, 2017 and 2016 were (19.4)% and 37.0% , respectively. The amount of tax expense recorded for the nine months ended September 30, 2017 reflects the Company’s estimate as of such date using the discrete effective tax rate method. The amount of tax benefit recorded for the nine month period ended September 30, 2016 was calculated using the annual estimated rate method. A discrete tax benefit of $17.4 million for the reserve recorded against the Turing receivable as described in "Note 7. Accounts Receivable" was also reflected in income tax benefit for the nine months ended September 30, 2016. Excluding the discrete item, the Company’s estimate of the annualized effective tax rate for the nine months ended September 30, 2016 was 37.1% . Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of the existing deferred tax assets. A significant piece of objective evidence that management evaluated was the cumulative loss incurred over the three year period ended December 31, 2016. Such objective evidence limits management's ability to consider other subjective evidence, such as projected taxable income. On the basis of this evaluation, as of December 31, 2016, the Company established a valuation allowance of $108.8 million . During the nine month period ended September 30, 2017, the Company considered new evidence, both positive and negative, that could impact the Company's assessment with regard to future realization of deferred tax assets. Based on the cumulative loss over the three year period ended September 30, 2017, an additional valuation allowance in the amount of $68.7 million was recorded against the gross deferred tax asset balance for a total valuation allowance of $177.5 million as of September 30, 2017. Tower Holdings, Inc. (“Tower”) is currently under audit for federal income tax by the U.S. Internal Revenue Service ("IRS") for the tax year ended March 9, 2015, which pre-dates the Company’s acquisition of Tower. The Company and the former stockholders of Tower are currently cooperating with the IRS in connection with the audit. Under the terms of the Stock Purchase Agreement related to the Tower Acquisition, the Company is not responsible for pre-acquisition income tax liabilities. Neither the Company nor any of its other affiliates is currently under audit for federal income tax. Through March 31, 2017, no provision had been made for U.S. federal deferred income taxes on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiary since it had been the current intention of management to indefinitely reinvest the undistributed earnings in the foreign subsidiary. As of June 30, 2017, following management’s announcement in May 2017 that it is reviewing potential options to either sell or close the Taiwan manufacturing facility and dissolve operations at Impax Taiwan, the Company has changed its assertion related to the accumulated unremitted foreign earnings of Impax’s Taiwan subsidiary. The Company is no longer able to assert under ASC 740-30-25 that the unremitted foreign earnings are indefinitely reinvested outside the U.S. Accordingly, the Company has recorded a deferred tax liability associated with remitting these earnings back to the U.S. For the six month period ended September 30, 2017, U.S. income and foreign withholding taxes of approximately $8.1 million have been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiary that had previously been indefinitely reinvested outside the United States. |
ALLIANCE AND COLLABORATION AGRE
ALLIANCE AND COLLABORATION AGREEMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ALLIANCE AND COLLABORATION AGREEMENTS | ALLIANCE AND COLLABORATION AGREEMENTS The Company has entered into several alliance, collaboration, license and distribution agreements, and similar agreements with respect to certain of its products and services, with unrelated third-party pharmaceutical companies. The consolidated statements of operations include revenue recognized under agreements the Company has entered into to develop marketing and/or distribution relationships with its partners to fully leverage the technology platform and revenue recognized under development agreements which generally obligate the Company to provide research and development services over multiple periods. The Company’s alliance and collaboration agreements often include milestones and provide for milestone payments upon achievement of these milestones. Generally, the milestone events contained in the Company’s alliance and collaboration agreements coincide with the progression of the Company’s products and technologies from pre-commercialization to commercialization. The Company groups pre-commercialization milestones in its alliance and collaboration agreements into clinical and regulatory categories, each of which may include the following types of events: Clinical Milestone Events: • Designation of a development candidate . Following the designation of a development candidate, generally, IND-enabling animal studies for a new development candidate take 12 to 18 months to complete. • Initiation of a Phase I clinical trial . Generally, Phase I clinical trials take one to two years to complete. • Initiation or completion of a Phase II clinical trial . Generally, Phase II clinical trials take one to three years to complete. • Initiation or completion of a Phase III clinical trial . Generally, Phase III clinical trials take two to four years to complete. • Completion of a bioequivalence study . Generally, bioequivalence studies take three months to one year to complete. Regulatory Milestone Events: • Filing or acceptance of regulatory applications for marketing approval such as a New Drug Application in the United States or Marketing Authorization Application in Europe . Generally, it takes six to 12 months to prepare and submit regulatory filings and two months for a regulatory filing to be accepted for substantive review. • Marketing approval in a major market, such as the United States or Europe . Generally it takes one to three years after an application is submitted to obtain approval from the applicable regulatory agency. • Marketing approval in a major market, such as the United States or Europe for a new indication of an already-approved product . Generally it takes one to three years after an application for a new indication is submitted to obtain approval from the applicable regulatory agency. Commercialization Milestones Events: • First commercial sale in a particular market , such as in the United States or Europe . • Product sales in excess of a pre-specified threshold, such as annual sales exceeding $100.0 million . The amount of time to achieve this type of milestone depends on several factors including but not limited to the dollar amount of the threshold, the pricing of the product and the pace at which customers begin using the product. License and Distribution Agreement with Shire In January 2006, the Company entered into a License and Distribution Agreement with an affiliate of Shire Laboratories, Inc., which was subsequently amended (“Prior Shire Agreement”), under which the Company received a non-exclusive license to market and sell an authorized generic of Shire’s Adderall XR® product (“AG Product”) subject to certain conditions, but in any event by no later than January 1, 2010. The Company commenced sales of the AG Product in October 2009. On February 7, 2013, the Company entered into an Amended and Restated License and Distribution Agreement with Shire (the “Amended and Restated Shire Agreement”), which amended and restated the Prior Shire Agreement. The Amended and Restated Shire Agreement was entered into by the parties in connection with the settlement of the Company’s litigation with Shire relating to Shire’s supply of the AG Product to the Company under the Prior Shire Agreement. Under the Amended and Restated Shire Agreement, Shire was required to supply the AG Product and the Company was responsible for marketing and selling the AG Product subject to the terms and conditions thereof until the earlier of (i) the first commercial sale of the Company’s generic equivalent product to Adderall XR® and (ii) September 30, 2014 (the “Supply Term”), subject to certain continuing obligations of the parties upon expiration or early termination of the Supply Term, including Shire’s obligation to deliver AG Products still owed to the Company as of the end of the Supply Term. Although the Supply Term expired on September 30, 2014, the Company was permitted to sell any AG Products in its inventory or owed to the Company by Shire under the Amended and Restated Shire Agreement until all such products are sold. The Company sold all remaining AG Products in its inventory during the year ended December 31, 2016. Pursuant to the terms of the Amended and Restated Shire Agreement, the Company is required to pay to Shire a specified profit share based on sales of the AG Product and a specified profit share based on sales of the Company’s generic Adderall XR® product. The Company began selling its generic Adderall XR® product during the second quarter of 2016. The Company owed a profit share payable to Shire of $1.8 million during the nine months ended September 30, 2017 , based on sales of the Company’s generic Adderall XR® product and reflecting adjustments for returns and government rebates from the Company's previous sales of the AG Product and of $7.2 million during the nine months ended September 30, 2016 , based on sales of the AG Product and the Company's generic Adderall XR® product, in each case with a corresponding charge included in the cost of revenues line in the consolidated statement of operations. Development, Supply and Distribution Agreement with TOLMAR, Inc. In June 2012, the Company entered into the Tolmar Agreement with Tolmar. Under the terms of the Tolmar Agreement, Tolmar granted to the Company an exclusive license to commercialize up to 11 generic topical prescription drug products, including 10 currently approved products in the United States and its territories; the parties agreed in 2015 to terminate development efforts of one product under the Tolmar Agreement that had been pending approval at the FDA. Under the terms of the Tolmar Agreement, Tolmar is responsible for developing and manufacturing the products, and the Company is responsible for marketing and sale of the products. As of September 30, 2017 , the Company was currently marketing and selling four approved products. The Company is required to pay a profit share to Tolmar on sales of each product commercialized pursuant to the terms of the Tolmar Agreement. The Company paid Tolmar a $21.0 million upfront payment upon signing of the agreement and, pursuant to the terms of the agreement, is also required to make payments to Tolmar up to an aggregate amount of $25.0 million upon the achievement of certain specified milestone events. The contingent milestone payments are initially recognized in the period the triggering event occurs. Milestone payments which are contingent upon commercialization events will be accounted for as an additional cost of acquiring the product license rights. Milestone payments which are contingent upon regulatory approval events are capitalized and amortized over the remaining estimated useful life of the approved product. As of September 30, 2017 , the Company had paid a total of $20.0 million to Tolmar upon the achievement of certain specified milestone events, including $12.0 million upon the achievement of a regulatory milestone event and $5.0 million upon the achievement of a commercialization event, and does not currently expect to make any additional milestone payments under the agreement. The $21.0 million upfront payment for the Tolmar product rights has been allocated to the underlying topical products based upon the relative fair value of each product and will be amortized over the remaining estimated useful life of each underlying product, ranging from five to 12 years, starting upon commencement of commercialization activities by the Company during the second half of 2012. The amortization of the Tolmar product rights has been included as a component of cost of revenues on the consolidated statements of operations. The Company is also required to pay a profit share to Tolmar on sales of the topical products, of which the Company owed a profit share payable to Tolmar of $9.8 million and $32.2 million during the nine months ended September 30, 2017 and 2016 , respectively, with a corresponding charge included in the cost of revenues line in the Company’s consolidated statement of operations. The Company entered into a Loan and Security Agreement with Tolmar in March 2012 (the “Tolmar Loan Agreement”), under which the Company agreed to lend to Tolmar one or more loans through December 31, 2014, in an aggregate amount not to exceed $15.0 million. The outstanding principal amount of, including any accrued and unpaid interest on, the loans under the Tolmar Loan Agreement are payable by Tolmar beginning from March 31, 2017 through March 31, 2020 or the maturity date, in accordance with the terms therein. Pursuant to the Tolmar Loan Agreement, Tolmar could prepay all or any portion of the outstanding balance of the loans prior to the maturity date without penalty or premium. In May 2016, Tolmar repaid in full the $15.0 million due to the Company under the Tolmar Loan Agreement. Strategic Alliance Agreement with Teva The Company is a party to a Strategic Alliance Agreement dated as of June 27, 2001 with Teva Pharmaceuticals USA, Inc. ("Teva USA"), an affiliate of Teva, which was subsequently amended (“Teva Agreement”). The Teva Agreement commits the Company to develop and manufacture, and Teva to distribute, a specified number of controlled release generic pharmaceutical products (“generic products”), each for a 10 -year period. The Company is required to develop the products, obtain FDA approval to market the products, and manufacture the products for Teva. The revenue the Company earns from the sale of product under the Teva Agreement consists of Teva’s reimbursement of the Company’s manufacturing costs plus a profit share on Teva’s sales of the product to its customers. The Company invoices Teva for the manufacturing costs or products it ships to Teva and payment is due within 30 days. Teva has the right to determine all terms and conditions of the product sales to its customers. Within 30 days of the end of each calendar quarter, Teva is required to provide the Company with a report of its net sales and profits during the quarter and to pay the Company its share of the profits resulting from those sales. Net sales are Teva’s gross sales less discounts, rebates, chargebacks, returns, and other adjustments, all of which are based upon fixed percentages, except chargebacks, which are estimated by Teva and subject to a true-up reconciliation. As of September 30, 2017 , the Company was supplying Teva with oxybutynin extended release tablets (Ditropan XL® 5 mg, 10 mg and 15 mg extended release tablets); the other products under the Teva Agreement have either been returned to the Company, are being manufactured by Teva at its election, were voluntarily withdrawn from the market or the Company’s obligations to supply such product had expired or were terminated in accordance with the Teva Agreement. Further, in connection with the Teva Transaction and as described in “Note 2. Business Acquisition,” the Company and Teva terminated each party’s rights and obligations under the Teva Agreement effective on August 3, 2016 with respect to the methylphenidate hydrochloride product (generic Concerta ® ). Refer to “Note 23. Subsequent Events” for further details related to the Company's methylphenidate hydrochloride product. OTC Partners Alliance Agreement In June 2002, the Company entered into a Development, License and Supply Agreement with Pfizer, Inc., formerly Wyeth LLC (“Pfizer”), for a term of 15 years, relating to the Company’s Loratadine and Pseudoephedrine Sulfate 5 mg/120 mg 12-hour Extended Release Tablets (the "D12 Product") and Loratadine and Pseudoephedrine Sulfate 10 mg/240 mg 24-hour Extended Release Tablets for the OTC market (the "D24 Product"); the agreement was terminated with respect to the D24 Product in 2005. The Company previously developed the products and is currently only responsible for manufacturing the products. Pfizer is responsible for marketing and sale of the products. The agreement included payments to the Company upon achievement of development milestones, as well as royalties paid to the Company by Pfizer on its sales of the product. Pfizer launched this product in May 2003 as Alavert® D-12 Hour. In December 2011, the Company and Pfizer entered into an agreement with L. Perrigo Company (“Perrigo”), which was subsequently amended whereby the parties agreed that the Company would supply the Company’s D-12 Product to Perrigo in the United States and its territories. The agreements with Pfizer and Perrigo are no longer a core area of the Company’s business, and the over-the-counter pharmaceutical products the Company sells to Pfizer and Perrigo under the agreements are older products which are only sold to Pfizer and Perrigo. The Company recognizes profit share revenue in the period earned. During the quarter ended September 30, 2016, the Company sold the ANDAs for both the D12 Product and the D24 Product, in addition to other specified assets, to Perrigo pursuant to an asset purchase agreement with Perrigo dated as of March 31, 2016 (the "Perrigo APA"). Under the terms of the Perrigo APA, the Company will also continue to supply the D-12 Product to Pfizer and Perrigo until the date that is the earliest of (i) the date Perrigo’s manufacturing facility is approved to manufacture the D-12 Product and (ii) December 31, 2017 (the "Supply End Date"). On the Supply End Date, the Company will assign and transfer its supply agreement with Pfizer in its entirety to Perrigo in accordance with the Perrigo APA. Agreements with Valeant Pharmaceuticals International, Inc. In November 2008, the Company and Valeant Pharmaceuticals International, Inc., formerly Medicis Pharmaceutical Corporation (“Valeant”), entered into a Joint Development Agreement and a License and Settlement Agreement (“Joint Development Agreement”). The Joint Development Agreement provides for the Company and Valeant to collaborate in the development of a total of five dermatology products, including four of the Company’s generic products and one branded advanced form of Valeant’s Solodyn® product. The Company is not currently in the process of developing the advanced form Solodyn® product. Upon FDA approval of the Company’s ANDA for each of the four generic products covered by the Joint Development Agreement, the Company will have the right (but not the obligation) to begin manufacture and sale of its four generic dermatology products. The Company sells its manufactured generic products to all Impax Generics division customers in the ordinary course of business through its Impax Generics Product sales channel. The Company accounts for the sale, if any, of the generic products covered by the Joint Development Agreement as current period revenue according to the Company’s revenue recognition policy applicable to its Impax Generics products. To the extent the Company sells any of the four generic dermatology products covered by the Joint Development Agreement, the Company pays Valeant a gross profit share, with such profit share payments accounted for as a current period cost of revenues in the consolidated statement of operations. The Company began selling one of the four dermatology products during the year ended December 31, 2011 and began selling a second dermatology product during the quarter ended September 30, 2016. Distribution, License, Development and Supply Agreement with AstraZeneca UK Limited In January 2012, the Company entered into the AZ Agreement with AstraZeneca and the parties subsequently entered into a First Amendment to the AZ Agreement dated May 31, 2016 (as amended, the "AZ Amendment"). Under the terms of the AZ Agreement, AstraZeneca granted to the Company an exclusive license to commercialize the tablet, orally disintegrating tablet and nasal spray formulations of Zomig® (zolmitriptan) products for the treatment of migraine headaches in the United States and in certain U.S. territories, except during an initial transition period when AstraZeneca fulfilled all orders of Zomig® products on the Company’s behalf and AstraZeneca paid to the Company the gross profit on such Zomig® products. The Company is obligated to fulfill certain minimum requirements with respect to the promotion of currently approved Zomig® products as well as other dosage strengths of such products approved by the FDA in the future. The Company may, but has no obligation to, develop and commercialize additional products containing zolmitriptan and additional indications for Zomig®, subject to certain restrictions as set forth in the AZ Agreement. Subject to the terms of the AZ Agreement, the Company will be responsible for conducting clinical studies and preparing regulatory filings related to the development of any such additional products and would bear all related costs. During the term of the AZ Agreement, AstraZeneca will continue to be the holder of the NDA for existing Zomig® products, as well as any future dosage strengths thereof approved by the FDA, and will be responsible for certain regulatory and quality-related activities for such Zomig® products. AstraZeneca will manufacture and supply Zomig® products to the Company and the Company will purchase its requirements of Zomig® products from AstraZeneca until a date determined in the AZ Agreement. Thereafter, AstraZeneca may terminate its supply obligations upon certain advance notice to the Company, in which case the Company would have the right to manufacture or have manufactured its own requirements for the applicable Zomig® product. Under the terms of the AZ Amendment, under certain conditions and depending on the nature and terms of the study agreed to with the FDA, the Company agreed to conduct, at its own expense, the juvenile toxicity study and pediatric study required by the FDA under the Pediatric Research Equity Act (“PREA”) for approval of the nasal formulation of Zomig ® for the acute treatment of migraine in pediatric patients ages six through eleven years old, as further described in the study protocol mutually agreed to by the parties (the “PREA Study”). In consideration for the Company conducting the PREA Study at its own expense, the AZ Amendment provides for the total royalty payments payable by the Company to AstraZeneca on net sales of Zomig ® products under the AZ Agreement to be reduced by certain specified amounts beginning from the quarter ended June 30, 2016 and through the quarter ended December 31, 2020, with such reduced royalty amounts totaling an aggregate amount of $30.0 million . In the event the royalty reduction amounts exceed the royalty payments payable by the Company to AstraZeneca pursuant to the AZ Agreement in any given quarter, AstraZeneca will be required to pay the Company an amount equal to the difference between the royalty reduction amount and the royalty payment payable by the Company to AstraZeneca. The Company’s commitment to perform the PREA Study may be terminated, without penalty, under certain circumstances as set forth in the AZ Amendment. Under the terms of the AZ Agreement, AstraZeneca was required to make payments to the Company representing 100% of the gross profit on sales of AstraZeneca-labeled Zomig® products during the specified transition period. Beginning from January 2013, the Company has paid AstraZeneca tiered royalties on net sales of branded Zomig® products, depending on brand exclusivity and subject to customary reductions and other terms and conditions set forth in the AZ Agreement. The Company has also paid to AstraZeneca royalties based on gross profit from sales of authorized generic versions of the Zomig® products subject to certain terms and conditions set forth in the AZ Agreement. In May 2013, the Company’s exclusivity period for branded Zomig® tablets and orally disintegrating tablets expired and the Company launched authorized generic versions of those products in the United States. As discussed above, pursuant to the AZ Amendment, the total royalty payments payable by the Company to AstraZeneca on net sales of Zomig ® products under the AZ Agreement is reduced by certain specified amounts beginning from the quarter ended June 30, 2016 and through the quarter ended December 31, 2020, with such reduced royalty amounts totaling an aggregate amount of $30.0 million . The Company owed a royalty payable to AstraZeneca of $12.5 million and $12.7 million during the nine months ended September 30, 2017 and 2016 , respectively, with a corresponding charge included in the cost of revenues line on the consolidated statements of operations. Agreement with DURECT Corporation During the three month period ended March 31, 2014, the Company entered into an Asset Transfer and License Agreement (the "DURECT Agreement") with DURECT Corporation (“DURECT”) granting the Company the exclusive worldwide rights to develop and commercialize DURECT’s investigational transdermal bupivacaine patch for the treatment of pain associated with post-herpetic neuralgia, referred to by the Company as IPX239. The Company paid DURECT a $2.0 million up-front payment upon signing of the agreement which was recognized immediately as research and development expense. The Company has the potential to pay up to $61.0 million in additional contingent milestone payments upon the achievement of certain specified development and commercialization events under the agreement. If IPX239 is commercialized, the Company would also be required to pay a tiered royalty based on product sales. On July 24, 2017, the Company provided notice to DURECT that the Company is terminating the DURECT Agreement, which termination was effective pursuant to the terms of such agreement on October 24, 2017. The development and commercialization rights to DURECT’s investigational transdermal bupivacaine patch were returned to DURECT at termination of the DURECT Agreement in accordance with the terms thereof. Mebendazole Product Acquisition Agreement with Teva Pharmaceuticals USA, Inc. In August 2013, the Company, through its Amedra Pharmaceuticals subsidiary, entered into a product acquisition agreement (the “Mebendazole Product Acquisition Agreement”) with Teva pursuant to which the Company acquired the assets (including the ANDA and other regulatory materials) and related liabilities related to Teva’s mebendazole tablet product in all dosage forms. Pursuant to the Mebendazole Product Acquisition Agreement, the Company was required to pay certain milestone payments up to an aggregate amount of $3.5 million upon the approval and launch of the mebendazole tablet product; the Company paid the $3.5 million to Teva during the quarter ended March 31, 2016 upon the FDA's approval and the Company's subsequent launch of Emverm® (mebendazole) 100 mg chewable tablets. The Company is also obligated to pay Teva a royalty payment based on net sales of Emverm®, including a specified annual minimum royalty payment, subject to customary reductions and the other terms and conditions set forth in the Teva Product Acquisition Agreement. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Executive Employment Agreements The Company is a party to employment and separation agreements with certain members of its executive management team that provide for severance and other payments following termination of their employment for various reasons. Lease Agreements The Company leases land, office space, manufacturing, warehouse and research and development facilities, and equipment under non-cancelable operating leases expiring at various dates through December 2027. Purchase Order Commitments As of September 30, 2017 , the Company had $103.5 million of open purchase order commitments, primarily for raw materials. The terms of these purchase order commitments are generally less than one year in duration. |
LEGAL AND REGULATORY MATTERS
LEGAL AND REGULATORY MATTERS | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL AND REGULATORY MATTERS | LEGAL AND REGULATORY MATTERS Patent Litigation There is substantial litigation in the pharmaceutical, biological, and biotechnology industries with respect to the manufacture, use, and sale of new products which are the subject of conflicting patent and intellectual property claims. One or more patents often cover the brand name products for which the Company is developing generic versions and the Company typically has patent rights covering the Company’s branded products. Under federal law, when a drug developer files an ANDA for a generic drug seeking approval before expiration of a patent, which has been listed with the FDA as covering the brand name product, the developer must certify its product will not infringe the listed patent(s) and/or the listed patent is invalid or unenforceable (commonly referred to as a “Paragraph IV” certification). Notices of such certification must be provided to the patent holder, who may file a suit for patent infringement within 45 days of the patent holder’s receipt of such notice. If the patent holder files suit within the 45 days period, the FDA can review and approve the ANDA, but is prevented from granting final marketing approval of the product until a final judgment in the action has been rendered in favor of the generic drug developer, or 30 months from the date the notice was received, whichever is sooner. The Company’s generic products division is typically subject to patent infringement litigation brought by branded pharmaceutical manufacturers in connection with the Company’s Paragraph IV certifications seeking an order delaying the approval of the Company’s ANDA until expiration of the patent(s) at issue in the litigation. Likewise, the Company’s branded products division is currently involved in patent infringement litigation against generic drug manufacturers who have filed Paragraph IV certifications to market their generic drugs prior to expiration of the Company’s patents at issue in the litigation. The uncertainties inherent in patent litigation make the outcome of such litigation difficult to predict. For the Company’s generic products division, the potential consequences in the event of an unfavorable outcome in such litigation include delaying launch of its generic products until patent expiration. If the Company were to launch its generic product prior to successful resolution of a patent litigation, the Company could be liable for potential damages measured by the profits lost by the branded product manufacturer rather than the profits earned by the Company if we are found to infringe a valid, enforceable patent. For the Company’s branded products division, an unfavorable outcome may significantly accelerate generic competition ahead of expiration of the patents covering the Company’s branded products. All such litigation typically involves significant expense. The Company is generally responsible for all of the patent litigation fees and costs associated with current and future products not covered by its alliance and collaboration agreements. The Company has agreed to share legal expenses with respect to third-party and Company products under the terms of certain of the alliance and collaboration agreements. The Company records the costs of patent litigation as expense in the period when incurred for products it has developed, as well as for products which are the subject of an alliance or collaboration agreement with a third-party. Although the outcome and costs of the asserted and unasserted claims is difficult to predict, based on the information presently known to management, the Company does not currently expect the ultimate liability, if any, for such matters to have a material adverse effect on its business, financial condition, results of operations, or cash flows. Patent Infringement Litigation Endo Pharmaceuticals Inc. and Grunenthal GmbH v. Impax Laboratories, Inc. and ThoRx Laboratories, Inc. (Oxymorphone hydrochloride); Endo Pharmaceuticals Inc. and Grunenthal GmbH v. Impax Laboratories, Inc. (Oxymorphone hydrochloride) In November 2012, Endo Pharmaceuticals, Inc. and Grunenthal GmbH filed suit against ThoRx Laboratories, Inc., a wholly owned subsidiary of the Company (“ThoRx”), and the Company in the U.S. District Court for the Southern District of New York alleging patent infringement based on the filing of ThoRx’s ANDA relating to Oxymorphone hydrochloride, Extended Release tablets, 5 mg, 7.5 mg, 10 mg, 15 mg, 20 mg, 30 mg and 40 mg, generic to Opana ER®. In January 2013, Endo filed a separate suit against the Company in the U.S. District Court for the Southern District of New York alleging patent infringement based on the filing of the Company’s ANDA relating to the same products. ThoRx and the Company filed an answer and counterclaims to the November 2012 suit and the Company filed an answer and counterclaims with respect to the January 2013 suit. A bench trial was completed in April 2015. In June 2016, the Court entered an amended judgment in both cases that the products described in the Company’s and ThoRx’s ANDAs would, if marketed, infringe certain claims of the patents asserted by Endo and Grunenthal. The Court also found that the asserted claims of patents owned by Endo were not invalid, but that the asserted claims of patents owned by Grunenthal were invalid. As a result, the Court enjoined the Company and ThoRx from marketing their products until expiration of the Endo patents in 2023. The Company and ThoRx are appealing the Court's judgment. In November 2014, Endo Pharmaceuticals Inc. and Mallinckrodt LLC filed suit against the Company in the U.S. District Court for the District of Delaware making additional allegations of patent infringement based on the filing of the Company’s Oxymorphone hydrochloride ANDA described above. Also in November 2014, Endo and Mallinckrodt filed a separate suit in the U.S. District Court for the District of Delaware making additional allegations of patent infringement based on the filing of ThoRx’s Oxymorphone hydrochloride ANDA described above. ThoRx and the Company filed an answer and counterclaim to those suits in which they are named as a defendant. The cases are currently stayed. In May 2016, Endo Pharmaceuticals Inc. filed suit against the Company in the U.S. District Court for the District of New Jersey, alleging that the Company’s marketed oxymorphone hydrochloride tablets infringe certain patents owned by Endo. Endo’s complaint also alleges that the Company and Endo entered into a settlement and license agreement (the "2010 ANDA Settlement") with respect to these products, but that the Company later breached that contract and breached its implied duty of good faith and fair dealing with respect to that agreement. Endo filed an amended complaint on August 1, 2016 and the Company filed a motion to dismiss the complaint. On October 25, 2016, that motion was granted in part and denied in part. On October 31, 2016, the Company received a letter from Endo purporting to terminate the 2010 ANDA Settlement for material breach. On August 5, 2017, the Company entered into a settlement agreement with Endo to resolve the contract dispute related to the 2010 ANDA Settlement (the "Contract Settlement Agreement"). In the 2010 ANDA Settlement, the Company obtained a non-exclusive license to certain then-existing and future Endo patents. Orange Book listed patents for Opana ER extend until November 2029. The Contract Settlement Agreement includes an amendment to the 2010 ANDA Settlement, whereby the Company agrees to pay Endo a royalty rate that splits the Company's gross profits for its sales of oxymorphone hydrochloride CII ER products, commencing January 1, 2018. The royalty will be eliminated based on certain commercial conditions. Impax Laboratories Inc., et al. v. Lannett Holdings, Inc. and Lannett Company (Zomig®) In July 2014, the Company filed suit against Lannett Holdings, Inc. and Lannett Company (collectively, “Lannett”) in the United States District Court for the District of Delaware, alleging patent infringement based on the filing of the Lannett ANDA relating to Zolmitriptan Nasal Spray, 5mg, generic to Zomig® Nasal Spray. The case went to trial in September 2016. On March 29, 2017, the District Court issued a Trial Opinion finding the asserted patents valid and infringed. On April 17, 2017, the District Court entered a Final Judgment and Injunction that, inter alia , bars FDA approval of Lannett’s proposed generic product prior to May 29, 2021. On May 12, 2017, Lannett filed a Notice of Appeal with the United States Court of Appeals for the Federal Circuit. Briefing of Lannett’s appeal has been completed and oral argument is expected to be scheduled in the first quarter of 2018. Impax Laboratories Inc., et al. v. Par Pharmaceutical, Inc. (Zomig®) On September 23, 2016, the Company filed suit against Par Pharmaceutical, Inc. (“Par”) in the United States District Court for the District of Delaware, alleging patent infringement based on the filing of the Par ANDA relating to Zolmitriptan Nasal Spray, 2.5 mg and 5 mg, generic to Zomig® Nasal Spray. On October 12, 2016, the parties stipulated to stay the case pending the outcome of the related case, Impax Laboratories Inc., et al. v. Lannett matter described above. On April 24, 2017, the parties stipulated that the stay shall remain in effect until the Impax Laboratories Inc., et al. v. Lannett matter is fully resolved. As such, Par has not yet filed an answer or counterclaims to the Company’s complaint. The 30-month stay of approval for applicable to the Par ANDA has been tolled pending resumption of this case. Impax Laboratories Inc., et al. v. Actavis Laboratories, Inc. and Actavis Pharma Inc. (Rytary ® ) In September 2015, the Company filed suit against Actavis Laboratories, Inc. and Actavis Pharma Inc. (collectively, “Actavis”) in the United States District Court for the District of New Jersey, alleging patent infringement of U.S. Patent Nos. 7,094,427; 8,377,474; 8,454,998; 8,557,283; 9,089,607; 9,089,608, based on the filing of the Actavis ANDA relating to carbidopa and levodopa extended release capsules, generic to Rytary ® . The Company filed related actions alleging infringement of later-issued U.S. Patent No. 9,463,246 in December 2016 and of later-issued U.S. Patent No. 9,533,046 in May 2017. Both related actions were consolidated with the lead action. Fact discovery and claim construction briefing have concluded and a claim construction hearing was held on April 26, 2017. On May 9, 2017, the District Court issued a decision interpreting certain claim terms in dispute in the litigation. Subject to reservation of all rights to appeal the Court’s May 9, 2017 decision, the parties stipulated to dismiss without prejudice all claims and counterclaims relating to the ‘474, ‘998, and ‘607 patents, and the Court entered an order recognizing this stipulation on June 8, 2017. The parties have completed expert discovery and Actavis filed a summary judgment motion on October 23, 2017. A trial date has not yet been set. Impax Laboratories, Inc. v. Sandoz Inc. ( Rytary ® ) On March 31, 2017, the Company filed suit against Sandoz Inc. in the United States District Court for the District of New Jersey, alleging infringement of U.S. Patent Nos. 7,094,427; 8,377,474; 8,454,998; 8,557,283; 9,089,607; 9,089,608; 9,463,246; and 9,533,046, based on the filing of Sandoz’s ANDA relating to carbidopa and levodopa extended release capsules, generic to Rytary ® . Sandoz has not yet answered or otherwise responded to the Complaint. Bristol-Myers Squibb Company, et al. v. Impax Laboratories, Inc.(Apixiban) On April 10, 2017, Bristol-Myers Squibb Company and Pfizer Inc. filed suit against the Company in the United States District Court for the District of Delaware alleging patent infringement based on the filing of the Company’s ANDA related to Apixaban Tablets, 2.5 mg and 5 mg, generic to Eliquis ® . The Company responded to the complaint on June 2, 2017 and Plaintiffs further responded on June 22, 2017. On September 22, 2017, the parties jointly filed a proposed schedule with the Court, proposing that the Company’s case and a number of related cases be consolidated. On November 3, 2017, the Court consolidated the related cases and set the case schedule. Trial is scheduled for October 15, 2019. Biogen MA Inc. v. Impax Laboratories, Inc. (Dimethyl Fumarate) On June 26, 2017, Biogen MA Inc. filed suit against the Company in the U.S. District Court for the District of Delaware alleging patent infringement based on the filing of the Company’s ANDA relating to Dimethyl Fumarate 120 and 240 mg capsules, generic to Tecfidera ® . The Company answered the complaint on October 16, 2017. No further schedule has been set. Other Litigation Related to the Company’s Business Solodyn ® Antitrust Class Actions From July 2013 to January 2016, 18 complaints were filed as class actions on behalf of direct and indirect purchasers, as well as by certain direct purchasers, against manufacturers of the brand drug Solodyn® and its generic equivalents, including the Company. On July 22, 2013, Plaintiff United Food and Commercial Workers Local 1776 & Participating Employers Health and Welfare Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On July 23, 2013, Plaintiff Rochester Drug Co-Operative, Inc., a direct purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On August 1, 2013, Plaintiff International Union of Operating Engineers Local 132 Health and Welfare Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Northern District of California on behalf of itself and others similarly situated. On August 29, 2013, this Plaintiff withdrew its complaint from the United States District Court for the Northern District of California, and on August 30, 2013, re-filed the same complaint in the United States Court for the Eastern District of Pennsylvania, on behalf of itself and others similarly situated. On August 9, 2013, Plaintiff Local 274 Health & Welfare Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On August 12, 2013, Plaintiff Sheet Metal Workers Local No. 25 Health & Welfare Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On August 27, 2013, Plaintiff Fraternal Order of Police, Fort Lauderdale Lodge 31, Insurance Trust Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On August 29, 2013, Plaintiff Heather Morgan, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On August 30, 2013, Plaintiff Plumbers & Pipefitters Local 178 Health & Welfare Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On September 9, 2013, Plaintiff Ahold USA, Inc., a direct purchaser, filed a class action complaint in the United States District Court for the District of Massachusetts on behalf of itself and others similarly situated. On September 24, 2013, Plaintiff City of Providence, Rhode Island, an indirect purchaser, filed a class action complaint in the United States District Court for the District of Arizona on behalf of itself and others similarly situated. On October 2, 2013, Plaintiff International Union of Operating Engineers Stationary Engineers Local 39 Health & Welfare Trust Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the District of Massachusetts on behalf of itself and others similarly situated. On October 7, 2013, Painters District Council No. 30 Health and Welfare Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the District of Massachusetts on behalf of itself and others similarly situated. On October 25, 2013, Plaintiff Man-U Service Contract Trust Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On March 13, 2014, Plaintiff Allied Services Division Welfare Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the District of Massachusetts on behalf of itself and others similarly situated. On March 19, 2014, Plaintiff NECA-IBEW Welfare Trust Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the District of Massachusetts on behalf of itself and others similarly situated. On February 25, 2014, the United States Judicial Panel on Multidistrict Litigation ordered the pending actions transferred to the District of Massachusetts for coordinated pretrial proceedings, as In Re Solodyn (Minocycline Hydrochloride) Antitrust Litigation. On March 26, 2015, Walgreen Co., The Kruger Co., Safeway Inc., HEB Grocery Company L.P., Albertson’s LLC, direct purchasers, filed a separate complaint in the United States District Court for the Middle District of Pennsylvania. On April 8, 2015, the Judicial Panel on Multi-District Litigation ordered the action be transferred to the District of Massachusetts, to be coordinated or consolidated with the coordinated proceedings. The original complaint filed by the plaintiffs asserted claims only against defendant Medicis. On October 5, 2015, the plaintiffs filed an amended complaint asserting claims against the Company and the other generic defendants. On April 16, 2015, Rite Aid Corporation and Rite Aid Hdqtrs. Corp, direct purchasers, filed a separate complaint in the United States District Court for the Middle District of Pennsylvania. On May 1, 2015, the Judicial Panel on Multi-District Litigation ordered the action be transferred to the District of Massachusetts, to be coordinated or consolidated with the coordinated proceedings. The original complaint filed by the plaintiffs asserted claims only against defendant Medicis. On October 5, 2015, the plaintiffs filed an amended complaint asserting claims against the Company and the other generic defendants. On January 25, 2016, CVS Pharmacy, Inc., a direct purchaser, filed a separate complaint in the United States District Court for the Middle District of Pennsylvania. On February 11, 2016, the Judicial Panel on Multi-District Litigation ordered the action to be transferred to the District of Massachusetts to be coordinated or consolidated with the coordinated proceedings. The consolidated amended complaints allege that Medicis engaged in anticompetitive schemes by, among other things, filing frivolous patent litigation lawsuits, submitting frivolous Citizen Petitions, and entering into anticompetitive settlement agreements with several generic manufacturers, including the Company, to delay generic competition of Solodyn® and in violation of state and federal antitrust laws. Plaintiffs seek, among other things, unspecified monetary damages and equitable relief, including disgorgement and restitution. On August 14, 2015, the District Court granted in part and denied in part defendants’ motion to dismiss the consolidated amended complaints. On October 16, 2017, the Court certified the Direct Purchaser Plaintiffs’ and End-Payor Plaintiffs’ classes. On October 30, 2017, the Company filed a petition for interlocutor appeal challenging the Court’s certification of the End-Payor Plaintiffs’ class and motions for Summary Judgment were filed on November 1, 2017. Trial is currently set for March 22, 2018. Opana ER® FTC Antitrust Suit On February 25, 2014, the Company received a Civil Investigative Demand ("CID") from the FTC concerning its investigation into the drug Opana® ER and its generic equivalents. On March 30, 2016, the FTC filed a complaint against the Company, Endo, and others in the United States District Court for the Eastern District of Pennsylvania, alleging that the Company and Endo violated antitrust laws when they entered into a June 2010 co-promotion and development agreement and a June 2010 settlement agreement that resolved patent litigation in connection with the submission of the Company’s ANDA for generic original Opana® ER. In July 2016, the defendants filed a motion to dismiss the complaint, and a motion to sever the claims regarding Opana® ER from claims with respect to a separate settlement agreement that was challenged by the FTC. On October 20, 2016, the Court granted the motion to sever, formally terminating the suit against the Company, with an order that the FTC re-file no later than November 3, 2016 and dismissed the motion to dismiss as moot. On October 25, 2016, the FTC filed a notice of voluntary dismissal. On January 19, 2017, the FTC filed a Part 3 Administrative complaint against the Company with similar allegations regarding the Company’s June 2010 settlement agreement with Endo that resolved patent litigation in connection with the submission of the Company’s ANDA for generic original Opana® ER. The Company filed its answer to the Administrative Complaint on February 7, 2017. Trial began on October 24, 2017. Opana ER® Antitrust Class Actions From June 2014 to April 2015, 14 complaints were filed as class actions on behalf of direct and end-payor (indirect) purchasers, as well as by certain direct purchasers, against the manufacturer of the brand drug Opana ER® and the Company. On June 4, 2014, Plaintiff Fraternal Order of Police, Miami Lodge 20, Insurance Trust Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On June 4, 2014, Plaintiff Rochester Drug Co-Operative, Inc., a direct purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On June 6, 2014, Plaintiff Value Drug Company, a direct purchaser, filed a class action complaint in the United States District Court for the Northern District of California on behalf of itself and others similarly situated. On June 26, 2014, this Plaintiff withdrew its complaint from the United States District Court for the Northern District of California, and on July 16, 2014, re-filed the same complaint in the United States District Court for the Northern District of Illinois, on behalf of itself and others similarly situated. On June 19, 2014, Plaintiff Wisconsin Masons’ Health Care Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Northern District of Illinois on behalf of itself and others similarly situated. On July 17, 2014, Plaintiff Massachusetts Bricklayers, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On August 11, 2014, Plaintiff Pennsylvania Employees Benefit Trust Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Northern District of Illinois on behalf of itself and others similarly situated. On September 19, 2014, Plaintiff Meijer Inc., a direct purchaser, filed a class action complaint in the United States District Court for the Northern District of Illinois on behalf of itself and others similarly situated. On October 3, 2014, Plaintiff International Union of Operating Engineers, Local 138 Welfare Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Northern District of Illinois on behalf of itself and others similarly situated. On November 17, 2014, Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana, an indirect purchaser, filed a class action complaint in the United States District Court for the Middle District of Louisiana on behalf of itself and others similarly situated. On December 12, 2014, the United States Judicial Panel on Multidistrict Litigation ordered the pending actions transferred to the Northern District of Illinois for coordinated pretrial proceedings, as In Re Opana ER Antitrust Litigation. On December 19, 2014, Plaintiff Kim Mahaffay, an indirect purchaser, filed a class action complaint in the Superior Court of the State of California, Alameda County, on behalf of herself and others similarly situated. On January 27, 2015, the Defendants removed the action to the United States District Court for the Northern District of California. On January 12, 2015, Plaintiff Plumbers & Pipefitters Local 178 Health & Welfare Trust Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Northern District of Illinois on behalf of itself and others similarly situated. On March 26, 2015 Walgreen Co., The Kruger Co., Safeway Inc., HEB Grocery Company L.P., Albertson’s LLC, direct purchasers, filed a separate complaint in the United States District Court for the Northern District of Illinois. On April 23, 2015, Rite Aid Corporation and Rite Aid Hdqtrs. Corp, direct purchasers, filed a separate complaint in the United States District Court for the Northern District of Illinois. In each case, the complaints allege that Endo engaged in an anticompetitive scheme by, among other things, entering into an anticompetitive settlement agreement with the Company to delay generic competition of Opana ER® and in violation of state and federal antitrust laws. Plaintiffs seek, among other things, unspecified monetary damages and equitable relief, including disgorgement and restitution. Consolidated amended complaints were filed on May 4, 2015 by direct purchaser plaintiffs and end-payor (indirect) purchaser plaintiffs. On July 3, 2015, defendants filed motions to dismiss the consolidated amended complaints, as well as the complaints of the “Opt-Out Plaintiffs” (Walgreen Co., The Kruger Co., Safeway Inc., HEB Grocery Company L.P., Albertson’s LLC, Rite Aid Corporation and Rite Aid Hdqtrs. Corp.). On February 1, 2016, CVS Pharmacy, Inc. filed a complaint in the United States District Court for the Northern District of Illinois. The parties agreed that CVS Pharmacy, Inc. would be bound by the Court’s ruling on the defendants’ motion to dismiss the Opt-Out Plaintiffs’ complaints. On February 10, 2016, the Court granted in part and denied in part defendants’ motion to dismiss the end-payor purchaser plaintiffs’ consolidated amended complaint, and denied defendants’ motion to dismiss the direct purchaser plaintiffs’ consolidated amended complaint. The end-payor purchaser plaintiffs have filed a second consolidated amended complaint and the Company has moved to dismiss certain state law claims. On February 25, 2016, the Court granted defendants’ motion to dismiss the Opt-Out Plaintiffs’ complaints, with leave to amend. The Opt-Out Plaintiffs and CVS Pharmacy, Inc. have filed amended complaints and the Company has filed its answer. Discovery is ongoing. No trial date has been scheduled. Civil Investigation Demand from the Attorney General of the State of Alaska On February 10, 2015, the Company received three CIDs from the Office of the Attorney General of the State of Alaska (“Alaska AG”) concerning its investigations into the drugs Adderall XR ® , Effexor XR ® and Opana ® ER (each a “Product” and collectively, the “Products”) and their generic equivalents. According to the Alaska AG, the investigation is to determine whether the Company may have violated Alaskan state law by entering into settlement agreements with the respective brand name manufacturer for each of the foregoing Products that delayed generic entry of such Product into the marketplace. The Company has cooperated with the Alaska AG in producing documents and information in response to the CIDs. To the knowledge of the Company, no proceedings have been initiated against the Company at this time; however no assurance can be given as to the timing or outcome of this investigation. United States Department of Justice Investigations Previously on November 6, 2014, the Company disclosed that one of its sales representatives received a grand jury subpoena from the Antitrust Division of the United States Justice Department (the “Justice Department”). In connection with this same investigation, on March 13, 2015, the Company received a grand jury subpoena from the Justice Department requesting the production of information and documents regarding the sales, marketing, and pricing of certain generic prescription medications. In particular, the Justice Department’s investigation currently focuses on four generic medications: digoxin tablets, terbutaline sulfate tablets, prilocaine/lidocaine cream, and calcipotriene topical solution. The Company has been cooperating and intends to continue cooperating with the investigation. However, no assurance can be given as to the timing or outcome of the investigation. Attorney General of the State of Connecticut Interrogatories and Subpoena Duces Tecum On July 14, 2014, the Company received a subpoena and interrogatories (the “Subpoena”) from the State of Connecticut Attorney General (“Connecticut AG”) concerning its investigation into sales of the Company’s generic product, digoxin. According to the Connecticut AG, the investigation is to determine whether anyone engaged in a contract, combination or conspiracy in restraint of trade or commerce which has the effect of (i) fixing, controlling or maintaining prices or (ii) allocating or dividing customers or territories relating to the sale of digoxin in violation of Connecticut state antitrust law. The Company intends to cooperate with the Connecticut AG in producing documents and information in response to the Subpoena. To the knowledge of the Company, no proceedings by the Connecticut AG have been initiated against the Company at this time; however no assurance can be given as to the timing or outcome of this investigation. In re Generic Pharmaceuticals Pricing Antitrust Litigation From March 2016 to April 2017, 22 complaints were filed as class actions on behalf of direct and indirect purchasers against manufacturers of generic digoxin and doxycycline and the Company alleging a conspiracy to fix, maintain and/or stabilize prices of these generic products. From January 2017 to April 2017, three complaints were filed on behalf of indirect purchasers against manufacturers of generic lidocaine/prilocaine and the Company alleging a conspiracy to fix, maintain and/or stabilize prices of these generic products. On March 2, 2016, Plaintiff International Union of Operating Engineers Local 30 Benefits Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. The plaintiff filed an amended complaint on June 9, 2016. On March 25, 2016, Plaintiff Tulsa Firefighters Health and Welfare Trust, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On March 25, 2016, Plaintiff NECA-IBEW Welfare Trust Fund, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On April 4, 2016, Plaintiff Pipe Trade Services MN, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On April 25, 2016, Plaintiff Edward Carpinelli, an indirect purchaser, filed a class action complaint in the United States District Court for the Eastern District of Pennsylvania on behalf of itself and others similarly situated. On April 27, 2016, Plaintiff Fraternal Order of Police, Miami Lodge 20, Insurance Trust Fund, an indirect purchaser, filed |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company has two reportable segments, Impax Generics and Impax Specialty Pharma. Impax Generics develops, manufactures, sells, and distributes generic pharmaceutical products, primarily through the following sales channels: the Impax Generics sales channel for sales of generic prescription products directly to wholesalers, large retail drug chains, and others; the Private Label Product sales channel for generic over-the-counter and prescription products sold to unrelated third-party customers who, in turn, sell the products under their own label; the Rx Partner sales channel for generic prescription products sold through unrelated third-party pharmaceutical entities under their own label pursuant to alliance agreements; and the OTC Partner sales channel for over-the-counter products sold through unrelated third-party pharmaceutical entities under their own labels pursuant to alliance and supply agreements. Revenues from generic products are reported under the caption "Impax Generics, net." Impax Specialty Pharma is engaged in the development, sale and distribution of proprietary brand pharmaceutical products that the Company believes represent improvements to already-approved pharmaceutical products addressing central nervous system (“CNS”) disorders and other select specialty segments. Impax Specialty Pharma currently has one internally developed branded pharmaceutical product, Rytary® (IPX066), an extended release oral capsule formulation of carbidopa-levodopa for the treatment of Parkinson’s disease, post-encephalitic parkinsonism, and parkinsonism that may follow carbon monoxide intoxication and/or manganese intoxication, which was approved by the FDA on January 7, 2015 and which the Company launched in April 2015. In November 2015, the European Commission granted marketing authorization for Numient® (IPX066) (referred to as Rytary® in the United States). The review of the Numient® application was conducted under the centralized licensing procedure as a therapeutic innovation, and authorization is applicable in all 28 member states of the European Union, as well as Iceland, Liechtenstein and Norway. Impax Specialty Pharma is also engaged in the sale and distribution of four other branded products including Zomig® (zolmitriptan) products, indicated for the treatment of migraine headaches, under the terms of the AZ Agreement with AstraZeneca in the United States and in certain U.S. territories, and Emverm® (mebendazole) 100 mg chewable tablets, indicated for the treatment of pinworm, whipworm, common roundworm, common hookworm, and American hookworm in single or mixed infections. Revenues from branded products are reported under the caption “Impax Specialty Pharma, net.” Impax Specialty Pharma also has a number of product candidates that are in varying stages of development. The Company’s chief operating decision maker evaluates the financial performance of the Company’s segments based upon segment income (loss) before income taxes. Items below income (loss) from operations are not reported by segment, since they are excluded from the measure of segment profitability reviewed by the Company’s chief operating decision maker. Additionally, general and administrative expenses, certain selling expenses, certain litigation settlements, and non-operating income and expenses are included in “Corporate and Other.” The Company does not report balance sheet information by segment since it is not reviewed by the Company’s chief operating decision maker. The accounting policies for the Company’s segments are the same as those described above in the discussion of "Revenue Recognition" in “Note 4. Summary of Significant Accounting Policies.” The Company has no inter-segment revenue. The tables below present segment information reconciled to total Company financial results, with segment operating income or loss including gross profit less direct research and development expenses and direct selling expenses as well as any litigation settlements, to the extent specifically identified by segment (in thousands): Three Months Ended September 30, 2017 Impax Impax Corporate Total Revenues, net $ 151,098 $ 55,294 $ — $ 206,392 Cost of revenues 141,133 17,603 — 158,736 Cost of revenues impairment charges 13,623 — — 13,623 Selling, general and administrative 5,570 16,135 31,880 53,585 Research and development 12,241 3,580 — 15,821 Patent litigation expense 28 1,612 — 1,640 (Loss) income before income taxes $ (21,497 ) $ 16,364 $ (47,281 ) $ (52,414 ) Three Months Ended September 30, 2016 Impax Impax Corporate Total Revenues, net $ 175,320 $ 52,589 $ — $ 227,909 Cost of revenues 115,020 21,853 — 136,873 Cost of revenues impairment charges 256,462 — — 256,462 Selling, general and administrative 6,103 16,358 32,577 55,038 Research and development 15,375 4,740 — 20,115 In-process research and development impairment charges 15,543 13,227 — 28,770 Patent litigation expense 147 3,132 — 3,279 Loss before income taxes $ (233,330 ) $ (6,721 ) $ (43,817 ) $ (283,868 ) Nine Months Ended September 30, 2017 Impax Impax Corporate Total Revenues, net $ 436,134 $ 156,743 $ — $ 592,877 Cost of revenues 355,375 53,269 — 408,644 Cost of revenues impairment charges 52,903 — — 52,903 Selling, general and administrative 20,072 49,279 82,904 152,255 Research and development 50,632 14,525 — 65,157 In-process research and development impairment charges 6,079 — — 6,079 Patent litigation expense 715 3,167 — 3,882 (Loss) income before income taxes $ (49,642 ) $ 36,503 $ (127,742 ) $ (140,881 ) Nine Months Ended September 30, 2016 Impax Impax Corporate Total Revenues, net $ 467,094 $ 158,913 $ — $ 626,007 Cost of revenues 307,936 49,916 — 357,852 Cost of revenues impairment charges 258,007 — — 258,007 Selling, general and administrative 12,442 46,309 85,493 144,244 Research and development 46,113 13,824 — 59,937 In-process research and development impairment charges 16,489 13,227 — 29,716 Patent litigation expense 416 6,111 — 6,527 (Loss) income before income taxes $ (174,309 ) $ 29,526 $ (160,529 ) $ (305,312 ) Significant Products The Company generally consolidates net revenue by "product family," meaning that it consolidates net revenue from products containing the same active ingredient(s) irrespective of dosage strength, delivery method or packaging size. The Company's significant product families, as determined based on net revenue, and their percentage of the Company's consolidated net revenue for each of the three and nine month periods ended September 30, 2017 and 2016 are set forth below (in thousands): Segment Product Family Three Months Ended September 30, 2017 $ % Impax Generics Epinephrine Auto-Injector family (generic Adrenaclick®) $ 40,482 20 % (1) Impax Specialty Pharma Rytary® family $ 21,520 10 % (2) Impax Generics Oxymorphone HCI ER family $ 16,362 8 % (3) Impax Specialty Pharma Zomig® family $ 13,899 7 % (4) Impax Generics Diclofenac Sodium Gel family (generic Solaraze®) $ 13,283 6 % (5) Segment Product Family Three Months Ended September 30, 2016 $ % Impax Generics Epinephrine Auto-Injector family (generic Adrenaclick®) $ 39,321 17 % (1) Impax Generics Oxymorphone HCI ER family $ 22,620 10 % (3) Impax Specialty Pharma Rytary® family $ 19,807 9 % (2) Impax Specialty Pharma Zomig® family $ 15,258 7 % (4) Impax Generics Fenofibrate family $ 14,521 6 % (6) Segment Product Family Nine Months Ended September 30, 2017 $ % Impax Generics Epinephrine Auto-Injector family (generic Adrenaclick®) $ 90,572 15 % (1) Impax Specialty Pharma Rytary® family $ 63,347 11 % (2) Impax Generics Oxymorphone HCI ER family $ 52,587 9 % (3) Impax Generics Budesonide family $ 41,095 7 % (7) Impax Specialty Pharma Zomig® family $ 36,081 6 % (4) Segment Product Family Nine Months Ended September 30, 2016 $ % Impax Generics Epinephrine Auto-Injector family (generic Adrenaclick®) $ 77,592 12 % (1) Impax Generics Diclofenac Sodium Gel family (generic Solaraze®) $ 60,828 10 % (5) Impax Specialty Pharma Rytary® family $ 52,030 8 % (2) Impax Generics Oxymorphone HCI ER family $ 51,898 8 % (3) Impax Generics Fenofibrate family $ 50,471 8 % (6) (1) Epinephrine Auto-Injector (generic Adrenaclick®) product family consists of the injector product in two different strengths and is indicated in the emergency treatment of allergic reactions (Type 1) including anaphylaxis. (2) Rytary® product family consists of the capsules product in four different strengths and is indicated for the treatment of Parkinson’s disease, post-encephalitic parkinsonism, and parkinsonism that may follow carbon monoxide intoxication or manganese intoxication. (3) Oxymorphone Hydrochloride Extended Release product family consists of the oxymorphone hydrochloride extended release tablet formulation of the product in seven different strengths and is indicated for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. (4) Zomig® product family consists of products in tablet, orally disintegrating tablet and nasal spray dosage forms, each dosage form in two different strengths, and is indicated for the acute treatment of migraine with or without aura in adults. Zomig® (zolmitriptan) Nasal Spray is also indicated in pediatric patients 12 years of age or older. (5) Diclofenac Sodium Gel (generic Solaraze®) product family consists of one product strength and is indicated for the topical treatment of actinic keratosis. (6) Fenofibrate product family consists of products in both capsule and tablet dosage forms in seven different strengths and is indicated as adjunctive therapy to diet to reduce elevated LDL-C, Total-C, Triglycerides and Apo B, and to increase HDL-C in adult patients with primary hypercholesterolemia or mixed dyslipidemia (Fredrickson Types IIa and IIb); and also indicated as adjunctive therapy to diet for treatment of adult patients with hypertriglyceridemia (Fredrickson Types IV and V hyperlipidemia). (7) Budesonide product family consists of the budesonide inhalation suspension formulation of the product in two different strengths and is indicated for the maintenance treatment of asthma and as prophylactic therapy in children 12 months to eight years of age. Foreign Operations The Company’s wholly-owned subsidiary, Impax Laboratories (Taiwan) Inc., constructed a manufacturing facility in Taiwan which is utilized for manufacturing, warehousing, and administrative functions, as well as some limited research and development activities. On the Company's consolidated balance sheets at September 30, 2017 and December 31, 2016 , Impax Laboratories (Taiwan) Inc. represents $130.4 million and $134.9 million , respectively, of net carrying value of assets, composed principally of a building and manufacturing equipment. See "Note 9. Property, Plant and Equipment" and "Note 16. Restructurings" for additional information related to the closure or sale of the Taiwan facility. |
SUPPLEMENTARY FINANCIAL INFORMA
SUPPLEMENTARY FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
SUPPLEMENTARY FINANCIAL INFORMATION | SUPPLEMENTARY FINANCIAL INFORMATION Selected financial information for the quarterly period noted is as follows: 2017 Quarters Ended (in thousands, except share and per share amounts) March 31 June 30 September 30 Revenue: Impax Generics, gross $ 635,897 $ 663,167 $ 622,252 Less: Chargebacks 298,744 286,092 281,835 Rebates 164,792 170,398 162,914 Product Returns 9,733 15,210 7,003 Other credits 28,481 40,578 19,402 Impax Generics, net 134,147 150,889 151,098 Impax Specialty Pharma, gross 84,133 84,238 107,407 Less: Chargebacks 9,828 8,967 14,121 Rebates 4,483 4,682 5,914 Product Returns 1,844 1,416 3,614 Other credits 17,722 17,980 28,464 Impax Specialty Pharma, net 50,256 51,193 55,294 Total revenues 184,403 202,082 206,392 Gross profit 24,891 72,406 34,033 Net loss $ (98,431 ) $ (20,417 ) $ (49,369 ) Net loss per common share: Basic $ (1.37 ) $ (0.28 ) $ (0.69 ) Diluted $ (1.37 ) $ (0.28 ) $ (0.69 ) Weighted-average common shares outstanding: Basic 71,594,472 71,803,920 71,924,592 Diluted 71,594,472 71,803,920 71,924,592 2016 Quarters Ended (in thousands, except share and per share amounts) March 31 June 30 September 30 Revenue: Impax Generics, gross $ 614,176 $ 532,968 $ 658,099 Less: Chargebacks 217,354 197,864 252,303 Rebates 185,476 178,097 183,347 Product Returns 11,913 10,237 16,151 Other credits 29,354 25,075 30,978 Impax Generics, net 170,079 121,695 175,320 Impax Specialty Pharma, gross 82,073 81,254 77,841 Less: Chargebacks 6,111 8,826 5,439 Rebates 2,853 2,430 3,556 Product Returns 1,508 1,279 574 Other credits 16,172 17,824 15,683 Impax Specialty Pharma, net 55,429 50,895 52,589 Total revenues 225,508 172,590 227,909 Gross profit (loss) 102,590 72,984 (165,426 ) Net loss $ (10,408 ) $ (2,701 ) $ (179,337 ) Net loss per common share: Basic $ (0.15 ) $ (0.04 ) $ (2.51 ) Diluted $ (0.15 ) $ (0.04 ) $ (2.51 ) Weighted-average common shares outstanding: Basic 70,665,394 71,100,123 71,331,247 Diluted 70,665,394 71,100,123 71,331,247 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Business Combination Agreement with Amneal Pharmaceuticals LLC On October 17, 2017, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) with Atlas Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Holdco”), K2 Merger Sub Corporation, a Delaware corporation and a wholly-owned subsidiary of Holdco (“Merger Sub”), and Amneal Pharmaceuticals LLC (“Amneal”). The Business Combination Agreement was unanimously approved by the board of directors of the Company on October 16, 2017. At the closing (the “Closing”) of the transactions contemplated by the Business Combination Agreement (the “Transactions”), (i) Merger Sub will merge with and into the Company (the “Impax Merger”), with the Company surviving the Impax Merger as a direct wholly-owned subsidiary of Holdco, (ii) each share of the Company’s common stock, par value $0.01 per share (“Company Common Stock”), issued and outstanding immediately prior to the Impax Merger, other than Company Common Stock held by the Company in treasury, by Amneal or by any of their respective subsidiaries, will be converted into the right to receive one fully paid and nonassessable share of Class A common stock of Holdco, par value $0.01 per share (“Holdco Class A Common Stock”), (iii) the Company will convert to a limited liability company pursuant to the General Corporation Law of the State of Delaware and the Delaware Limited Liability Company Act, (iv) Holdco will contribute to Amneal all of Holdco’s equity interests in the Company to Amneal, in exchange for common units of Amneal (the “Contribution”), (v) Holdco will issue an aggregate number of shares of Class B common stock of Holdco, par value $0.01 per share (“Holdco Class B Common Stock”, and together with Holdco Class A Common Stock, “Holdco Common Stock”) to the existing members of Amneal (the “Amneal Members”) and (vi) Holdco will become the managing member of Amneal. In connection with the Closing, Holdco will be renamed Amneal Pharmaceuticals, Inc. (“New Amneal”). Subject to the satisfaction or waiver of closing conditions, the Closing is expected to occur in the first half of 2018. Immediately following the Closing, (i) the Amneal Members will hold 100% of Holdco Class B Common Stock, which, together with their common units of Amneal, will represent approximately 75% of the voting power and economic interests in New Amneal, and (ii) the Company’s stockholders immediately prior to the Closing will hold 100% of the Holdco Class A Common Stock, which will represent approximately 25% of the voting power and economic interests in New Amneal. Consummation of the Transactions is subject to customary closing conditions, including, among other things, (i) the approval of the Company’s stockholders holding a majority of the outstanding Company Common Stock entitled to vote (the “Requisite Stockholder Approval”), (ii) expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (iii) effectiveness of the S-4 Registration Statement registering the shares of Holdco Common Stock to be issued in connection with the Transactions and (iv) NYSE listing approval for Holdco Class A Common Stock. The obligation to consummate the Transactions is also conditioned upon each party’s representations and warranties being true and correct (subject to certain materiality exceptions) and each party having performed in all material respects its obligations under the Business Combination Agreement. The Business Combination Agreement contains customary and reciprocal representations and warranties of the Company and Amneal, many of which are subject to and qualified by materiality qualifiers. The Company and Amneal have also made customary covenants in the Business Combination Agreement regarding the operation of their respective businesses and the businesses of their respective subsidiaries in the ordinary course prior to the Closing. The Business Combination Agreement also contains a customary “no shop” covenant prohibiting the Company from soliciting proposals for alternative proposals to acquire the Company, or providing information or participating in any discussions in connection with any such proposals. However, prior to adoption of the Business Combination Agreement by the Company’s stockholders, the Board may, in the exercise of its fiduciary duties, (i) withhold, withdraw, qualify or modify its recommendation that the Company’s stockholders adopt the Business Combination Agreement in connection with certain intervening events, or (ii) terminate the Business Combination Agreement to enter into an agreement in connection with an alternative proposal to acquire the Company that is more favorable to the Company’s stockholders from a financial point of view than the Transactions (a “Superior Proposal”), in each case, subject to complying with certain notice and other specified requirements, including giving Amneal the opportunity to propose revisions to the terms of the Transactions and the payment of the Termination Fee (as defined below). Consummation of the Transactions is not subject to a financing condition. However, Amneal is required to use its reasonable best efforts to obtain financing to (i) fund repayment of the Company’s Notes and refinance the RBC Credit Facilities and (ii) refinance outstanding Amneal debt. The Company is required to use reasonable best efforts to provide cooperation in connection with the financing process. The Business Combination Agreement may be terminated by each of the Company and Amneal under certain circumstances, including if the Closing does not occur on or before the later of (i) 75 days after the effectiveness of the Registration Statement and (ii) July 17, 2018 (the “Outside Date”), but in no event will the Outside Date be later than October 17, 2018. Amneal also has certain additional termination rights, including in connection with a change of the Board’s recommendation that the Company’s stockholders adopt and approve the Business Combination Agreement. The Company is required to pay Amneal a termination fee of $45.0 million (the “Termination Fee”) in connection with such a termination by Amneal, as well as under certain other circumstances, including if the Business Combination Agreement is terminated by the Company in connection with a Superior Proposal. Additionally, Amneal will be entitled to reimbursement for up to $15.0 million of its reasonable out-of-pocket expenses incurred in connection with the Business Combination Agreement and the Transactions if the Business Combination Agreement is terminated due to the failure to obtain the Requisite Stockholder Approval. On October 17, 2017, Holdco and the Amneal Members also entered into a Stockholders Agreement, as described in further detail below (the “Stockholders Agreement”). The Stockholders Agreement provides, among other things, that: • Board and Committee Representation . Following the Closing, the board of directors of New Amneal (the “New Amneal Board”) will consist of no more than eleven directors, consisting of (i) six directors (the “Amneal Directors”) designated by Amneal Holdings, LLC (the “Amneal Group Representative”) and (ii) five directors (the “Non-Amneal Directors”) designated by the Company. However, in the event that an institutional investor beneficially owns more than 4% of the outstanding Holdco Common Stock, such investor may have a board observer right or the number of directors may be increased to provide such investor with a director designee. Immediately following the Closing, the Co-Chairmen of the New Amneal Board will be Chirag Patel and Chintu Patel, and the lead independent director will be the current chairman of the Company Board, Robert L. Burr. For so long as the Amneal Members or any of their affiliates, successors and permitted assigns to which any shares of Holdco Common Stock have been transferred in accordance with certain provisions of the Stockholders Agreement (collectively, “Amneal Group Members”) beneficially own more than 50% of the outstanding Holdco Common Stock, the Amneal Group Representative may designate for nomination to the New Amneal Board the lowest number of directors that constitutes a majority of the New Amneal Board and two of the four directors serving on each of the Nominating Committee and Compensation Committee. For so long as the Amneal Group Members beneficially own more than 50% of the outstanding Holdco Common Stock, (a) the Amneal Directors may designate the two Co-Chairmen of the New Amneal Board, and (b) the Non-Amneal Directors may designate the lead independent director. Until the Amneal Group Members beneficially own less than 10% of the outstanding Holdco Common Stock, (x) if the Amneal Group Members beneficially own less than 50% of the outstanding Holdco Common Stock, the Amneal Group Representative may designate a number of directors proportionate to the beneficial ownership of outstanding Holdco Common Stock by the Amneal Group Members (rounded up to the nearest whole number), and (y) each New Amneal Board committee (other than the Audit Committee) will include at least one Amneal director. • Conflicts Committee. Until the Amneal Group Members beneficially own less than 10% of the outstanding Holdco Common Stock, the New Amneal Board will have a Conflicts Committee comprised solely of independent directors to provide leadership and guidance to the New Amneal Board and New Amneal regarding potential conflicts of interest between New Amneal and any Amneal Group Member, including with respect to related party transactions. • Integration Committee. For at least two years following the Closing, the New Amneal Board will have an Integration Committee comprised of Chirag Patel, Chintu Patel, the current Co-Chief Executive Officers and Co-Chairmen of Amneal, and Paul Bisaro, the Company’s President and Chief Executive Officer, which will serve as an advisory committee to management to provide input in connection with the integration of the Company and Amneal. • Chief Executive Officer . Paul Bisaro will be the Chief Executive Officer of New Amneal. • Standstill Provisions . The Amneal Group Members will be subject to customary standstill provisions, subject to certain exceptions, until the earlier of (i) the third anniversary of the Closing Date and (ii) such time when the Amneal Group Members beneficially own less than 20% of the outstanding shares of Holdco Common Stock. • Amneal Buyout Transactions . Any proposal by an Amneal Group Member to acquire all outstanding Holdco Common Stock held by all other stockholders (other than other Amneal Group Members) must be approved by the Conflicts Committee and, as long as the Amneal Group Members beneficially own 37.5% of the outstanding shares of Holdco Common Stock, be subject to a non-waivable condition that a majority of the voting power of the outstanding shares of Holdco Common Stock held by such other stockholders approve the transaction. • Transfer Restrictions . At any time, an Amneal Group Member may transfer shares of Holdco Common Stock to an affiliate. For the period of 180 days following the closing (the “Lock-Up Period”), no Amneal Group Member may transfer any shares of Holdco Common Stock, unless with the prior written consent of the Conflicts Committee, subject to certain exceptions. Following the expiration of the Lock-Up Period, Amneal Group Members may transfer shares of Holdco Common Stock pursuant to an effective registration statement, or in transactions exempt from or not subject to registration requirements, subject to certain customary restrictions. The Stockholders Agreement will terminate when the Amneal Group Members cease to own 10% of the outstanding shares of Holdco Common Stock. Prohealth Stock Purchase Agreement On October 24, 2017, the Company completed its previously announced acquisition of all the issued and outstanding share capital of Prohealth Biotech Inc., a company incorporated under the laws of the Republic of China (Taiwan) (“Prohealth”) pursuant to the Stock Purchase Agreement dated as of July 23, 2017 (the “Prohealth SPA”) with the stockholders of Prohealth who collectively had owned 42.46% of the issued and outstanding share capital of Prohealth. Prior to the closing of the transactions contemplated by the Prohealth SPA, the Company had owned 57.54% of the issued and outstanding share capital of Prohealth. Prohealth currently does not conduct any business activities and the Company currently intends to dissolve the entity during fiscal year 2017. The total purchase price payable by the Company to the stockholders of Prohealth pursuant to the Prohealth SPA was $0.1 million . Generic Concerta ® (methylphenidate hydrochloride) Product Launch Delay In late October 2017, it became clear that the validation efforts for the Company's AB-rated methylphenidate hydrochloride (generic equivalent to Concerta ® ) product, produced by the Company's third party manufacturer, were not immediately successful and would require additional time and effort. The Company and its third party manufacturer are currently assessing the issue. As the assessment is currently ongoing, the Company is currently unable to determine the impact of the issue on the timing of the product launch. A significant delay of the product launch compared to the Company's estimated launch date could result in a significant intangible asset impairment charge, as well as a change in the fair value of the contingent consideration potentially due to Teva pursuant to the Termination Agreement as described under "Note 6. Fair Value Measurement and Financial Instruments." As of September 30, 2017, the fair value of the generic Concerta ® intangible asset was $149.7 million and the fair value of the contingent consideration was $38.1 million on the Company's consolidated balance sheet. Supplemental Indenture related to 2% Convertible Senior Notes Due 2022 On November 6, 2017, the Company entered into a supplemental indenture (the “First Supplemental Indenture”) to the indenture (the “Indenture”), dated as of June 30, 2015, by and between the Company and Wilmington Trust, National Association, a national banking association, as Trustee, under which the Company previously issued its 2% Convertible Senior Notes due 2022 (the “Notes”). Refer to “Note 12. Debt” for a description of the Notes. The First Supplemental Indenture was entered into by the Company to effectuate certain amendments to the Indenture in connection with the consummation of the Company’s consent solicitation for holders of the Notes to amend the Indenture. The Company initiated the consent solicitation pursuant to the requirements of the Business Combination Agreement with Amneal. See “Business Combination Agreement with Amneal Pharmaceuticals LLC” above for a description of the Business Combination Agreement and the Company’s proposed transaction with Amneal. The First Supplemental Indenture (a) amends a covenant in the Indenture relating to the Company’s corporate existence, (b) allows the Company to satisfy its reporting requirements by providing reports of any parent entity, (c) adds a provision to the Indenture requiring the Company to make and consummate a tender offer for any outstanding notes under the Indenture, and (d) expressly authorizes the Company to consummate the transactions contemplated by the Business Combination Agreement. |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | Interim Financial Statements The accompanying unaudited interim consolidated financial statements have been prepared from the books and records of the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and Rule 10-01 of Regulation S-X promulgated by the United States Securities and Exchange Commission (“SEC”), which permit reduced disclosures for interim periods. All adjustments necessary for a fair presentation of the accompanying balance sheets and statements of operations, comprehensive loss, and cash flows have been made. Although these interim consolidated financial statements do not include all of the information and footnotes required for complete annual financial statements, management believes the disclosures are adequate to make the information presented not misleading. Unaudited interim results of operations and cash flows are not necessarily indicative of the results that may be expected for the full year. |
Principles of Consolidation | Principles of Consolidation The Company's unaudited interim consolidated financial statements include the accounts of the operating parent company, Impax Laboratories, Inc., its wholly owned subsidiaries, including Impax Laboratories USA, LLC, Impax Laboratories (Taiwan), Inc., ThoRx Laboratories, Inc., Impax International Holdings, Inc., Impax Holdings, LLC, Impax Laboratories (Netherlands) C.V., Impax Laboratories (Netherlands) B.V., Impax Laboratories Ireland Limited, Lineage and Tower, including operating subsidiaries CorePharma, Amedra Pharmaceuticals, Mountain LLC and Trail Services, Inc., in addition to an equity investment in Prohealth Biotech (Taiwan), Inc. (“Prohealth”), in which the Company held a 57.54% majority ownership interest at September 30, 2017 . All significant intercompany accounts and transactions have been eliminated. |
Foreign Currency Translation | Foreign Currency Translation The Company translates the assets and liabilities of the Taiwan dollar functional currency of its majority-owned affiliate Prohealth and its wholly-owned subsidiary Impax Laboratories (Taiwan), Inc. into the U.S. dollar reporting currency using exchange rates in effect at the end of each reporting period. The revenues and expenses of these entities are translated using an average of the rates in effect during the reporting period. Gains and losses from these translations are recorded as currency translation adjustments included in the consolidated statements of comprehensive loss. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") and the rules and regulations of the U.S. Securities & Exchange Commission ("SEC") requires the use of estimates and assumptions, based on complex judgments considered reasonable, which affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant judgments are employed in estimates used in determining values of tangible and intangible assets, contingent consideration, legal contingencies, tax assets and tax liabilities, fair value of share-based compensation related to equity incentive awards issued to employees and directors, and estimates used in applying the Company’s revenue recognition policy, including those related to accrued chargebacks, rebates, product returns, Medicare, Medicaid, and other government rebate programs, shelf-stock adjustments, and the timing and amount of deferred and recognized revenue and deferred and amortized product manufacturing costs related to alliance and collaboration agreements. Actual results may differ from estimated results. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when the earnings process is complete, which under SEC Staff Accounting Bulletin No. 104, Topic No. 13, “Revenue Recognition” (“SAB 104”), is when revenue is realized or realizable and earned, there is persuasive evidence a revenue arrangement exists, delivery of goods or services has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. The Company accounts for material revenue arrangements which contain multiple deliverables in accordance with FASB ASC Topic 605-25, Revenue Recognition - Multiple-Element Arrangements ("ASC 605-25"), which addresses the determination of whether an arrangement involving multiple deliverables contains more than one unit of accounting. A delivered item within an arrangement is considered a separate unit of accounting only if both of the following criteria are met: • the delivered item has value to the customer on a stand-alone basis; and • if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor. Under ASC 605-25, if both of the criteria above are not met, then separate accounting for the individual deliverables is not appropriate. Revenue recognition for arrangements with multiple deliverables constituting a single unit of accounting is recognized generally over the greater of the term of the arrangement or the expected period of performance, either on a straight-line basis or on a modified proportional performance method. The Company accounts for milestones related to research and development activities in accordance with FASB ASC Topic 605-28, Revenue Recognition - Milestone Method ("ASC 605-28"). ASC Topic 605-28 allows for the recognition of consideration, which is contingent on the achievement of a substantive milestone, in its entirety in the period the milestone is achieved. A milestone is considered to be substantive if all of the following criteria are met: • the milestone is commensurate with either (1) the performance required to achieve the milestone or (2) the enhancement of the value of the delivered items resulting from the performance required to achieve the milestone; • the milestone relates solely to past performance; and • the milestone payment is reasonable relative to all of the deliverables and payment terms within the agreement. Impax Generics revenues, net and Impax Specialty Pharma revenues, net The Impax Generics revenues, net and Impax Specialty Pharma revenues, net include revenue recognized related to shipments of generic and branded pharmaceutical products to the Company’s customers, primarily drug wholesalers and retail chains. Gross sales revenue is recognized at the time title and risk of loss passes to the customer, which is generally when product is received by the customer. Net revenues may include deductions from the gross sales price related to estimates for chargebacks, rebates and administrative fees, distribution service fees, returns, shelf-stock adjustments, and other pricing adjustments. The Company records an estimate for these deductions in the same period when revenue is recognized. A description of each of these gross-to-net deductions follows. • Chargebacks The Company has agreements establishing contract prices for certain products with certain indirect customers, such as retail pharmacy chains, group purchasing organizations, managed care organizations, hospitals and government agencies who purchase products from drug wholesalers. The contract prices are lower than the prices the customer would otherwise pay to the wholesaler, and the price difference is referred to as a chargeback, which generally takes the form of a credit memo issued by the Company to reduce the invoiced gross selling price charged to the wholesaler. An estimated accrued provision for chargeback deductions is recognized at the time of product shipment. The primary factors considered when estimating the provision for chargebacks are the average historical chargeback credits given, the mix of products shipped, and the amount of inventory on hand at the major drug wholesalers with whom the Company does business. The Company also monitors actual chargebacks granted and compares them to the estimated provision for chargebacks to assess the reasonableness of the chargeback reserve at each quarterly balance sheet date. • Rebates and Administrative Fees The Company maintains various rebate and administrative fee programs with its customers in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. The rebates generally take the form of a credit memo to reduce the invoiced gross selling price charged to a customer for products shipped. An estimated accrued provision for rebate deductions is recognized at the time of product shipment. The primary factors the Company considers when estimating the provision for rebates are the average historical experience of aggregate credits issued, the mix of products shipped and the historical relationship of rebates as a percentage of total gross product sales, the contract terms and conditions of the various rebate programs in effect at the time of shipment, and the amount of inventory on hand at the major drug wholesalers with whom the Company does business. The Company also monitors actual rebates granted and compares them to the estimated provision for rebates to assess the reasonableness of the rebate reserve at each quarterly balance sheet date. • Distribution Service Fees The Company pays distribution service fees to several of its wholesaler customers related to sales of its Impax Products. The wholesalers are generally obligated to provide the Company with periodic outbound sales information as well as inventory levels of the Company’s Impax Products held in their warehouses. Additionally, the wholesalers have agreed to manage the variability of their purchases and inventory levels within specified days on hand limits. An accrued provision for distribution service fees is recognized at the time products are shipped to wholesalers. • Returns The Company allows its customers to return product if approved by authorized personnel in writing or by telephone with the lot number and expiration date accompanying any request and if such products are returned within six months prior to or until twelve months following, the product’s expiration date. The Company estimates and recognizes an accrued provision for product returns as a percentage of gross sales based upon historical experience. The product return reserve is estimated using a historical lag period, which is the time between when the product is sold and when it is ultimately returned, and estimated return rates which may be adjusted based on various assumptions including: changes to internal policies and procedures, business practices, commercial terms with customers, and the competitive position of each product; the amount of inventory in the wholesale and retail supply chain; the introduction of new products; and changes in market sales information. The Company also considers other factors, including significant market changes which may impact future expected returns and actual product returns. The Company monitors actual returns on a quarterly basis and may record specific provisions for returns it believes are not covered by historical percentages. • Shelf-Stock Adjustments Based upon competitive market conditions, the Company may reduce the selling price of certain Impax Generics division products. The Company may issue a credit against the sales amount to a customer based upon their remaining inventory of the product in question, provided the customer agrees to continue to make future purchases of product from the Company. This type of customer credit is referred to as a shelf-stock adjustment, which is the difference between the initial sales price and the revised lower sales price, multiplied by an estimate of the number of product units on hand at a given date. Decreases in selling prices are discretionary decisions made by the Company in response to market conditions, including estimated launch dates of competing products and declines in market price. The Company records an estimate for shelf-stock adjustments in the period it agrees to grant such a credit memo to a customer. • Cash Discounts The Company offers cash discounts to its customers, generally 2% to 3% of the gross selling price, as an incentive for paying within invoice terms, which generally range from 30 to 90 days. An estimate of cash discounts is recorded in the same period when revenue is recognized. • Medicaid and Other U.S. Government Pricing Programs As required by law, the Company provides a rebate on drugs dispensed under the Medicaid program, Medicare Part D, TRICARE, and other U.S. government pricing programs. The Company determines its estimated government rebate accrual primarily based on historical experience of claims submitted by the various states and other jurisdictions and any new information regarding changes in the various programs which may impact the Company’s estimate of government rebates. In determining the appropriate accrual amount, the Company considers historical payment rates and processing lag for outstanding claims and payments. The Company records estimates for government rebates as a deduction from gross sales, with a corresponding adjustment to accrued liabilities. • Rx Partner and OTC Partner The Rx Partner and OTC Partner contracts include revenue recognized under alliance and collaboration agreements between the Company and unrelated third-party pharmaceutical companies. The Company has entered into these alliance agreements to develop marketing and/or distribution relationships with its partners to fully leverage its technology platform. The Rx Partners and OTC Partners alliance agreements obligate the Company to deliver multiple goods and/or services over extended periods. Such deliverables include manufactured pharmaceutical products, exclusive and semi-exclusive marketing rights, distribution licenses, and research and development services. In exchange for these deliverables the Company receives payments from its agreement partners for product shipments and research and development services, and may also receive other payments including royalties, profit sharing payments, and upfront and periodic milestone payments. Revenue received from the alliance agreement partners for product shipments under these agreements is not subject to deductions for chargebacks, rebates, product returns, and other pricing adjustments. Royalty and profit sharing amounts the Company receives under these agreements are calculated by the respective agreement partner, with such royalty and profit share amounts generally based upon estimates of net product sales or gross profit which include estimates of deductions for chargebacks, rebates, product returns, and other adjustments the alliance agreement partners may negotiate with their respective customers. The Company records the agreement partner's adjustments to such estimated amounts in the period the agreement partner reports the amounts to the Company. The Company applies the updated guidance of ASC 605-25 to the Strategic Alliance Agreement, as amended, with Teva Pharmaceuticals USA, Inc., an affiliate of Teva Pharmaceutical Industries Limited (the “Teva Agreement”). The Company looks to the underlying delivery of goods and/or services which give rise to the payment of consideration under the Teva Agreement to determine the appropriate revenue recognition. The Company initially defers consideration received as a result of research and development-related activities performed under the Teva Agreement. The Company recognizes deferred revenue on a straight-line basis over the expected period of performance for such services. Consideration received as a result of the manufacture and delivery of products under the Teva Agreement is recognized at the time title and risk of loss passes to the customer, which is generally when product is received by Teva. The Company recognizes profit share revenue in the period earned. OTC Partner revenue is related to agreements with Pfizer, Inc., formerly Wyeth LLC (“Pfizer”) and L. Perrigo Company (“Perrigo”) with respect to the supply of the Company's over-the-counter pharmaceutical product Loratadine and Pseudoephedrine Sulfate 5 mg/129 mg 12-hour Extended Release Tablets (the "D12 Product"). The OTC Partner sales channel is no longer a core area of the business, and the over-the-counter pharmaceutical products the Company sells through this sales channel are older products which are now only sold to Pfizer and Perrigo. The Company is currently only required to manufacture the over-the-counter pharmaceutical products under its agreements with Pfizer and Perrigo. The Company recognizes profit share revenue in the period earned. During the quarter ended September 30, 2016, the Company sold the ANDAs for both the D12 Product and the Loratadine and Pseudoephedrine Sulfate 10 mg/240 mg 24-hour Extended Release Tablets, in addition to other specified assets, to Perrigo pursuant to an asset purchase agreement with Perrigo dated as of March 31, 2016 (the "Perrigo APA"). Under the terms of the Perrigo APA, the Company will also continue to supply the D-12 Product to Pfizer and Perrigo until the date that is the earliest of (i) the date Perrigo’s manufacturing facility is approved to manufacture the D-12 Product and (ii) December 31, 2017 (the "Supply End Date"). On the Supply End Date, the Company will assign and transfer its supply agreement with Pfizer in its entirety to Perrigo in accordance with the Perrigo APA. • Research Partner The Research Partner contract revenue results from development agreements the Company enters into with unrelated third-party pharmaceutical companies. The development agreements generally obligate the Company to provide research and development services over multiple periods. In exchange for this service, the Company generally receives upfront payments upon signing of each development agreement and is eligible to receive contingent milestone payments, payment of which is based upon the achievement of contractually specified events. Additionally, the Company may also receive royalty payments from the sale, if any, of a successfully developed and commercialized product under one of these development agreements. The Company recognizes revenue received from the achievement of contingent research and development milestones in the period such payment is earned. Royalty revenue, if any, will be recognized as current period revenue when earned. |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, “ Revenue from Contracts with Customers ” (Topic 606), regarding the accounting for and disclosures of revenue recognition, with an effective date for annual and interim periods beginning after December 15, 2016. This update provides a single comprehensive model for accounting for revenue from contracts with customers. The model requires that revenue recognized reflect the actual consideration to which the entity expects to be entitled in exchange for the goods or services defined in the contract, including in situations with multiple performance obligations. In July 2015, the FASB issued ASU 2015-14, “ Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ,” which deferred the effective date of the previously issued revenue recognition guidance by one year. The guidance will be effective for annual and interim periods beginning after December 15, 2017. In April 2016 and May 2016, the FASB issued ASU 2016-10, " Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing " and ASU 2016-12, " Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ," respectively. Both of these updates provide improvements and clarification to the previously issued revenue recognition guidance. The new standard can be adopted using one of two methods: the full retrospective method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect of adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The Company will adopt the new revenue recognition standard in 2018 using the modified retrospective method. The new standard will result in additional revenue-related disclosures in the notes to the Company’s consolidated financial statements. The Company is currently finalizing the impact that adoption will have on its consolidated financial statements. The majority of the Company's revenue relates to the sale of finished products to various customers, and management does not currently believe that the adoption will have a material impact on these transactions. The Company is continuing to evaluate the impact on certain less significant transactions involving third-party collaborations and other arrangements, but does not currently believe it will have a material effect on the overall financial results. In addition, the new standard will require changes to the Company’s processes and controls to support additional disclosures; and the Company is in the process of identifying and designing such changes to processes and controls to ensure readiness. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): “ Simplifying the Measurement of Inventory ,” with guidance regarding the accounting for and measurement of inventory. The update requires that inventory measured using first-in, first-out ("FIFO") shall be measured at the lower of cost and net realizable value. When there is evidence that the net realizable value of inventory is lower than its cost, the difference shall be recognized as a loss in earnings in the period in which it occurs. The guidance is effective for annual and interim periods beginning after December 15, 2016. The Company adopted this guidance during the first quarter of 2017, and it did not have a material effect on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), with guidance regarding the accounting for and disclosure of leases. The update requires lessees to recognize all leases, including operating leases, with a term greater than 12 months on the balance sheet. This update also requires lessees and lessors to disclose key information about their leasing transactions. The guidance will be effective for annual and interim periods beginning after December 15, 2018. The Company is currently evaluating the effect that this guidance will have on its consolidated financial statements and related disclosures. The Company expects the implementation of this standard to have an impact on its consolidated financial statements and related disclosures as its aggregate future minimum lease payments were $30.2 million as of December 31, 2016 under its current portfolio of non-cancelable leases for land, office space, and manufacturing, warehouse and research and development facilities with various expiration dates between April 2017 and December 2027. The Company anticipates recognition of additional assets and corresponding liabilities related to these leases on its consolidated balance sheet. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): " Contingent Put and Call Options in Debt Instruments ," with guidance regarding the accounting for embedded derivatives related to debt contracts. The update clarifies that determining whether the economic characteristics of a put or call are clearly and closely related to its debt host requires only an assessment of the four-step decision sequence outlined in FASB ASC paragraph 815-15-25-24. The update also indicates that entities are not required to separately assess whether the contingency itself is clearly and closely related. The guidance is effective for annual and interim periods beginning after December 15, 2016. The Company adopted this guidance during the first quarter of 2017, and it did not have an effect on the Company's consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): " Improvements to Employee Share-Based Payment Accounting ," with guidance regarding the simplification of accounting for share-based payment award transactions. The update changes the accounting for such areas as the accounting and cash flow classification for excess tax benefits and deficiencies; forfeitures; and tax withholding requirements and cash flow classification. The guidance is effective for annual and interim periods beginning after December 15, 2016. The Company adopted the new guidance effective January 1, 2017 and elected to eliminate the use of a forfeiture rate estimate in the determination of share-based compensation expense for restricted stock awards using the modified retrospective transition method, which resulted in a $1.4 million charge to opening retained earnings for 2017. In addition, the Company is now presenting the cash paid for tax withholdings on stock options exercised and restricted stock awards vested retrospectively in cash flows from financing activities as opposed to the historical presentation in cash flows from operating activities. Excess tax benefits or deficiencies, historically recorded to additional paid-in capital, are recorded to income tax expense as they occur on a prospective basis. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): " Classification of Certain Cash Receipts and Cash Payments, " with guidance intended to reduce the diversity in practice regarding how certain cash receipts and cash payments are presented and classified within the statement of cash flows. The update addresses eight specific cash flow issues including debt prepayment or debt extinguishment costs, the settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies (COLIs) (including bank-owned life insurance policies (BOLIs)), distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. The guidance will be effective for annual and interim periods beginning after December 15, 2017. The Company is currently evaluating the effect that this guidance may have on its consolidated financial statements. In October 2016, the FASB issued ASU-2016-16, Income Taxes (Topic 740): " Intra-Entity Transfers of Assets Other Than Inventory, " with guidance intended to more faithfully represent the economics of intra-entity asset transfers. The update clarifies that entities must recognize the income tax consequences of intra-entity asset transfers, other than inventory, when the transfer occurs. The guidance will be effective for annual and interim periods beginning after December 15, 2017. The Company is currently evaluating the effect that this guidance may have on its consolidated financial statements. In January 2017, the FASB issued ASU-2017-01, Business Combinations (Topic 805): " Clarifying the Definition of a Business, " with guidance intended to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The update provides a screen to determine whether an integrated set of assets and activities constitute a business. If the screen is not met, it (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace the missing elements. The guidance will be effective for annual and interim periods beginning after December 15, 2017 and should be applied prospectively. The Company is currently evaluating the effect that this guidance may have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323), which add to and amend SEC paragraphs pursuant to the SEC Staff Announcements at the September 22, 2016 and November 17, 2016 Emerging Issues Task Force (EITF) meetings. The guidance provides additional disclosure requirements regarding the impact of recently issued accounting standards on the financial statements of a registrant when such standards are adopted in a future period. The Company adopted this guidance during the first quarter of 2017, and it did not have an effect on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU-2017-04, Intangibles - Goodwill and Other (Topic 350): " Simplifying the Test for Goodwill Impairment, " which removes the second step of the two-step goodwill impairment test. In order to reduce the cost and complexity of testing goodwill for impairment, entities are now only required to perform a one-step quantitative impairment test and to record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of a reporting unit to determine if the quantitative impairment test is necessary. Entities should apply the guidance on a prospective basis and disclose the nature of and reason for the change in accounting principle upon transition. The guidance will be effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed after January 1, 2017. The Company adopted this guidance as of the first quarter of 2017, and it did not have an effect on the Company’s consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), which provides clarification regarding the scope of the asset derecognition guidance and accounting for partial sales of nonfinancial assets. The update defines an in substance nonfinancial asset and clarifies that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. All businesses and nonprofit activities within the scope of Subtopic 610-20 are excluded from the amendments in this update. This guidance will be effective for annual and interim periods beginning after December 15, 2017 and is required to be applied at the same time as ASU 2014-09 (described above) is applied. The guidance can be applied using one of two methods: the full retrospective method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect of adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The Company is currently evaluating the effect that this guidance may have on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): " Scope of Modification Accounting ," which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The guidance will be effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the effect that this guidance may have on its consolidated financial statements. |
BUSINESS ACQUISITION (Tables)
BUSINESS ACQUISITION (Tables) - Teva transaction | 9 Months Ended |
Sep. 30, 2017 | |
Business Acquisition [Line Items] | |
Schedule of Estimated Purchase Price | The following is an estimate of the purchase price for the Teva Transaction as of the closing date of August 3, 2016 (in thousands): Estimated Fair Value Purchase price per the APAs $ 575,800 Upfront payment pursuant to Termination Agreement 10,000 Total cash consideration 585,800 Fair value of contingent consideration pursuant to Termination Agreement (1) 30,100 Total consideration transferred $ 615,900 (1) The contingent consideration arrangement pursuant to the Termination Agreement potentially requires the Company to pay up to $40.0 million of additional consideration to Teva upon the achievement of specified commercialization events related to methylphenidate hydrochloride. The $30.1 million fair value of the potential contingent consideration payments recognized on the acquisition date was estimated by applying a probability-weighted expected return methodology. |
Schedule of Fair Value of the Intangible and Tangible Assets Acquired | The following is an estimate of the fair value of the intangible and tangible assets acquired in connection with the Teva Transaction on the closing date of August 3, 2016 (in thousands): Estimated Fair Value Intangible assets $ 613,032 Inventory - raw materials 2,868 Total assets acquired $ 615,900 |
Schedule of Allocations of Purchase Price to Intangible Assets | The following identifies the Company’s allocations of purchase price to intangible assets, including the weighted-average amortization period, in total and by major intangible asset class as of the closing date (in thousands): Estimated Fair Value Weighted-Average Estimated Useful Life Marketed product rights $ 455,529 19 years Acquired IPR&D product rights (1) 157,503 n/a Total intangible assets $ 613,032 (1) "IPR&D" refers to the Company's in-process research and development product rights. Pursuant to the Termination Agreement, Teva returned to the Company its full commercial rights to its pending ANDA for the generic equivalent to Concerta ® (methylphenidate hydrochloride), a product the Company previously partnered with Teva USA under a Strategic Alliance Agreement dated June 27, 2001, as amended. As a result, the Company recognized an intangible asset of $78.9 million related to the reacquired IPR&D. The Company engaged a third-party valuation specialist to measure the value of the reacquired product right using a discounted cash flow analysis. The asset was determined to be indefinite-lived based on the market participant methodology prescribed in ASC 805. |
Schedule of Business Acquisition, Pro Forma Information | The unaudited pro forma combined results of operations for the three and nine months ended September 30, 2016 (assuming the closing of the Teva Transaction occurred on January 1, 2015) are as follows (in thousands): Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Total revenues $ 242,647 $ 729,171 Net loss (177,379 ) (167,505 ) |
FAIR VALUE MEASUREMENT AND FI32
FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The carrying amounts and fair values of the Company’s financial instruments at September 30, 2017 and December 31, 2016 are indicated below (in thousands): As of September 30, 2017 Fair Value Measurement Based on Carrying Fair Value Quoted Prices in Active Markets Significant Significant Unobservable Assets Deferred Compensation Plan asset (1) $ 37,004 $ 37,004 $ — $ 37,004 $ — Liabilities Term Loan Facility due August 2021, current portion (2) $ 20,000 $ 20,000 $ — $ 20,000 $ — Term Loan Facility due August 2021, long-term portion (2) $ 310,000 $ 310,000 $ — $ 310,000 $ — 2% Convertible Senior Notes due June 2022 (3) $ 600,000 $ 542,586 $ 542,586 $ — $ — Deferred Compensation Plan liabilities (1) $ 31,746 $ 31,746 $ — $ 31,746 $ — Contingent consideration, current portion (4) $ 25,000 $ 25,000 $ — $ — $ 25,000 Contingent consideration, long-term portion (4) $ 13,123 $ 13,123 $ — $ — $ 13,123 As of December 31, 2016 Fair Value Measurement Based on Carrying Fair Value Quoted Prices in Active Markets Significant Significant Unobservable Assets Deferred Compensation Plan asset (1) $ 37,382 $ 37,382 $ — $ 37,382 $ — Liabilities Term Loan Facility due August 2021, current portion (2) $ 20,000 $ 20,000 $ — $ 20,000 $ — Term Loan Facility due August 2021, long-term portion (2) $ 375,000 $ 375,000 $ — $ 375,000 $ — 2% Convertible Senior Notes due June 2022 (3) $ 600,000 $ 469,800 $ 469,800 $ — $ — Deferred Compensation Plan liabilities (1) $ 28,582 $ 28,582 $ — $ 28,582 $ — Contingent consideration, long-term portion (4) $ 31,048 $ 31,048 $ — $ — $ 31,048 (1) The Deferred Compensation Plan liabilities are non-current liabilities recorded at the value of the amount owed to the plan participants, with changes in value recognized as compensation expense in the Company’s consolidated statements of operations. The calculation of the Deferred Compensation Plan obligation is derived from observable market data by reference to hypothetical investments selected by the participants and is included in the line items captioned “Other non-current liabilities” on the Company’s consolidated balance sheets. The Company invests participant contributions in corporate-owned life insurance (“COLI”) policies, for which the cash surrender value is included in the line item captioned “Other non-current assets” on the Company’s consolidated balance sheets. (2) The difference between the amount shown as the carrying value in the above tables and the amount shown on the Company’s consolidated balance sheets at September 30, 2017 and December 31, 2016 represents the unaccreted discount related to deferred debt issuance costs. (3) The difference between the amount shown as the carrying value in the above tables and the amount shown on the Company’s consolidated balance sheets at September 30, 2017 and December 31, 2016 represents the unaccreted discounts related to deferred debt issuance costs and bifurcation of the conversion feature of the notes. (4) The contingent consideration liability represents future consideration potentially payable to Teva upon the achievement of specified commercialization events related to methylphenidate hydrochloride in accordance with the Termination Agreement related to the Teva Transaction as described in "Note 2. Business Acquisition." A discounted cash flow valuation model was used to value the contingent consideration. The valuation is based on significant unobservable inputs, including the probability and timing of successful product launch, the expected number of product competitors as defined in the Termination Agreement in the market at the time of launch, and the expected number of such competitors in the market on the one-year launch anniversary date. The Company conducts a quarterly review of the underlying inputs and assumptions and significant changes in unobservable inputs could result in material changes to the contingent consideration liability. Due to the Company's expectation as of September 30, 2017 that the product launch would occur in the fourth quarter of 2017 and the then expected existence of two product competitors in the market at the time of launch, a 100% probability of payment was used to calculate the $25.0 million fair value of the $25.0 million contingent payment related to the product launch. As of September 30, 2017, the Company determined that it was 90% probable that the Company would be required to pay to Teva the $15.0 million contingent payment at the one-year product launch anniversary and based on the expected number of competitors in the market at such time in accordance with the terms of the Termination Agreement, resulting in the Company's determination of a $13.1 million fair value of the $15.0 million contingent payment as of September 30, 2017. The maximum aggregate amount in contingent consideration payments the Company could be expected to make to Teva in accordance with the Termination Agreement related to methylphenidate hydrochloride is $40.0 million . Refer to "Note 23. Subsequent Events" for further details related to the Company's methylphenidate hydrochloride product. |
Changes in Level 3 Instruments on Recurring Basis | The following table presents the changes in Level 3 instruments measured on a recurring basis for the nine months ended September 30, 2017 (in thousands): As of Change in As of Total contingent consideration $ 31,048 $ 7,075 $ 38,123 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable Composition | The composition of accounts receivable, net is as follows (in thousands): September 30, 2017 December 31, 2016 Gross accounts receivable (1) $ 580,874 $ 794,173 Less: Rebate reserve (149,271 ) (293,816 ) Less: Chargeback reserve (119,386 ) (151,978 ) Less: Distribution services reserve (7,956 ) (18,318 ) Less: Discount reserve (16,366 ) (17,957 ) Less: Uncollectible accounts reserve (2) (45,875 ) (54,736 ) Accounts receivable, net $ 242,020 $ 257,368 (1) Includes estimated $43.0 million and $40.3 million as of September 30, 2017 and December 31, 2016 , respectively, receivable due from Turing Pharmaceuticals AG ("Turing") for reimbursement of Daraprim® chargebacks and Medicaid rebate liabilities pursuant to an Asset Purchase Agreement between the Company and Turing dated August 7, 2015 (the "Turing APA"). In accordance with the terms of the Turing APA and in accordance with federal laws and regulations, the Company receives, and is initially responsible for processing and paying (subject to reimbursement by Turing), all chargebacks and rebates resulting from utilization by Medicaid, Medicare and other federal, state and local government programs, health plans and other health care providers for products sold under the Company's labeler code. Under the terms of the Turing APA, Turing is responsible for liabilities related to chargebacks and rebates that arise as a result of Turing's marketing or selling related activities in connection with Daraprim®. Refer to "Note 20. Legal and Regulatory Matters" for a description of the Company's suit against Turing related to, among other matters, Turing's failure to reimburse the Company for chargebacks and Medicaid rebate liabilities when due. (2) As a result of the uncertainty of collection from Turing that developed during the first quarter of 2016, the Company recorded a reserve of $48.0 million as of March 31, 2016, which represented the full amount of the estimated receivable due from Turing. During the fourth quarter of 2016, the Company received a $7.7 million payment from Turing. During the nine month period ended September 30, 2017, the Company increased the reserve balance by a net $2.7 million , consisting of a $3.6 million increase in the reserve resulting from additional Medicaid rebate claims received during the period and a $0.9 million reduction in the reserve resulting from payments received from Turing during the period. As of September 30, 2017, the $43.0 million estimated receivable due from Turing was fully reserved. |
Schedules of Rebate and Chargeback Activity | A rollforward of the rebate and chargeback reserves activity for the nine months ended September 30, 2017 and the year ended December 31, 2016 is as follows (in thousands): Nine Months Ended Year Ended Rebate reserve September 30, 2017 December 31, 2016 Beginning balance $ 293,816 $ 265,229 Provision recorded during the period 498,104 756,774 Credits issued during the period (642,649 ) (728,187 ) Ending balance $ 149,271 $ 293,816 The payment mechanisms for rebates in the Impax Generics and Impax Specialty Pharma divisions are different, which impacts the location on the Company's consolidated balance sheets. Impax Generics rebates are classified as "Accounts receivable, net" on the Company's consolidated balance sheets. Impax Specialty Pharma rebates are classified as "Accrued expenses" on the Company's consolidated balance sheets. Nine Months Ended Year Ended Chargeback reserve September 30, 2017 December 31, 2016 Beginning balance $ 151,978 $ 102,630 Provision recorded during the period 899,587 1,011,400 Credits issued during the period (932,179 ) (962,052 ) Ending balance $ 119,386 $ 151,978 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net of Carrying Value Reserves | Inventory, net of carrying value reserves, as of September 30, 2017 and December 31, 2016 consisted of the following (in thousands): September 30, 2017 December 31, 2016 Raw materials $ 69,037 $ 53,808 Work in process 6,754 3,280 Finished goods 109,873 130,879 Total inventory 185,664 187,967 Less: Non-current inventory 12,878 12,737 Total inventory - current $ 172,786 $ 175,230 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment, net of accumulated depreciation, consists of the following (in thousands): September 30, 2017 December 31, 2016 Land $ 3,500 $ 5,603 Buildings and improvements 190,828 174,303 Equipment 152,012 143,818 Office furniture and equipment 15,259 15,767 Construction-in-progress 46,632 50,191 Property, plant and equipment, gross 408,231 389,682 Less: Accumulated depreciation (185,039 ) (156,310 ) Property, plant and equipment, net $ 223,192 $ 233,372 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following tables show the gross carrying values and accumulated amortization, where applicable, of the Company’s intangible assets by type for the Company’s consolidated balance sheets presented (in thousands): September 30, 2017 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Amortized intangible assets: Marketed product rights $ 473,971 $ (188,637 ) $ 285,334 Royalties 339 (339 ) — 474,310 (188,976 ) 285,334 Non-amortized intangible assets: Acquired IPR&D product rights 223,598 — 223,598 Acquired future royalty rights 1,135 — 1,135 224,733 — 224,733 Total intangible assets $ 699,043 $ (188,976 ) $ 510,067 December 31, 2016 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Amortized intangible assets: Marketed product rights $ 524,733 $ (139,245 ) $ 385,488 Royalties 339 (339 ) — 525,072 (139,584 ) 385,488 Non-amortized intangible assets: Acquired IPR&D product rights 232,576 — 232,576 Acquired future royalty rights 2,402 — 2,402 234,978 — 234,978 Total intangible assets $ 760,050 $ (139,584 ) $ 620,466 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | The following table sets forth the Company’s accrued expenses (in thousands): September 30, 2017 December 31, 2016 Payroll-related expenses $ 35,739 $ 37,986 Product returns 80,716 72,888 Accrued shelf stock 5,715 7,032 Government rebates 64,856 72,063 Legal and professional fees 13,619 8,395 Income taxes payable 3,152 — Interest payable 3,546 544 Estimated Teva and Allergan chargebacks and rebates (1) 13,277 14,813 Accrued profit sharing and royalty expenses 15,243 13,642 Other 16,631 17,290 Total accrued expenses $ 252,494 $ 244,653 (1) As discussed in "Note 2. Business Acquisition," pursuant to certain agreed upon transition related services by and among the Company, Teva and Allergan after the closing of the Teva Transaction, the Company agreed to manage the payment process for certain commercial chargebacks and rebates on behalf of Teva and Allergan related to products each of Teva and Allergan sold into the channel prior to the Company's acquisition of the products. On August 18, 2016, the Company received a payment totaling $42.4 million from Teva and Allergan, which represented their combined estimate of the amount of commercial chargebacks and rebates to be paid by the Company on their behalf to wholesalers who purchased products from Teva and Allergan prior to the closing. Pursuant to the agreed upon transition services, Teva and Allergan are obligated to reimburse the Company for additional payments related to chargebacks and rebates for products they sold into the channel prior to the closing and made on their behalf in excess of the $42.4 million . If the total payments made by the Company on behalf of Teva and Allergan are less than $42.4 million , the Company is obligated to refund the difference to Teva and/or Allergan. As of September 30, 2017 , the Company had paid $29.1 million related to chargebacks and rebates on behalf of Teva and/or Allergan as described above and $13.3 million remained in accrued expenses on the Company's consolidated balance sheet. |
Schedule of Return Reserve Activity | A rollforward of the return reserve activity for the nine months ended September 30, 2017 and the year ended December 31, 2016 is as follows (in thousands): Nine Months Ended Year Ended Returns reserve September 30, 2017 December 31, 2016 Beginning balance $ 72,888 $ 48,950 Provision related to sales recorded in the period 38,820 52,383 Credits issued during the period (30,992 ) (28,445 ) Ending balance $ 80,716 $ 72,888 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Common Stock Reserved for Future Issuance | In addition, the Company had reserved for issuance the following amounts of shares of its common stock for the purposes described below as of September 30, 2017 (in thousands): Shares issued 74,407 Stock options outstanding (1) 3,375 Conversion of Notes payable (2) 9,471 Warrants outstanding (see below) 9,471 Total shares of common stock issued and reserved for issuance 96,724 (1) See “Note 15. Share-based Compensation.” (2) See “Note 12. Debt.” |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a reconciliation of basic and diluted net loss per share of common stock for the three and nine months ended September 30, 2017 and 2016 (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Basic Loss Per Common Share: Net loss $ (49,369 ) $ (179,337 ) $ (168,217 ) $ (192,446 ) Weighted-average common shares outstanding 71,925 71,331 71,776 71,033 Basic loss per share $ (0.69 ) $ (2.51 ) $ (2.34 ) $ (2.71 ) Diluted Loss Per Common Share: Net loss $ (49,369 ) $ (179,337 ) $ (168,217 ) $ (192,446 ) Add-back of interest expense on outstanding convertible notes payable, net of tax — (1) — (1) — (1) — (1) Adjusted net loss $ (49,369 ) $ (179,337 ) $ (168,217 ) $ (192,446 ) Weighted-average common shares outstanding 71,925 71,331 71,776 71,033 Weighted-average incremental shares related to assumed exercise of warrants and stock options, vesting of non-vested shares and ESPP share issuance — (2) — (3) — (2) — (3) Weighted-average incremental shares assuming conversion of outstanding notes payable — (1) — (1) — (1) — (1) Diluted weighted-average common shares outstanding 71,925 (2) 71,331 (3) 71,776 (2) 71,033 (3) Diluted loss per share $ (0.69 ) $ (2.51 ) $ (2.34 ) $ (2.71 ) (1) For the three and nine month periods ended September 30, 2017 and September 30, 2016 , the Company incurred a net loss, which cannot be diluted, so basic and diluted loss per common share were the same. Accordingly, there were no numerator or denominator adjustments related to the Company’s outstanding Notes. (2) For the three and nine month periods ended September 30, 2017 , the Company incurred a net loss, which cannot be diluted, so basic and diluted loss per common share were the same. As of September 30, 2017 , shares issuable but not included in the Company's calculation of diluted EPS, which could potentially dilute future earnings, include 9.47 million warrants outstanding, 9.47 million shares for conversion of outstanding Notes payable, 3.38 million stock options outstanding and 2.24 million non-vested restricted stock awards. (3) For the three and nine month periods ended September 30, 2016 , the Company incurred a net loss, which cannot be diluted, so basic and diluted loss per common share were the same. As of September 30, 2016 , shares issuable but not included in the Company's calculation of diluted EPS, which could potentially dilute future earnings, include 9.47 million warrants outstanding, 9.47 million shares for conversion of outstanding Notes payable, 2.47 million stock options outstanding and 2.60 million non-vested restricted stock awards. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes all of the Company's stock option activity for the current year through September 30, 2017 : Stock Options Number of Weighted- Outstanding at December 31, 2016 2,234,331 $ 22.67 Options granted 1,198,726 12.21 Options exercised (34,473 ) 9.70 Options forfeited (23,474 ) 27.05 Outstanding at September 30, 2017 3,375,110 $ 19.01 Options exercisable at September 30, 2017 1,820,971 $ 20.68 |
Schedule of Share-based Compensation, Restricted Stock Awards Activity | A summary of the non-vested restricted stock awards is as follows: Restricted Stock Awards Number of Weighted- Non-vested at December 31, 2016 2,160,127 $ 34.02 Granted 961,808 13.74 Vested (490,487 ) 35.66 Forfeited (390,006 ) 32.27 Non-vested at September 30, 2017 2,241,442 $ 25.30 |
Schedule of Employee Share-based Compensation Expense | The amount of share-based compensation expense recognized by the Company is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Cost of revenues $ 1,521 $ 1,331 $ 4,307 $ 4,579 Selling, general and administrative 3,930 5,070 11,443 14,537 Research and development 1,039 1,312 3,922 4,259 Total $ 6,490 $ 7,713 $ 19,672 $ 23,375 |
RESTRUCTURINGS (Tables)
RESTRUCTURINGS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Summary of Total Estimated Charges to be Incurred by Type | The following is a summary of the total estimated charges to be incurred by major type of cost (in millions): Type of Cost Amount Expected to be Incurred Employee retention and severance payments $ 14.1 Technical transfer of products 11.2 Asset impairment and accelerated depreciation charges 24.4 Facilities lease terminations and asset retirement obligations 1.9 Legal and professional fees 0.2 Total estimated restructuring charges $ 51.8 |
Schedule of Restructuring Reserve by Type of Cost | A rollforward of the charges incurred for the nine months ended September 30, 2017 is as follows (in thousands): Balance as of Expensed/ Balance as of December 31, 2016 Accrued Expense Cash Payments Non-Cash Items September 30, 2017 Employee retention and severance payments $ 5,945 $ 4,165 $ (3,816 ) $ — $ 6,294 Technical transfer of products — 2,584 (2,584 ) — — Asset impairment and accelerated depreciation charges — 6,145 — (6,145 ) — Facilities lease terminations and asset retirement obligations 209 398 — — 607 Legal and professional fees — — — — — Total $ 6,154 $ 13,292 $ (6,400 ) $ (6,145 ) $ 6,901 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The tables below present segment information reconciled to total Company financial results, with segment operating income or loss including gross profit less direct research and development expenses and direct selling expenses as well as any litigation settlements, to the extent specifically identified by segment (in thousands): Three Months Ended September 30, 2017 Impax Impax Corporate Total Revenues, net $ 151,098 $ 55,294 $ — $ 206,392 Cost of revenues 141,133 17,603 — 158,736 Cost of revenues impairment charges 13,623 — — 13,623 Selling, general and administrative 5,570 16,135 31,880 53,585 Research and development 12,241 3,580 — 15,821 Patent litigation expense 28 1,612 — 1,640 (Loss) income before income taxes $ (21,497 ) $ 16,364 $ (47,281 ) $ (52,414 ) Three Months Ended September 30, 2016 Impax Impax Corporate Total Revenues, net $ 175,320 $ 52,589 $ — $ 227,909 Cost of revenues 115,020 21,853 — 136,873 Cost of revenues impairment charges 256,462 — — 256,462 Selling, general and administrative 6,103 16,358 32,577 55,038 Research and development 15,375 4,740 — 20,115 In-process research and development impairment charges 15,543 13,227 — 28,770 Patent litigation expense 147 3,132 — 3,279 Loss before income taxes $ (233,330 ) $ (6,721 ) $ (43,817 ) $ (283,868 ) Nine Months Ended September 30, 2017 Impax Impax Corporate Total Revenues, net $ 436,134 $ 156,743 $ — $ 592,877 Cost of revenues 355,375 53,269 — 408,644 Cost of revenues impairment charges 52,903 — — 52,903 Selling, general and administrative 20,072 49,279 82,904 152,255 Research and development 50,632 14,525 — 65,157 In-process research and development impairment charges 6,079 — — 6,079 Patent litigation expense 715 3,167 — 3,882 (Loss) income before income taxes $ (49,642 ) $ 36,503 $ (127,742 ) $ (140,881 ) Nine Months Ended September 30, 2016 Impax Impax Corporate Total Revenues, net $ 467,094 $ 158,913 $ — $ 626,007 Cost of revenues 307,936 49,916 — 357,852 Cost of revenues impairment charges 258,007 — — 258,007 Selling, general and administrative 12,442 46,309 85,493 144,244 Research and development 46,113 13,824 — 59,937 In-process research and development impairment charges 16,489 13,227 — 29,716 Patent litigation expense 416 6,111 — 6,527 (Loss) income before income taxes $ (174,309 ) $ 29,526 $ (160,529 ) $ (305,312 ) |
Schedule of Product Information | The Company's significant product families, as determined based on net revenue, and their percentage of the Company's consolidated net revenue for each of the three and nine month periods ended September 30, 2017 and 2016 are set forth below (in thousands): Segment Product Family Three Months Ended September 30, 2017 $ % Impax Generics Epinephrine Auto-Injector family (generic Adrenaclick®) $ 40,482 20 % (1) Impax Specialty Pharma Rytary® family $ 21,520 10 % (2) Impax Generics Oxymorphone HCI ER family $ 16,362 8 % (3) Impax Specialty Pharma Zomig® family $ 13,899 7 % (4) Impax Generics Diclofenac Sodium Gel family (generic Solaraze®) $ 13,283 6 % (5) Segment Product Family Three Months Ended September 30, 2016 $ % Impax Generics Epinephrine Auto-Injector family (generic Adrenaclick®) $ 39,321 17 % (1) Impax Generics Oxymorphone HCI ER family $ 22,620 10 % (3) Impax Specialty Pharma Rytary® family $ 19,807 9 % (2) Impax Specialty Pharma Zomig® family $ 15,258 7 % (4) Impax Generics Fenofibrate family $ 14,521 6 % (6) Segment Product Family Nine Months Ended September 30, 2017 $ % Impax Generics Epinephrine Auto-Injector family (generic Adrenaclick®) $ 90,572 15 % (1) Impax Specialty Pharma Rytary® family $ 63,347 11 % (2) Impax Generics Oxymorphone HCI ER family $ 52,587 9 % (3) Impax Generics Budesonide family $ 41,095 7 % (7) Impax Specialty Pharma Zomig® family $ 36,081 6 % (4) Segment Product Family Nine Months Ended September 30, 2016 $ % Impax Generics Epinephrine Auto-Injector family (generic Adrenaclick®) $ 77,592 12 % (1) Impax Generics Diclofenac Sodium Gel family (generic Solaraze®) $ 60,828 10 % (5) Impax Specialty Pharma Rytary® family $ 52,030 8 % (2) Impax Generics Oxymorphone HCI ER family $ 51,898 8 % (3) Impax Generics Fenofibrate family $ 50,471 8 % (6) (1) Epinephrine Auto-Injector (generic Adrenaclick®) product family consists of the injector product in two different strengths and is indicated in the emergency treatment of allergic reactions (Type 1) including anaphylaxis. (2) Rytary® product family consists of the capsules product in four different strengths and is indicated for the treatment of Parkinson’s disease, post-encephalitic parkinsonism, and parkinsonism that may follow carbon monoxide intoxication or manganese intoxication. (3) Oxymorphone Hydrochloride Extended Release product family consists of the oxymorphone hydrochloride extended release tablet formulation of the product in seven different strengths and is indicated for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. (4) Zomig® product family consists of products in tablet, orally disintegrating tablet and nasal spray dosage forms, each dosage form in two different strengths, and is indicated for the acute treatment of migraine with or without aura in adults. Zomig® (zolmitriptan) Nasal Spray is also indicated in pediatric patients 12 years of age or older. (5) Diclofenac Sodium Gel (generic Solaraze®) product family consists of one product strength and is indicated for the topical treatment of actinic keratosis. (6) Fenofibrate product family consists of products in both capsule and tablet dosage forms in seven different strengths and is indicated as adjunctive therapy to diet to reduce elevated LDL-C, Total-C, Triglycerides and Apo B, and to increase HDL-C in adult patients with primary hypercholesterolemia or mixed dyslipidemia (Fredrickson Types IIa and IIb); and also indicated as adjunctive therapy to diet for treatment of adult patients with hypertriglyceridemia (Fredrickson Types IV and V hyperlipidemia). (7) Budesonide product family consists of the budesonide inhalation suspension formulation of the product in two different strengths and is indicated for the maintenance treatment of asthma and as prophylactic therapy in children 12 months to eight years of age. |
SUPPLEMENTARY FINANCIAL INFOR43
SUPPLEMENTARY FINANCIAL INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Selected financial information for the quarterly period noted is as follows: 2017 Quarters Ended (in thousands, except share and per share amounts) March 31 June 30 September 30 Revenue: Impax Generics, gross $ 635,897 $ 663,167 $ 622,252 Less: Chargebacks 298,744 286,092 281,835 Rebates 164,792 170,398 162,914 Product Returns 9,733 15,210 7,003 Other credits 28,481 40,578 19,402 Impax Generics, net 134,147 150,889 151,098 Impax Specialty Pharma, gross 84,133 84,238 107,407 Less: Chargebacks 9,828 8,967 14,121 Rebates 4,483 4,682 5,914 Product Returns 1,844 1,416 3,614 Other credits 17,722 17,980 28,464 Impax Specialty Pharma, net 50,256 51,193 55,294 Total revenues 184,403 202,082 206,392 Gross profit 24,891 72,406 34,033 Net loss $ (98,431 ) $ (20,417 ) $ (49,369 ) Net loss per common share: Basic $ (1.37 ) $ (0.28 ) $ (0.69 ) Diluted $ (1.37 ) $ (0.28 ) $ (0.69 ) Weighted-average common shares outstanding: Basic 71,594,472 71,803,920 71,924,592 Diluted 71,594,472 71,803,920 71,924,592 2016 Quarters Ended (in thousands, except share and per share amounts) March 31 June 30 September 30 Revenue: Impax Generics, gross $ 614,176 $ 532,968 $ 658,099 Less: Chargebacks 217,354 197,864 252,303 Rebates 185,476 178,097 183,347 Product Returns 11,913 10,237 16,151 Other credits 29,354 25,075 30,978 Impax Generics, net 170,079 121,695 175,320 Impax Specialty Pharma, gross 82,073 81,254 77,841 Less: Chargebacks 6,111 8,826 5,439 Rebates 2,853 2,430 3,556 Product Returns 1,508 1,279 574 Other credits 16,172 17,824 15,683 Impax Specialty Pharma, net 55,429 50,895 52,589 Total revenues 225,508 172,590 227,909 Gross profit (loss) 102,590 72,984 (165,426 ) Net loss $ (10,408 ) $ (2,701 ) $ (179,337 ) Net loss per common share: Basic $ (0.15 ) $ (0.04 ) $ (2.51 ) Diluted $ (0.15 ) $ (0.04 ) $ (2.51 ) Weighted-average common shares outstanding: Basic 70,665,394 71,100,123 71,331,247 Diluted 70,665,394 71,100,123 71,331,247 |
DESCRIPTION OF BUSINESS - Narra
DESCRIPTION OF BUSINESS - Narrative (Details) $ in Millions | Mar. 24, 2017 | Sep. 30, 2017segmentsales_channelfacilitypropertyproduct | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||
Number of reportable segments | segment | 2 | ||
Number of operating divisions | segment | 2 | ||
Number of sales channels | sales_channel | 4 | ||
Number of internally developed branded pharmaceutical product candidate | product | 1 | ||
Number of other branded products | product | 4 | ||
President | |||
Business Acquisition [Line Items] | |||
Renewal period | 1 year | ||
Notice of non-renewal period (at least) | 90 days | ||
President, Chief Executive Officer, and Board of Directors Member | Severance Charges And Accelerated Equity Expense | |||
Business Acquisition [Line Items] | |||
Employee related costs | $ 5.4 | ||
President, Chief Executive Officer, and Board of Directors Member | Severance Charges | |||
Business Acquisition [Line Items] | |||
Employee related costs | 4.9 | ||
President, Chief Executive Officer, and Board of Directors Member | Accelerated Equity Expense | |||
Business Acquisition [Line Items] | |||
Employee related costs | $ 0.5 | ||
California | |||
Business Acquisition [Line Items] | |||
Number of owned properties | property | 4 | ||
Hayward California | |||
Business Acquisition [Line Items] | |||
Number of leased properties | facility | 2 |
BUSINESS ACQUISITION - Narrativ
BUSINESS ACQUISITION - Narrative (Details) - USD ($) | Aug. 18, 2016 | Aug. 03, 2016 | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||
Total cash consideration | $ 0 | $ 585,800,000 | |||||||
Estimated Teva and Allergan chargebacks and rebates | $ 13,277,000 | $ 14,813,000 | 13,277,000 | ||||||
Impairment charge | 828,000 | $ 134,000 | 3,022,000 | 134,000 | |||||
Teva transaction | |||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||
Total cash consideration | $ 585,800,000 | ||||||||
Acquisition-related costs | 0 | 1,700,000 | $ 4,000,000 | 300,000 | $ 2,900,000 | ||||
Acquired balances | $ 42,400,000 | ||||||||
Chargeback and reserve payments | 29,100,000 | ||||||||
Estimated Teva and Allergan chargebacks and rebates | 13,300,000 | $ 13,300,000 | |||||||
Impairment charge | $ 13,600,000 | $ 41,800,000 | $ 57,400,000 | $ 251,000,000 | |||||
Teva transaction | Currently marketed product rights | |||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||
Fair value inputs, discount rate | 6.70% | ||||||||
Teva transaction | Term Loan | Revolving Credit Facility | |||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||
Proceeds from issuance of debt | $ 400,000,000 | ||||||||
Teva transaction | Maximum | |||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||||
Contingent consideration (up to) | $ 40,000,000 |
BUSINESS ACQUISITION - Purchase
BUSINESS ACQUISITION - Purchase Price Allocation - Teva (Details) - USD ($) | Aug. 03, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Business Acquisition [Line Items] | |||
Total cash consideration | $ 0 | $ 585,800,000 | |
Teva transaction | |||
Business Acquisition [Line Items] | |||
Purchase price per the APAs | $ 575,800,000 | ||
Upfront payment pursuant to Termination Agreement | 10,000,000 | ||
Total cash consideration | 585,800,000 | ||
Fair value of contingent consideration pursuant to Termination Agreement | 30,100,000 | ||
Total consideration transferred | 615,900,000 | ||
Additional consideration | 40,000,000 | ||
Teva transaction | Maximum | |||
Business Acquisition [Line Items] | |||
Additional consideration | $ 40,000,000 |
BUSINESS ACQUISITION - Fair Val
BUSINESS ACQUISITION - Fair Values of Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed - Teva (Details) - Teva transaction $ in Thousands | Aug. 03, 2016USD ($) |
Business Acquisition [Line Items] | |
Intangible assets | $ 613,032 |
Inventory - raw materials | 2,868 |
Total assets acquired | $ 615,900 |
BUSINESS ACQUISITION - Acquired
BUSINESS ACQUISITION - Acquired Intangible Assets - Teva (Details) - USD ($) $ in Thousands | Aug. 03, 2016 | Sep. 30, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Marketed product rights | $ 474,310 | $ 525,072 | |
Acquired IPR&D product rights | 224,733 | 234,978 | |
Total intangible assets | $ 699,043 | 760,050 | |
Weighted-Average Estimated Useful Life | 6 years 8 months | ||
Teva transaction | |||
Business Acquisition [Line Items] | |||
Total intangible assets | $ 613,032 | ||
In-process research and development product rights | Teva transaction | |||
Business Acquisition [Line Items] | |||
Acquired IPR&D product rights | 157,503 | ||
Reacquired in process research and development | Teva transaction | |||
Business Acquisition [Line Items] | |||
Acquired IPR&D product rights | 78,900 | ||
Marketed product rights | |||
Business Acquisition [Line Items] | |||
Marketed product rights | $ 473,971 | $ 524,733 | |
Marketed product rights | Teva transaction | |||
Business Acquisition [Line Items] | |||
Marketed product rights | $ 455,529 | ||
Weighted-Average Estimated Useful Life | 19 years |
BUSINESS ACQUISITION - Unaudite
BUSINESS ACQUISITION - Unaudited Condensed Pro Forma Consolidated Statements of Operations - Teva (Details) - Teva transaction - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||
Total revenues | $ 242,647 | $ 729,171 |
Net loss | $ (177,379) | $ (167,505) |
BASIS OF PRESENTATION - Narrati
BASIS OF PRESENTATION - Narrative (Details) | Sep. 30, 2017 |
Prohealth Biotech | |
Schedule of Equity Method Investments [Line Items] | |
Majority ownership interest | 57.54% |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Minimum | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Cash discount, discount rate | 2.00% |
Cash discount, invoice terms | 30 days |
Maximum | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Cash discount, discount rate | 3.00% |
Cash discount, invoice terms | 90 days |
RECENT ACCOUNTING PRONOUNCEME52
RECENT ACCOUNTING PRONOUNCEMENTS - Narrative (Details) - USD ($) $ in Millions | Jan. 01, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Future minimum lease payments | $ 30.2 | |
Retained Earnings | Accounting Standards Update 2016-09 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Charge to opening retained earnings | $ 1.4 |
FAIR VALUE MEASUREMENT AND FI53
FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS - Schedule of Carrying Amounts and Fair Values (Details) $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)competitor | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Aug. 03, 2016USD ($) |
Assets | |||||
Deferred Compensation Plan asset | $ 37,004 | $ 37,382 | |||
Liabilities | |||||
Term Loan Facility due August 2021, current portion, carrying amount | 17,836 | 17,719 | |||
Term Loan Facility due August 2021, long-term portion, carrying amount | 767,935 | 813,545 | |||
Deferred Compensation Plan liabilities | 31,746 | 28,582 | |||
Contingent consideration, current portion, carrying amount | 25,000 | 0 | |||
Contingent consideration, current portion, fair value | 25,000 | ||||
Contingent consideration, long-term portion, carrying amount | 13,123 | 31,048 | |||
Contingent consideration, long-term portion, fair value | 13,123 | 31,048 | |||
Teva transaction | |||||
Liabilities | |||||
Contingent consideration, current portion, fair value | $ 25,000 | ||||
Probability of payment used to calculate fair value of contingent liability at launch | 100.00% | ||||
Maximum contingent consideration payments | $ 40,000 | ||||
Probability of payment used to calculate fair value of contingent liability at launch anniversary | 90.00% | ||||
Teva transaction | Scenario, Forecast | |||||
Liabilities | |||||
Number of competitors at time of product launch | competitor | 2 | ||||
Maximum contingent consideration payments | $ 15,000 | $ 25,000 | |||
2% Convertible senior notes due June 2022 | |||||
Liabilities | |||||
2% convertible senior notes due June 2022, carrying amount | $ 600,000 | 600,000 | |||
2% convertible senior notes due June 2022, fair value | 542,586 | 469,800 | |||
Term Loan | |||||
Liabilities | |||||
Term Loan Facility due August 2021, current portion, carrying amount | 20,000 | 20,000 | |||
Term Loan Facility due August 2021, current portion, fair value | 20,000 | 20,000 | |||
Term Loan Facility due August 2021, long-term portion, carrying amount | 310,000 | 375,000 | |||
Term Loan Facility due August 2021, long-term portion, fair value | 310,000 | 375,000 | |||
Quoted Prices in Active Markets (Level 1) | |||||
Assets | |||||
Deferred Compensation Plan asset | 0 | 0 | |||
Liabilities | |||||
Deferred Compensation Plan liabilities | 0 | 0 | |||
Contingent consideration, current portion, fair value | 0 | ||||
Contingent consideration, long-term portion, fair value | 0 | 0 | |||
Quoted Prices in Active Markets (Level 1) | 2% Convertible senior notes due June 2022 | |||||
Liabilities | |||||
2% convertible senior notes due June 2022, fair value | $ 542,586 | 469,800 | |||
Interest rate, stated percentage | 2.00% | ||||
Quoted Prices in Active Markets (Level 1) | Term Loan | |||||
Liabilities | |||||
Term Loan Facility due August 2021, current portion, fair value | $ 0 | 0 | |||
Term Loan Facility due August 2021, long-term portion, fair value | 0 | 0 | |||
Significant Other Observable Inputs (Level 2) | |||||
Assets | |||||
Deferred Compensation Plan asset | 37,004 | 37,382 | |||
Liabilities | |||||
Deferred Compensation Plan liabilities | 31,746 | 28,582 | |||
Contingent consideration, current portion, fair value | 0 | ||||
Contingent consideration, long-term portion, fair value | 0 | 0 | |||
Significant Other Observable Inputs (Level 2) | 2% Convertible senior notes due June 2022 | |||||
Liabilities | |||||
2% convertible senior notes due June 2022, fair value | 0 | 0 | |||
Significant Other Observable Inputs (Level 2) | Term Loan | |||||
Liabilities | |||||
Term Loan Facility due August 2021, current portion, fair value | 20,000 | 20,000 | |||
Term Loan Facility due August 2021, long-term portion, fair value | 310,000 | 375,000 | |||
Significant Unobservable Inputs (Level 3) | |||||
Assets | |||||
Deferred Compensation Plan asset | 0 | 0 | |||
Liabilities | |||||
Deferred Compensation Plan liabilities | 0 | 0 | |||
Contingent consideration, current portion, fair value | 25,000 | ||||
Contingent consideration, long-term portion, fair value | 13,123 | 31,048 | |||
Significant Unobservable Inputs (Level 3) | 2% Convertible senior notes due June 2022 | |||||
Liabilities | |||||
2% convertible senior notes due June 2022, fair value | 0 | 0 | |||
Significant Unobservable Inputs (Level 3) | Term Loan | |||||
Liabilities | |||||
Term Loan Facility due August 2021, current portion, fair value | 0 | 0 | |||
Term Loan Facility due August 2021, long-term portion, fair value | $ 0 | $ 0 |
FAIR VALUE MEASURMENT AND FINAN
FAIR VALUE MEASURMENT AND FINANCIAL INSTRUMENTS - Fair Value Changes Unobservable Inputs (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Contingent consideration, beginning balance | $ 31,048 |
Change in Fair Value Included in Earnings | 7,075 |
Contingent consideration, ending balance | $ 38,123 |
ACCOUNTS RECEIVABLE - Compositi
ACCOUNTS RECEIVABLE - Composition of Accounts Receivable Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Gross accounts receivable | $ 580,874 | $ 794,173 | $ 580,874 | |||
Less: Rebate reserve | (149,271) | (293,816) | (149,271) | |||
Less: Chargeback reserve | (119,386) | (151,978) | (119,386) | |||
Less: Distribution services reserve | (7,956) | (18,318) | (7,956) | |||
Less: Discount reserve | (16,366) | (17,957) | (16,366) | |||
Less: Uncollectible accounts reserve | (45,875) | (54,736) | (45,875) | |||
Accounts receivable, net | 242,020 | 257,368 | 242,020 | |||
Reserve for Turing receivable | 0 | $ 0 | 2,670 | $ 48,043 | ||
Receivable from Turing Pharmaceuticals AG | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Gross accounts receivable | 43,000 | 40,300 | 43,000 | |||
Turing Pharmaceuticals AG | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Gross accounts receivable | $ 43,000 | 43,000 | ||||
Reserve for Turing receivable | $ 48,000 | 3,600 | ||||
Reduction in the reserve resulting from payments received | $ 7,700 | 900 | ||||
Change in reserve | $ 2,700 |
ACCOUNTS RECEIVABLE - Roll Forw
ACCOUNTS RECEIVABLE - Roll Forward of the Rebate Reserves Activity (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Rebate reserve | ||
Beginning balance | $ 293,816 | |
Ending balance | 149,271 | $ 293,816 |
Rebates | ||
Rebate reserve | ||
Beginning balance | 293,816 | 265,229 |
Provision recorded during the period | 498,104 | 756,774 |
Credits issued during the period | (642,649) | (728,187) |
Ending balance | $ 149,271 | $ 293,816 |
ACCOUNTS RECEIVABLE - Roll Fo57
ACCOUNTS RECEIVABLE - Roll Forward of the Chargeback Reserves Activity (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Chargeback reserve | ||
Beginning balance | $ 151,978 | |
Ending balance | 119,386 | $ 151,978 |
Chargebacks | ||
Chargeback reserve | ||
Beginning balance | 151,978 | 102,630 |
Provision recorded during the period | 899,587 | 1,011,400 |
Credits issued during the period | (932,179) | (962,052) |
Ending balance | $ 119,386 | $ 151,978 |
INVENTORY - Net of Carrying Val
INVENTORY - Net of Carrying Value Reserves (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 69,037 | $ 53,808 |
Work in process | 6,754 | 3,280 |
Finished goods | 109,873 | 130,879 |
Total inventory | 185,664 | 187,967 |
Less: Non-current inventory | 12,878 | 12,737 |
Total inventory - current | $ 172,786 | $ 175,230 |
INVENTORY - Narrative (Details)
INVENTORY - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Inventory [Line Items] | ||
Inventory valuation reserves | $ 85.9 | $ 38 |
Inventory valuation reserve, pre-launch included in reserve | 20.5 | |
Unapproved Inventory | ||
Inventory [Line Items] | ||
Unapproved product inventory, net | $ 35.3 | $ 29.2 |
Raw Materials | ||
Inventory [Line Items] | ||
Inventory turnover period, minimum life | 3 years | |
Inventory turnover period, maximum life | 5 years | |
Finished Goods | ||
Inventory [Line Items] | ||
Inventory turnover period, maximum life | 2 years |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Schedule of Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 3,500 | $ 5,603 |
Buildings and improvements | 190,828 | 174,303 |
Equipment | 152,012 | 143,818 |
Office furniture and equipment | 15,259 | 15,767 |
Construction-in-progress | 46,632 | 50,191 |
Property, plant and equipment, gross | 408,231 | 389,682 |
Less: Accumulated depreciation | (185,039) | (156,310) |
Property, plant and equipment, net | $ 223,192 | $ 233,372 |
PROPERTY, PLANT AND EQUIPMENT61
PROPERTY, PLANT AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||||||
Depreciation expense | $ 31,900 | $ 21,800 | ||||
Unpaid vendor invoices, excluded from cash flows | $ 1,100 | $ 3,500 | 1,100 | 3,500 | ||
Net book value of building | 223,192 | 223,192 | $ 233,372 | |||
Non-refundable deposit | $ 400 | |||||
Gain on sale of storage warehouse | 4,708 | $ (33) | 4,963 | $ 111 | ||
TAIWAN, R.O.C. | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Net book value of building | 92,100 | $ 92,100 | ||||
Building | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Sale price | 9,400 | |||||
Sale of storage warehouse, additional payment received | 8,500 | |||||
Gain on sale of storage warehouse | $ 4,400 | |||||
Building | Prepaid and Other Current Assets | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Net book value of building | $ 4,100 |
INTANGIBLE ASSETS AND GOODWIL62
INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) $ in Thousands | Aug. 03, 2016 | Sep. 30, 2017USD ($)product | Jun. 30, 2017USD ($)asset | Mar. 31, 2017USD ($)product | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Amortized intangible assets: | ||||||||
Weighted-average amortization period | 6 years 8 months | |||||||
Intangible asset impairment charges | $ 45,400 | $ 58,982 | $ 287,723 | |||||
Proceeds from sale of intangible assets | 11,850 | 0 | ||||||
Net gain on sale | $ 0 | $ 0 | 11,850 | 0 | ||||
Cost of revenues impairment charges | 13,623 | 256,462 | 52,903 | 258,007 | ||||
Amortization expense | 17,000 | 18,400 | 51,500 | 39,600 | ||||
Goodwill | 207,329 | 207,329 | $ 207,329 | |||||
Impax Generics | ||||||||
Amortized intangible assets: | ||||||||
Cost of revenues impairment charges | 13,623 | 256,462 | 52,903 | 258,007 | ||||
Goodwill | 147,600 | 147,600 | ||||||
Impax Specialty Pharma | ||||||||
Amortized intangible assets: | ||||||||
Cost of revenues impairment charges | 0 | $ 0 | 0 | $ 0 | ||||
Goodwill | 59,700 | 59,700 | ||||||
Minimum | ||||||||
Amortized intangible assets: | ||||||||
Estimated future amortization expense, remainder of 2017 | 30,000 | 30,000 | ||||||
Estimated future amortization expense, 2018 | 30,000 | 30,000 | ||||||
Estimated future amortization expense, 2019 | 30,000 | 30,000 | ||||||
Estimated future amortization expense, 2020 | 30,000 | 30,000 | ||||||
Estimated future amortization expense, 2021 | 30,000 | 30,000 | ||||||
Maximum | ||||||||
Amortized intangible assets: | ||||||||
Estimated future amortization expense, remainder of 2017 | 68,400 | 68,400 | ||||||
Estimated future amortization expense, 2018 | 68,400 | 68,400 | ||||||
Estimated future amortization expense, 2019 | 68,400 | 68,400 | ||||||
Estimated future amortization expense, 2020 | 68,400 | 68,400 | ||||||
Estimated future amortization expense, 2021 | $ 68,400 | $ 68,400 | ||||||
Teva transaction | ||||||||
Amortized intangible assets: | ||||||||
Intangible assets, number of products impaired | product | 3 | |||||||
Teva transaction | IPR&D Product Rights | ||||||||
Amortized intangible assets: | ||||||||
Indefinite-lived intangible assets, number of products impaired | product | 1 | |||||||
Asset value, transferred out | $ 2,500 | |||||||
Teva transaction | Marketed Product Rights | ||||||||
Amortized intangible assets: | ||||||||
Weighted-average amortization period | 19 years | |||||||
Intangible assets, number of products impaired | product | 1 | 2 | ||||||
Asset value, transferred in | $ 2,500 | |||||||
Useful life | 7 years | |||||||
Tower | IPR&D Product Rights | ||||||||
Amortized intangible assets: | ||||||||
Asset value, transferred out | $ 1,500 | |||||||
Tower | Marketed Product Rights | ||||||||
Amortized intangible assets: | ||||||||
Asset value, transferred in | $ 1,500 | |||||||
Useful life | 8 years 4 months | |||||||
Tower | ANDA | ||||||||
Amortized intangible assets: | ||||||||
Number of assets sold for approved non-strategic generic products | asset | 29 | |||||||
Tower | NDA | ||||||||
Amortized intangible assets: | ||||||||
Number of assets sold for approved non-strategic generic products | asset | 1 | |||||||
Tower | ANDA and NDA | ||||||||
Amortized intangible assets: | ||||||||
Proceeds from sale of intangible assets | $ 12,000 | |||||||
Number of assets sold with a remaining net book value | asset | 0 | |||||||
Legal expenses | $ 100 | |||||||
Net gain on sale | $ 11,900 | |||||||
Cost of revenues | ||||||||
Amortized intangible assets: | ||||||||
Intangible asset impairment charges | $ 39,300 | |||||||
In-process research and development | ||||||||
Amortized intangible assets: | ||||||||
Intangible asset impairment charges | $ 6,100 |
INTANGIBLE ASSETS AND GOODWIL63
INTANGIBLE ASSETS AND GOODWILL - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Amortized intangible assets: | ||
Gross Carrying Value | $ 474,310 | $ 525,072 |
Accumulated Amortization | (188,976) | (139,584) |
Intangible Assets, Net | 285,334 | 385,488 |
Non-amortized intangible assets: | ||
Gross Carrying Value | 224,733 | 234,978 |
Total intangible assets | 699,043 | 760,050 |
Total intangible assets, net | 510,067 | 620,466 |
Acquired IPR&D product rights | ||
Non-amortized intangible assets: | ||
Gross Carrying Value | 223,598 | 232,576 |
Acquired future royalty rights | ||
Non-amortized intangible assets: | ||
Gross Carrying Value | 1,135 | 2,402 |
Marketed product rights | ||
Amortized intangible assets: | ||
Gross Carrying Value | 473,971 | 524,733 |
Accumulated Amortization | (188,637) | (139,245) |
Intangible Assets, Net | 285,334 | 385,488 |
Royalties | ||
Amortized intangible assets: | ||
Gross Carrying Value | 339 | 339 |
Accumulated Amortization | (339) | (339) |
Intangible Assets, Net | $ 0 | $ 0 |
ACCRUED EXPENSES - Schedule of
ACCRUED EXPENSES - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Aug. 18, 2016 | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Payroll-related expenses | $ 35,739 | $ 37,986 | |
Product returns | 80,716 | 72,888 | |
Accrued shelf stock | 5,715 | 7,032 | |
Government rebates | 64,856 | 72,063 | |
Legal and professional fees | 13,619 | 8,395 | |
Income taxes payable | 3,152 | 0 | |
Interest payable | 3,546 | 544 | |
Estimated Teva and Allergan chargebacks and rebates | 13,277 | 14,813 | |
Accrued profit sharing and royalty expenses | 15,243 | 13,642 | |
Other | 16,631 | 17,290 | |
Total accrued expenses | 252,494 | $ 244,653 | |
Teva transaction | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Estimated Teva and Allergan chargebacks and rebates | 13,300 | ||
Acquired balances | $ 42,400 | ||
Chargeback and reserve payments | $ 29,100 |
ACCRUED EXPENSES - Return Reser
ACCRUED EXPENSES - Return Reserve Activity (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 72,888 | |
Ending balance | 80,716 | $ 72,888 |
Returns Reserve | ||
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | 72,888 | 48,950 |
Provision related to sales recorded in the period | 38,820 | 52,383 |
Credits issued during the period | (30,992) | (28,445) |
Ending balance | $ 80,716 | $ 72,888 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | Feb. 28, 2017USD ($) | Aug. 03, 2016USD ($) | Jun. 30, 2015USD ($)day$ / shares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)$ / shares | Mar. 31, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016USD ($) | Mar. 27, 2017 | Dec. 31, 2016USD ($) | Aug. 02, 2016USD ($) |
Debt Instrument [Line Items] | ||||||||||||
Current portion of long-term debt, net | $ 17,836,000 | $ 17,836,000 | $ 17,719,000 | |||||||||
Long-term debt, net | 767,935,000 | 767,935,000 | 813,545,000 | |||||||||
Loss on debt extinguishment | 0 | $ 0 | 1,215,000 | $ 0 | ||||||||
Convertible debt | $ 600,000,000 | |||||||||||
Carrying value of convertible debt | 463,800,000 | 463,800,000 | 446,400,000 | |||||||||
Conversion Option | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Fair value of conversion option derivative liability | 167,000,000 | |||||||||||
Convertible Debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issuance costs | $ 18,700,000 | |||||||||||
Interest expense | 8,900,000 | 8,500,000 | 26,400,000 | 25,300,000 | ||||||||
Increase in accrued interest | 3,000,000 | 3,000,000 | 9,000,000 | 9,000,000 | ||||||||
Non-cash accretion | $ 5,900,000 | 5,500,000 | $ 17,400,000 | 16,300,000 | ||||||||
Interest rate, stated percentage | 2.00% | |||||||||||
Conversion ratio | 0.0157858 | 0.0157858 | ||||||||||
Exercise price (in dollars per share) | $ / shares | $ 63.35 | $ 63.35 | $ 63.35 | |||||||||
Number of trading days (at least) | day | 20 | |||||||||||
Number of consecutive trading days | day | 30 | |||||||||||
Percentage of stock price trigger | 130.00% | |||||||||||
Interest payable | $ 3,500,000 | $ 3,500,000 | 500,000 | |||||||||
Convertible Debt | Conversion Circumstance 2 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of trading days (at least) | day | 5 | |||||||||||
Number of consecutive trading days | day | 10 | |||||||||||
Percentage of stock price trigger | 98.00% | |||||||||||
Teva transaction | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Cash | $ 196,400,000 | |||||||||||
Revolving Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Borrowing capacity | $ 200,000,000 | 200,000,000 | 200,000,000 | $ 100,000,000 | ||||||||
Leverage ratio (not to exceed) | 5 | 2.5 | ||||||||||
Interest coverage ratio (less than) | 3 | |||||||||||
Debt issuance costs for lines of credit | $ 300,000 | |||||||||||
Revolving Credit Facility | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Commitment fee percentage | 0.50% | |||||||||||
Revolving Credit Facility | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Commitment fee percentage | 0.375% | |||||||||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Change in margin | 0.25% | |||||||||||
Letter of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Borrowing capacity | $ 12,500,000 | |||||||||||
Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Current portion of long-term debt, net | 20,000,000 | 20,000,000 | 20,000,000 | |||||||||
Long-term debt, net | 310,000,000 | 310,000,000 | $ 375,000,000 | |||||||||
Term Loan | Revolving Credit Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Borrowing capacity | 400,000,000 | |||||||||||
Interest expense | $ 2,600,000 | 4,500,000 | 13,100,000 | |||||||||
Increase in accrued interest | 2,200,000 | 3,900,000 | 11,400,000 | |||||||||
Non-cash accretion | 400,000 | 600,000 | 1,700,000 | |||||||||
Long-term debt | 322,000,000 | 322,000,000 | ||||||||||
Current portion of long-term debt, net | 17,800,000 | 17,800,000 | ||||||||||
Long-term debt, net | 304,200,000 | 304,200,000 | ||||||||||
Principal payment | 5,000,000 | |||||||||||
Outstanding principal | $ 330,000,000 | $ 330,000,000 | ||||||||||
Repayment of debt and accrued interest | $ 50,300,000 | |||||||||||
Repayment of debt principal | 50,000,000 | |||||||||||
Interest payment | $ 300,000 | |||||||||||
Loss on debt extinguishment | $ 1,200,000 | |||||||||||
Term Loan | Revolving Credit Facility | Teva transaction | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Proceeds from issuance of debt | 400,000,000 | |||||||||||
Debt issuance costs | $ 11,000,000 | $ 11,000,000 | $ 11,000,000 | |||||||||
Debt issuance costs for lines of credit | $ 800,000 | $ 800,000 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) $ / shares in Units, $ in Millions | Jun. 30, 2015$ / shares | Sep. 30, 2017USD ($)shares$ / shares | Dec. 31, 2015USD ($) | Jan. 01, 2017USD ($) | Dec. 31, 2016$ / sharesshares |
Class of Stock [Line Items] | |||||
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||
Preferred stock, shares issued (in shares) | 0 | 0 | |||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||
Common stock, shares issued (in shares) | 74,407,135 | 73,948,340 | |||
Common stock, shares outstanding (in shares) | 74,163,406 | 73,704,611 | |||
Accounting Standards Update 2016-09 | Retained Earnings | |||||
Class of Stock [Line Items] | |||||
Opening retained earnings | $ | $ 1.4 | ||||
Convertible Debt | |||||
Class of Stock [Line Items] | |||||
Number of call options (in shares) | 600,000 | ||||
Consideration for call options | $ | $ 147 | ||||
Conversion ratio | 0.0157858 | 0.0157858 | |||
Exercise price (in dollars per share) | $ / shares | $ 63.35 | $ 63.35 | |||
Warrant | |||||
Class of Stock [Line Items] | |||||
Warrants to purchase common stock (in shares) | 9,471,000 | ||||
Proceeds from sale of warrants | $ | $ 88.3 | ||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 81.277 | ||||
Increase to additional paid-in capital | $ | $ 21 |
STOCKHOLDERS' EQUITY - Common S
STOCKHOLDERS' EQUITY - Common Stock Reserved for Future Issuance (Details) - shares | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Class of Stock [Line Items] | ||
Shares issued (in shares) | 74,407,135 | 73,948,340 |
Total shares of common stock issued and reserved for issuance (in shares) | 96,724,000 | |
Warrant | ||
Class of Stock [Line Items] | ||
Stock options outstanding (in shares) | 9,471,000 | |
Warrants outstanding (in shares) | 9,471,000 | |
Warrant | ||
Class of Stock [Line Items] | ||
Conversion of Notes payable (in shares) | 9,471,000 | |
Employee Stock Option | ||
Class of Stock [Line Items] | ||
Stock options outstanding (in shares) | 3,375,000 | |
Warrants outstanding (in shares) | 3,375,000 |
EARNINGS PER SHARE - Reconcilia
EARNINGS PER SHARE - Reconciliation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Basic Loss Per Common Share: | ||||||||
Net loss | $ (49,369) | $ (20,417) | $ (98,431) | $ (179,337) | $ (2,701) | $ (10,408) | $ (168,217) | $ (192,446) |
Weighted-average common shares outstanding (in shares) | 71,924,592 | 71,803,920 | 71,594,472 | 71,331,247 | 71,100,123 | 70,665,394 | 71,775,537 | 71,033,346 |
Basic loss per share (in dollars per share) | $ (0.69) | $ (0.28) | $ (1.37) | $ (2.51) | $ (0.04) | $ (0.15) | $ (2.34) | $ (2.71) |
Diluted Loss Per Common Share: | ||||||||
Net loss | $ (49,369) | $ (20,417) | $ (98,431) | $ (179,337) | $ (2,701) | $ (10,408) | $ (168,217) | $ (192,446) |
Add-back of interest expense on outstanding convertible notes payable, net of tax | 0 | 0 | 0 | 0 | ||||
Adjusted net loss | $ (49,369) | $ (179,337) | $ (168,217) | $ (192,446) | ||||
Weighted-average common shares outstanding (in shares) | 71,924,592 | 71,803,920 | 71,594,472 | 71,331,247 | 71,100,123 | 70,665,394 | 71,775,537 | 71,033,346 |
Weighted-average incremental shares related to assumed exercise of warrants and stock options, vesting of non-vested shares and ESPP share issuance (in shares) | 0 | 0 | 0 | 0 | ||||
Weighted-average incremental shares assuming conversion of outstanding notes payable (in shares) | 0 | 0 | 0 | 0 | ||||
Diluted weighted-average common shares outstanding (in shares) | 71,924,592 | 71,803,920 | 71,594,472 | 71,331,247 | 71,100,123 | 70,665,394 | 71,775,537 | 71,033,346 |
Diluted loss per share (in dollars per share) | $ (0.69) | $ (0.28) | $ (1.37) | $ (2.51) | $ (0.04) | $ (0.15) | $ (2.34) | $ (2.71) |
Warrant | ||||||||
Diluted Loss Per Common Share: | ||||||||
Antidilutive securities (in shares) | 9,470,000 | 9,470,000 | ||||||
Convertible Debt Securities | ||||||||
Diluted Loss Per Common Share: | ||||||||
Antidilutive securities (in shares) | 9,470,000 | 9,470,000 | ||||||
Employee Stock Option | ||||||||
Diluted Loss Per Common Share: | ||||||||
Antidilutive securities (in shares) | 3,380,000 | 2,470,000 | ||||||
Restricted Stock | ||||||||
Diluted Loss Per Common Share: | ||||||||
Antidilutive securities (in shares) | 2,240,000 | 2,600,000 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 27, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options outstanding (in shares) | 3,375,110 | 2,234,331 | ||
Options granted (in shares) | 1,198,726 | |||
Weighted average contractual life | 6 years 11 months 15 days | |||
Weighted average remaining contractual life | 5 years 8 months 6 days | |||
Intrinsic value of options outstanding | $ 17.2 | |||
Intrinsic value of exercisable options | $ 7.5 | |||
Stock options vested or expected to vest (in shares) | 2,987,961 | |||
Restricted stock awards vested or expected to vest (in shares) | 1,984,333 | |||
Unrecognized share-based compensation expense | $ 52.6 | |||
Period of recognition | 1 year 9 months 2 days | |||
Intrinsic value of options exercisable | $ 0.2 | $ 5.6 | ||
Dividend yield | 0.00% | |||
President and CEO | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options outstanding (in shares) | 850,000 | |||
Options granted (in shares) | 850,000 | |||
Amended and Restated 2002 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 18,050,000 | |||
Stock options outstanding (in shares) | 2,525,110 | 2,233,393 | ||
Restricted stock awards outstanding (in shares) | 2,241,442 | 2,160,127 | ||
Number of shares available for grant (in shares) | 1,722,080 | |||
The 1999 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 5,000,000 | |||
Stock options outstanding (in shares) | 0 | 938 | ||
Number of shares available for grant (in shares) | 296,921 | |||
The ESPP Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant (in shares) | 1,507,789 | |||
Stock Options And Restricted Stock Awards | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of awards | 10 years | |||
Employee Stock Option | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock awards intrinsic value | $ 45.5 | |||
Vested (in shares) | 490,487 | |||
Fair value of restricted stock vested | $ 17.5 | $ 16.4 | ||
Restricted Stock | Withheld for Minimum Withholding Tax Purposes | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested (in shares) | 189,125 | |||
Vested (in dollars per share) | $ 14.12 |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Shares Under Option | |
Outstanding at December 31, 2016 (in shares) | shares | 2,234,331 |
Options granted (in shares) | shares | 1,198,726 |
Options exercised (in shares) | shares | (34,473) |
Options forfeited (in shares) | shares | (23,474) |
Outstanding at September 30, 2017 (in shares) | shares | 3,375,110 |
Options exercisable at September 30, 2017 (in shares) | shares | 1,820,971 |
Weighted- Average Exercise Price per Share | |
Outstanding at December 31, 2016 (in dollars per share) | $ / shares | $ 22.67 |
Options granted (in dollars per share) | $ / shares | 12.21 |
Options exercised ( in dollars per share) | $ / shares | 9.70 |
Options forfeited (in dollars per share) | $ / shares | 27.05 |
Outstanding at September 30, 2017 (in dollars per share) | $ / shares | 19.01 |
Options exercisable at September 30, 2017 (in dollars per share) | $ / shares | $ 20.68 |
SHARE-BASED COMPENSATION - Su72
SHARE-BASED COMPENSATION - Summary of Non-vested Restricted Stock Awards (Details) - Restricted Stock Awards | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Restricted Stock Awards | |
Non-vested at December 31, 2016 (in shares) | shares | 2,160,127 |
Granted (in shares) | shares | 961,808 |
Vested (in shares) | shares | (490,487) |
Forfeited (in shares) | shares | (390,006) |
Non-vested at September 30, 2017 (in shares) | shares | 2,241,442 |
Weighted- Average Grant Date Fair Value | |
Non-vested at December 31, 2016 (in dollars per share) | $ / shares | $ 34.02 |
Granted (in dollars per share) | $ / shares | 13.74 |
Vested (in dollars per share) | $ / shares | 35.66 |
Forfeited (in dollars per share) | $ / shares | 32.27 |
Non-vested at September 30, 2017 (in dollars per share) | $ / shares | $ 25.30 |
SHARE-BASED COMPENSATION - Shar
SHARE-BASED COMPENSATION - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expense | $ 6,490 | $ 7,713 | $ 19,672 | $ 23,375 |
Cost of revenues | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expense | 1,521 | 1,331 | 4,307 | 4,579 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expense | 3,930 | 5,070 | 11,443 | 14,537 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Share-based compensation expense | $ 1,039 | $ 1,312 | $ 3,922 | $ 4,259 |
RESTRUCTURINGS - Narrative (Det
RESTRUCTURINGS - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 5 Months Ended | 7 Months Ended | 9 Months Ended | 19 Months Ended | 26 Months Ended | ||||||
Jun. 30, 2017position | May 31, 2017USD ($)position | Mar. 31, 2017position | Sep. 30, 2017USD ($) | Jun. 30, 2017asset | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($)position | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)position | Jun. 30, 2019USD ($) | Dec. 31, 2016USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Program termination costs that were paid | $ 6,400 | ||||||||||||
Net book value of building | $ 223,192 | $ 223,192 | $ 223,192 | 223,192 | $ 223,192 | $ 233,372 | |||||||
TAIWAN, PROVINCE OF CHINA | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Net book value of building | 92,100 | 92,100 | 92,100 | 92,100 | $ 92,100 | ||||||||
TAIWAN, PROVINCE OF CHINA | Scenario, Forecast | Minimum | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Accelerated depreciation | $ 95,000 | ||||||||||||
Building, revised estimated useful life | 2 years | ||||||||||||
TAIWAN, PROVINCE OF CHINA | Scenario, Forecast | Maximum | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Accelerated depreciation | $ 105,000 | ||||||||||||
Cost of revenues | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Incurred cost | 3,300 | $ 13,900 | 12,400 | $ 20,500 | |||||||||
Other Nonoperating Income (Expense) | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Incurred cost | 600 | 900 | |||||||||||
Manufacturing and Packaging Site | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Estimated period, from approval to completion (up to) | 2 years | ||||||||||||
Expected number of positions eliminated | position | 215 | ||||||||||||
Total estimated restructuring charges | 51,800 | 51,800 | 51,800 | 51,800 | $ 51,800 | ||||||||
Incurred cost | 40,400 | ||||||||||||
Consolidation and Improvement Plan Generic R&D | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Total estimated restructuring charges | $ 3,400 | ||||||||||||
Number of positions eliminated | position | 31 | ||||||||||||
Number of positions eliminated with employment through the end of 2017 | position | 15 | ||||||||||||
Accelerated depreciation | 0 | 400 | |||||||||||
Consolidation and Improvement Plan Generic R&D | Employee Termination Benefits | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Incurred cost | 300 | 2,800 | |||||||||||
Program termination costs that were paid | 2,000 | ||||||||||||
Restructuring reserve, current | 100 | 100 | $ 100 | 100 | 100 | ||||||||
Technical Operations Group Reduction-in-force | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Number of positions eliminated | position | 3 | 18 | 21 | ||||||||||
Number of positions eliminated with employment through the end of 2017 | position | 2 | ||||||||||||
Technical Operations Group Reduction-in-force | Employee Termination Benefits | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Total estimated restructuring charges | 2,800 | 2,800 | $ 2,800 | 2,800 | 2,800 | ||||||||
Incurred cost | 300 | 2,600 | |||||||||||
Program termination costs that were paid | 2,100 | ||||||||||||
Restructuring reserve, current | $ 500 | $ 500 | $ 500 | $ 500 | $ 500 | ||||||||
Tower | ANDA | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Number of assets sold for approved non-strategic generic products | asset | 29 | ||||||||||||
Tower | NDA | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Number of assets sold for approved non-strategic generic products | asset | 1 |
RESTRUCTURINGS - Summary of Tot
RESTRUCTURINGS - Summary of Total Estimated Charges (Details) - Manufacturing and Packaging Site $ in Millions | Sep. 30, 2017USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Total estimated restructuring charges | $ 51.8 |
Employee retention and severance payments | |
Restructuring Cost and Reserve [Line Items] | |
Total estimated restructuring charges | 14.1 |
Technical transfer of products | |
Restructuring Cost and Reserve [Line Items] | |
Total estimated restructuring charges | 11.2 |
Asset impairment and accelerated depreciation charges | |
Restructuring Cost and Reserve [Line Items] | |
Total estimated restructuring charges | 24.4 |
Facilities lease terminations and asset retirement obligations | |
Restructuring Cost and Reserve [Line Items] | |
Total estimated restructuring charges | 1.9 |
Legal and professional fees | |
Restructuring Cost and Reserve [Line Items] | |
Total estimated restructuring charges | $ 0.2 |
RESTRUCTURINGS - Summary of Res
RESTRUCTURINGS - Summary of Reserve Activity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning of period | $ 6,154 |
Expensed / Accrued Expense | 13,292 |
Cash Payments | (6,400) |
Non-Cash Items | (6,145) |
Restructuring reserve, end of period | 6,901 |
Employee retention and severance payments | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning of period | 5,945 |
Expensed / Accrued Expense | 4,165 |
Cash Payments | (3,816) |
Non-Cash Items | 0 |
Restructuring reserve, end of period | 6,294 |
Technical transfer of products | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning of period | 0 |
Expensed / Accrued Expense | 2,584 |
Cash Payments | (2,584) |
Non-Cash Items | 0 |
Restructuring reserve, end of period | 0 |
Asset impairment and accelerated depreciation charges | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning of period | 0 |
Expensed / Accrued Expense | 6,145 |
Cash Payments | 0 |
Non-Cash Items | (6,145) |
Restructuring reserve, end of period | 0 |
Facilities lease terminations and asset retirement obligations | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning of period | 209 |
Expensed / Accrued Expense | 398 |
Cash Payments | 0 |
Non-Cash Items | 0 |
Restructuring reserve, end of period | 607 |
Legal and professional fees | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning of period | 0 |
Expensed / Accrued Expense | 0 |
Cash Payments | 0 |
Non-Cash Items | 0 |
Restructuring reserve, end of period | $ 0 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Tax expense (benefit) | $ (3,045) | $ (104,531) | $ 27,336 | $ (112,866) | ||
Effective income tax rate reconciliation, percent | (19.40%) | 37.00% | ||||
Effective income tax rate reconciliation, excluding discrete items, percent | 37.10% | |||||
Valuation allowance | $ 177,500 | $ 177,500 | $ 177,500 | $ 108,800 | ||
Additional valuation allowance | $ 68,700 | |||||
U.S. income and foreign withholding taxes | $ 8,100 | |||||
Turing Pharmaceuticals AG | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Tax expense (benefit) | $ (17,400) |
ALLIANCE AND COLLABORATION AG78
ALLIANCE AND COLLABORATION AGREEMENTS - Narrative (Details) | Jun. 30, 2016USD ($) | May 31, 2016USD ($) | Aug. 31, 2013USD ($) | Jun. 30, 2012USD ($)product | Mar. 31, 2012USD ($)agreement | Nov. 30, 2008product | Jun. 30, 2002 | Sep. 30, 2016USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2012 | Sep. 30, 2017USD ($)product | Dec. 31, 2015product | Dec. 31, 2011product | Dec. 31, 2016USD ($) | Jan. 31, 2012 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Profit share payable | $ 15,243,000 | $ 13,642,000 | |||||||||||||
Tolmar Incorporated | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Number of loans (or more) | agreement | 1 | ||||||||||||||
Maximum loan amount | $ 15,000,000 | ||||||||||||||
Payment received under Tolmar Loan Agreement | $ 15,000,000 | ||||||||||||||
Teva | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Maximum achievement payments | $ 3,500,000 | ||||||||||||||
Milestone payment | $ 3,500,000 | ||||||||||||||
Products Approved | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Number of products | product | 4 | ||||||||||||||
Specified Threshold | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Product sales | $ 100,000,000 | ||||||||||||||
Shire Laboratories Incorporated | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Profit share payable | 7,200,000 | 1,800,000 | |||||||||||||
Tolmar Incorporated | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Profit share payable | 32,200,000 | 9,800,000 | |||||||||||||
Number of products | product | 11 | ||||||||||||||
Number of products with terminated development efforts | product | 1 | ||||||||||||||
Upfront payment | $ 21,000,000 | ||||||||||||||
Tolmar Incorporated | Up-front Payment Arrangement | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Upfront payment | 21,000,000 | ||||||||||||||
Tolmar Incorporated | Milestone Payments | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Maximum achievement payments | $ 25,000,000 | ||||||||||||||
Achievement payments made | 20,000,000 | ||||||||||||||
Regulatory milestone event amount | 12,000,000 | ||||||||||||||
Commercialization event amount | $ 5,000,000 | ||||||||||||||
Tolmar Incorporated | Products Approved | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Number of products | product | 10 | ||||||||||||||
Teva Pharmaceutical Industries Limited | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Service agreement term | 10 years | ||||||||||||||
Pfizer Incorporated | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Service agreement term | 15 years | ||||||||||||||
Valeant Pharmaceuticals International | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Number of products | product | 5 | ||||||||||||||
Valeant Pharmaceuticals International | Products Approved | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Number of products | product | 1 | ||||||||||||||
Valeant Pharmaceuticals International | Generic Products | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Number of products | product | 4 | 4 | |||||||||||||
Valeant Pharmaceuticals International | Branded Advanced Form of Solodyn Product | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Number of products | product | 1 | ||||||||||||||
Astra Zeneca | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Reduced royalty amounts | $ 30,000,000 | ||||||||||||||
Required payments as a percent of gross profit on sales | 100.00% | ||||||||||||||
Royalty payable | $ 12,700,000 | $ 12,500,000 | |||||||||||||
DURECT Corporation | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Upfront payment | $ 2,000,000 | ||||||||||||||
Maximum achievement payments | $ 61,000,000 | ||||||||||||||
Minimum | Tolmar Product Rights | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Useful life | 5 years | ||||||||||||||
Maximum | Tolmar Product Rights | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Useful life | 12 years | ||||||||||||||
IND-enabling Animal Studies for New Development Candidate | Minimum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 12 months | ||||||||||||||
IND-enabling Animal Studies for New Development Candidate | Maximum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 18 months | ||||||||||||||
Phase 1 Trials | Minimum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 1 year | ||||||||||||||
Phase 1 Trials | Maximum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 2 years | ||||||||||||||
Phase 2 Trials | Minimum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 1 year | ||||||||||||||
Phase 2 Trials | Maximum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 3 years | ||||||||||||||
Phase 3 Trials | Minimum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 2 years | ||||||||||||||
Phase 3 Trials | Maximum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 4 years | ||||||||||||||
Bioequivalence Studies | Minimum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 3 months | ||||||||||||||
Bioequivalence Studies | Maximum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 1 year | ||||||||||||||
Preparation And Submission Of Regulatory Filings | Minimum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 6 months | ||||||||||||||
Preparation And Submission Of Regulatory Filings | Maximum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 12 months | ||||||||||||||
Acceptance Of Regulatory Filings For Substantive Review | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 2 months | ||||||||||||||
Potential Marketing Approval One | Minimum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 1 year | ||||||||||||||
Potential Marketing Approval One | Maximum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 3 years | ||||||||||||||
Potential Marketing Approval Two | Minimum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 1 year | ||||||||||||||
Potential Marketing Approval Two | Maximum | |||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||
Completion period | 3 years |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Open purchase order commitments | $ 103.5 |
Purchase commitment period (less than) | 1 year |
LEGAL AND REGULATORY MATTERS -
LEGAL AND REGULATORY MATTERS - Narrative (Details) $ in Millions | Jan. 27, 2017complaint | May 02, 2016USD ($) | Feb. 10, 2015cid | Apr. 30, 2017complaint | Sep. 30, 2017 | Apr. 30, 2015complaint | Apr. 30, 2017complaint | Jan. 31, 2016complaint | Apr. 06, 2017drug | Feb. 15, 2017litigation |
Loss Contingencies [Line Items] | ||||||||||
Period to file suit for patent infringement | 45 days | |||||||||
Stay period for approval of abbreviated new drug application | 30 months | |||||||||
Number of CIDs received | cid | 3 | |||||||||
Solodyn | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Number of complaints | 18 | |||||||||
Opana ER | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Number of complaints | 14 | |||||||||
Generic Drug Pricing Class Action | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Number of complaints | 3 | 22 | ||||||||
Generic Digoxin and Doxycycline Antitrust Litigation | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Number of complaints | 2 | |||||||||
Number of generic drugs included in consolidation of civil actions | drug | 18 | |||||||||
Turing Pharmaceuticals AG | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Chargebacks not reimbursed for (more than) | $ | $ 40.9 | |||||||||
Teva | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Number of litigations | litigation | 2 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($)segmentproduct | Dec. 31, 2016USD ($) | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Number of reportable segments | segment | 2 | |
Number of internally developed branded pharmaceutical product candidate | product | 1 | |
Number of products sold and distributed | product | 4 | |
Assets | $ | $ 1,649,154 | $ 1,823,018 |
Taiwan Facility | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Assets | $ | $ 130,400 | $ 134,900 |
SEGMENT INFORMATION - Segment I
SEGMENT INFORMATION - Segment Information Reconciled to Consolidated Financial Results (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||||||
Revenues, net | $ 206,392 | $ 202,082 | $ 184,403 | $ 227,909 | $ 172,590 | $ 225,508 | $ 592,877 | $ 626,007 |
Cost of revenues | 158,736 | 136,873 | 408,644 | 357,852 | ||||
Cost of revenues impairment charges | 13,623 | 256,462 | 52,903 | 258,007 | ||||
Selling, general and administrative | 53,585 | 55,038 | 152,255 | 144,244 | ||||
Research and development | 15,821 | 20,115 | 65,157 | 59,937 | ||||
In-process research and development impairment charges | 0 | 28,770 | 6,079 | 29,716 | ||||
Patent litigation expense | 1,640 | 3,279 | 3,882 | 6,527 | ||||
(Loss) income before income taxes | (52,414) | (283,868) | (140,881) | (305,312) | ||||
Corporate and Other | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Selling, general and administrative | 31,880 | 32,577 | 82,904 | 85,493 | ||||
(Loss) income before income taxes | (47,281) | (43,817) | (127,742) | (160,529) | ||||
Impax Generics | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues, net | 151,098 | 150,889 | 134,147 | 175,320 | 121,695 | 170,079 | 436,134 | 467,094 |
Cost of revenues | 141,133 | 115,020 | 355,375 | 307,936 | ||||
Cost of revenues impairment charges | 13,623 | 256,462 | 52,903 | 258,007 | ||||
Research and development | 12,241 | 15,375 | 50,632 | 46,113 | ||||
In-process research and development impairment charges | 15,543 | 6,079 | 16,489 | |||||
Patent litigation expense | 28 | 147 | 715 | 416 | ||||
Impax Generics | Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Selling, general and administrative | 5,570 | 6,103 | 20,072 | 12,442 | ||||
(Loss) income before income taxes | (21,497) | (233,330) | (49,642) | (174,309) | ||||
Impax Specialty Pharma | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues, net | 55,294 | $ 51,193 | $ 50,256 | 52,589 | $ 50,895 | $ 55,429 | 156,743 | 158,913 |
Cost of revenues | 17,603 | 21,853 | 53,269 | 49,916 | ||||
Cost of revenues impairment charges | 0 | 0 | 0 | 0 | ||||
Research and development | 3,580 | 4,740 | 14,525 | 13,824 | ||||
In-process research and development impairment charges | 13,227 | 0 | 13,227 | |||||
Patent litigation expense | 1,612 | 3,132 | 3,167 | 6,111 | ||||
Impax Specialty Pharma | Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Selling, general and administrative | 16,135 | 16,358 | 49,279 | 46,309 | ||||
(Loss) income before income taxes | $ 16,364 | $ (6,721) | $ 36,503 | $ 29,526 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Product Line Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Product Information [Line Items] | ||||||||
Total revenues | $ 206,392 | $ 202,082 | $ 184,403 | $ 227,909 | $ 172,590 | $ 225,508 | $ 592,877 | $ 626,007 |
Impax Generics | ||||||||
Product Information [Line Items] | ||||||||
Total revenues | 151,098 | 150,889 | 134,147 | 175,320 | 121,695 | 170,079 | 436,134 | 467,094 |
Impax Generics | Epinephrine Auto-Injector family (generic Adrenaclick®) | ||||||||
Product Information [Line Items] | ||||||||
Total revenues | $ 40,482 | $ 39,321 | $ 90,572 | $ 77,592 | ||||
Percentage of revenue | 20.00% | 17.00% | 15.00% | 12.00% | ||||
Impax Generics | Oxymorphone HCI ER family | ||||||||
Product Information [Line Items] | ||||||||
Total revenues | $ 16,362 | $ 22,620 | $ 52,587 | $ 51,898 | ||||
Percentage of revenue | 8.00% | 10.00% | 9.00% | 8.00% | ||||
Impax Generics | Diclofenac Sodium Gel family (generic Solaraze®) | ||||||||
Product Information [Line Items] | ||||||||
Total revenues | $ 13,283 | $ 60,828 | ||||||
Percentage of revenue | 6.00% | 10.00% | ||||||
Impax Generics | Fenofibrate family | ||||||||
Product Information [Line Items] | ||||||||
Total revenues | $ 14,521 | $ 50,471 | ||||||
Percentage of revenue | 6.00% | 8.00% | ||||||
Impax Generics | Budesonide family | ||||||||
Product Information [Line Items] | ||||||||
Total revenues | $ 41,095 | |||||||
Percentage of revenue | 7.00% | |||||||
Impax Specialty Pharma | ||||||||
Product Information [Line Items] | ||||||||
Total revenues | $ 55,294 | $ 51,193 | $ 50,256 | $ 52,589 | $ 50,895 | $ 55,429 | $ 156,743 | $ 158,913 |
Impax Specialty Pharma | Rytary® family | ||||||||
Product Information [Line Items] | ||||||||
Total revenues | $ 21,520 | $ 19,807 | $ 63,347 | $ 52,030 | ||||
Percentage of revenue | 10.00% | 9.00% | 11.00% | 8.00% | ||||
Impax Specialty Pharma | Zomig® family | ||||||||
Product Information [Line Items] | ||||||||
Total revenues | $ 13,899 | $ 15,258 | $ 36,081 | |||||
Percentage of revenue | 7.00% | 7.00% | 6.00% |
SUPPLEMENTARY FINANCIAL INFOR84
SUPPLEMENTARY FINANCIAL INFORMATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Less: | |||||||||
Total revenues | $ 206,392 | $ 202,082 | $ 184,403 | $ 227,909 | $ 172,590 | $ 225,508 | $ 592,877 | $ 626,007 | |
Gross profit | 34,033 | 72,406 | 24,891 | (165,426) | 72,984 | 102,590 | 131,330 | 10,148 | |
Net loss | $ (49,369) | $ (20,417) | $ (98,431) | $ (179,337) | $ (2,701) | $ (10,408) | $ (168,217) | $ (192,446) | |
Net loss per common share: | |||||||||
Basic (in dollars per share) | $ (0.69) | $ (0.28) | $ (1.37) | $ (2.51) | $ (0.04) | $ (0.15) | $ (2.34) | $ (2.71) | |
Diluted (in dollars per share) | $ (0.69) | $ (0.28) | $ (1.37) | $ (2.51) | $ (0.04) | $ (0.15) | $ (2.34) | $ (2.71) | |
Weighted-average common shares outstanding: | |||||||||
Basic (in shares) | 71,924,592 | 71,803,920 | 71,594,472 | 71,331,247 | 71,100,123 | 70,665,394 | 71,775,537 | 71,033,346 | |
Diluted (in shares) | 71,924,592 | 71,803,920 | 71,594,472 | 71,331,247 | 71,100,123 | 70,665,394 | 71,775,537 | 71,033,346 | |
Chargebacks | |||||||||
Less: | |||||||||
Sales Allowances | $ 899,587 | $ 1,011,400 | |||||||
Rebates | |||||||||
Less: | |||||||||
Sales Allowances | 498,104 | $ 756,774 | |||||||
Impax Generics | |||||||||
Revenue: | |||||||||
Impax sales, gross | $ 622,252 | $ 663,167 | $ 635,897 | $ 658,099 | $ 532,968 | $ 614,176 | |||
Less: | |||||||||
Product Returns | 7,003 | 15,210 | 9,733 | 16,151 | 10,237 | 11,913 | |||
Total revenues | 151,098 | 150,889 | 134,147 | 175,320 | 121,695 | 170,079 | 436,134 | $ 467,094 | |
Impax Generics | Chargebacks | |||||||||
Less: | |||||||||
Sales Allowances | 281,835 | 286,092 | 298,744 | 252,303 | 197,864 | 217,354 | |||
Impax Generics | Rebates | |||||||||
Less: | |||||||||
Sales Allowances | 162,914 | 170,398 | 164,792 | 183,347 | 178,097 | 185,476 | |||
Impax Generics | Other credits | |||||||||
Less: | |||||||||
Sales Allowances | 19,402 | 40,578 | 28,481 | 30,978 | 25,075 | 29,354 | |||
Impax Specialty Pharma | |||||||||
Revenue: | |||||||||
Impax sales, gross | 107,407 | 84,238 | 84,133 | 77,841 | 81,254 | 82,073 | |||
Less: | |||||||||
Product Returns | 3,614 | 1,416 | 1,844 | 574 | 1,279 | 1,508 | |||
Total revenues | 55,294 | 51,193 | 50,256 | 52,589 | 50,895 | 55,429 | $ 156,743 | $ 158,913 | |
Impax Specialty Pharma | Chargebacks | |||||||||
Less: | |||||||||
Sales Allowances | 14,121 | 8,967 | 9,828 | 5,439 | 8,826 | 6,111 | |||
Impax Specialty Pharma | Rebates | |||||||||
Less: | |||||||||
Sales Allowances | 5,914 | 4,682 | 4,483 | 3,556 | 2,430 | 2,853 | |||
Impax Specialty Pharma | Other credits | |||||||||
Less: | |||||||||
Sales Allowances | $ 28,464 | $ 17,980 | $ 17,722 | $ 15,683 | $ 17,824 | $ 16,172 |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) | Oct. 24, 2017USD ($) | Dec. 31, 2017 | Oct. 23, 2017 | Jun. 30, 2018directorchairman$ / sharesshares | Oct. 17, 2017USD ($) | Sep. 30, 2017USD ($)$ / shares | Jul. 23, 2017 | Dec. 31, 2016USD ($)$ / shares | Jun. 30, 2015 |
Subsequent Event [Line Items] | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||||
Fair value of contingent consideration | $ | $ 38,123,000 | $ 31,048,000 | |||||||
Convertible Debt | |||||||||
Subsequent Event [Line Items] | |||||||||
Interest rate, stated percentage | 2.00% | ||||||||
Concerta | |||||||||
Subsequent Event [Line Items] | |||||||||
Intangible asset fair value | $ | 149,700,000 | ||||||||
Fair value of contingent consideration | $ | $ 38,100,000 | ||||||||
Prohealth Biotech | Prohealth Biotech | |||||||||
Subsequent Event [Line Items] | |||||||||
Ownership percentage by noncontrolling owners | 42.46% | ||||||||
Subsequent Event | Prohealth Biotech | |||||||||
Subsequent Event [Line Items] | |||||||||
Issued and outstanding share capital owned, percentage | 57.54% | ||||||||
Amneal | Subsequent Event | Amneal | |||||||||
Subsequent Event [Line Items] | |||||||||
Termination fee obligation, if certain circumstances met | $ | $ 45,000,000 | ||||||||
Reimbursement obligation, if certain circumstances met | $ | $ 15,000,000 | ||||||||
Amneal | Scenario, Forecast | |||||||||
Subsequent Event [Line Items] | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||||||||
Amneal | Scenario, Forecast | New Amneal | Stockholders Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Maximum number of board of directors | director | 11 | ||||||||
Minimum number of directors, designation criteria, nominating committee and compensation committee | director | 2 | ||||||||
Number of directors, nominating committee and compensation committee | director | 4 | ||||||||
Minimum period of time, integration committee member compilation rights (at least) | 2 years | ||||||||
Stock transfer restrictions following closing, period | 180 days | ||||||||
Amneal | Scenario, Forecast | New Amneal | Stockholders Agreement | Amneal Director | |||||||||
Subsequent Event [Line Items] | |||||||||
Maximum number of board of directors | director | 6 | ||||||||
Minimum number of board of directors | director | 1 | ||||||||
Amneal | Scenario, Forecast | New Amneal | Stockholders Agreement | Non-Amneal Director | |||||||||
Subsequent Event [Line Items] | |||||||||
Maximum number of board of directors | director | 5 | ||||||||
Amneal | Scenario, Forecast | New Amneal | Stockholders Agreement | Amneal Board Of Directors Chairman | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of co-chairmen, board of directors | chairman | 2 | ||||||||
Amneal | Scenario, Forecast | Common Class B | Holdco | |||||||||
Subsequent Event [Line Items] | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||||||||
Amneal | Scenario, Forecast | Holdco | Common Class A | |||||||||
Subsequent Event [Line Items] | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||||||||
Convertible common stock, shares issued upon conversion | shares | 1 | ||||||||
Ownership percentage, prior to closing | 100.00% | ||||||||
Amneal | Scenario, Forecast | Holdco | Common Class B | Amneal | |||||||||
Subsequent Event [Line Items] | |||||||||
Ownership percentage, following the closing | 100.00% | ||||||||
Amneal | Scenario, Forecast | Holdco | Common Stock | New Amneal | Stockholders Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Institutional investor beneficial ownership criteria for possible board of director placement change, minimum percentage | 4.00% | ||||||||
Beneficial ownership criteria for designation of lowest number of board of directors that constitutes majority, threshold percentage | 50.00% | ||||||||
Beneficial ownership criteria for designation of lowest number of board of directors that constitutes majority, floor threshold percentage | 10.00% | ||||||||
Standstill provision, floor threshold percentage (less than) | 20.00% | ||||||||
Beneficial ownership criteria for buyout transactions, percentage | 37.50% | ||||||||
Beneficial ownership criteria for termination, percentage | 10.00% | ||||||||
Amneal | Scenario, Forecast | Holdco | Common Stock | New Amneal | Stockholders Agreement | Minimum | |||||||||
Subsequent Event [Line Items] | |||||||||
Beneficial ownership criteria for designation of lowest number of board of directors that constitutes majority, threshold percentage | 50.00% | ||||||||
Amneal | Scenario, Forecast | Holdco | Common Stock | New Amneal | Stockholders Agreement | Maximum | |||||||||
Subsequent Event [Line Items] | |||||||||
Beneficial ownership criteria for designation of lowest number of board of directors that constitutes majority, threshold percentage | 50.00% | ||||||||
Amneal | Scenario, Forecast | New Amneal | Amneal | |||||||||
Subsequent Event [Line Items] | |||||||||
Voting power and economic interests, following the closing | 75.00% | ||||||||
Amneal | Scenario, Forecast | New Amneal | Common Class A | |||||||||
Subsequent Event [Line Items] | |||||||||
Voting power and economic interests, following the closing | 25.00% | ||||||||
Prohealth Biotech | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Purchase price | $ | $ 100,000 |