EXHIBIT 99.2
Acorda Therapeutics, Inc.
Unaudited Pro Forma Condensed Consolidation Financial Statements
Introduction
On January 12, 2021 Acorda Therapeutics, Inc. (the “Company”) and Catalent Pharma Solutions, Inc. (“Catalent”) entered into an asset purchase agreement (the “Asset Purchase Agreement”), pursuant to which the Company agreed to sell to Catalent certain assets related to the Company’s manufacturing operations located at the facilities situated in Chelsea, Massachusetts and Waltham, Massachusetts, and Catalent agreed to assume certain liabilities relating to such manufacturing operations (the “Transaction”). The Company closed the Transaction on February 10, 2021. At closing, Catalent paid the Company $80 million in cash, resulting in expected net proceeds of approximately $74 million after transaction fees and expenses and settlement of customary post-closing adjustments.
The unaudited pro forma condensed consolidated financial data of the Company was derived from historical condensed consolidated financial statements. The unaudited pro forma condensed consolidated balance sheet assumes the Transaction occurred on September 30, 2020. The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2020, and the year ended December 31, 2019, give effect to the Transaction as if it occurred as of January 1, 2019. The following unaudited pro forma condensed consolidated financial information should be read in conjunction with the Company’s historical financial statements and accompanying notes.
The transaction accounting adjustments for the Transaction remove the assets, liabilities and results of operations and also give effect to adjustments to reflect the cash proceeds from the Transaction. The transaction accounting adjustments are based on the best information available and assumptions that management believes are factually supportable and reasonable; however, such adjustments are subject to change. In addition, such adjustments are estimates.
The unaudited pro forma condensed consolidated financial information is for illustrative and informational purposes only and is not intended to reflect what the Company’s consolidated financial position and results of operations would have been had the Transaction occurred on the dates indicated and is not necessarily indicative of the Company’s future consolidated financial position and results of operations.
Acorda Therapeutics, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2020
(in thousands)
| Acorda Therapeutics Historical | | | Transaction Accounting Adjustments | | | | Unaudited Pro Forma | |
Assets | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | |
Cash and cash equivalents | $ | 57,910 | | | $ | 74,060 | | (a) | | $ | 131,970 | |
Restricted cash - short term | | 13,200 | | | | — | | | | | 13,200 | |
Inventories, net | | 30,120 | | | | (2,265 | ) | (b) | | | 27,855 | |
Other current assets | | 50,584 | | | | — | | | | | 50,584 | |
Total current assets | | 151,814 | | | | 71,795 | | | | | 223,609 | |
Property and equipment, net | | 139,255 | | | | (132,546 | ) | (b) | | | 6,709 | |
Intangible assets, net | | 374,743 | | | | — | | | | | 374,743 | |
Right of use assets, net | | 19,805 | | | | (7,730 | ) | (b) | | | 12,075 | |
Other assets | | 24,830 | | | | — | | | | | 24,830 | |
Total assets | $ | 710,447 | | | $ | (68,481 | ) | | | $ | 641,966 | |
| | | | | | | | | | | | |
Liabilities and stockholders' equity | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | |
Accounts payable, accrued expenses and other current liabilities | $ | 51,791 | | | $ | — | | | | $ | 51,791 | |
Current portion of royalty liability | | 8,624 | | | | — | | | | | 8,624 | |
Current portion of lease liability | | 7,893 | | | | (1,774 | ) | (b) | | | 6,119 | |
Current portion of contingent consideration | | 2,391 | | | | — | | | | | 2,391 | |
Current portion of loans payable | | 68,050 | | | | — | | | | | 68,050 | |
Total current liabilities | | 138,749 | | | | (1,774 | ) | | | | 136,975 | |
Contingent consideration | | 43,709 | | | | — | | | | | 43,709 | |
Deferred tax liability | | 23,120 | | | | — | | (f) | | | 23,120 | |
Other non-current liabilities | | 1,012 | | | | — | | | | | 1,012 | |
Convertible senior notes | | 134,622 | | | | — | | | | | 134,622 | |
Derivative liability | | 832 | | | | — | | | | | 832 | |
Non-current portion of royalty liability | | 9,147 | | | | — | | | | | 9,147 | |
Non-current portion of lease liability | | 18,747 | | | | (6,425 | ) | (b) | | | 12,322 | |
Non-current portion of loans payable | | 26,978 | | | | — | | | | | 26,978 | |
Common stock | | 48 | | | | — | | | | | 48 | |
Treasury stock | | (638 | ) | | | — | | | | | (638 | ) |
Additional paid in capital | | 999,762 | | | | — | | | | | 999,762 | |
Accumulated deficit | | (683,355 | ) | | | (60,282 | ) | (c) | | | (743,637 | ) |
Accumulated other comprehensive income (loss) | | (2,286 | ) | | | — | | | | | (2,286 | ) |
Total stockholder's equity | | 313,531 | | | | (60,282 | ) | | | | 253,249 | |
Total liabilities and stockholders' equity | $ | 710,447 | | | $ | (68,481 | ) | | | $ | 641,966 | |
| | | | | | | | | | | | |
See accompanying notes to unaudited pro forma condensed consolidated financial statements. | |
Acorda Therapeutics, Inc.
Unaudited Pro Forma Condensed Consolidated Statements of Operations
For the Nine Months Ended September 30, 2020
(in thousands, except per share amounts)
| Acorda Therapeutics Historical | | | Transaction Accounting Adjustments | | | | Unaudited Pro Forma | |
Revenues: | | | | | | | | | | | | |
Net product revenues | $ | 90,153 | | | $ | — | | | | $ | 90,153 | |
Milestone revenues | | 15,000 | | | | — | | | | | 15,000 | |
Royalty revenues | | 9,654 | | | | — | | | | | 9,654 | |
Total net revenues | | 114,807 | | | | — | | | | | 114,807 | |
| | | | | | | | | | | | |
Costs and expenses: | | | | | | | | | | | | |
Cost of sales | | 22,670 | | | | (5,445 | ) | (d) | | | 17,225 | |
Research and development | | 18,689 | | | | (2,090 | ) | (d) | | | 16,599 | |
Selling, general and administrative | | 119,700 | | | | (2,359 | ) | (d) | | | 117,341 | |
Asset impairment | | 4,131 | | | | — | | | | | 4,131 | |
Amortization of intangible assets | | 23,073 | | | | — | | | | | 23,073 | |
Change in fair value of derivative liability | | (40,320 | ) | | | — | | | | | (40,320 | ) |
Change in fair value of acquired contingent consideration | | (33,455 | ) | | | — | | | | | (33,455 | ) |
Total operating expenses | | 114,488 | | | | (9,894 | ) | | | | 104,594 | |
Operating income (loss) | | 319 | | | | 9,894 | | | | | 10,213 | |
Other income (expense), net: | | | | | | | | | | | | |
Interest and amortization of debt discount expense | | (22,810 | ) | | | (52 | ) | (e) | | | (22,862 | ) |
Interest and other income (expense), net | | 783 | | | | — | | | | | 783 | |
Gain on disposal of property and equipment | | 200 | | | | — | | | | | 200 | |
Total other income (expense) | | (21,827 | ) | | | (52 | ) | | | | (21,879 | ) |
Income (loss) before income taxes | | (21,508 | ) | | | 9,842 | | | | | (11,666 | ) |
(Provision for) benefit from income taxes | | 4,962 | | | | (2,434 | ) | (f) | | | 2,528 | |
Net income (loss) | $ | (16,546 | ) | | $ | 7,408 | | | | $ | (9,138 | ) |
| | | | | | | | | | | | |
Net income (loss) per common share - basic | $ | (0.35 | ) | | | | | | | $ | (0.19 | ) |
Net income (loss) per common share - diluted | $ | (0.35 | ) | | | | | | | $ | (0.19 | ) |
Weighted average common shares - basic | | 47,704 | | | | | | | | | 47,704 | |
Weighted average common shares - diluted | | 47,704 | | | | | | | | | 47,704 | |
| | | | | | | | | | | | |
See accompanying notes to unaudited pro forma condensed consolidated financial statements. | |
Acorda Therapeutics, Inc.
Unaudited Pro Forma Condensed Consolidated Statements of Operations
For the Year Ended December 31, 2019
(in thousands, except per share amounts)
| Acorda Therapeutics Historical | | | Transaction Accounting Adjustments | | | | Unaudited Pro Forma | |
Revenues: | | | | | | | | | | | | |
Net product revenues | $ | 180,736 | | | $ | — | | | | $ | 180,736 | |
Royalty revenues | | 11,672 | | | | — | | | | | 11,672 | |
Total net revenues | | 192,408 | | | | — | | | | | 192,408 | |
| | | | | | | | | | | | |
Costs and expenses: | | | | | | | | | | | | |
Cost of sales | | 34,849 | | | | (736 | ) | (d) | | | 34,113 | |
Research and development | | 60,083 | | | | (2,496 | ) | (d) | | | 57,587 | |
Selling, general and administrative | | 192,846 | | | | (3,061 | ) | (d) | | | 189,785 | |
Asset impairment | | 277,561 | | | | — | | | | | 277,561 | |
Amortization of intangible assets | | 25,636 | | | | — | | | | | 25,636 | |
Change in fair value of acquired contingent consideration | | (86,935 | ) | | | — | | | | | (86,935 | ) |
Total operating expenses | | 504,040 | | | | (6,293 | ) | | | | 497,747 | |
Operating income (loss) | | (311,632 | ) | | | 6,293 | | | | | (305,339 | ) |
Other income (expense), net: | | | | | | | | | | | | |
Interest and amortization of debt discount expense | | (21,872 | ) | | | (900 | ) | (e) | | | (22,772 | ) |
Interest and other income (expense), net | | 4,183 | | | | — | | | | | 4,183 | |
Gain on extinguishment of debt | | 55,073 | | | | — | | | | | 55,073 | |
Total other income (expense) | | 37,384 | | | | (900 | ) | | | | 36,484 | |
Income (loss) before income taxes | | (274,248 | ) | | | 5,393 | | | | | (268,855 | ) |
(Provision for) benefit from income taxes | | 1,282 | | | | (1,330 | ) | (f) | | | (48 | ) |
Net income (loss) | $ | (272,966 | ) | | $ | 4,063 | | | | $ | (268,903 | ) |
| | | | | | | | | | | | |
Net income (loss) per common share - basic | $ | (5.75 | ) | | | | | | | $ | (5.66 | ) |
Net income (loss) per common share - diluted | $ | (5.75 | ) | | | | | | | $ | (5.66 | ) |
Weighted average common shares - basic | | 47,512 | | | | | | | | | 47,512 | |
Weighted average common shares - diluted | | 47,512 | | | | | | | | | 47,512 | |
| | | | | | | | | | | | |
See accompanying notes to unaudited pro forma condensed consolidated financial statements. | |
The unaudited pro forma condensed consolidated financial statements give effect to the transaction accounting adjustments necessary to reflect the Transaction as if it had occurred as of January 1, 2019, in the unaudited pro forma statements of operations for the nine months ended September 30, 2020, and the year ended December 31, 2019, and on September 30, 2020, in the unaudited pro forma balance sheet. The Company agreed to sell certain assets related to the Company’s manufacturing operations located at the facilities situated in Chelsea, Massachusetts and Waltham, Massachusetts, and Catalent agreed to assume certain liabilities relating to such manufacturing operations. At closing, Catalent paid the Company $80 million in cash, resulting in expected net proceeds of approximately $74 million after transaction fees and expenses and settlement of customary post-closing adjustments. The Company intends to use the net proceeds received from the Transaction for general corporate purposes, which may include funding capital expenditures and the repayment of indebtedness. Due to the uncertainty of how the cash proceeds will be used, transaction accounting adjustments to reflect the use of cash proceeds are not reflected in the pro forma financials.
The unaudited pro forma condensed consolidated financial statements reflect the following adjustments:
| (a) | This adjustment reflects the receipt of cash consideration of $80.0 million at the closing of the transaction, which was reduced by $8.2 million for transaction costs, plus $2.3 million for raw materials inventory purchased by Catalent to arrive at estimated net proceeds of $74.1 million. |
| (b) | These adjustments reflect the elimination of assets and liabilities attributable to the manufacturing operations. |
| (c) | This adjustment reflects the $60.3 million loss on disposal from the Transaction as if it occurred on September 30, 2020. The amount includes $74.1 million closing consideration less $134.3 million representing the carrying value of the assets and liabilities being transferred at the closing of the transaction. |
| (d) | These adjustments reflect the elimination of costs of sales, research and development, and selling, general and administrative expenses related to the manufacturing operations that would have a continuing impact on the Company. |
| (e) | These adjustments reflect the reduction to interest and amortization of debt discount expense for capitalized interest related to the construction in progress for the expansion of the Company’s Chelsea facility. |
| (f) | These adjustments reflect the income tax impacts for the transaction accounting adjustments using a pro forma continuing operations statutory rate of 24.7% for the nine and twelve-month periods ending September 30, 2020 and December 31, 2019, respectively. No deferred tax adjustments have been made based on the Transaction. |
