Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 29, 2015 | |
Document Information [Line Items] | ||
Entity Registrant Name | ANI PHARMACEUTICALS INC | |
Entity Central Index Key | 1,023,024 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | ANIP | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 11,451,292 | |
Class C Special Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 10,864 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 166,731 | $ 169,037 |
Accounts receivable, net of $7,724 and $8,708 of adjustments for chargebacks and other allowances at June 30, 2015 and December 31, 2014, respectively | 18,880 | 17,297 |
Inventories, net | 12,701 | 7,518 |
Prepaid income taxes | 1,022 | 0 |
Deferred tax assets, net of valuation allowance | 7,999 | 7,643 |
Prepaid expenses and other current assets | 1,615 | 1,983 |
Total Current Assets | 208,948 | 203,478 |
Property and equipment, net | 5,249 | 5,223 |
Deferred financing costs, net | 2,885 | 3,307 |
Deferred tax asset, net of valuation allowance | 7,027 | 7,796 |
Intangible assets, net | 44,174 | 42,067 |
Goodwill | 1,838 | 1,838 |
Total Assets | 270,121 | 263,709 |
Current Liabilities | ||
Accounts payable | 1,325 | 2,654 |
Current income taxes payable | 0 | 4,253 |
Accrued expenses and other | 1,170 | 1,269 |
Accrued compensation and related expenses | 844 | 1,348 |
Accrued Medicaid rebates | 1,891 | 2,264 |
Returned goods reserve | 1,719 | 1,445 |
Total Current Liabilities | 6,949 | 13,233 |
Long-term Liabilities | ||
Convertible notes, net of discount | 113,672 | 110,691 |
Total Liabilities | $ 120,621 | $ 123,924 |
Commitments and Contingencies (Note 11) | ||
Stockholders' Equity | ||
Common Stock, $0.0001 par value, 33,333,334 shares authorized; 11,444,203 shares issued and 11,439,311 shares outstanding at June 30, 2015; 11,387,860 shares issued and outstanding at December 31, 2014 | $ 1 | $ 1 |
Class C Special Stock, $0.0001 par value, 781,281 shares authorized; 10,864 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | 0 | 0 |
Preferred Stock, $0.0001 par value, 1,666,667 shares authorized; 0 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | 0 | 0 |
Treasury stock, 4,892 shares of common stock, at cost, at June 30, 2015, 0 shares of common stock at December 31, 2014 | (113) | 0 |
Additional paid-in capital | 161,397 | 159,509 |
Accumulated deficit | (11,785) | (19,725) |
Total Stockholders' Equity | 149,500 | 139,785 |
Total Liabilities and Stockholders' Equity | $ 270,121 | $ 263,709 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets [Parenthetical] - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Adjustments for chargebacks and other allowances | $ 7,724 | $ 8,708 |
Treasury Stock, Shares | 4,892 | 0 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 1,666,667 | 1,666,667 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common stock | ||
Common Stock, Par Value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock, Authorized Shares | 33,333,334 | 33,333,334 |
Common Stock, Issued Shares | 11,444,203 | 11,387,860 |
Common Stock, Outstanding Shares | 11,439,311 | 11,387,860 |
Class C special stock | ||
Common Stock, Par Value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock, Authorized Shares | 781,281 | 781,281 |
Common Stock, Issued Shares | 10,864 | 10,864 |
Common Stock, Outstanding Shares | 10,864 | 10,864 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net Revenues | $ 19,516 | $ 6,647 | $ 38,315 | $ 17,546 |
Operating Expenses: | ||||
Cost of sales (excluding depreciation and amortization) | 3,141 | 2,117 | 5,892 | 4,739 |
Research and development | 995 | 851 | 1,398 | 1,227 |
Selling, general and administrative | 5,551 | 5,433 | 10,302 | 9,136 |
Depreciation and amortization | 1,415 | 706 | 2,742 | 1,409 |
Total Operating Expenses | 11,102 | 9,107 | 20,334 | 16,511 |
Operating Income/(Loss) | 8,414 | (2,460) | 17,981 | 1,035 |
Other (Expense)/Income | ||||
Interest (expense)/income, net | (2,749) | 3 | (5,474) | 3 |
Other (expense)/income, net | 0 | (39) | 68 | (10) |
Income/(Loss) Before Provision for/Benefit from Income Taxes | 5,665 | (2,496) | 12,575 | 1,028 |
(Provision for)/Benefit from income taxes | (2,094) | 133 | (4,635) | (32) |
Net Income/(Loss) | $ 3,571 | $ (2,363) | $ 7,940 | $ 996 |
Basic and Diluted Earnings/(Loss) Per Share: | ||||
Basic Earnings/(Loss) Per Share (in dollars per share) | $ 0.31 | $ (0.21) | $ 0.70 | $ 0.09 |
Diluted Earnings/(Loss) Per Share (in dollars per share) | $ 0.31 | $ (0.21) | $ 0.68 | $ 0.09 |
Basic Weighted-Average Shares Outstanding (in shares) | 11,344 | 11,233 | 11,335 | 10,612 |
Diluted Weighted-Average Shares Outstanding (in shares) | 11,549 | 11,233 | 11,556 | 10,640 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash Flows From Operating Activities | ||
Net income | $ 7,940 | $ 996 |
Adjustments to reconcile net loss to net cash and cash equivalents provided by operating activities: | ||
Stock-based compensation | 1,597 | 2,026 |
Deferred taxes | 413 | 0 |
Depreciation and amortization | 2,742 | 1,409 |
Non-cash interest relating to convertible notes and loan cost amortization | 3,388 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (1,583) | 4,719 |
Inventories, net | (5,183) | (2,394) |
Prepaid expenses and other current assets | 368 | 87 |
Accounts payable | (1,379) | 302 |
Accrued compensation and related expenses | (504) | (81) |
Current income taxes, net | (5,275) | 3 |
Accrued Medicaid rebates | (373) | (56) |
Accrued expenses, returned goods reserve, and other | 175 | 122 |
Net Cash and Cash Equivalents Provided by Operating Activities | 2,326 | 7,133 |
Cash Flows From Investing Activities | ||
Acquisition of product rights and other related assets | (4,500) | (12,517) |
Acquisition of property and equipment | (310) | (371) |
Net Cash and Cash Equivalents Used in Investing Activities | (4,810) | (12,888) |
Cash Flows From Financing Activities | ||
Net proceeds from equity offering | 0 | 46,680 |
Proceeds from stock option exercises | 244 | 743 |
Proceeds from warrant exercise | 0 | 180 |
Excess tax benefit from share-based compensation awards | 47 | 8 |
Treasury stock purchases | (113) | 0 |
Net Cash and Cash Equivalents Provided by Financing Activities | 178 | 47,611 |
Change in Cash and Cash Equivalents | (2,306) | 41,856 |
Cash and cash equivalents, beginning of period | 169,037 | 11,105 |
Cash and cash equivalents, end of period | 166,731 | 52,961 |
Supplemental disclosure for cash flow information: | ||
Cash paid for interest | 2,048 | (3) |
Cash paid for income taxes | 9,450 | 60 |
Supplemental non-cash investing and financing activities: | ||
Property and equipment purchased on credit | $ 50 | $ 0 |
BUSINESS, PRESENTATION, AND REC
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2015 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS | 1. BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS ANI Pharmaceuticals, Inc. and its subsidiary, ANIP Acquisition Company (together, “ANI,” the “Company,” “we,” “us,” or “our”) is an integrated specialty pharmaceutical company developing, manufacturing, and marketing branded and generic prescription pharmaceuticals. Our targeted areas of product development currently include narcotics, oncolytics (anti-cancers), hormones and steroids, and complex formulations involving extended release and combination products. We have two pharmaceutical manufacturing facilities located in Baudette, Minnesota that are capable of producing oral solid dose products, as well as liquids and topicals, narcotics, and potent products that must be manufactured in a fully-contained environment. Our strategy is to use our assets to develop, acquire, manufacture, and market branded and generic specialty prescription pharmaceuticals. By executing this strategy, we believe we will be able to continue to grow the business, expand and diversify our product portfolio, and create long-term value for our investors. The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations and cash flows. The condensed consolidated balance sheet at December 31, 2014, has been derived from audited financial statements of that date. The interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules and regulations prescribed by the United States Securities and Exchange Commission. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our annual report on Form 10-K for the year ended December 31, 2014. Certain prior period information has been reclassified to conform to the current period presentation. The unaudited interim condensed consolidated financial statements include the accounts of ANI Pharmaceuticals, Inc. and its wholly owned subsidiary, ANIP Acquisition Company. All significant inter-company accounts and transactions are eliminated in consolidation. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. In the accompanying unaudited interim condensed consolidated financial statements, estimates are used for, but not limited to, stock-based compensation, allowance for doubtful accounts, accruals for chargebacks, rebates, returns and other allowances, allowance for inventory obsolescence, allowances for contingencies and litigation, fair value of long-lived assets, income tax provision, deferred taxes and valuation allowance, and the depreciable and amortizable lives of long-lived assets. Actual results could differ from those estimates. In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance for revenue recognition for contracts, superseding the previous revenue recognition requirements, along with most existing industry-specific guidance. The guidance requires an entity to review contracts in five steps: 1) identify the contract, 2) identify performance obligations, 3) determine the transaction price, 4) allocate the transaction price, and 5) recognize revenue. The new standard will result in enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue arising from contracts with customers. The FASB approved a one-year deferral in July 2015, making the standard effective for reporting periods beginning after December 15, 2017, with early adoption permitted only for reporting periods beginning after December 15, 2016. We are currently evaluating the impact, if any, that this new accounting pronouncement will have on our financial statements. In April 2015, the FASB issued guidance as to whether a cloud computing arrangement (e.g., software as a service, platform as a service, infrastructure as a service, and other similar hosting arrangements) includes a software license and, based on that determination, how to account for such arrangements. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendment is effective for reporting periods beginning after December 15, 2015 and may be applied on either a prospective or retrospective basis. Early adoption is permitted. We do not expect the adoption of this new accounting pronouncement to have a material impact on our financial statements. In April 2015, the FASB issued guidance to simplify the balance sheet disclosure for debt issuance costs. Under the guidance, debt issuance costs related to a recognized debt liability will be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, in the same manner as debt discounts, rather than as an asset. The standard is effective for reporting periods beginning after December 15, 2015 and early adoption is permitted. We do not expect the adoption of this new accounting pronouncement to have a material impact on our financial statements. In July 2015, the FASB issued guidance for inventory. Under the guidance, an entity should measure inventory within the scope of this guidance at the lower of cost and net realizable value, except when inventory is measured using LIFO or the retail inventory method. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. In addition, the FASB has amended some of the other inventory guidance to more clearly articulate the requirements for the measurement and disclosure of inventory. The standard is effective for reporting periods beginning after December 15, 2016. The amendments in this pronouncement should be applied prospectively, with earlier application permitted. We are currently evaluating the impact, if any, that this new accounting pronouncement will have on our financial statements. We have evaluated all other issued and unadopted Accounting Standards Updates and believe the adoption of these standards will not have a material impact on our results of operations, financial position, or cash flows. |
REVENUE RECOGNITION AND RELATED
REVENUE RECOGNITION AND RELATED ALLOWANCES | 6 Months Ended |
Jun. 30, 2015 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION AND RELATED ALLOWANCES | 2. REVENUE RECOGNITION AND RELATED ALLOWANCES Revenue Recognition Revenue is recognized for product sales and contract manufacturing product sales upon passing of risk and title to the customer, when estimates of the selling price and discounts, Medicaid rebates, promotional adjustments, price adjustments, returns, chargebacks, and other potential adjustments are reasonably determinable, collection is reasonably assured, and we have no further performance obligations. Contract manufacturing arrangements are typically less than two weeks in duration, and therefore the revenue is recognized upon completion of the aforementioned factors rather than using a proportional performance method of revenue recognition. The estimates for discounts, Medicaid rebates, promotional adjustments, price adjustments, returns, chargebacks, and other potential adjustments reduce gross revenues to net revenues in the accompanying unaudited interim condensed consolidated statements of operations, and are presented as current liabilities or reductions in accounts receivable in the accompanying unaudited interim condensed consolidated balance sheets (see “Accruals for Chargebacks, Rebates, Returns, and Other Allowances,” below). Historically, we have not entered into revenue arrangements with multiple elements. Occasionally, we engage in contract services, which include product development services, laboratory services, and royalties on net sales of certain contract manufactured products. For these services, revenue is recognized according to the terms of the agreement with the customer, which sometimes include substantive, measurable risk-based milestones, and when we have a contractual right to receive such payment, the contract price is fixed or determinable, the collection of the resulting receivable is reasonably assured, and we have no further performance obligations under the agreement. Accruals for Chargebacks, Rebates, Returns and Other Allowances Our generic and branded product revenues are typically subject to agreements with customers allowing chargebacks, Medicaid rebates, product returns, administrative fees, and other rebates and prompt payment discounts. We accrue for these items at the time of sale and continually monitor and re-evaluate the accruals as additional information becomes available. We adjust the accruals at the end of each reporting period, to reflect any such updates to the relevant facts and circumstances. Accruals are relieved upon receipt of payment from the customer or upon issuance of credit to the customer. (in thousands) Accruals for Chargebacks, Rebates, Returns and Other Allowances Administrative Prompt Medicaid Fees and Other Payment Chargebacks Rebates Returns Rebates Discounts Balance at December 31, 2013 $ 4,076 $ 253 $ 736 $ 735 $ 332 Accruals/Adjustments 19,327 266 561 2,360 742 Credits Taken Against Reserve (17,070) (322) (346) (1,974) (734) Balance at June 30, 2014 $ 6,333 $ 197 $ 951 $ 1,121 $ 340 Balance at December 31, 2014 $ 6,865 $ 2,264 $ 1,445 $ 1,487 $ 471 Accruals/Adjustments 31,903 3,131 1,342 4,385 1,839 Credits Taken Against Reserve (32,847) (3,504) (1,068) (4,432) (1,825) Balance at June 30, 2015 $ 5,921 $ 1,891 $ 1,719 $ 1,440 $ 485 Credit Concentration Our customers are primarily wholesale distributors, chain drug stores, group purchasing organizations, and pharmaceutical companies. During the three-month period ended June 30, 2015, three customers represented 20 18 15 20 22 19 11.6 29 22 14 26 19 16 |
INDEBTEDNESS
INDEBTEDNESS | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | 3. INDEBTEDNESS Convertible Senior Notes In December 2014, we issued $ 143.8 122.6 3.0 2,068,793 69.48 The Notes are convertible at the option of the holder (i) during any calendar quarter beginning after March 31, 2015, if the last reported sale price of the common stock for at least 20 30 130 1,000 Upon conversion by the holders, we may elect to settle such conversion in shares of our common stock, cash, or a combination thereof. As a result of our cash conversion option, we separately accounted for the value of the embedded conversion option as a debt discount (with an offset to Additional Paid in Capital (“APIC”)) of $ 33.6 Offering costs of $ 5.5 4.2 1.3 A portion of the offering proceeds was used to simultaneously enter into “bond hedge” (or purchased call) and “warrant” (or written call) transactions with an affiliate of one of the offering underwriters (collectively, the “Call Option Overlay”). We entered into the Call Option Overlay to synthetically raise the initial conversion price of the Notes to $ 96.21 69.48 2,068,792 15.6 (in thousands) 2015 Principal amount $ 143,750 Unamortized debt discount (30,078) Net carrying value $ 113,672 Three months ended Six months ended (in thousands) June 30, 2015 June 30, 2015 Contractual coupon $ 1,078 $ 2,156 Amortization of debt discount 1,501 2,981 Amortization of finance fees 211 422 Capitalized interest (6) (15) $ 2,784 $ 5,544 The effective interest rate on the Notes is 7.7 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 4. EARNINGS PER SHARE Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. For periods of net income, and when the effects are not anti-dilutive, we calculate diluted earnings per share by dividing net income available to common shareholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options, unvested restricted stock awards, stock purchase warrants, and any conversion gain on our Notes (see Note 3), using the treasury stock method. For periods of net loss, diluted loss per share is calculated similarly to basic loss per share. Our unvested restricted shares contain non-forfeitable rights to dividends, and therefore are considered to be participating securities; in periods of net income, the calculation of basic and diluted earnings per share excludes from the numerator net income attributable to the unvested restricted shares, and excludes the impact of those shares from the denominator. For purposes of determining diluted earnings per share, we have elected a policy to assume that the principal portion of the Notes (see Note 3) is settled in cash. As such, the principal portion of the Notes has no effect on either the numerator or denominator when determining diluted earnings per share. Any conversion gain is assumed to be settled in shares and is incorporated in diluted earnings per share using the treasury method. The warrants issued in conjunction with the issuance of the Notes (see Note 3) are considered to be dilutive when they are in-the-money relative to our average stock price during the period; the bond hedge purchased in conjunction with the issuance of the Notes is always considered to be anti-dilutive. Basic Diluted Basic Diluted (in thousands, except per share amounts) Three months ended Three months ended Six months ended Six months ended 2015 2014 2015 2014 2015 2014 2015 2014 Net income/(loss) $ 3,571 $ (2,363) $ 3,571 $ (2,363) $ 7,940 $ 996 $ 7,940 $ 996 Net income allocated to warrants - - - - - (6) - (6) Net income allocated to restricted stock (24) - (23) - (53) (5) (52) (5) Net income/(loss) from continuing operations allocated to common shares $ 3,547 $ (2,363) $ 3,548 $ (2,363) $ 7,887 $ 985 $ 7,888 $ 985 Basic Weighted-Average Shares Outstanding 11,344 11,233 11,344 11,233 11,335 10,612 11,335 10,612 Dilutive effect of stock options 205 - 221 28 Diluted Weighted-Average Shares Outstanding 11,549 11,233 11,556 10,640 Earnings/(Loss) Per Share $ 0.31 $ (0.21) $ 0.31 $ (0.21) $ 0.70 $ 0.09 $ 0.68 $ 0.09 The number of anti-dilutive shares, which have been excluded from the computation of diluted earnings per share, including the shares underlying the Notes, was 4.6 1.1 4.6 0.7 As of June 30, 2015, we had 0.5 76 2.4 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2015 | |
INVENTORIES | |
INVENTORIES | 5. INVENTORIES (in thousands) June 30, December 31, Raw materials $ 9,945 $ 5,056 Packaging materials 922 794 Work-in-progress 350 411 Finished goods 1,763 1,368 12,980 7,629 Reserve for excess/obsolete inventories (279) (111) Inventories, net $ 12,701 $ 7,518 Vendor Concentration We source the raw materials for our products, including active pharmaceutical ingredients (“API”), from both domestic and international suppliers. Generally, only a single source of API is qualified for use in each product due to the costs and time required to validate a second source of supply. As a result, we are dependent upon our current vendors to reliably supply the API required for ongoing product manufacturing. During the three months ended June 30, 2015, we purchased approximately 43 40 34 40 |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT | 6. PROPERTY, PLANT, AND EQUIPMENT (in thousands) June 30, December 31, Land $ 87 $ 87 Buildings 3,682 3,682 Machinery, furniture and equipment 5,473 4,822 Construction in progress 150 426 9,392 9,017 Less: accumulated depreciation (4,143) (3,794) Property, Plant and Equipment, net $ 5,249 $ 5,223 Depreciation expense for the three-month periods ended June 30, 2015 and 2014 totaled $ 0.2 0.1 0.3 6 15 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2015 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | 7. GOODWILL AND INTANGIBLE ASSETS Goodwill As a result of our 2013 merger with BioSante Pharmaceuticals, Inc. (“BioSante”), we recorded goodwill of $ 1.8 Acquisition of Abbreviated New Drug Application In March 2015 we purchased from Teva Pharmaceuticals (“Teva”) the Abbreviated New Drug Application (“ANDA”) for a generic product, Flecainide Acetate tablets, for $ 4.5 10 Testosterone Gel NDA As part of our 2013 merger with BioSante, we acquired a testosterone gel product that was licensed to Teva (the “Teva license”). In May 2015, we acquired from Teva the approved new drug application (“NDA”) for the previously - licensed product. Pursuant to the terms of the purchase agreement, upon commercialization, we will pay Teva a royalty of up to $ 5 5 Definite-Lived Intangible Assets (in thousands) June 30, 2015 December 31, 2014 Weighted Average Gross Carrying Accumulated Gross Carrying Accumulated Amortization Acquired ANDA intangible assets $ 17,077 $ (2,088) $ 12,577 $ (1,312) 10 years Product rights 22,522 (2,255) 22,522 (1,133) 10 years Testosterone gel NDA 10,900 (1,982) 10,900 (1,487) 11 years $ 50,499 $ (6,325) $ 45,999 $ (3,932) Our acquired ANDA intangible assets consist of the exclusive rights, including all of the applicable technical data and other relevant information, to produce certain pharmaceutical products that we acquired from various companies, including the group of ANDAs acquired from Teva in the first quarter of 2014 and the additional ANDA acquired in 2015. The product rights assets consist of the exclusive rights, including all of the applicable technical data and other relevant information, to produce certain branded pharmaceutical products that we acquired from various companies, including the Lithobid and Vancocin products acquired in the third quarter of 2014. The testosterone gel NDA was acquired in May 2015. Definite-lived intangible assets are stated at cost, net of amortization using the straight line method over the expected useful lives of the intangible assets. Amortization expense was $ 1.2 0.6 2.4 1.1 We test for impairment of definite-lived intangible assets when events or circumstances indicate that the carrying value of the assets may not be recoverable. No such triggering events were identified during the three and six months ended June 30, 2015 and 2014 and therefore no impairment loss was recognized in the three and six months ended June 30, 2015 or 2014. (in thousands) 2015 (remainder of the year) $ 2,467 2016 4,935 2017 4,935 2018 4,935 2019 4,935 2020 and thereafter 21,967 Total $ 44,174 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2015 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 8. STOCK-BASED COMPENSATION All stock options and restricted stock are granted under the ANI Pharmaceuticals, Inc. Fourth Amended and Restated 2008 Stock Incentive Plan (the “2008 Plan”). As of June 30, 2015, 0.6 Total expense related to stock options for the three months ended June 30, 2015 was $ 0.8 20 33 0.7 1.3 37 49 1.2 1.3 325 1.9 70 46 1.8 0.2 0.3 79 0.1 (in thousands) Options RSAs Outstanding December 31, 2013 120 50 Granted 80 30 Options previously granted, approved by shareholders 325 - Options Exercised/RSAs Vested (31) - Expired (60) - Outstanding June 30, 2014 434 80 Outstanding December 31, 2014 458 63 Granted 120 28 Options Exercised/RSAs Vested (31) (10) Forfeited (33) (5) Outstanding June 30, 2015 514 76 |
STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders Equity Note [Abstract] | |
SHAREHOLDER'S EQUITY | 9. STOCKHOLDER’S EQUITY On March 10, 2014, we completed a follow-on public offering of 1.6 31.00 50.0 46.7 3.3 . 0.2 Warrants to purchase 0.1 20 9.00 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2015 | |
INCOME TAXES | |
INCOME TAXES | 10. INCOME TAXES We use the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. As of both June 30, 2015 and December 31, 2014, we had provided a valuation allowance against certain state net operating loss carryforwards of approximately $ 0.1 We use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return, as well as guidance on derecognition, classification, interest and penalties and financial statement reporting disclosures. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. We have not identified any uncertain income tax positions that could have a material impact on the financial statements. We are subject to taxation in various jurisdictions and all of our income tax returns remain subject to examination by tax authorities due to the availability of NOL carryforwards. We recognize interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense. We did not have any such amounts accrued as of June 30, 2015 and December 31, 2014. The effective tax rate for the three and six-month periods ended June 30, 2015 were 37.0 36.9 (5.3) 2.9 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2015 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 11. COMMITMENTS AND CONTINGENCIES Operating Leases We lease equipment under operating leases that expire in May 2017. We also lease office space under operating leases that expire beginning in February 2016 through September 2018. Future minimum lease payments due under these leases total $ 0.2 Rent expense for the three months ended June 30, 2015 and 2014 totaled $ 20 19 38 36 Government Regulation Our products and facilities are subject to regulation by a number of federal and state governmental agencies. The Food and Drug Administration (“FDA”), in particular, maintains oversight of the formulation, manufacture, distribution, packaging and labeling of all of our products. The Drug Enforcement Administration (“DEA”) maintains oversight over our products that are controlled substances. Unapproved Products Two of our products, Esterified Estrogen with Methyltestosterone tablets (“EEMT”) and Opium Tincture, are marketed without approved New Drug Applications (“NDAs”) or ANDAs. During the three months ended June 30, 2015 and 2014, net revenues for these products totaled $ 11.0 3.8 21.3 10.5 The FDA's policy with respect to the continued marketing of unapproved products is stated in the FDA's September 2011 Compliance Policy Guide Sec. 440.100 titled “Marketed New Drugs without Approved NDAs or ANDAs.” Under this policy, the FDA has stated that it will follow a risk-based approach with regard to enforcement against such unapproved products. The FDA evaluates whether to initiate enforcement action on a case-by-case basis, but gives higher priority to enforcement action against products in certain categories, such as those marketed as unapproved drugs with potential safety risks or that lack evidence of effectiveness. We believe that, so long as we comply with applicable manufacturing standards, the FDA will not take action against us under the current enforcement policy. There can be no assurance, however, that the FDA will continue this policy or not take a contrary position with any individual product or group of products. If the FDA were to take a contrary position, we may be required to seek FDA approval for these products or withdraw such products from the market. If we decide to withdraw the products from the market, our net revenues for generic pharmaceutical products would decline materially, and if we decide to seek FDA approval, we would face increased expenses and might need to suspend sales of the products until such approval was obtained, and there are no assurances that we would receive such approval. In addition, one group of products that we manufacture on behalf of a contract customer is marketed by that customer without an approved NDA. If the FDA took enforcement action against such customer, the customer may be required to seek FDA approval for the group of products or withdraw them from the market. Our contract manufacturing revenues for these unapproved products for the three months ended June 30, 2015 and 2014 were $ 0.5 0.1 0.8 0.5 We receive royalties on the net sales of a group of contract-manufactured products, which are marketed by the contract customer without an approved NDA. If the FDA took enforcement action against such customer, the customer may be required to seek FDA approval for the group of products or withdraw them from the market. Our royalties on the net sales of these unapproved products for each of the three months ended June 30, 2015 and 2014 were $ 0.1 0.2 Louisiana Medicaid Lawsuit On September 11, 2013, the Attorney General of the State of Louisiana filed a lawsuit in Louisiana state court against numerous pharmaceutical companies, including us, under various state laws, alleging that each defendant caused the state’s Medicaid agency to provide reimbursement for drug products that allegedly were not approved by the FDA and therefore allegedly not reimbursable under the federal Medicaid program. The lawsuit relates to three cough and cold prescription products manufactured and sold by our former Gulfport, Mississippi operation, which was sold in September 2010. Through its lawsuit, the state seeks unspecified damages, statutory fines, penalties, attorneys’ fees and costs. On October 15, 2013, the defendants removed the lawsuit to the U.S. District Court. On November 14, 2013, the state filed a motion to remand the lawsuit to the Louisiana state court. On September 30, 2014, the U.S. District Court remanded the case from the federal to the state court. While we cannot predict the outcome of the lawsuit at this time, we could be subject to material damages, penalties and fines. We intend to vigorously defend against all claims in the lawsuit. Other Commitments and Contingencies All manufacturers of the drug Reglan and its generic equivalent metoclopramide, including ANI, are facing allegations from plaintiffs in various states, including California, New Jersey and Pennsylvania, claiming bodily injuries as a result of ingestion of metoclopramide or its brand name, Reglan, prior to the FDA's February 2009 Black Box warning requirement. In August 2012, we were dismissed with prejudice from all New Jersey cases. We consider our exposure to this litigation to be limited due to several factors: (1) the only generic metoclopramide that we manufactured prior to the implementation of the FDA's warning requirement was an oral solution introduced after May 28, 2008; (2) our market share for the oral solution was a very small portion of the overall metoclopramide market; and (3) once we received a request for change of labeling from the FDA, we submitted our proposed changes within 30 days, and such changes were subsequently approved by the FDA. At the present time, we are unable to assess the likely outcome of the cases in the remaining states. Our insurance company has assumed the defense of this matter. However, our current product liability insurance policy contains absolute exclusions for claims related to Reglan and metoclopramide. We cannot provide assurances that the outcome of these matters will not have an adverse effect on our business, financial condition, and operating results. Furthermore, like all pharmaceutical manufacturers, we may be exposed to other product liability claims in the future, which could further limit our coverage under future insurance policies or cause those policies to become more expensive, which could harm our business, financial condition, and operating results. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 6 Months Ended |
Jun. 30, 2015 | |
FAIR VALUE DISCLOSURES | |
FAIR VALUE DISCLOSURES | 12. FAIR VALUE DISCLOSURES Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value. The inputs used in measuring the fair value of cash and cash equivalents are considered to be level 1 in accordance with the three-tier fair value hierarchy. The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of our funds. The fair value of short-term financial instruments (primarily accounts receivable, prepaid expenses, accounts payable, accrued expenses, borrowings under line of credit, and other current liabilities) approximate their carrying values because of their short-term nature. While our Notes are recorded on our consolidated balance sheets at their net carrying value of $ 113.7 163.7 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Our contingent value rights (“CVRs”), which were granted coincident with our merger with BioSante, are considered contingent consideration and are classified as liabilities. As such, the CVRs were recorded as purchase consideration at their estimated fair value, using level 3 inputs, and are marked to market each reporting period until settlement. The fair value of CVRs is estimated using the present value of our projection of the expected payments pursuant to the terms of the CVR agreement, which is the primary unobservable input. If our projection or expected payments were to increase substantially, the value of the CVRs could increase as a result. The present value of the liability was calculated using a discount rate of 15 (in thousands) Description Fair Value at Level 1 Level 2 Level 3 Liabilities CVRs $ - $ - $ - $ - Description Fair Value at Level 1 Level 2 Level 3 Liabilities CVRs $ - $ - $ - $ - Financial Liabilities Measured at Fair Value on a Non-Recurring Basis In December 2014, we issued $ 143.8 9 A portion of the offering proceeds was used to simultaneously enter into “bond hedge” (or purchased call) and “warrant” (or written call) transactions with an affiliate of one of the offering underwriters (see Note 3). The exercise price of the bond hedge is $ 69.48 2,068,792 96.21 We calculated the fair value of the bond hedge based on the price we paid to purchase the call. We calculated the fair value of the warrant based on the price at which the affiliate purchased the warrants from us. Because the bond hedge and warrant are both indexed to our common stock and otherwise would be classified as equity, we recorded both elements as equity, resulting in a net reduction to APIC of $ 15.6 Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis We do not have any non-financial assets and liabilities that are measured at fair value on a recurring basis. Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis We measure our long-lived assets, including property, plant and equipment, intangible assets and goodwill, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. No such fair value impairment was recognized in the three months ended June 30, 2015 and 2014. In March 2015, we purchased from Teva the ANDA for Flecainide Acetate tablets for $ 4.5 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | 13. SUBSEQUENT EVENT In July 2015, we purchased from Teva the ANDAs for 22 25 |
BUSINESS, PRESENTATION, AND R19
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Overview | Overview ANI Pharmaceuticals, Inc. and its subsidiary, ANIP Acquisition Company (together, “ANI,” the “Company,” “we,” “us,” or “our”) is an integrated specialty pharmaceutical company developing, manufacturing, and marketing branded and generic prescription pharmaceuticals. Our targeted areas of product development currently include narcotics, oncolytics (anti-cancers), hormones and steroids, and complex formulations involving extended release and combination products. We have two pharmaceutical manufacturing facilities located in Baudette, Minnesota that are capable of producing oral solid dose products, as well as liquids and topicals, narcotics, and potent products that must be manufactured in a fully-contained environment. Our strategy is to use our assets to develop, acquire, manufacture, and market branded and generic specialty prescription pharmaceuticals. By executing this strategy, we believe we will be able to continue to grow the business, expand and diversify our product portfolio, and create long-term value for our investors. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations and cash flows. The condensed consolidated balance sheet at December 31, 2014, has been derived from audited financial statements of that date. The interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules and regulations prescribed by the United States Securities and Exchange Commission. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our annual report on Form 10-K for the year ended December 31, 2014. Certain prior period information has been reclassified to conform to the current period presentation. |
Principles of consolidation | Principles of Consolidation The unaudited interim condensed consolidated financial statements include the accounts of ANI Pharmaceuticals, Inc. and its wholly owned subsidiary, ANIP Acquisition Company. All significant inter-company accounts and transactions are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. In the accompanying unaudited interim condensed consolidated financial statements, estimates are used for, but not limited to, stock-based compensation, allowance for doubtful accounts, accruals for chargebacks, rebates, returns and other allowances, allowance for inventory obsolescence, allowances for contingencies and litigation, fair value of long-lived assets, income tax provision, deferred taxes and valuation allowance, and the depreciable and amortizable lives of long-lived assets. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance for revenue recognition for contracts, superseding the previous revenue recognition requirements, along with most existing industry-specific guidance. The guidance requires an entity to review contracts in five steps: 1) identify the contract, 2) identify performance obligations, 3) determine the transaction price, 4) allocate the transaction price, and 5) recognize revenue. The new standard will result in enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue arising from contracts with customers. The FASB approved a one-year deferral in July 2015, making the standard effective for reporting periods beginning after December 15, 2017, with early adoption permitted only for reporting periods beginning after December 15, 2016. We are currently evaluating the impact, if any, that this new accounting pronouncement will have on our financial statements. In April 2015, the FASB issued guidance as to whether a cloud computing arrangement (e.g., software as a service, platform as a service, infrastructure as a service, and other similar hosting arrangements) includes a software license and, based on that determination, how to account for such arrangements. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendment is effective for reporting periods beginning after December 15, 2015 and may be applied on either a prospective or retrospective basis. Early adoption is permitted. We do not expect the adoption of this new accounting pronouncement to have a material impact on our financial statements. In April 2015, the FASB issued guidance to simplify the balance sheet disclosure for debt issuance costs. Under the guidance, debt issuance costs related to a recognized debt liability will be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, in the same manner as debt discounts, rather than as an asset. The standard is effective for reporting periods beginning after December 15, 2015 and early adoption is permitted. We do not expect the adoption of this new accounting pronouncement to have a material impact on our financial statements. In July 2015, the FASB issued guidance for inventory. Under the guidance, an entity should measure inventory within the scope of this guidance at the lower of cost and net realizable value, except when inventory is measured using LIFO or the retail inventory method. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. In addition, the FASB has amended some of the other inventory guidance to more clearly articulate the requirements for the measurement and disclosure of inventory. The standard is effective for reporting periods beginning after December 15, 2016. The amendments in this pronouncement should be applied prospectively, with earlier application permitted. We are currently evaluating the impact, if any, that this new accounting pronouncement will have on our financial statements. We have evaluated all other issued and unadopted Accounting Standards Updates and believe the adoption of these standards will not have a material impact on our results of operations, financial position, or cash flows. |
REVENUE RECOGNITION AND RELAT20
REVENUE RECOGNITION AND RELATED ALLOWANCES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Revenue Recognition [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | The following table summarizes activity in the consolidated balance sheets for accruals and allowances for the six-month periods ended June 30, 2015 and 2014, respectively: (in thousands) Accruals for Chargebacks, Rebates, Returns and Other Allowances Administrative Prompt Medicaid Fees and Other Payment Chargebacks Rebates Returns Rebates Discounts Balance at December 31, 2013 $ 4,076 $ 253 $ 736 $ 735 $ 332 Accruals/Adjustments 19,327 266 561 2,360 742 Credits Taken Against Reserve (17,070) (322) (346) (1,974) (734) Balance at June 30, 2014 $ 6,333 $ 197 $ 951 $ 1,121 $ 340 Balance at December 31, 2014 $ 6,865 $ 2,264 $ 1,445 $ 1,487 $ 471 Accruals/Adjustments 31,903 3,131 1,342 4,385 1,839 Credits Taken Against Reserve (32,847) (3,504) (1,068) (4,432) (1,825) Balance at June 30, 2015 $ 5,921 $ 1,891 $ 1,719 $ 1,440 $ 485 |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Convertible Debt | The carrying value of the Notes is as follows as of June 30: (in thousands) 2015 Principal amount $ 143,750 Unamortized debt discount (30,078) Net carrying value $ 113,672 |
Interest Income and Interest Expense Disclosure | The following table sets forth the components of total interest expense related to the Notes recognized in the accompanying consolidated statements of operations for the three and six-months ended June 30, 2015: Three months ended Six months ended (in thousands) June 30, 2015 June 30, 2015 Contractual coupon $ 1,078 $ 2,156 Amortization of debt discount 1,501 2,981 Amortization of finance fees 211 422 Capitalized interest (6) (15) $ 2,784 $ 5,544 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Earnings per share for the three and six-months ended June 30, 2015 and 2014 are calculated for basic and diluted earnings per share as follows: Basic Diluted Basic Diluted (in thousands, except per share amounts) Three months ended Three months ended Six months ended Six months ended 2015 2014 2015 2014 2015 2014 2015 2014 Net income/(loss) $ 3,571 $ (2,363) $ 3,571 $ (2,363) $ 7,940 $ 996 $ 7,940 $ 996 Net income allocated to warrants - - - - - (6) - (6) Net income allocated to restricted stock (24) - (23) - (53) (5) (52) (5) Net income/(loss) from continuing operations allocated to common shares $ 3,547 $ (2,363) $ 3,548 $ (2,363) $ 7,887 $ 985 $ 7,888 $ 985 Basic Weighted-Average Shares Outstanding 11,344 11,233 11,344 11,233 11,335 10,612 11,335 10,612 Dilutive effect of stock options 205 - 221 28 Diluted Weighted-Average Shares Outstanding 11,549 11,233 11,556 10,640 Earnings/(Loss) Per Share $ 0.31 $ (0.21) $ 0.31 $ (0.21) $ 0.70 $ 0.09 $ 0.68 $ 0.09 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
INVENTORIES | |
Schedule of Inventory, Current | Inventories consist of the following as of: (in thousands) June 30, December 31, Raw materials $ 9,945 $ 5,056 Packaging materials 922 794 Work-in-progress 350 411 Finished goods 1,763 1,368 12,980 7,629 Reserve for excess/obsolete inventories (279) (111) Inventories, net $ 12,701 $ 7,518 |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant, and equipment consist of the following as of: (in thousands) June 30, December 31, Land $ 87 $ 87 Buildings 3,682 3,682 Machinery, furniture and equipment 5,473 4,822 Construction in progress 150 426 9,392 9,017 Less: accumulated depreciation (4,143) (3,794) Property, Plant and Equipment, net $ 5,249 $ 5,223 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of Intangible Assets and Goodwill | The components of our definite-lived intangible assets are as follows: (in thousands) June 30, 2015 December 31, 2014 Weighted Average Gross Carrying Accumulated Gross Carrying Accumulated Amortization Acquired ANDA intangible assets $ 17,077 $ (2,088) $ 12,577 $ (1,312) 10 years Product rights 22,522 (2,255) 22,522 (1,133) 10 years Testosterone gel NDA 10,900 (1,982) 10,900 (1,487) 11 years $ 50,499 $ (6,325) $ 45,999 $ (3,932) |
Finite-lived Intangible Assets Amortization Expense | Expected future amortization expense is as follows: (in thousands) 2015 (remainder of the year) $ 2,467 2016 4,935 2017 4,935 2018 4,935 2019 4,935 2020 and thereafter 21,967 Total $ 44,174 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
STOCK-BASED COMPENSATION | |
Schedule of Share-based Compansation, Stock Option And Restricted Stock, Activity | A summary of stock option and restricted stock activity under the Plan during the six months ended June 30, 2015 and 2014 is presented below: (in thousands) Options RSAs Outstanding December 31, 2013 120 50 Granted 80 30 Options previously granted, approved by shareholders 325 - Options Exercised/RSAs Vested (31) - Expired (60) - Outstanding June 30, 2014 434 80 Outstanding December 31, 2014 458 63 Granted 120 28 Options Exercised/RSAs Vested (31) (10) Forfeited (33) (5) Outstanding June 30, 2015 514 76 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
FAIR VALUE DISCLOSURES | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents our financial assets and liabilities accounted for at fair value on a recurring basis as of June 30, 2015 and December 31, 2014, by level within the fair value hierarchy: (in thousands) Description Fair Value at Level 1 Level 2 Level 3 Liabilities CVRs $ - $ - $ - $ - Description Fair Value at Level 1 Level 2 Level 3 Liabilities CVRs $ - $ - $ - $ - |
REVENUE RECOGNITION AND RELAT28
REVENUE RECOGNITION AND RELATED ALLOWANCES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Valuation and Qualifying Accounts Disclosure | ||
Beginning balance | $ 8,708 | |
Ending balance | 7,724 | |
Chargebacks | ||
Valuation and Qualifying Accounts Disclosure | ||
Beginning balance | 6,865 | $ 4,076 |
Accruals/Adjustments | 31,903 | 19,327 |
Credits Taken Against Reserve | (32,847) | (17,070) |
Ending balance | 5,921 | 6,333 |
Medicaid Rebates | ||
Valuation and Qualifying Accounts Disclosure | ||
Beginning balance | 2,264 | 253 |
Accruals/Adjustments | 3,131 | 266 |
Credits Taken Against Reserve | (3,504) | (322) |
Ending balance | 1,891 | 197 |
Returns | ||
Valuation and Qualifying Accounts Disclosure | ||
Beginning balance | 1,445 | 736 |
Accruals/Adjustments | 1,342 | 561 |
Credits Taken Against Reserve | (1,068) | (346) |
Ending balance | 1,719 | 951 |
Administrative Fees and Other Rebates | ||
Valuation and Qualifying Accounts Disclosure | ||
Beginning balance | 1,487 | 735 |
Accruals/Adjustments | 4,385 | 2,360 |
Credits Taken Against Reserve | (4,432) | (1,974) |
Ending balance | 1,440 | 1,121 |
Prompt Payment Discounts | ||
Valuation and Qualifying Accounts Disclosure | ||
Beginning balance | 471 | 332 |
Accruals/Adjustments | 1,839 | 742 |
Credits Taken Against Reserve | (1,825) | (734) |
Ending balance | $ 485 | $ 340 |
REVENUE RECOGNITION AND RELAT29
REVENUE RECOGNITION AND RELATED ALLOWANCES (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Accounts Receivable, Net, Current, Total | $ 18,880 | $ 18,880 | $ 17,297 | ||
Customer One [Member] | Net Revenues [Member] | |||||
Concentration Risk, Percentage | 20.00% | 29.00% | 20.00% | 26.00% | |
Customer Two [Member] | Net Revenues [Member] | |||||
Concentration Risk, Percentage | 18.00% | 22.00% | 22.00% | 19.00% | |
Customer Three [Member] | Net Revenues [Member] | |||||
Concentration Risk, Percentage | 15.00% | 14.00% | 19.00% | 16.00% | |
Customer One Two And Three [Member] | Net Accounts Receivable [Member] | |||||
Accounts Receivable, Net, Current, Total | $ 11,600 | $ 11,600 |
INDEBTEDNESS (Details)
INDEBTEDNESS (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Principal amount | $ 143,750 |
Unamortized debt discount | (30,078) |
Net Carrying value | $ 113,672 |
INDEBTEDNESS (Details 1)
INDEBTEDNESS (Details 1) - Jun. 30, 2015 - USD ($) $ in Thousands | Total | Total |
Contractual coupon | $ 1,078 | $ 2,156 |
Amortization of debt discount | 1,501 | 2,981 |
Amortization of finance fees | 211 | 422 |
Capitalized interest | (6) | (15) |
Interest Expense, Debt | $ 2,784 | $ 5,544 |
INDEBTEDNESS (Details Textual)
INDEBTEDNESS (Details Textual) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($)$ / sharesshares | |
Long-term Debt, Gross | $ 143,750 | $ 143,750 | |
Debt Instrument, Unamortized Discount | 30,078 | 30,078 | |
Amortization of Financing Costs | $ 211 | $ 422 | |
Convertible Senior Notes [Member] | |||
Long-term Debt, Gross | $ 143,800 | ||
Proceeds from Issuance of Debt | $ 122,600 | ||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 3.00% | ||
Underlying Shares Of Common Stock Convertible Debt | shares | 2,068,793 | ||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 69.48 | ||
Debt Instrument, Convertible, Threshold Trading Days | 20 | ||
Debt Instrument Percent Of Conversion Price | 130.00% | ||
Per Note Principal | $ / shares | $ 1,000 | ||
Debt Instrument, Unamortized Discount | $ 33,600 | ||
Deferred Offering Costs | $ 5,500 | ||
Exercise Price Of Bond Hedge | $ / shares | $ 69.48 | ||
Underlying Shares Of Common Stock Bond Hedge | shares | 2,068,792 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 96.21 | ||
Net Adjustments To Additional Paid In Capital Bond Hedge Acquired Warrant Issued Net | $ 15,600 | ||
Debt Instrument, Interest Rate, Effective Percentage | 7.70% | 7.70% | |
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 30 days | ||
Amortization of Financing Costs | $ 4,200 | ||
Payments of Stock Issuance Costs | $ 1,300 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net income/(loss), Basic | $ 3,571 | $ (2,363) | $ 7,940 | $ 996 |
Net income/(loss), Diluted | 3,571 | (2,363) | 7,940 | 996 |
Net income allocated, Diluted | 3,548 | (2,363) | 7,888 | 985 |
Net income from continuing operations allocated to common shares, Basic | $ 3,547 | $ (2,363) | $ 7,887 | $ 985 |
Basic Weighted-Average Shares Outstanding | 11,344 | 11,233 | 11,335 | 10,612 |
Dilutive effect of stock options | 205 | 0 | 221 | 28 |
Diluted Weighted-Average Shares Outstanding | 11,549 | 11,233 | 11,556 | 10,640 |
Earnings Per Share, Basic | $ 0.31 | $ (0.21) | $ 0.70 | $ 0.09 |
Earnings Per Share, Diluted | $ 0.31 | $ (0.21) | $ 0.68 | $ 0.09 |
Warrant [Member] | ||||
Net income allocated, Basic | $ 0 | $ 0 | $ 0 | $ (6) |
Net income allocated, Diluted | 0 | 0 | 0 | (6) |
Restricted Stock [Member] | ||||
Net income allocated, Basic | (24) | 0 | (53) | (5) |
Net income allocated, Diluted | $ (23) | $ 0 | $ (52) | $ (5) |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,600 | 1,100 | 4,600 | 700 |
Class of Warrant or Right, Outstanding | 2,400 | 2,400 | ||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Beginning Balance | 76 | 76 | ||
Common Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 500 | 500 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Inventories | ||
Raw materials | $ 9,945 | $ 5,056 |
Packaging materials | 922 | 794 |
Work-in-progress | 350 | 411 |
Finished goods | 1,763 | 1,368 |
Inventory, Gross, Total | 12,980 | 7,629 |
Reserve for excess/obsolete inventories | (279) | (111) |
Inventories, net | $ 12,701 | $ 7,518 |
INVENTORIES (Details Textual)
INVENTORIES (Details Textual) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Two Suppliers (2015) [Member] | ||||
Concentration Risk, Percentage | 43.00% | 40.00% | ||
Two Suppliers (2014) [Member] | ||||
Concentration Risk, Percentage | 34.00% | 40.00% |
PROPERTY, PLANT, AND EQUIPMEN37
PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment, Gross, Total | $ 9,392 | $ 9,017 |
Less: accumulated depreciation | (4,143) | (3,794) |
Property, Plant and Equipment, net | 5,249 | 5,223 |
Land [Member] | ||
Property, Plant and Equipment, Gross, Total | 87 | 87 |
Buildings [Member] | ||
Property, Plant and Equipment, Gross, Total | 3,682 | 3,682 |
Machinery, furniture and equipment [Member] | ||
Property, Plant and Equipment, Gross, Total | 5,473 | 4,822 |
Construction in progress [Member] | ||
Property, Plant and Equipment, Gross, Total | $ 150 | $ 426 |
PROPERTY, PLANT, AND EQUIPMEN38
PROPERTY, PLANT, AND EQUIPMENT (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Depreciation, Total | $ 200 | $ 100 | $ 300 | $ 300 |
Interest Costs Capitalized | $ 6 | $ 15 |
GOODWILL AND INTANGIBLE ASSET39
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
GOODWILL AND INTANGIBLE ASSETS | |||
Gross Carrying Amount | $ 50,499 | $ 45,999 | |
Accumulated Amortization | (6,325) | (3,932) | |
Acquired ANDA intangible assets | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Gross Carrying Amount | 17,077 | 12,577 | |
Accumulated Amortization | $ (2,088) | (1,312) | |
Weighted Average Amortization Period | 10 years | 10 years | |
Product rights | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Gross Carrying Amount | $ 22,522 | 22,522 | |
Accumulated Amortization | $ (2,255) | (1,133) | |
Weighted Average Amortization Period | 10 years | ||
Testosterone gel NDA | |||
GOODWILL AND INTANGIBLE ASSETS | |||
Gross Carrying Amount | $ 10,900 | 10,900 | |
Accumulated Amortization | $ (1,982) | $ (1,487) | |
Weighted Average Amortization Period | 11 years |
GOODWILL AND INTANGIBLE ASSET40
GOODWILL AND INTANGIBLE ASSETS (Details 1) $ in Thousands | Jun. 30, 2015USD ($) |
GOODWILL AND INTANGIBLE ASSETS | |
2015 (remainder of the year) | $ 2,467 |
2,016 | 4,935 |
2,017 | 4,935 |
2,018 | 4,935 |
2,019 | 4,935 |
2020 and thereafter | 21,967 |
Total | $ 44,174 |
GOODWILL AND INTANGIBLE ASSET41
GOODWILL AND INTANGIBLE ASSETS (Details Textual) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May. 31, 2015 | Mar. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
GOODWILL AND INTANGIBLE ASSETS | ||||||
Amortization of Intangible Assets | $ 1.2 | $ 0.6 | $ 2.4 | $ 1.1 | ||
Goodwill, Gross | $ 1.8 | $ 1.8 | ||||
Acquired ANDA Intangible Asset [Member] | ||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||
Intangible Asset Purchase Agreement, Amount | $ 4.5 | |||||
Finite-Lived Intangible Asset, Useful Life | 10 years | 10 years | ||||
Testosterone Gel NDA [Member] | ||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||
Finite-Lived Intangible Asset, Useful Life | 11 years | |||||
Maximum Royalties Potentially Payable | $ 5 | |||||
Royalty Rate | 5.00% |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Outstanding | 458 | 120 |
Granted | 120 | 80 |
Options previously granted, approved by shareholders | 325 | |
Options Exercised | (31) | (31) |
Expired | (60) | |
Forfeited | (33) | |
Outstanding | 514 | 434 |
RSAs [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Options previously granted, approved by shareholders | 0 | |
Outstanding | 63 | 50 |
Granted | 28 | 30 |
RSAs Vested | (10) | 0 |
Forfeited | (5) | 0 |
Outstanding | 76 | 80 |
STOCK-BASED COMPENSATION (Det43
STOCK-BASED COMPENSATION (Details Textual) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 600 | 600 | ||
Stock or Unit Option Plan Expense | $ 800 | $ 1,900 | $ 1,300 | $ 1,900 |
Share Based Compensation Catch Up | 1,300 | 1,300 | ||
Cost of Sales [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock or Unit Option Plan Expense | 20 | 70 | 37 | 70 |
Research and Development Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock or Unit Option Plan Expense | 33 | 46 | 49 | 46 |
Selling, General and Administrative Expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock or Unit Option Plan Expense | 700 | 1,800 | 1,200 | 1,800 |
Restricted Stock or Unit Expense | $ 200 | $ 79 | $ 300 | $ 100 |
Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Options Previously Granted Approved By Share holders | 325 |
STOCKHOLDER'S EQUITY (Details T
STOCKHOLDER'S EQUITY (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Mar. 10, 2014 | Jan. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Stock Issued During Period Due To Warrant Exercise Number | 20,000 | |||||
Proceeds from Issuance of Common Stock, Net | $ 0 | $ 46,680 | ||||
Class Of Warrant Or Right Number Of Securities Called By Warrants That Expired During Period Number | 100,000 | 0 | 100,000 | 0 | ||
Common Stock [Member] | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 9 | |||||
Stock Issued During Period, Shares, New Issues | 1,600,000 | |||||
Shares Issued, Price Per Share | $ 31 | |||||
Proceeds from Issuance of Common Stock | $ 50,000 | |||||
Proceeds from Issuance of Common Stock, Net | 46,700 | |||||
Payments of Stock Issuance Costs | $ 3,300 | |||||
Stock Issued During Period Shares New Issues Due to Exercise of Option to Purchase Additional Shares | 200,000 |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Effective Income Tax Rate Reconciliation, Percent | 37.00% | (5.30%) | 36.90% | 2.90% | |
Deferred Tax Assets, Valuation Allowance | $ 0.1 | $ 0.1 | $ 0.1 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
COMMITMENTS AND CONTINGENCIES | ||||
Operating Leases, Future Minimum Payments Due, Total | $ 200 | $ 200 | ||
Operating Leases, Rent Expense | 20 | $ 19 | 38 | $ 36 |
Unapproved Generic Products [Member] | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Revenue, Net | 11,000 | 3,800 | 21,300 | 10,500 |
Unapproved Generic Products [Member] | Contract Customer [Member] | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Revenue, Net | 500 | 100 | 800 | 500 |
Royalty Revenue, Total | $ 100 | $ 100 | $ 200 | $ 200 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Liabilities | ||
CVRs | $ 0 | $ 0 |
Fair Value, Inputs, Level 1 [Member] | ||
Liabilities | ||
CVRs | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Liabilities | ||
CVRs | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Liabilities | ||
CVRs | $ 0 | $ 0 |
FAIR VALUE DISCLOSURES (Detai48
FAIR VALUE DISCLOSURES (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Fair Value Inputs, Assets, Quantitative Information | ||||
Fair Value Inputs, Discount Rate | 15.00% | |||
Payments to Acquire Intangible Assets | $ 4,500 | $ 4,500 | $ 12,517 | |
Long-term Debt, Gross | 143,750 | |||
Notes Payable, Fair Value Disclosure | 163,700 | |||
Convertible Debt, Noncurrent | $ 113,672 | $ 110,691 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value Inputs, Assets, Quantitative Information | ||||
Theoretical Interest Rate For Debt Without Embedded Conversion Option | 9.00% | |||
Convertible Senior Notes [Member] | ||||
Fair Value Inputs, Assets, Quantitative Information | ||||
Long-term Debt, Gross | $ 143,800 | |||
Exercise Price Of Bond Hedge | $ 69.48 | |||
Underlying Shares Of Common Stock Bond Hedge | 2,068,792 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 96.21 | |||
Net Adjustments To Additional Paid In Capital Bond Hedge Acquired Warrant Issued Net | $ 15,600 |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - Jul. 31, 2015 - Subsequent Event [Member] $ in Millions | USD ($) |
Subsequent Event [Line Items] | |
Intangible Asset Purchase Agreement Quantity Acquired | 22 |
Intangible Asset Purchase Agreement, Amount | $ 25 |