Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 30, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
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 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 11,846,735 | |
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 | Sep. 30, 2018 | Dec. 31, 2017 | |
Current Assets | |||
Cash and cash equivalents | $ 44,136 | $ 31,144 | |
Accounts receivable, net of $50,603 and $34,686 of adjustments for chargebacks and other allowances at September 30, 2018 and December 31, 2017, respectively | 67,647 | 58,788 | |
Inventories, net | 40,006 | [1] | 37,727 |
Prepaid income taxes, net | 0 | 1,162 | |
Prepaid expenses and other current assets | 5,004 | 2,784 | |
Total Current Assets | 156,793 | 131,605 | |
Property and equipment, net | 37,418 | [2] | 20,403 |
Restricted cash | 5,014 | 5,006 | |
Deferred tax assets, net of deferred tax liabilities and valuation allowance | 25,082 | 22,667 | |
Intangible assets, net | 209,544 | 229,790 | |
Goodwill | 4,180 | 1,838 | |
Other long-term assets | 1,412 | 829 | |
Total Assets | 439,443 | 412,138 | |
Current Liabilities | |||
Current component of long-term borrowing, net of deferred financing costs | 5,692 | 3,353 | |
Accounts payable | 7,257 | 3,630 | |
Accrued expenses and other | 2,818 | 1,571 | |
Accrued royalties | 7,455 | 12,164 | |
Accrued compensation and related expenses | 2,773 | 2,306 | |
Current income taxes payable, net | 318 | 0 | |
Accrued government rebates | 9,014 | 7,930 | |
Returned goods reserve | 10,840 | 8,274 | |
Deferred revenue | 735 | 0 | |
Total Current Liabilities | 46,902 | 39,228 | |
Long-term Liabilities | |||
Long-term borrowing, net of deferred financing costs and current borrowing component | 65,954 | 69,946 | |
Convertible notes, net of discount and deferred financing costs | 134,122 | 128,208 | |
Total Liabilities | 246,978 | 237,382 | |
Commitments and Contingencies (Note 12) | |||
Stockholders' Equity | |||
Common Stock, $0.0001 par value, 33,333,334 shares authorized; 11,857,914 shares issued and 11,846,735 shares outstanding at September 30, 2018; 11,655,768 shares issued and 11,650,565 outstanding at December 31, 2017 | 1 | 1 | |
Class C Special Stock, $0.0001 par value, 781,281 shares authorized; 10,864 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 0 | 0 | |
Preferred Stock, $0.0001 par value, 1,666,667 shares authorized; 0 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 0 | 0 | |
Treasury stock, 11,179 shares of common stock, at cost, at September 30, 2018 and 5,203 shares of common stock, at cost, at December 31, 2017 | (659) | (259) | |
Additional paid-in capital | 186,532 | 179,020 | |
Retained earnings/(accumulated deficit) | 6,058 | (4,006) | |
Accumulated other comprehensive income, net of tax | 533 | 0 | |
Total Stockholders' Equity | 192,465 | 174,756 | |
Total Liabilities and Stockholders' Equity | $ 439,443 | $ 412,138 | |
[1] | Includes inventory acquired in acquisition of WellSpring (Note 3). | ||
[2] | Includes property, plant, and equipment acquired in acquisition of WellSpring (Note 3). |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets [Parenthetical] - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Adjustments for chargebacks and other allowances | $ 50,603 | $ 34,686 |
Preferred Stock, Par or Stated Value Per Share (in dollars 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 |
Treasury Stock, Common, Shares | 11,179 | 5,203 |
Common Stock [Member] | ||
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 | 11,857,914 | 11,655,768 |
Common Stock, Outstanding Shares | 11,846,735 | 11,650,565 |
Class C Special Stock [Member] | ||
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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net Revenues | $ 50,703 | $ 48,164 | $ 144,454 | $ 129,556 |
Operating Expenses: | ||||
Cost of sales (excluding depreciation and amortization) | 15,605 | 21,078 | 52,891 | 58,586 |
Research and development | 4,667 | 2,634 | 11,906 | 6,419 |
Selling, general, and administrative | 11,769 | 8,022 | 30,687 | 22,695 |
Depreciation and amortization | 8,548 | 7,099 | 25,056 | 20,906 |
Total Operating Expenses | 40,589 | 38,833 | 120,540 | 108,606 |
Operating Income | 10,114 | 9,331 | 23,914 | 20,950 |
Other Expense, net | ||||
Interest expense, net | (3,768) | (3,052) | (11,132) | (9,009) |
Other income/(expense), net | 20 | 95 | (71) | 58 |
Income Before Provision for Income Taxes | 6,366 | 6,374 | 12,711 | 11,999 |
Provision for income taxes | (1,329) | (1,654) | (2,647) | (3,446) |
Net Income | $ 5,037 | $ 4,720 | $ 10,064 | $ 8,553 |
Basic and Diluted Earnings Per Share: | ||||
Basic Earnings Per Share | $ 0.43 | $ 0.41 | $ 0.85 | $ 0.74 |
Diluted Earnings Per Share | $ 0.42 | $ 0.40 | $ 0.85 | $ 0.73 |
Basic Weighted-Average Shares Outstanding | 11,706 | 11,553 | 11,659 | 11,542 |
Diluted Weighted-Average Shares Outstanding | 11,804 | 11,677 | 11,767 | 11,666 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net income | $ 5,037 | $ 4,720 | $ 10,064 | $ 8,553 |
Other comprehensive income, net of tax: | ||||
Change in fair value of interest rate swap, net of tax | 317 | 0 | 533 | 0 |
Total other comprehensive income, net of tax | 317 | 0 | 533 | 0 |
Total comprehensive income, net of tax | $ 5,354 | $ 4,720 | $ 10,597 | $ 8,553 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Cash Flows From Operating Activities | |||||
Net income | $ 5,037 | $ 4,720 | $ 10,064 | $ 8,553 | |
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | |||||
Stock-based compensation | 4,954 | 4,668 | |||
Deferred taxes | (2,581) | (4,602) | |||
Depreciation and amortization | 8,548 | 7,099 | 25,056 | 20,906 | |
Acquired in-process research and development ("IPR&D") | 1,335 | 0 | |||
Non-cash interest relating to convertible notes and loan cost amortization | 6,392 | 5,723 | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable, net | (7,548) | (16,279) | |||
Inventories, net | 118 | 4,605 | |||
Prepaid expenses and other current assets | (1,769) | (1,365) | |||
Accounts payable | 2,250 | 2,078 | |||
Accrued royalties | (4,709) | (840) | |||
Accrued compensation and related expenses | (194) | 378 | |||
Current income taxes, net | 1,480 | (4,450) | |||
Accrued government rebates | 1,084 | (136) | |||
Returned goods reserve | 2,566 | 2,561 | |||
Accrued expenses and other | 1,344 | 1,814 | |||
Net Cash and Cash Equivalents Provided by Operating Activities | 39,842 | 23,614 | |||
Cash Flows From Investing Activities | |||||
Acquisition of WellSpring Pharma Services Inc., net of cash acquired | (17,067) | 0 | |||
Acquisition of product rights, IPR&D, and other related assets | (5,169) | (50,956) | |||
Acquisition of property and equipment, net | (4,736) | (6,922) | |||
Net Cash and Cash Equivalents Used in Investing Activities | (26,972) | (57,878) | |||
Cash Flows From Financing Activities | |||||
Payment of debt issuance costs | (153) | 0 | |||
Payments on term loan agreement | (1,875) | 0 | |||
Net borrowings under line of credit agreement | 0 | 25,000 | |||
Proceeds from stock option exercises | 2,817 | 191 | |||
Treasury stock purchases for restricted stock vestings | (659) | (259) | |||
Net Cash and Cash Equivalents Provided by Financing Activities | 130 | 24,932 | |||
Change in Cash, Cash Equivalents, and Restricted Cash | 13,000 | (9,332) | |||
Cash, cash equivalents, and restricted cash, beginning of period | 36,150 | 32,367 | $ 32,367 | ||
Cash, cash equivalents, and restricted cash, end of period | 49,150 | 23,035 | 49,150 | 23,035 | 36,150 |
Reconciliation of cash, cash equivalents, and restricted cash, beginning of period | |||||
Cash and cash equivalents | 31,144 | 27,365 | 27,365 | ||
Restricted cash | 5,006 | 5,002 | 5,002 | ||
Cash, cash equivalents, and restricted cash, beginning of period | 36,150 | 32,367 | 32,367 | ||
Reconciliation of cash, cash equivalents, and restricted cash, end of period | |||||
Cash and cash equivalents | 44,136 | 18,031 | 44,136 | 18,031 | 31,144 |
Restricted cash | 5,014 | 5,004 | 5,014 | 5,004 | 5,006 |
Cash, cash equivalents, and restricted cash, end of period | $ 49,150 | $ 23,035 | 49,150 | 23,035 | $ 36,150 |
Supplemental disclosure for cash flow information: | |||||
Cash paid for interest, net of amounts capitalized | 3,763 | 2,197 | |||
Cash paid for income taxes | 3,890 | 12,493 | |||
Supplemental non-cash investing and financing activities: | |||||
Property and equipment purchased and included in accounts payable | $ 110 | $ 354 |
BUSINESS, PRESENTATION, AND REC
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS | 1. BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS Overview ANI Pharmaceuticals, Inc. and its consolidated subsidiaries, ANIP Acquisition Company and ANI Pharmaceuticals Canada Inc. (together, “ANI,” the “Company,” “we,” “us,” or “our”) is an integrated specialty pharmaceutical company focused on delivering value to our customers by developing, manufacturing, and marketing high quality branded and generic prescription pharmaceuticals. We focus on niche and high barrier to entry opportunities including controlled substances, anti-cancer (oncolytics), hormones and steroids, and complex formulations. Our three pharmaceutical manufacturing facilities, of which two are located in Baudette, Minnesota and one is located in Oakville, Canada are capable of producing oral solid dose products, as well as semi-solids, liquids and topicals, controlled substances, 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 our business, expand and diversify our product portfolio, and create long-term value for our investors. On August 6, 2018, our subsidiary, ANI Pharmaceuticals Canada Inc. (“ANI Canada”), acquired all the issued and outstanding equity interests of WellSpring Pharma Services Inc. (“WellSpring”), a Canadian company that performs contract development and manufacturing of pharmaceutical products for a purchase price of $18.0 million, subject to certain customary adjustments. Subject to further adjustments, the estimated consideration was $17.3 million. The consideration was paid entirely from cash on hand. In conjunction with the transaction, we acquired WellSpring’s pharmaceutical manufacturing facility, laboratory, and offices, its current book of commercial business, as well as an organized workforce. Following the consummation of the transaction, WellSpring was merged into ANI Canada with the resulting entity’s name being ANI Pharmaceuticals Canada Inc. 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, comprehensive income/(loss), and cash flows. The consolidated balance sheet at December 31, 2017, has been derived from audited financial statements of that date. The unaudited 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, 2017. Principles of Consolidation The unaudited interim condensed consolidated financial statements include the accounts of ANI Pharmaceuticals, Inc. and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. Foreign Currency The company has a subsidiary located in Canada. The subsidiary conducts its transactions in U.S. dollars and Canadian dollars, but its functional currency is the U.S. dollar. The results of any non-U.S. dollar transactions are remeasured in U.S. dollars at the average exchange rates during the period and resulting foreign currency transaction gains and losses are included in the determination of net income. Unless otherwise noted, all references to “$” or “dollar” refer to the U.S. dollar. 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, administrative fees and rebates, government rebates, returns and other allowances, allowance for inventory obsolescence, valuation of financial instruments and intangible assets, accruals for contingent liabilities, fair value of long-lived assets, income tax provision, deferred taxes and valuation allowance, purchase price allocations, and the depreciable lives of long-lived assets. Because of the uncertainties inherent in such estimates, actual results may differ from those estimates. Management periodically evaluates estimates used in the preparation of the financial statements for reasonableness. Geographic Information Based on the distinct nature of our operations, our internal management structure, and the financial information that is evaluated regularly by our Chief Operating Decision Maker (“ The following table depicts the Company’s revenue by geographic operations during the following periods: (in thousands) Three Months Ended Nine Months Ended Location of Operations September 30, September 30, September 30, September 30, United States $ 48,961 $ 48,164 $ 142,712 $ 129,556 Canada 1,742 - 1,742 - Total Revenue $ 50,703 $ 48,164 $ 144,454 $ 129,556 The following table depicts the Company’s property, plant, and equipment, net according to geographic location as of: (in thousands) September 30, December 31, United States $ 23,645 $ 20,403 Canada 13,773 - Total Property, Plant, and Equipment, net $ 37,418 $ 20,403 Recent Accounting Pronouncements Recent Accounting Pronouncements Not Yet Adopted In October 2018, the Financial Accounting Standards Board (“FASB”) issued guidance for accounting for derivatives and hedging. The guidance provides for the inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index swap rate as a benchmark interest rate for hedge accounting purposes. In July 2017, the Financial Conduct Authority in the United Kingdom announced that it would phase out London Interbank Offered Rate (“LIBOR”) as a benchmark by the end of 2021. As a result, the U.S. Federal Reserve identified the SOFR as its preferred alternative reference rate, calculated with a broad set of short-term repurchase agreements backed by treasury securities. Amounts drawn under our five-year senior secured credit facility bear interest rates in relation to LIBOR, and our interest rate swap is designated in LIBOR. The guidance is effective for reporting periods beginning after December 15, 2018 and early adoption is permitted. The guidance must be adopted on a modified retrospective basis and provides for certain practical expedients. We will adopt this guidance as of January 1, 2019. In August 2018, the Securities and Exchange Commission (“SEC”) adopted the final rule amending certain disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded. In addition, the amendments expand the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The rule was effective on November 5, 2018 and will be effective for the quarter that begins after the effective date. The adoption of this guidance will result in the inclusion of the statement of stockholder’s equity in our interim financial statement filings. In August 2018, the FASB issued guidance modifying the disclosure requirements on fair value measurements. The amendments add, modify, and eliminate certain disclosure requirements on fair value measurements. The guidance is effective for reporting periods beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact, if any, that the adoption of this guidance will have on our consolidated financial statements. In June 2018, the FASB issued guidance simplifying the accounting for nonemployee stock-based compensation awards. The guidance aligns the measurement and classification for employee stock-based compensation awards to nonemployee stock-based compensation awards. Under the guidance, nonemployee awards will be measured at their grant date fair value. Upon transition, the existing nonemployee awards will be measured at fair value as of the adoption date. The guidance is effective for reporting periods beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact, if any, that the adoption of this guidance will have on our consolidated financial statements. In June 2016, the FASB issued guidance with respect to measuring credit losses on financial instruments, including trade receivables. The guidance eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate can now reflect an entity's current estimate of all future expected credit losses. Under the previous guidance, an entity only considered past events and current conditions. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of certain amendments of this guidance must be applied on a modified retrospective basis and the adoption of the remaining amendments must be applied on a prospective basis. We currently expect that the adoption of this guidance will likely change the way we assess the collectability of our receivables and recoverability of other financial instruments. We have not yet begun to evaluate the specific impacts of this guidance nor have we determined the manner in which we will adopt this guidance. In February 2016 , the FASB issued guidance for accounting for leases. The guidance requires lessees to recognize assets and liabilities related to long-term leases on the balance sheet and expands disclosure requirements regarding leasing arrangements. In July 2018 , the FASB issued additional guidance, which offers a transition option to entities adopting the new lease standards. Under the transition option, entities can elect to apply the new guidance using a modified retrospective approach at the beginning of the year in which the new lease standard is adopted, rather than to the earliest comparative period presented in their financial statements. The guidance is effective for reporting periods beginning after December 15, 2018 and early adoption is permitted. The guidance must be adopted on a modified retrospective basis and provides for certain practical expedients. We will elect to use the transition option and adopt the guidance using the modified retrospective approach as of January 1, 2019 . We are currently reviewing our leases and other contracts to determine the impact the adoption of this guidance will have on our consolidated financial statements, and we will continue to assess any new lease arrangements entered into during 2018 . We currently expect that the adoption of this guidance will likely change the way we account for our operating leases and will likely result in recording right-of-use assets and liabilities in our consolidated balance sheets and result in additional lease-related disclosures in the footnotes to our consolidated 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 condensed consolidated statements of operations, balance sheets, or cash flows. Recently Adopted Accounting Pronouncements In August 2017, the FASB issued guidance improving accounting for hedging activities. The guidance is intended to simplify hedge accounting by better aligning how an entity’s risk management activities and hedging relationships are presented in its financial statements. The guidance also simplifies the application of hedge accounting guidance in certain situations. The guidance is effective for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption was permitted, including adoption in an interim period. The guidance with respect to the cash flow and net investment hedge relationships existing on the date of adoption must be applied on a modified retrospective basis and the new disclosure requirements must be applied on a prospective basis. We adopted this guidance as of January 1, 2018. The adoption of this guidance did not have a material impact on our consolidated financial statements. However, the adoption of this guidance did impact how we accounted for the interest rate swap we entered into in April 2018. See Note 5 for further details regarding the interest rate swap. In May 2017, the FASB issued guidance clarifying when modification accounting should be used for changes to the terms or conditions of a share-based payment award. The guidance does not change the accounting for modifications, but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The guidance is effective for the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption was permitted, including adoption in an interim period. We adopted this guidance as of January 1, 2018 on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial statements. In May 2014, the 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. In August 2015, the FASB issued guidance approving a one-year deferral, 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. In March 2016, the FASB issued guidance to clarify the implementation guidance on principal versus agent considerations for reporting revenue gross rather than net, with the same deferred effective date. In April 2016, the FASB issued guidance to clarify the implementation guidance on identifying performance obligations and the accounting for licenses of intellectual property, with the same deferred effective date. In May 2016, the FASB issued guidance rescinding SEC paragraphs related to revenue recognition, pursuant to two SEC Staff Announcements at the March 3, 2016 Emerging Issues Task Force meeting. In May 2016, the FASB also issued guidance to clarify the implementation guidance on assessing collectability, presentation of sales tax, noncash consideration, and contracts and contract modifications at transition, with the same effective date. In September 2017, the FASB issued guidance amending and rescinding prior SEC staff announcements and observer comments related to revenue recognition, pursuant to the SEC Staff Announcement at the July 20, 2017 Emerging Issues Task Force meeting. We performed a comprehensive review of our existing revenue arrangements as of January 1, 2018 following the five-step model. Our analysis indicated that there were no significant changes to how the amount and timing of revenue is recognized under the new guidance as compared to existing guidance. Additionally, our analysis indicated that there were no significant changes to how costs to obtain and fulfill our customer contracts are recognized under the new guidance as compared to existing guidance. We adopted this guidance as of January 1, 2018 using the modified retrospective method and the impact of adoption on our consolidated balance sheet, statement of operations, and statement of cash flows was not material. The adoption of the new guidance impacted the way we analyze, document, and disclose revenue recognition under customer contracts beginning on January 1, 2018 and resulted in additional disclosures in our financial statements. ANI Canada adopted this guidance as of the acquisition date, August 6, 2018. The adoption of this guidance did not have a material impact on our consolidated financial statements. |
REVENUE RECOGNITION AND RELATED
REVENUE RECOGNITION AND RELATED ALLOWANCES | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION AND RELATED ALLOWANCES | 2. REVENUE RECOGNITION AND RELATED ALLOWANCES Revenue Recognition As of January 1, 2018, we adopted guidance for revenue recognition for contracts, using the modified retrospective method. The implementation of the guidance had no material impact on the measurement or recognition of revenue from customer contracts of prior periods. For our revenue recognition policies prior to adopting the guidance for revenue recognition for contracts, please see Item 8. Consolidated Financial Statements, Note 1, Description of Business and Summary of Significant Accounting Policies Upon adoption of this new guidance, we recognize revenue using the following steps: · Identification of the contract, or contracts, with a customer; · Identification of the performance obligations in the contract; · Determination of the transaction price, including the identification and estimation of variable consideration; · Allocation of the transaction price to the performance obligations in the contract; and · Recognition of revenue when we satisfy a performance obligation. We derive our revenues primarily from sales of generic and branded pharmaceutical products. Revenue is recognized when our obligations under the terms of our contracts with customers are satisfied, which generally occurs when control of the products we sell is transferred to the customer. We estimate variable consideration after considering applicable information that is reasonably available. We generally do not have incremental costs to obtain contracts that would otherwise not have been incurred. We do not adjust revenue for the promised amount of consideration for the effects of a significant financing component because our customers generally pay us within 100 days. All revenue recognized in the accompanying unaudited interim condensed consolidated statements of operations is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue according to contract type: Three Months Ended Nine Months Ended (in thousands) September 30, September 30, September 30, September 30, Sales of generic pharmaceutical products $ 30,287 $ 30,546 $ 83,716 $ 88,608 Sales of branded pharmaceutical products 14,589 15,688 41,714 35,398 Sales of contract manufactured products 2,826 1,829 5,450 5,151 Royalties from licensing agreements 2,409 - 12,560 - Product development services 288 - 288 - Other (1) 304 101 726 399 Total net revenues $ 50,703 $ 48,164 $ 144,454 $ 129,556 (1) Primarily includes laboratory services and royalties on sales of contract manufactured products The following table depicts revenue recognized during the following periods: Three Months Ended Nine Months Ended (in thousands) September 30, September 30, September 30, September 30, Performance obligations transferred at a point in time $ 50,415 $ 48,164 $ 144,166 $ 129,556 Performance obligations transferred over time 288 - 288 - Total $ 50,703 $ 48,164 $ 144,454 $ 129,556 In the three and nine months ended September 30, 2018, we did not incur, and therefore did not defer, any material incremental costs to obtain contracts. We recognized $6.4 million of net revenue from performance obligations satisfied in prior periods during the nine months ended September 30, 2018, consisting primarily of royalties from licensing agreements and revised estimates for variable consideration, including chargebacks, rebates, returns, and other allowances, related to prior period sales. In August 2018, we acquired WellSpring (see Note 3), a contract manufacturing company that also provides technical transfer services to customers, for which services are transferred over time. As a result, we had $14 thousand of contract assets and $0.7 million of deferred revenue at September 30, 2018. We had no contract assets or deferred revenue at December 31, 2017 or June 30, 2018. Revenue from Sales of Generic and Branded Pharmaceutical Products Product sales consists of sales of our generic and brand pharmaceutical products. Our sole performance obligation in our contracts is to provide pharmaceutical products to customers. Our products are sold at pre-determined standalone selling prices and our performance obligation is considered to be satisfied when control of the product is transferred to the customer. Control is transferred to the customer upon delivery of the product to the customer, as our pharmaceutical products are sold on an FOB destination basis and because inventory risk and risk of ownership passes to the customer upon delivery. Payment terms for these sales are generally less than 100 days. Sales of our pharmaceutical products are subject to variable consideration due to chargebacks, government rebates, returns, administrative and other rebates, and cash discounts. Estimates for these elements of variable consideration require significant judgment. Chargebacks Chargebacks, primarily from wholesalers, result from arrangements we have with indirect customers establishing prices for products which the indirect customer purchases through a wholesaler. Alternatively, we may pre-authorize wholesalers to offer specified contract pricing to other indirect customers. Under either arrangement, we provide a chargeback credit to the wholesaler for any difference between the contracted price with the indirect customer and the wholesaler's invoice price, typically Wholesale Acquisition Cost ("WAC"). Chargeback credits are calculated as follows: Prior period chargebacks claimed by wholesalers are analyzed to determine the actual average selling price ("ASP") for each product. This calculation is performed by product by wholesaler. ASPs can be affected by several factors such as: · A change in customer mix · A change in negotiated terms with customers · A change in the volume of off-contract purchases · Changes in WAC As necessary, we adjust ASPs based on anticipated changes in the factors above. The difference between ASP and WAC is recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable in the consolidated balance sheets, at the time we recognize revenue from the product sale. To evaluate the adequacy of our chargeback accruals, we obtain on-hand inventory counts from the wholesalers. This inventory is multiplied by the chargeback amount, the difference between ASP and WAC, to arrive at total expected future chargebacks, which is then compared to the chargeback accruals. We continually monitor chargeback activity and adjust ASPs when we believe that actual selling prices will differ from current ASPs. Government Rebates Our government rebates reserve consists of estimated payments due to governmental agencies for purchases made by third parties under various governmental programs. The two largest government programs that impact our net revenue and our government rebates reserve are federal and state Medicaid rebate programs and Medicare. We participate in certain qualifying federal and state Medicaid rebate programs whereby discounts and rebates are provided to participating programs after the final dispensing of the product by a pharmacy to a Medicaid plan participant. Medicaid rebates are typically billed up to 120 days after the product is shipped. Medicaid rebate amounts per product unit are established by law, based on the Average Manufacturer Price (“AMP”), which is reported on a monthly and quarterly basis, and, in the case of branded products, best price, which is reported on a quarterly basis. Our Medicaid reserves are based on expected claims from state Medicaid programs. Estimates for expected claims are driven by patient usage, sales mix, calculated AMP or best price, as well as inventory in the distribution channel that will be subject to a Medicaid rebate. As a result of the delay between selling the products and rebate billing, our Medicaid rebate reserve includes both an estimate of outstanding claims for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to plan participants. Many of our products are also covered under Medicare. We, like all pharmaceutical companies, must provide a discount for any products sold under New Drug Applications (“NDAs”) to Medicare Part D participants. This applies to all products sold under NDAs, regardless of whether the products are marketed as branded or generic. Our estimates for these discounts are based on historical experience with Medicare rebates for our products. While such experience has allowed for reasonable estimations in the past, history may not always be an accurate indicator of future rebates. Medicare rebates are typically billed up to 120 days after the product is shipped. As a result of the delay between selling the products and rebate billing, our Medicare rebate reserve includes both an estimate of outstanding claims for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to Medicare Part D participants. To evaluate the adequacy of our government rebate reserves, we review the reserves on a quarterly basis against actual claims data to ensure the liability is fairly stated. We continually monitor our government rebate reserve and adjust our estimates if we believe that actual government rebates may differ from our established accruals. Accruals for government rebates are recorded as a reduction to gross revenues in the consolidated statements of operations and as an increase to accrued government rebates in the consolidated balance sheets. Returns We maintain a return policy that allows customers to return product within a specified period prior to and subsequent to the expiration date. Generally, product may be returned for a period beginning six months prior to its expiration date to up to one year after its expiration date. Our product returns are settled through the issuance of a credit to the customer. Our estimate for returns is based upon historical experience with actual returns. While such experience has allowed for reasonable estimation in the past, history may not always be an accurate indicator of future returns. We continually monitor our estimates for returns and make adjustments when we believe that actual product returns may differ from the established accruals. Accruals for returns are recorded as a reduction to gross revenues in the consolidated statements of operations and as an increase to the return goods reserve in the consolidated balance sheets. Administrative Fees and Other Rebates Administrative fees or rebates are offered to wholesalers, group purchasing organizations and indirect customers. We accrue for fees and rebates, by product by wholesaler, at the time of sale based on contracted rates and ASPs. To evaluate the adequacy of our administrative fee accruals, we obtain on-hand inventory counts from the wholesalers. This inventory is multiplied by the ASPs to arrive at total expected future sales, which is then multiplied by contracted rates. The result is then compared to the administrative fee accruals. We continually monitor administrative fee activity and adjust our accruals when we believe that actual administrative fees will differ from the accruals. Accruals for administrative fees and other rebates are recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable in the consolidated balance sheets. Prompt Payment Discounts We often grant sales discounts for prompt payment. The reserve for prompt payment discounts is based on invoices outstanding. We assume, based on past experience, that all available discounts will be taken. Accruals for prompt payment discounts are recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable in the consolidated balance sheets. The following table summarizes activity in the consolidated balance sheets for accruals and allowances for the nine months ended September 30, 2018 and 2017, respectively: (in thousands) Accruals for Chargebacks, Rebates, Returns, and Other Allowances Administrative Prompt Government Fees and Other Payment Chargebacks Rebates Returns Rebates Discounts Balance at December 31, 2016 $ 26,785 $ 5,891 $ 5,756 $ 3,550 $ 1,554 Accruals/Adjustments 133,849 7,807 8,949 16,840 5,960 Credits Taken Against Reserve (134,412 ) (7,943 ) (6,388 ) (15,448 ) (5,617 ) Balance at September 30, 2017 $ 26,222 $ 5,755 $ 8,317 $ 4,942 $ 1,897 Balance at December 31, 2017 $ 28,230 $ 7,930 $ 8,274 $ 5,226 $ 1,834 Accruals/Adjustments 170,533 8,097 10,942 23,148 6,744 Credits Taken Against Reserve (156,750 ) (7,013 ) (8,376 ) (21,418 ) (6,373 ) Balance at September 30, 2018 $ 42,013 $ 9,014 $ 10,840 $ 6,956 $ 2,205 Contract Manufacturing Product Sales Revenue Contract manufacturing arrangements consists of agreements in which we manufacture a pharmaceutical product on behalf of third party. Our performance obligation is to manufacture and provide pharmaceutical products to customers, typically pharmaceutical companies. The contract manufactured products are sold at pre-determined standalone selling prices and our performance obligations are considered to be satisfied when control of the product is transferred to the customer. Control is transferred to the customer when the product leaves our dock to be shipped to the customer, as our pharmaceutical products are sold on an FOB shipping point basis and the inventory risk and risk of ownership passes to the customer at that time. Payment terms for these sales are generally less than two months. We estimate returns based on historical experience. Historically, we have not had material returns for contract manufactured products. As of September 30, 2018, the value of our unsatisfied performance obligations (or backlog) was $5.7 million, which consists of firm orders for contract manufactured products, for which our performance obligations remain unsatisfied and for which the related revenue has yet to be recognized. We anticipate satisfying these performance obligations within six months. Royalties from Licensing Agreements From time to time, we enter into transition agreements with the sellers of products we acquire, under which we license to the seller the right to sell the acquired products. Therefore, we recognize the revenue associated with sales of the underlying products as royalties. Because these royalties are sales-based, we recognize the revenue when the underlying sales occur, based on sales and gross profit information received from the sellers. Upon full transition of the products and upon launching the products under our own labels, we recognize revenue for the products as sales of generic or branded pharmaceutical products, as described above. In addition, we receive royalties from a license for patent rights initially owned by Cell Genesys, Inc., which merged with BioSante in 2009. The royalties are the results of sales and milestones related to the Yescarta® product. We recognize revenue for sales-based royalties when the underlying sales occur. We estimate variable consideration related to milestones, which requires significant judgment. Product Development Services Revenue We provide product development services to customers, which are performed over time. These services primarily relate to the technical transfer of products to our facility in Oakville, Canada. The duration of these technical transfer projects is generally 18 months to three years. Deposits received from these customers are recorded as deferred revenue until revenue is recognized. For contracts with no deposits and for the remainder of contracts with deposits, we invoice customers as our performance obligations are satisfied. We recognize revenue on a percentage of completion basis, which results in contract assets on our balance sheet. As of September 30, 2018, the value of our unsatisfied performance obligations for product development services contracts was $3.5 million. We expect to satisfy these performance obligations in the next 9 to 15 months. Credit Concentration Our customers are primarily wholesale distributors, chain drug stores, group purchasing organizations, and pharmaceutical companies. During the three months ended September 30, 2018 , three customers represented 35 %, 23 %, and 20 % of net revenues, respectively. During the nine months ended September 30, 2018 , the same three customers represented 34 %, 23 %, and 20 % of net revenues respectively. As of September 30, 2018 , accounts receivable from these customers totaled 80 % of accounts receivable, net. During the three months ended September 30, 2017 , three customers represented 30 %, 30 %, and 19 % of net revenues, respectively. During the nine months ended September 30, 2017 , these same three customers represented 31 %, 26 %, and 21 % of net revenues, respectively. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION | 3. BUSINESS COMBINATION Summary On August 6, 2018, our subsidiary, ANI Canada, acquired all the issued and outstanding equity interests of WellSpring, a Canadian company that performs contract development and manufacturing of pharmaceutical products for a purchase price of $18.0 million, subject to certain customary adjustments. Subject to further adjustments, the estimated consideration was $17.3 million. The consideration was paid entirely from cash on hand. In conjunction with the transaction, we acquired WellSpring’s pharmaceutical manufacturing facility, laboratory, and offices, its current book of commercial business, as well as an organized workforce. Following the consummation of the transaction, WellSpring was merged into ANI Canada with the resulting entity’s name being ANI Pharmaceuticals Canada Inc. We acquired WellSpring to provide an additional tech transfer site in order to accelerate the re-commercialization of the previously-approved ANDAs in our pipeline, to expand our contract manufacturing revenue base, and to broaden our manufacturing capabilities to three manufacturing facilities. Transaction Costs In conjunction with the acquisition, we incurred approximately $ 1.0 Purchase Consideration and Net Assets Acquired The business combination was accounted for using the acquisition method of accounting, with ANI as the accounting acquirer of WellSpring. The acquisition method requires that acquired assets and assumed liabilities be recorded at their fair values as of the acquisition date. The following presents the preliminary allocation of the preliminary purchase price to the assets acquired and liabilities assumed on August 6, 2018: (in thousands) Total Purchase Consideration $ 17,287 Cash and cash equivalents 220 Accounts receivable 1,311 Inventories 2,197 Prepaid expenses and other current assets 361 Property and equipment 13,935 Goodwill 2,342 Total assets acquired 20,366 Accounts payable and other current liabilities 2,413 Deferred revenue 666 Total liabilities assumed 3,079 Net assets acquired $ 17,287 The net assets were recorded at their estimated fair value. In valuing acquired assets and liabilities, fair value estimates were based primarily on future expected cash flows, market rate assumptions for contractual obligations, and appropriate discount rates. The above allocation of the purchase price is based upon certain preliminary valuations and other analyses that have not been finalized as of the date of this filing. Any changes in the estimated fair values of the net assets recorded for this business combination upon the finalization of more detailed analyses of the facts and circumstances that existed at the date of the transaction may change the allocation of the purchase price. As such, the purchase price allocations for this transaction are preliminary estimates, which may be subject to change within the measurement period. Goodwill is considered an indefinite-lived asset and relates primarily to intangible assets that do not qualify for separate recognition, such as the assembled workforce and synergies between the entities. Goodwill established as a result of the acquisition is not tax deductible in any taxing jurisdiction. There was no value ascribed to any separately identifiable intangible assets. Legacy WellSpring operations g enerated $1.7 million of revenue and recorded a net loss of $0.2 million . Pro Forma Condensed Combined Financial Information (unaudited) The following unaudited pro forma condensed combined financial information summarizes the results of operations for the periods indicated as if the WellSpring acquisition had been completed as of January 1, 2017. Three Months Ended Nine Months Ended (in thousands) September 30, 2018 September 30, 2017 (1) September 30, 2018 September 30, 2017 (1) Net revenues $ 51,384 $ 51,676 $ 151,091 $ 137,884 Net income $ 4,456 $ 8,683 $ 7,812 $ 10,108 (1) Net income for the three and nine months ended September 30, 2017 includes the impact to WellSpring of $4.4 million of related party debt forgiveness. The pro forma amounts are not necessarily indicative of the results that would have been obtained if the transaction had occurred as of January 1, 2017 or that may be obtained in the future. The unaudited pro forma condensed consolidated financial information includes pro forma adjustments primarily relating to the following non-recurring items directly attributable to the business combination: Elimination of amortization expense related to the acquiree’s historical intangible assets; Elimination of transaction costs; Elimination of profit on sales from WellSpring to ANI in the periods; and Tax impacts of the adjustments to the acquirer’s net income, calculated as 23 37 The pro forma financial information does not include the effects of any expected operational efficiencies or synergies resulting from the acquisition. |
INDEBTEDNESS
INDEBTEDNESS | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | 4. INDEBTEDNESS Convertible Senior Notes In December 2014, we issued $143.8 million of our Convertible Senior Notes due 2019 (the “Notes”) in a registered public offering. The Notes pay 3.0% interest semi-annually in arrears starting on June 1, 2015 and are due December 1, 2019. The initial conversion price was $69.48 per share. Simultaneous with the issuance of the Notes, we entered into “bond hedge” (or purchased call) and “warrant” (or written call) transactions with an affiliate of one of the offering underwriters in order to synthetically raise the initial conversion price of the Notes to $96.21 per share and reduce the potential common stock dilution that may arise from the conversion of the Notes. The Notes are convertible at the option of the holder under certain circumstances and upon conversion 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 million. Deferred financing costs are recorded as a reduction of long-term debt in the consolidated balance sheets and are being amortized as additional non-cash interest expense on a straight-line basis over the term of the debt, since this method was not significantly different from the effective interest method. The carrying value of the Notes is as follows as of: (in thousands) September 30, 2018 December 31, 2017 Principal amount $ 143,750 $ 143,750 Unamortized debt discount (8,643 ) (13,924 ) Deferred financing costs (985 ) (1,618 ) Net carrying value $ 134,122 $ 128,208 We had accrued interest of $1.4 million and $0.4 million related to the Notes recorded in accrued expenses, other in our consolidated balance sheets at September 30, 2018 and December 31, 2017, respectively. Credit Agreement In December 2017, we entered into a five-year senior secured credit facility (the “Credit Agreement”) with Citizens Bank, N.A. as a lender and administrative agent. As contemplated in the initial agreement, Citizens Bank, N.A. syndicated the facility to five additional lenders on February 5, 2018. The Credit Agreement is comprised of a $75.0 million five-year term loan (the “Term Loan”) and a $50.0 million senior secured revolving credit facility (the “Revolving Credit Facility”), with availability subject to a borrowing base consisting of eligible accounts receivable and inventory and the satisfaction of conditions precedent specified in the agreement. We may repay borrowings under the Term Loan and Revolving Credit Facility without any premium or penalty, but must pay all borrowings thereunder by August 30, 2019 if we do not meet certain conditions relating to the repayment or refinance of our outstanding 3.0% Senior Convertible Notes due 2019, and in no event later than December 29, 2022. The Term Loan includes a repayment schedule, pursuant to which $6.1 million of the loan will be paid in quarterly installments during the 12 months ended September 30, 2019. As a result, $6.1 million of the loan is recorded in current component of long-term borrowing, net of deferred financing in the accompanying unaudited interim condensed consolidated balance sheets. We deferred $2.9 million of total debt issuance costs related to the Credit Agreement, of which $1.8 million was allocated to the Term Loan and $1.1 million was allocated to the undrawn Revolving Credit Facility. In April 2018, we entered into an interest rate swap with Citizens Bank, N.A. to hedge the variable rate on our Term Loan balance with a fixed rate (Note 5). The carrying value of the current and long-term components of the Term Loan as of September 30, 2018 and December 31, 2017 are: Current (in thousands) September 30, 2018 December 31, 2017 Current borrowing on secured term loan $ 6,094 $ 3,750 Unamortized deferred financing costs (402 ) (397 ) Current component of long-term borrowing, net of unamortized deferred financing costs $ 5,692 $ 3,353 Long-Term (in thousands) September 30, 2018 December 31, 2017 Long-term borrowing on secured term loan $ 67,031 $ 71,250 Unamortized deferred financing costs (1,077 ) (1,304 ) Long-term borrowing, net of unamortized deferred financing costs and current borrowing component $ 65,954 $ 69,946 The Term Loan was accounted for as a modification of our existing Line of Credit and consequently, the remaining balance of the deferred issuance costs related to the Line of Credit are included with the Term Loan issuance costs and amortized as interest expense over the life of the Term Loan using the effective interest method. The issuance costs allocated to the Revolving Credit Facility will be deferred and amortized as interest expense on a straight-line basis over the term of the Revolving Credit Facility. As of September 30, 2018, we had a $73.1 million balance on the Term Loan. As of September 30, 2018, we had not drawn on the Revolving Credit Facility. As of September 30, 2018, $0.7 million of unamortized deferred debt issuance costs is included in other long-term assets in the accompanying unaudited interim condensed consolidated balance sheets and $0.2 million is included in prepaid expenses and other current assets in the unaudited interim condensed consolidated balance sheets. The following table sets forth the components of total interest expense related to the Notes and Term Loan recognized in the accompanying unaudited interim condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended (in thousands) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Contractual coupon $ 1,835 $ 1,078 $ 5,393 $ 3,234 Amortization of debt discount 1,783 1,692 5,280 5,007 Amortization of finance fees 370 211 1,111 633 Capitalized interest (174 ) (143 ) (552 ) (367 ) $ 3,814 $ 2,838 $ 11,232 $ 8,507 As of September 30, 2018, the combined effective interest rate on the Notes and Term Loan was 6.8%, on an annualized basis. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY | 5. DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY We use derivative financial instruments to hedge our exposure to interest rate risks. All derivative financial instruments are recognized as either assets or liabilities at fair value on the consolidated balance sheet and are classified as current or long-term based on the scheduled maturity of the instrument. When we enter into a hedge arrangement and intend to apply hedge accounting, we formally document the hedge relationship and designate the instrument for financial reporting purposes as a fair value hedge, a cash flow hedge, or a net investment hedge. When we determine that a derivative financial instrument qualifies as a cash flow hedge and is effective, the changes in fair value of the instrument are recorded in accumulated other comprehensive income/(loss), net of tax in our consolidated balance sheets and will be reclassified to earnings when the hedged item affects earnings. In April 2018, we entered into an interest rate swap arrangement, which is considered a derivative financial instrument, with Citizens Bank, N.A. to manage our exposure to changes in LIBOR-based interest rates underlying our Term Loan. The interest rate swap hedges the variable cash flows associated with the borrowings under our Term Loan (Note 4), effectively providing a fixed rate of interest throughout the life of the Term Loan. The interest rate swap arrangement with Citizens Bank, N.A became effective on April 29, 2018, with a maturity date of December 29, 2022. The notional amount of the swap agreement at inception was $74.1 million and will decrease in line with our Term Loan. As of September 30, 2018, the notional amount of the interest rate swap was $72.2 million. The interest rate swap has a weighted average fixed rate of 2.60% and has been designated as an effective cash flow hedge and therefore qualifies for hedge accounting. As of September 30, 2018, the fair value of the interest rate swap asset was valued at $0.7 million and was recorded in other long-term assets in the accompanying unaudited condensed consolidated balance sheets. September 30, 2018, the fair value of the interest rate swap net of tax, was recorded in accumulated other comprehensive income, net of tax in the accompanying unaudited condensed consolidated balance sheets condensed consolidated statements of comprehensive income. Differences between the hedged LIBOR rate and the fixed rate recorded as interest expense in the same period that the related interest is recorded for the Term Loan based on the LIBOR rate. In three and nine months ended September 30, 2018, $0.1 million and $0.2 million of interest expense was recognized in relation to the interest rate swap, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 6. 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, shares to be purchased under our Employee Stock Purchase Plan (“ESPP”), unvested restricted stock awards, stock purchase warrants, and any conversion gain on our Notes (Note 4), 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 (Note 4) 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 (Note 4) 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. Earnings per share for the three and nine months ended September 30, 2018 and 2017 are calculated for basic and diluted earnings per share as follows: Basic Diluted Basic Diluted (in thousands, except per share amounts) Three Months Ended September 30, Three Months Ended September 30, Nine Months Ended September30, Nine Months Ended September 30, 2018 2017 2018 2017 2018 2017 2018 2017 Net income $ 5,037 $ 4,720 $ 5,037 $ 4,720 $ 10,064 $ 8,553 $ 10,064 $ 8,553 Net income allocated to restricted stock (51 ) (35 ) (51 ) (35 ) (101 ) (64 ) (101 ) (64 ) Net income allocated to common shares $ 4,986 $ 4,685 $ 4,986 $ 4,685 $ 9,963 $ 8,489 $ 9,963 $ 8,489 Basic Weighted-Average Shares Outstanding 11,706 11,553 11,706 11,553 11,659 11,542 11,659 11,542 Dilutive effect of stock options and ESPP 98 124 108 124 Diluted Weighted-Average Shares Outstanding 11,804 11,677 11,767 11,666 Earnings Per Share $ 0.43 $ 0.41 $ 0.42 $ 0.40 $ 0.85 $ 0.74 $ 0.85 $ 0.73 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 4.8 million for both the three months ended September 30, 2018 and 2017 and was 4.7 million for both the nine months ended September 30, 2018 and 2017. Anti-dilutive shares consist of out-of-the-money Class C Special stock, out-of-the-money common stock options, common stock options that are anti-dilutive when calculating the impact of the potential dilutive common shares using the treasury stock method, underlying shares related to out-of-the-money bonds issued as convertible debt, and out-of-the-money warrants exercisable for common stock. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 7. INVENTORIES Inventories consist of the following as of: (in thousands) September 30, 2018 (1) December 31, Raw materials $ 26,653 $ 22,139 Packaging materials 2,283 1,527 Work-in-progress 1,282 510 Finished goods 10,317 13,901 (2) 40,535 38,077 Reserve for excess/obsolete inventories (529 ) (350 ) Inventories, net $ 40,006 $ 37,727 (1) Includes inventory acquired in acquisition of WellSpring (Note 3). (2) Includes finished goods acquired in asset purchases (Note 13). 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 cost 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 on-going product manufacturing. During the three months ended September 30, 2018, we purchased approximately 36% of our inventory (exclusive of inventory acquired in the acquisition of WellSpring (Note 3)) from one supplier. As of September 30, 2018, the amounts payable to this supplier was immaterial. During the nine months ended September 30, 2018, we purchased approximately 25% of our inventory (exclusive of inventory acquired in the acquisition of WellSpring (Note 3)) from two suppliers. As of September 30, 2018, the amounts payable to these suppliers was immaterial. During the three months ended September 30, 2017, we purchased approximately 40% of our inventory (exclusive of inventory acquired in asset purchases (Note 13)) from two suppliers. During the nine months ended September 30, 2017, we purchased approximately 24% of our inventory (exclusive of inventory acquired in asset purchases (Note 13)) from two suppliers. |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT | 8. PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment consist of the following as of: (in thousands) September 30, 2018 (1) December 31, 2017 Land $ 4,558 $ 160 Buildings 6,725 3,835 Machinery, furniture, and equipment 23,038 12,334 Construction in progress 10,744 10,663 45,065 26,992 Less: accumulated depreciation (7,647 ) (6,589 ) Property, Plant, and Equipment, net $ 37,418 $ 20,403 (1) Includes property, plant, and equipment acquired in acquisition of WellSpring (Note 3). Depreciation expense was $0.6 million and $0.3 million for the three months ended September 30, 2018 and 2017, respectively. Depreciation expense was $1.3 million and $0.9 million for the nine months ended September 30, 2018 and 2017, respectively. During the three months ended September 30, 2018 and 2017, there was $0.2 million and $0.1 million of interest capitalized into construction in progress, respectively. During the nine months ended September 30, 2018 and 2017, there was $0.6 million and $0.4 million of interest capitalized into construction in progress, respectively. Construction in progress consists of multiple projects, primarily related to new equipment to expand our manufacturing capability as our product lines continue to grow. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | 9. GOODWILL AND INTANGIBLE ASSETS Goodwill As a result of our 2013 merger with BioSante Pharmaceuticals, Inc. (“BioSante”), we recorded goodwill of $1.8 million. As a result of our acquisition of WellSpring, we recorded additional goodwill of $ 2 .3 million in August 2018. We assess the recoverability of the carrying value of goodwill as of October 31 st of each year, and whenever events occur or circumstances change that would, more likely than not, reduce the fair value of our reporting unit below its carrying value. There have been no events or changes in circumstances that would have reduced the fair value of our reporting unit below its carrying value during the nine months ended September 30, 2018. No impairment losses were recognized during the three or nine months ended September 30, 2018 or 2017. Definite-lived Intangible Assets Acquisition of Abbreviated New Drug Applications In April 2018, we entered into an agreement with Impax Laboratories, Inc. (now Amneal Pharmaceuticals, Inc., or “Amneal”) to purchase the approved ANDAs for three previously-commercialized generic drug products, the approved ANDAs for two generic drug products that have not yet been commercialized, the development package for one generic drug product, a license, supply, and distribution agreement for a generic drug product with an ANDA that is pending approval, and certain manufacturing equipment required to manufacture one of the products, for $2.3 million in cash up front. The transaction closed in May 2018 and we made the $2.3 million payment using cash on hand. We also capitalized $0.1 million of costs directly related to the transaction. We accounted for this transaction as an asset purchase. The $1.0 million acquired ANDA intangible assets are being amortized in full over their estimated useful lives of 10 years. Please see Note 13 for further details regarding the transaction. In April 2018, we entered into an agreement with IDT Australia, Limited to purchase the ANDAs for 23 previously-marketed generic drug products and API for four of the acquired products for $2.7 million in cash and a single-digit royalty on net profits from sales of one of the products. The transaction closed in April 2018 and we made the $2.7 million payment using cash on hand. We also capitalized $18 thousand of costs directly related to the transaction. We accounted for this transaction as an asset purchase. The $2.5 million acquired ANDA intangible assets are being amortized in full over their estimated useful lives of 10 years. Please see Note 13 for further details regarding the transaction. Acquisition of New Drug Applications and Product Rights In December 2017, we entered into an agreement with AstraZeneca AB and AstraZeneca UK Limited to purchase the right, title, and interest in the NDAs and the U.S. rights to market Atacand, Atacand HCT, Arimidex, and Casodex, for $46.5 million in cash. We also entered into a license agreement for use of these trademarks in the U.S. We made the $46.5 million cash payment with funds from our Term Loan (Note 3). We also capitalized $0.2 million of costs directly related to the asset purchase. We accounted for this transaction as an asset purchase. The $46.7 million product rights assets are being amortized in full over their estimated useful lives of 10 years. Please see Note 13 for further details regarding the transaction. In February 2017, we entered into an agreement with Cranford Pharmaceuticals, LLC to purchase a distribution license, trademark, and certain finished goods inventory for Inderal XL for $20.2 million in cash. We made the $20.2 million cash payment using cash on hand. We accounted for this transaction as an asset purchase. We also capitalized $40 thousand of costs directly related to the transaction. The $15.1 million product rights intangible asset acquired in the asset purchase is being amortized in full over its estimated useful life of 10 years. Please see Note 13 for further details regarding the transaction. In February 2017, we entered into an agreement with Holmdel Pharmaceuticals, LP to purchase the NDA, trademark, and certain finished goods inventory for InnoPran XL, including a license to an Orange Book listed patent, for $30.6 million in cash. We made the $30.6 million cash payment using $30.0 million of funds from our former Line of Credit and $0.6 million of cash on hand. We accounted for this transaction as an asset purchase. We also capitalized $0.1 million of costs directly related to the transaction. The $19.0 million product rights intangible asset acquired in the asset purchase is being amortized in full over its estimated useful life of 10 years. Please see Note 13 for further details regarding the transaction. The components of net definite-lived intangible assets are as follows: (in thousands) September 30, 2018 December 31, 2017 Weighted Average Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortization Period Acquired ANDA intangible assets $ 46,194 $ (15,940 ) $ 42,076 $ (12,592 ) 10.0 years NDAs and product rights 230,974 (55,939 ) 230,974 (37,091 ) 10.0 years Marketing and distribution rights 10,423 (6,569 ) 11,042 (5,087 ) 4.7 years Non-compete agreement 624 (223 ) 624 (156 ) 7.0 years $ 288,215 $ (78,671 ) $ 284,716 $ (54,926 ) Definite-lived intangible assets are stated at cost, net of amortization, generally using the straight-line method over the expected useful lives of the intangible assets. In the case of the Inderal XL and InnoPran XL asset purchases, because we anticipate that the acquired assets will provide a greater economic benefit in the earlier years, we are amortizing 80% of the value of the intangible assets over the first five years of useful lives of the assets and amortizing the remaining 20% of the value of the intangible assets over the second five years of useful lives of the assets. Amortization expense was $7.9 million and $6.8 million for the three months ended September 30, 2018 and 2017, respectively. Amortization expense was $23.7 million and $20.0 million for the nine months ended September 30, 2018 and 2017, respectively. 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 nine months ended September 30, 2018 and 2017 and therefore no impairment loss was recognized in the three and nine months ended September 30, 2018 or 2017. Expected future amortization expense is as follows: (in thousands) 2018 (remainder of the year) $ 7,940 2019 31,761 2020 31,279 2021 29,833 2022 26,428 2023 and thereafter 82,303 Total $ 209,544 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | 10. STOCK-BASED COMPENSATION In July 2016, we commenced administration of the ANI Pharmaceuticals, Inc. 2016 Employee Stock Purchase Plan. As of September 30, 2018, we have 0.2 million shares of common stock available under the ESPP. Under the ESPP, participants can purchase shares of our stock at a 15% discount. In the three and nine months ended September 30, 2018, we recognized $2 thousand and $6 thousand of stock-based compensation expense related to the ESPP in cost of sales, $5 thousand, and $8 thousand of stock-based compensation expense related to the ESPP in research and development, and $15 thousand and $43 thousand of stock-based compensation expense related to the ESPP in sales, general, and administrative expense in our accompanying unaudited interim condensed consolidated statements of operations, respectively. In the three and nine months ended September 30, 2017, we recognized $1 thousand and $5 thousand of stock-based compensation expense related to the ESPP in cost of sales and $11 thousand and $50 thousand of stock-based compensation expense related to the ESPP in sales, general, and administrative expense in our accompanying unaudited interim condensed consolidated statements of operations, respectively. All equity-based service awards are granted under the ANI Pharmaceuticals, Inc. Amended and Restated 2008 Stock Incentive Plan (the “2008 Plan”). As of September 30, 2018, 0.6 million shares of our common stock remained available for issuance under the 2008 Plan. The following table summarizes stock-based compensation expense incurred under the 2008 Plan and included in our accompanying unaudited interim condensed consolidated statements of operations: (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Cost of sales $ 24 $ 19 $ 66 $ 68 Research and development 184 173 564 485 Selling, general, and adminstrative 1,564 1,270 4,266 4,059 $ 1,772 $ 1,462 $ 4,896 $ 4,612 A summary of stock option and restricted stock activity under the 2008 Plan during the nine months ended September 30, 2018 and 2017 is presented below: (in thousands) Options RSAs Outstanding December 31, 2016 578 63 Granted 192 50 Options Exercised/RSAs Vested (7 ) (27 ) (1) Forfeited (3 ) - Outstanding September 30, 2017 760 86 Outstanding December 31, 2017 767 86 Granted 156 65 Options Exercised/RSAs Vested (140 ) (33 ) (2) Forfeited (22 ) - Outstanding September 30, 2018 761 118 (1) (2) |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 11. 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. The utilization of our NOL carryforwards will be limited in future years as prescribed by Section 382 of the U.S. Internal Revenue Code. As of both September 30, 2018 and December 31, 2017, we had provided a valuation allowance against certain state net operating loss (“NOL”) carryforwards of $0.3 million. 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. 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 consolidated financial statements. 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 September 30, 2018 and December 31, 2017. 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. For interim periods, we recognize an income tax provision/(benefit) based on our estimated annual effective tax rate, calculated on a worldwide consolidated basis, expected for the entire year. If we project taxable losses in any specific taxing jurisdiction, those losses are excluded from the calculation of the worldwide estimated annual effective tax rate and a resulting tax benefit is not recognized. The interim annual estimated effective tax rate is based on the statutory tax rates then in effect, as adjusted for estimated changes in temporary and estimated permanent differences, and excludes certain discrete items whose tax effect, when material, is recognized in the interim period in which they occur. These changes in temporary differences, permanent differences, and discrete items result in variances to the effective tax rate from period to period. We also have elected to exclude the impacts from significant pre-tax non-recognized subsequent events from our interim estimated annual effective rate until the period in which they occur. Our estimated annual effective tax rate changes throughout the year as our on-going estimates of pre-tax income, changes in temporary differences, and permanent differences are revised, and as discrete items occur. Global Intangible Low-Taxed Income (“GILTI”), as defined in the Tax Cuts and Jobs Act of 2017, generated from our recently acquired Canadian operations is subject to U.S. taxes, with certain defined exemptions, thresholds and credits. For financial reporting purposes we have elected to treat GILTI inclusions as a period cost. The estimated consolidated effective tax rate for the three months ended September 30, 2018, calculated after excluding the taxable losses projected in our Canadian operations for which no tax benefit can be recognized, was 20.9% of pre-tax income reported in the period, calculated based on the estimated annual effective rate anticipated for the year ending December 31, 2018 plus the effects of certain discrete items occurring in the third quarter. Our effective tax rate for the three months ended September 30, 2018 was impacted primarily by the Tax Cuts and Jobs Act of 2017, which was enacted on December 22, 2017 and lowered the U.S. corporate tax rate from 35% to 21%, beginning in 2018. Our effective tax rate was also impacted by the discrete impact of current period awards of stock-based compensation, stock option exercises, and disqualifying dispositions of incentive stock options, all of which impact the consolidated effective rate in the period in which they occur. The effective tax rate for the three months ended September 30, 2017 was 25.9% of pre-tax income reported in the period, calculated based on the estimated annual effective rate anticipated for the year ending December 31, 2017. Our effective tax rate for the three months ended September 30, 2017 was impacted primarily by the Domestic Production Activities Deduction, as well as the impact of current period awards of stock-based compensation, stock option exercises, and disqualifying dispositions of incentive stock options, all of which impact the consolidated effective rate in the period in which they occur. The estimated consolidated effective tax rate for the nine months ended September 30, 2018, calculated after excluding the taxable losses projected in our Canadian operations for which no tax benefit can be recognized, was 20.8% of pre-tax income reported in the period, calculated based on the estimated annual effective rate anticipated for the year ending December 31, 2018 plus the effects of certain discrete items occurring in 2018. Our effective tax rate for the nine months ended September 30, 2018 was impacted primarily by the Tax Cuts and Jobs Act of 2017, which was enacted on December 22, 2017 and lowered the U.S. corporate tax rate from 35% to 21%, beginning in 2018. Our effective tax rate was also impacted by the discrete impact of current period awards of stock-based compensation, stock option exercises, and disqualifying dispositions of incentive stock options, all of which impact the consolidated effective rate in the period in which they occur. The effective tax rate for the nine months ended September 30, 2017 was 28.7% of pre-tax income reported in the period, calculated based on the estimated annual effective rate anticipated for the year ending December 31, 2017. Our effective tax rate for the nine months ended September 30, 2017 was impacted primarily by the Domestic Production Activities Deduction, as well as the impact of current period awards of stock-based compensation, stock option exercises, and disqualifying dispositions of incentive stock options, all of which impact the consolidated effective rate in the period in which they occur. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Government Regulation Our products and facilities are subject to regulation by a number of federal and state governmental agencies. The 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 (“EEMT”) and Opium Tincture, are marketed without approved NDAs or Abbreviated New Drug Applications (“ANDAs”). During the three months ended September 30, 2018 and 2017, net revenues for these products totaled $ 6.2 18.3 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 both the three months ended September 30, 2018 and 2017 were $0.6 million. Our contract manufacturing revenues for these unapproved products for the nine months ended September 30, 2018 and 2017 were $1.6 million and $1.5 million, respectively. 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 the three and nine months ended September 30, 2018 and 2017 were less than 1% of total revenues. 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. 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. Civil Action In November of 2017, we were served with a complaint filed by Arbor Pharmaceuticals, LLC, in the United States District Court, District of Minnesota. The complaint alleges false advertising and unfair competition in violation of Section 43(a) of the Lanham Act, Section 1125(a) of Title 15 of the United States Code, and Minnesota State law, and seeks injunctive relief and damages. The action is currently in the discovery phase. We intend to defend this action vigorously. Other Commitments and Contingencies All manufacturers of the drug Reglan and its generic equivalent metoclopramide, including ANI, have faced 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 complaints. In August 2016, we settled the outstanding California short form complaints and in February 2018, we settled the remaining four complaints that were not captured in the 2016 settlement. 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 and paid all losses in settlement of the California cases. 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 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. Our ANDA for Erythromycin Ethylsuccinate (“EES”) was originally approved by the FDA on November 27 th On or about September 20, 2017, the Company and certain of its employees were served with search warrants and/or grand jury subpoenas to produce documents and possibly testify relating to a federal investigation of the generic pharmaceutical industry. 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. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | 13. 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 accompanying unaudited interim condensed consolidated balance sheets at their net carrying value of $134.1 million as of September 30, 2018, the Notes are being traded on the bond market and their fair value is $146.8 million, based on their closing price on September 30, 2018, a Level 1 input. 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 and expire in June 2023, 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%. We determined that the fair value of the CVRs was immaterial as of September 30, 2018 and December 31, 2017. We also determined that the changes in such fair value were immaterial in the three and nine months ended September 30, 2018 and 2017. In April 2018, we entered into an interest rate swap (Note 5) to manage our exposure to the variable interest rate on our Term Loan (Note 4). The notional amount of our interest rate swap is set to match the balance of our Term Loan. Both the notional amount of the interest rate swap and the balance of our Term Loan were $72.2 million as of September 30, 2018. The fair value of our interest rate swap is estimated based on the present value of projected future cash flows using the LIBOR forward rate curve. The model used to value the interest rate swap includes inputs of readily observable market data, a Level 2 input. As described in detail in Note 5, the fair value of the interest rate swap was a $0.7 million asset at September 30, 2018. The following table presents our financial assets and liabilities accounted for at fair value on a recurring basis as of September 30, 2018 and December 31, 2017, by level within the fair value hierarchy: (in thousands) Description Fair Value at September 30, 2018 Level 1 Level 2 Level 3 Assets Interest rate swap $ 699 $ - $ 699 $ - Liabilities CVRs $ - $ - $ - $ - Description Fair Value at December 31, 2017 Level 1 Level 2 Level 3 Assets Interest rate swap $ - $ - $ - $ - Liabilities CVRs $ - $ - $ - $ - Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis We do not have any financial assets and liabilities that are measured at fair value on a non-recurring basis. 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 and nine months ended September 30, 2018 and 2017. Please see Note 3 for discussion of assets and liabilities acquired in the acquisition of WellSpring. Acquired Non-Financial Assets Measured at Fair Value In April 2018, we entered into an agreement with Impax Laboratories, Inc. (now Amneal) to purchase the approved ANDAs for three previously-commercialized generic drug products, the approved ANDAs for two generic drug products that have not yet been commercialized, the development package for one generic drug product, a license, supply, and distribution agreement for a generic drug product with an ANDA that is pending approval, and certain manufacturing equipment required to manufacture one of the products, for $2.3 million in cash (Note 9). At the same time, we entered into a supply agreement with Amneal under which we may elect to purchase the finished goods for one of the products for up to 17 months beginning October 1, 2019, under certain conditions. If we do elect to purchase the finished goods from Amneal for this period, we may be required to pay a milestone payment of up to $10.0 million upon launch, depending on the number of competitors selling the product at the time of launch. This milestone payment was determined to be contingent consideration and will be recognized when the contingency is resolved. When one of the approved ANDAs that have not yet been commercialized is launched, we could be required to pay a milestone of $25.0 million to Teva Pharmaceuticals (“Teva”), depending on the number of competitors selling the product at the time of launch. In addition, depending on the number of competitors selling the product one year after the launch date, we could be required to pay a second milestone of $15.0 million to Teva. These milestones are determined to be contingent liabilities and will be recognized if and when they are both estimable and probable. Because we believe that neither milestone is both estimable and probable, we did not record a contingent liability for the milestones. We made the $2.3 million cash payment using cash on hand and capitalized $0.1 million of costs directly related to the asset purchase. We accounted for this transaction as an asset purchase. The $1.0 million acquired ANDA intangible assets were recorded at their relative fair value, determined using Level 3 unobservable inputs. In order to determine the fair value of the acquired ANDA intangible assets, we used the present value of the estimated cash flows related to the approved ANDAs, using discount rates of 10 to 15%. The acquired ANDAs will be amortized in full over their 10-year useful lives, and will be tested for impairment when events or circumstances indicate that the carrying value of the assets may not be recoverable. The $58 thousand of manufacturing equipment used to manufacture one of the products was recorded at its relative fair value, based on the estimated net book value of the equipment purchased. The equipment will be amortized in full over its 5-year useful life, and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to September 30, 2018 and therefore no impairment loss was recognized for the nine months ended September 30, 2018. The $1.3 million of in-process research and development was recorded at its relative fair value, determined using Level 3 unobservable inputs. In order to determine the fair value of the in-process research and development, we used the present value of the estimated cash flows related to the products, using a discount rate of 75%, reflective of the higher risk associated with these products. As the transaction was accounted for as an asset purchase, the $1.3 million of in-process research and development was immediately recognized as research and development expense. In April 2018, we entered into an agreement with IDT Australia, Limited to purchase the ANDAs for 23 previously-marketed generic drug products and API for four of the acquired products for $2.7 million in cash and a single-digit royalty on net profits from sales of one of the products (Note 9). We made the $2.7 million cash payment using cash on hand and capitalized $18 thousand of costs directly related to the asset purchase. We accounted for this transaction as an asset purchase. The $2.5 million acquired ANDA intangible assets were recorded at their relative fair value, determined using Level 3 unobservable inputs. In order to determine the fair value of the product rights intangible assets, we used the present value of the estimated cash flows related to the product rights, using discount rates of 10% to 15%. The acquired ANDA intangible assets will be amortized in full over their 10-year useful lives, and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to September 30, 2018 and therefore no impairment loss was recognized for the nine months ended September 30, 2018. We also recorded $0.2 million of raw materials inventory, measured at fair value. The fair value of the raw materials inventory was determined based on the estimated replacement cost. In December 2017, we entered into an agreement with AstraZeneca AB and AstraZeneca UK Limited to purchase the right, title, and interest in the NDAs and the U.S. right to market Atacand, Atacand HCT, Arimidex, and Casodex, for $46.5 million in cash (Note 9). We also licensed these trademarks for use in the U.S. We made the $46.5 million cash payment with funds from our Term Loan (Note 3) and capitalized $0.2 million of costs directly related to the asset purchase. The agreement included a $3.0 million contingent payment due in early 2023 if the annual net sales of the Atacand and Atacand HCT products equals or exceeds certain threshold amounts in 2020, 2021, and 2022. Because we believe that the likelihood of meeting or exceeding the threshold amounts is not probable, we did not record a contingent liability in relation to the agreement. We accounted for this transaction as an asset purchase. The $46.7 million product rights intangible assets were recorded at their relative fair value, determined using Level 3 unobservable inputs. In order to determine the fair value of the product rights intangible assets, we used the present value of the estimated cash flows related to the product rights, using a discount rate of 10%. The product rights will be amortized in full over their 10-year useful lives, and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to September 30, 2018 and therefore no impairment loss was recognized for the nine months ended September 30, 2018. In February 2017, we entered into an agreement with Cranford Pharmaceuticals, LLC to purchase a distribution license, trademark, and certain finished goods inventory for Inderal XL for $20.2 million in cash (Note 9). We made the $20.2 million cash payment using cash on hand and capitalized $40 thousand of costs directly related to the asset purchase. We accounted for this transaction as an asset purchase. The $15.1 million product rights intangible asset was recorded at its relative fair value, determined using Level 3 unobservable inputs. In order to determine the fair value of the product rights intangible asset, we used the present value of the estimated cash flows related to the product rights, using a discount rate of 10%. The product rights will be amortized in full over its 10-year useful life, and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to September 30, 2018 and therefore no impairment loss was recognized for the nine months ended September 30, 2018. We also recorded $5.0 million of finished goods inventory. The fair value of the finished goods inventory was determined based on the estimated selling price to be generated from the finished goods, less costs to sell, including a reasonable margin. In February 2017, we entered into an agreement with Holmdel Pharmaceuticals, LP to purchase the NDA, trademark, and certain finished goods inventory for InnoPran XL, including a license to an Orange Book listed patent, for $30.6 million in cash (Note 9). We made the $30.6 million cash payment using $30.0 million of funds from our former Line of Credit and $0.6 million of cash on hand. We also capitalized $0.1 million of costs directly related to the asset purchase. We accounted for this transaction as an asset purchase. The $19.0 million product rights intangible asset was recorded at its relative fair value, determined using Level 3 unobservable inputs. In order to determine the fair value of the product rights intangible asset, we used the present value of the estimated cash flows related to the product rights, using a discount rate of 10%. The product rights will be amortized in full over its 10-year useful life, and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to September 30, 2018 and therefore no impairment loss was recognized for the nine months ended September 30, 2018. We also recorded $11.6 million of finished goods inventory. The fair value of the finished goods inventory was determined based on the estimated selling price to be generated from the finished goods, less costs to sell, including a reasonable margin. |
BUSINESS, PRESENTATION, AND R_2
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
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, comprehensive income/(loss), and cash flows. The consolidated balance sheet at December 31, 2017, has been derived from audited financial statements of that date. The unaudited 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, 2017. |
Principles of consolidation | Principles of Consolidation The unaudited interim condensed consolidated financial statements include the accounts of ANI Pharmaceuticals, Inc. and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. |
Foreign Currency | Foreign Currency The company has a subsidiary located in Canada. The subsidiary conducts its transactions in U.S. dollars and Canadian dollars, but its functional currency is the U.S. dollar. The results of any non-U.S. dollar transactions are remeasured in U.S. dollars at the average exchange rates during the period and resulting foreign currency transaction gains and losses are included in the determination of net income. Unless otherwise noted, all references to “$” or “dollar” refer to the U.S. dollar. |
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, administrative fees and rebates, government rebates, returns and other allowances, allowance for inventory obsolescence, valuation of financial instruments and intangible assets, accruals for contingent liabilities, fair value of long-lived assets, income tax provision, deferred taxes and valuation allowance, purchase price allocations, and the depreciable lives of long-lived assets. Because of the uncertainties inherent in such estimates, actual results may differ from those estimates. Management periodically evaluates estimates used in the preparation of the financial statements for reasonableness. |
Geographic Information | Geographic Information Based on the distinct nature of our operations, our internal management structure, and the financial information that is evaluated regularly by our Chief Operating Decision Maker (“ The following table depicts the Company’s revenue by geographic operations during the following periods: (in thousands) Three Months Ended Nine Months Ended Location of Operations September 30, September 30, September 30, September 30, United States $ 48,961 $ 48,164 $ 142,712 $ 129,556 Canada 1,742 - 1,742 - Total Revenue $ 50,703 $ 48,164 $ 144,454 $ 129,556 The following table depicts the Company’s property, plant, and equipment, net according to geographic location as of: (in thousands) September 30, December 31, United States $ 23,645 $ 20,403 Canada 13,773 - Total Property, Plant, and Equipment, net $ 37,418 $ 20,403 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recent Accounting Pronouncements Not Yet Adopted In October 2018, the Financial Accounting Standards Board (“FASB”) issued guidance for accounting for derivatives and hedging. The guidance provides for the inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index swap rate as a benchmark interest rate for hedge accounting purposes. In July 2017, the Financial Conduct Authority in the United Kingdom announced that it would phase out London Interbank Offered Rate (“LIBOR”) as a benchmark by the end of 2021. As a result, the U.S. Federal Reserve identified the SOFR as its preferred alternative reference rate, calculated with a broad set of short-term repurchase agreements backed by treasury securities. Amounts drawn under our five-year senior secured credit facility bear interest rates in relation to LIBOR, and our interest rate swap is designated in LIBOR. The guidance is effective for reporting periods beginning after December 15, 2018 and early adoption is permitted. The guidance must be adopted on a modified retrospective basis and provides for certain practical expedients. We will adopt this guidance as of January 1, 2019. In August 2018, the Securities and Exchange Commission (“SEC”) adopted the final rule amending certain disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded. In addition, the amendments expand the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The rule was effective on November 5, 2018 and will be effective for the quarter that begins after the effective date. The adoption of this guidance will result in the inclusion of the statement of stockholder’s equity in our interim financial statement filings. In August 2018, the FASB issued guidance modifying the disclosure requirements on fair value measurements. The amendments add, modify, and eliminate certain disclosure requirements on fair value measurements. The guidance is effective for reporting periods beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact, if any, that the adoption of this guidance will have on our consolidated financial statements. In June 2018, the FASB issued guidance simplifying the accounting for nonemployee stock-based compensation awards. The guidance aligns the measurement and classification for employee stock-based compensation awards to nonemployee stock-based compensation awards. Under the guidance, nonemployee awards will be measured at their grant date fair value. Upon transition, the existing nonemployee awards will be measured at fair value as of the adoption date. The guidance is effective for reporting periods beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact, if any, that the adoption of this guidance will have on our consolidated financial statements. In June 2016, the FASB issued guidance with respect to measuring credit losses on financial instruments, including trade receivables. The guidance eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate can now reflect an entity's current estimate of all future expected credit losses. Under the previous guidance, an entity only considered past events and current conditions. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of certain amendments of this guidance must be applied on a modified retrospective basis and the adoption of the remaining amendments must be applied on a prospective basis. We currently expect that the adoption of this guidance will likely change the way we assess the collectability of our receivables and recoverability of other financial instruments. We have not yet begun to evaluate the specific impacts of this guidance nor have we determined the manner in which we will adopt this guidance. In February 2016 , the FASB issued guidance for accounting for leases. The guidance requires lessees to recognize assets and liabilities related to long-term leases on the balance sheet and expands disclosure requirements regarding leasing arrangements. In July 2018 , the FASB issued additional guidance, which offers a transition option to entities adopting the new lease standards. Under the transition option, entities can elect to apply the new guidance using a modified retrospective approach at the beginning of the year in which the new lease standard is adopted, rather than to the earliest comparative period presented in their financial statements. The guidance is effective for reporting periods beginning after December 15, 2018 and early adoption is permitted. The guidance must be adopted on a modified retrospective basis and provides for certain practical expedients. We will elect to use the transition option and adopt the guidance using the modified retrospective approach as of January 1, 2019 . We are currently reviewing our leases and other contracts to determine the impact the adoption of this guidance will have on our consolidated financial statements, and we will continue to assess any new lease arrangements entered into during 2018 . We currently expect that the adoption of this guidance will likely change the way we account for our operating leases and will likely result in recording right-of-use assets and liabilities in our consolidated balance sheets and result in additional lease-related disclosures in the footnotes to our consolidated 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 condensed consolidated statements of operations, balance sheets, or cash flows. Recently Adopted Accounting Pronouncements In August 2017, the FASB issued guidance improving accounting for hedging activities. The guidance is intended to simplify hedge accounting by better aligning how an entity’s risk management activities and hedging relationships are presented in its financial statements. The guidance also simplifies the application of hedge accounting guidance in certain situations. The guidance is effective for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption was permitted, including adoption in an interim period. The guidance with respect to the cash flow and net investment hedge relationships existing on the date of adoption must be applied on a modified retrospective basis and the new disclosure requirements must be applied on a prospective basis. We adopted this guidance as of January 1, 2018. The adoption of this guidance did not have a material impact on our consolidated financial statements. However, the adoption of this guidance did impact how we accounted for the interest rate swap we entered into in April 2018. See Note 5 for further details regarding the interest rate swap. In May 2017, the FASB issued guidance clarifying when modification accounting should be used for changes to the terms or conditions of a share-based payment award. The guidance does not change the accounting for modifications, but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The guidance is effective for the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption was permitted, including adoption in an interim period. We adopted this guidance as of January 1, 2018 on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial statements. In May 2014, the 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. In August 2015, the FASB issued guidance approving a one-year deferral, 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. In March 2016, the FASB issued guidance to clarify the implementation guidance on principal versus agent considerations for reporting revenue gross rather than net, with the same deferred effective date. In April 2016, the FASB issued guidance to clarify the implementation guidance on identifying performance obligations and the accounting for licenses of intellectual property, with the same deferred effective date. In May 2016, the FASB issued guidance rescinding SEC paragraphs related to revenue recognition, pursuant to two SEC Staff Announcements at the March 3, 2016 Emerging Issues Task Force meeting. In May 2016, the FASB also issued guidance to clarify the implementation guidance on assessing collectability, presentation of sales tax, noncash consideration, and contracts and contract modifications at transition, with the same effective date. In September 2017, the FASB issued guidance amending and rescinding prior SEC staff announcements and observer comments related to revenue recognition, pursuant to the SEC Staff Announcement at the July 20, 2017 Emerging Issues Task Force meeting. We performed a comprehensive review of our existing revenue arrangements as of January 1, 2018 following the five-step model. Our analysis indicated that there were no significant changes to how the amount and timing of revenue is recognized under the new guidance as compared to existing guidance. Additionally, our analysis indicated that there were no significant changes to how costs to obtain and fulfill our customer contracts are recognized under the new guidance as compared to existing guidance. We adopted this guidance as of January 1, 2018 using the modified retrospective method and the impact of adoption on our consolidated balance sheet, statement of operations, and statement of cash flows was not material. The adoption of the new guidance impacted the way we analyze, document, and disclose revenue recognition under customer contracts beginning on January 1, 2018 and resulted in additional disclosures in our financial statements. ANI Canada adopted this guidance as of the acquisition date, August 6, 2018. The adoption of this guidance did not have a material impact on our consolidated financial statements. |
BUSINESS, PRESENTATION, AND R_3
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Revenue from External Customers by Geographic Areas | The following table depicts the Company’s revenue by geographic operations during the following periods: (in thousands) Three Months Ended Nine Months Ended Location of Operations September 30, September 30, September 30, September 30, United States $ 48,961 $ 48,164 $ 142,712 $ 129,556 Canada 1,742 - 1,742 - Total Revenue $ 50,703 $ 48,164 $ 144,454 $ 129,556 |
Schedule of LongLived Assets by Geographical Areas | The following table depicts the Company’s property, plant, and equipment, net according to geographic location as of: (in thousands) September 30, December 31, United States $ 23,645 $ 20,403 Canada 13,773 - Total Property, Plant, and Equipment, net $ 37,418 $ 20,403 |
REVENUE RECOGNITION AND RELAT_2
REVENUE RECOGNITION AND RELATED ALLOWANCES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition [Abstract] | |
Disaggregation of Revenue | The following table depicts the disaggregation of revenue according to contract type: Three Months Ended Nine Months Ended (in thousands) September 30, September 30, September 30, September 30, Sales of generic pharmaceutical products $ 30,287 $ 30,546 $ 83,716 $ 88,608 Sales of branded pharmaceutical products 14,589 15,688 41,714 35,398 Sales of contract manufactured products 2,826 1,829 5,450 5,151 Royalties from licensing agreements 2,409 - 12,560 - Product development services 288 - 288 - Other (1) 304 101 726 399 Total net revenues $ 50,703 $ 48,164 $ 144,454 $ 129,556 (1) Primarily includes laboratory services and royalties on sales of contract manufactured products |
Second Disaggregation Of Revenue | The following table depicts revenue recognized during the following periods: Three Months Ended Nine Months Ended (in thousands) September 30, September 30, September 30, September 30, Performance obligations transferred at a point in time $ 50,415 $ 48,164 $ 144,166 $ 129,556 Performance obligations transferred over time 288 - 288 - Total $ 50,703 $ 48,164 $ 144,454 $ 129,556 |
Schedule of Valuation and Qualifying Accounts Disclosure | The following table summarizes activity in the consolidated balance sheets for accruals and allowances for the nine months ended September 30, 2018 and 2017, respectively: (in thousands) Accruals for Chargebacks, Rebates, Returns, and Other Allowances Administrative Prompt Government Fees and Other Payment Chargebacks Rebates Returns Rebates Discounts Balance at December 31, 2016 $ 26,785 $ 5,891 $ 5,756 $ 3,550 $ 1,554 Accruals/Adjustments 133,849 7,807 8,949 16,840 5,960 Credits Taken Against Reserve (134,412 ) (7,943 ) (6,388 ) (15,448 ) (5,617 ) Balance at September 30, 2017 $ 26,222 $ 5,755 $ 8,317 $ 4,942 $ 1,897 Balance at December 31, 2017 $ 28,230 $ 7,930 $ 8,274 $ 5,226 $ 1,834 Accruals/Adjustments 170,533 8,097 10,942 23,148 6,744 Credits Taken Against Reserve (156,750 ) (7,013 ) (8,376 ) (21,418 ) (6,373 ) Balance at September 30, 2018 $ 42,013 $ 9,014 $ 10,840 $ 6,956 $ 2,205 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following presents the preliminary allocation of the preliminary purchase price to the assets acquired and liabilities assumed on August 6, 2018: (in thousands) Total Purchase Consideration $ 17,287 Cash and cash equivalents 220 Accounts receivable 1,311 Inventories 2,197 Prepaid expenses and other current assets 361 Property and equipment 13,935 Goodwill 2,342 Total assets acquired 20,366 Accounts payable and other current liabilities 2,413 Deferred revenue 666 Total liabilities assumed 3,079 Net assets acquired $ 17,287 |
Business Acquisition, Pro Forma Information | The following unaudited pro forma condensed combined financial information summarizes the results of operations for the periods indicated as if the WellSpring acquisition had been completed as of January 1, 2017. Three Months Ended Nine Months Ended (in thousands) September 30, 2018 September 30, 2017 (1) September 30, 2018 September 30, 2017 (1) Net revenues $ 51,384 $ 51,676 $ 151,091 $ 137,884 Net income $ 4,456 $ 8,683 $ 7,812 $ 10,108 (1) Net income for the three and nine months ended September 30, 2017 includes the impact to WellSpring of $4.4 million of related party debt forgiveness. |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Debt | The carrying value of the Notes is as follows as of: (in thousands) September 30, 2018 December 31, 2017 Principal amount $ 143,750 $ 143,750 Unamortized debt discount (8,643 ) (13,924 ) Deferred financing costs (985 ) (1,618 ) Net carrying value $ 134,122 $ 128,208 |
Schedule of Long-term Debt Instruments | The carrying value of the current and long-term components of the Term Loan as of September 30, 2018 and December 31, 2017 are: Current (in thousands) September 30, 2018 December 31, 2017 Current borrowing on secured term loan $ 6,094 $ 3,750 Unamortized deferred financing costs (402 ) (397 ) Current component of long-term borrowing, net of unamortized deferred financing costs $ 5,692 $ 3,353 Long-Term (in thousands) September 30, 2018 December 31, 2017 Long-term borrowing on secured term loan $ 67,031 $ 71,250 Unamortized deferred financing costs (1,077 ) (1,304 ) Long-term borrowing, net of unamortized deferred financing costs and current borrowing component $ 65,954 $ 69,946 |
Interest Income and Interest Expense Disclosure | The following table sets forth the components of total interest expense related to the Notes and Term Loan recognized in the accompanying unaudited interim condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended (in thousands) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Contractual coupon $ 1,835 $ 1,078 $ 5,393 $ 3,234 Amortization of debt discount 1,783 1,692 5,280 5,007 Amortization of finance fees 370 211 1,111 633 Capitalized interest (174 ) (143 ) (552 ) (367 ) $ 3,814 $ 2,838 $ 11,232 $ 8,507 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Earnings per share for the three and nine months ended September 30, 2018 and 2017 are calculated for basic and diluted earnings per share as follows: Basic Diluted Basic Diluted (in thousands, except per share amounts) Three Months Ended September 30, Three Months Ended September 30, Nine Months Ended September30, Nine Months Ended September 30, 2018 2017 2018 2017 2018 2017 2018 2017 Net income $ 5,037 $ 4,720 $ 5,037 $ 4,720 $ 10,064 $ 8,553 $ 10,064 $ 8,553 Net income allocated to restricted stock (51 ) (35 ) (51 ) (35 ) (101 ) (64 ) (101 ) (64 ) Net income allocated to common shares $ 4,986 $ 4,685 $ 4,986 $ 4,685 $ 9,963 $ 8,489 $ 9,963 $ 8,489 Basic Weighted-Average Shares Outstanding 11,706 11,553 11,706 11,553 11,659 11,542 11,659 11,542 Dilutive effect of stock options and ESPP 98 124 108 124 Diluted Weighted-Average Shares Outstanding 11,804 11,677 11,767 11,666 Earnings Per Share $ 0.43 $ 0.41 $ 0.42 $ 0.40 $ 0.85 $ 0.74 $ 0.85 $ 0.73 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consist of the following as of: (in thousands) September 30, 2018 (1) December 31, Raw materials $ 26,653 $ 22,139 Packaging materials 2,283 1,527 Work-in-progress 1,282 510 Finished goods 10,317 13,901 (2) 40,535 38,077 Reserve for excess/obsolete inventories (529 ) (350 ) Inventories, net $ 40,006 $ 37,727 (1) Includes inventory acquired in acquisition of WellSpring (Note 3). (2) Includes finished goods acquired in asset purchases (Note 13). |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant, and equipment consist of the following as of: (in thousands) September 30, 2018 (1) December 31, 2017 Land $ 4,558 $ 160 Buildings 6,725 3,835 Machinery, furniture, and equipment 23,038 12,334 Construction in progress 10,744 10,663 45,065 26,992 Less: accumulated depreciation (7,647 ) (6,589 ) Property, Plant, and Equipment, net $ 37,418 $ 20,403 (1) Includes property, plant, and equipment acquired in acquisition of WellSpring (Note 3). |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The components of net definite-lived intangible assets are as follows: (in thousands) September 30, 2018 December 31, 2017 Weighted Average Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortization Period Acquired ANDA intangible assets $ 46,194 $ (15,940 ) $ 42,076 $ (12,592 ) 10.0 years NDAs and product rights 230,974 (55,939 ) 230,974 (37,091 ) 10.0 years Marketing and distribution rights 10,423 (6,569 ) 11,042 (5,087 ) 4.7 years Non-compete agreement 624 (223 ) 624 (156 ) 7.0 years $ 288,215 $ (78,671 ) $ 284,716 $ (54,926 ) |
Finite-lived Intangible Assets Amortization Expense | Expected future amortization expense is as follows: (in thousands) 2018 (remainder of the year) $ 7,940 2019 31,761 2020 31,279 2021 29,833 2022 26,428 2023 and thereafter 82,303 Total $ 209,544 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following table summarizes stock-based compensation expense incurred under the 2008 Plan and included in our accompanying unaudited interim condensed consolidated statements of operations: (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Cost of sales $ 24 $ 19 $ 66 $ 68 Research and development 184 173 564 485 Selling, general, and adminstrative 1,564 1,270 4,266 4,059 $ 1,772 $ 1,462 $ 4,896 $ 4,612 |
Schedule of Share-based Compansation, Stock Option And Restricted Stock, Activity | A summary of stock option and restricted stock activity under the 2008 Plan during the nine months ended September 30, 2018 and 2017 is presented below: (in thousands) Options RSAs Outstanding December 31, 2016 578 63 Granted 192 50 Options Exercised/RSAs Vested (7 ) (27 ) (1) Forfeited (3 ) - Outstanding September 30, 2017 760 86 Outstanding December 31, 2017 767 86 Granted 156 65 Options Exercised/RSAs Vested (140 ) (33 ) (2) Forfeited (22 ) - Outstanding September 30, 2018 761 118 (1) (2) |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
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 September 30, 2018 and December 31, 2017, by level within the fair value hierarchy: (in thousands) Description Fair Value at September 30, 2018 Level 1 Level 2 Level 3 Assets Interest rate swap $ 699 $ - $ 699 $ - Liabilities CVRs $ - $ - $ - $ - Description Fair Value at December 31, 2017 Level 1 Level 2 Level 3 Assets Interest rate swap $ - $ - $ - $ - Liabilities CVRs $ - $ - $ - $ - |
BUSINESS, PRESENTATION, AND R_4
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | $ 50,703 | $ 48,164 | $ 144,454 | $ 129,556 |
United States [Member] | ||||
Revenues | 48,961 | 48,164 | 142,712 | 129,556 |
Canada [Member] | ||||
Revenues | $ 1,742 | $ 0 | $ 1,742 | $ 0 |
BUSINESS, PRESENTATION, AND R_5
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS (Details 1) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Property, Plant, and Equipment | $ 37,418 | [1] | $ 20,403 |
United States [Member] | |||
Property, Plant, and Equipment | 23,645 | 20,403 | |
Canada [Member] | |||
Property, Plant, and Equipment | $ 13,773 | $ 0 | |
[1] | Includes property, plant, and equipment acquired in acquisition of WellSpring (Note 3). |
BUSINESS, PRESENTATION, AND R_6
BUSINESS, PRESENTATION, AND RECENT ACCOUNTING PRONOUNCEMENTS (Details Textual) - WellSpring Pharma Services Inc [Member] $ in Millions | Aug. 06, 2018USD ($) |
Business Combination Purchase Price Before Adjustments | $ 18 |
Business Combination, Consideration Transferred | $ 17.3 |
REVENUE RECOGNITION AND RELAT_3
REVENUE RECOGNITION AND RELATED ALLOWANCES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Revenue Recognition | $ 50,703 | $ 48,164 | $ 144,454 | $ 129,556 | |
Sales of generic pharmaceutical products [Member] | |||||
Revenue Recognition | 30,287 | 30,546 | 83,716 | 88,608 | |
Sales of branded pharmaceutical products [Member] | |||||
Revenue Recognition | 14,589 | 15,688 | 41,714 | 35,398 | |
Sales of contract manufactured products [Member] | |||||
Revenue Recognition | 2,826 | 1,829 | 5,450 | 5,151 | |
Royalties from licensing Agreements [Member] | |||||
Revenue Recognition | 2,409 | 0 | 12,560 | 0 | |
Product development services [Member] | |||||
Revenue Recognition | 288 | 0 | 288 | 0 | |
Other [Member] | |||||
Revenue Recognition | [1] | $ 304 | $ 101 | $ 726 | $ 399 |
[1] | Primarily includes laboratory services and royalties on sales of contract manufactured products |
REVENUE RECOGNITION AND RELAT_4
REVENUE RECOGNITION AND RELATED ALLOWANCES (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | $ 50,703 | $ 48,164 | $ 144,454 | $ 129,556 |
Performance obligations transferred at a point in time [Member] | ||||
Revenues | 50,415 | 48,164 | 144,166 | 129,556 |
Performance obligations transferred over time [Member] | ||||
Revenues | $ 288 | $ 0 | $ 288 | $ 0 |
REVENUE RECOGNITION AND RELAT_5
REVENUE RECOGNITION AND RELATED ALLOWANCES (Details 2) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | $ 34,686 | |
Ending balance | 50,603 | |
Chargebacks [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | 28,230 | $ 26,785 |
Accruals/Adjustments | 170,533 | 133,849 |
Credits Taken Against Reserve | (156,750) | (134,412) |
Ending balance | 42,013 | 26,222 |
Government Rebates [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | 7,930 | 5,891 |
Accruals/Adjustments | 8,097 | 7,807 |
Credits Taken Against Reserve | (7,013) | (7,943) |
Ending balance | 9,014 | 5,755 |
Returns [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | 8,274 | 5,756 |
Accruals/Adjustments | 10,942 | 8,949 |
Credits Taken Against Reserve | (8,376) | (6,388) |
Ending balance | 10,840 | 8,317 |
Administrative Fees And Other Rebates [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | 5,226 | 3,550 |
Accruals/Adjustments | 23,148 | 16,840 |
Credits Taken Against Reserve | (21,418) | (15,448) |
Ending balance | 6,956 | 4,942 |
Prompt Payment Discounts [Member] | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | 1,834 | 1,554 |
Accruals/Adjustments | 6,744 | 5,960 |
Credits Taken Against Reserve | (6,373) | (5,617) |
Ending balance | $ 2,205 | $ 1,897 |
REVENUE RECOGNITION AND RELAT_6
REVENUE RECOGNITION AND RELATED ALLOWANCES (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Revenues | $ 50,703 | $ 48,164 | $ 144,454 | $ 129,556 | |
Contract with Customer, Asset, Net | 14 | 14 | |||
Deferred Revenue, Current | 735 | 735 | $ 0 | ||
Sales of contract manufactured products [Member] | |||||
Revenue, Remaining Performance Obligation, Amount | 5,700 | 5,700 | |||
Performance Obligation From Prior Period [Member] | |||||
Revenues | 6,400 | ||||
Product Development Services [Member] | |||||
Revenue, Remaining Performance Obligation, Amount | $ 3,500 | $ 3,500 | |||
Maximum [Member] | Product Development Services [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 15 months | 15 months | |||
Minimum [Member] | Product Development Services [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 9 months | 9 months | |||
Customer One [Member] | Net Revenues [Member] | |||||
Concentration Risk, Percentage | 35.00% | 30.00% | 34.00% | 31.00% | |
Customer Two [Member] | Net Revenues [Member] | |||||
Concentration Risk, Percentage | 23.00% | 30.00% | 23.00% | 26.00% | |
Customer Three [Member] | Net Revenues [Member] | |||||
Concentration Risk, Percentage | 20.00% | 19.00% | 20.00% | 21.00% | |
Customer One Two And Three [Member] | Net Accounts Receivable [Member] | |||||
Concentration Risk, Percentage | 80.00% |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) - USD ($) $ in Thousands | Aug. 06, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Total Purchase Consideration | $ 17,287 | ||
Cash and cash equivalents | 220 | ||
Accounts receivable | 1,311 | ||
Inventories | 2,197 | ||
Prepaid expenses and other current assets | 361 | ||
Property and equipment | 13,935 | ||
Goodwill | 2,342 | $ 4,180 | $ 1,838 |
Total assets acquired | 20,366 | ||
Accounts payable and other current liabilities | 2,413 | ||
Deferred revenue | 666 | ||
Total liabilities assumed | 3,079 | ||
Net assets acquired | $ 17,287 |
BUSINESS COMBINATION (Details 1
BUSINESS COMBINATION (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | [1] | Sep. 30, 2018 | Sep. 30, 2017 | [1] | |
Net revenues | $ 51,384 | $ 51,676 | $ 151,091 | $ 137,884 | ||
Net income | $ 4,456 | $ 8,683 | $ 7,812 | $ 10,108 | ||
[1] | Net income for the three and nine months ended September 30, 2017 includes the impact to WellSpring of $4.4 million of related party debt forgiveness. |
BUSINESS COMBINATION (Details T
BUSINESS COMBINATION (Details Textual) - USD ($) $ in Thousands | Aug. 06, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Revenues | $ 50,703 | $ 48,164 | $ 144,454 | $ 129,556 | ||||
Net Income (Loss) Attributable to Parent | 5,037 | 4,720 | 10,064 | 8,553 | ||||
Business Acquisition, Pro Forma Net Income (Loss) | $ 4,456 | $ 8,683 | [1] | $ 7,812 | $ 10,108 | [1] | ||
WellSpring Pharma Services Inc [Member] | ||||||||
Business Combination, Consideration Transferred | $ 17,300 | |||||||
Revenues | $ 1,700 | |||||||
Net Income (Loss) Attributable to Parent | $ (200) | |||||||
Business Acquisition Pro Forma Information Effective Tax Rate | 23.00% | 37.00% | ||||||
Business Combination, Acquisition Related Costs | $ 1,000 | |||||||
Business Combination Purchase Price Before Adjustments | $ 18,000 | |||||||
[1] | Net income for the three and nine months ended September 30, 2017 includes the impact to WellSpring of $4.4 million of related party debt forgiveness. |
INDEBTEDNESS (Details)
INDEBTEDNESS (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Principal amount | $ 143,750 | $ 143,750 |
Unamortized debt discount | (8,643) | (13,924) |
Deferred financing costs | (985) | (1,618) |
Net carrying value | $ 134,122 | $ 128,208 |
INDEBTEDNESS (Details 1)
INDEBTEDNESS (Details 1) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Borrowing on secured term loan | $ 143,750 | $ 143,750 |
Current component of long-term borrowing, net of unamortized deferred financing costs | 5,692 | 3,353 |
Long-term borrowing, net of unamortized deferred financing costs and current borrowing component | 65,954 | 69,946 |
Long Term Debt Current [Member] | ||
Borrowing on secured term loan | 6,094 | 3,750 |
Unamortized deferred financing costs | (402) | (397) |
Current component of long-term borrowing, net of unamortized deferred financing costs | 5,692 | 3,353 |
Long Term Debt Noncurrent [Member] | ||
Borrowing on secured term loan | 67,031 | 71,250 |
Unamortized deferred financing costs | (1,077) | (1,304) |
Long-term borrowing, net of unamortized deferred financing costs and current borrowing component | $ 65,954 | $ 69,946 |
INDEBTEDNESS (Details 2)
INDEBTEDNESS (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Contractual coupon | $ 1,835 | $ 1,078 | $ 5,393 | $ 3,234 |
Amortization of debt discount | 1,783 | 1,692 | 5,280 | 5,007 |
Amortization of finance fees | 370 | 211 | 1,111 | 633 |
Capitalized interest | (174) | (143) | (552) | (367) |
Interest Expense, Debt | $ 3,814 | $ 2,838 | $ 11,232 | $ 8,507 |
INDEBTEDNESS (Details Textual)
INDEBTEDNESS (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2014 | |
Long-term Debt, Gross | $ 143,750 | $ 143,750 | |
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 3.00% | ||
Debt Instrument, Unamortized Discount | $ 13,924 | $ 8,643 | |
Long-term Debt [Member] | |||
Debt Instrument, Interest Rate, Effective Percentage | 6.80% | ||
Senior Secured Credit Facility [Member] | Citizens Bank, N.A. [Member] | |||
Debt Instrument, Term | 5 years | ||
Debt Issuance Costs, Gross | $ 2,900 | ||
Prepaid Expenses and Other Current Assets [Member] | Revolving Credit Facility [Member] | |||
Debt Issuance Costs, Current, Net | 200 | ||
Other Long Term Assets [Member] | Revolving Credit Facility [Member] | |||
Debt Issuance Costs, Gross | 1,100 | ||
Other Noncurrent Assets [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000 | ||
Debt Issuance Costs, Noncurrent, Net | 700 | ||
Convertible Senior Notes [Member] | |||
Long-term Debt, Gross | $ 143,800 | ||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 3.00% | ||
Debt Instrument, Unamortized Discount | $ 33,600 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 96.21 | ||
Debt Instrument, Convertible, Conversion Price | $ 69.48 | ||
Convertible Senior Notes [Member] | Accrued Liabilities [Member] | |||
Interest Payable, Current | 400 | 1,400 | |
Term Loan [Member] | Citizens Bank, N.A. [Member] | |||
Debt Instrument Periodic Payment To Be Paid In Installments | 6,100 | ||
Debt Instrument, Face Amount | $ 75,000 | 73,100 | |
Debt Issuance Costs, Gross | 1,800 | ||
Current Term Loan [Member] | Citizens Bank, N.A. [Member] | |||
Debt Instrument, Face Amount | $ 6,100 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Apr. 29, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Derivative Asset, Notional Amount | $ 72,200 | $ 72,200 | ||
Other Assets, Noncurrent | 1,412 | 1,412 | $ 829 | |
Interest Rate Swap [Member] | ||||
Derivative, Maturity Date | Dec. 29, 2022 | |||
Derivative Asset, Notional Amount | $ 74,100 | $ 72,200 | $ 72,200 | |
Derivative, Swaption Interest Rate | 2.60% | 2.60% | ||
Other Assets, Noncurrent | $ 700 | $ 700 | ||
Unrealized Gain (Loss) on Interest Rate Cash Flow Hedges, Pretax, Accumulated Other Comprehensive Income (Loss) | 300 | 500 | ||
Interest Expense | 100 | 200 | ||
Derivative Asset, Fair Value, Gross Asset | $ 500 | $ 500 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net income, Basic | $ 5,037 | $ 4,720 | $ 10,064 | $ 8,553 |
Net income, Diluted | 5,037 | 4,720 | 10,064 | 8,553 |
Net income allocated to common shares, Basic | 4,986 | 4,685 | 9,963 | 8,489 |
Net income allocated to common shares, Diluted | $ 4,986 | $ 4,685 | $ 9,963 | $ 8,489 |
Basic Weighted-Average Shares Outstanding, Basic and Diluted | 11,706 | 11,553 | 11,659 | 11,542 |
Dilutive effect of stock options and ESPP, Diluted | 98 | 124 | 108 | 124 |
Diluted Weighted-Average Shares Outstanding, Diluted | 11,804 | 11,677 | 11,767 | 11,666 |
Earnings Per Share, Basic | $ 0.43 | $ 0.41 | $ 0.85 | $ 0.74 |
Earnings Per Share, Diluted | $ 0.42 | $ 0.40 | $ 0.85 | $ 0.73 |
Restricted Stock [Member] | ||||
Net income allocated to restricted stock, Basic | $ (51) | $ (35) | $ (101) | $ (64) |
Net income allocated to restricted stock, Diluted | $ (51) | $ (35) | $ (101) | $ (64) |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4.8 | 4.8 | 4.7 | 4.7 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | [1] | Dec. 31, 2017 | |
Inventories | ||||
Raw materials | $ 26,653 | $ 22,139 | ||
Packaging materials | 2,283 | 1,527 | ||
Work-in-progress | 1,282 | 510 | ||
Finished goods | 10,317 | 13,901 | [2] | |
Inventory, Gross, Total | 40,535 | 38,077 | ||
Reserve for excess/obsolete inventories | (529) | (350) | ||
Inventories, net | $ 40,006 | $ 37,727 | ||
[1] | Includes inventory acquired in acquisition of WellSpring (Note 3). | |||
[2] | Includes finished goods acquired in asset purchases (Note 13). |
INVENTORIES (Details Textual)
INVENTORIES (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
One Supplier Three Months Ended September 30 2018 [Member] | ||||
Concentration Risk, Percentage | 36.00% | |||
Two Suppliers Nine Months Ended September 30 2018 [Member] | ||||
Concentration Risk, Percentage | 25.00% | |||
Two Suppliers - Three Months Ended September 30, 2017 [Member] | ||||
Concentration Risk, Percentage | 40.00% | |||
Two Suppliers Nine Months Ended September 30 2017 [Member] | ||||
Concentration Risk, Percentage | 24.00% |
PROPERTY, PLANT, AND EQUIPMEN_2
PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | [1] | Dec. 31, 2017 |
Property, Plant and Equipment, Gross, Total | $ 45,065 | $ 26,992 | |
Less: accumulated depreciation | (7,647) | (6,589) | |
Property, Plant, and Equipment, net | 37,418 | 20,403 | |
Land [Member] | |||
Property, Plant and Equipment, Gross, Total | 4,558 | 160 | |
Buildings [Member] | |||
Property, Plant and Equipment, Gross, Total | 6,725 | 3,835 | |
Machinery, furniture and equipment [Member] | |||
Property, Plant and Equipment, Gross, Total | 23,038 | 12,334 | |
Construction in progress [Member] | |||
Property, Plant and Equipment, Gross, Total | $ 10,744 | $ 10,663 | |
[1] | Includes property, plant, and equipment acquired in acquisition of WellSpring (Note 3). |
PROPERTY, PLANT, AND EQUIPMEN_3
PROPERTY, PLANT, AND EQUIPMENT (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Depreciation, Total | $ 0.6 | $ 0.3 | $ 1.3 | $ 0.9 |
Interest Costs Capitalized | $ 0.2 | $ 0.1 | $ 0.6 | $ 0.4 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | ||
Gross Carrying Amount | $ 288,215 | $ 284,716 |
Accumulated Amortization | (78,671) | (54,926) |
Acquired ANDA intangible assets | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Gross Carrying Amount | 46,194 | 42,076 |
Accumulated Amortization | $ (15,940) | (12,592) |
Weighted Average Amortization Period | 10 years | |
NDAs and product rights | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Gross Carrying Amount | $ 230,974 | 230,974 |
Accumulated Amortization | $ (55,939) | (37,091) |
Weighted Average Amortization Period | 10 years | |
Marketing and distribution rights | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Gross Carrying Amount | $ 10,423 | 11,042 |
Accumulated Amortization | $ (6,569) | (5,087) |
Weighted Average Amortization Period | 4 years 8 months 12 days | |
Non-compete agreement | ||
GOODWILL AND INTANGIBLE ASSETS | ||
Gross Carrying Amount | $ 624 | 624 |
Accumulated Amortization | $ (223) | $ (156) |
Weighted Average Amortization Period | 7 years |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Details 1) $ in Thousands | Sep. 30, 2018USD ($) |
GOODWILL AND INTANGIBLE ASSETS | |
2018 (remainder of the year) | $ 7,940 |
2,019 | 31,761 |
2,020 | 31,279 |
2,021 | 29,833 |
2,022 | 26,428 |
2023 and thereafter | 82,303 |
Total | $ 209,544 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
May 31, 2018 | Apr. 30, 2018 | Feb. 28, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Aug. 06, 2018 | |
GOODWILL AND INTANGIBLE ASSETS | |||||||||
Amortization of Intangible Assets | $ 7,900 | $ 6,800 | $ 23,700 | $ 20,000 | |||||
Payments to Acquire Intangible Assets | 5,169 | $ 50,956 | |||||||
Goodwill | 4,180 | 4,180 | $ 1,838 | $ 2,342 | |||||
Finite-Lived Intangible Assets, Gross | $ 288,215 | $ 288,215 | 284,716 | ||||||
Acquired Finite-lived Intangible Asset, Amortization Description | we are amortizing 80% of the value of the intangible assets over the first five years of useful lives of the assets and amortizing the remaining 20% of the value of the intangible assets over the second five years of useful lives of the assets. | ||||||||
WellSpring Pharma Services Inc [Member] | |||||||||
GOODWILL AND INTANGIBLE ASSETS | |||||||||
Goodwill | $ 2,400 | ||||||||
Inderal XL [Member] | |||||||||
GOODWILL AND INTANGIBLE ASSETS | |||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||||||
Finite-Lived Intangible Assets, Gross | $ 15,100 | ||||||||
Acquisition Costs Capitalized | 40 | ||||||||
Asset Acquisition Purchase Price | $ 20,200 | ||||||||
InnoPran XL [Member] | |||||||||
GOODWILL AND INTANGIBLE ASSETS | |||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||||||
Finite-Lived Intangible Assets, Gross | $ 19,000 | ||||||||
Acquisition Costs Capitalized | 100 | ||||||||
Asset Acquisition Purchase Price | 30,600 | ||||||||
InnoPran XL [Member] | Line of Credit [Member] | |||||||||
GOODWILL AND INTANGIBLE ASSETS | |||||||||
Payments to Acquire Intangible Assets | 30,000 | ||||||||
InnoPran XL [Member] | Cash [Member] | |||||||||
GOODWILL AND INTANGIBLE ASSETS | |||||||||
Payments to Acquire Intangible Assets | $ 600 | ||||||||
Abbreviated New Drug Applications [Member] | Impax Laboratories, Inc. [Member] | |||||||||
GOODWILL AND INTANGIBLE ASSETS | |||||||||
Payments to Acquire Intangible Assets | $ 2,300 | ||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||||||
Finite-Lived Intangible Assets, Gross | $ 1,000 | ||||||||
Acquisition Costs Capitalized | $ 100 | ||||||||
Acquired New Drug Applications [Member] | IDT Australia, Limited [Member] | |||||||||
GOODWILL AND INTANGIBLE ASSETS | |||||||||
Payments to Acquire Intangible Assets | $ 2,700 | ||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||||||
Finite-Lived Intangible Assets, Gross | $ 2,500 | ||||||||
Acquisition Costs Capitalized | $ 18 | ||||||||
AstraZeneca AB and AstraZeneca UK Limited [Member] | New Drug Applications [Member] | |||||||||
GOODWILL AND INTANGIBLE ASSETS | |||||||||
Payments to Acquire Intangible Assets | $ 46,500 | ||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||||||
Finite-Lived Intangible Assets, Gross | $ 46,700 | ||||||||
Acquisition Costs Capitalized | $ 200 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Allocated Share-based Compensation Expense | $ 1,772 | $ 1,462 | [1] | $ 4,896 | $ 4,612 |
Cost of Sales [Member] | 2008 Plan [Member] | |||||
Allocated Share-based Compensation Expense | 24 | 19 | 66 | 68 | |
Research and Development Expense [Member] | 2008 Plan [Member] | |||||
Allocated Share-based Compensation Expense | 184 | 173 | 564 | 485 | |
Selling, General and Administrative Expenses [Member] | 2008 Plan [Member] | |||||
Allocated Share-based Compensation Expense | $ 1,564 | $ 1,270 | $ 4,266 | $ 4,059 | |
[1] | Includes 11 thousand shares purchased from employees to cover employee income taxes related to income earned upon vesting of restricted stock. The shares purchased are held in treasury and the $659 thousand total purchase price for the shares is included in Treasury stock in our accompanying unaudited interim condensed consolidated balance sheets. |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details 1) - shares shares in Thousands | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | |||
Options [Member] | ||||
Option Shares | ||||
Outstanding at the beginning of the period (in shares) | 767 | 578 | ||
Granted (in shares) | 156 | 192 | ||
Options Exercised/RSAs Vested (in shares) | (140) | (7) | ||
Forfeited (in shares) | (22) | (3) | ||
Outstanding at the end of the period (in shares) | 761 | 760 | ||
RSAs [Member] | ||||
Option Shares | ||||
Outstanding at the beginning of the period (in shares) | 86 | 63 | ||
Granted (in shares) | 65 | 50 | ||
Options Exercised/RSAs Vested (in shares) | (33) | [1] | (27) | [2] |
Forfeited (in shares) | 0 | 0 | ||
Outstanding at the end of the period (in shares) | 118 | 86 | ||
[1] | Includes 11 thousand shares purchased from employees to cover employee income taxes related to income earned upon vesting of restricted stock. The shares purchased are held in treasury and the $659 thousand total purchase price for the shares is included in Treasury stock in our accompanying unaudited interim condensed consolidated balance sheets. | |||
[2] | Includes five thousand shares purchased from employees to cover employee income taxes related to income earned upon vesting of restricted stock. The shares purchased are held in treasury and the $259 thousand total purchase price for the shares is included in Treasury stock in our accompanying unaudited interim condensed consolidated balance sheets. |
STOCK-BASED COMPENSATION (Det_3
STOCK-BASED COMPENSATION (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Allocated Share-based Compensation Expense | $ 1,772 | $ 1,462 | [1] | $ 4,896 | $ 4,612 | |
Treasury Stock, Common, Value | $ 659 | $ 659 | $ 259 | |||
Treasury Stock, Common, Shares | 11,179 | 11,179 | 5,203 | |||
2008 Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 600,000 | 600,000 | ||||
Employee Stock Purchase Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 200,000 | 200,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Purchase Date | 15.00% | |||||
Employee Stock Purchase Plan [Member] | Cost of Sales [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Allocated Share-based Compensation Expense | $ 2 | 1 | $ 6 | 5 | ||
Employee Stock Purchase Plan [Member] | Research and Development Expense [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Allocated Share-based Compensation Expense | 5 | 8 | ||||
Employee Stock Purchase Plan [Member] | Selling, General and Administrative Expenses [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Allocated Share-based Compensation Expense | $ 15 | $ 11 | $ 43 | $ 50 | ||
[1] | Includes 11 thousand shares purchased from employees to cover employee income taxes related to income earned upon vesting of restricted stock. The shares purchased are held in treasury and the $659 thousand total purchase price for the shares is included in Treasury stock in our accompanying unaudited interim condensed consolidated balance sheets. |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Percent | 20.90% | 25.90% | 20.80% | 28.70% | |
Deferred Tax Assets, Valuation Allowance | $ 0.3 | $ 0.3 | $ 0.3 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 35.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES | ||||
Revenue, Net | $ 50,703 | $ 48,164 | $ 144,454 | $ 129,556 |
Percentage of Royalties on Net Sales of Unapproved Products | less than 1% | less than 1% | less than 1% | less than 1% |
Unapproved Products [Member] | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Revenue, Net | $ 6,200 | $ 7,900 | $ 18,300 | $ 20,900 |
Unapproved Products [Member] | Contract Customer [Member] | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Revenue, Net | $ 600 | $ 600 | $ 1,600 | $ 1,500 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
CVRs | ||
Liabilities | ||
Financial Liabilities Fair Value Disclosure | $ 0 | $ 0 |
Fair Value, Inputs, Level 1 [Member] | CVRs | ||
Liabilities | ||
Financial Liabilities Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | CVRs | ||
Liabilities | ||
Financial Liabilities Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | CVRs | ||
Liabilities | ||
Financial Liabilities Fair Value Disclosure | 0 | 0 |
Interest Rate Swap [Member] | ||
Assets | ||
Assets, Fair Value Disclosure | 699 | 0 |
Interest Rate Swap [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Assets | ||
Assets, Fair Value Disclosure | 0 | 0 |
Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Assets | ||
Assets, Fair Value Disclosure | 699 | 0 |
Interest Rate Swap [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets | ||
Assets, Fair Value Disclosure | $ 0 | $ 0 |
FAIR VALUE DISCLOSURES (Detai_2
FAIR VALUE DISCLOSURES (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||
May 31, 2018 | Apr. 30, 2018 | Feb. 28, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Payments to Acquire Intangible Assets | $ 5,169 | $ 50,956 | ||||||
Long-term Debt, Total | 134,100 | |||||||
Finite-Lived Intangible Assets, Gross | 288,215 | $ 284,716 | ||||||
Inventory, Finished Goods, Gross | 10,317 | [1] | 13,901 | [2] | ||||
InventoryRawMaterials | 26,653 | [1] | 22,139 | |||||
Derivative Asset, Notional Amount | $ 72,200 | |||||||
Measurement Input, Discount Rate [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Fair Value Input Discount Rate | 15.00% | |||||||
Inderal XL [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Finite-Lived Intangible Assets, Gross | $ 15,100 | |||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||
Acquisition Costs Capitalized | $ 40 | |||||||
Inventory, Finished Goods, Gross | 5,000 | |||||||
Asset Acquisition Purchase Price | $ 20,200 | |||||||
Inderal XL [Member] | Measurement Input, Discount Rate [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Fair Value Input Discount Rate | 10.00% | |||||||
InnoPran XL [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Finite-Lived Intangible Assets, Gross | $ 19,000 | |||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||
Acquisition Costs Capitalized | $ 100 | |||||||
Inventory, Finished Goods, Gross | 11,600 | |||||||
Asset Acquisition Purchase Price | $ 30,600 | |||||||
InnoPran XL [Member] | Measurement Input, Discount Rate [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Fair Value Input Discount Rate | 10.00% | |||||||
InnoPran XL [Member] | Cash [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Payments to Acquire Intangible Assets | $ 600 | |||||||
InnoPran XL [Member] | Line of Credit [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Payments to Acquire Intangible Assets | $ 30,000 | |||||||
Fair Value, Inputs, Level 1 [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Notes Payable, Fair Value Disclosure | $ 146,800 | |||||||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Interest Rate Derivative Assets, at Fair Value | $ 700 | |||||||
Equipment [Member] | Impax Laboratories, Inc. [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Finite-Lived Intangible Assets, Gross | $ 58 | |||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | |||||||
Teva Pharmaceuticals [Member] | Milestone One [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Contingent Liability Not Recognized | $ 25,000 | |||||||
Teva Pharmaceuticals [Member] | Milestone Two [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Contingent Liability Not Recognized | 15,000 | |||||||
Abbreviated New Drug Applications [Member] | Impax Laboratories, Inc. [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Payments to Acquire Intangible Assets | 2,300 | |||||||
Finite-Lived Intangible Assets, Gross | $ 1,000 | |||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||
Acquisition Costs Capitalized | $ 100 | |||||||
Contingent Consideration In An Asset Purchase | $ 10,000 | |||||||
Abbreviated New Drug Applications [Member] | Impax Laboratories, Inc. [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Fair Value Input Discount Rate | 15.00% | |||||||
Abbreviated New Drug Applications [Member] | Impax Laboratories, Inc. [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Fair Value Input Discount Rate | 10.00% | |||||||
Abbreviated New Drug Applications [Member] | IDT Australia, Limited [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Fair Value Input Discount Rate | 15.00% | |||||||
Abbreviated New Drug Applications [Member] | IDT Australia, Limited [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Fair Value Input Discount Rate | 10.00% | |||||||
Acquired New Drug Applications [Member] | IDT Australia, Limited [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Payments to Acquire Intangible Assets | $ 2,700 | |||||||
Finite-Lived Intangible Assets, Gross | $ 2,500 | |||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||
Acquisition Costs Capitalized | $ 18 | |||||||
InventoryRawMaterials | $ 200 | |||||||
In Process Research and Development [Member] | Impax Laboratories, Inc. [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Finite-Lived Intangible Assets, Gross | $ 1,300 | |||||||
In Process Research and Development [Member] | Impax Laboratories, Inc. [Member] | Measurement Input, Discount Rate [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Fair Value Input Discount Rate | 75.00% | |||||||
AstraZeneca AB and AstraZeneca UK Limited [Member] | New Drug Applications [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Payments to Acquire Intangible Assets | 46,500 | |||||||
Finite-Lived Intangible Assets, Gross | $ 46,700 | |||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||
Acquisition Costs Capitalized | $ 200 | |||||||
Accumulated Capitalized Interest Costs | 200 | |||||||
Contingent Consideration In An Asset Purchase | $ 3,000 | |||||||
AstraZeneca AB and AstraZeneca UK Limited [Member] | New Drug Applications [Member] | Measurement Input, Discount Rate [Member] | ||||||||
Fair Value Inputs, Assets, Quantitative Information | ||||||||
Fair Value Input Discount Rate | 10.00% | |||||||
[1] | Includes inventory acquired in acquisition of WellSpring (Note 3). | |||||||
[2] | Includes finished goods acquired in asset purchases (Note 13). |