Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 23, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 0-26301 | |
Entity Registrant Name | United Therapeutics Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 52-1984749 | |
Entity Address, Address Line One | 1040 Spring Street | |
Entity Address, City or Town | Silver Spring | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20910 | |
City Area Code | 301 | |
Local Phone Number | 608-9292 | |
Security 12b Title | Common Stock, par value $0.01 per share | |
Trading Symbol | UTHR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 43,881,350 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001082554 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 719.7 | $ 669.2 |
Marketable investments | 850.3 | 746.7 |
Accounts receivable, no allowance for 2019 and 2018 | 183.6 | 175.7 |
Inventories, net | 94.1 | 101 |
Other current assets | 85.7 | 75.4 |
Total current assets | 1,933.4 | 1,768 |
Marketable investments | 730.4 | 442.6 |
Goodwill and other intangible assets, net | 158.4 | 170.8 |
Property, plant and equipment, net | 678.3 | 699.7 |
Deferred tax assets, net | 268.1 | 95.7 |
Other non-current assets | 231 | 224.2 |
Total assets | 3,999.6 | 3,401 |
Current liabilities: | ||
Accounts payable and accrued expenses | 161.1 | 166.1 |
Line of credit (current) | 250 | |
Share tracking awards plan | 18.3 | 72.2 |
Other current liabilities | 40.5 | 38.3 |
Total current liabilities | 469.9 | 276.6 |
Line of credit (non-current) | 750 | 250 |
Other non-current liabilities | 63.9 | 66.6 |
Total liabilities | 1,283.8 | 593.2 |
Commitments and contingencies | ||
Temporary equity | 19.2 | |
Stockholders' equity: | ||
Common stock, par value $.01, 245,000,000 shares authorized, 70,499,819 and 70,207,581 shares issued, and 43,880,603 and 43,588,365 shares outstanding at September 30, 2019 and December 31, 2018, respectively | 0.7 | 0.7 |
Additional paid-in capital | 2,025.8 | 1,940.2 |
Accumulated other comprehensive loss | (4.1) | (7.9) |
Treasury stock, 26,619,216 shares at September 30, 2019 and December 31, 2018 | (2,579.2) | (2,579.2) |
Retained earnings | 3,272.6 | 3,434.8 |
Total stockholders' equity | 2,715.8 | 2,788.6 |
Total liabilities and stockholders' equity | 3,999.6 | 3,401 |
Preferred stock | ||
Stockholders' equity: | ||
Preferred stock, par value $.01, 10,000,000 shares authorized, no shares issued | ||
Series A junior participating preferred stock | ||
Stockholders' equity: | ||
Preferred stock, par value $.01, 10,000,000 shares authorized, no shares issued |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts receivable, allowance (in dollars) | $ 0 | $ 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 245,000,000 | 245,000,000 |
Common stock, shares issued | 70,499,819 | 70,207,581 |
Common stock, shares outstanding | 43,880,603 | 43,588,365 |
Treasury stock, shares | 26,619,216 | 26,619,216 |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Series A junior participating preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 401.5 | $ 412.7 | $ 1,137.7 | $ 1,246.4 |
Operating expenses: | ||||
Cost of product sales | 33 | 51.9 | 88.8 | 166.8 |
Research and development | 85.7 | 101.1 | 1,069 | 219.1 |
Selling, general and administrative | 99.4 | 110.1 | 231 | 186.6 |
Total operating expenses | 218.1 | 263.1 | 1,388.8 | 572.5 |
Operating income (loss) | 183.4 | 149.6 | (251.1) | 673.9 |
Interest income | 12.1 | 7.9 | 32.7 | 19.9 |
Interest expense | (11.7) | (4.1) | (34.2) | (9.6) |
Other (expense) income, net | (16.9) | (0.9) | 19.3 | (4.8) |
Impairment of investment in privately-held company | (12.4) | (12.4) | ||
Total other (expense) income, net | (16.5) | (9.5) | 17.8 | (6.9) |
Income (loss) before income taxes | 166.9 | 140.1 | (233.3) | 667 |
Income tax (expense) benefit | (34.5) | (33.6) | 76.2 | (143.1) |
Net income (loss) | $ 132.4 | $ 106.5 | $ (157.1) | $ 523.9 |
Net income (loss) per common share: | ||||
Basic (in dollars per share) | $ 3.02 | $ 2.44 | $ (3.59) | $ 12.04 |
Diluted (in dollars per share) | $ 3.01 | $ 2.42 | $ (3.59) | $ 11.91 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 43.9 | 43.6 | 43.8 | 43.5 |
Diluted (in shares) | 44 | 44 | 43.8 | 44 |
Net product sales | ||||
Revenues: | ||||
Total revenues | $ 401.5 | $ 412.7 | $ 1,137.7 | $ 1,246.4 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Comprehensive income: | ||||
Net income (loss) | $ 132.4 | $ 106.5 | $ (157.1) | $ 523.9 |
Defined benefit pension plan: | ||||
Actuarial loss arising during period, net of tax | (0.6) | |||
Amortization of actuarial gain and prior service cost included in net periodic pension cost, net of tax | (0.1) | 0.4 | (1.6) | 1 |
Total defined benefit pension plan, net of tax | (0.1) | 0.4 | (2.2) | 1 |
Unrealized gain (loss) on available-for-sale securities, net of tax | 1 | (0.7) | 6 | (3.6) |
Other comprehensive income (loss), net of tax | 0.9 | (0.3) | 3.8 | (2.6) |
Comprehensive income (loss) | $ 133.3 | $ 106.2 | $ (153.3) | $ 521.3 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Treasury Stock | Retained Earnings | Total |
Balance at Dec. 31, 2017 | $ 0.7 | $ 1,854.3 | $ (19.6) | $ (2,579.2) | $ 2,845.6 | $ 2,101.8 |
Balance (in shares) at Dec. 31, 2017 | 69.9 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 523.9 | 523.9 | ||||
Unrealized gain (loss) on available-for-sale securities | (3.6) | (3.6) | ||||
Defined benefit pension plan | 1 | 1 | ||||
Shares issued under employee stock purchase plan | 3.9 | 3.9 | ||||
Exercise of stock options | 15.5 | 15.5 | ||||
Exercise of stock options (in shares) | 0.3 | |||||
Share-based compensation | 50.3 | 50.3 | ||||
Balance at Sep. 30, 2018 | $ 0.7 | 1,924 | (22.2) | (2,579.2) | 3,369.5 | 2,692.8 |
Balance (in shares) at Sep. 30, 2018 | 70.2 | |||||
Balance at Jun. 30, 2018 | $ 0.7 | 1,903 | (21.9) | (2,579.2) | 3,263 | 2,565.6 |
Balance (in shares) at Jun. 30, 2018 | 70.2 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 106.5 | 106.5 | ||||
Unrealized gain (loss) on available-for-sale securities | (0.7) | (0.7) | ||||
Defined benefit pension plan | 0.4 | 0.4 | ||||
Shares issued under employee stock purchase plan | 1.8 | 1.8 | ||||
Exercise of stock options | 0.6 | 0.6 | ||||
Share-based compensation | 18.6 | 18.6 | ||||
Balance at Sep. 30, 2018 | $ 0.7 | 1,924 | (22.2) | (2,579.2) | 3,369.5 | 2,692.8 |
Balance (in shares) at Sep. 30, 2018 | 70.2 | |||||
Balance at Dec. 31, 2018 | $ 0.7 | 1,940.2 | (7.9) | (2,579.2) | 3,434.8 | 2,788.6 |
Balance (in shares) at Dec. 31, 2018 | 70.2 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (157.1) | (157.1) | ||||
Unrealized gain (loss) on available-for-sale securities | 6 | 6 | ||||
Defined benefit pension plan | (2.2) | (2.2) | ||||
Shares issued under employee stock purchase plan | 4.1 | 4.1 | ||||
Restricted stock units withheld for taxes | (2.1) | (2.1) | ||||
Common stock issued upon RSU vesting (in shares) | 0.1 | |||||
Exercise of stock options | 9.9 | 9.9 | ||||
Exercise of stock options (in shares) | 0.2 | |||||
Share-based compensation | 63 | 63 | ||||
Cumulative effect of accounting change | (5.1) | (5.1) | ||||
Reclassification from temporary equity to permanent equity | 10.8 | 10.8 | ||||
Deconsolidation of variable interest entity | (0.1) | (0.1) | ||||
Balance at Sep. 30, 2019 | $ 0.7 | 2,025.8 | (4.1) | (2,579.2) | 3,272.6 | 2,715.8 |
Balance (in shares) at Sep. 30, 2019 | 70.5 | |||||
Balance at Jun. 30, 2019 | $ 0.7 | 2,001.7 | (5) | (2,579.2) | 3,140.2 | 2,558.4 |
Balance (in shares) at Jun. 30, 2019 | 70.5 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 132.4 | 132.4 | ||||
Unrealized gain (loss) on available-for-sale securities | 1 | 1 | ||||
Defined benefit pension plan | (0.1) | (0.1) | ||||
Shares issued under employee stock purchase plan | 1.9 | 1.9 | ||||
Restricted stock units withheld for taxes | (0.2) | (0.2) | ||||
Share-based compensation | 22.5 | 22.5 | ||||
Deconsolidation of variable interest entity | (0.1) | (0.1) | ||||
Balance at Sep. 30, 2019 | $ 0.7 | $ 2,025.8 | $ (4.1) | $ (2,579.2) | $ 3,272.6 | $ 2,715.8 |
Balance (in shares) at Sep. 30, 2019 | 70.5 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Millions | Sep. 30, 2019USD ($)$ / sharesshares |
Common stock subject to repurchase | $ | $ 10.8 |
Temporary equity common stock subject to repurchase | |
Common stock issued (in shares) | 200,000 |
Common stock issued split (in shares) | 400,000 |
Repurchase price (in dollars per share) | $ / shares | $ 27.21 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (157.1) | $ 523.9 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 33.4 | 25.4 |
Share-based compensation expense (benefit) | 15.9 | (29.2) |
Impairment of investment in privately-held company | 12.4 | |
Deconsolidation of variable interest entity | 2 | |
Intangible asset impairment charges | 8.8 | |
Asset impairment charges | 8.4 | |
Other | (27.9) | 4.4 |
Impairment write downs | 8.4 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (7.8) | 81.9 |
Inventories | 10.5 | 4.2 |
Accounts payable and accrued expenses | (4.9) | 21.9 |
Other assets and liabilities | (190.4) | 48.1 |
Net cash (used in) provided by operating activities | (309.1) | 693 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (59) | (132.6) |
Decrease in cash due to deconsolidation of variable interest entity | (12.5) | |
Deposits | (5.6) | (33) |
Purchases of held-to-maturity and other investments | (63.4) | |
Sales/maturities of held-to-maturity investments | 39.7 | 53 |
Purchases of available-for-sale investments | (974.7) | (618.5) |
Sales/maturities of available-for-sale investments | 618.5 | 175.2 |
Purchase of investments in privately-held companies | (8) | (5) |
Acquisition, net of cash acquired | (124.1) | |
Net cash used in investing activities | (401.6) | (748.4) |
Cash flows from financing activities: | ||
Proceeds from line of credit | 800 | 250 |
Repayment of line of credit | (50) | (250) |
Payments of debt issuance costs | (0.7) | (13.2) |
Proceeds from the exercise of stock options | (9.9) | (15.5) |
Proceeds from the issuance of stock under employee stock purchase plan | 4.1 | 3.9 |
Restricted stock units withheld for taxes | (2.1) | |
Net cash provided by financing activities | 761.2 | 6.2 |
Effect of exchange rate changes on cash and cash equivalents | 0.1 | |
Net increase in cash and cash equivalents | 50.5 | (49.1) |
Net increase in cash and cash equivalents | 50.5 | (49.1) |
Cash and cash equivalents, beginning of period | 669.2 | 705.1 |
Cash and cash equivalents, end of period | 719.7 | 656 |
Supplemental cash flow information: | ||
Cash paid for interest | 31.7 | 6.9 |
Cash paid for income taxes | 94.4 | 52.1 |
Non-cash investing and financing activities: | ||
Non-cash additions to property, plant and equipment | $ 3.9 | $ 18.2 |
Organization and Business Descr
Organization and Business Description | 9 Months Ended |
Sep. 30, 2019 | |
Organization and Business Description | |
Organization and Business Description | 1. Organization and Business Description United Therapeutics Corporation is a biotechnology company focused on the development and commercialization of innovative products to address the unmet medical needs of patients with chronic and life-threatening conditions. We have approval from the U.S. Food and Drug Administration (FDA) to market the following therapies: Remodulin ® ® ® ® ® As used in these notes to our consolidated financial statements, unless the context otherwise requires, the terms “we”, “us”, “our”, and similar terms refer to United Therapeutics Corporation and its consolidated subsidiaries. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation | |
Basis of Presentation | 2. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) for interim financial information. Accordingly, they do not include all of the information required by U.S. generally accepted accounting principles (GAAP) for complete financial statements. These consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the accompanying notes to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on February 27, 2019. In our management’s opinion, the accompanying consolidated financial statements contain all adjustments, including normal, recurring adjustments, necessary to fairly present our financial position as of September 30, 2019 and December 31, 2018, our statements of operations, comprehensive income, and stockholders’ equity for the three- and nine-month periods ended September 30, 2019 and 2018 and our statements of cash flows for the nine-month periods ended September 30, 2019 and 2018. Interim results are not necessarily indicative of results for an entire year. In our statements of cash flows, we reclassified the prior period deposits within the “cash flows from operating activities” section to “cash flows from investing activities” section to conform with the current period presentation. Recently Issued Accounting Standards Accounting Standards Adopted During the Period In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) Leases (Topic 842)—Targeted Improvements Upon adoption of this standard, we recognized a right-of-use asset of $8.2 million, and a corresponding lease liability of the same amount, related to our operating leases as of January 1, 2019. In addition, we recognized a cumulative-effect adjustment for the de-recognition of our build-to-suit leases as these leases no longer qualify for build-to-suit accounting and have instead been recognized as operating leases under ASC 842. The adjustment resulted in a decrease to retained earnings of $5.1 million, which is net of a tax benefit. At adoption, our weighted-average remaining lease term was 3.0 years and our weighted-average discount rate was 4.9%. Supplemental balance sheet information related to operating leases was as follows (in millions): Financial Statement Line Item on our September 30, January 1, Operating Leases Consolidated Balance Sheets 2019 2019 Right-of-use assets Other non-current assets $ 4.7 $ 8.2 Current lease liabilities Other current liabilities $ 1.9 $ 4.1 Non-current lease liabilities Other non-current liabilities 2.8 4.1 Total operating lease liabilities $ 4.7 $ 8.2 We recorded $1.2 million and $3.9 million in operating lease expense for the three and nine months ended September 30, 2019 and recorded $1.0 million and $3.2 million in operating lease expense for the three and nine months ended September 30, 2018. The amounts recorded in operating lease expense include short-term leases and variable lease costs, which are immaterial. In connection with completion of construction in the third quarter of 2019 of a building we own, we leased part of the space in the building to another entity as part of a broader collaboration arrangement. The lease is accounted for as a sales-type lease. Upon lease commencement in the third quarter of 2019, we reclassified $23.1 million of property, plant and equipment, net to other non-current assets on our consolidated balance sheets. The collaboration arrangement activity was immaterial for the period ended September 30, 2019. In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, to eliminate or modify certain disclosure rules that are redundant, outdated, or duplicative of U.S. GAAP or other regulatory requirements. Among other changes, the amendments eliminated the annual requirement to disclose the high and low trading prices of our common stock. In addition, the amendments expanded the disclosure requirements related to the analysis of shareholders’ equity for interim financial statements. An analysis of the changes in each caption of shareholders’ equity presented in the balance sheet must be provided in a note or separate statement, and we have provided this disclosure in a separate statement (Consolidated Statements of Stockholders’ Equity) beginning in the first quarter of 2019. Accounting Standards Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans |
Investments
Investments | 9 Months Ended |
Sep. 30, 2019 | |
Investments | |
Investments | 3. Investments Available-for-Sale Debt Securities Available-for-sale debt securities are recorded at fair value, with unrealized gains and losses included as a component of accumulated other comprehensive income in stockholders’ equity, until realized. Available-for-sale debt securities consisted of the following (in millions): Gross Gross Amortized Unrealized Unrealized Fair As of September 30, 2019 Cost Gains Losses Value U.S. government and agency securities $ 1,287.9 $ 3.2 $ (0.5) $ 1,290.6 Corporate debt securities 223.6 1.8 (0.1) 225.3 Total $ 1,511.5 $ 5.0 $ (0.6) $ 1,515.9 Reported under the following captions on our consolidated balance sheet: Current marketable investments 785.5 Non-current marketable investments 730.4 Total $ 1,515.9 Gross Gross Amortized Unrealized Unrealized Fair As of December 31, 2018 Cost Gains Losses Value U.S. government and agency securities $ 1,077.4 $ 0.7 $ (3.9) $ 1,074.2 Corporate debt securities 72.3 — (0.3) 72.0 Total $ 1,149.7 $ 0.7 $ (4.2) $ 1,146.2 Reported under the following captions on our consolidated balance sheet: Current marketable investments 705.8 Non-current marketable investments 440.4 Total $ 1,146.2 The following table summarizes the contractual maturities of available-for-sale marketable investments (in millions): As of September 30, 2019 Amortized Fair Cost Value Due within one year $ 784.7 $ 785.5 Due in one to three years 726.8 730.4 Total $ 1,511.5 $ 1,515.9 As of December 31, 2018 Amortized Fair Cost Value Due within one year $ 708.2 $ 705.8 Due in one to three years 441.5 440.4 Total $ 1,149.7 $ 1,146.2 Investments in Privately-Held Companies As of September 30, 2019, we maintained non-controlling equity investments in privately-held companies of $101.7 million in the aggregate. We measure these investments using the measurement alternative because the fair values of these investments are not readily determinable. Under this alternative, the investments are measured at cost, less any impairment, adjusted for any observable price changes. There were no impairments or observable price changes in our investments in privately-held companies during the three and nine months ended September 30, 2019. We include our investments in privately-held companies within other non-current assets on our consolidated balance sheets. These investments are subject to a periodic impairment review and if impaired, the investment is measured and recorded at fair value in accordance with ASC 820, Fair Value Measurements During the quarter ended September 30, 2018, one of the privately-held companies in which we invested underwent a significant change in management and a change in business outlook and strategy, all of which triggered our review of the recoverability of our investment in the company. We determined the fair value of our investment as of September 30, 2018 considering an income approach based on the company's discounted projected cash flows. We corroborated the implied revenue multiples from the income approach with the observed revenue multiples of comparable public companies. We concluded that the fair value of our investment as of September 30, 2018 was lower than its carrying value, resulting in an impairment charge of $12.4 million. Deconsolidation of a Variable Interest Entity In April 2017, we made a $7.5 million minority equity investment in a privately-held company. In addition to our investment, we entered into an exclusive license, development and commercialization agreement (the License Agreement) with this company. The License Agreement entitled us to control rights sufficient to require us to regard the company as a variable interest entity (VIE) and to consolidate the company’s balance sheet and results of operations as the primary beneficiary of this company. In June 2019, we elected to terminate the License Agreement. The termination of the License Agreement caused us to impair an associated in-process research and development (IPR&D) asset during the second quarter of 2019 and recognize an impairment charge of $8.8 million, which is included within research and development expense on our consolidated statements of operations. Upon effectiveness of the termination of the License Agreement in the third quarter of 2019 , we no longer have the power to direct the entity’s activities. Consequently, we deconsolidated the entity in the third quarter of 2019. Our deconsolidation of the entity’s balance sheet, which included $3.5 million of goodwill and $8.4 million of temporary equity, resulted in a net deconsolidation loss of $2.0 million. The deconsolidation loss is included within other (expense) income, net on our consolidated statements of operations . We have no further funding obligations to the entity, and our maximum exposure to loss is equal to the carrying value of our retained interest. We now account for our equity investment in this privately-held company using the equity method of accounting because we have the ability to exercise significant influence over the operating and financial policies of the entity, but we no longer have a controlling financial interest. Investments in Equity Securities with Readily Determinable Fair Values We held investments in equity securities with readily determinable fair values of $64.8 million and $3.5 million as of September 30, 2019 and December 31, 2018, respectively, which are included in current marketable investments on our consolidated balance sheets. During the second quarter of 2019, TransMedics Group, Inc., one of the privately-held companies in which we had invested, completed its initial public offering and its common stock began trading on the Nasdaq Stock Market. As a result, the equity securities we own in this company are now recorded at fair value rather than reflected as an investment in a privately-held company. Changes in the fair value of publicly traded equity securities are recorded on our consolidated statements of operations within other (expense) income, net. Refer to Note 4 —Fair Value Investments |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | 4. Fair Value Measurements We account for certain assets and liabilities at fair value and classify these assets and liabilities within a fair value hierarchy (Level 1, Level 2 or Level 3). Our other current assets and other current liabilities have fair values that approximate their carrying values. Assets and liabilities subject to fair value measurements are as follows (in millions): As of September 30, 2019 Level 1 Level 2 Level 3 Balance Assets Money market funds (1) $ 253.4 $ — $ — $ 253.4 Time deposits (2) — 86.9 — 86.9 U.S. government and agency securities (3) — 1,290.6 — 1,290.6 Corporate debt securities (3) — 225.3 — 225.3 Equity securities (4) 64.8 — — 64.8 Total assets $ 318.2 $ 1,602.8 $ — $ 1,921.0 Liabilities Contingent consideration (5) — — 13.4 13.4 Total liabilities $ — $ — $ 13.4 $ 13.4 As of December 31, 2018 Level 1 Level 2 Level 3 Balance Assets Money market funds (1) $ 247.6 $ — $ — $ 247.6 Time deposits (2) — 35.9 — 35.9 U.S. government and agency securities (3) — 1,074.2 — 1,074.2 Corporate debt securities (3) — 75.7 — 75.7 Equity securities (4) 3.5 — — 3.5 Total assets $ 251.1 $ 1,185.8 $ — $ 1,436.9 Liabilities Contingent consideration (5) — — 13.4 13.4 Total liabilities $ — $ — $ 13.4 $ 13.4 (1) Included in cash and cash equivalents on our consolidated balance sheets. (2) Included in cash equivalents and current and non-current marketable investments on our consolidated balance sheets. The fair value of these securities is principally measured or corroborated by trade data for identical securities in which related trading activity is not sufficiently frequent to be considered a Level 1 input or comparable securities that are more actively traded. (3) Included in cash equivalents and current and non-current marketable investments on our consolidated balance sheets. Refer to Note 3 —Investments—Available-for-Sale Debt Securities for further information. The fair value of these securities is principally measured or corroborated by trade data for identical securities for which related trading activity is not sufficiently frequent to be considered a Level 1 input or comparable securities that are more actively traded. (4) Included in current marketable investments on our consolidated balance sheets. The fair value of these securities is based on quoted market prices for identical instruments in active markets. During the three and nine months ended September 30, 2019, we recognized $13.0 million of net unrealized losses and $19.5 million of net unrealized gains, respectively, on these securities and recorded these losses and gains on our consolidated statements of operations within other (expense) income, net. Refer to Note 3 —Investments—Investments in Equity Securities with Readily Determinable Fair Values. (5) Included in non-current liabilities on our consolidated balance sheets. The fair value of contingent consideration has been estimated using probability-weighted discounted cash flow models (DCFs). The DCFs incorporate Level 3 inputs including estimated discount rates that we believe market participants would consider relevant in pricing and the projected timing and amount of cash flows, which are estimated and developed, in part, based on the requirements specific to each acquisition agreement. The change in the fair value of contingent consideration for the three and nine months ended September 30, 2019 was not material. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value because of their short maturities. The fair values of our marketable investments are reported above within the fair value hierarchy. Refer to Note 3 —Investments. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventories | |
Inventories | 5. Inventories Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value and consist of the following, net of reserves (in millions): September 30, December 31, 2019 2018 Raw materials $ 19.3 $ 24.3 Work-in-progress 29.8 28.0 Finished goods 45.0 48.7 Total inventories $ 94.1 $ 101.0 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 6. Goodwill and Other Intangible Assets Goodwill and other intangible assets comprise the following (in millions): As of September 30, 2019 As of December 31, 2018 Accumulated Accumulated Gross Amortization Net Gross Amortization Net Goodwill $ 28.0 $ — $ 28.0 $ 31.5 $ — $ 31.5 Other intangible assets: Technology, patents and trade names 6.7 (5.2) 1.5 6.7 (5.1) 1.6 In-process research and development 128.9 — 128.9 137.7 — 137.7 Total $ 163.6 $ (5.2) $ 158.4 $ 175.9 $ (5.1) $ 170.8 In June 2019, we elected to terminate our License Agreement with the VIE discussed under Note 3 —Investments—Deconsolidation of a Variable Interest Entity |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt | |
Debt | 7. Debt Unsecured Revolving Credit Facility - Credit Agreement In June 2018, we entered into a credit agreement (the Credit Agreement) with Wells Fargo Bank, National Association (Wells Fargo), as administrative agent and a swingline lender, and various other lender parties, providing for: (1) an unsecured revolving credit facility of up to $1.0 billion; and (2) a second unsecured revolving credit facility of up to $500.0 million (which facilities may, at our request, be increased by up to $300.0 million in the aggregate subject to obtaining commitments from existing or new lenders for such increase and other conditions). In accordance with the terms of the Credit Agreement, in June 2019, we extended the maturity date of the Credit Agreement by one year, to June 2024. The Credit Agreement provides the lenders the ability to extend the maturity date by one additional year to June 2025 if we request such an extension. At our option, amounts borrowed under the Credit Agreement bear interest at either the LIBOR rate or a fluctuating base rate, in each case, plus an applicable margin determined on a quarterly basis based on our consolidated ratio of total indebtedness to EBITDA (as calculated in accordance with the Credit Agreement). To date, we have elected to calculate interest on the outstanding balance at LIBOR plus an applicable margin. In connection with the Credit Agreement, we incurred debt issuance costs in June 2018 of $13.2 million, $12.6 million of which were capitalized and are being amortized over the term of the Credit Agreement. On June 27, 2018 we borrowed $250.0 million under the Credit Agreement and used the funds to repay outstanding indebtedness under a prior credit agreement. On January 24, 2019, we paid an upfront payment of $800.0 million related to our exclusive license agreement with Arena Pharmaceuticals, Inc. (Arena) and funded the payment by borrowing $800.0 million under the Credit Agreement. On September 30, 2019, we paid down $50.0 million on our revolving credit facility under the Credit Agreement. This brought our aggregate outstanding balance under the Credit Agreement to $1.0 billion as of September 30, 2019. Although our credit facility matures in 2024, we classified $250.0 million of the outstanding balance as a current liability on our consolidated balance sheet as we intend to repay this amount within one year. The Credit Agreement contains customary events of default and customary affirmative and negative covenants. As of September 30, 2019, we were in compliance with these covenants. Lung Biotechnology PBC is our only subsidiary that guarantees our obligations under the Credit Agreement though, from time to time, one or more of our other subsidiaries may be required to guarantee our obligations. During the three and nine months ended September 30, 2019, we recorded $11.7 million and $34.2 million of interest expense, respectively, related to the Credit Agreement. During the three and nine months ended September 30, 2018, we recorded $4.1 million and $9.6 million of interest expense, respectively, related to a prior credit agreement. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-Based Compensation | |
Share-Based Compensation | 8. Share-Based Compensation As of September 30, 2019, we have two shareholder-approved equity incentive plans: the United Therapeutics Corporation Amended and Restated Equity Incentive Plan (the 1999 Plan) and the United Therapeutics Corporation Amended and Restated 2015 Stock Incentive Plan (as amended to date, the 2015 Plan). The 2015 Plan provides for the issuance of up to 9,500,000 shares of our common stock pursuant to awards granted under the 2015 Plan, which includes the 450,000 shares added pursuant to an amendment and restatement of the 2015 Plan approved by our shareholders in June 2019. No further awards will be granted under the 1999 Plan. We also have one equity incentive plan, the United Therapeutics Corporation 2019 Inducement Stock Incentive Plan (the 2019 Inducement Plan), that has not been approved by our shareholders, as permitted by the Nasdaq Stock Market rules. The 2019 Inducement Plan was approved by our Board of Directors in February 2019 and provides for the issuance of up to 99,000 shares of our common stock under awards granted to newly-hired employees. Currently, we grant equity-based awards to employees and members of our Board of Directors in the form of stock options and restricted stock units under the 2015 Plan, and we grant restricted stock units to newly-hired employees under the 2019 Inducement Plan. Refer to the sections entitled Stock Options Restricted Stock Units We previously issued awards under the United Therapeutics Corporation Share Tracking Awards Plan (2008 STAP) and the United Therapeutics Corporation 2011 Share Tracking Awards Plan (2011 STAP). We refer to the 2008 STAP and the 2011 STAP collectively as the “STAP” and awards outstanding under either of these plans as “STAP awards.” Refer to the section entitled Share Tracking Awards Plans In 2012, our shareholders approved the United Therapeutics Corporation Employee Stock Purchase Plan (ESPP), which is structured to comply with Section 423 of the Internal Revenue Code. Refer to the section entitled Employee Stock Purchase Plan The following table reflects the components of share-based compensation expense (benefit) recognized in our consolidated statements of operations (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock options $ 18.4 $ 16.6 $ 52.2 $ 44.8 Restricted stock units 3.8 2.4 9.8 5.3 STAP awards 1.4 32.2 (47.0) (80.1) Employee stock purchase plan 0.3 0.2 0.9 0.8 Total share-based compensation expense (benefit) before tax $ 23.9 $ 51.4 $ 15.9 $ (29.2) Stock Options We estimate the fair value of stock options using the Black-Scholes-Merton valuation model, which requires us to make certain assumptions that can materially impact the estimation of fair value and related compensation expense. The assumptions used to estimate fair value include the price of our common stock, the expected volatility of our common stock, the risk-free interest rate, the expected term of stock option awards and the expected dividend yield. The table below includes the weighted-average assumptions used to measure the fair value of all stock options granted during the nine-month periods ended September 30, 2019 and September 30, 2018: September 30, September 30, 2019 2018 Expected volatility 33.8 % 36.2 % Risk-free interest rate 2.4 % 2.7 % Expected term of awards (in years) 5.8 6.3 Expected dividend yield 0.0 % 0.0 % A summary of the activity and status of stock options under our equity incentive plans during the nine-month period ended September 30, 2019 is presented below: Weighted Weighted- Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Options Price Term (Years) (in millions) Outstanding at January 1, 2019 6,299,803 $ 120.78 Granted 2,081,047 124.87 Exercised (191,508) 51.53 Forfeited/canceled (95,016) 131.04 Outstanding at September 30, 2019 8,094,326 $ 123.35 6.5 $ 8.4 Exercisable at September 30, 2019 3,915,462 $ 119.40 5.4 $ 8.2 Unvested at September 30, 2019 4,178,864 $ 127.05 7.6 $ 0.2 The weighted average fair value of a stock option granted during each of the nine-month periods ended September 30, 2019 and September 30, 2018, was $39.63 and $45.02, respectively. These stock options have an aggregate grant date fair value of $82.5 million and $44.3 million, respectively. The total grant date fair value of stock options that vested during the nine-month periods ended September 30, 2019 and September 30, 2018 was $36.4 million and $33.9 million, respectively. Total share-based compensation expense relating to stock options is recorded as follows (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Cost of product sales $ 0.3 $ 0.2 $ 0.7 $ 0.7 Research and development 0.9 0.9 2.7 2.8 Selling, general and administrative 17.2 15.5 48.8 41.3 Share-based compensation expense before taxes 18.4 16.6 52.2 44.8 Related income tax benefit (4.2) (3.8) (11.8) (10.3) Share-based compensation expense, net of taxes $ 14.2 $ 12.8 $ 40.4 $ 34.5 As of September 30, 2019, unrecognized compensation expense relating to stock options was $108.4 million. Unvested outstanding stock options as of September 30, 2019 had a weighted average remaining vesting period of 2.6 years. Stock option exercise data is summarized below (dollars in millions): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Number of options exercised — 4,857 191,508 287,760 Cash received $ — $ 0.6 $ 9.9 $ 15.5 Total intrinsic value of options exercised $ — $ 0.1 $ 11.5 $ 17.0 Restricted Stock Units Each restricted stock unit entitles the recipient to one share of our common stock upon vesting. We measure the fair value of restricted stock units using the stock price on the date of grant. Share-based compensation expense for the restricted stock units is recorded ratably over their vesting period. A summary of the activity with respect to, and status of, restricted stock units during the nine-month period ended September 30, 2019 is presented below: Weighted Weighted- Average Aggregate Number of Average Remaining Intrinsic Restricted Grant Contractual Value Stock Units Price Term (Years) (in millions) Unvested at January 1, 2019 186,255 $ 112.48 Granted 222,614 113.03 Vested (69,761) 111.81 Forfeited/canceled (18,445) 118.24 Unvested at September 30, 2019 320,663 $ 112.68 9.2 $ 25.6 Total share-based compensation expense relating to restricted stock units is recorded as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Cost of product sales $ 0.3 $ 0.1 $ 0.8 $ 0.3 Research and development 1.3 0.5 3.2 1.1 Selling, general and administrative 2.2 1.8 5.8 3.9 Share-based compensation expense before taxes 3.8 2.4 9.8 5.3 Related income tax benefit (0.8) (0.5) (2.2) (1.2) Share-based compensation expense, net of taxes $ 3.0 $ 1.9 $ 7.6 $ 4.1 As of September 30, 2019, unrecognized compensation cost related to the grant of restricted stock units was $28.4 million. Unvested outstanding restricted stock units as of September 30, 2019 had a weighted average remaining vesting period of 2.1 years. Share Tracking Awards Plans STAP awards convey the right to receive in cash an amount equal to the appreciation of our common stock, which is measured as the increase in the closing price of our common stock between the dates of grant and exercise. STAP awards expire on the tenth anniversary of the grant date, and in most cases they vest in equal increments on each anniversary of the grant date over a four-year period. The STAP liability includes vested awards and awards that are expected to vest. The aggregate STAP liability balance was $18.3 million and $72.2 million at September 30, 2019 and December 31, 2018, respectively, all of which was classified as a current liability on our consolidated balance sheets. Estimating the fair value of STAP awards requires the use of certain inputs that can materially impact the determination of fair value and the amount of compensation expense (benefit) we recognize. Inputs used in estimating fair value include the price of our common stock, the expected volatility of the price of our common stock, the risk-free interest rate, the expected term of STAP awards, and the expected dividend yield. Prior to December 31, 2018, we used historical data to develop the expected term input for our STAP awards. As of December 31, 2018, we no longer believed historical exercise data formed a reasonable basis from which to determine the expected exercise behavior of outstanding STAPs given the prolonged volatility of the price of our common stock. As such, we began determining the expected term assumption as of December 31, 2018 using the weighted average midpoint of the remaining contractual term for outstanding awards and expect to continue to use this methodology until circumstances dictate otherwise. The fair value of the STAP awards is measured at the end of each financial reporting period because the awards are settled in cash. The table below includes the weighted-average assumptions used to measure the fair value of outstanding STAP awards: September 30, September 30, 2019 2018 Expected volatility 29.3 % 33.4 % Risk-free interest rate 1.6 % 2.5 % Expected term of awards (in years) 2.1 0.9 Expected dividend yield — % — % The closing price of our common stock was $79.75 and $127.88 on September 30, 2019 and September 30, 2018, respectively. The closing price of our common stock was $108.90 on December 31, 2018. A summary of the activity and status of STAP awards during the nine-month period ended September 30, 2019 is presented below: Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Number of Exercise Term Value Awards Price (in Years) (in millions) Outstanding at January 1, 2019 2,867,979 $ 107.85 Granted — — Exercised (138,773) 59.36 Forfeited/canceled (80,182) 159.91 Outstanding at September 30, 2019 2,649,024 $ 108.82 4.3 $ 22.4 Exercisable at September 30, 2019 2,639,024 $ 109.03 4.3 $ 22.1 Unvested at September 30, 2019 10,000 $ 52.57 3.2 $ 0.3 Share-based compensation expense (benefit) recognized in connection with STAP awards is as follows (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Cost of product sales $ 0.1 $ 2.0 $ (1.9) $ (4.0) Research and development 0.4 6.8 (9.9) (15.2) Selling, general and administrative 0.9 23.4 (35.2) (60.9) Share-based compensation expense (benefit) before taxes 1.4 32.2 (47.0) (80.1) Related income tax (benefit) expense (0.2) (7.4) 10.7 18.3 Share-based compensation expense (benefit), net of taxes $ 1.2 $ 24.8 $ (36.3) $ (61.8) Cash paid to settle STAP exercises during the nine-month periods ended September 30, 2019 and September 30, 2018 was $6.9 million and $71.5 million, respectively. Employee Stock Purchase Plan In June 2012, our shareholders approved the ESPP, which is structured to comply with Section 423 of the Internal Revenue Code. The ESPP provides eligible employees with the right to purchase shares of our common stock at a discount through elective accumulated payroll deductions at the end of each offering period. Offering periods, which began in 2012, occur in consecutive six- month periods commencing on September 5th and March 5th of each year. Eligible employees may contribute up to 15 percent of their base salary, subject to certain annual limitations as defined in the ESPP. The purchase price of the shares is equal to the lower of 85 percent of the closing price of our common stock on either the first or last trading day of a given offering period. In addition, the ESPP provides that no eligible employee may purchase more than 4,000 shares during any offering period. The ESPP has a 20-year term and limits the aggregate number of shares that can be issued under the ESPP to 3.0 million. |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Common Share | |
Earnings Per Common Share | 9. Earnings Per Common Share Basic earnings per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period, adjusted for the potential dilutive effect of our outstanding stock options, as if such options were exercised. For the nine months ended September 30, 2019, we had a net loss, and as such, all outstanding stock options and restricted stock units were excluded from our calculation of diluted loss per share. The components of basic and diluted earnings (loss) per common share comprised the following (in millions, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Numerator: Net income (loss) $ 132.4 $ 106.5 $ (157.1) $ 523.9 Denominator: Weighted average outstanding shares — basic 43.9 43.6 43.8 43.5 Effect of dilutive securities (1) Stock options, restricted stock units and employee stock purchase plan 0.1 0.4 — 0.5 Weighted average shares — diluted (2) 44.0 44.0 43.8 44.0 Net income (loss) per common share: Basic $ 3.02 $ 2.44 $ (3.59) $ 12.04 Diluted $ 3.01 $ 2.42 $ (3.59) $ 11.91 Stock options and restricted stock units excluded from calculation (2) 8.0 4.5 7.1 4.6 (1) Calculated using the treasury stock method. (2) The common shares underlying certain stock options and restricted stock units have been excluded from the computation of diluted earnings per share because their impact would be anti-dilutive for the three-and nine-month periods ended September 30, 2019 and September 30, 2018. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes | |
Income Taxes | 10. Income Taxes Our effective income tax rate (ETR) for the nine months ended September 30, 2019 and 2018 was 33 percent and 21 percent, respectively. We recognized a loss before income taxes, and a corresponding income tax benefit, for the nine months ended September 30, 2019, as a result of the one-time $800.0 million payment to Arena in January 2019. As a result of this loss, our anticipated tax credits and foreign sales deduction, partially offset by non-deductible compensation expense, increased our tax benefit and resulting ETR for the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018. Deferred tax assets increased by $172.4 million as of September 30, 2019 compared to December 31, 2018 primarily due to the amount of the Arena payment that will not be deductible for tax purposes in 2019. Our unrecognized tax benefits were $0.9 million for the nine months ended September 30, 2019 and September 30, 2018, and included $0.7 million of tax benefits that, if recognized, would impact our ETR. We record interest and penalties related to uncertain tax positions as a component of income tax expense. As of September 30, 2019, and 2018, we have not accrued any material interest expense related to uncertain tax positions. We are unaware of any material positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Information | |
Segment Information | 11. Segment Information We currently operate as one operating segment with a focus on the development and commercialization of products to address the unmet needs of patients with chronic and life-threatening conditions. Our Chief Executive Officer, as our chief operating decision maker, manages and allocates resources to the operations of our company on a consolidated basis. This enables our Chief Executive Officer to assess our overall level of available resources and determine how best to deploy these resources across functions, therapeutic areas, and research and development projects in line with our long-term company-wide strategic goals. Net product sales, cost of product sales and gross profit for each of our commercial products were as follows (in millions): Three Months Ended September 30, 2019 Remodulin Tyvaso Orenitram Unituxin Adcirca Total Net product sales $ 168.3 $ 110.8 $ 62.0 $ 30.1 $ 30.3 $ 401.5 Cost of product sales 5.5 6.9 3.5 4.1 13.0 33.0 Gross profit $ 162.8 $ 103.9 $ 58.5 $ 26.0 $ 17.3 $ 368.5 2018 Net product sales $ 153.6 $ 107.8 $ 53.8 $ 22.9 $ 74.6 $ 412.7 Cost of product sales 4.4 6.9 3.9 4.2 32.5 51.9 Gross profit $ 149.2 $ 100.9 $ 49.9 $ 18.7 $ 42.1 $ 360.8 Nine Months Ended September 30, 2019 Remodulin Tyvaso Orenitram Unituxin Adcirca Total Net product sales $ 479.6 $ 324.2 $ 174.4 $ 80.1 $ 79.4 $ 1,137.7 Cost of product sales 16.1 14.8 12.3 11.4 34.2 88.8 Gross profit $ 463.5 $ 309.4 $ 162.1 $ 68.7 $ 45.2 $ 1,048.9 2018 Net product sales $ 439.9 $ 308.3 $ 155.5 $ 60.7 $ 282.0 $ 1,246.4 Cost of product sales 10.8 14.3 9.9 9.9 121.9 166.8 Gross profit $ 429.1 $ 294.0 $ 145.6 $ 50.8 $ 160.1 $ 1,079.6 Geographic revenues are determined based on the country in which our customers (distributors) are located. Total revenues from external customers by geographic area are as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 United States $ 359.4 $ 389.0 $ 1,028.4 $ 1,177.1 Rest-of-World (1) 42.1 23.7 109.3 69.3 Total $ 401.5 $ 412.7 $ 1,137.7 $ 1,246.4 (1) Primarily Europe. We recorded revenue from two specialty pharmaceutical distributors in the United States. Total revenue from these two specialty pharmaceutical distributors as a percentage of total revenues are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Distributor 1 53 % 52 % 55 % 50 % Distributor 2 21 % 18 % 21 % 17 % |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2019 | |
Litigation | |
Litigation | 12. Litigation On April 16, 2019, Sandoz Inc. (Sandoz) and its commercialization collaborator, RareGen, LLC, filed a complaint in the U.S. District Court for the District of New Jersey against us and Smiths Medical ASD, Inc. (Smiths Medical), alleging that we and Smiths Medical engaged in anticompetitive conduct in connection with plaintiffs’ efforts to launch their generic version of Remodulin. In particular, the complaint alleges that we and Smiths Medical unlawfully impeded competition by entering into an agreement to produce CADD MS ® 3 cartridges specifically for the delivery of subcutaneous Remodulin, without making these cartridges available for the delivery of Sandoz’s generic version of Remodulin. The parties have completed expedited discovery in anticipation of a motion filed by the plaintiffs on October 4, 2019, seeking preliminary injunctive relief. We and Smiths Medical have filed a motion to dismiss the complaint, and we filed our opposition to plaintiffs’ motion for a preliminary injunction on October 25, 2019. We believe plaintiffs’ claims to be meritless and intend to vigorously defend the litigation. However, due to the uncertainty inherent in any litigation, we cannot guarantee that an adverse outcome will not result. Any litigation of this nature could involve substantial cost, and an adverse outcome could result in substantial monetary damages and/or injunctive relief adverse to our business. We currently are not able to reasonably estimate a range of potential losses due to the early stage of the litigation. |
Arena License Agreement
Arena License Agreement | 9 Months Ended |
Sep. 30, 2019 | |
Arena License Agreement | |
Arena License Agreement | 13. Arena License Agreement On November 15, 2018, we entered into an exclusive license agreement with Arena related to ralinepag, a next-generation, oral, selective and potent prostacyclin receptor agonist being developed for the treatment of PAH. On January 24, 2019, in connection with the closing of the transactions contemplated by the license agreement: (1) Arena granted to us perpetual, irrevocable and exclusive rights throughout the universe to develop, manufacture and commercialize ralinepag; (2) Arena transferred to us certain other assets related to ralinepag, including, among others, related domain names and trademarks, permits, certain contracts, inventory, regulatory documentation, Investigational New Drug (IND) Application No. 109021 (related to ralinepag) and non-clinical, pre-clinical and clinical trial data; (3) we assumed certain limited liabilities from Arena, including, among others, all obligations arising after the closing under the assumed contracts and the IND described above; and (4) we paid Arena an upfront payment of $800.0 million, which was expensed as acquired in-process research and development and included within research and development expenses on our consolidated statements of operations in the first quarter of 2019. We will also pay Arena: (1) a one-time payment of $250.0 million for the first, if any, marketing approval we receive in the United States for an inhaled version of ralinepag to treat PAH; (2) a one-time payment of $150.0 million for the first, if any, marketing approval we receive in any of Japan, France, Italy, the United Kingdom, Spain or Germany for an oral version of ralinepag to treat any indication; and (3) low double-digit, tiered royalties on net sales of any pharmaceutical product containing ralinepag as an active ingredient, subject to certain adjustments for third party license payments. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting Standards Adopted During the Period In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) Leases (Topic 842)—Targeted Improvements Upon adoption of this standard, we recognized a right-of-use asset of $8.2 million, and a corresponding lease liability of the same amount, related to our operating leases as of January 1, 2019. In addition, we recognized a cumulative-effect adjustment for the de-recognition of our build-to-suit leases as these leases no longer qualify for build-to-suit accounting and have instead been recognized as operating leases under ASC 842. The adjustment resulted in a decrease to retained earnings of $5.1 million, which is net of a tax benefit. At adoption, our weighted-average remaining lease term was 3.0 years and our weighted-average discount rate was 4.9%. Supplemental balance sheet information related to operating leases was as follows (in millions): Financial Statement Line Item on our September 30, January 1, Operating Leases Consolidated Balance Sheets 2019 2019 Right-of-use assets Other non-current assets $ 4.7 $ 8.2 Current lease liabilities Other current liabilities $ 1.9 $ 4.1 Non-current lease liabilities Other non-current liabilities 2.8 4.1 Total operating lease liabilities $ 4.7 $ 8.2 We recorded $1.2 million and $3.9 million in operating lease expense for the three and nine months ended September 30, 2019 and recorded $1.0 million and $3.2 million in operating lease expense for the three and nine months ended September 30, 2018. The amounts recorded in operating lease expense include short-term leases and variable lease costs, which are immaterial. In connection with completion of construction in the third quarter of 2019 of a building we own, we leased part of the space in the building to another entity as part of a broader collaboration arrangement. The lease is accounted for as a sales-type lease. Upon lease commencement in the third quarter of 2019, we reclassified $23.1 million of property, plant and equipment, net to other non-current assets on our consolidated balance sheets. The collaboration arrangement activity was immaterial for the period ended September 30, 2019. In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, to eliminate or modify certain disclosure rules that are redundant, outdated, or duplicative of U.S. GAAP or other regulatory requirements. Among other changes, the amendments eliminated the annual requirement to disclose the high and low trading prices of our common stock. In addition, the amendments expanded the disclosure requirements related to the analysis of shareholders’ equity for interim financial statements. An analysis of the changes in each caption of shareholders’ equity presented in the balance sheet must be provided in a note or separate statement, and we have provided this disclosure in a separate statement (Consolidated Statements of Stockholders’ Equity) beginning in the first quarter of 2019. Accounting Standards Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment In August 2018, the FASB issued ASU No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Basis of Presentation | |
Schedule of Supplemental balance sheet information related to operating leases | Supplemental balance sheet information related to operating leases was as follows (in millions): Financial Statement Line Item on our September 30, January 1, Operating Leases Consolidated Balance Sheets 2019 2019 Right-of-use assets Other non-current assets $ 4.7 $ 8.2 Current lease liabilities Other current liabilities $ 1.9 $ 4.1 Non-current lease liabilities Other non-current liabilities 2.8 4.1 Total operating lease liabilities $ 4.7 $ 8.2 |
Investments (Tables)
Investments (Tables) - Available-for-Sale Debt Securities | 9 Months Ended |
Sep. 30, 2019 | |
Investments | |
Schedule of available-for-sale debt securities | Available-for-sale debt securities are recorded at fair value, with unrealized gains and losses included as a component of accumulated other comprehensive income in stockholders’ equity, until realized. Available-for-sale debt securities consisted of the following (in millions): Gross Gross Amortized Unrealized Unrealized Fair As of September 30, 2019 Cost Gains Losses Value U.S. government and agency securities $ 1,287.9 $ 3.2 $ (0.5) $ 1,290.6 Corporate debt securities 223.6 1.8 (0.1) 225.3 Total $ 1,511.5 $ 5.0 $ (0.6) $ 1,515.9 Reported under the following captions on our consolidated balance sheet: Current marketable investments 785.5 Non-current marketable investments 730.4 Total $ 1,515.9 Gross Gross Amortized Unrealized Unrealized Fair As of December 31, 2018 Cost Gains Losses Value U.S. government and agency securities $ 1,077.4 $ 0.7 $ (3.9) $ 1,074.2 Corporate debt securities 72.3 — (0.3) 72.0 Total $ 1,149.7 $ 0.7 $ (4.2) $ 1,146.2 Reported under the following captions on our consolidated balance sheet: Current marketable investments 705.8 Non-current marketable investments 440.4 Total $ 1,146.2 |
Summary of the contractual maturities | The following table summarizes the contractual maturities of available-for-sale marketable investments (in millions): As of September 30, 2019 Amortized Fair Cost Value Due within one year $ 784.7 $ 785.5 Due in one to three years 726.8 730.4 Total $ 1,511.5 $ 1,515.9 As of December 31, 2018 Amortized Fair Cost Value Due within one year $ 708.2 $ 705.8 Due in one to three years 441.5 440.4 Total $ 1,149.7 $ 1,146.2 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Measurements | |
Schedule of assets and liabilities subject to fair value measurements | As of September 30, 2019 Level 1 Level 2 Level 3 Balance Assets Money market funds (1) $ 253.4 $ — $ — $ 253.4 Time deposits (2) — 86.9 — 86.9 U.S. government and agency securities (3) — 1,290.6 — 1,290.6 Corporate debt securities (3) — 225.3 — 225.3 Equity securities (4) 64.8 — — 64.8 Total assets $ 318.2 $ 1,602.8 $ — $ 1,921.0 Liabilities Contingent consideration (5) — — 13.4 13.4 Total liabilities $ — $ — $ 13.4 $ 13.4 As of December 31, 2018 Level 1 Level 2 Level 3 Balance Assets Money market funds (1) $ 247.6 $ — $ — $ 247.6 Time deposits (2) — 35.9 — 35.9 U.S. government and agency securities (3) — 1,074.2 — 1,074.2 Corporate debt securities (3) — 75.7 — 75.7 Equity securities (4) 3.5 — — 3.5 Total assets $ 251.1 $ 1,185.8 $ — $ 1,436.9 Liabilities Contingent consideration (5) — — 13.4 13.4 Total liabilities $ — $ — $ 13.4 $ 13.4 (1) Included in cash and cash equivalents on our consolidated balance sheets. (2) Included in cash equivalents and current and non-current marketable investments on our consolidated balance sheets. The fair value of these securities is principally measured or corroborated by trade data for identical securities in which related trading activity is not sufficiently frequent to be considered a Level 1 input or comparable securities that are more actively traded. (3) Included in cash equivalents and current and non-current marketable investments on our consolidated balance sheets. Refer to Note 3 —Investments—Available-for-Sale Debt Securities for further information. The fair value of these securities is principally measured or corroborated by trade data for identical securities for which related trading activity is not sufficiently frequent to be considered a Level 1 input or comparable securities that are more actively traded. (4) Included in current marketable investments on our consolidated balance sheets. The fair value of these securities is based on quoted market prices for identical instruments in active markets. During the three and nine months ended September 30, 2019, we recognized $13.0 million of net unrealized losses and $19.5 million of net unrealized gains, respectively, on these securities and recorded these losses and gains on our consolidated statements of operations within other (expense) income, net. Refer to Note 3 —Investments—Investments in Equity Securities with Readily Determinable Fair Values. (5) Included in non-current liabilities on our consolidated balance sheets. The fair value of contingent consideration has been estimated using probability-weighted discounted cash flow models (DCFs). The DCFs incorporate Level 3 inputs including estimated discount rates that we believe market participants would consider relevant in pricing and the projected timing and amount of cash flows, which are estimated and developed, in part, based on the requirements specific to each acquisition agreement. The change in the fair value of contingent consideration for the three and nine months ended September 30, 2019 was not material. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventories | |
Schedule of inventories, net of reserves | Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value and consist of the following, net of reserves (in millions): September 30, December 31, 2019 2018 Raw materials $ 19.3 $ 24.3 Work-in-progress 29.8 28.0 Finished goods 45.0 48.7 Total inventories $ 94.1 $ 101.0 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Other Intangible Assets | |
Schedule of goodwill and other intangible assets | Goodwill and other intangible assets comprise the following (in millions): As of September 30, 2019 As of December 31, 2018 Accumulated Accumulated Gross Amortization Net Gross Amortization Net Goodwill $ 28.0 $ — $ 28.0 $ 31.5 $ — $ 31.5 Other intangible assets: Technology, patents and trade names 6.7 (5.2) 1.5 6.7 (5.1) 1.6 In-process research and development 128.9 — 128.9 137.7 — 137.7 Total $ 163.6 $ (5.2) $ 158.4 $ 175.9 $ (5.1) $ 170.8 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stock Options | |
Share-Based Compensation | |
Schedule of components of share-based compensation expense (benefit) recognized | The following table reflects the components of share-based compensation expense (benefit) recognized in our consolidated statements of operations (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock options $ 18.4 $ 16.6 $ 52.2 $ 44.8 Restricted stock units 3.8 2.4 9.8 5.3 STAP awards 1.4 32.2 (47.0) (80.1) Employee stock purchase plan 0.3 0.2 0.9 0.8 Total share-based compensation expense (benefit) before tax $ 23.9 $ 51.4 $ 15.9 $ (29.2) |
Summary of weighted-average assumptions to measure the fair value of stock options | September 30, September 30, 2019 2018 Expected volatility 33.8 % 36.2 % Risk-free interest rate 2.4 % 2.7 % Expected term of awards (in years) 5.8 6.3 Expected dividend yield 0.0 % 0.0 % |
Schedule of activity and status of stock options | Weighted Weighted- Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Options Price Term (Years) (in millions) Outstanding at January 1, 2019 6,299,803 $ 120.78 Granted 2,081,047 124.87 Exercised (191,508) 51.53 Forfeited/canceled (95,016) 131.04 Outstanding at September 30, 2019 8,094,326 $ 123.35 6.5 $ 8.4 Exercisable at September 30, 2019 3,915,462 $ 119.40 5.4 $ 8.2 Unvested at September 30, 2019 4,178,864 $ 127.05 7.6 $ 0.2 |
Schedule of share-based compensation expense (benefit) recognized | Total share-based compensation expense relating to stock options is recorded as follows (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Cost of product sales $ 0.3 $ 0.2 $ 0.7 $ 0.7 Research and development 0.9 0.9 2.7 2.8 Selling, general and administrative 17.2 15.5 48.8 41.3 Share-based compensation expense before taxes 18.4 16.6 52.2 44.8 Related income tax benefit (4.2) (3.8) (11.8) (10.3) Share-based compensation expense, net of taxes $ 14.2 $ 12.8 $ 40.4 $ 34.5 |
Summary of stock option exercise data | Stock option exercise data is summarized below (dollars in millions): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Number of options exercised — 4,857 191,508 287,760 Cash received $ — $ 0.6 $ 9.9 $ 15.5 Total intrinsic value of options exercised $ — $ 0.1 $ 11.5 $ 17.0 |
Restricted Stock Units | |
Share-Based Compensation | |
Schedule of restricted stock units activity | Weighted Weighted- Average Aggregate Number of Average Remaining Intrinsic Restricted Grant Contractual Value Stock Units Price Term (Years) (in millions) Unvested at January 1, 2019 186,255 $ 112.48 Granted 222,614 113.03 Vested (69,761) 111.81 Forfeited/canceled (18,445) 118.24 Unvested at September 30, 2019 320,663 $ 112.68 9.2 $ 25.6 |
Schedule of share-based compensation expense (benefit) recognized | Total share-based compensation expense relating to restricted stock units is recorded as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Cost of product sales $ 0.3 $ 0.1 $ 0.8 $ 0.3 Research and development 1.3 0.5 3.2 1.1 Selling, general and administrative 2.2 1.8 5.8 3.9 Share-based compensation expense before taxes 3.8 2.4 9.8 5.3 Related income tax benefit (0.8) (0.5) (2.2) (1.2) Share-based compensation expense, net of taxes $ 3.0 $ 1.9 $ 7.6 $ 4.1 |
STAP awards | |
Share-Based Compensation | |
Schedule of share-based compensation expense (benefit) recognized | Share-based compensation expense (benefit) recognized in connection with STAP awards is as follows (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Cost of product sales $ 0.1 $ 2.0 $ (1.9) $ (4.0) Research and development 0.4 6.8 (9.9) (15.2) Selling, general and administrative 0.9 23.4 (35.2) (60.9) Share-based compensation expense (benefit) before taxes 1.4 32.2 (47.0) (80.1) Related income tax (benefit) expense (0.2) (7.4) 10.7 18.3 Share-based compensation expense (benefit), net of taxes $ 1.2 $ 24.8 $ (36.3) $ (61.8) |
Schedule of weighted-average assumptions to measure the fair value of outstanding STAP awards | September 30, September 30, 2019 2018 Expected volatility 29.3 % 33.4 % Risk-free interest rate 1.6 % 2.5 % Expected term of awards (in years) 2.1 0.9 Expected dividend yield — % — % |
Summary of the activity and status of STAP awards | Weighted Average Weighted Remaining Aggregate Average Contractual Intrinsic Number of Exercise Term Value Awards Price (in Years) (in millions) Outstanding at January 1, 2019 2,867,979 $ 107.85 Granted — — Exercised (138,773) 59.36 Forfeited/canceled (80,182) 159.91 Outstanding at September 30, 2019 2,649,024 $ 108.82 4.3 $ 22.4 Exercisable at September 30, 2019 2,639,024 $ 109.03 4.3 $ 22.1 Unvested at September 30, 2019 10,000 $ 52.57 3.2 $ 0.3 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Common Share | |
Schedule of components of basic and diluted earnings (loss) per common share | Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Numerator: Net income (loss) $ 132.4 $ 106.5 $ (157.1) $ 523.9 Denominator: Weighted average outstanding shares — basic 43.9 43.6 43.8 43.5 Effect of dilutive securities (1) Stock options, restricted stock units and employee stock purchase plan 0.1 0.4 — 0.5 Weighted average shares — diluted (2) 44.0 44.0 43.8 44.0 Net income (loss) per common share: Basic $ 3.02 $ 2.44 $ (3.59) $ 12.04 Diluted $ 3.01 $ 2.42 $ (3.59) $ 11.91 Stock options and restricted stock units excluded from calculation (2) 8.0 4.5 7.1 4.6 (1) Calculated using the treasury stock method. (2) The common shares underlying certain stock options and restricted stock units have been excluded from the computation of diluted earnings per share because their impact would be anti-dilutive for the three-and nine-month periods ended September 30, 2019 and September 30, 2018. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Information | |
Schedule of net product sales, cost of product sales and gross profit for each commercial products | Net product sales, cost of product sales and gross profit for each of our commercial products were as follows (in millions): Three Months Ended September 30, 2019 Remodulin Tyvaso Orenitram Unituxin Adcirca Total Net product sales $ 168.3 $ 110.8 $ 62.0 $ 30.1 $ 30.3 $ 401.5 Cost of product sales 5.5 6.9 3.5 4.1 13.0 33.0 Gross profit $ 162.8 $ 103.9 $ 58.5 $ 26.0 $ 17.3 $ 368.5 2018 Net product sales $ 153.6 $ 107.8 $ 53.8 $ 22.9 $ 74.6 $ 412.7 Cost of product sales 4.4 6.9 3.9 4.2 32.5 51.9 Gross profit $ 149.2 $ 100.9 $ 49.9 $ 18.7 $ 42.1 $ 360.8 Nine Months Ended September 30, 2019 Remodulin Tyvaso Orenitram Unituxin Adcirca Total Net product sales $ 479.6 $ 324.2 $ 174.4 $ 80.1 $ 79.4 $ 1,137.7 Cost of product sales 16.1 14.8 12.3 11.4 34.2 88.8 Gross profit $ 463.5 $ 309.4 $ 162.1 $ 68.7 $ 45.2 $ 1,048.9 2018 Net product sales $ 439.9 $ 308.3 $ 155.5 $ 60.7 $ 282.0 $ 1,246.4 Cost of product sales 10.8 14.3 9.9 9.9 121.9 166.8 Gross profit $ 429.1 $ 294.0 $ 145.6 $ 50.8 $ 160.1 $ 1,079.6 |
Schedule of net revenues from external customers by geographic area | Geographic revenues are determined based on the country in which our customers (distributors) are located. Total revenues from external customers by geographic area are as follows (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 United States $ 359.4 $ 389.0 $ 1,028.4 $ 1,177.1 Rest-of-World (1) 42.1 23.7 109.3 69.3 Total $ 401.5 $ 412.7 $ 1,137.7 $ 1,246.4 (1) Primarily Europe. |
Schedule of revenue from two specialty pharmaceutical distributors in the United States as a percentage of total revenue | Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Distributor 1 53 % 52 % 55 % 50 % Distributor 2 21 % 18 % 21 % 17 % |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Leases | |||||
Decrease to retained earnings | $ (5.1) | ||||
Right-of-use assets | $ 8.2 | $ 4.7 | $ 4.7 | ||
Other non-current assets | us-gaap:OtherAssetsNoncurrent | us-gaap:OtherAssetsNoncurrent | |||
Current lease liabilities | 4.1 | $ 1.9 | $ 1.9 | ||
Other current liabilities | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent | |||
Non-current lease liabilities | 4.1 | $ 2.8 | $ 2.8 | ||
Other non-current liabilities | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent | |||
Total operating lease liabilities | 8.2 | $ 4.7 | $ 4.7 | ||
Operating lease expense | 1.2 | $ 1 | $ 3.9 | $ 3.2 | |
Broader collaboration arrangement | |||||
Leases | |||||
Reclassification from Property, plant and equipment to other noncurrent assets | $ 23.1 | ||||
ASU 2016-02 | |||||
Leases | |||||
Decrease to retained earnings | $ (5.1) | ||||
Weighted-average remaining lease term | 3 years | ||||
Weighted-average discount rate | 4.90% |
Investments - Available-for-Sal
Investments - Available-for-Sale Debt Securities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Marketable investments classified as available-for-sale securities: | ||
Amortized Cost | $ 1,511.5 | $ 1,149.7 |
Gross Unrealized Gains | 5 | 0.7 |
Gross Unrealized Losses | (0.6) | (4.2) |
Fair Value | 1,515.9 | 1,146.2 |
U.S. government and agency securities | ||
Marketable investments classified as available-for-sale securities: | ||
Amortized Cost | 1,287.9 | 1,077.4 |
Gross Unrealized Gains | 3.2 | 0.7 |
Gross Unrealized Losses | (0.5) | (3.9) |
Fair Value | 1,290.6 | 1,074.2 |
Corporate debt securities | ||
Marketable investments classified as available-for-sale securities: | ||
Amortized Cost | 223.6 | 72.3 |
Gross Unrealized Gains | 1.8 | 0 |
Gross Unrealized Losses | (0.1) | (0.3) |
Fair Value | $ 225.3 | $ 72 |
Investments - Current and Non-c
Investments - Current and Non-current of Available-for-Sale Debt Securities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Reported under the following captions on our consolidated balance sheet: | ||
Total | $ 1,515.9 | $ 1,146.2 |
Current marketable investments | ||
Reported under the following captions on our consolidated balance sheet: | ||
Total | 785.5 | 705.8 |
Non-current marketable investments | ||
Reported under the following captions on our consolidated balance sheet: | ||
Total | $ 730.4 | $ 440.4 |
Investments - Contractual Matur
Investments - Contractual Maturities of Available-for-Sale Marketable Investments (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due within one year | $ 784.7 | $ 708.2 |
Due in one to three years | 726.8 | 441.5 |
Total | 1,511.5 | 1,149.7 |
Fair Value | ||
Due within one year | 785.5 | 705.8 |
Due in one to three years | 730.4 | 440.4 |
Total | $ 1,515.9 | $ 1,146.2 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Apr. 30, 2017 | |
Investments in Privately-Held Companies and Investments in Equity Securities with Readily Determinable Fair Values | |||||||
Impairment charges | $ 12.4 | $ 12.4 | |||||
Goodwill on deconsolidation | $ 3.5 | ||||||
Privately-held Companies | |||||||
Investments in Privately-Held Companies and Investments in Equity Securities with Readily Determinable Fair Values | |||||||
Investments | 101.7 | $ 101.7 | |||||
Upward price changes of investments | 0 | 0 | |||||
Impairment charges | $ 12.4 | ||||||
Privately-held Companies | Variable Interest Entity | |||||||
Investments in Privately-Held Companies and Investments in Equity Securities with Readily Determinable Fair Values | |||||||
Minority equity investment in a privately-held company | $ 7.5 | ||||||
Impairment charge on research and development | $ 8.8 | ||||||
Goodwill on deconsolidation | 3.5 | ||||||
Temporary equity derecognized | $ 8.4 | ||||||
Net loss on deconsolidating | (2) | ||||||
Equity securities | |||||||
Investments in Privately-Held Companies and Investments in Equity Securities with Readily Determinable Fair Values | |||||||
Investments in equity securities with readily determinable fair value | $ 64.8 | $ 64.8 | $ 3.5 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring fair value measurements - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Equity securities | Other income (expense), net | |||
Liabilities | |||
Net unrealized losses on securities | $ 13 | ||
Net unrealized gains on securities | $ 19.5 | ||
Level 1 | |||
Assets | |||
Total assets | 318.2 | 318.2 | $ 251.1 |
Level 1 | Money market funds | |||
Assets | |||
Total assets | 253.4 | 253.4 | 247.6 |
Level 1 | Equity securities | |||
Assets | |||
Total assets | 64.8 | 64.8 | 3.5 |
Level 2 | |||
Assets | |||
Total assets | 1,602.8 | 1,602.8 | 1,185.8 |
Level 2 | Time deposits | |||
Assets | |||
Total assets | 86.9 | 86.9 | 35.9 |
Level 2 | U.S. government and agency securities | |||
Assets | |||
Total assets | 1,290.6 | 1,290.6 | 1,074.2 |
Level 2 | Corporate debt securities | |||
Assets | |||
Total assets | 225.3 | 225.3 | 75.7 |
Level 3 | |||
Liabilities | |||
Contingent consideration | 13.4 | 13.4 | 13.4 |
Total liabilities | 13.4 | 13.4 | 13.4 |
Balance | |||
Assets | |||
Total assets | 1,921 | 1,921 | 1,436.9 |
Liabilities | |||
Contingent consideration | 13.4 | 13.4 | 13.4 |
Total liabilities | 13.4 | 13.4 | 13.4 |
Balance | Money market funds | |||
Assets | |||
Total assets | 253.4 | 253.4 | 247.6 |
Balance | Time deposits | |||
Assets | |||
Total assets | 86.9 | 86.9 | 35.9 |
Balance | U.S. government and agency securities | |||
Assets | |||
Total assets | 1,290.6 | 1,290.6 | 1,074.2 |
Balance | Corporate debt securities | |||
Assets | |||
Total assets | 225.3 | 225.3 | 75.7 |
Balance | Equity securities | |||
Assets | |||
Total assets | $ 64.8 | $ 64.8 | $ 3.5 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Inventories | ||
Raw materials | $ 19.3 | $ 24.3 |
Work-in-progress | 29.8 | 28 |
Finished goods | 45 | 48.7 |
Total inventories | $ 94.1 | $ 101 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Goodwill and Other Intangible Assets | ||||
Goodwill, Gross | $ 28 | $ 28 | $ 31.5 | |
Goodwill, Net | 28 | 28 | 31.5 | |
Total Goodwill and other intangible assets, Gross | 163.6 | 163.6 | 175.9 | |
Other intangible assets, Accumulated Amortization | (5.2) | (5.2) | (5.1) | |
Total goodwill and other intangible assets, Net | 158.4 | 158.4 | 170.8 | |
Impairment charges | 8.8 | |||
Goodwill wrote off | 3.5 | |||
Technology, patents and trade names | ||||
Goodwill and Other Intangible Assets | ||||
Other intangible assets, Gross | 6.7 | 6.7 | 6.7 | |
Other intangible assets, Accumulated Amortization | (5.2) | (5.2) | (5.1) | |
Other intangible assets, Net | 1.5 | 1.5 | 1.6 | |
In-process research and development | ||||
Goodwill and Other Intangible Assets | ||||
Other intangible assets, Gross | 128.9 | 128.9 | 137.7 | |
Other intangible assets, Accumulated Amortization | 0 | |||
Other intangible assets, Net | $ 128.9 | $ 128.9 | $ 137.7 | |
Impairment charges | $ 8.8 |
Debt (Details)
Debt (Details) - USD ($) $ in Millions | Jan. 24, 2019 | Jun. 30, 2019 | Jan. 31, 2019 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 27, 2018 |
Debt | |||||||||
Line of credit (current) | $ 250 | $ 250 | |||||||
Debt issuance costs | 0.7 | $ 13.2 | |||||||
Arena Pharmaceuticals, Inc. | |||||||||
Debt | |||||||||
Upfront payment | $ 800 | $ 800 | |||||||
Credit Agreement | |||||||||
Debt | |||||||||
Borrowing | 800 | ||||||||
Period of extension in maturity | 1 year | 1 year | |||||||
Debt aggregate principal value | $ 250 | ||||||||
Interest expense | $ 11.7 | $ 4.1 | 34.2 | 9.6 | |||||
Upfront payment | $ 800 | ||||||||
Outstanding Balance | $ 1,000 | 1,000 | |||||||
Line of credit repaid during the period | $ 50 | ||||||||
Debt issuance costs | $ 13.2 | ||||||||
Debt issuance costs capitalized | 12.6 | ||||||||
First unsecured revolving credit facility | |||||||||
Debt | |||||||||
Borrowing | 1,000 | 1,000 | |||||||
Second unsecured revolving credit facility | |||||||||
Debt | |||||||||
Borrowing | $ 500 | $ 500 | |||||||
Increase in borrowing capacity | $ 300 |
Share-Based Compensation - Gene
Share-Based Compensation - General (Details) | 1 Months Ended | 9 Months Ended |
Feb. 28, 2019shares | Sep. 30, 2019itemshares | |
Share-Based Compensation | ||
Number of equity incentive plans | item | 2 | |
2015 Plan | ||
Share-Based Compensation | ||
Maximum number of shares authorized to be issued | 9,500,000 | |
Additional number of shares authorized to be issued | 450,000 | |
2019 Inducement Plan | Newly-hired employees | ||
Share-Based Compensation | ||
Number of equity incentive plans | 1 | |
Granted (in shares) | 99,000 | |
Amended and Restated Equity Incentive Plan (The 1999 Plan) | ||
Share-Based Compensation | ||
Granted (in shares) | 0 |
Share-Based Compensation - Allo
Share-Based Compensation - Allocation of Compensation Expense (Benefit) by Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-Based Compensation | ||||
Share-based compensation expense (benefit) before tax | $ 23.9 | $ 51.4 | $ 15.9 | $ (29.2) |
Stock Options | ||||
Share-Based Compensation | ||||
Share-based compensation expense (benefit) before tax | 18.4 | 16.6 | 52.2 | 44.8 |
Restricted Stock Units | ||||
Share-Based Compensation | ||||
Share-based compensation expense (benefit) before tax | 3.8 | 2.4 | 9.8 | 5.3 |
STAP awards | ||||
Share-Based Compensation | ||||
Share-based compensation expense (benefit) before tax | 1.4 | 32.2 | (47) | (80.1) |
Employee Stock Purchase Plan | ||||
Share-Based Compensation | ||||
Share-based compensation expense (benefit) before tax | $ 0.3 | $ 0.2 | $ 0.9 | $ 0.8 |
Share-Based Compensation - Assu
Share-Based Compensation - Assumptions For Stock Options (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-Based Compensation | ||||
Share-based compensation expense (benefit) before tax | $ 23.9 | $ 51.4 | $ 15.9 | $ (29.2) |
Stock Options | ||||
Share-Based Compensation | ||||
Granted (in shares) | 2,081,047 | |||
Total grant date fair value of employee stock options that vested | $ 36.4 | 33.9 | ||
Share-based compensation expense (benefit) before tax | $ 18.4 | $ 16.6 | $ 52.2 | $ 44.8 |
Method and assumptions on valuation of stock options | ||||
Expected volatility (as a percent) | 33.80% | 36.20% | ||
Risk-free interest rate (as a percent) | 2.40% | 2.70% | ||
Expected term of awards (in years) | 5 years 9 months 18 days | 6 years 3 months 18 days | ||
Expected dividend yield (as a percent) | 0.00% | 0.00% |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock and Status (Details) - Stock Options - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Options | |||
Outstanding at beginning of period (in shares) | 6,299,803 | ||
Granted (in shares) | 2,081,047 | ||
Exercised (in shares) | (4,857) | (191,508) | (287,760) |
Forfeited/canceled (in shares) | (95,016) | ||
Outstanding at the end of period (in shares) | 8,094,326 | ||
Exercisable at the end of period (in shares) | 3,915,462 | ||
Unvested at the end of period (in shares) | 4,178,864 | ||
Weighted-Average Exercise Price | |||
Outstanding at beginning of period (in dollars per share) | $ 120.78 | ||
Granted (in dollars per share) | 124.87 | ||
Exercised (in dollars per share) | 51.53 | ||
Forfeited (in dollars per share) | 131.04 | ||
Outstanding at the end of period (in dollars per share) | 123.35 | ||
Exercisable at the end of period (in dollars per share) | 119.40 | ||
Unvested at the end of period (in dollars per share) | $ 127.05 | ||
Weighted Average Remaining Contractual Term (in Years) | |||
Outstanding at the end of period (in Years) | 6 years 6 months | ||
Exercisable at the end of period (in Years) | 5 years 4 months 24 days | ||
Unvested at the end of period (in Years) | 7 years 7 months 6 days | ||
Outstanding at the end of period) | $ 8.4 | ||
Exercisable at the end of period | 8.2 | ||
Unvested at the end of period | $ 0.2 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value Disclosures [Abstract] | |||
Weighted average grant date fair value of stock options (in dollars per share) | $ 39.63 | $ 45.02 | |
Aggregate grant date fair value | $ 82.5 | $ 44.3 | |
Total grant date fair value of employee stock options that vested | $ 36.4 | $ 33.9 |
Share-Based Compensation - Shar
Share-Based Compensation - Share-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based compensation expense | ||||
Share-based compensation expense (benefit) before tax | $ 23.9 | $ 51.4 | $ 15.9 | $ (29.2) |
Stock Options | ||||
Share-based compensation expense | ||||
Share-based compensation expense (benefit) before tax | 18.4 | 16.6 | 52.2 | 44.8 |
Related income tax (benefit) expense | (4.2) | (3.8) | (11.8) | (10.3) |
Share-based compensation expense (benefit), net of taxes | 14.2 | 12.8 | 40.4 | 34.5 |
Unrecognized compensation cost | 108.4 | $ 108.4 | ||
Recognition of share-based compensation expense (in years) | 2 years 7 months 6 days | |||
Restricted Stock Units | ||||
Share-based compensation expense | ||||
Share-based compensation expense (benefit) before tax | 3.8 | 2.4 | $ 9.8 | 5.3 |
Related income tax (benefit) expense | (0.8) | (0.5) | (2.2) | (1.2) |
Share-based compensation expense (benefit), net of taxes | 3 | 1.9 | 7.6 | 4.1 |
Unrecognized compensation cost | 28.4 | $ 28.4 | ||
Recognition of share-based compensation expense (in years) | 2 years 1 month 6 days | |||
Cost of product sales | Stock Options | ||||
Share-based compensation expense | ||||
Share-based compensation expense (benefit) before tax | 0.3 | 0.2 | $ 0.7 | 0.7 |
Cost of product sales | Restricted Stock Units | ||||
Share-based compensation expense | ||||
Share-based compensation expense (benefit) before tax | 0.3 | 0.1 | 0.8 | 0.3 |
Research and development | Stock Options | ||||
Share-based compensation expense | ||||
Share-based compensation expense (benefit) before tax | 0.9 | 0.9 | 2.7 | 2.8 |
Research and development | Restricted Stock Units | ||||
Share-based compensation expense | ||||
Share-based compensation expense (benefit) before tax | 1.3 | 0.5 | 3.2 | 1.1 |
Selling, general and administrative | Stock Options | ||||
Share-based compensation expense | ||||
Share-based compensation expense (benefit) before tax | 17.2 | 15.5 | 48.8 | 41.3 |
Selling, general and administrative | Restricted Stock Units | ||||
Share-based compensation expense | ||||
Share-based compensation expense (benefit) before tax | $ 2.2 | $ 1.8 | $ 5.8 | $ 3.9 |
Share-Based Compensation - St_2
Share-Based Compensation - Stock Options Exercise Data (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Summary of stock option exercise data | |||
Cash received from options exercised | $ 9.9 | $ 15.5 | |
Stock Options | |||
Summary of stock option exercise data | |||
Number of options exercised (in shares) | 4,857 | 191,508 | 287,760 |
Cash received from options exercised | $ 0.6 | $ 9.9 | $ 15.5 |
Total intrinsic value of options exercised | $ 0.1 | $ 11.5 | $ 17 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Options Activity and Status (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($)item$ / sharesshares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)item$ / sharesshares | Sep. 30, 2018USD ($) | |
Aggregate Intrinsic Value | ||||
Share-based compensation expense (benefit) before tax | $ | $ 23.9 | $ 51.4 | $ 15.9 | $ (29.2) |
Restricted Stock Units | ||||
Share-Based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Entitled To Receive For Each Unit Upon Vesting | item | 1 | 1 | ||
Number of Restricted Stock Units | ||||
Unvested at beginning of period (in shares) | shares | 186,255 | |||
Granted (in shares) | shares | 222,614 | |||
Vested (in shares) | shares | (69,761) | |||
Forfeited/cancelled (in shares) | shares | (18,445) | |||
Unvested at the end of period (in shares) | shares | 320,663 | 320,663 | ||
Weighted Average Grant Price | ||||
Unvested at beginning of period (in dollars per share) | $ / shares | $ 112.48 | |||
Granted (in dollars per share) | $ / shares | 113.03 | |||
Vested (in dollars per share) | $ / shares | 111.81 | |||
Forfeited/cancelled (in dollars per share) | $ / shares | 118.24 | |||
Unvested at the end of period (in dollars per share) | $ / shares | $ 112.68 | $ 112.68 | ||
Weighted Average Remaining Contractual Term (Years) | ||||
Outstanding at the end of period (Years) | 9 years 2 months 12 days | |||
Aggregate Intrinsic Value | ||||
Unvested at the end of period (in dollars) | $ | $ 25.6 | $ 25.6 | ||
Share-based compensation expense (benefit) before tax | $ | $ 3.8 | $ 2.4 | $ 9.8 | $ 5.3 |
Weighted average remaining vesting period (in years) | 2 years 1 month 6 days |
Share-Based Compensation - STAP
Share-Based Compensation - STAP awards (Details) - STAP awards - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Awards granted | |||
Grant expiration period from the grant date | 4 years | ||
Aggregate STAP liability | $ 18.3 | $ 72.2 | |
Weighted-average assumptions used to measure the fair value of the outstanding STAP awards: | |||
Expected volatility (as a percent) | 29.30% | 33.40% | |
Risk-free interest rate (as a percent) | 1.60% | 2.50% | |
Expected term of awards (in years) | 2 years 1 month 6 days | 10 months 24 days | |
Closing price of common stock (in dollars per share) | $ 79.75 | $ 127.88 | $ 108.90 |
Share-based awards activity | |||
Outstanding at January 1, 2018 | 2,867,979 | ||
Exercised (in shares) | (138,773) | ||
Forfeited/cancelled (in shares) | (80,182) | ||
Outstanding at December 31, 2018 | 2,649,024 | ||
Exercisable at December 31, 2018 | 2,639,024 | ||
Unvested at December 31, 2018 | 10,000 | ||
Share awards, Weighted Average Exercise Price | |||
Outstanding at January 1, 2018 | $ 107.85 | ||
Exercised (in dollars per share) | 59.36 | ||
Forfeited (in dollars per share) | 159.91 | ||
Outstanding at December 31, 2018 | 108.82 | ||
Exercisable at December 31, 2018 | 109.03 | ||
Unvested at December 31, 2018 | $ 52.57 | ||
Share awards, Weighted Average Remaining Contractual Term (in Years) | |||
Outstanding at December 31, 2018 | 4 years 3 months 18 days | ||
Exercisable at December 31, 2018 | 4 years 3 months 18 days | ||
Unvested at December 31, 2018 | 3 years 2 months 12 days | ||
Share awards, Aggregate Intrinsic Value | |||
Outstanding at December 31, 2018 | $ 22.4 | ||
Exercisable at December 31, 2018 | 22.1 | ||
Unvested at December 31, 2018 | $ 0.3 |
Share-Based Compensation - Sh_2
Share-Based Compensation - Share Tracking Awards Plans - Benefit recognized (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share based compensation benefit recognized in connection with the STAP | ||||
Share-based compensation expense (benefit) before tax | $ 23.9 | $ 51.4 | $ 15.9 | $ (29.2) |
STAP awards | ||||
Share based compensation benefit recognized in connection with the STAP | ||||
Share-based compensation expense (benefit) before tax | 1.4 | 32.2 | (47) | (80.1) |
Related income tax (benefit) expense | (0.2) | (7.4) | 10.7 | 18.3 |
Share-based compensation expense (benefit), net of taxes | 1.2 | 24.8 | (36.3) | (61.8) |
Cash payments on awards exercised during the period | 6.9 | 71.5 | ||
Cost of product sales | STAP awards | ||||
Share based compensation benefit recognized in connection with the STAP | ||||
Share-based compensation expense (benefit) before tax | 0.1 | 2 | (1.9) | (4) |
Research and development | STAP awards | ||||
Share based compensation benefit recognized in connection with the STAP | ||||
Share-based compensation expense (benefit) before tax | 0.4 | 6.8 | (9.9) | (15.2) |
Selling, general and administrative | STAP awards | ||||
Share based compensation benefit recognized in connection with the STAP | ||||
Share-based compensation expense (benefit) before tax | $ 0.9 | $ 23.4 | $ (35.2) | $ (60.9) |
Share-Based Compensation - Empl
Share-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan | 1 Months Ended |
Jun. 30, 2012shares | |
Share-based compensation expense | |
Maximum percentage of compensation employees may contribute for ESPP (in percentage) | 15.00% |
Percentage of the lower of the fair market value of common stock on the first or last trading day of a given offering period (in percentage) | 85.00% |
Maximum number of shares each eligible employees may purchase in any given offering period (in shares) | 4,000 |
Term of ESPP (in years) | 20 years |
Maximum number of shares authorized to be issued (in shares) | 3,000,000 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||
Net income (loss) | $ 132.4 | $ 106.5 | $ (157.1) | $ 523.9 |
Denominator: | ||||
Weighted average outstanding shares - basic (in shares) | 43.9 | 43.6 | 43.8 | 43.5 |
Effect of dilutive securities: | ||||
Stock options, restricted stock units and employee stock purchase plan (in shares) | 0.1 | 0.4 | 0.5 | |
Weighted average shares - diluted (in shares) | 44 | 44 | 43.8 | 44 |
Net income (loss) per common share: | ||||
Basic (in dollars per share) | $ 3.02 | $ 2.44 | $ (3.59) | $ 12.04 |
Diluted (in dollars per share) | $ 3.01 | $ 2.42 | $ (3.59) | $ 11.91 |
Stock options and restricted stock units excluded from calculation (in shares) | 8 | 4.5 | 7.1 | 4.6 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Jan. 24, 2019 | Jan. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Effective income tax rate (as a percent) | 33.00% | 21.00% | ||
Unrecognized tax benefits | $ 0.9 | $ 0.9 | ||
Positions of unrecognized tax benefits, if realized, would impact the effective tax rate | 0.7 | $ 0.7 | ||
Arena Pharmaceuticals, Inc. | ||||
One-time payment | $ 800 | $ 800 | ||
Increase in deferred tax assets | $ 172.4 |
Segment Information - General (
Segment Information - General (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | |
Net product sales, cost of product sales and gross profit by product | ||||
Net product sales | $ 401.5 | $ 412.7 | $ 1,137.7 | $ 1,246.4 |
Cost of product sales | 33 | 51.9 | 88.8 | 166.8 |
Gross profit | 368.5 | 360.8 | $ 1,048.9 | 1,079.6 |
Segment disclosures | ||||
Number of operating segments | segment | 1 | |||
Remodulin | ||||
Net product sales, cost of product sales and gross profit by product | ||||
Net product sales | 168.3 | 153.6 | $ 479.6 | 439.9 |
Cost of product sales | 5.5 | 4.4 | 16.1 | 10.8 |
Gross profit | 162.8 | 149.2 | 463.5 | 429.1 |
Tyvaso | ||||
Net product sales, cost of product sales and gross profit by product | ||||
Net product sales | 110.8 | 107.8 | 324.2 | 308.3 |
Cost of product sales | 6.9 | 6.9 | 14.8 | 14.3 |
Gross profit | 103.9 | 100.9 | 309.4 | 294 |
Orenitram | ||||
Net product sales, cost of product sales and gross profit by product | ||||
Net product sales | 62 | 53.8 | 174.4 | 155.5 |
Cost of product sales | 3.5 | 3.9 | 12.3 | 9.9 |
Gross profit | 58.5 | 49.9 | 162.1 | 145.6 |
Unituxin | ||||
Net product sales, cost of product sales and gross profit by product | ||||
Net product sales | 30.1 | 22.9 | 80.1 | 60.7 |
Cost of product sales | 4.1 | 4.2 | 11.4 | 9.9 |
Gross profit | 26 | 18.7 | 68.7 | 50.8 |
Adcirca | ||||
Net product sales, cost of product sales and gross profit by product | ||||
Net product sales | 30.3 | 74.6 | 79.4 | 282 |
Cost of product sales | 13 | 32.5 | 34.2 | 121.9 |
Gross profit | $ 17.3 | $ 42.1 | $ 45.2 | $ 160.1 |
Segment Information - Geographi
Segment Information - Geographic Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues from external customers by geographic area | ||||
Total revenues | $ 401.5 | $ 412.7 | $ 1,137.7 | $ 1,246.4 |
United States | ||||
Revenues from external customers by geographic area | ||||
Total revenues | 359.4 | 389 | 1,028.4 | 1,177.1 |
Rest-of-World | ||||
Revenues from external customers by geographic area | ||||
Total revenues | $ 42.1 | $ 23.7 | $ 109.3 | $ 69.3 |
Segment Information - Concentra
Segment Information - Concentration Risk (Details) - item | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Information | ||||
Number of distributors | 2 | |||
Net revenues | Customer concentration | Customer one | ||||
Segment Information | ||||
Concentration risk, percentage | 53.00% | 52.00% | 55.00% | 50.00% |
Net revenues | Customer concentration | Customer two | ||||
Segment Information | ||||
Concentration risk, percentage | 21.00% | 18.00% | 21.00% | 17.00% |
Arena License Agreement (Detail
Arena License Agreement (Details) - Arena Pharmaceuticals, Inc. - USD ($) $ in Millions | Jan. 24, 2019 | Jan. 31, 2019 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions | ||
Upfront payment | $ 800 | $ 800 |
Marketing approval in the United States | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | ||
Milestone payment to be made upon marketing approval | 250 | |
Marketing approval in any of Japan, France, Italy, the United Kingdom, Spain or Germany | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | ||
Milestone payment to be made upon marketing approval | $ 150 |