Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | JAZZ | |
Entity Registrant Name | Jazz Pharmaceuticals plc | |
Entity Central Index Key | 1,232,524 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 59,950,496 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 252,615 | $ 365,963 |
Investments | 200,000 | 60,000 |
Accounts receivable, net of allowances | 258,616 | 234,244 |
Inventories | 41,344 | 34,051 |
Prepaid expenses | 29,249 | 24,501 |
Other current assets | 49,120 | 29,310 |
Total current assets | 830,944 | 748,069 |
Property and equipment, net | 159,386 | 107,490 |
Intangible assets, net | 3,019,035 | 3,012,001 |
Goodwill | 941,428 | 893,810 |
Deferred tax assets, net, non-current | 23,662 | 15,060 |
Deferred financing costs | 8,149 | 9,737 |
Other non-current assets | 16,420 | 14,060 |
Total assets | 4,999,024 | 4,800,227 |
Current liabilities: | ||
Accounts payable | 29,972 | 22,415 |
Accrued liabilities | 179,890 | 193,268 |
Current portion of long-term debt | 36,094 | 36,094 |
Income taxes payable | 13,603 | 4,506 |
Deferred revenue | 8,618 | 1,123 |
Total current liabilities | 268,177 | 257,406 |
Deferred revenue, non-current | 18,270 | 2,601 |
Long-term debt, less current portion | 1,543,819 | 1,993,531 |
Deferred tax liability, net, non-current | 540,964 | 556,733 |
Other non-current liabilities | 158,497 | 112,617 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Ordinary shares | 6 | 6 |
Non-voting euro deferred shares | 55 | 55 |
Capital redemption reserve | 472 | 472 |
Additional paid-in capital | 1,899,628 | 1,665,232 |
Accumulated other comprehensive loss | (158,987) | (317,333) |
Retained earnings | 728,123 | 528,907 |
Total shareholders’ equity | 2,469,297 | 1,877,339 |
Total liabilities and shareholders’ equity | $ 4,999,024 | $ 4,800,227 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Product sales, net | $ 407,971 | $ 371,621 | $ 1,171,304 | $ 1,084,647 |
Royalties and contract revenues | 3,884 | 2,560 | 10,990 | 6,705 |
Total revenues | 411,855 | 374,181 | 1,182,294 | 1,091,352 |
Operating expenses: | ||||
Cost of product sales (excluding amortization of intangible assets) | 31,203 | 24,311 | 84,940 | 71,730 |
Selling, general and administrative | 124,523 | 124,368 | 401,106 | 375,751 |
Research and development | 47,362 | 47,796 | 132,447 | 118,139 |
Acquired in-process research and development | 75,000 | 15,000 | 77,000 | 23,750 |
Intangible asset amortization | 47,313 | 26,453 | 99,164 | 75,832 |
Total operating expenses | 325,401 | 237,928 | 794,657 | 665,202 |
Income from operations | 86,454 | 136,253 | 387,637 | 426,150 |
Interest expense, net | (19,192) | (18,498) | (56,330) | (42,811) |
Foreign exchange loss | (2,224) | (749) | (9,115) | (1,568) |
Loss on extinguishment and modification of debt | 0 | (638) | 0 | (638) |
Income before income tax provision and equity in loss of investees | 65,038 | 116,368 | 322,192 | 381,133 |
Income tax provision | 1,239 | 26,437 | 65,914 | 100,888 |
Equity in loss of investees | 273 | 103 | 637 | 103 |
Net income | $ 63,526 | $ 89,828 | $ 255,641 | $ 280,142 |
Net income per ordinary share: | ||||
Basic (in dollars per share) | $ 1.06 | $ 1.49 | $ 4.26 | $ 4.62 |
Diluted (in dollars per share) | $ 1.03 | $ 1.45 | $ 4.17 | $ 4.51 |
Weighted-average ordinary shares used in per share calculations - basic (in shares) | 60,108 | 60,437 | 60,030 | 60,692 |
Weighted-average ordinary shares used in per share calculations - diluted (in shares) | 61,436 | 61,795 | 61,360 | 62,150 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 63,526 | $ 89,828 | $ 255,641 | $ 280,142 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 50,870 | 14,612 | 159,302 | 32,096 |
Unrealized loss on hedging activities, net of tax benefit (expense) of $(56), $0, $137 and $0, respectively | 392 | 0 | (956) | 0 |
Other comprehensive income | 51,262 | 14,612 | 158,346 | 32,096 |
Total comprehensive income | $ 114,788 | $ 104,440 | $ 413,987 | $ 312,238 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax benefit (expense) on hedging activities | $ (56) | $ 0 | $ 137 | $ 0 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities | ||
Net income | $ 255,641 | $ 280,142 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Intangible asset amortization | 99,164 | 75,832 |
Share-based compensation | 79,579 | 74,490 |
Depreciation | 9,288 | 8,165 |
Acquired in-process research and development | 77,000 | 23,750 |
Loss on disposal of property and equipment | 360 | 3 |
Deferred income taxes | (53,359) | (29,273) |
Provision for losses on accounts receivable and inventory | 1,825 | 1,764 |
Loss on extinguishment and modification of debt | 0 | 638 |
Amortization of debt discount and deferred financing costs | 19,234 | 16,418 |
Other non-cash transactions | 14,480 | 1,460 |
Changes in assets and liabilities: | ||
Accounts receivable | (22,273) | (28,274) |
Inventories | (7,132) | (14,117) |
Prepaid expenses and other current assets | (10,590) | (8,512) |
Other long-term assets | (1,825) | 297 |
Accounts payable | 6,130 | (4,288) |
Accrued liabilities | (23,583) | (7,792) |
Income taxes payable | 8,495 | 3,323 |
Deferred revenue | 23,163 | (682) |
Other non-current liabilities | 12,931 | 18,352 |
Net cash provided by operating activities | 488,528 | 411,696 |
Investing activities | ||
Purchases of property and equipment | (20,072) | (8,410) |
Acquisitions, net of cash acquired | 0 | (1,502,443) |
Acquired in-process research and development | (77,000) | (23,750) |
Acquisition of investments | (290,000) | (75,904) |
Proceeds from maturity of investments | 150,000 | 11,211 |
Acquisition of intangible assets | 0 | (150,000) |
Net cash used in investing activities | (237,072) | (1,749,296) |
Financing activities | ||
Net proceeds from issuance of debt | 559,484 | 994,777 |
Proceeds from employee equity incentive and purchase plans | 22,793 | 17,951 |
Repayments of long-term debt | (27,070) | (19,282) |
Payment of employee withholding taxes related to share-based awards | (17,909) | (20,595) |
Share repurchases | (56,425) | (259,819) |
Repayments under revolving credit facility | (850,000) | 0 |
Net cash provided by (used in) financing activities | (369,127) | 713,032 |
Effect of exchange rates on cash and cash equivalents | 4,323 | 2,350 |
Net decrease in cash and cash equivalents | (113,348) | (622,218) |
Cash and cash equivalents, at beginning of period | 365,963 | 988,785 |
Cash and cash equivalents, at end of period | $ 252,615 | $ 366,567 |
The Company and Summary of Sign
The Company and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
The Company and Summary of Significant Accounting Policies | The Company and Summary of Significant Accounting Policies Jazz Pharmaceuticals plc is an international biopharmaceutical company focused on improving patients’ lives by identifying, developing and commercializing meaningful products that address unmet medical needs. We have a diverse portfolio of products and product candidates, with a focus in the areas of sleep and hematology/oncology. Our lead marketed products are: • Xyrem ® (sodium oxybate) oral solution , the only product approved by the U.S. Food and Drug Administration, or FDA, and marketed in the U.S. for the treatment of both cataplexy and excessive daytime sleepiness, or EDS, in patients with narcolepsy; • Erwinaze ® (asparaginase Erwinia chrysanthemi ) , a treatment approved in the U.S. and in certain markets in Europe (where it is marketed as Erwinase ® ) for patients with acute lymphoblastic leukemia, or ALL, who have developed hypersensitivity to E. coli -derived asparaginase; • Defitelio ® (defibrotide sodium) , a product approved in the U.S. for the treatment of adult and pediatric patients with hepatic veno-occlusive disease, or VOD, also known as sinusoidal obstruction syndrome, or SOS, with renal or pulmonary dysfunction following hematopoietic stem cell transplantation, or HSCT, and in Europe (where it is marketed as Defitelio ® (defibrotide)) for the treatment of severe VOD in adults and children undergoing HSCT therapy; and • Vyxeos TM (daunorubicin and cytarabine) liposome for injection , a product approved in the U.S. for the treatment of adults with newly-diagnosed therapy-related acute myeloid leukemia, or AML, or AML with myelodysplasia-related changes. Our strategy is to create shareholder value by: • Growing sales of the existing products in our portfolio, including by identifying and investing in growth opportunities such as new treatment indications and new geographic markets; • Acquiring or licensing rights to clinically meaningful and differentiated products that are on the market or product candidates that are in late-stage development; and • Pursuing targeted development of post-discovery differentiated product candidates. We apply a disciplined approach to allocating our resources between investments in our current commercial and development portfolio and acquisitions or in-licensing of new assets. Throughout this report, unless otherwise indicated or the context otherwise requires, all references to “Jazz Pharmaceuticals,” “the registrant,” “we,” “us,” and “our” refer to Jazz Pharmaceuticals plc and its consolidated subsidiaries. Throughout this report, all references to “ordinary shares” refer to Jazz Pharmaceuticals plc’s ordinary shares. Basis of Presentation These unaudited condensed consolidated financial statements have been prepared following the requirements of the U.S. Securities and Exchange Commission, or SEC, for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles, or U.S. GAAP, can be condensed or omitted. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our annual consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2016 . In the opinion of management, these condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, considered necessary for the fair presentation of our financial position and operating results. The results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 , for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of Jazz Pharmaceuticals plc and our subsidiaries, and intercompany transactions and balances have been eliminated. Significant Risks and Uncertainties Our financial results remain significantly influenced by sales of Xyrem. In the three and nine months ended September 30, 2017, net product sales of Xyrem were $303.9 million and $874.2 million , respectively, which represented 74% and 75% of total net product sales, respectively. Our ability to maintain or increase product sales of Xyrem is subject to risks and uncertainties, including the potential U.S. introduction of a generic version of Xyrem before the entry dates specified in our settlements with certain companies that had filed abbreviated new drug applications, or ANDAs, with the FDA seeking approval to market a generic version of Xyrem or on terms that are different from those contemplated by the settlements; the potential U.S. introduction of an alternative product to Xyrem for treating cataplexy and/or EDS in narcolepsy; changes to, increases in or uncertainties around regulatory restrictions, including, among other things, changes to our Xyrem risk evaluation and mitigation strategy, or REMS, particularly in light of the FDA’s waiver of the single shared REMS requirement for sodium oxybate and approval of a separate generic sodium oxybate REMS; any increase in pricing pressure from, or restrictions on reimbursement imposed by, third party payors; changes in healthcare laws and policy, including changes in requirements for patient assistance programs, rebates, reimbursement and coverage by federal healthcare programs, and changes resulting from increased scrutiny on pharmaceutical pricing and REMS programs by government entities; operational disruptions at the Xyrem central pharmacy or any failure to comply with our REMS obligations to the satisfaction of the FDA; any supply or manufacturing problems, including any problems with our sole source provider of the active pharmaceutical ingredient for Xyrem; continued acceptance of Xyrem by physicians and patients, even in the face of negative publicity that surfaces from time to time; changes to our label, including new safety warnings or changes to our boxed warning, that further restrict how we market and sell Xyrem; and our U.S.-based sodium oxybate and Xyrem suppliers’ ability to obtain sufficient quotas from the U.S. Drug Enforcement Administration, or DEA, to satisfy our needs for Xyrem. Although Xyrem is protected by patents covering its manufacture, formulation, distribution system and method of use, eight companies have filed ANDAs with the FDA seeking approval to market a generic version of Xyrem. We filed patent lawsuits against each of the ANDA filers in the U.S. District Court for the District of New Jersey, or the District Court, and an additional lawsuit against the most recent ANDA filer, Ascent Pharmaceuticals, Inc., or Ascent, in the U.S. District Court for the Eastern District of New York, or EDNY, where Ascent is incorporated. On April 5, 2017, we settled all lawsuits against the first ANDA filer, West-Ward Pharmaceuticals Corp. (a wholly owned subsidiary of Hikma Pharmaceuticals PLC), which acquired Roxane Laboratories, Inc., or West-Ward, granting West-Ward the right to sell an authorized generic version of Xyrem, or the West-Ward AG Product, commencing on January 1, 2023, or earlier under certain circumstances, and granting West-Ward a license to launch its generic sodium oxybate product as early as six months thereafter. In the second quarter of 2016, we had settled lawsuits with two of the other ANDA filers, granting those filers a license to manufacture, market and sell their generic versions of Xyrem on or after December 31, 2025, or earlier depending on the occurrence of certain events. In addition, on August 22, 2017, we settled all lawsuits with Ascent, granting Ascent a license to manufacture, market and sell its generic version of Xyrem on or after December 31, 2025, or earlier depending on the occurrence of certain events. For a description of our settlements with West-Ward and three of the other ANDA filers, see “Overview—Challenges, Risks and Trends Related to Our Lead Marketed Products” in Part I, Item 2 of this Quarterly Report on Form 10-Q. Lawsuits with the remaining non-settling ANDA filers have been consolidated as one case and remain pending in the District Court. Although no trial date has been set, discovery is scheduled to conclude in the second quarter of 2018, and the trial in this consolidated case could occur as early as mid-2018. For a description of these legal proceedings, see “Legal Proceedings” in Part II, Item 1 of this Quarterly Report on Form 10-Q. We cannot predict the timing or outcome of the ANDA litigation proceedings against the remaining non-settling ANDA filers. In July 2016, the Patent Trial and Appeal Board, or PTAB, of the U.S. Patent and Trademark Office issued final decisions that the claims of six patents listed in the FDA’s publication, “Approved Drug Products with Therapeutic Equivalence Evaluations,” or Orange Book, as covering the Xyrem REMS are unpatentable. We filed a notice of appeal of these decisions on February 22, 2017. If the United States Court of Appeals for the Federal Circuit upholds those decisions on appeal, these claims will be canceled, and we will not be able to enforce these patents. In March 2016, the PTAB partially instituted an inter partes review, or IPR, on three claims of a seventh REMS patent, declining to review 25 of 28 claims. The PTAB issued a final decision in March 2017 that the three claims they reviewed are unpatentable. We filed a notice of appeal of that decision on May 18, 2017, and the Court of Appeals for the Federal Circuit has consolidated the appeal of the March 2017 decision with the pending appeals of the July 2016 decisions. For a description of these legal proceedings, see “Legal Proceedings” in Part II, Item 1 of this Quarterly Report on Form 10-Q. We cannot predict whether additional post-grant patent review challenges will be filed by any of the ANDA filers or any other entity, the outcome of any proceeding, including any appeal, or the impact any IPR or other proceeding might have on ongoing ANDA litigation proceedings or other aspects of our Xyrem business. On January 17, 2017, the FDA announced approval of the West-Ward ANDA, and on January 19, 2017, the FDA tentatively approved two additional ANDAs for generic versions of Xyrem, one for Amneal Pharmaceuticals, LLC, or Amneal, and one for Ohm Laboratories Inc., formerly known as Ranbaxy, Inc., or Ohm. West-Ward’s ANDA approval includes a waiver that permits West-Ward to use a separate REMS program from the Xyrem REMS, or the generic sodium oxybate REMS, on the condition that the generic sodium oxybate REMS be open to all future sponsors of ANDAs or new drug applications, or NDAs, for sodium oxybate products. We were not involved in the development of the generic sodium oxybate REMS. We continue to evaluate potential challenges based on the FDA’s waiver of the requirement for a single, shared system REMS in connection with the approvals of the ANDAs, including whether the FDA’s waiver decision meets the conditions for such a waiver under applicable law. We cannot predict whether or when we may pursue any such challenges or whether any such challenges would be successful. The actual timing of any commercial launch of an authorized generic or generic version of Xyrem is uncertain. We do not believe a launch by an ANDA filer is likely to occur prior to either a date agreed in a settlement agreement between us and such ANDA filer or a decision by the District Court, or an appellate court, if applicable, in our ongoing patent litigation. However, notwithstanding our patents, and settlement agreements licensing those patents as of future dates, it is possible that West-Ward, Amneal, Ohm or any other company that receives FDA approval of an ANDA for a generic version of Xyrem or an NDA for another sodium oxybate product could introduce a generic version of Xyrem or other sodium oxybate product before the entry dates specified in our settlement agreements or before our patents expire, including if it is determined that the introduction of the competing product does not infringe our patents, if it is determined that our patents are invalid or unenforceable, or if a non-settling ANDA filer that has received approval for its product decides, before applicable ongoing patent litigation is concluded, to launch a sodium oxybate product at risk of being held liable for damages for patent infringement. In addition, even if we prevail in our ongoing litigation at trial or on appeal, we cannot guarantee that the court will grant an injunction that prevents the ANDA filers from marketing their generic versions of Xyrem. Instead the court may order an ANDA filer that is found to infringe to pay damages in the form of lost profits or a reasonable royalty, which could be significant. We expect that the launch of any generic version of Xyrem, including the West-Ward AG Product or other authorized generic version of Xyrem, or the approval and launch of other products that compete with Xyrem, could have a material adverse effect on our sales of Xyrem and on our business, financial condition, results of operations and growth prospects. For further discussion regarding the risks associated with the West-Ward settlement agreement, the tentative approval of the Amneal and Ohm ANDAs, potential approval or tentative approval of additional ANDAs, the potential launch of a generic version of Xyrem, or the approval and launch of other sodium oxybate or other products that compete with Xyrem, see the risk factors under the headings “Risks Related to Xyrem and the Significant Impact of Xyrem Sales,” “ We face substantial competition from other companies, including companies with greater resources, including larger sales organizations and more experience working with large and diverse product portfolios, than we have ,” and “Risks Related to Our Intellectual Property” in Part II, Item 1A of this Quarterly Report on Form 10-Q. In August 2015, we implemented the current Xyrem REMS, and we have submitted and expect to continue to submit ongoing assessments as set forth in the FDA’s Xyrem REMS approval letter. However, we cannot guarantee that our implementation and ongoing assessments will be satisfactory to the FDA or that the Xyrem REMS will satisfy the FDA’s expectations in its evaluation of the Xyrem REMS on an ongoing basis. Any failure to comply with the REMS obligations could result in enforcement action by the FDA; lead to changes in our Xyrem REMS obligations; negatively affect sales of Xyrem; result in additional costs and expenses for us; and/or take a significant amount of time, any of which could materially and adversely affect our business, financial condition, results of operations and growth prospects. Further, we cannot predict whether the FDA will request, seek to require or ultimately require modifications to, or impose additional requirements on, the Xyrem REMS in connection with the anticipated distribution of the West-Ward AG Product, the approval of the generic sodium oxybate REMS or otherwise, or the potential timing, terms or propriety thereof. Any such modifications or additional requirements could make it more difficult or expensive for us to distribute Xyrem, make distribution easier for sodium oxybate competitors, impair the safety profile of Xyrem and/or negatively affect sales of Xyrem. We may face pressure to modify the Xyrem REMS, or license or share intellectual property pertinent to the Xyrem REMS, including proprietary data required for the safe distribution of sodium oxybate, in connection with the FDA’s approval of the generic sodium oxybate REMS. We cannot predict the outcome or impact on our business of any future action that we may take with respect to the approval of the generic sodium oxybate REMS, or licensing or sharing intellectual property pertinent to the Xyrem REMS or elements of the Xyrem REMS. For more information, see the risk factors under the headings “ The launch of a generic version of Xyrem or other sodium oxybate products that compete with Xyrem would adversely affect sales of Xyrem ” and “ We have incurred and expect to continue to incur substantial costs as a result of litigation or other proceedings relating to patents, other intellectual property rights and related matters, and we may be unable to protect our rights to, or commercialize, our products ” in Part II, Item 1A of this Quarterly Report on Form 10-Q. In September 2016, Jazz Pharmaceuticals, Inc., our wholly owned subsidiary, submitted a Citizen Petition to the FDA requesting that, for safety reasons, the FDA refuse to approve any sodium oxybate ANDA with a proposed package insert or REMS that omits the portions of the Xyrem package insert and the Xyrem REMS that instruct prescribers on adjusting the dose of the product when it is co-administered with divalproex sodium (also known as valproate or valproic acid). On January 17, 2017, the FDA granted the Citizen Petition with respect to the Xyrem package insert. The FDA concluded that it will not approve any sodium oxybate ANDA referencing Xyrem that does not include in its package insert the portions of the currently approved Xyrem package insert related to the drug-drug interaction, or DDI, with divalproex sodium. The FDA stated that it did not need to reach the question of whether the DDI information could have been excluded from the generic sodium oxybate REMS materials because it was approving a REMS in connection with a sodium oxybate ANDA including that information. Our Xyrem patents include three method of administration patents relating to a DDI, or DDI patents, covering these instructions on the Xyrem package insert and Xyrem REMS. We cannot predict whether or when one or more of the ANDA filers may pursue a challenge to the FDA’s response to the Citizen Petition or whether any such challenges would be successful. Likewise, we cannot predict whether we will be able to maintain the validity of, or will otherwise obtain a judicial determination that the generic sodium oxybate package insert or the generic sodium oxybate REMS will infringe, any of our patents or, if we prevail in proving infringement, whether a court will grant an injunction that prevents any non-settling ANDA filer or other company introducing a different sodium oxybate product from marketing its product. For a further discussion of risks and uncertainties related to our REMS, our REMS patents and our DDI patents, see the risk factors under the headings “Risks Related to Xyrem and the Significant Impact of Xyrem Sales” and “Risks Related to Our Intellectual Property” in Part II, Item 1A of this Quarterly Report on Form 10-Q. We may also face competition from companies with other sodium oxybate products. For example, we are aware of a third party that has stated that it intends to file an NDA to market a once nightly formulation of sodium oxybate for treatment of cataplexy and/or EDS in narcolepsy under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, which allows companies to seek approval of a product that is similar, but not identical, to a previously-approved brand-name product. We are also aware of a product to treat adult patients with narcolepsy with or without cataplexy that received marketing approval in Europe in 2016. While this product is currently not approved by the FDA for marketing in the U.S., the company that has exclusive U.S. commercialization rights to this product recently announced that it expects to establish an expanded access program for the product in early 2018 and submit an NDA to the FDA for the treatment of narcolepsy in adult patients during the first half of 2018. See the risk factor under the heading “ We face substantial competition from other companies, including companies with greater resources, including larger sales organizations and more experience working with large and diverse product portfolios, than we have ” in Part II, Item 1A of this Quarterly Report on Form 10-Q. Obtaining and maintaining appropriate reimbursement for Xyrem in the U.S. is increasingly challenging due to, among other things, the attention being paid to healthcare cost containment and prescription drug pricing, pricing pressure from third party payors and increasingly restrictive reimbursement conditions being imposed by third party payors. In this regard, we have experienced and expect to continue to experience increasing pressure from third party payors to agree to discounts, rebates or other pricing terms for Xyrem. Any such restrictive pricing terms or additional reimbursement conditions could have a material adverse effect on our Xyrem revenues. In addition, drug pricing by pharmaceutical companies has recently come under close scrutiny, particularly with respect to companies that have increased the price of products after acquiring those products from other companies. We expect that healthcare policies and reforms intended to curb healthcare costs will continue to be proposed, which could limit the prices that we charge for our products, including Xyrem, limit our commercial opportunity and/or negatively impact revenues from sales of our products. Also, price increases on Xyrem and our other products, and negative publicity regarding pricing and price increases generally, whether with respect to our products or products distributed by other pharmaceutical companies, could negatively affect market acceptance of Xyrem and our other products. In the three and nine months ended September 30, 2017 , net product sales of our second largest product, Erwinaze/Erwinase (which we refer to in this report as Erwinaze unless otherwise indicated or the context otherwise requires), were $49.2 million and $149.6 million , respectively, which represented 12% and 13% of total net product sales, respectively. We seek to increase sales of Erwinaze, as well as to make Erwinaze more widely available, through ongoing sales and marketing activities. Erwinaze is licensed from and manufactured by a single source, Porton Biopharma Limited, or PBL, which is wholly owned by the U.K. Secretary of State for Health. Our agreement with PBL, including our license, expires in December 2020, subject to five -year extensions unless terminated by either party in writing by December 2018. We cannot predict whether the term of the agreement will be extended or, if extended, the terms of any such extension. Erwinaze was approved by the FDA under a biologics license application, or BLA, and was launched in the U.S. in November 2011. The FDA’s approval of the BLA for Erwinaze includes a number of post-marketing commitments related to the manufacture of Erwinaze by PBL. We cannot predict if or when PBL will comply with its manufacturing-related post-marketing commitments that are part of the BLA approval. In January 2017, the FDA issued a warning letter to PBL indicating that it was not satisfied with PBL’s response to the FDA Form 483 issued to PBL in March 2016, citing significant violations of current Good Manufacturing Practices, or cGMP, for finished pharmaceuticals and significant deviations from cGMP for active pharmaceutical ingredients, or APIs. In March 2017, PBL filed a response to the warning letter with the FDA. We attended a meeting with PBL and the FDA in the third quarter of 2017 to discuss the warning letter, and PBL continues to address the issues identified by the FDA in the warning letter. We cannot predict if or when PBL will correct the violations and deviations to the satisfaction of the FDA or whether the FDA will be satisfied with PBL’s response to the warning letter. Any failure to do so could result in the FDA refusing admission of Erwinaze into the U.S., as well as additional enforcement actions by the FDA and other regulatory entities. In addition, a significant challenge to our ability to maintain current sales levels and to increase sales is our need to avoid supply disruptions of Erwinaze due to capacity constraints, production delays, quality or regulatory challenges or other manufacturing difficulties. The current manufacturing capacity for Erwinaze is completely absorbed by demand for the product. We are working with PBL to evaluate potential expansion of its production capacity to increase the supply of Erwinaze over the longer term and to address the production delays and quality challenges, and related regulatory scrutiny. As a consequence of constrained manufacturing capacity, we have had an extremely limited or no ability to build product inventory levels that can be used to absorb disruptions to supply resulting from quality, regulatory or other issues. We have experienced product quality, manufacturing and inventory challenges that have resulted, and may continue to result from time to time through the remainder of 2017 and into 2018, in disruptions in our ability to supply certain markets and have caused, and may in the future cause, us to implement batch-specific, modified product use instructions. Most recently, we experienced supply disruptions in the third quarter of 2017 in the U.S. and certain other countries. As capacity constraints and supply disruptions continue, whether as a result of continued quality or other manufacturing issues, regulatory issues or otherwise, we will be unable to build a desired excess level of product inventory, our ability to supply the market may continue to be compromised and physicians’ decisions to use Erwinaze have been, and in the future may continue to be, negatively impacted. Additional Erwinaze supply disruptions and/or our inability to expand production capacity could materially adversely affect our sales of and revenues from Erwinaze and our potential future maintenance and growth of the market for this product. Our ability to successfully and sustainably grow sales of Erwinaze is subject to a number of other risks and uncertainties, including the limited population of patients with ALL and the incidence of hypersensitivity reactions to E. coli -derived asparaginase within that population, our need to apply for and receive marketing authorizations, through the European Union’s, or EU’s, mutual recognition procedure or otherwise, in certain additional countries if we decide to launch promotional efforts in those countries, as well as those other risks and uncertainties discussed in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. In the three and nine months ended September 30, 2017 , net product sales of Defitelio/defibrotide represented 8% of total net product sales for both periods. We acquired this product in January 2014 in connection with our acquisition of Gentium S.r.l., or Gentium, which we refer to as the Gentium Acquisition, and secured worldwide rights to the product by acquiring rights to defibrotide in the Americas in August 2014. We began to commercialize Defitelio in certain European countries in 2014. The process of maintaining pricing and reimbursement approvals is complex and varies from country to country. Many European countries periodically review their reimbursement classes, which could have an adverse impact on the reimbursement status of Defitelio. We cannot predict the outcome of periodic pricing and reimbursement reviews across Europe. If we are unable to maintain favorable pricing and reimbursement approvals in countries that represent significant markets, especially where a country’s reimbursed price influences other countries, our anticipated revenue from and growth prospects for Defitelio in the EU could be negatively affected. In March 2016, the FDA approved our NDA for Defitelio for the treatment of adult and pediatric patients with VOD with renal or pulmonary dysfunction following HSCT. We launched Defitelio in the U.S. shortly after FDA approval, and our U.S. commercial launch is still at an early stage. Our ability to realize the anticipated benefits from our investment in Defitelio is subject to risks and uncertainties, including the continued acceptance of Defitelio in the U.S. by hospital pharmacy and therapeutics committees and the continued availability of adequate coverage and reimbursement by government programs and third party payors; the limited experience of U.S. physicians in diagnosing and treating VOD, particularly in adults, and the possibility that physicians may not initiate or may delay initiation of treatment while waiting for VOD symptoms to improve, or terminate treatment before the end of the recommended dosing schedule; our ability to successfully maintain or grow sales of Defitelio in Europe and other non-U.S. countries; delays or problems in the supply or manufacture of the product; the limited size of the population of VOD patients who are indicated for treatment with Defitelio (particularly if changes in HSCT treatment protocols reduce the incidence of VOD diagnosis); our ability to meet the post-marketing commitments and requirements imposed by the FDA in connection with its approval of our NDA for Defitelio; and our ability to obtain marketing approval in other countries and to develop the product for additional indications, as well as those other risks and uncertainties discussed in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. If sales of Defitelio do not reach the levels we expect, our anticipated revenue from the product will be negatively affected, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In addition, we made a significant investment in Vyxeos through the acquisition of Celator Pharmaceuticals Inc., or Celator, in July 2016, or the Celator Acquisition. On August 3, 2017, the FDA approved our NDA for Vyxeos for the treatment of adults with newly-diagnosed therapy-related AML or AML with myelodysplasia-related changes. We launched and began shipping Vyxeos in the U.S. in August 2017, and the launch is at an early stage. We submitted a marketing authorization application for Vyxeos to the European Medicines Agency in the fourth quarter of 2017. Our ability to realize the anticipated benefits from our investment in Vyxeos is subject to additional risks and uncertainties, including our ability to differentiate Vyxeos from other liposomal chemotherapies and generically available chemotherapy combinations with which physicians and treatment centers are more familiar; delays or problems in the supply or manufacture of the product, including the ability of the third parties upon which we rely to manufacture Vyxeos and its APIs to manufacture sufficient quantities in accordance with applicable specifications; the need to establish pricing and reimbursement support for Vyxeos in the U.S. and in other countries; the acceptance of Vyxeos in the U.S. and other countries by hospital pharmacy and therapeutics committees and the availability of adequate coverage and reimbursement by government programs and third party payors; the approval and use of new and novel compounds in AML that are only approved for use in combination with other agents and that have not been tested in combination with Vyxeos; and the limited size of the population of high-risk AML patients who may potentially be indicated for treatment with Vyxeos, particularly given the ongoing clinical trials by other companies with the same patient population, as well as those other risks and uncertainties discussed in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10‑Q. If sales of Vyxeos do not reach the levels we expect, or we are unable to obtain regulatory approval for Vyxeos in Europe in a timely manner, or at all, our anticipated revenue from Vyxeos would be negatively affected, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In May and October 2016 and in February 2017, we received subpoenas from the U.S. Attorney’s Office for the District of Massachusetts requesting documents related to our support of 501(c)(3) organizations that provide financial assistance to Medicare patients and documents concerning the provision of financial assistance to Medicare patients taking drugs sold by us. We are cooperating with the investigation, and the outcome of this investigation could include an enforcement action or a settlement with the federal government. The Office of the Inspector General has established guidelines that permit pharmaceutical manufacturers to make donations to charitable organizations who provide co-pay assistance to Medicare patie |
Collaboration and Option Agreem
Collaboration and Option Agreement | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaboration and Option Agreement | Collaboration and Option Agreement In August 2017, we entered into a collaboration and option agreement with ImmunoGen, Inc., or ImmunoGen, granting us rights to opt into exclusive, worldwide licenses to develop and commercialize two early-stage, hematology-related antibody-drug conjugate, or ADC, programs, as well as an additional program to be designated during the term of the agreement. The programs covered under the agreement include IMGN779, a CD33-targeted ADC for the treatment of AML in Phase 1 testing, and IMGN632, a CD123-targeted ADC for hematological malignancies expected to enter clinical testing before the end of 2017. Under the terms of the agreement, ImmunoGen will be responsible for the development of the three ADC programs prior to any potential opt-in by us. Following any opt-in, we would be responsible for any further development as well as for potential regulatory submissions and commercialization. As part of the agreement, we paid ImmunoGen a non-refundable upfront payment of $75.0 million , which was charged to acquired in-process research and development, or IPR&D, expense upon closing of the transaction. Additionally, we will pay ImmunoGen up to $100 million in development funding over 7 years to support the three ADC programs. For each program, we may exercise our opt-in right at any time prior to a pivotal study or any time prior to a BLA upon payment of an option exercise fee. The option exercise fee depends on the timing of exercise and certain other conditions. For each program to which we elect to opt-in, ImmunoGen would be eligible to receive milestone payments based on receiving regulatory approval of the applicable product, plus tiered royalties as a percentage of commercial sales. After opt-in, we will share with ImmunoGen the costs associated with developing and obtaining regulatory approvals of the applicable product in the U.S. and the EU. ImmunoGen has the right to co-commercialize one product (or two products, under certain limited circumstances) with us in the U.S. with U.S. profit-sharing in lieu of our payment of applicable U.S. milestone and royalties to ImmunoGen. |
Cash and Available-for-Sale Sec
Cash and Available-for-Sale Securities | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash and Available-for-Sale Securities | Cash and Available-for-Sale Securities Cash, cash equivalents and investments consisted of the following (in thousands): September 30, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and Cash Equivalents Investments Cash $ 122,154 $ — $ — $ 122,154 $ 122,154 $ — Time deposits 220,000 — — 220,000 20,000 200,000 Money market funds 110,461 — — 110,461 110,461 — Totals $ 452,615 $ — $ — $ 452,615 $ 252,615 $ 200,000 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and Cash Equivalents Investments Cash $ 215,963 $ — $ — $ 215,963 $ 215,963 $ — Time deposits 210,000 — — 210,000 150,000 60,000 Totals $ 425,963 $ — $ — $ 425,963 $ 365,963 $ 60,000 Cash equivalents and investments are considered available-for-sale securities. We use the specific-identification method for calculating realized gains and losses on securities sold and include them in interest expense, net in the condensed consolidated statements of income. Our investments balance represents time deposits with original maturities of greater than three months. |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The following table summarizes, by major security type, our available-for-sale securities and derivative contracts as of September 30, 2017 and December 31, 2016 that were measured at fair value on a recurring basis and were categorized using the fair value hierarchy (in thousands): September 30, 2017 December 31, 2016 Quoted Significant Total Significant Total Assets: Available-for-sale securities: Time deposits $ — $ 220,000 $ 220,000 $ 210,000 $ 210,000 Money market funds 110,461 — 110,461 — — Interest rate contracts — 201 201 — — Foreign exchange forward contracts — 12,124 12,124 — — Totals $ 110,461 $ 232,325 $ 342,786 $ 210,000 $ 210,000 Liabilities: Interest rate contracts $ — $ 1,322 $ 1,322 $ — $ — Foreign exchange forward contracts — 291 291 — — Totals $ — $ 1,613 $ 1,613 $ — $ — As of September 30, 2017 , our available-for-sale securities included time deposits and money market funds and their carrying values were approximately equal to their fair values. Time deposits were measured at fair value using Level 2 inputs and money market funds were measured using quoted prices in active markets, which represent Level 1 inputs. Level 2 inputs, obtained from various third party data providers, represent quoted prices for similar assets in active markets, or these inputs were derived from observable market data, or if not directly observable, were derived from or corroborated by other observable market data. Our derivative assets and liabilities include interest rate and foreign exchange derivatives that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk as well as an evaluation of our counterparties’ credit risks. Based on these inputs, the derivative assets and liabilities are classified within Level 2 of the fair value hierarchy. There were no transfers between the different levels of the fair value hierarchy in 2017 or in 2016. As of September 30, 2017 , the estimated fair values of our 2021 Notes and 2024 Notes were approximately $607 million and $565 million , respectively. The fair values of our 2021 Notes and 2024 Notes were estimated using quoted market prices obtained from brokers (Level 2). The estimated fair value of our borrowing under our term loan was approximately equal to its book value based on the borrowing rates currently available for variable rate loans (Level 2). |
Derivative and Hedging Activiti
Derivative and Hedging Activities | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative and Hedging Activities | Derivative and Hedging Activities We are exposed to certain risks arising from operating internationally, including fluctuations in interest rates on our outstanding term loan borrowings and fluctuations in foreign exchange rates primarily related to the translation of euro-denominated net monetary liabilities, including intercompany balances, held by subsidiaries with a U.S. dollar functional currency. We manage these exposures within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes. To achieve a desired mix of floating and fixed interest rates on our variable rate debt, we entered into interest rate swap agreements in March 2017 which are effective from March 3, 2017 until July 12, 2021. These agreements hedge contractual term loan interest rates. As of September 30, 2017 , the interest rate swap agreements had a notional amount of $300.0 million . As a result of these agreements, the interest rate on a portion of our term loan borrowings was fixed at 1.895% , plus the borrowing spread, until July 12, 2021 . The effective portion of changes in the fair value of derivatives designated as and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value is recognized directly in earnings. The impact on accumulated other comprehensive loss and earnings from derivative instruments that qualified as cash flow hedges for the three and nine months ended September 30, 2017 was as follows (in thousands): Three Months Ended Nine Months Ended Interest Rate Contracts: 2017 2016 2017 2016 Loss recognized in accumulated other comprehensive loss, net of tax $ (59 ) $ — $ (2,234 ) $ — Loss reclassified from accumulated other comprehensive loss to interest expense, net of tax $ 451 $ — $ 1,278 $ — A ssuming no change in LIBOR-based interest rates from market rates as of September 30, 2017 , $1.2 million of losses recognized in accumulated other comprehensive loss will be reclassified to earnings over the next 12 months. The gains related to the ineffective portion of derivative instruments that qualified as cash flow hedges for the three and nine months ended September 30, 2017 were minimal. We enter into foreign exchange forward contracts, with durations of up to 365 days, designed to limit the exposure to fluctuations in foreign exchange rates related to the translation of certain non-U.S. dollar denominated liabilities, including intercompany balances. Hedge accounting is not applied to these derivative instruments as gains and losses on these hedge transactions are designed to offset gains and losses on underlying balance sheet exposures. As of September 30, 2017 , the notional amount of foreign exchange contracts where hedge accounting is not applied was $330.6 million . The foreign exchange loss in our condensed consolidated statements of income included gains of $2.8 million and $11.8 million associated with foreign exchange contracts not designated as hedging instruments for the three and nine months ended September 30, 2017 , respectively. The cash flow effects of our derivative contracts for the nine months ended September 30, 2017 are included within net cash provided by operating activities in the condensed consolidated statements of cash flows. The following table summarizes the fair value of outstanding derivatives as of September 30, 2017 (in thousands): September 30, 2017 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate contracts Other non-current assets $ 201 Accrued liabilities $ 1,322 Derivatives not designated as hedging instruments: Foreign exchange forward contracts Other current assets 12,124 Accrued liabilities 291 Total fair value of derivative instruments $ 12,325 $ 1,613 Although we do not offset derivative assets and liabilities within our condensed consolidated balance sheets, our International Swap and Derivatives Association agreements provide for net settlement of transactions that are due to or from the same counterparty upon early termination of the agreement due to an event of default or other termination event. The following table summarizes the potential effect on our condensed consolidated balance sheets of offsetting our interest rate contracts and foreign exchange forward contracts subject to such provisions (in thousands): September 30, 2017 Gross Amounts of Recognized Assets/Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet Description Derivative Financial Instruments Cash Collateral Received (Pledged) Net Amount Derivative assets $ 1,938 $ — $ 1,938 $ (560 ) $ — $ 1,378 Derivative liabilities $ (560 ) $ — $ (560 ) $ 560 $ — $ — There were no outstanding derivatives as of December 31, 2016 . |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in thousands): September 30, December 31, Raw materials $ 2,681 $ 1,547 Work in process 19,965 18,689 Finished goods 18,698 13,815 Total inventories $ 41,344 $ 34,051 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The gross carrying amount of goodwill was as follows (in thousands): Balance at December 31, 2016 $ 893,810 Foreign exchange 47,618 Balance at September 30, 2017 $ 941,428 The gross carrying amounts and net book values of our intangible assets were as follows (in thousands): September 30, 2017 December 31, 2016 Remaining Gross Accumulated Net Book Gross Accumulated Net Book Acquired developed technologies 15.1 $ 3,376,895 $ (505,369 ) $ 2,871,526 $ 1,477,618 $ (410,523 ) $ 1,067,095 Manufacturing contracts 0.6 12,647 (11,670 ) 977 11,278 (8,292 ) 2,986 Trademarks — 2,905 (2,905 ) — 2,872 (2,872 ) — Total finite-lived intangible assets 3,392,447 (519,944 ) 2,872,503 1,491,768 (421,687 ) 1,070,081 Acquired in-process research and development assets 146,532 — 146,532 1,941,920 — 1,941,920 Total intangible assets $ 3,538,979 $ (519,944 ) $ 3,019,035 $ 3,433,688 $ (421,687 ) $ 3,012,001 The increase in the gross carrying amount of intangible assets as of September 30, 2017 compared to December 31, 2016 reflected the positive impact of foreign currency translation adjustments, which was due to the strengthening of the euro against the U.S. dollar. Additionally, after receiving FDA approval of our NDA for Vyxeos in August 2017, we reclassified $1.8 billion of acquired IPR&D from an indefinite-lived intangible asset to an acquired developed technology finite-lived intangible asset. This acquired developed technology asset is being amortized over its estimated useful life of 18 years. The assumptions and estimates used to determine future cash flows and remaining useful lives of our intangible and other long-lived assets are complex and subjective. They can be affected by various factors, including external factors, such as industry and economic trends, and internal factors such as changes in our business strategy and our forecasts for specific product lines. Based on finite-lived intangible assets recorded as of September 30, 2017 , and assuming the underlying assets will not be impaired and that we will not change the expected lives of the assets, future amortization expenses were estimated as follows (in thousands): Year Ending December 31, Estimated Amortization Expense 2017 (remainder) $ 52,966 2018 208,830 2019 208,595 2020 205,644 2021 204,609 Thereafter 1,991,859 Total $ 2,872,503 |
Certain Balance Sheet Items
Certain Balance Sheet Items | 9 Months Ended |
Sep. 30, 2017 | |
Certain Balance Sheet Items [Abstract] | |
Certain Balance Sheet Items | Certain Balance Sheet Items Property and equipment consisted of the following (in thousands): September 30, December 31, Construction-in-progress $ 82,802 $ 33,427 Land and buildings 46,616 46,033 Manufacturing equipment and machinery 22,903 19,596 Computer software 19,281 17,832 Leasehold improvements 12,953 9,328 Computer equipment 11,912 10,980 Furniture and fixtures 3,373 2,436 Subtotal 199,840 139,632 Less accumulated depreciation and amortization (40,454 ) (32,142 ) Property and equipment, net $ 159,386 $ 107,490 Accrued liabilities consisted of the following (in thousands): September 30, December 31, Rebates and other sales deductions $ 76,930 $ 72,344 Employee compensation and benefits 46,672 43,363 Royalties 11,309 11,643 Accrued construction-in-progress 5,488 1,597 Inventory-related accruals 3,843 3,350 Sales returns reserve 3,470 4,366 Professional fees 3,244 4,596 Clinical trial accruals 2,657 10,139 Selling and marketing accruals 2,384 3,924 Accrued interest 2,347 5,179 Accrued contract termination fees — 11,612 Other 21,546 21,155 Total accrued liabilities $ 179,890 $ 193,268 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table summarizes the carrying amount of our indebtedness (in thousands): September 30, December 31, 2021 Notes $ 575,000 $ 575,000 Unamortized discount and debt issuance costs on 2021 Notes (86,663 ) (101,094 ) 2021 Notes, net 488,337 473,906 2024 Notes 575,000 — Unamortized discount and debt issuance costs on 2024 Notes (163,363 ) — 2024 Notes, net 411,637 — Term loan 679,939 705,719 Borrowings under revolving credit facility — 850,000 Total debt 1,579,913 2,029,625 Less current portion 36,094 36,094 Total long-term debt $ 1,543,819 $ 1,993,531 Exchangeable Senior Notes Due 2024 In the third quarter of 2017, we completed a private placement of $575.0 million principal amount of 2024 Notes. We used the net proceeds from this offering to repay $500.0 million in outstanding loans under the revolving credit facility and to pay related fees and expenses. We used the remainder of the net proceeds for general corporate purposes. Interest on the 2024 Notes is payable semi-annually in cash in arrears on February 15 and August 15 of each year, beginning on February 15, 2018, at a rate of 1.50% per year. In certain circumstances, we may be required to pay additional amounts as a result of any applicable tax withholding or deductions required in respect of payments on the 2024 Notes. The 2024 Notes mature on August 15, 2024, unless earlier exchanged, repurchased or redeemed. The holders of the 2024 Notes have the ability to require us to repurchase all or a portion of their 2024 Notes for cash in the event we undergo certain fundamental changes, such as specified change of control transactions, our liquidation or dissolution or the delisting of our ordinary shares from The NASDAQ Global Select Market. Prior to August 15, 2024, we may redeem the 2024 Notes, in whole but not in part, subject to compliance with certain conditions, if we have, or on the next interest payment date would, become obligated to pay to the holder of any 2024 Notes additional amounts as a result of certain tax-related events. We also may redeem the 2024 Notes on or after August 20, 2021, in whole or in part, if the last reported sale price per ordinary share has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide the notice of redemption. The 2024 Notes are exchangeable at an initial exchange rate of 4.5659 ordinary shares per $1,000 principal amount of 2024 Notes, which is equivalent to an initial exchange price of approximately $219.02 per ordinary share. Upon exchange, the 2024 Notes may be settled in cash, ordinary shares or a combination of cash and ordinary shares, at our election. Our intent and policy is to settle the principal amount of the 2024 Notes in cash upon exchange. The exchange rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain make-whole fundamental changes occurring prior to the maturity date of the 2024 Notes or upon our issuance of a notice of redemption, we will in certain circumstances increase the exchange rate for holders of the 2024 Notes who elect to exchange their 2024 Notes in connection with that make-whole fundamental change or during the related redemption period. Prior to May 15, 2024, the 2024 Notes will be exchangeable only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. In accounting for the issuance of the 2024 Notes, we separated the 2024 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the estimated fair value of a similar liability that does not have an associated exchange feature. The carrying amount of the equity component representing the exchange option was determined by deducting the fair value of the liability component from the face value of the 2024 Notes as a whole. The excess of the principal amount of the liability component over its carrying amount will be amortized to interest expense over the expected life of the 2024 Notes using the effective interest method with an effective interest rate of 6.8% per annum. We have determined the expected life of the 2024 Notes to be equal to the original seven -year term. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. We allocated the total issuance costs incurred of $15.5 million to the liability and equity components based on their relative values. Issuance costs attributable to the liability component will be amortized to expense over the term of the 2024 Notes, and issuance costs attributable to the equity component were included with the equity component in our shareholders’ equity. As of September 30, 2017 , the carrying value of the equity component of the 2024 Notes, net of equity issuance costs, was $149.8 million . The 2021 Notes and the 2024 Notes were issued by Jazz Investments I Limited, or the Issuer, a 100% -owned finance subsidiary of Jazz Pharmaceuticals plc. The 2021 Notes and the 2024 Notes are senior unsecured obligations of the Issuer and are fully and unconditionally guaranteed on a senior unsecured basis by Jazz Pharmaceuticals plc. No subsidiary of Jazz Pharmaceuticals plc guaranteed the 2021 or the 2024 Notes. Subject to certain local law restrictions on payment of dividends, among other things, and potential negative tax consequences, we are not aware of any significant restrictions on the ability of Jazz Pharmaceuticals plc to obtain funds from the Issuer or Jazz Pharmaceuticals plc’s other subsidiaries by dividend or loan, or any legal or economic restrictions on the ability of the Issuer or Jazz Pharmaceuticals plc’s other subsidiaries to transfer funds to Jazz Pharmaceuticals plc in the form of cash dividends, loans or advances. There is no assurance that in the future such restrictions will not be adopted. Maturities Scheduled maturities with respect to our long-term debt principal balances outstanding as of September 30, 2017 were as follows (in thousands): Year Ending December 31, Scheduled Long-Term Debt Maturities 2017 (remainder) $ 9,023 2018 40,606 2019 58,652 2020 76,699 2021 1,075,801 Thereafter 575,000 Total $ 1,835,781 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Indemnification In the normal course of business, we enter into agreements that contain a variety of representations and warranties and provide for general indemnification, including indemnification associated with product liability or infringement of intellectual property rights. Our exposure under these agreements is unknown because it involves future claims that may be made but have not yet been made against us. To date, we have not paid any claims or been required to defend any action related to these indemnification obligations. We have agreed to indemnify our executive officers, directors and certain other employees for losses and costs incurred in connection with certain events or occurrences, including advancing money to cover certain costs, subject to certain limitations. The maximum potential amount of future payments we could be required to make under the indemnification obligations is unlimited; however, we maintain insurance policies that may limit our exposure and may enable us to recover a portion of any future amounts paid. Assuming the applicability of coverage and the willingness of the insurer to assume coverage, and subject to certain retention, loss limits and other policy provisions, we believe the fair value of these indemnification obligations is not significant. Accordingly, we did not recognize any liabilities relating to these obligations as of September 30, 2017 and December 31, 2016 . No assurances can be given that the covering insurers will not attempt to dispute the validity, applicability, or amount of coverage without expensive litigation against these insurers, in which case we may incur substantial liabilities as a result of these indemnification obligations. Lease and Other Commitments We have noncancelable operating leases for our office buildings and we are obligated to make payments under noncancelable operating leases for automobiles used by our sales force. Future minimum lease payments under our noncancelable operating and facility leases as of September 30, 2017 were as follows (in thousands): Year Ending December 31, Lease Payments 2017 (remainder) $ 6,615 2018 15,811 2019 16,885 2020 19,127 2021 19,166 Thereafter 165,797 Total $ 243,401 In January 2015, we entered into an agreement to lease office space located in Palo Alto, California in a building subsequently constructed by the landlord. We began to occupy this office space in October 2017. In September 2017, we entered into an agreement to lease office space located in Palo Alto, California in a second building to be constructed by the same landlord. We expect to occupy this office space by the end of 2019. In connection with these leases, the landlord is providing a tenant improvement allowance for the costs associated with the design, development and construction of tenant improvements for the leased facilities. We are obligated to fund all costs incurred in excess of the tenant improvement allowance. The scope of the planned tenant improvements do not qualify as “normal tenant improvements” under the lease accounting guidance. Accordingly, for accounting purposes, we have concluded we are the deemed owner of the buildings during the construction period. As of September 30, 2017 , we recorded project construction costs of $60.9 million incurred by the landlord as construction-in-progress in property and equipment, net and a corresponding financing obligation in other non-current liabilities in our condensed consolidated balance sheets. We will increase the asset and financing obligation as additional building costs are incurred by the landlord during the construction period. We recorded rent expense associated with the ground leases of $0.5 million and $1.4 million in the three and nine months ended September 30, 2017, respectively , in our condensed consolidated statements of income. As of September 30, 2017 , we had $43.2 million of noncancelable purchase commitments due within one year, primarily related to agreements with third party manufacturers. Legal Proceedings We are involved in legal proceedings, including the following matters: Xyrem ANDA Matters . On December 10, 2012, we received a notice of Paragraph IV Patent Certification, or Paragraph IV Certification, from Amneal that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. On January 18, 2013, we filed a lawsuit against Amneal in the District Court alleging that our patents covering Xyrem are infringed or will be infringed by Amneal’s ANDA and seeking a permanent injunction to prevent Amneal from introducing a generic version of Xyrem that would infringe these patents. On November 21, 2013, we received a notice of Paragraph IV Certification from Par Pharmaceutical, Inc., or Par, that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. On December 27, 2013, we filed a lawsuit against Par in the District Court alleging that our patents covering Xyrem are infringed or will be infringed by Par’s ANDA and seeking a permanent injunction to prevent Par from introducing a generic version of Xyrem that would infringe these patents. In April 2014, Amneal asked the District Court to consolidate its case with the Par case, stating that both cases would proceed on the schedule for the Par case. The District Court granted this request in May 2014. The order consolidating the cases extended Amneal’s 30 -month stay period to coincide with the date of Par’s 30 -month stay period. The stay expired on May 20, 2016. Additional patents covering Xyrem have been issued since April 2014 and have been listed in the Orange Book for Xyrem. Amneal and Par have given us additional notices of Paragraph IV Certifications regarding such patents, and we have filed additional lawsuits against Amneal and Par in the District Court alleging that our patents covering Xyrem are infringed or will be infringed by Amneal’s and Par’s ANDAs and seeking a permanent injunction to prevent Amneal and Par from introducing a generic version of Xyrem that would infringe our patents. In March 2016, Par moved to dismiss claims involving our patents covering a part of the Xyrem label that instructs prescribers on adjusting the dose of Xyrem when it is being co-administered with divalproex sodium (also known as valproate or valproic acid), or our DDI patents. In August 2016, we and Par stipulated to dismiss claims relating to our patents covering the formulation of Xyrem on the grounds that Par had notified FDA that it had converted its Paragraph IV Certifications to Paragraph III Certifications. In September 2017, we and Amneal stipulated to dismiss claims relating to certain of our patents covering the formulation of Xyrem on the grounds that Amneal had notified FDA that it had converted its Paragraph IV Certifications as to these patents to Paragraph III Certifications. On October 30, 2014, we received a notice of Paragraph IV Certification from Teva Pharmaceutical Industries Ltd., formerly known as Watson Laboratories, Inc., or Teva, that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. On December 11, 2014, we filed a lawsuit against Teva in the District Court alleging that our patents covering Xyrem are or will be infringed by Teva’s ANDA and seeking a permanent injunction to prevent Teva from introducing a generic version of Xyrem that would infringe these patents. In March 2015, Teva moved to dismiss the portion of the case based on our Orange Book-listed REMS patents on the grounds that these patents do not cover patentable subject matter. In November 2015, the District Court administratively terminated this motion to dismiss (without prejudice) pending the outcome of IPR proceedings before the PTAB relating to the patents that were the subject of Teva’s motion. Since March 2015, we have received an additional notice of Paragraph IV Certification from Teva regarding newly issued patents for Xyrem listed in the Orange Book, and we have filed an additional lawsuit against Teva in the District Court alleging that our patents covering Xyrem are or will be infringed by Teva’s ANDA and seeking a permanent injunction to prevent Teva from introducing a generic version of Xyrem that would infringe these patents. In April 2015, the District Court issued an order that consolidated all then-pending lawsuits against Amneal, Par and Teva into one case. On July 23, 2015, we received a notice of Paragraph IV Certification from Lupin Inc., or Lupin, that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. On September 2, 2015, we filed a lawsuit in the District Court alleging that our patents covering Xyrem are or will be infringed by Lupin’s ANDA and seeking a permanent injunction to prevent Lupin from introducing a generic version of Xyrem that would infringe our patents. In January, April and June 2016, the District Court issued orders consolidating all of the cases then pending against Amneal, Par, Teva and Lupin into a single case for all purposes. Although no trial date has been set, discovery is scheduled to conclude in the second quarter of 2018, and the trial in this consolidated case could occur as early as mid-2018. Additional patents covering Xyrem have been issued since June 2016 and have been listed in the Orange Book for Xyrem. We have received additional Paragraph IV Certification notices from Amneal regarding such patents and have filed new lawsuits in the District Court, alleging that our additional patents covering Xyrem are or will be infringed by Amneal’s ANDA and seeking a permanent injunction to prevent Amneal from introducing a generic version of Xyrem that would infringe our patents. On June 14, 2017, we received a notice of Paragraph IV Certification from Ascent that it had submitted an ANDA to the FDA requesting approval to market a generic version of Xyrem. On July 27, 2017, we filed lawsuits against Ascent in the District Court as well as in the EDNY, where Ascent is incorporated, alleging that our patents covering Xyrem are infringed or will be infringed by Ascent’s ANDA and seeking a permanent injunction to prevent Ascent from introducing a generic version of Xyrem that would infringe our patents. On August 22, 2017, we settled all lawsuits with Ascent, granting Ascent a license to manufacture, market and sell its generic version of Xyrem on or after December 31, 2025, or earlier depending on the occurrence of certain events. We had previously settled lawsuits with three other ANDA filers, and the specific terms of the settlement agreements are confidential. The settlements do not resolve the consolidated case against Amneal, Par, Teva and Lupin, which remains pending. We cannot predict the specific timing or outcome of events with respect to the remaining defendants or the impact of developments involving any specific parties or patents on other ongoing proceedings with any ANDA filer. Xyrem Post-Grant Patent Review Matters . In January 2015, certain of the ANDA filers filed petitions for IPR with respect to the validity of the six REMS patents. In July 2016, the PTAB issued final decisions that the claims of these six patents are unpatentable; as a result, if the United States Court of Appeals for the Federal Circuit upholds those decisions on appeal, these claims will be canceled. We have filed notices of appeal with respect to these IPR decisions to the United States Court of Appeals for the Federal Circuit. In September 2015, certain of the ANDA filers filed a petition for IPR with respect to the validity of an additional REMS patent. In March 2016, the PTAB partially instituted an IPR on three claims of a seventh REMS patent, declining to review 25 of 28 claims. In March 2017, the PTAB issued a final decision that the three claims that were reviewed by the PTAB are unpatentable. We have filed a notice of appeal of that decision on May 18, 2017, and the Court of Appeals for the Federal Circuit has consolidated the appeal of the March 2017 decision with the pending appeals of the July 2016 decisions. We cannot predict whether additional post-grant patent review challenges will be filed by any of the ANDA filers or any other entity, the outcome of any pending IPR or other proceeding, the outcome of any appeal of the July 2016 and March 2017 IPR decisions with respect to the REMS patents or the impact any IPR or other proceeding might have on ongoing ANDA litigation proceedings or other aspects of our Xyrem business. Shareholder Litigation Matters Relating to Celator Acquisition. On June 21, 2016, a putative class-action lawsuit challenging our Celator Acquisition, captioned Dunbar v. Celator Pharmaceuticals, Inc., or the Dunbar action, was filed in the Superior Court of New Jersey. We refer to our acquisition of Celator in this report as the Celator Acquisition. The complaint was filed against Celator, each member of the Celator board of directors, Jazz Pharmaceuticals plc and our wholly owned subsidiary Plex Merger Sub, Inc., or Plex. The complaint generally alleges that the Celator directors breached their fiduciary duties in connection with the Celator Acquisition, and that Jazz Pharmaceuticals plc and Plex aided and abetted these alleged breaches of fiduciary duty. The complaint also generally asserts that the Celator directors breached their fiduciary duties to Celator’s public stockholders by, among other things, (i) agreeing to sell Celator to us at an inadequate price, (ii) implementing an unfair process, (iii) agreeing to certain provisions of the merger agreement for the Celator Acquisition that allegedly favored us and deterred alternative bids, and (iv) failing to disclose purportedly material information in Celator’s Schedule 14D-9 filing with the U.S. Securities and Exchange Commission, or SEC. The plaintiff sought, among other things, an injunction against the consummation of the Celator Acquisition and an award of costs and expenses, including a reasonable allowance for attorneys’ and experts’ fees. Between June 27, 2016 and June 29, 2016, two putative class-action lawsuits challenging the Celator Acquisition, captioned Palmisciano v. Celator Pharmaceuticals, Inc., or the Palmisciano action, and Barreto v. Celator Pharmaceuticals, Inc. , or the Barreto action , were filed in the District Court. The complaints were filed against Celator and each member of the Celator board of directors. The complaints assert causes of action under sections 14 and 20 of the Securities Exchange Act of 1934, as amended, predicated on Celator’s and the Celator directors’ alleged failure to disclose purportedly material information in Celator’s Schedule 14D-9 filing with the SEC. The plaintiffs sought, among other things, an injunction against the consummation of the Celator Acquisition and an award of costs and expenses, including a reasonable allowance for attorneys’ and experts’ fees. Neither Jazz Pharmaceuticals plc nor Plex were named defendants in these actions. On July 6, 2016, the defendants to the Dunbar action, the Palmisciano action and the Barreto action entered into a memorandum of understanding, or MOU, regarding settlement of these actions with the plaintiffs. The MOU outlines the terms of the parties’ agreement in principle to settle and release all claims which were or could have been asserted in these actions. In consideration for such settlement and release, the parties to these actions agreed, among other things, that Celator would amend its Schedule 14D-9 to include certain supplemental disclosures. The Schedule 14D-9 was amended by Celator on July 6, 2016, and the Celator Acquisition was completed on July 12, 2016. In June 2017, the parties to the MOU agreed to terminate the MOU, and the plaintiffs agreed to voluntarily dismiss the remaining actions. Thereafter, the parties negotiated and ultimately agreed, in October 2017, on a mootness fee paid to plaintiffs’ counsel. The Dunbar, Palmisciano and Barreto actions have each been dismissed with prejudice. From time to time we are involved in legal proceedings arising in the ordinary course of business. We believe there is no other litigation pending that could have, individually or in the aggregate, a material adverse effect on our results of operations or financial condition. Other Contingencies In May 2016, we received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts requesting documents related to our support of 501(c)(3) organizations that provide financial assistance to Medicare patients, and, for Xyrem, documents concerning the provision of financial assistance to Medicare patients. In October 2016, we received a second subpoena updating and further specifying document requests regarding support to 501(c)(3) organizations that provide financial assistance to Medicare patients and the provision of financial assistance for Medicare patients taking drugs sold by us. In February 2017, we received a third subpoena requesting documents regarding our support to a specific 501(c)(3) organization that established a fund for narcolepsy patients in January 2017. Other companies have disclosed similar subpoenas and continuing inquiries. We are cooperating with this investigation. We are unable to predict how long this investigation will continue, whether we will receive additional subpoenas in connection with this investigation, or its outcome, but we expect that we will continue to incur significant costs in connection with the investigation, regardless of the outcome. If the federal government were to file an enforcement action against us as a result of the investigation and could establish the elements of a violation of relevant laws, we could be subject to damages, fines and penalties, which could be substantial, along with other criminal, civil or administrative sanctions. Any settlement with the federal government could result in substantial payments and entry into a corporate integrity agreement, which would impose costs and burdens on the operation of our business. For more information, see the risk factor under the heading “ We are subject to significant ongoing regulatory obligations and oversight, which may result in significant additional expense and limit our ability to commercialize our products” in Part II, Item 1A of this Quarterly Report on Form 10-Q. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity The following tables present a reconciliation of our beginning and ending balances in shareholders’ equity for the nine months ended September 30, 2017 and 2016 (in thousands): Total Shareholders' Equity Shareholders' equity at January 1, 2017 $ 1,877,339 Issuance of 2024 Notes 149,767 Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans 22,793 Employee withholding taxes related to share-based awards (17,909 ) Share-based compensation 79,745 Shares repurchased (56,425 ) Other comprehensive income 158,346 Net income 255,641 Shareholders' equity at September 30, 2017 $ 2,469,297 Total Shareholders' Equity Shareholders' equity at January 1, 2016 $ 1,706,333 Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans 17,951 Employee withholding taxes related to share-based awards (20,595 ) Share-based compensation 75,176 Shares repurchased (259,819 ) Other comprehensive income 32,096 Net income 280,142 Shareholders' equity at September 30, 2016 $ 1,831,284 Share Repurchase Program In November 2016, our board of directors authorized a new share repurchase program pursuant to which we are authorized to repurchase a number of ordinary shares having an aggregate purchase price of up to $300.0 million , exclusive of any brokerage commissions. In the nine months ended September 30, 2017 , we spent a total of $56.4 million to purchase 0.4 million of our ordinary shares under the share repurchase program at an average total purchase price, including commissions, of $141.73 per share. As of September 30, 2017 , the remaining amount authorized under the share repurchase program was $225.1 million . Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss as of September 30, 2017 and December 31, 2016 were as follows (in thousands): Net Unrealized Foreign Total Balance at December 31, 2016 $ — $ (317,333 ) $ (317,333 ) Other comprehensive income (loss) before reclassifications (2,234 ) 159,302 157,068 Amounts reclassified from accumulated other comprehensive loss 1,278 — 1,278 Net other comprehensive income (loss) (956 ) 159,302 158,346 Balance at September 30, 2017 $ (956 ) $ (158,031 ) $ (158,987 ) During the nine months ended September 30, 2017 , other comprehensive income (loss) reflects foreign currency translation adjustments, primarily due to the strengthening of the euro against the U.S. dollar, and the net unrealized losses on derivatives that qualify as cash flow hedges. |
Segment and Other Information
Segment and Other Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment and Other Information | Segment and Other Information Our operating segment is reported in a manner consistent with the internal reporting provided to the chief operating decision maker, or CODM. Our CODM has been identified as our chief executive officer. We have determined that we operate in one business segment, which is the identification, development and commercialization of meaningful pharmaceutical products that address unmet medical needs. The following table presents a summary of total revenues (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Xyrem $ 303,870 $ 285,907 $ 874,222 $ 816,412 Erwinaze/Erwinase 49,173 42,986 149,585 143,907 Defitelio/defibrotide 31,213 28,137 97,351 79,280 Vyxeos 9,719 — 9,719 — Prialt ® (ziconotide) intrathecal infusion 7,930 8,783 21,303 23,065 Other 6,066 5,808 19,124 21,983 Product sales, net 407,971 371,621 1,171,304 1,084,647 Royalties and contract revenues 3,884 2,560 10,990 6,705 Total revenues $ 411,855 $ 374,181 $ 1,182,294 $ 1,091,352 The following table presents a summary of total revenues attributed to geographic sources (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 United States $ 372,846 $ 339,825 $ 1,068,716 $ 991,557 Europe 24,937 25,788 83,667 79,557 All other 14,072 8,568 29,911 20,238 Total revenues $ 411,855 $ 374,181 $ 1,182,294 $ 1,091,352 The following table presents a summary of the percentage of total revenues from customers that represented more than 10% of our total revenues: Three Months Ended Nine Months Ended 2017 2016 2017 2016 Express Scripts 74 % 76 % 74 % 75 % McKesson 14 % 13 % 14 % 14 % The following table presents total long-lived assets, consisting of property and equipment, by location (in thousands): September 30, December 31, United States $ 84,764 $ 35,791 Ireland 64,947 62,453 Italy 7,917 7,000 Other 1,758 2,246 Total long-lived assets $ 159,386 $ 107,490 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Share-based compensation expense related to share options, RSUs and grants under our ESPP was as follows (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Selling, general and administrative $ 20,903 $ 19,511 $ 61,582 $ 60,664 Research and development 4,650 4,056 13,651 10,867 Cost of product sales 1,573 1,307 4,346 2,959 Total share-based compensation expense, pre-tax 27,126 24,874 79,579 74,490 Income tax benefit from share-based compensation expense (6,354 ) (8,486 ) (23,816 ) (24,341 ) Total share-based compensation expense, net of tax $ 20,772 $ 16,388 $ 55,763 $ 50,149 Share Options The table below shows the number of shares underlying options granted to purchase our ordinary shares, the weighted-average assumptions used in the Black-Scholes option pricing model and the resulting weighted-average grant date fair value of share options granted: Three Months Ended Nine Months Ended 2017 2016 2017 2016 Shares underlying options granted (in thousands) 87 147 1,343 1,247 Grant date fair value $ 45.87 $ 42.89 $ 42.69 $ 40.85 Black-Scholes option pricing model assumption information: Volatility 35 % 37 % 35 % 39 % Expected term (years) 4.3 4.2 4.3 4.2 Range of risk-free rates 1.6-1.8% 0.8-1.0% 1.6-1.8% 0.8-1.5% Expected dividend yield — % — % — % — % Restricted Stock Units The table below shows the number of RSUs granted covering an equal number of our ordinary shares and the weighted-average grant date fair value of RSUs granted: Three Months Ended Nine Months Ended 2017 2016 2017 2016 RSUs granted (in thousands) 35 59 537 495 Grant date fair value $ 148.60 $ 138.55 $ 137.23 $ 126.80 The fair value of RSUs is determined on the date of grant based on the market price of our ordinary shares on that date. The fair value of RSUs is expensed ratably over the vesting period, generally over four years . As of September 30, 2017 , compensation cost not yet recognized related to unvested share options and RSUs was $83.2 million and $100.5 million , respectively, which is expected to be recognized over a weighted-average period of 2.7 years and 2.6 years, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our income tax provision was $1.2 million and $65.9 million in the three and nine months ended September 30, 2017 , respectively, compared to $26.4 million and $100.9 million for the same periods in 2016 . The effective tax rates were 1.9% and 20.5% in the three and nine months ended September 30, 2017 , respectively, compared to 22.7% and 26.5% for the same periods in 2016 . The decrease in the effective tax rates for the three and nine months ended September 30, 2017 compared to the same periods in 2016 was primarily due to the release of a valuation allowance held against certain foreign net operating losses and the release of reserves related to unrecognized tax benefits upon the expiration of a statute of limitation. The effective tax rate for the three months ended September 30, 2017 was lower than the Irish statutory rate of 12.5% primarily due to the release of a valuation allowance held against certain foreign net operating losses and the release of reserves related to unrecognized tax benefits upon the expiration of a statute of limitation. The effective tax rate for the nine months ended September 30, 2017 was higher than the Irish statutory rate of 12.5% primarily due to income taxable at a rate higher than the Irish statutory rate, unrecognized tax benefits, and various expenses not deductible for tax purposes, partially offset by originating tax credits and deductions available in relation to subsidiary equity. We do not provide for Irish income taxes on undistributed earnings of our foreign operations that are intended to be indefinitely reinvested in our foreign subsidiaries. Our net deferred tax liability primarily arose due to the Celator Acquisition. The balance is net of deferred tax assets which are comprised primarily of U.S. federal and state net operating loss carryforwards, foreign net operating loss carryforwards and other temporary differences. We maintain a valuation allowance against certain foreign and U.S. federal and state deferred tax assets. Each reporting period, we evaluate the need for a valuation allowance on our deferred tax assets by jurisdiction and adjust our estimates as more information becomes available. We are required to recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. As a result, we have established a liability for certain tax benefits which we judge may not be sustained upon examination. Our most significant tax jurisdictions are Ireland, the U.S. (both at the federal level and in various state jurisdictions), Italy and France. Because of our net operating loss carryforwards and tax credit carryforwards, substantially all of our tax years remain open to federal, state, and foreign tax examination. Certain of our subsidiaries are currently under examination by the French tax authorities for the years ended December 31, 2012 and 2013. These examinations may lead to ordinary course adjustments or proposed adjustments to our taxes. In December 2015, we received proposed tax assessment notices from the French tax authorities for 2012 and 2013 relating to certain transfer pricing adjustments. The notices propose additional French tax of approximately $45.2 million , including interest and penalties through the date of the assessment, translated at the foreign exchange rate at September 30, 2017 . We disagree with the proposed assessment and intend to contest it vigorously. |
The Company and Summary of Si21
The Company and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These unaudited condensed consolidated financial statements have been prepared following the requirements of the U.S. Securities and Exchange Commission, or SEC, for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by U.S. generally accepted accounting principles, or U.S. GAAP, can be condensed or omitted. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our annual consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2016 . In the opinion of management, these condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, considered necessary for the fair presentation of our financial position and operating results. The results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 , for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of Jazz Pharmaceuticals plc and our subsidiaries, and intercompany transactions and balances have been eliminated. |
Significant Risks and Uncertainties | Significant Risks and Uncertainties Our financial results remain significantly influenced by sales of Xyrem. In the three and nine months ended September 30, 2017, net product sales of Xyrem were $303.9 million and $874.2 million , respectively, which represented 74% and 75% of total net product sales, respectively. Our ability to maintain or increase product sales of Xyrem is subject to risks and uncertainties, including the potential U.S. introduction of a generic version of Xyrem before the entry dates specified in our settlements with certain companies that had filed abbreviated new drug applications, or ANDAs, with the FDA seeking approval to market a generic version of Xyrem or on terms that are different from those contemplated by the settlements; the potential U.S. introduction of an alternative product to Xyrem for treating cataplexy and/or EDS in narcolepsy; changes to, increases in or uncertainties around regulatory restrictions, including, among other things, changes to our Xyrem risk evaluation and mitigation strategy, or REMS, particularly in light of the FDA’s waiver of the single shared REMS requirement for sodium oxybate and approval of a separate generic sodium oxybate REMS; any increase in pricing pressure from, or restrictions on reimbursement imposed by, third party payors; changes in healthcare laws and policy, including changes in requirements for patient assistance programs, rebates, reimbursement and coverage by federal healthcare programs, and changes resulting from increased scrutiny on pharmaceutical pricing and REMS programs by government entities; operational disruptions at the Xyrem central pharmacy or any failure to comply with our REMS obligations to the satisfaction of the FDA; any supply or manufacturing problems, including any problems with our sole source provider of the active pharmaceutical ingredient for Xyrem; continued acceptance of Xyrem by physicians and patients, even in the face of negative publicity that surfaces from time to time; changes to our label, including new safety warnings or changes to our boxed warning, that further restrict how we market and sell Xyrem; and our U.S.-based sodium oxybate and Xyrem suppliers’ ability to obtain sufficient quotas from the U.S. Drug Enforcement Administration, or DEA, to satisfy our needs for Xyrem. Although Xyrem is protected by patents covering its manufacture, formulation, distribution system and method of use, eight companies have filed ANDAs with the FDA seeking approval to market a generic version of Xyrem. We filed patent lawsuits against each of the ANDA filers in the U.S. District Court for the District of New Jersey, or the District Court, and an additional lawsuit against the most recent ANDA filer, Ascent Pharmaceuticals, Inc., or Ascent, in the U.S. District Court for the Eastern District of New York, or EDNY, where Ascent is incorporated. On April 5, 2017, we settled all lawsuits against the first ANDA filer, West-Ward Pharmaceuticals Corp. (a wholly owned subsidiary of Hikma Pharmaceuticals PLC), which acquired Roxane Laboratories, Inc., or West-Ward, granting West-Ward the right to sell an authorized generic version of Xyrem, or the West-Ward AG Product, commencing on January 1, 2023, or earlier under certain circumstances, and granting West-Ward a license to launch its generic sodium oxybate product as early as six months thereafter. In the second quarter of 2016, we had settled lawsuits with two of the other ANDA filers, granting those filers a license to manufacture, market and sell their generic versions of Xyrem on or after December 31, 2025, or earlier depending on the occurrence of certain events. In addition, on August 22, 2017, we settled all lawsuits with Ascent, granting Ascent a license to manufacture, market and sell its generic version of Xyrem on or after December 31, 2025, or earlier depending on the occurrence of certain events. For a description of our settlements with West-Ward and three of the other ANDA filers, see “Overview—Challenges, Risks and Trends Related to Our Lead Marketed Products” in Part I, Item 2 of this Quarterly Report on Form 10-Q. Lawsuits with the remaining non-settling ANDA filers have been consolidated as one case and remain pending in the District Court. Although no trial date has been set, discovery is scheduled to conclude in the second quarter of 2018, and the trial in this consolidated case could occur as early as mid-2018. For a description of these legal proceedings, see “Legal Proceedings” in Part II, Item 1 of this Quarterly Report on Form 10-Q. We cannot predict the timing or outcome of the ANDA litigation proceedings against the remaining non-settling ANDA filers. In July 2016, the Patent Trial and Appeal Board, or PTAB, of the U.S. Patent and Trademark Office issued final decisions that the claims of six patents listed in the FDA’s publication, “Approved Drug Products with Therapeutic Equivalence Evaluations,” or Orange Book, as covering the Xyrem REMS are unpatentable. We filed a notice of appeal of these decisions on February 22, 2017. If the United States Court of Appeals for the Federal Circuit upholds those decisions on appeal, these claims will be canceled, and we will not be able to enforce these patents. In March 2016, the PTAB partially instituted an inter partes review, or IPR, on three claims of a seventh REMS patent, declining to review 25 of 28 claims. The PTAB issued a final decision in March 2017 that the three claims they reviewed are unpatentable. We filed a notice of appeal of that decision on May 18, 2017, and the Court of Appeals for the Federal Circuit has consolidated the appeal of the March 2017 decision with the pending appeals of the July 2016 decisions. For a description of these legal proceedings, see “Legal Proceedings” in Part II, Item 1 of this Quarterly Report on Form 10-Q. We cannot predict whether additional post-grant patent review challenges will be filed by any of the ANDA filers or any other entity, the outcome of any proceeding, including any appeal, or the impact any IPR or other proceeding might have on ongoing ANDA litigation proceedings or other aspects of our Xyrem business. On January 17, 2017, the FDA announced approval of the West-Ward ANDA, and on January 19, 2017, the FDA tentatively approved two additional ANDAs for generic versions of Xyrem, one for Amneal Pharmaceuticals, LLC, or Amneal, and one for Ohm Laboratories Inc., formerly known as Ranbaxy, Inc., or Ohm. West-Ward’s ANDA approval includes a waiver that permits West-Ward to use a separate REMS program from the Xyrem REMS, or the generic sodium oxybate REMS, on the condition that the generic sodium oxybate REMS be open to all future sponsors of ANDAs or new drug applications, or NDAs, for sodium oxybate products. We were not involved in the development of the generic sodium oxybate REMS. We continue to evaluate potential challenges based on the FDA’s waiver of the requirement for a single, shared system REMS in connection with the approvals of the ANDAs, including whether the FDA’s waiver decision meets the conditions for such a waiver under applicable law. We cannot predict whether or when we may pursue any such challenges or whether any such challenges would be successful. The actual timing of any commercial launch of an authorized generic or generic version of Xyrem is uncertain. We do not believe a launch by an ANDA filer is likely to occur prior to either a date agreed in a settlement agreement between us and such ANDA filer or a decision by the District Court, or an appellate court, if applicable, in our ongoing patent litigation. However, notwithstanding our patents, and settlement agreements licensing those patents as of future dates, it is possible that West-Ward, Amneal, Ohm or any other company that receives FDA approval of an ANDA for a generic version of Xyrem or an NDA for another sodium oxybate product could introduce a generic version of Xyrem or other sodium oxybate product before the entry dates specified in our settlement agreements or before our patents expire, including if it is determined that the introduction of the competing product does not infringe our patents, if it is determined that our patents are invalid or unenforceable, or if a non-settling ANDA filer that has received approval for its product decides, before applicable ongoing patent litigation is concluded, to launch a sodium oxybate product at risk of being held liable for damages for patent infringement. In addition, even if we prevail in our ongoing litigation at trial or on appeal, we cannot guarantee that the court will grant an injunction that prevents the ANDA filers from marketing their generic versions of Xyrem. Instead the court may order an ANDA filer that is found to infringe to pay damages in the form of lost profits or a reasonable royalty, which could be significant. We expect that the launch of any generic version of Xyrem, including the West-Ward AG Product or other authorized generic version of Xyrem, or the approval and launch of other products that compete with Xyrem, could have a material adverse effect on our sales of Xyrem and on our business, financial condition, results of operations and growth prospects. For further discussion regarding the risks associated with the West-Ward settlement agreement, the tentative approval of the Amneal and Ohm ANDAs, potential approval or tentative approval of additional ANDAs, the potential launch of a generic version of Xyrem, or the approval and launch of other sodium oxybate or other products that compete with Xyrem, see the risk factors under the headings “Risks Related to Xyrem and the Significant Impact of Xyrem Sales,” “ We face substantial competition from other companies, including companies with greater resources, including larger sales organizations and more experience working with large and diverse product portfolios, than we have ,” and “Risks Related to Our Intellectual Property” in Part II, Item 1A of this Quarterly Report on Form 10-Q. In August 2015, we implemented the current Xyrem REMS, and we have submitted and expect to continue to submit ongoing assessments as set forth in the FDA’s Xyrem REMS approval letter. However, we cannot guarantee that our implementation and ongoing assessments will be satisfactory to the FDA or that the Xyrem REMS will satisfy the FDA’s expectations in its evaluation of the Xyrem REMS on an ongoing basis. Any failure to comply with the REMS obligations could result in enforcement action by the FDA; lead to changes in our Xyrem REMS obligations; negatively affect sales of Xyrem; result in additional costs and expenses for us; and/or take a significant amount of time, any of which could materially and adversely affect our business, financial condition, results of operations and growth prospects. Further, we cannot predict whether the FDA will request, seek to require or ultimately require modifications to, or impose additional requirements on, the Xyrem REMS in connection with the anticipated distribution of the West-Ward AG Product, the approval of the generic sodium oxybate REMS or otherwise, or the potential timing, terms or propriety thereof. Any such modifications or additional requirements could make it more difficult or expensive for us to distribute Xyrem, make distribution easier for sodium oxybate competitors, impair the safety profile of Xyrem and/or negatively affect sales of Xyrem. We may face pressure to modify the Xyrem REMS, or license or share intellectual property pertinent to the Xyrem REMS, including proprietary data required for the safe distribution of sodium oxybate, in connection with the FDA’s approval of the generic sodium oxybate REMS. We cannot predict the outcome or impact on our business of any future action that we may take with respect to the approval of the generic sodium oxybate REMS, or licensing or sharing intellectual property pertinent to the Xyrem REMS or elements of the Xyrem REMS. For more information, see the risk factors under the headings “ The launch of a generic version of Xyrem or other sodium oxybate products that compete with Xyrem would adversely affect sales of Xyrem ” and “ We have incurred and expect to continue to incur substantial costs as a result of litigation or other proceedings relating to patents, other intellectual property rights and related matters, and we may be unable to protect our rights to, or commercialize, our products ” in Part II, Item 1A of this Quarterly Report on Form 10-Q. In September 2016, Jazz Pharmaceuticals, Inc., our wholly owned subsidiary, submitted a Citizen Petition to the FDA requesting that, for safety reasons, the FDA refuse to approve any sodium oxybate ANDA with a proposed package insert or REMS that omits the portions of the Xyrem package insert and the Xyrem REMS that instruct prescribers on adjusting the dose of the product when it is co-administered with divalproex sodium (also known as valproate or valproic acid). On January 17, 2017, the FDA granted the Citizen Petition with respect to the Xyrem package insert. The FDA concluded that it will not approve any sodium oxybate ANDA referencing Xyrem that does not include in its package insert the portions of the currently approved Xyrem package insert related to the drug-drug interaction, or DDI, with divalproex sodium. The FDA stated that it did not need to reach the question of whether the DDI information could have been excluded from the generic sodium oxybate REMS materials because it was approving a REMS in connection with a sodium oxybate ANDA including that information. Our Xyrem patents include three method of administration patents relating to a DDI, or DDI patents, covering these instructions on the Xyrem package insert and Xyrem REMS. We cannot predict whether or when one or more of the ANDA filers may pursue a challenge to the FDA’s response to the Citizen Petition or whether any such challenges would be successful. Likewise, we cannot predict whether we will be able to maintain the validity of, or will otherwise obtain a judicial determination that the generic sodium oxybate package insert or the generic sodium oxybate REMS will infringe, any of our patents or, if we prevail in proving infringement, whether a court will grant an injunction that prevents any non-settling ANDA filer or other company introducing a different sodium oxybate product from marketing its product. For a further discussion of risks and uncertainties related to our REMS, our REMS patents and our DDI patents, see the risk factors under the headings “Risks Related to Xyrem and the Significant Impact of Xyrem Sales” and “Risks Related to Our Intellectual Property” in Part II, Item 1A of this Quarterly Report on Form 10-Q. We may also face competition from companies with other sodium oxybate products. For example, we are aware of a third party that has stated that it intends to file an NDA to market a once nightly formulation of sodium oxybate for treatment of cataplexy and/or EDS in narcolepsy under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, which allows companies to seek approval of a product that is similar, but not identical, to a previously-approved brand-name product. We are also aware of a product to treat adult patients with narcolepsy with or without cataplexy that received marketing approval in Europe in 2016. While this product is currently not approved by the FDA for marketing in the U.S., the company that has exclusive U.S. commercialization rights to this product recently announced that it expects to establish an expanded access program for the product in early 2018 and submit an NDA to the FDA for the treatment of narcolepsy in adult patients during the first half of 2018. See the risk factor under the heading “ We face substantial competition from other companies, including companies with greater resources, including larger sales organizations and more experience working with large and diverse product portfolios, than we have ” in Part II, Item 1A of this Quarterly Report on Form 10-Q. Obtaining and maintaining appropriate reimbursement for Xyrem in the U.S. is increasingly challenging due to, among other things, the attention being paid to healthcare cost containment and prescription drug pricing, pricing pressure from third party payors and increasingly restrictive reimbursement conditions being imposed by third party payors. In this regard, we have experienced and expect to continue to experience increasing pressure from third party payors to agree to discounts, rebates or other pricing terms for Xyrem. Any such restrictive pricing terms or additional reimbursement conditions could have a material adverse effect on our Xyrem revenues. In addition, drug pricing by pharmaceutical companies has recently come under close scrutiny, particularly with respect to companies that have increased the price of products after acquiring those products from other companies. We expect that healthcare policies and reforms intended to curb healthcare costs will continue to be proposed, which could limit the prices that we charge for our products, including Xyrem, limit our commercial opportunity and/or negatively impact revenues from sales of our products. Also, price increases on Xyrem and our other products, and negative publicity regarding pricing and price increases generally, whether with respect to our products or products distributed by other pharmaceutical companies, could negatively affect market acceptance of Xyrem and our other products. In the three and nine months ended September 30, 2017 , net product sales of our second largest product, Erwinaze/Erwinase (which we refer to in this report as Erwinaze unless otherwise indicated or the context otherwise requires), were $49.2 million and $149.6 million , respectively, which represented 12% and 13% of total net product sales, respectively. We seek to increase sales of Erwinaze, as well as to make Erwinaze more widely available, through ongoing sales and marketing activities. Erwinaze is licensed from and manufactured by a single source, Porton Biopharma Limited, or PBL, which is wholly owned by the U.K. Secretary of State for Health. Our agreement with PBL, including our license, expires in December 2020, subject to five -year extensions unless terminated by either party in writing by December 2018. We cannot predict whether the term of the agreement will be extended or, if extended, the terms of any such extension. Erwinaze was approved by the FDA under a biologics license application, or BLA, and was launched in the U.S. in November 2011. The FDA’s approval of the BLA for Erwinaze includes a number of post-marketing commitments related to the manufacture of Erwinaze by PBL. We cannot predict if or when PBL will comply with its manufacturing-related post-marketing commitments that are part of the BLA approval. In January 2017, the FDA issued a warning letter to PBL indicating that it was not satisfied with PBL’s response to the FDA Form 483 issued to PBL in March 2016, citing significant violations of current Good Manufacturing Practices, or cGMP, for finished pharmaceuticals and significant deviations from cGMP for active pharmaceutical ingredients, or APIs. In March 2017, PBL filed a response to the warning letter with the FDA. We attended a meeting with PBL and the FDA in the third quarter of 2017 to discuss the warning letter, and PBL continues to address the issues identified by the FDA in the warning letter. We cannot predict if or when PBL will correct the violations and deviations to the satisfaction of the FDA or whether the FDA will be satisfied with PBL’s response to the warning letter. Any failure to do so could result in the FDA refusing admission of Erwinaze into the U.S., as well as additional enforcement actions by the FDA and other regulatory entities. In addition, a significant challenge to our ability to maintain current sales levels and to increase sales is our need to avoid supply disruptions of Erwinaze due to capacity constraints, production delays, quality or regulatory challenges or other manufacturing difficulties. The current manufacturing capacity for Erwinaze is completely absorbed by demand for the product. We are working with PBL to evaluate potential expansion of its production capacity to increase the supply of Erwinaze over the longer term and to address the production delays and quality challenges, and related regulatory scrutiny. As a consequence of constrained manufacturing capacity, we have had an extremely limited or no ability to build product inventory levels that can be used to absorb disruptions to supply resulting from quality, regulatory or other issues. We have experienced product quality, manufacturing and inventory challenges that have resulted, and may continue to result from time to time through the remainder of 2017 and into 2018, in disruptions in our ability to supply certain markets and have caused, and may in the future cause, us to implement batch-specific, modified product use instructions. Most recently, we experienced supply disruptions in the third quarter of 2017 in the U.S. and certain other countries. As capacity constraints and supply disruptions continue, whether as a result of continued quality or other manufacturing issues, regulatory issues or otherwise, we will be unable to build a desired excess level of product inventory, our ability to supply the market may continue to be compromised and physicians’ decisions to use Erwinaze have been, and in the future may continue to be, negatively impacted. Additional Erwinaze supply disruptions and/or our inability to expand production capacity could materially adversely affect our sales of and revenues from Erwinaze and our potential future maintenance and growth of the market for this product. Our ability to successfully and sustainably grow sales of Erwinaze is subject to a number of other risks and uncertainties, including the limited population of patients with ALL and the incidence of hypersensitivity reactions to E. coli -derived asparaginase within that population, our need to apply for and receive marketing authorizations, through the European Union’s, or EU’s, mutual recognition procedure or otherwise, in certain additional countries if we decide to launch promotional efforts in those countries, as well as those other risks and uncertainties discussed in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. In the three and nine months ended September 30, 2017 , net product sales of Defitelio/defibrotide represented 8% of total net product sales for both periods. We acquired this product in January 2014 in connection with our acquisition of Gentium S.r.l., or Gentium, which we refer to as the Gentium Acquisition, and secured worldwide rights to the product by acquiring rights to defibrotide in the Americas in August 2014. We began to commercialize Defitelio in certain European countries in 2014. The process of maintaining pricing and reimbursement approvals is complex and varies from country to country. Many European countries periodically review their reimbursement classes, which could have an adverse impact on the reimbursement status of Defitelio. We cannot predict the outcome of periodic pricing and reimbursement reviews across Europe. If we are unable to maintain favorable pricing and reimbursement approvals in countries that represent significant markets, especially where a country’s reimbursed price influences other countries, our anticipated revenue from and growth prospects for Defitelio in the EU could be negatively affected. In March 2016, the FDA approved our NDA for Defitelio for the treatment of adult and pediatric patients with VOD with renal or pulmonary dysfunction following HSCT. We launched Defitelio in the U.S. shortly after FDA approval, and our U.S. commercial launch is still at an early stage. Our ability to realize the anticipated benefits from our investment in Defitelio is subject to risks and uncertainties, including the continued acceptance of Defitelio in the U.S. by hospital pharmacy and therapeutics committees and the continued availability of adequate coverage and reimbursement by government programs and third party payors; the limited experience of U.S. physicians in diagnosing and treating VOD, particularly in adults, and the possibility that physicians may not initiate or may delay initiation of treatment while waiting for VOD symptoms to improve, or terminate treatment before the end of the recommended dosing schedule; our ability to successfully maintain or grow sales of Defitelio in Europe and other non-U.S. countries; delays or problems in the supply or manufacture of the product; the limited size of the population of VOD patients who are indicated for treatment with Defitelio (particularly if changes in HSCT treatment protocols reduce the incidence of VOD diagnosis); our ability to meet the post-marketing commitments and requirements imposed by the FDA in connection with its approval of our NDA for Defitelio; and our ability to obtain marketing approval in other countries and to develop the product for additional indications, as well as those other risks and uncertainties discussed in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. If sales of Defitelio do not reach the levels we expect, our anticipated revenue from the product will be negatively affected, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In addition, we made a significant investment in Vyxeos through the acquisition of Celator Pharmaceuticals Inc., or Celator, in July 2016, or the Celator Acquisition. On August 3, 2017, the FDA approved our NDA for Vyxeos for the treatment of adults with newly-diagnosed therapy-related AML or AML with myelodysplasia-related changes. We launched and began shipping Vyxeos in the U.S. in August 2017, and the launch is at an early stage. We submitted a marketing authorization application for Vyxeos to the European Medicines Agency in the fourth quarter of 2017. Our ability to realize the anticipated benefits from our investment in Vyxeos is subject to additional risks and uncertainties, including our ability to differentiate Vyxeos from other liposomal chemotherapies and generically available chemotherapy combinations with which physicians and treatment centers are more familiar; delays or problems in the supply or manufacture of the product, including the ability of the third parties upon which we rely to manufacture Vyxeos and its APIs to manufacture sufficient quantities in accordance with applicable specifications; the need to establish pricing and reimbursement support for Vyxeos in the U.S. and in other countries; the acceptance of Vyxeos in the U.S. and other countries by hospital pharmacy and therapeutics committees and the availability of adequate coverage and reimbursement by government programs and third party payors; the approval and use of new and novel compounds in AML that are only approved for use in combination with other agents and that have not been tested in combination with Vyxeos; and the limited size of the population of high-risk AML patients who may potentially be indicated for treatment with Vyxeos, particularly given the ongoing clinical trials by other companies with the same patient population, as well as those other risks and uncertainties discussed in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10‑Q. If sales of Vyxeos do not reach the levels we expect, or we are unable to obtain regulatory approval for Vyxeos in Europe in a timely manner, or at all, our anticipated revenue from Vyxeos would be negatively affected, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In May and October 2016 and in February 2017, we received subpoenas from the U.S. Attorney’s Office for the District of Massachusetts requesting documents related to our support of 501(c)(3) organizations that provide financial assistance to Medicare patients and documents concerning the provision of financial assistance to Medicare patients taking drugs sold by us. We are cooperating with the investigation, and the outcome of this investigation could include an enforcement action or a settlement with the federal government. The Office of the Inspector General has established guidelines that permit pharmaceutical manufacturers to make donations to charitable organizations who provide co-pay assistance to Medicare patients, provided that such organizations, among other things, are bona fide charities, are entirely independent of and not controlled by the manufacturer, provide aid to applicants on a first-come basis according to consistent financial criteria, and do not link aid to use of a donor’s product. If we or our vendors or donation recipients are deemed to fail to comply with relevant laws, regulations or evolving government guidance in the operation of these programs, such facts could be used as the basis for an enforcement action by the federal government. If the federal government were to file an enforcement action against us as a result of the investigation and could establish the elements of a violation of relevant laws, we could be subject to damages, fines and penalties, which could be substantial, along with other criminal, civil or administrative sanctions. Any settlement with the federal government could result in substantial payments and entry into a corporate integrity agreement, which would impose costs and burdens on the operation of our business. For more information, see the risk factors under the headings “ Changes in healthcare law and implementing regulations, including those based on recently enacted legislation, as well as changes in healthcare policy, may impact our business in ways that we cannot currently predict, and these changes could have a material adverse effect on our business and financial condition ” and “ We are subject to significant ongoing regulatory obligations and oversight, which may result in significant additional expense and limit our ability to commercialize our products ” in Part II, Item 1A of this Quarterly Report on Form 10-Q. Other key challenges and risks that we face include risks and uncertainties related to: • the challenges of protecting and enhancing our intellectual property rights; • the challenges of achieving and maintaining commercial success of our products; • delays or problems in the supply or manufacture of our products and product candidates, particularly with respect to certain products as to which we maintain limited inventories, our dependence on single source suppliers for most of our products, product candidates and APIs, and the requirement that we and our product suppliers be qualified by the FDA to manufacture product and comply with applicable manufacturing regulations; • the need to obtain and maintain appropriate pricing and reimbursement for our products in an increasingly challenging environment due to, among other things, the attention being paid to healthcare cost containment and pharmaceutical pricing in the U.S. and worldwide, including the need to obtain and maintain reimbursement for Xyrem in the U.S. in an environment in which we are subject to increasingly restrictive conditions for reimbursement required by government programs and third party payors; • our ability to identify and acquire, in-license or develop additional products or product candidates to grow our business; • the challenges of compliance with the requirements of the FDA, the DEA, and comparable non-U.S. regulatory agencies, including with respect to product labeling, requirements for distribution, obtaining sufficient DEA quotas where needed, marketing and promotional activities, patient assistance programs, adverse event reporting and product recalls or withdrawals; • the difficulty and uncertainty of pharmaceutical product development, including the timing thereof, and the uncertainty of clinical success, such as the risk that results from preclinical studies and/or early clinical trials may not be predictive of results obtained in later and larger clinical trials planned or anticipated to be conducted for our product candidates; • the inherent uncertainty associated with the regulatory approval process, especially as we continue to increase investment in our product pipeline development projects and undertake multiple planned regulatory submissions for our product candidates; • the risks associated with business combination or product or product candidate acqui |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities We record the fair value of derivative instruments as either assets or liabilities on the consolidated balance sheets. Changes in the fair value of derivative instruments are recorded each period in current earnings or other comprehensive income (loss), depending on whether a derivative instrument is designated as part of a hedging transaction and, if it is, the type of hedging transaction. For a derivative to qualify as a hedge at inception and throughout the hedged period, we formally document the nature and relationships between the hedging instruments and hedged item. We assess, both at inception and on an on-going basis, whether the derivative instruments that are used in cash flow hedging transactions are highly effective in offsetting the changes in cash flows of hedged items. We assess hedge ineffectiveness on a quarterly basis and record the gain or loss related to the ineffective portion of derivative instruments, if any, to current earnings. If we determine that a forecasted transaction is no longer probable of occurring, we discontinue hedge accounting and any related unrealized gain or loss on the derivative instrument is recognized in current earnings. Derivatives that are not designated and do not qualify as hedges are adjusted to fair value through current earnings. |
Concentrations of Risk | Concentrations of Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents, investments and derivative contracts. Our investment policy permits investments in U.S. federal government and federal agency securities, corporate bonds or commercial paper issued by U.S. corporations, money market instruments, certain qualifying money market mutual funds, certain repurchase agreements, and tax-exempt obligations of U.S. states, agencies and municipalities and places restrictions on credit ratings, maturities, and concentration by type and issuer. We are exposed to credit risk in the event of a default by the financial institutions holding our cash, cash equivalents and investments to the extent recorded on the balance sheet. We manage our foreign currency transaction risk and interest rate risk within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes. As of September 30, 2017 , we had foreign exchange forward contracts with notional amounts totaling $330.6 million . As of September 30, 2017 , the asset fair value of outstanding foreign exchange forward contracts was $11.8 million . As of September 30, 2017 , we had interest rate swap contracts with notional amounts totaling $300.0 million . These outstanding interest rate swap contracts had a net liability fair value of $1.1 million as of September 30, 2017 . The counterparties to these contracts are large multinational commercial banks, and we believe the risk of nonperformance is not material. We are also subject to credit risk from our accounts receivable related to our product sales. We monitor our exposure within accounts receivable and record a reserve against uncollectible accounts receivable as necessary. We extend credit to pharmaceutical wholesale distributors and specialty pharmaceutical distribution companies, primarily in the U.S., and to other international distributors and hospitals. Customer creditworthiness is monitored and collateral is not required. We monitor deteriorating economic conditions in certain European countries which may result in variability of the timing of cash receipts and an increase in the average length of time that it takes to collect accounts receivable outstanding. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. |
Net Income per Ordinary Share | Net Income per Ordinary Share Basic net income per ordinary share is based on the weighted-average number of ordinary shares outstanding. Diluted net income per ordinary share is based on the weighted-average number of ordinary shares outstanding and potentially dilutive ordinary shares outstanding. Basic and diluted net income per ordinary share were computed as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Numerator: Net income $ 63,526 $ 89,828 $ 255,641 $ 280,142 Denominator: Weighted-average ordinary shares used in per share calculation - basic 60,108 60,437 60,030 60,692 Dilutive effect of employee equity incentive and purchase plans 1,328 1,358 1,330 1,458 Weighted-average ordinary shares used in per share calculation - diluted 61,436 61,795 61,360 62,150 Net income per ordinary share: Basic $ 1.06 $ 1.49 $ 4.26 $ 4.62 Diluted $ 1.03 $ 1.45 $ 4.17 $ 4.51 Potentially dilutive ordinary shares from our employee equity incentive and purchase plans, our 1.875% exchangeable senior notes due 2021, or the 2021 Notes, and our 1.50% exchangeable senior notes due 2024, or the 2024 Notes, are determined by applying the treasury stock method to the assumed exercise of share options, the assumed vesting of outstanding restricted stock units, or RSUs, the assumed issuance of ordinary shares under our employee stock purchase plan, or ESPP, and the assumed issuance of ordinary shares upon exchange of the 2021 Notes and the 2024 Notes, which we refer to together as the Exchangeable Senior Notes. The potential issue of ordinary shares issuable upon exchange of the Exchangeable Senior Notes had no effect on diluted net income per ordinary share because the average price of our ordinary shares for the three and nine months ended September 30, 2017 and 2016 did not exceed the effective exchange prices per ordinary share of the Exchangeable Senior Notes. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board, or FASB, issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”. ASU No. 2017-12 amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in their financial statements. ASU No. 2017-12 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently assessing the impact of adoption of ASU No. 2017-12 on our consolidated financial statements and our approach to adoption. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” which simplifies the accounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test. Goodwill impairment will now be the amount by which the reporting unit’s carrying value exceeds its fair value, limited to the carrying value of the goodwill. The standard is effective for us beginning January 1, 2020. Early adoption is permitted for any impairment tests performed after January 1, 2017. The new guidance is not expected to have a material impact on our results of operations and financial position. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” which provides clarification on the definition of a business and adds guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard is effective for us beginning January 1, 2018. Early adoption is permitted. The future impact of ASU No. 2017-01 will be dependent upon the nature of our future acquisition or disposition transactions, if any. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” which requires an entity to recognize the income tax consequences of an intra-entity asset transfer, other than an intra-entity asset transfer of inventory, when the transfer occurs. The standard is effective for us beginning January 1, 2018. Early adoption is permitted. We plan to adopt ASU No. 2016-16 at its effective date and do not expect adoption to have a material impact on our results of operations and financial position. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The standard is effective for us beginning January 1, 2018. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. Under the new guidance, lessees will be required to recognize a right-of-use asset, which represents the lessee’s right to use, or control the use of, a specified asset for the lease term, and a corresponding lease liability, which represents the lessee’s obligation to make lease payments under a lease, measured on a discounted basis. ASU No. 2016-02 is effective beginning January 1, 2019 and early adoption is permitted. ASU No. 2016-02 must be adopted on a modified retrospective transition basis for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements. The adoption of ASU No. 2016-02 will result in a significant increase in our consolidated balance sheet for right-of-use assets and lease liabilities. While we are continuing to assess all potential impacts of the standard, we currently believe the most significant impact relates to our accounting for the lease agreements we entered into in January 2015 and September 2017 to lease office space located in Palo Alto, California in buildings constructed or to be constructed by the landlord, which are accounted for as build-to-suit arrangements under existing accounting standards, and the lease agreement we entered into in August 2016 for office space in Dublin, Ireland. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”. The standard states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this, an entity will need to identify the contract with a customer; identify the separate performance obligations in the contract; determine the transaction price; allocate the transaction price to the separate performance obligations in the contract; and recognize revenue when (or as) the entity satisfies each performance obligation. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date”, which deferred the effective date of ASU No. 2014-09. ASU No. 2014-09 will now be effective for us beginning January 1, 2018 and can be adopted on a full retrospective basis or on a modified retrospective basis. In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations”, which clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”, which clarifies certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers. We plan to adopt ASU No. 2014-09 at its effective date on a modified retrospective basis. We have substantially completed our review of existing revenue contracts and currently do not anticipate that the implementation of ASU No. 2014-09 will have a material impact on our results of operations and financial position. We are continuing to review the impact that the new standard will have on our financial statement disclosures and to identify any changes required to our accounting policies, business processes and internal controls to support the new accounting and disclosure requirements. |
The Company and Summary of Si22
The Company and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basic and Diluted Net Income per Ordinary Share Computation | Basic and diluted net income per ordinary share were computed as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Numerator: Net income $ 63,526 $ 89,828 $ 255,641 $ 280,142 Denominator: Weighted-average ordinary shares used in per share calculation - basic 60,108 60,437 60,030 60,692 Dilutive effect of employee equity incentive and purchase plans 1,328 1,358 1,330 1,458 Weighted-average ordinary shares used in per share calculation - diluted 61,436 61,795 61,360 62,150 Net income per ordinary share: Basic $ 1.06 $ 1.49 $ 4.26 $ 4.62 Diluted $ 1.03 $ 1.45 $ 4.17 $ 4.51 |
Weighted-Average Ordinary Shares Excluded from Computation of Diluted Net Income per Share | The following table represents the weighted-average ordinary shares that were excluded from the calculation of diluted net income per ordinary share for the periods presented because including them would have an anti-dilutive effect (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Exchangeable Senior Notes 3,958 2,878 3,238 2,878 Options to purchase ordinary shares and RSUs 2,998 2,851 3,175 2,688 Ordinary shares under ESPP 16 45 9 72 |
Cash and Available-for-Sale S23
Cash and Available-for-Sale Securities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash and Cash Equivalents and Investments | Cash, cash equivalents and investments consisted of the following (in thousands): September 30, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and Cash Equivalents Investments Cash $ 122,154 $ — $ — $ 122,154 $ 122,154 $ — Time deposits 220,000 — — 220,000 20,000 200,000 Money market funds 110,461 — — 110,461 110,461 — Totals $ 452,615 $ — $ — $ 452,615 $ 252,615 $ 200,000 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and Cash Equivalents Investments Cash $ 215,963 $ — $ — $ 215,963 $ 215,963 $ — Time deposits 210,000 — — 210,000 150,000 60,000 Totals $ 425,963 $ — $ — $ 425,963 $ 365,963 $ 60,000 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table summarizes, by major security type, our available-for-sale securities and derivative contracts as of September 30, 2017 and December 31, 2016 that were measured at fair value on a recurring basis and were categorized using the fair value hierarchy (in thousands): September 30, 2017 December 31, 2016 Quoted Significant Total Significant Total Assets: Available-for-sale securities: Time deposits $ — $ 220,000 $ 220,000 $ 210,000 $ 210,000 Money market funds 110,461 — 110,461 — — Interest rate contracts — 201 201 — — Foreign exchange forward contracts — 12,124 12,124 — — Totals $ 110,461 $ 232,325 $ 342,786 $ 210,000 $ 210,000 Liabilities: Interest rate contracts $ — $ 1,322 $ 1,322 $ — $ — Foreign exchange forward contracts — 291 291 — — Totals $ — $ 1,613 $ 1,613 $ — $ — |
Derivative and Hedging Activi25
Derivative and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of gains (losses) on derivative instruments | The impact on accumulated other comprehensive loss and earnings from derivative instruments that qualified as cash flow hedges for the three and nine months ended September 30, 2017 was as follows (in thousands): Three Months Ended Nine Months Ended Interest Rate Contracts: 2017 2016 2017 2016 Loss recognized in accumulated other comprehensive loss, net of tax $ (59 ) $ — $ (2,234 ) $ — Loss reclassified from accumulated other comprehensive loss to interest expense, net of tax $ 451 $ — $ 1,278 $ — |
Schedule of the fair value of outstanding derivatives | The following table summarizes the fair value of outstanding derivatives as of September 30, 2017 (in thousands): September 30, 2017 Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate contracts Other non-current assets $ 201 Accrued liabilities $ 1,322 Derivatives not designated as hedging instruments: Foreign exchange forward contracts Other current assets 12,124 Accrued liabilities 291 Total fair value of derivative instruments $ 12,325 $ 1,613 |
Schedule of offsetting assets | The following table summarizes the potential effect on our condensed consolidated balance sheets of offsetting our interest rate contracts and foreign exchange forward contracts subject to such provisions (in thousands): September 30, 2017 Gross Amounts of Recognized Assets/Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet Description Derivative Financial Instruments Cash Collateral Received (Pledged) Net Amount Derivative assets $ 1,938 $ — $ 1,938 $ (560 ) $ — $ 1,378 Derivative liabilities $ (560 ) $ — $ (560 ) $ 560 $ — $ — |
Schedule of offsetting liabilities | The following table summarizes the potential effect on our condensed consolidated balance sheets of offsetting our interest rate contracts and foreign exchange forward contracts subject to such provisions (in thousands): September 30, 2017 Gross Amounts of Recognized Assets/Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet Description Derivative Financial Instruments Cash Collateral Received (Pledged) Net Amount Derivative assets $ 1,938 $ — $ 1,938 $ (560 ) $ — $ 1,378 Derivative liabilities $ (560 ) $ — $ (560 ) $ 560 $ — $ — |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories consisted of the following (in thousands): September 30, December 31, Raw materials $ 2,681 $ 1,547 Work in process 19,965 18,689 Finished goods 18,698 13,815 Total inventories $ 41,344 $ 34,051 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Gross Carrying Amount of Goodwill | The gross carrying amount of goodwill was as follows (in thousands): Balance at December 31, 2016 $ 893,810 Foreign exchange 47,618 Balance at September 30, 2017 $ 941,428 |
Gross Carrying Amounts and Net Book Values of Intangible Assets | The gross carrying amounts and net book values of our intangible assets were as follows (in thousands): September 30, 2017 December 31, 2016 Remaining Gross Accumulated Net Book Gross Accumulated Net Book Acquired developed technologies 15.1 $ 3,376,895 $ (505,369 ) $ 2,871,526 $ 1,477,618 $ (410,523 ) $ 1,067,095 Manufacturing contracts 0.6 12,647 (11,670 ) 977 11,278 (8,292 ) 2,986 Trademarks — 2,905 (2,905 ) — 2,872 (2,872 ) — Total finite-lived intangible assets 3,392,447 (519,944 ) 2,872,503 1,491,768 (421,687 ) 1,070,081 Acquired in-process research and development assets 146,532 — 146,532 1,941,920 — 1,941,920 Total intangible assets $ 3,538,979 $ (519,944 ) $ 3,019,035 $ 3,433,688 $ (421,687 ) $ 3,012,001 |
Estimated Future Amortization Costs | Based on finite-lived intangible assets recorded as of September 30, 2017 , and assuming the underlying assets will not be impaired and that we will not change the expected lives of the assets, future amortization expenses were estimated as follows (in thousands): Year Ending December 31, Estimated Amortization Expense 2017 (remainder) $ 52,966 2018 208,830 2019 208,595 2020 205,644 2021 204,609 Thereafter 1,991,859 Total $ 2,872,503 |
Certain Balance Sheet Items (Ta
Certain Balance Sheet Items (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Certain Balance Sheet Items [Abstract] | |
Property and Equipment | Property and equipment consisted of the following (in thousands): September 30, December 31, Construction-in-progress $ 82,802 $ 33,427 Land and buildings 46,616 46,033 Manufacturing equipment and machinery 22,903 19,596 Computer software 19,281 17,832 Leasehold improvements 12,953 9,328 Computer equipment 11,912 10,980 Furniture and fixtures 3,373 2,436 Subtotal 199,840 139,632 Less accumulated depreciation and amortization (40,454 ) (32,142 ) Property and equipment, net $ 159,386 $ 107,490 |
Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): September 30, December 31, Rebates and other sales deductions $ 76,930 $ 72,344 Employee compensation and benefits 46,672 43,363 Royalties 11,309 11,643 Accrued construction-in-progress 5,488 1,597 Inventory-related accruals 3,843 3,350 Sales returns reserve 3,470 4,366 Professional fees 3,244 4,596 Clinical trial accruals 2,657 10,139 Selling and marketing accruals 2,384 3,924 Accrued interest 2,347 5,179 Accrued contract termination fees — 11,612 Other 21,546 21,155 Total accrued liabilities $ 179,890 $ 193,268 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The following table summarizes the carrying amount of our indebtedness (in thousands): September 30, December 31, 2021 Notes $ 575,000 $ 575,000 Unamortized discount and debt issuance costs on 2021 Notes (86,663 ) (101,094 ) 2021 Notes, net 488,337 473,906 2024 Notes 575,000 — Unamortized discount and debt issuance costs on 2024 Notes (163,363 ) — 2024 Notes, net 411,637 — Term loan 679,939 705,719 Borrowings under revolving credit facility — 850,000 Total debt 1,579,913 2,029,625 Less current portion 36,094 36,094 Total long-term debt $ 1,543,819 $ 1,993,531 |
Schedule of Maturities of Long-Term Debt | Scheduled maturities with respect to our long-term debt principal balances outstanding as of September 30, 2017 were as follows (in thousands): Year Ending December 31, Scheduled Long-Term Debt Maturities 2017 (remainder) $ 9,023 2018 40,606 2019 58,652 2020 76,699 2021 1,075,801 Thereafter 575,000 Total $ 1,835,781 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments under Noncancelable Operating Leases | Future minimum lease payments under our noncancelable operating and facility leases as of September 30, 2017 were as follows (in thousands): Year Ending December 31, Lease Payments 2017 (remainder) $ 6,615 2018 15,811 2019 16,885 2020 19,127 2021 19,166 Thereafter 165,797 Total $ 243,401 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Reconciliation of Shareholders' Equity | The following tables present a reconciliation of our beginning and ending balances in shareholders’ equity for the nine months ended September 30, 2017 and 2016 (in thousands): Total Shareholders' Equity Shareholders' equity at January 1, 2017 $ 1,877,339 Issuance of 2024 Notes 149,767 Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans 22,793 Employee withholding taxes related to share-based awards (17,909 ) Share-based compensation 79,745 Shares repurchased (56,425 ) Other comprehensive income 158,346 Net income 255,641 Shareholders' equity at September 30, 2017 $ 2,469,297 Total Shareholders' Equity Shareholders' equity at January 1, 2016 $ 1,706,333 Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans 17,951 Employee withholding taxes related to share-based awards (20,595 ) Share-based compensation 75,176 Shares repurchased (259,819 ) Other comprehensive income 32,096 Net income 280,142 Shareholders' equity at September 30, 2016 $ 1,831,284 |
Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss as of September 30, 2017 and December 31, 2016 were as follows (in thousands): Net Unrealized Foreign Total Balance at December 31, 2016 $ — $ (317,333 ) $ (317,333 ) Other comprehensive income (loss) before reclassifications (2,234 ) 159,302 157,068 Amounts reclassified from accumulated other comprehensive loss 1,278 — 1,278 Net other comprehensive income (loss) (956 ) 159,302 158,346 Balance at September 30, 2017 $ (956 ) $ (158,031 ) $ (158,987 ) |
Segment and Other Information (
Segment and Other Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Summary of Total Revenues | The following table presents a summary of total revenues (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Xyrem $ 303,870 $ 285,907 $ 874,222 $ 816,412 Erwinaze/Erwinase 49,173 42,986 149,585 143,907 Defitelio/defibrotide 31,213 28,137 97,351 79,280 Vyxeos 9,719 — 9,719 — Prialt ® (ziconotide) intrathecal infusion 7,930 8,783 21,303 23,065 Other 6,066 5,808 19,124 21,983 Product sales, net 407,971 371,621 1,171,304 1,084,647 Royalties and contract revenues 3,884 2,560 10,990 6,705 Total revenues $ 411,855 $ 374,181 $ 1,182,294 $ 1,091,352 |
Summary of Total Revenues Attributed to Geographic Sources | The following table presents a summary of total revenues attributed to geographic sources (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 United States $ 372,846 $ 339,825 $ 1,068,716 $ 991,557 Europe 24,937 25,788 83,667 79,557 All other 14,072 8,568 29,911 20,238 Total revenues $ 411,855 $ 374,181 $ 1,182,294 $ 1,091,352 |
Summary of Revenues from Customers Representing More Than 10% of Total Revenues | The following table presents a summary of the percentage of total revenues from customers that represented more than 10% of our total revenues: Three Months Ended Nine Months Ended 2017 2016 2017 2016 Express Scripts 74 % 76 % 74 % 75 % McKesson 14 % 13 % 14 % 14 % |
Total Long-Lived Assets by Location | The following table presents total long-lived assets, consisting of property and equipment, by location (in thousands): September 30, December 31, United States $ 84,764 $ 35,791 Ireland 64,947 62,453 Italy 7,917 7,000 Other 1,758 2,246 Total long-lived assets $ 159,386 $ 107,490 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation Expense Related to Share Options, RSUs and Grants Under ESPP | Share-based compensation expense related to share options, RSUs and grants under our ESPP was as follows (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Selling, general and administrative $ 20,903 $ 19,511 $ 61,582 $ 60,664 Research and development 4,650 4,056 13,651 10,867 Cost of product sales 1,573 1,307 4,346 2,959 Total share-based compensation expense, pre-tax 27,126 24,874 79,579 74,490 Income tax benefit from share-based compensation expense (6,354 ) (8,486 ) (23,816 ) (24,341 ) Total share-based compensation expense, net of tax $ 20,772 $ 16,388 $ 55,763 $ 50,149 |
Weighted-Average Assumptions Used in Black-Scholes Option Pricing Model which was Used to Estimate Grant Date Fair Value per Share | The table below shows the number of shares underlying options granted to purchase our ordinary shares, the weighted-average assumptions used in the Black-Scholes option pricing model and the resulting weighted-average grant date fair value of share options granted: Three Months Ended Nine Months Ended 2017 2016 2017 2016 Shares underlying options granted (in thousands) 87 147 1,343 1,247 Grant date fair value $ 45.87 $ 42.89 $ 42.69 $ 40.85 Black-Scholes option pricing model assumption information: Volatility 35 % 37 % 35 % 39 % Expected term (years) 4.3 4.2 4.3 4.2 Range of risk-free rates 1.6-1.8% 0.8-1.0% 1.6-1.8% 0.8-1.5% Expected dividend yield — % — % — % — % |
Schedule of Restricted Stock Unit activity | The table below shows the number of RSUs granted covering an equal number of our ordinary shares and the weighted-average grant date fair value of RSUs granted: Three Months Ended Nine Months Ended 2017 2016 2017 2016 RSUs granted (in thousands) 35 59 537 495 Grant date fair value $ 148.60 $ 138.55 $ 137.23 $ 126.80 |
The Company and Summary of Si34
The Company and Summary of Significant Accounting Policies - Significant Risks and Uncertainties Additional Information (Details) $ in Thousands | Apr. 05, 2017 | Mar. 31, 2017claim_under_petition | Jul. 31, 2016patent | Mar. 31, 2016claim_under_petition | Apr. 30, 2015litigation_case | Sep. 30, 2017USD ($)company | Sep. 30, 2016USD ($) | Jun. 30, 2016lawsuit | Jun. 30, 2016litigation_case | Sep. 30, 2017USD ($)lawsuitpatentcompany | Sep. 30, 2016USD ($) | Jan. 19, 2017application |
Concentration Risk [Line Items] | ||||||||||||
Product sales, net | $ | $ 407,971 | $ 371,621 | $ 1,171,304 | $ 1,084,647 | ||||||||
Xyrem ANDA Matters | Pending Litigation | ||||||||||||
Concentration Risk [Line Items] | ||||||||||||
Number of litigation cases after consolidation | litigation_case | 1 | 1 | ||||||||||
Xyrem | ||||||||||||
Concentration Risk [Line Items] | ||||||||||||
Product sales, net | $ | $ 303,870 | 285,907 | $ 874,222 | 816,412 | ||||||||
Number of ANDAs filed by third parties | company | 8 | 8 | ||||||||||
Exclusivity grace period | 6 months | |||||||||||
Number of claims settled | lawsuit | 2 | 3 | ||||||||||
Number of ANDAs approved | application | 2 | |||||||||||
Number of DDI patents covered in instructions | patent | 3 | |||||||||||
Xyrem | Pending Litigation | ||||||||||||
Concentration Risk [Line Items] | ||||||||||||
Number of patents deemed unenforceable by PTAB | patent | 6 | |||||||||||
Number of claims under IPR review | 3 | |||||||||||
Number of petition claims PTAB denied | 25 | |||||||||||
Number of petition claims under patent review | 28 | |||||||||||
Number of petition claims under patent review deemed unpatentable | 3 | |||||||||||
Xyrem | Amneal Pharmaceuticals | ||||||||||||
Concentration Risk [Line Items] | ||||||||||||
Number of ANDAs approved | application | 1 | |||||||||||
Xyrem | Ohm Laboratories Inc. | ||||||||||||
Concentration Risk [Line Items] | ||||||||||||
Number of ANDAs approved | application | 1 | |||||||||||
Xyrem | Product Concentration Risk | Sales Revenue, Product Line | ||||||||||||
Concentration Risk [Line Items] | ||||||||||||
Percentage of product sales, net (as a percent) | 74.00% | 75.00% | ||||||||||
Erwinaze and Erwinase | ||||||||||||
Concentration Risk [Line Items] | ||||||||||||
Product sales, net | $ | $ 49,173 | $ 42,986 | $ 149,585 | $ 143,907 | ||||||||
Licensing agreement extension term | 5 years | |||||||||||
Erwinaze and Erwinase | Product Concentration Risk | Sales Revenue, Product Line | ||||||||||||
Concentration Risk [Line Items] | ||||||||||||
Percentage of product sales, net (as a percent) | 12.00% | 13.00% | ||||||||||
Defitelio/Defibrotide | Product Concentration Risk | Sales Revenue, Product Line | ||||||||||||
Concentration Risk [Line Items] | ||||||||||||
Percentage of product sales, net (as a percent) | 8.00% | 8.00% |
The Company and Summary of Si35
The Company and Summary of Significant Accounting Policies - Concentrations of Risk Additional Information (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)Customer | Dec. 31, 2016Customer | |
Concentration Risk [Line Items] | ||
Number of customers with significant accounts receivable | Customer | 5 | 5 |
Customer concentration risk | Gross accounts receivable | ||
Concentration Risk [Line Items] | ||
Percentage of gross accounts receivable (as a percent) | 91.00% | 90.00% |
Customer concentration risk | Gross accounts receivable | Express Scripts | ||
Concentration Risk [Line Items] | ||
Percentage of gross accounts receivable (as a percent) | 72.00% | 73.00% |
Customer concentration risk | Gross accounts receivable | McKesson | ||
Concentration Risk [Line Items] | ||
Percentage of gross accounts receivable (as a percent) | 17.00% | 13.00% |
Foreign exchange forward contracts | Derivatives not designated as hedging instruments | ||
Concentration Risk [Line Items] | ||
Notional amount | $ 330,600,000 | |
Net fair value | 11,800,000 | |
Interest rate contracts | Derivatives designated as hedging instruments | ||
Concentration Risk [Line Items] | ||
Notional amount | 300,000,000 | |
Net fair value | $ (1,100,000) |
The Company and Summary of Si36
The Company and Summary of Significant Accounting Policies - Basic and Diluted Net Income (Loss) per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Net income | $ 63,526 | $ 89,828 | $ 255,641 | $ 280,142 |
Denominator: | ||||
Weighted-average ordinary shares used in per share calculation - basic (in shares) | 60,108 | 60,437 | 60,030 | 60,692 |
Dilutive effect of employee equity incentive and purchase plans (in shares) | 1,328 | 1,358 | 1,330 | 1,458 |
Weighted-average ordinary shares used in per share calculation - diluted (in shares) | 61,436 | 61,795 | 61,360 | 62,150 |
Net income per ordinary share: | ||||
Basic (in dollars per share) | $ 1.06 | $ 1.49 | $ 4.26 | $ 4.62 |
Diluted (in dollars per share) | $ 1.03 | $ 1.45 | $ 4.17 | $ 4.51 |
The Company and Summary of Si37
The Company and Summary of Significant Accounting Policies - Net Income per Ordinary Share Additional Information (Details) - Convertible Debt | Sep. 30, 2017 |
2021 Notes | |
Debt Instrument [Line Items] | |
Interest rate (as a percent) | 1.875% |
2024 Notes | |
Debt Instrument [Line Items] | |
Interest rate (as a percent) | 1.50% |
The Company and Summary of Si38
The Company and Summary of Significant Accounting Policies - Weighted-Average Ordinary Shares Excluded from Computation of Diluted Net Income per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Exchangeable Senior Notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Ordinary shares (in shares) | 3,958 | 2,878 | 3,238 | 2,878 |
Options to purchase ordinary shares and RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Ordinary shares (in shares) | 2,998 | 2,851 | 3,175 | 2,688 |
Ordinary shares under ESPP | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Ordinary shares (in shares) | 16 | 45 | 9 | 72 |
Collaboration and Option Agre39
Collaboration and Option Agreement - Additional Information (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Aug. 31, 2017USD ($)productprogram | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of programs under agreement | program | 3 | ||
Non-refundable upfront payment | $ | $ 75,000 | $ 77,000 | $ 23,750 |
Additional development funding (up to $100 million) | $ | $ 100,000 | ||
Development funding term | 7 years | ||
Number of projects subject to right to co-commercialize | product | 1 | ||
Number of projects subject to right to co-commercialize under certain limited circumstances | product | 2 |
Cash and Available-for-Sale S40
Cash and Available-for-Sale Securities - Summary of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | $ 452,615 | $ 425,963 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value | 452,615 | 425,963 | ||
Cash and cash equivalents | 252,615 | 365,963 | $ 366,567 | $ 988,785 |
Investments | 200,000 | 60,000 | ||
Cash | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 122,154 | 215,963 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value | 122,154 | 215,963 | ||
Cash and cash equivalents | 122,154 | 215,963 | ||
Investments | 0 | 0 | ||
Time deposits | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 220,000 | 210,000 | ||
Gross Unrealized Gains | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | ||
Estimated Fair Value | 220,000 | 210,000 | ||
Cash and cash equivalents | 20,000 | 150,000 | ||
Investments | 200,000 | $ 60,000 | ||
Money market funds | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost | 110,461 | |||
Gross Unrealized Gains | 0 | |||
Gross Unrealized Losses | 0 | |||
Estimated Fair Value | 110,461 | |||
Cash and cash equivalents | 110,461 | |||
Investments | $ 0 |
Fair Value Measurement - Assets
Fair Value Measurement - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Available-for-sale securities: | ||
Available-for-sale securities | $ 452,615 | $ 425,963 |
Time deposits | ||
Available-for-sale securities: | ||
Available-for-sale securities | 220,000 | 210,000 |
Money market funds | ||
Available-for-sale securities: | ||
Available-for-sale securities | 110,461 | |
Recurring | Total Estimated Fair Value | ||
Available-for-sale securities: | ||
Totals | 342,786 | 210,000 |
Liabilities: | ||
Totals | 1,613 | 0 |
Recurring | Total Estimated Fair Value | Interest rate contracts | ||
Available-for-sale securities: | ||
Derivative asset | 201 | 0 |
Liabilities: | ||
Interest rate contracts | 1,322 | 0 |
Recurring | Total Estimated Fair Value | Foreign exchange forward contracts | ||
Available-for-sale securities: | ||
Derivative asset | 12,124 | 0 |
Liabilities: | ||
Interest rate contracts | 291 | 0 |
Recurring | Total Estimated Fair Value | Time deposits | ||
Available-for-sale securities: | ||
Available-for-sale securities | 220,000 | 210,000 |
Recurring | Total Estimated Fair Value | Money market funds | ||
Available-for-sale securities: | ||
Available-for-sale securities | 110,461 | 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Available-for-sale securities: | ||
Totals | 110,461 | |
Liabilities: | ||
Totals | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate contracts | ||
Available-for-sale securities: | ||
Derivative asset | 0 | |
Liabilities: | ||
Interest rate contracts | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign exchange forward contracts | ||
Available-for-sale securities: | ||
Derivative asset | 0 | |
Liabilities: | ||
Interest rate contracts | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Time deposits | ||
Available-for-sale securities: | ||
Available-for-sale securities | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Available-for-sale securities: | ||
Available-for-sale securities | 110,461 | |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Available-for-sale securities: | ||
Totals | 232,325 | 210,000 |
Liabilities: | ||
Totals | 1,613 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | Interest rate contracts | ||
Available-for-sale securities: | ||
Derivative asset | 201 | 0 |
Liabilities: | ||
Interest rate contracts | 1,322 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | Foreign exchange forward contracts | ||
Available-for-sale securities: | ||
Derivative asset | 12,124 | 0 |
Liabilities: | ||
Interest rate contracts | 291 | 0 |
Recurring | Significant Other Observable Inputs (Level 2) | Time deposits | ||
Available-for-sale securities: | ||
Available-for-sale securities | 220,000 | 210,000 |
Recurring | Significant Other Observable Inputs (Level 2) | Money market funds | ||
Available-for-sale securities: | ||
Available-for-sale securities | $ 0 | $ 0 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) - Convertible Debt $ in Millions | Sep. 30, 2017USD ($) |
2021 Notes | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Fair value of exchangeable senior notes | $ 607 |
2024 Notes | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Fair value of exchangeable senior notes | $ 565 |
Derivative and Hedging Activi43
Derivative and Hedging Activities - Additional Information (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | |
Derivative [Line Items] | ||
Losses recognized in AOCI to be reclassified over the next 12 months | $ 1,200,000 | |
Gain on cash flow hedge ineffectiveness | $ 0 | 0 |
Interest rate contracts | Derivatives designated as hedging instruments | ||
Derivative [Line Items] | ||
Notional amount | $ 300,000,000 | $ 300,000,000 |
Interest rate contracts | Derivatives not designated as hedging instruments | ||
Derivative [Line Items] | ||
Fixed interest rate | 1.895% | 1.895% |
Foreign exchange forward contracts | Derivatives not designated as hedging instruments | ||
Derivative [Line Items] | ||
Notional amount | $ 330,600,000 | $ 330,600,000 |
Contract term (up to 365 days) | 365 days | |
Gain recognized in other income and expense | $ 2,800,000 | $ 11,800,000 |
Derivative and Hedging Activi44
Derivative and Hedging Activities - Gains on Derivative Instruments (Details) - Interest rate contracts - Cash Flow Hedges - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss recognized in accumulated other comprehensive loss, net of tax | $ (59) | $ 0 | $ (2,234) | $ 0 |
Loss reclassified from accumulated other comprehensive loss to interest expense, net of tax | $ 451 | $ 0 | $ 1,278 | $ 0 |
Derivative and Hedging Activi45
Derivative and Hedging Activities - Fair Value of Outstanding Derivatives (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Derivatives, Fair Value [Line Items] | |
Asset Derivatives | $ 12,325 |
Liability Derivatives | 1,613 |
Derivatives designated as hedging instruments | Interest rate contracts | Other non-current assets | |
Derivatives, Fair Value [Line Items] | |
Asset Derivatives | 201 |
Derivatives designated as hedging instruments | Interest rate contracts | Accrued liabilities | |
Derivatives, Fair Value [Line Items] | |
Liability Derivatives | 1,322 |
Derivatives not designated as hedging instruments | Foreign exchange forward contracts | Accrued liabilities | |
Derivatives, Fair Value [Line Items] | |
Liability Derivatives | 291 |
Derivatives not designated as hedging instruments | Foreign exchange forward contracts | Other current assets | |
Derivatives, Fair Value [Line Items] | |
Asset Derivatives | $ 12,124 |
Derivative and Hedging Activi46
Derivative and Hedging Activities - Offsetting Assets and Liabilities (Details) - Pro Forma [Member] $ in Thousands | Sep. 30, 2017USD ($) |
Derivative assets | |
Gross Amounts of Recognized Assets/Liabilities | $ 1,938 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 |
Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheet | 1,938 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | |
Derivative Financial Instruments | (560) |
Cash Collateral Received (Pledged) | 0 |
Net Amount | 1,378 |
Derivative liabilities | |
Gross Amounts of Recognized Assets/Liabilities | (560) |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 |
Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheet | (560) |
Gross Amounts Not Offset in the Consolidated Balance Sheet | |
Derivative Financial Instruments | 560 |
Cash Collateral Received (Pledged) | 0 |
Net Amount | $ 0 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,681 | $ 1,547 |
Work in process | 19,965 | 18,689 |
Finished goods | 18,698 | 13,815 |
Total inventories | $ 41,344 | $ 34,051 |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets - Goodwill Activity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | $ 893,810 |
Foreign exchange | 47,618 |
Goodwill, end of period | $ 941,428 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets - Gross Carrying Amounts and Net Book Values of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,392,447 | $ 1,491,768 |
Accumulated Amortization | (519,944) | (421,687) |
Total | 2,872,503 | 1,070,081 |
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Amount - Total Intangible Assets | 3,538,979 | 3,433,688 |
Net Book Value - Total Intangible Assets | 3,019,035 | 3,012,001 |
Acquired in-process research and development assets | ||
Indefinite-lived Intangible Assets [Line Items] | ||
In-process research and development | $ 146,532 | 1,941,920 |
Acquired developed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining Weighted-Average Useful Life (in years) | 15 years 1 month | |
Gross Carrying Amount | $ 3,376,895 | 1,477,618 |
Accumulated Amortization | (505,369) | (410,523) |
Total | $ 2,871,526 | 1,067,095 |
Manufacturing contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining Weighted-Average Useful Life (in years) | 7 months 18 days | |
Gross Carrying Amount | $ 12,647 | 11,278 |
Accumulated Amortization | (11,670) | (8,292) |
Total | $ 977 | 2,986 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining Weighted-Average Useful Life (in years) | 0 years | |
Gross Carrying Amount | $ 2,905 | 2,872 |
Accumulated Amortization | (2,905) | (2,872) |
Total | $ 0 | $ 0 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets - Estimated Future Amortization Costs (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Estimated Amortization Expense | ||
2017 (remainder) | $ 52,966 | |
2,018 | 208,830 | |
2,019 | 208,595 | |
2,020 | 205,644 | |
2,021 | 204,609 | |
Thereafter | 1,991,859 | |
Total | $ 2,872,503 | $ 1,070,081 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Billions | 1 Months Ended | 9 Months Ended |
Aug. 31, 2017 | Sep. 30, 2017 | |
Acquired developed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining Weighted-Average Useful Life (in years) | 15 years 1 month | |
Vyxeos | Acquired developed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Increase in finite-lived intangible assets | $ 1.8 | |
Remaining Weighted-Average Useful Life (in years) | 18 years | |
Vyxeos | Acquired in-process research and development assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Decrease in indefinite-lived intangible assets | $ 1.8 |
Certain Balance Sheet Items - P
Certain Balance Sheet Items - Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 199,840 | $ 139,632 |
Less accumulated depreciation and amortization | (40,454) | (32,142) |
Property and equipment, net | 159,386 | 107,490 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 82,802 | 33,427 |
Land and buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 46,616 | 46,033 |
Manufacturing equipment and machinery | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 22,903 | 19,596 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 19,281 | 17,832 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 12,953 | 9,328 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 11,912 | 10,980 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,373 | $ 2,436 |
Certain Balance Sheet Items - A
Certain Balance Sheet Items - Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Certain Balance Sheet Items [Abstract] | ||
Rebates and other sales deductions | $ 76,930 | $ 72,344 |
Employee compensation and benefits | 46,672 | 43,363 |
Royalties | 11,309 | 11,643 |
Accrued construction-in-progress | 5,488 | 1,597 |
Inventory-related accruals | 3,843 | 3,350 |
Sales returns reserve | 3,470 | 4,366 |
Professional fees | 3,244 | 4,596 |
Clinical trial accruals | 2,657 | 10,139 |
Selling and marketing accruals | 2,384 | 3,924 |
Accrued interest | 2,347 | 5,179 |
Accrued contract termination fees | 0 | 11,612 |
Other | 21,546 | 21,155 |
Total accrued liabilities | $ 179,890 | $ 193,268 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Long term debt outstanding | $ 1,835,781 | |
Total debt | 1,579,913 | $ 2,029,625 |
Less current portion | 36,094 | 36,094 |
Total long-term debt | 1,543,819 | 1,993,531 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 850,000 |
Convertible Debt | 2021 Notes | ||
Debt Instrument [Line Items] | ||
Long term debt outstanding | 575,000 | 575,000 |
Unamortized discount and debt issuance costs | (86,663) | (101,094) |
Total debt | 488,337 | 473,906 |
Convertible Debt | 2024 Notes | ||
Debt Instrument [Line Items] | ||
Long term debt outstanding | 575,000 | 0 |
Unamortized discount and debt issuance costs | (163,363) | 0 |
Total debt | 411,637 | 0 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total debt | $ 679,939 | $ 705,719 |
Debt - Additional Information (
Debt - Additional Information (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017USD ($)d$ / shares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016USD ($) | |
Debt Instrument [Line Items] | |||
Debt repayment | $ 850,000,000 | $ 0 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt repayment | $ 500,000,000 | ||
Convertible Debt | |||
Debt Instrument [Line Items] | |||
Percentage of ownership (as a percent) | 100.00% | 100.00% | |
Convertible Debt | 2024 Notes | |||
Debt Instrument [Line Items] | |||
Face amount | $ 575,000,000 | $ 575,000,000 | |
Interest rate (as a percent) | 1.50% | 1.50% | |
Percentage of conversion price | 130.00% | ||
Number of trading days | d | 20 | ||
Number of consecutive days in trading period | d | 30 | ||
Conversion rate of shares | 4.5659 | ||
Conversion denominator | $ 1,000 | ||
Debt conversion price (in dollars per share) | $ / shares | $ 219.02 | $ 219.02 | |
Effective interest rate | 6.80% | 6.80% | |
Debt term | 7 years | ||
Total issuance costs incurred | $ 15,500,000 | $ 15,500,000 | |
Carrying value of the equity component | $ 149,800,000 | $ 149,800,000 |
Debt - Schedule of Maturities (
Debt - Schedule of Maturities (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2017 (remainder) | $ 9,023 |
2,018 | 40,606 |
2,019 | 58,652 |
2,020 | 76,699 |
2,021 | 1,075,801 |
Thereafter | 575,000 |
Total debt | $ 1,835,781 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Lease Payments under Noncancelable Operating Leases (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Lease Payments | |
2017 (remainder) | $ 6,615 |
2,018 | 15,811 |
2,019 | 16,885 |
2,020 | 19,127 |
2,021 | 19,166 |
Thereafter | 165,797 |
Total | $ 243,401 |
Commitments and Contingencies58
Commitments and Contingencies - Lease and Other Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Operating Leased Assets [Line Items] | |||
Other non-current liabilities | $ 158,497 | $ 158,497 | $ 112,617 |
Noncancelable purchase commitments, due within one year | 43,200 | 43,200 | |
Building | Palo Alto | |||
Operating Leased Assets [Line Items] | |||
Rent expense | 500 | 1,400 | |
Building | Palo Alto | Property and Equipment, Net | |||
Operating Leased Assets [Line Items] | |||
Construction-in-progress | 60,900 | 60,900 | |
Building | Palo Alto | Other Non-Current Liabilities | |||
Operating Leased Assets [Line Items] | |||
Other non-current liabilities | $ 60,900 | $ 60,900 |
Commitments and Contingencies59
Commitments and Contingencies - Legal Proceedings and Other Contingencies (Details) | Jun. 29, 2016lawsuit | Mar. 31, 2017claim_under_petition | Jul. 31, 2016patent | Mar. 31, 2016claim_under_petition | Apr. 30, 2015litigation_case | Jan. 31, 2015patent | Apr. 30, 2014 | Jun. 30, 2016lawsuit | Jun. 30, 2016litigation_case | Sep. 30, 2017lawsuit |
Xyrem | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Number of claims settled | lawsuit | 2 | 3 | ||||||||
Celator Acquisition | Celator Pharmaceuticals, Inc. | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Number of claims filed during the period | lawsuit | 2 | |||||||||
Pending Litigation | Xyrem | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Number of patents named in review petitions | patent | 6 | |||||||||
Number of patents deemed unenforceable by PTAB | patent | 6 | |||||||||
Number of petition claims under patent review awaiting decision | 3 | |||||||||
Number of petition claims PTAB denied | 25 | |||||||||
Number of petition claims under patent review | 28 | |||||||||
Number of petition claims under patent review deemed unpatentable | 3 | |||||||||
Pending Litigation | Xyrem ANDA Matters | ||||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||||
Court ordered stay period | 30 months | |||||||||
Number of litigation cases after consolidation | litigation_case | 1 | 1 |
Shareholders' Equity - Equity C
Shareholders' Equity - Equity Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 1,877,339 | $ 1,706,333 | ||
Issuance of 2024 Notes | 149,767 | |||
Issuance of ordinary shares in conjunction with employee equity incentive and purchase plans | 22,793 | 17,951 | ||
Employee withholding taxes related to share-based awards | (17,909) | (20,595) | ||
Share-based compensation | 79,745 | 75,176 | ||
Shares repurchased | (56,425) | (259,819) | ||
Other comprehensive income | $ 51,262 | $ 14,612 | 158,346 | 32,096 |
Net income | 63,526 | 89,828 | 255,641 | 280,142 |
Ending balance | $ 2,469,297 | $ 1,831,284 | $ 2,469,297 | $ 1,831,284 |
Shareholders' Equity - Share Re
Shareholders' Equity - Share Repurchase Programs (Details) - USD ($) $ / shares in Units, shares in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Nov. 30, 2016 | |
Stock Activity [Line Items] | |||
Shares repurchased | $ 56,425,000 | $ 259,819,000 | |
Ordinary Options | |||
Stock Activity [Line Items] | |||
Shares repurchased | $ 56,400,000 | ||
Shares repurchased (in shares) | 0.4 | ||
Average price of shares repurchased (in dollars per share) | $ 141.73 | ||
Ordinary Options | November 2016 Share Repurchase Program | |||
Stock Activity [Line Items] | |||
Total amount authorized for repurchase of shares under share repurchase program | $ 300,000,000 | ||
Remaining amount authorized for repurchase of shares | $ 225,100,000 |
Shareholders' Equity - Componen
Shareholders' Equity - Component of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | $ 1,877,339 | $ 1,706,333 | ||
Other comprehensive income (loss) before reclassifications | 157,068 | |||
Amounts reclassified from accumulated other comprehensive loss | 1,278 | |||
Other comprehensive income | $ 51,262 | $ 14,612 | 158,346 | 32,096 |
Ending balance | 2,469,297 | $ 1,831,284 | 2,469,297 | $ 1,831,284 |
Net Unrealized Losses From Hedging Activities | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | 0 | |||
Other comprehensive income (loss) before reclassifications | (2,234) | |||
Amounts reclassified from accumulated other comprehensive loss | 1,278 | |||
Other comprehensive income | (956) | |||
Ending balance | (956) | (956) | ||
Foreign Currency Translation Adjustments | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (317,333) | |||
Other comprehensive income (loss) before reclassifications | 159,302 | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | |||
Other comprehensive income | 159,302 | |||
Ending balance | (158,031) | (158,031) | ||
Total Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (317,333) | |||
Ending balance | $ (158,987) | $ (158,987) |
Segment and Other Information -
Segment and Other Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2017Segment | |
Segment Reporting [Abstract] | |
Number of operating business segment | 1 |
Segment and Other Information64
Segment and Other Information - Summary of Total Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue from External Customer [Line Items] | ||||
Product sales, net | $ 407,971 | $ 371,621 | $ 1,171,304 | $ 1,084,647 |
Royalties and contract revenues | 3,884 | 2,560 | 10,990 | 6,705 |
Total revenues | 411,855 | 374,181 | 1,182,294 | 1,091,352 |
Xyrem | ||||
Revenue from External Customer [Line Items] | ||||
Product sales, net | 303,870 | 285,907 | 874,222 | 816,412 |
Erwinaze/Erwinase | ||||
Revenue from External Customer [Line Items] | ||||
Product sales, net | 49,173 | 42,986 | 149,585 | 143,907 |
Defitelio/defibrotide | ||||
Revenue from External Customer [Line Items] | ||||
Product sales, net | 31,213 | 28,137 | 97,351 | 79,280 |
Vyxeos | ||||
Revenue from External Customer [Line Items] | ||||
Product sales, net | 9,719 | 0 | 9,719 | 0 |
Prialt® (ziconotide) intrathecal infusion | ||||
Revenue from External Customer [Line Items] | ||||
Product sales, net | 7,930 | 8,783 | 21,303 | 23,065 |
Other | ||||
Revenue from External Customer [Line Items] | ||||
Product sales, net | $ 6,066 | $ 5,808 | $ 19,124 | $ 21,983 |
Segment and Other Information65
Segment and Other Information - Summary of Total Revenues Attributed to Geographic Sources (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | $ 411,855 | $ 374,181 | $ 1,182,294 | $ 1,091,352 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | 372,846 | 339,825 | 1,068,716 | 991,557 |
Europe | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | 24,937 | 25,788 | 83,667 | 79,557 |
All other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenues | $ 14,072 | $ 8,568 | $ 29,911 | $ 20,238 |
Segment and Other Information66
Segment and Other Information - Summary of Revenues from Customers Representing at Least 10% of Total Revenues (Details) - Sales Revenue, Goods, Net - Customer concentration risk | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Express Scripts | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of total revenues (as a percent) | 74.00% | 76.00% | 74.00% | 75.00% |
McKesson | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of total revenues (as a percent) | 14.00% | 13.00% | 14.00% | 14.00% |
Segment and Other Information67
Segment and Other Information - Total Long-Lived Assets by Location (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $ 159,386 | $ 107,490 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 84,764 | 35,791 |
Ireland | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 64,947 | 62,453 |
Italy | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 7,917 | 7,000 |
All other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $ 1,758 | $ 2,246 |
Share-Based Compensation - Expe
Share-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense, pre-tax | $ 27,126 | $ 24,874 | $ 79,579 | $ 74,490 |
Income tax benefit from share-based compensation expense | (6,354) | (8,486) | (23,816) | (24,341) |
Total share-based compensation expense, net of tax | 20,772 | 16,388 | 55,763 | 50,149 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense, pre-tax | 20,903 | 19,511 | 61,582 | 60,664 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense, pre-tax | 4,650 | 4,056 | 13,651 | 10,867 |
Cost of product sales | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share-based compensation expense, pre-tax | $ 1,573 | $ 1,307 | $ 4,346 | $ 2,959 |
Share-Based Compensation - Weig
Share-Based Compensation - Weighted-Average Assumptions and Resulting Grant Date Fair Value (Details) - Employee Stock Option - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Schedule of Weighted Average Assumptions for Fair Values of Stock Options[Line Items] | ||||
Shares underlying options granted (in shares) | 87 | 147 | 1,343 | 1,247 |
Weighted-average grant date fair value (in dollars per share) | $ 45.87 | $ 42.89 | $ 42.69 | $ 40.85 |
Weighted-average volatility (as a percent) | 35.00% | 37.00% | 35.00% | 39.00% |
Weighted-average expected term | 4 years 3 months | 4 years 2 months | 4 years 3 months | 4 years 2 months |
Range of risk-free rates, minimum (as a percent) | 1.60% | 0.80% | 1.60% | 0.80% |
Range of risk-free rates, maximum (as a percent) | 1.80% | 1.00% | 1.80% | 1.50% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Units (Details) - Restricted Stock Units (RSUs) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
RSUs granted (in shares) | 35 | 59 | 537 | 495 |
Grant date fair value (in dollars per share) | $ 148.60 | $ 138.55 | $ 137.23 | $ 126.80 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 4 years |
Unrecognized compensation cost related to unvested stock option and RSUs | $ 100.5 |
Weighted-average period expected to be recognized | 2 years 7 months |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost related to unvested stock option and RSUs | $ 83.2 |
Weighted-average period expected to be recognized | 2 years 8 months |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Taxes [Line Items] | ||||
Income tax provision | $ 1,239 | $ 26,437 | $ 65,914 | $ 100,888 |
Effective income tax rate (as a percent) | 1.90% | 22.70% | 20.50% | 26.50% |
Ireland | ||||
Income Taxes [Line Items] | ||||
Effective statutory income tax rate (as a percent) | 12.50% | 12.50% | ||
France | ||||
Income Taxes [Line Items] | ||||
Proposed additional tax including interest and penalties | $ 45,200 |