Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 03, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Amphastar Pharmaceuticals, Inc. | |
Trading Symbol | amph | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 1,297,184 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Accelerated Filer | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Common Stock, Shares Outstanding | 46,614,060 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 54,547 | $ 65,594 |
Short-term investments | 2,826 | 2,635 |
Restricted cash and short-term investments | 4,155 | 4,155 |
Accounts receivable, net | 31,883 | 35,996 |
Inventories | 62,780 | 63,609 |
Income tax refunds and deposits | 12,194 | 6,036 |
Prepaid expenses and other assets | 5,661 | 9,753 |
Total current assets | 174,046 | 187,778 |
Property, plant, and equipment, net | 191,915 | 185,339 |
Goodwill and intangible assets, net | 44,850 | 45,140 |
Other assets | 10,714 | 8,663 |
Deferred tax assets | 28,257 | 27,745 |
Total assets | 449,782 | 454,665 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 58,498 | 57,555 |
Income taxes payable | 7,983 | 3,325 |
Current portion of long-term debt and capital leases | 6,061 | 6,312 |
Total current liabilities | 72,542 | 67,192 |
Long-term reserve for income tax liabilities | 879 | 879 |
Long-term debt and capital leases, net of current portion | 39,706 | 40,844 |
Deferred tax liabilities | 1,425 | 1,361 |
Other long-term liabilities | 8,126 | 7,060 |
Total liabilities | 122,678 | 117,336 |
Stockholders’ equity: | ||
Preferred stock: par value $0.0001; 20,000,000 shares authorized; no shares issued and outstanding | ||
Common stock: par value $0.0001; 300,000,000 shares authorized; 50,471,687 and 46,656,793 shares issued and outstanding as of March 31, 2018 and 50,039,212 and 46,623,581 shares issued and outstanding as of December 31, 2017, respectively | 5 | 5 |
Additional paid-in capital | 316,665 | 313,891 |
Retained earnings | 69,570 | 76,235 |
Accumulated other comprehensive loss | (910) | (2,100) |
Treasury stock | (58,226) | (50,702) |
Total stockholders’ equity | 327,104 | 337,329 |
Total liabilities and stockholders’ equity | $ 449,782 | $ 454,665 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock; shares authorized | 300,000,000 | 300,000,000 |
Common stock; shares issued | 50,471,687 | 50,039,212 |
Common stock; shares outstanding | 46,656,793 | 46,623,581 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Net revenues | $ 58,393 | $ 56,670 |
Cost of revenues | 41,332 | 33,842 |
Gross profit | 17,061 | 22,828 |
Operating (income) expenses: | ||
Selling, distribution, and marketing | 1,721 | 1,479 |
General and administrative | 10,998 | 11,338 |
Research and development | 14,260 | 11,250 |
Gain on sale of intangible assets | (2,643) | |
Total operating expenses | 26,979 | 21,424 |
Income (loss) from operations | (9,918) | 1,404 |
Non-operating income (expenses): | ||
Interest income | 124 | 91 |
Interest expense | (18) | (191) |
Other income (expenses), net | 782 | 200 |
Total non-operating income (expenses), net | 888 | 100 |
Income (loss) before income taxes | (9,030) | 1,504 |
Income tax expense (benefit) | (1,784) | 611 |
Net income (loss) | $ (7,246) | $ 893 |
Net income (loss) per share: | ||
Basic (in Dollars per share) | $ (0.16) | $ 0.02 |
Diluted (in Dollars per share) | $ (0.16) | $ 0.02 |
Weighted-average shares used to compute net income (loss) per share: | ||
Basic (in Shares) | 46,514 | 46,069 |
Diluted (in Shares) | 46,514 | 48,057 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net income (loss) | $ (7,246) | $ 893 |
Other comprehensive income (loss), net of income taxes | ||
Foreign currency translation adjustment | 1,190 | 466 |
Total other comprehensive income (loss) | 1,190 | 466 |
Total comprehensive income (loss) | $ (6,056) | $ 1,359 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ (7,246) | $ 893 |
Reconciliation to net cash provided by operating activities: | ||
Loss (gain) on disposal and impairment of long-lived assets | 598 | (2,643) |
Depreciation of property, plant, and equipment | 3,201 | 3,100 |
Amortization of product rights, trademarks, and patents | 729 | 721 |
Share-based compensation | 4,666 | 4,451 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 4,635 | 920 |
Inventories | 1,441 | 1,891 |
Prepaid expenses and other assets | (761) | 344 |
Income tax refund, deposits, and payable | (1,761) | 394 |
Accounts payable and accrued liabilities | 2,858 | 12,327 |
Net cash provided by operating activities | 8,360 | 22,398 |
Cash Flows From Investing Activities: | ||
Purchases and construction of property, plant, and equipment | (12,340) | (7,267) |
Sale of intangible assets | 4,400 | 1,000 |
Purchase of short-term investments | (201) | (1,564) |
Maturity of short-term investments | 1,345 | |
Payment of deposits and other assets | (597) | 521 |
Net cash used in investing activities | (8,738) | (5,965) |
Cash Flows From Financing Activities: | ||
Proceeds from equity plans, net of withholding tax payments | (1,793) | (2,173) |
Purchase of treasury stock | (7,624) | (8,203) |
Principal payments on long-term debt | (1,411) | (1,342) |
Net cash provided by (used in) financing activities | (10,828) | (11,718) |
Effect of exchange rate changes on cash | 159 | (174) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (11,047) | 4,541 |
Cash, cash equivalents, and restricted cash at beginning of period | 67,459 | 72,354 |
Cash, cash equivalents, and restricted cash at end of period | 56,412 | 76,895 |
Supplemental Disclosures of Cash Flow Information: | ||
Interest paid, net of capitalized interest | 532 | 390 |
Income taxes paid | $ 8 | $ 440 |
General
General | 3 Months Ended |
Mar. 31, 2018 | |
General | |
General | Note 1. Genera Amphastar Pharmaceuticals, Inc., a California corporation, was incorporated on February 29, 1996 and merged with and into Amphastar Pharmaceuticals, Inc., a Delaware corporation, in July 2004 (together with its subsidiaries, hereinafter referred to as “the Company”). The Company is a specialty pharmaceutical company that primarily develops, manufactures, markets, and sells generic and proprietary injectable, inhalation, and intranasal products, including products with high technical barriers to market entry. Additionally, the Company sells insulin active pharmaceutical ingredient, or API, products. Most of the Company’s products are used in hospital or urgent care clinical settings and are primarily contracted and distributed through group purchasing organizations and drug wholesalers. The Company’s insulin API products are sold to other pharmaceutical companies for use in their own products and are being used by the Company in the development of injectable finished pharmaceutical products. The Company’s inhalation products will be primarily distributed through drug retailers if they are approved and brought to market. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2017 and the notes thereto as filed with the Securities and Exchange Commission, or SEC, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles, or GAAP, have been condensed or omitted from the accompanying condensed consolidated financial statements. The accompanying year-end condensed consolidated balance sheet was derived from the audited financial statements. The accompanying interim financial statements are unaudited, but reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the Company’s consolidated financial position, results of operations, comprehensive income (loss) and cash flows for the periods presented. Unless otherwise noted, all such adjustments are of a normal, recurring nature. The Company’s results of operations, comprehensive income (loss) and cash flows for the interim periods are not necessarily indicative of the results of operations and cash flows that it may achieve in future periods. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, and are prepared in accordance with the requirements of the SEC for interim reporting. Effective January 1, 2018, the Company retrospectively adopted Accounting Standard Update, or ASU, No. 2016-15 Classification of Certain Cash Receipts and Cash Payments . Certain amounts in the prior quarter’s condensed consolidated balance sheet and condensed consolidated statement of cash flows have been reclassified to conform to the current quarter presentation. This reclassification has no impact on net income or cash flows. All significant intercompany activity has been eliminated in the preparation of the condensed consolidated financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the consolidated financial position, results of operations, and cash flows of the Company. The Company’s subsidiaries include: (1) International Medication Systems, Limited, or IMS, (2) Armstrong Pharmaceuticals, Inc., or Armstrong, (3) Amphastar Nanjing Pharmaceuticals Inc., or ANP, (4) Nanjing Letop Fine Chemistry Co., Ltd., or Letop, (5) Nanjing Hanxin Medical Technology Co., Ltd., or Hanxin, (6) Nanjing Baixin Trading Co., Ltd., or Baixin, (7) Amphastar France Pharmaceuticals, S.A.S., or AFP, (8) Amphastar UK Ltd., or AUK, and (9) International Medication Systems (UK) Limited, or IMS UK. Use of Estimates The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The principal accounting estimates include determination of allowances for doubtful accounts and discounts, provision for chargebacks and rebates, provision for product returns, adjustment of inventory to their net realizable values, impairment of long-lived and intangible assets and goodwill, self-insured claims, workers’ compensation liabilities, litigation reserves, stock price volatilities for share-based compensation expense, valuation allowances for deferred tax assets, and liabilities for uncertain income tax positions. Foreign Currency The functional currency of the Company, its domestic subsidiaries, its Chinese subsidiary, ANP, and its U.K. subsidiary, AUK, is the U.S. dollar, or USD. ANP maintains its books of record in Chinese Yuan. These books are remeasured into the functional currency of USD using the current or historical exchange rates. The resulting currency remeasurement adjustments and other transactional foreign currency exchange gains and losses are reflected in the Company’s statements of operations. The Company’s French subsidiary, AFP, maintains its book of record in Euros. Its other Chinese subsidiaries maintain their books of record in Chinese Yuan. Its U.K. subsidiary IMS UK, maintains its book of record in Great Britain Pounds. These local currencies have been determined to be the subsidiaries’ respective functional currencies. These books of record are translated into USD using average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Equity is translated at the prevailing rate of exchange at the date of the equity transactions. Translation adjustments are reflected in stockholders’ equity and are included as a component of other accumulated comprehensive income (loss). The unrealized gains or losses of intercompany foreign currency transactions that are of a long-term investment nature are reported in other accumulated comprehensive income (loss). The unrealized gains of intercompany foreign currency transactions that are of a long-term investment nature for the three months ended March 31, 2018 and 2017 were $0.9 million, and a $0.5 million, respectively. Additionally, the Company does not undertake hedging transactions to cover its foreign currency exposure. Comprehensive Income (loss) For the three months ended March 31, 2018 and 2017, the Company included its foreign currency translation gain or loss as part of its comprehensive income (loss). Income tax expense of $0.3 million was allocated to other comprehensive income (loss) for the three months ended March 31, 2018. There was no material income tax expense (benefit) allocated to other comprehensive income (loss) for the three months ended March 31, 2017. Restricted Cash and Short-term Investments Restricted cash and short-term investments are collateral required for the Company to effect a standby letter of credit and to qualify for workers’ compensation self-insurance and are available to meet the Company’s workers’ compensation obligations on a current basis, as needed. As of March 31, 2018 and December 31, 2017, restricted cash and short-term investments include $1.9 million in cash and $2.3 million in certificates of deposit, respectively. The certificates of deposit have original maturities greater than three months and are classified as short-term investments. Financial Instruments The carrying amounts of cash and cash equivalents, short-term investments, restricted cash and short-term investments, accounts receivable, accounts payable, accrued expenses, and short-term borrowings approximate fair value due to the short maturity of these items. The majority of the Company’s long-term obligations consist of variable rate debt, and their carrying value approximates fair value as the stated borrowing rates are comparable to rates currently offered to the Company for instruments with similar maturities. However, the Company has one fixed-rate, long-term mortgage for which the carrying value differs from the fair value and is not remeasured on a recurring basis (see Note 12). The Company at times enters into fixed interest rate swap contracts to exchange the variable interest rates for fixed interest rates without the exchange of the underlying notional debt amounts. Such interest rate swap contracts are recorded at their fair values. Deferred Income Taxes The Company utilizes the liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates. A valuation allowance is recorded when it is more likely than not that the deferred tax assets will not be realized. At March 31, 2018, the Company had not completed its accounting for the tax effects of the enactment of the Tax Cuts and Jobs Act of 2017, or the Tax Act. Business Combinations If an acquired set of activities and assets is capable of being operated as a business consisting of inputs and processes from the viewpoint of a market participant, the asset acquired and liabilities assumed are a business. Business combinations are accounted for using the acquisition method of accounting, which requires an acquirer to recognize the assets acquired and the liabilities assumed at the acquisition date measured at their fair values as of that date. Fair value determinations are based on discounted cash flow analyses or other valuation techniques. In determining the fair value of the assets acquired and liabilities assumed in a material acquisition, the Company may utilize appraisals from third party valuation firms to determine fair values of some or all of the assets acquired and liabilities assumed, or may complete some or all of the valuations internally. In either case, the Company takes full responsibility for the determination of the fair value of the assets acquired and liabilities assumed. The value of goodwill reflects the excess of the fair value of the consideration conveyed to the seller over the fair value of the net assets received. Acquisition-related costs that the Company incurs to effect a business combination are expensed in the periods in which the costs are incurred. When the operations of the acquired businesses were not material to the Company's condensed consolidated financial statements, no pro forma presentations were disclosed. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 Leases , that is aimed at making leasing activities more transparent and comparable, and which requires substantially all leases be recognized by lessees on their balance sheets as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. This guidance will become effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019, and all annual and interim reporting periods thereafter. Early adoption is permitted. The Company is required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements for the reporting periods in which the guidance is adopted. While the Company continues to evaluate the provisions of ASC 842 to determine how it will be affected, the primary effect of adopting the new standard will be to record assets and obligations for current operating leases on its consolidated financial statements. Footnote 16 provides details on the Company’s current operating lease arrangements. The adoption of ASC 842 is not expected to have a material impact on the Company’s results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses , which is aimed at providing financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit. The standard update changes the impairment model for financial assets measured at amortized cost, requiring presentation at the net amount expected to be collected. The measurement of expected credit losses requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Available-for-sale debt securities with unrealized losses will be recorded through an allowance for credit losses. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted for interim or annual periods after December 31, 2019. The Company will be required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company does not believe the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04 S implifying the Test for Goodwill Impairment , which eliminates the requirement to calculate the implied fair value of goodwill. An entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The update also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020, and applied on a prospective basis. Early adoption is permitted for interim and annual goodwill impairment testing dates after January 1, 2017. The Company currently does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In August 2017, the FASB issued ASU No. 2017-12 Targeted Improvements to Accounting for Hedging Activities , which amends the hedge accounting model in ASC 815 to enable entities to better portray the economics of their risk management activities in the financial statements and enhance the transparency and understandability of hedge results. The amendments also simplify the application of hedge accounting in certain situations. The new guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019. Early adoption is permitted. The Company does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU No. 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows entities to reclassify from accumulated other comprehensive income to retained earnings stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019. Early adoption is permitted. The Company does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition | |
Revenue Recognition | Note 3. Revenue Recognition During the quarter ended March 31, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers , or ASC 606, using the modified retrospective transition method. The adoption of ASC 606 did not have a material impact on the Company’s revenue recognition or on the condensed consolidated financial statements and related disclosures. Subsequent to the adoption of ASC 606, revenue is recognized at the time that the Company’s customers obtain control of the promised goods. Revenues derived from contract manufacturing services are recognized when third-party products are shipped to customers, after the customer has accepted test samples of the products to be shipped. The results for the reporting period beginning after January 1, 2018, are presented in accordance with the new standard, although comparative information continues to be reported under the accounting standards and policies in effect for those periods. For the accounting policy related to revenue recognition for the years ended prior to and on December 31, 2017, see Note 4, Revenue Recognition, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017. The Company only records revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved, by estimating and recording reductions to revenue for discounts, product returns, and pricing adjustments, such as wholesaler chargebacks, in the same period that the related revenue is recorded. Provision for Chargebacks and Rebates The provision for chargebacks and rebates is a significant estimate used in the recognition of revenue. Wholesaler chargebacks relate to sales terms under which the Company agrees to reimburse wholesalers for differences between the gross sales prices at which the Company sells its products to wholesalers and the actual prices of such products that wholesalers resell them under the Company’s various contractual arrangements with third parties such as hospitals and group purchasing organizations in the United States. Rebates include primarily amounts paid to retailers, payers, and providers in the United States, including those paid to state Medicaid programs, and are based on contractual arrangements or statutory requirements. The Company estimates chargebacks and rebates using the expected value method at the time of sale to wholesalers based on wholesaler inventory stocking levels, historic chargeback and rebate rates, and current contract pricing. The provision for chargebacks and rebates is reflected in net revenues. The following table is an analysis of the chargeback and rebate provision: Three Months Ended March 31, 2018 2017 (in thousands) Beginning balance $ 18,470 $ 39,709 Provision for chargebacks and rebates 25,334 58,606 Credits and payments issued to third parties (28,774) (76,242) Ending balance $ 15,030 $ 22,073 Changes in the chargeback provision from period to period are primarily dependent on the Company’s sales to its wholesalers, the level of inventory held by wholesalers, and the wholesaler’s customer mix. Changes in the rebate provision from period to period are primarily dependent on retailer’s and other indirect customers’ purchases. The approach that the Company uses to estimate chargebacks has been consistently applied for all periods presented. Variations in estimates have been historically small. The Company continually monitors the provision for chargebacks and rebates and makes adjustments when it believes that the actual chargebacks and rebates may differ from the estimates. The settlement of chargebacks and rebates generally occurs within 30 days to 60 dates after the sale to wholesalers. Accounts receivable and/or accounts payable and accrued liabilities are reduced and/or increased by the chargebacks and rebate amounts depending on whether the Company has the right to offset with the customer. Of the provision for chargebacks and rebates as of March 31, 2018 and December 31, 2017, $5.3 million and $6.8 million were included in accounts receivable, net, on the condensed consolidated balance sheets, respectively. The remaining provision of $9.7 million and $11.7 million were included in accounts payable and accrued liabilities, respectively. Accrual for Product Returns The Company offers most customers the right to return qualified excess or expired inventory for partial credit; however, API product sales are generally non-returnable. The Company’s product returns primarily consist of the returns of expired products from sales made in prior periods. Returned products cannot be resold. At the time product revenue is recognized, the Company records an accrual for product returns estimated using the expected value method. The accrual is based, in part, upon the historical relationship of product returns to sales and customer contract terms. The Company also assesses other factors that could affect product returns including market conditions, product obsolescence, and the introduction of new competition. Although these factors do not normally give the Company’s customers the right to return products outside of the regular return policy, the Company realizes that such factors could ultimately lead to increased returns. The Company analyzes these situations on a case-by-case basis and makes adjustments to the product return reserve as appropriate. As of March 31, 2018 and December 31, 2017, cumulative sales of approximately $1.0 million and $1.2 million, respectively, for one of the Company’s products were not recognized in revenues, due to insufficient information available to determine that a significant reversal of such amount will not occur when the uncertainty associated with the return refund is subsequently resolved. The provision for product returns is reflected in net revenues. The following table is an analysis of product return liability: Three Months Ended March 31, 2018 2017 (in thousands) Beginning balance $ 6,522 $ 3,143 Provision for product returns 747 1,062 Credits issued to third parties (498) (462) Ending balance $ 6,771 $ 3,743 Of the provision of product returns as of March 31, 2018 and December 31, 2017, $4.6 million and $4.1 million were included in accounts payable and accrued liabilities on the condensed consolidated balance sheets, respectively. The remaining provision of $2.2 million and $2.4 million were included in other long-term liabilities, respectively. For the three months ended March 31, 2018 and 2017 , the Company’s aggregate product return rate was 1.3% and 1.1% of qualified sales, respectively. |
Income (Loss) per Share
Income (Loss) per Share | 3 Months Ended |
Mar. 31, 2018 | |
Income (Loss) per Share | |
Income (Loss) per Share | Note 4. Income (loss) per Share Basic income (loss) per share is calculated based upon the weighted-average number of shares outstanding during the period. Diluted income (loss) per share gives effect to all potential dilutive shares outstanding during the period, such as stock options, nonvested restricted stock units and shares issuable under the Company’s Employee Stock Purchase Plan, or ESPP. As the Company reported a net loss for the three months ended March 31, 2018, the diluted net loss per share, as reported, equals the basic net loss per share since the effect of the assumed exercise of stock options, vesting of nonvested RSUs, and issuance of common shares under the Company’s ESPP are anti-dilutive. Total stock options, nonvested RSUs, and shares issuable under the Company’s ESPP excluded from the three months ended March 31, 2018 net loss per share were 11,610,229 stock options; 1,259,273 nonvested RSUs, and 56,128 shares issuable under the ESPP. For the three months ended March 31, 2017, options to purchase 2,376,234 shares of stock with a weighted-average exercise price of $22.44 per share, were excluded in the computation of diluted net income per share because the effect from the assumed exercise of these options would be anti-dilutive. The following table provides the calculation of basic and diluted net income (loss) per share for each of the periods presented: Three Months Ended March 31, 2018 2017 (in thousands, except per share data) Basic and dilutive numerator: Net income (loss) $ (7,246) $ 893 Denominator: Weighted-average shares outstanding — basic 46,514 46,069 Net effect of dilutive securities: Incremental shares from equity awards — 1,988 Weighted-average shares outstanding — diluted 46,514 48,057 Net income (loss) per share — basic $ (0.16) $ 0.02 Net income (loss) per share — diluted $ (0.16) $ 0.02 |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting | |
Segment Reporting | Note 5. Segment Reporting The Company’s business is the development, manufacture, and marketing of pharmaceutical products. The Company has established two reporting segments that each report to the Chief Operating Decision Maker, or CODM, as defined in ASC 280, Segment Reporting. The Company’s performance is assessed and resources are allocated by the CODM based on the following two reportable segments: · Finished pharmaceutical products · Active pharmaceutical ingredients, or API The finished pharmaceutical products segment manufactures, markets and distributes enoxaparin, naloxone, phytonadione, lidocaine, as well as various other critical and non-critical care drugs. The API segment manufactures and distributes recombinant human insulin API and porcine insulin API for external customers and internal product development. Selected financial information by reporting segment is presented below: Three Months Ended March 31, 2018 2017 (in thousands) Net revenues: Finished pharmaceutical products $ 53,117 $ 55,934 API 5,276 736 Total net revenues 58,393 56,670 Gross profit: Finished pharmaceutical products 19,725 24,310 API (2,664) (1,482) Total gross profit 17,061 22,828 Operating expenses 26,979 21,424 Income (loss) from operations (9,918) 1,404 Non-operating income 888 100 Income (loss) before income taxes $ (9,030) $ 1,504 The Company manages its business segments to the gross profit level and manages its operating and other costs on a company-wide basis. The Company does not identify total assets by segment for internal purposes, as the Company’s CODM does not assess performance, make strategic decisions, or allocate resources based on assets. The amount of net revenues in the finished pharmaceutical product segment is presented below: Three Months Ended March 31, 2018 2017 (in thousands) Finished pharmaceutical products net revenues: Lidocaine $ 9,782 $ 8,289 Phytonadione 9,181 7,886 Naloxone 8,927 10,939 Enoxaparin 7,007 10,410 Epinephrine 3,223 9,574 Medroxyprogesterone 2,706 — Other finished pharmaceutical products 12,291 8,836 Total finished pharmaceutical products net revenues $ 53,117 $ 55,934 Discontinuation of epinephrine injection, USP vial product In February 2017, the U.S. Food and Drug Administration, or FDA, requested the Company to discontinue the manufacturing and distribution of its epinephrine injection, USP vial product, which had been marketed under the “grandfather” exception to the FDA’s “Prescription Drug Wrap-Up” program. The Company discontinued selling this product in the second quarter of 2017. For the year ended December 31, 2017, the Company recognized $17.8 million in net revenues for the sale of this product. Net revenues and carrying values of long-lived assets of enterprises by geographic regions are as follows: Net Revenue Long-Lived Assets Three Months Ended March 31, March 31, December 31, 2018 2017 2018 2017 (in thousands) United States $ 53,104 $ 55,930 $ 110,461 $ 110,235 China — — 43,323 41,078 France 5,289 740 38,131 34,026 United Kingdom — — — — Total $ 58,393 $ 56,670 $ 191,915 $ 185,339 |
Customer and Supplier Concentra
Customer and Supplier Concentration | 3 Months Ended |
Mar. 31, 2018 | |
Customer and Supplier Concentration | |
Customer and Supplier Concentration | Note 6. Customer and Supplier Concentration Customer Concentrations Three large wholesale drug distributors, AmerisourceBergen Corporation, or AmerisourceBergen, Cardinal Health, Inc., or Cardinal, and McKesson Corporation, or McKesson, are all distributors of the Company’s products, as well as suppliers of a broad range of health care products. The Company considers these three customers to be its major customers, as each individually, and these customers collectively, represented a significant percentage of the Company’s net revenue for the three months ended March 31, 2018 and 2017 and accounts receivable as of March 31, 2018 and December 31, 2017. The following table provides accounts receivable and net revenue information for these major customers: % of Total Accounts % of Net Receivable Revenue Three Months Ended March 31, December 31, March 31, 2018 2017 2018 2017 McKesson 22 % 22 % 28 % 26 % AmerisourceBergen 24 % 33 % 26 % 30 % Cardinal Health 20 % 12 % 23 % 24 % Supplier Concentrations The Company depends on suppliers for raw materials, active pharmaceutical ingredients, and other components that are subject to stringent FDA, requirements. Some of these materials may only be available from one or a limited number of sources. Establishing additional or replacement suppliers for these materials may take a substantial period of time, as suppliers must be approved by the FDA. Furthermore, a significant portion of raw materials may only be available from foreign sources. If the Company is unable to secure, on a timely basis, sufficient quantities of the materials it depends on to manufacture and market its products, it could have a materially adverse effect on the Company’s business, financial condition, and results of operations. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 7. Fair Value Measurements The accounting standards of the FASB, define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability at the measurement date (an exit price). These standards also establish a hierarchy that prioritizes observable and unobservable inputs used in measuring fair value of an asset or liability, as described below: · Level 1 – Inputs to measure fair value are based on quoted prices (unadjusted) in active markets on identical assets or liabilities; · Level 2 – Inputs to measure fair value are based on the following: a) quoted prices in active markets on similar assets or liabilities, b) quoted prices for identical or similar instruments in inactive markets, or c) observable (other than quoted prices) or collaborated observable market data used in a pricing model from which the fair value is derived; and · Level 3 – Inputs to measure fair value are unobservable and the assets or liabilities have little, if any, market activity; these inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities based on best information available in the circumstances. As of March 31, 2018, cash equivalents include money market accounts. Short-term investments consist of certificates of deposit with original expiration dates within 12 months. These certificates of deposit are carried at amortized cost in the Company’s consolidated balance sheet, which approximates their fair value determined based on Level 2 inputs. The restrictions on restricted cash and short-term investments have a negligible effect on the fair value of these financial assets. The Company does not hold any Level 2 or Level 3 instruments that are measured for fair value on a recurring basis. Nonfinancial assets and liabilities are not measured at fair value on a recurring basis but are subject to fair value adjustments in certain circumstances. These items primarily include long-lived assets, goodwill, and intangible assets for which the fair value of assets is determined as part of the related impairment test. As of March 31, 2018 and December 31, 2017, there were no significant adjustments to fair value for nonfinancial assets or liabilities. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 8. Goodwill and Intangible Assets The table below shows the weighted-average life, original cost, accumulated amortization, and net book value by major intangible asset classification: Weighted-Average Accumulated Life (Years) Original Cost Amortization Net Book Value (in thousands) Definite-lived intangible assets Cortrosyn® product rights 12 $ 27,134 $ 26,688 $ 446 IMS (UK) international product rights 10 9,802 1,634 8,168 Patents 12 486 181 305 Land-use rights 39 2,540 436 2,104 Other intangible assets 4 69 50 19 Subtotal 12 40,031 28,989 11,042 Indefinite-lived intangible assets Trademark * 29,225 — 29,225 Goodwill - Finished pharmaceutical products * 4,583 — 4,583 Subtotal * 33,808 — 33,808 As of March 31, 2018 * $ 73,839 $ 28,989 $ 44,850 Weighted-Average Accumulated Life (Years) Original Cost Amortization Net Book Value (in thousands) Definite-lived intangible assets Cortrosyn® product rights 12 $ 27,134 $ 26,243 $ 891 IMS (UK) international product rights 10 9,440 1,337 8,103 Patents 12 486 170 316 Land-use rights 39 2,540 419 2,121 Other intangible assets 4 69 46 23 Subtotal 12 39,669 28,215 11,454 Indefinite-lived intangible assets Trademark * 29,225 — 29,225 Goodwill - Finished pharmaceutical products * 4,461 — 4,461 Subtotal * 33,686 — 33,686 As of December 31, 2017 * $ 73,355 $ 28,215 $ 45,140 * Intangible assets with indefinite lives have an indeterminable average life. Sale of Fourteen Injectable ANDAs In March 2016, the Company acquired 14 abbreviated new drug applications, or ANDAs, representing 11 different injectable chemical entities from Hikma Pharmaceuticals PLC, or Hikma. In February 2017, the Company sold the 14 ANDAs to an unrelated party. The consideration included a purchase price of $6.4 million of which the amount of $1.0 million was received upon closing, $1.0 million was received in the second quarter of 2017 and the remaining $4.4 million was received in January 2018. In addition to the purchase price, the purchaser agreed to pay the Company a royalty fee equal to 2% of net sales derived from purchaser’s sales of the products for the period from February 2017 through February 2027. The Company has not recognized any royalty fee revenue. The Company is also subject to a certain indemnification liability payable to the purchaser, which is limited up to $0.6 million. The Company recognized a gain of $2.6 million within operating (income) expenses on its condensed consolidated statement of operations for the three months ended March 31, 2017. Goodwill The changes in the carrying amounts of goodwill were as follows: March 31, December 31, 2018 2017 (in thousands) Beginning balance $ 4,461 $ 3,976 Currency translation and other adjustments 122 485 Ending balance $ 4,583 $ 4,461 Primatene ® Trademark In January 2009, the Company acquired the exclusive rights to the trademark, domain name, website and domestic marketing, distribution and selling rights related to Primatene ® Mist, an over-the-counter bronchodilator product, which are recorded at the allocated fair value of $29.2 million, which is its carrying value as of March 31, 2018. The trademark was determined to have an indefinite life. In determining its indefinite life, the Company considered the following: the expected use of the intangible; the longevity of the brand; the legal, regulatory and contractual provisions that affect their maximum useful life; the Company’s ability to renew or extend the asset’s legal or contractual life without substantial costs; effects of the regulatory environment; expected changes in distribution channels; maintenance expenditures required to obtain the expected future cash flows from the asset; and considerations for obsolescence, demand, competition and other economic factors. As a result of environmental concerns about Chlorofluorocarbons, or CFCs, the FDA issued a final ruling on January 16, 2009 that required the CFC formulation of its Primatene ® Mist product to be phased out by December 31, 2011. The former formulation of Primatene ® Mist contained CFCs as a propellant; however, the Company intends to use the trademark for a future version of Primatene ® that utilizes hydrofluoroalkane, or HFA, as a propellant. In 2013, the Company filed a new drug application, or NDA, for Primatene ® Mist and received a Prescription Drug User Fee Act date set for May 2014. In May 2014, the Company received a complete response letter, or CRL, from the FDA, which required additional non-clinical information, label revisions and follow-up studies (label comprehension, behavioral/human factors and actual use) to assess consumers’ ability to use the device correctly to support approval of the product in the over-the-counter setting. The Company submitted a responsive NDA amendment in June 2016 and received a second CRL from the FDA in December 2016, which requires additional packaging and label revisions and follow-up studies to assess consumers’ ability to use the product correctly to support approval in the over-the-counter setting. After several meetings with the FDA in 2017, the Company further revised its packaging and label and plans to perform another human factors study based on such revisions. In November 2017, the Company submitted its proposed protocol to the FDA. In March 2018, the Company received as Advice Letter from the FDA regarding our proposed protocol. Based on that feedback, the Company has conducted an additional human factors study. The Company believes it has received acceptable results from the study, and the Company has resubmitted the NDA. The Company intends to continue to work with the FDA to address their concerns in the CRL and bring Primatene ® Mist back to the over-the-counter market. However, there can be no guarantee that any future amendment to the Company’s NDA will result in timely approval of Primatene ® Mist or approval at all. Based on the Company’s filed version of Primatene ® Mist, the long history of the Primatene ® trademark (marketed since 1963), and the Company’s perpetual rights to the trademark, the nature of the CRL received in December 2016, the plan that the HFA version will be marketed under the same trademark if approved by the FDA, and other factors previously considered, the trademark continues to have an indefinite useful life, and an impairment charge is not required based on the Company’s qualitative assessment as of March 31, 2018. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | |
Inventories | Note 9. Inventories Inventories consist of the following: March 31, December 31, 2018 2017 (in thousands) Raw materials and supplies $ 22,272 $ 19,973 Work in process 21,796 22,469 Finished goods 18,712 21,167 Total inventories $ 62,780 $ 63,609 A charge of $1.9 million and $0.4 million was included in the cost of revenues in the Company’s consolidated statements of operations for the three months ended March 31, 2018 and 2017, respectively, to adjust the Company’s inventory and related firm inventory purchase commitments to their net realizable value. |
Property, Plant, and Equipment
Property, Plant, and Equipment | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant, and Equipment | |
Property, Plant, and Equipment | Note 10. Property, Plant, and Equipment Property, plant, and equipment consist of the following: March 31, December 31, 2018 2017 (in thousands) Buildings $ 89,579 $ 89,124 Leasehold improvements 29,938 29,847 Land 7,148 7,110 Machinery and equipment 120,756 118,056 Furniture, fixtures, and automobiles 17,132 16,385 Construction in progress 63,959 58,145 Total property, plant, and equipment 328,512 318,667 Less accumulated depreciation (136,597) (133,328) Total property, plant, and equipment, net $ 191,915 $ 185,339 As of March 31, 2018 and December 31, 2017, the Company had $2.2 million and $2.3 million, respectively, in capitalized manufacturing equipment that is intended to be used specifically for the manufacture of Primatene ® Mist. The Company will continue to monitor developments with the FDA as it relates to its Primatene ® indefinite lived intangible assets in determining if there is an impairment of these related fixed assets (see Note 8). |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Accounts Payable and Accrued Liabilities | |
Accounts Payable and Accrued Liabilities | Note 11. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following: March 31, December 31, 2018 2017 (in thousands) Accrued customer fees and rebates $ 13,464 $ 15,981 Accrued payroll and related benefits 17,774 15,680 Accrued product returns, current portion 4,586 4,133 Other accrued liabilities 7,043 5,132 Total accrued liabilities 42,867 40,926 Accounts payable 15,631 16,629 Total accounts payable and accrued liabilities $ 58,498 $ 57,555 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt | |
Debt | Note 12. Debt Debt consists of the following: March 31, December 31, 2018 2017 (in thousands) Loans with East West Bank Line of credit facility due December 2018 $ — $ — Equipment loan due January 2019 1,283 1,668 Mortgage payable due February 2021 3,556 3,577 Equipment loan due June 2021 3,980 4,286 Equipment line of credit due December 2022 — — Mortgage payable due October 2026 3,509 3,524 Mortgage payable due June 2027 8,903 8,936 Loans with Cathay Bank Line of credit facility due May 2018 — — Acquisition loan due April 2019 14,562 15,073 Mortgage payable due August 2027 7,752 7,795 Loans with Seine-Normandie Water Agency French government loan 1 paid off March 2018 — French government loan 2 due June 2020 88 French government loan 3 due July 2021 248 Payment Obligation to Merck 599 599 Equipment under Capital Leases 1,287 1,357 Total debt and capital leases 45,767 47,156 Less current portion of long-term debt and capital leases 6,061 6,312 Long-term debt and capital leases, net of current portion $ 39,706 $ 40,844 As of March 31, 2018, the fair value of the loans approximates their carrying amount. The interest rate used in the fair value estimation was determined to be a Level 2 input. For certain loans with East West Bank, the Company has entered into fixed interest rate swap contracts to exchange the variable interest rates for fixed interest rates over the life of certain debt instruments without the exchange of the underlying notional debt amount. The interest rate swap contracts do not qualify for hedge accounting and are recorded at fair value based on Level 2 inputs. These swap contacts have an aggregate fair value of $0.4 million and $0.1 million as of March 31, 2018 and December 31, 2017, respectively. The change in fair value is recorded in other income (expense) in the Company’s condensed consolidated statement of operations. Covenants At March 31, 2018 and December 31, 2017, the Company was in compliance with its debt covenants, which include a minimum current ratio, minimum debt service coverage, minimum tangible net worth, maximum debt-to-effective-tangible-net-worth ratio, and minimum deposit requirement, computed on a consolidated basis. The fixed charge coverage ratio and debt service coverage ratio requirements for loans with Cathay Bank were not effective as of December 31, 2017. Such requirements will become effective as of December 31, 2018. Equipment under Capital Leases The Company entered into leases for certain equipment under capital leasing arrangements, which will expire at various times through 2022. The cost of equipment under capital leases was $1.6 million and $1.6 million at March 31, 2018 and December 31, 2017, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes | |
Income Taxes | Note 13. Income Taxes The following table sets forth the Company’s income tax provision for the periods indicated: Three Months Ended March 31, 2018 2017 (in thousands) Income (loss) before taxes $ (9,030) $ 1,504 Income tax expense (benefit) (1,784) 611 Net income (loss) $ (7,246) $ 893 Income tax provision as a percentage of income before income taxes 19.8 % 40.6 % The decrease in the Company’s effective tax rate for the three months ended March 31, 2018, was primarily due to the Tax Act, which was enacted on December 22, 2017. The Tax Act, among other things, reduces the statutory U.S. federal corporate income tax rate from 35% to 21% and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred. In March 2018, the FASB issued ASU No. 2018-05 to incorporate Staff Accounting Bulletin, or SAB 118, pursuant to which the Company’s final analysis will be completed over a one-year measurement period ending December 22, 2018, and any adjustments during this measurement period will be included in net earnings from continuing operations as an adjustment to income tax expense in the reporting period when such adjustments are determined. During the three month period ended March 31, 2018, the Company has made no changes to the provisional amounts recorded at December 31, 2017. The Company will continue to refine its calculations as additional analysis and changes to certain amounts and estimates are completed and tax returns are filed. The Company’s estimates may also be affected as it gains a more thorough understanding of the tax law. Effective January 1, 2018, the Company adopted ASU No. 2016-16 , Intra-Entity Transfers of Assets Other Than Inventory , pursuant to which the income tax consequences of intra-entity transfer of an asset other than inventory is required to be recognized in the period in which the transfer occurs. The Company adopted the standard on a modified retrospective basis resulting in an increase of deferred tax assets and the beginning balance of retained earnings by $0.5 million, respectively. Valuation Allowance In assessing the need for a valuation allowance, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. Ultimately, the realization of deferred tax assets depends on the existence of future taxable income. M anagement considers sources of taxable income such as income in prior carryback periods, future reversal of existing deferred taxable temporary differences, tax-planning strategies, and projected future taxable income. The Company has discontinued recognizing AFP income tax benefits by recording a full valuation allowance until it is determined that it is more likely than not that AFP will generate sufficient taxable income to realize its deferred income tax assets. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | Note 14. Stockholders' Equity The changes in stockholders’ equity for the three months ended March 31, 2018, consisted of the following: Three Months Ended March 31, 2018 (in thousands) Stockholders’ equity as of December 31, 2017 $ 337,329 Beginning balance adjustment as a result of the adoption of new accounting standards 582 Net loss (7,246) Other comprehensive income 1,190 Net proceeds from equity plans (1,793) Share-based compensation expense 4,666 Purchase of treasury stock (7,624) Stockholders’ equity as of March 31, 2018 $ 327,104 Share Buyback Program Pursuant to the Company’s share buyback program, the Company purchased 407,604 and 532,894 shares of its common stock during the three months ended March 31, 2018 and 2017, totaling $7.6 million and $8.2 million, respectively. On May 7, 2018, the Company’s Board of Directors authorized an increase of $20.0 million to the Company’s share buyback program, which is expected to continue for an indefinite period of time. The primary goal of the programs is to offset dilution created by the Company’s equity compensation programs. Purchases are made through open market and private block transactions pursuant to Rule 10b5-1 plans, privately negotiated transactions or other means as determined by the Company’s management and in accordance with the requirements of the SEC. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, and other conditions. These repurchased shares are accounted for under the cost method and are included as a component of treasury stock in the Company’s consolidated balance sheets. The 2015 Equity Incentive Plan As of March 31, 2018, the Company reserved an aggregate of 4,782,238 shares of common stock for future issuance under the 2015 Equity Incentive Plan, or the 2015 Plan. In January 2018, an additional 1,165,590 shares were reserved under the 2015 Plan pursuant to the evergreen provision. Share-Based Award Activity and Balances The Company accounts for share‑based compensation payments in accordance with ASC 718, which requires measurement and recognition of compensation expense at fair value for all share‑based payment awards made to employees and directors. Under these standards, the fair value of option awards and the option components of the Employee Stock Purchase Plan awards are estimated at the grant date using the Black-Scholes option-pricing model. The fair value of RSUs is estimated at the grant date using the Company’s common share price. Non‑vested stock options held by non-employees are revalued at each balance sheet date. The portion that is ultimately expected to vest is amortized and recognized in compensation expense on a straight-line basis over the requisite service period, generally from the grant date to the vesting date. The weighted-averages for key assumptions used in determining the fair value of options granted during the three months ended March 31, 2018 and 2017, are as follows: Three Months Ended March 31, 2018 2017 Average volatility 39.6 % 36.7 % Risk-free interest rate 2.7 % 2.2 % Weighted-average expected life in years 5.8 5.7 Dividend yield rate — % — % A summary of option activity under all plans for the three months ended March 31, 2018, is presented below: Weighted-Average Weighted-Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term (Years) Value (1) (in thousands) Outstanding as of December 31, 2017 10,898,701 $ 14.65 Options granted 966,026 20.59 Options exercised (147,508) 12.61 Options cancelled (106,615) 13.02 Options expired (375) 14.66 Outstanding as of March 31, 2018 11,610,229 $ 15.19 5.02 $ 49,844 Exercisable as of March 31, 2018 8,122,678 $ 15.07 3.79 $ 36,557 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the estimated fair value of the Company’s common stock for those awards that have an exercise price below the estimated fair value at March 31, 2018. For the three months ended March 31, 2018 and 2017 , the Company recorded of $2 .4 million and $2 .0 million, respectively, related to stock options granted to employees under all plans, and expenses of $0.1 million and $0.1 million, respectively, related to stock options granted to the Board of Directors under all plans. Information relating to option grants and exercises is as follows: Three Months Ended March 31, 2018 2017 (in thousands, except per share data) Weighted-average grant date fair value per option share $ 7.94 $ 4.87 Intrinsic value of options exercised 1,061 24 Cash received from options exercised 1,861 96 Total fair value of the options vested during the year 6,407 4,781 A summary of the status of the Company’s nonvested options as of March 31, 2018, and changes during the three months ended March 31, 2018, are presented below: Weighted-Average Grant Date Options Fair Value Non-vested as of December 31, 2017 4,310,241 $ 4.21 Options granted 966,026 7.94 Options vested (1,682,101) 3.81 Options forfeited (106,615) 4.77 Non-vested as of March 31, 2018 3,487,551 5.41 As of March 31, 2018, there was $15.6 million of total unrecognized compensation cost, net of forfeitures, related to nonvested stock option based compensation arrangements granted under all plans. The cost is expected to be recognized over a weighted-average period of 2.7 years and will be adjusted for future changes in estimated forfeitures. Restricted Stock Units The Company grants restricted stock units, or RSUs, to certain employees and members of the Board of Directors with a vesting period of up to five years. The grantee receives one share of common stock at a specified future date for each RSU awarded. The RSUs may not be sold or otherwise transferred until certificates of common stock have been issued, recorded, and delivered to the participant. The RSUs do not have any voting or dividend rights prior to the issuance of certificates of the underlying common stock. The share-based expense associated with these grants was based on the Company’s common stock fair value at the time of grant and is amortized over the requisite service period, which generally is the vesting period using the straight-line method. During the three months ended March 31, 2018 and 2017, the Company recorded a total expense of $1.7 million and $2.0 million, respectively, related to RSU awards granted to employees under all plans and expenses of $0.1 million and $0.1 million, respectively, related to RSU awards granted to the Board of Directors. As of March 31, 2018, there was $17.2 million of total unrecognized compensation cost, net of forfeitures, related to nonvested RSU-based compensation arrangements granted under all plans. The cost is expected to be recognized over a weighted-average period of 2.8 years and will be adjusted for future changes in estimated forfeitures. Information relating to RSU grants and deliveries is as follows: Total Fair Market Value of RSUs Issued Total RSUs as Issued Compensation (1) (in thousands) RSUs outstanding at December 31, 2017 1,392,781 RSUs granted 387,551 $ 7,670 RSUs forfeited (40,473) RSUs vested (2) (480,586) RSUs outstanding at March 31, 2018 1,259,273 (1) The total fair market value is derived from the number of RSUs granted times the current stock price on the date of grant. (2) Of the vested RSUs, 187,528 shares of common stock were surrendered to fulfil tax withholding obligations. The Company recorded share-based compensation expense under all plans and is included in the Company’s consolidated statement of operations as follows: Three Months Ended March 31, 2018 2017 (in thousands) Cost of revenues $ 1,160 $ 1,131 Operating expenses: Selling, distribution, and marketing 107 84 General and administrative 2,893 2,783 Research and development 506 453 Total share-based compensation $ 4,666 $ 4,451 |
Employee Benefits
Employee Benefits | 3 Months Ended |
Mar. 31, 2018 | |
Employee Benefits | |
Employee Benefits | Note 15. Employee Benefits 401(k) Plan The Company has a defined contribution 401(k) plan, or the Plan, whereby eligible employees voluntarily contribute up to a defined percentage of their annual compensation. The Company matches contributions at a rate of 50% on the first 6% of employee contributions, and pays the administrative costs of the Plan. Employer contributions vest over four years. Total employer contributions for the three months ended March 31, 2018 and 2017, were approximately $0.3 million and $0.3 million, respectively. Defined Benefit Pension Plan In connection with the Merck API Transaction, the Company assumed an obligation associated with a defined-benefit plan for eligible employees of AFP. This plan provides benefits to the employees from the date of retirement and is based on the employee’s length of time employed by the Company. The calculation is based on a statistical calculation combining a number of factors that include the employee’s age, length of service, and AFP employee turnover rate. The liability under the plan is based on a discount rate of 1.60% as of March 31, 2018 and December 31, 2017, respectively. The liability is included in accrued liabilities in the accompanying consolidated balance sheets. The plan is currently unfunded, and the benefit obligation under the plan was $2.3 million and $2.1 million at March 31, 2018 and December 31, 2017, respectively. The Company recorded an immaterial amount of expense under the plan for the three months ended March 31, 2018 and 2017. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 16. Commitments and Contingencies Supply Agreement with MannKind Corporation On July 31, 2014, the Company entered into a supply agreement with MannKind Corporation, or MannKind, or the Supply Agreement, pursuant to which the Company agreed to manufacture for and supply to MannKind certain quantities of recombinant human insulin, or RHI API for use in MannKind’s product Afrezza ® . In January 2015, the Company entered into a supply option agreement with MannKind, or the Option Agreement, pursuant to which MannKind has the option to purchase additional RHI API. The Supply Agreement and the Option Agreement were subsequently amended in November 2016. For the year ended December 31, 2017, sales of RHI API to MannKind totaled $3.2 million, which fulfilled the 2017 commitment of RHI API under the amended Supply Agreement. Under the Option Agreement, the Company recognized the cancellation fee for 2018 of $0.9 million in net revenues in its consolidated statement of operations for the year ended December 31, 2017. Collaboration Agreements with Medical Device Manufacturers In August 2014, the Company entered into a collaboration agreement with a medical device manufacturer to develop a drug delivery system to be used by the Company for one of its pipeline products. As of March 31, 2018, the Company has paid an upfront payment of $0.5 million and $1.5 million in milestone payments under this agreement, which were classified as research and development expense as the milestones were met. The Company is obligated to pay up to an additional $0.5 million if certain research and development milestones are met. As of March 31, 2018, no such obligation existed. Pursuant to the collaboration agreement, if the medical device manufacturer is successful in the development of this drug delivery system and the Company’s pipeline products receive appropriate regulatory approval, the Company intends to enter into a commercial supply agreement with such medical device manufacturer for a minimum purchase of 1.0 million units during the first 12 months. In October 2017, the Company entered into a collaboration agreement with a medical device manufacturer to develop a drug delivery system to be used by the Company for one of its pipeline products for a total of $1.6 million. As of March 31, 2018, the Company has paid an upfront payment of $0.4 million, and is obligated to pay up to an additional $1.2 million, if certain research and development milestones are met. As of March 31, 2018, no such obligation existed for the milestones. In addition, pursuant to the collaboration agreement, if the medical device manufacturer is successful in the development of this drug delivery system and the Company’s pipeline products receive appropriate regulatory approval, the Company intends to enter into a commercial supply agreement with such medical device manufacturer under which the Company is obligated to pay an additional $1.0 million, if certain commercial development milestones are met and to purchase a minimum of 100,000 units per year for three years. Operating Lease Agreements The Company leases real and personal property, in the normal course of business, under various non-cancelable operating leases. The Company, at its option, can renew a substantial portion of its leases, at the market rate, for various renewal periods ranging from one to six years. Rental expense under these leases for the three months ended March 31, 2018 and 2017, was approximately $1.0 million and $0.9 million, respectively. Purchase Commitments As of March 31, 2018, the Company has entered into commitments to purchase equipment and raw materials for an aggregate amount of approximately $50.0 million. The Company anticipates that most of these commitments with remaining terms in excess of one year will be fulfilled by 2019. In addition, the Company is obligated to pay a supplier certain payments up to $1.5 million based on the sale of one of the Company’s product. The Company entered into agreements with a Chinese governmental entity to acquire land-use rights to real property in Nanjing, China. Under the terms of these agreements, the Company committed to invest capital in its wholly-owned subsidiary, ANP, and to develop these properties as an API manufacturing facility for the Company’s pipeline products. In conjunction with these agreements, ANP modified its business license on July 3, 2012, to increase its authorized capital. As of December 31, 2016, the Company had completed its investment of total registered capital commitment of $61.0 million to ANP. This investment in ANP resulted in cash being transferred from the U.S. parent company to ANP. Per these agreements, in January 2010, the Company acquired certain land-use rights with a carrying value of $1.2 million. In addition, the Company purchased additional land-use rights in November 2012 for $1.3 million. The Company committed to spend approximately $15.0 million in land development. The agreements require the construction of fixed assets on the property and specified a timetable for the construction of these fixed assets. The current pace of development of the property is behind the schedules described in the purchase agreements and, per the purchase agreements, potential monetary penalties could result if the development is delayed or not completed in accordance with the guidelines stated in the purchase agreements. The Company is in discussions with the Chinese government regarding the development and believes that the likelihood of incurring any penalty is remote. |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2018 | |
Litigation | |
Litigation | Note 17. Litigation Enoxaparin Patent Litigation In September 2011, Momenta Pharmaceuticals, Inc., or Momenta, a Boston‑based pharmaceutical company, and Sandoz Inc., or Sandoz, the generic division of Novartis, initiated litigation against the Company for alleged patent infringement of two patents related to testing methods for batch release of enoxaparin, which the Company refers to as the “‘886 patent” and the “‘466 patent.” The lawsuit was filed in the United States District Court for the District of Massachusetts, or the Massachusetts District Court. In October 2011, the Massachusetts District Court issued a preliminary injunction barring the Company from selling its generic enoxaparin product and also requiring Momenta and Sandoz to post a $100.1 million bond. The preliminary injunction was stayed by the United States Court of Appeals for the Federal Circuit, or the Federal Circuit, in January 2012, and reversed by the Federal Circuit in August 2012. In January 2013, the Company moved for summary judgment of non‑infringement of both patents. Momenta and Sandoz withdrew their allegations as to the ‘466 patent, and in July 2013, the Massachusetts District Court granted the Company’s motion for summary judgment of non‑infringement of the ‘886 patent and denied Momenta and Sandoz’s motion for leave to amend their infringement contentions. On January 24, 2014, the Massachusetts District Court judge entered final judgment in the Company’s favor on both patents. Momenta and Sandoz also filed a motion to collect attorneys’ fees and costs relating to a discovery motion, which the Massachusetts District Court granted. On May 9, 2016, the Massachusetts District Court issued an order imposing fees and costs of approximately $0.4 million in relation to this discovery motion. This amount has been accrued in the general and administrative expense for the quarter ended March 31, 2016 . On January 30, 2014, Momenta and Sandoz filed a notice of appeal to the Federal Circuit appealing the court’s final judgment including summary judgment denying Momenta and Sandoz’s motion for leave to amend their infringement contentions. Following appeal briefing filed by the parties, t he Federal Circuit held oral argument on May 4, 2015. On November 10, 2015, the Federal Circuit panel affirmed-in-part and vacated-in-part the decision of the Massachusetts District Court granting summary judgment of non-infringement as to the Company, and it remanded the case to the Massachusetts District Court for further proceedings consistent with its opinion. The Federal Circuit panel affirmed the Massachusetts District Court’s holding in the Company’s favor that the Company does not infringe under 35 U.S.C. 271(g), and the panel vacated the grant of summary judgment to the extent it was based on the determination that the Company’s activities fall within the 35 U.S.C. 271(e)(1) safe harbor. The Federal Circuit panel also left to the Massachusetts District Court’s discretion whether to reconsider on remand its denial of leave for Momenta and Sandoz to amend their infringement contentions. On January 11, 2016, the Company filed a Petition for Rehearing En Banc with the Federal Circuit. On February 17, 2016, the Federal Circuit denied the Company’s Petition, and the Federal Circuit issued its mandate on February 24, 2016, whereby the case returned to the Massachusetts District Court for further proceedings. On March 18, 2016, the parties filed a joint status report with the Massachusetts District Court. On June 21, 2016, the Massachusetts District Court granted Momenta and Sandoz’s Motion for Leave to Amend its Infringement Contentions. In light of Momenta and Sandoz’s Amended Infringement Contentions and recent changes in Supreme Court precedent since the case was stayed in 2012, the Company sought to amend its Non-Infringement and Invalidity Contentions. On July 18, 2016, the Company submitted its Motion for Leave to Amend Its Non-Infringement and Invalidity Contentions and Momenta and Sandoz responded on July 25, 2016. In light of the new arguments made in their response, the Company further filed a Motion For Leave to Reply in Further Support of Defendants’ Motion for Leave to Amend Non-Infringement and Invalidity Contentions, which was granted. A hearing was held on August 23, 2016, where the Magistrate Judge ordered the Company to file its proposed amended contentions, which it filed on August 31, 2016. On February 4, 2017, the Magistrate Judge issued an order denying the Company leave to amend its contentions. The Company filed objections to this order with the District Court on February 21, 2017. On April 13, 2017, the District Court rejected the determination of the Magistrate Judge with respect to the Company’s amended non-infringement contentions, and allowed the Company to amend its non-infringement contentions. With respect to the Company’s amended invalidity contentions, the District Court accepted the Magistrate Judge’s determination; however, the District Court specifically stated that the Company can argue changes in law at the summary judgment stage or at trial. In parallel with the Massachusetts District Court proceedings, the Company appealed the Federal Circuit’s decision to vacate the grant of the Company’s summary judgment to the extent it was based on the determination that the Company’s activities are protected under the Safe Harbor. The Company filed a Petition for a Writ of Certiorari with the Supreme Court on May 17, 2016. Momenta and Sandoz initially waived their right to respond to the petition; however, on May 31, 2016, the Supreme Court requested a response from Momenta and Sandoz. The response from Momenta and Sandoz was initially due on June 30, 2016, but they requested an extension. Momenta and Sandoz filed their response on August 1, 2016. On October 3, 2016, the Supreme Court declined the Petition for a Writ of Certiorari. Fact discovery in the Massachusetts District Court proceedings closed on November 22, 2016, and the parties proceeded with expert discovery and exchanged opening and rebuttal expert reports. Expert discovery closed on March 24, 2017. On April 14, 2017, Plaintiffs filed a Motion for Summary Judgment seeking to dismiss the Company’s equitable defenses. On April 14, 2017, the Company filed Defendants’ Motion for Summary Judgment of Invalidity and Noninfringement. In the Motion, the Company moved for the District Court to grant summary judgment in favor of the Company on the following issues: (1) the ’886 patent is invalid under 35 U.S.C. § 101 as claiming non-patentable subject matter; (2) the ’886 patent is invalid under 35 U.S.C. § 112 because the claims are indefinite; and (3) the Company’s tests do not infringe the claims of the ’886 patent. Oppositions to the motions for summary judgment were filed on May 5, 2017. Replies in support of the motions for summary judgment were filed on May 19, 2017. On June 16, 2017, the District Court issued an order denying the summary judgment motions. The District Court also denied Plaintiffs’ motion for summary judgment dismissing the Company’s defenses of implied waiver and equitable estoppel, and denied Plaintiffs’ alternative request for a separate hearing on the implied waiver and equitable estoppel defenses holding that the defenses would be submitted to the jury for an advisory verdict. Trial in the Massachusetts District Court on all claims and defenses began on July 10, 2017. On July 21, 2017, the jury returned a unanimous verdict finding that although the Company’s tests infringed the asserted patent, the patent was invalid for lack of enablement and lack of written description and the jury further found that Plaintiffs are entitled to zero ($0) damages. As for the Company’s defenses of implied waiver and equitable estoppel, the jury found that Plaintiffs waived their right to recover for infringement of the asserted patent and that Plaintiffs are estopped from enforcing the asserted patent against the Company. The verdict on these equitable defenses was briefed by the parties and submitted to the Court. In the post-trial briefing, the Company requested the Court to adopt the findings of the jury on the equitable defenses, and to set aside the jury’s finding of infringement. In Plaintiffs’ post-trial briefing, Plaintiffs requested a new trial, and requested the Court to set aside the jury’s finding that the asserted patent was invalid for lack of enablement and lack of written description. In a February 7, 2018 Memorandum and Order and with respect to the equitable defenses, the Court found that Plaintiffs waived their right to enforce the ‘866 patent against the Company for its use of one of its test, and are equitably estopped from enforcing the ‘866 patent against the Company for its use of that same test. The Court also found that Plaintiffs have not waived their right to enforce the ‘866 patent against the Company for its use of a second test, and are not equitable estopped from enforcing the ‘866 patent against the Company for its use of that same second test. On February 7, 2018, the Court also denied all other post-trial motions. On March 20, 2018, the Court entered final judgment in this matter reflecting the jury’s verdict and the Court’s February 7, 2018 Memorandum and Order. On March 23, 2018, the Company filed a motion to enforce liability on the bonds related to the preliminary injunction issued in October 2011, stayed in January 2012, and reversed by the Federal Circuit in August 2012. On March 27, 2018, Plaintiffs filed a notice of appeal with the Federal Circuit. Plaintiffs have not yet identified the issues they intend to appeal. On April 3, 2018, Plaintiffs filed a motion with the District Court to defer decision on the Company’s motion to enforce liability on the bonds pending their appeal. The Court has not yet decided the Company’s or Plaintiffs’ motions. The Company will continue to vigorously defend the jury’s verdict, including against any potential appeal by the Plaintiffs. The Company intends to continue to pursue its attempt to collect the $100.1 million bond posted by Momenta and Sandoz. False Claims Act Litigation In January 2009, the Company filed a qui tam complaint in the U.S. District Court for the Central District of California, or the California District Court, alleging that Aventis Pharma S.A., or Aventis, through its acquisition of a patent through false and misleading statements to the U.S. Patent and Trademark Office, as well as through false and misleading statements to the FDA, overcharged the federal and state governments for its Lovenox ® product. If the Company is successful in this litigation, it could be entitled to a portion of any damage award that the government ultimately may recover from Aventis. In October 2011, the California District Court unsealed the Company’s complaint. On February 28, 2014, Aventis filed a motion for summary judgment on the issue of the adequacy of the Company’s notice letter to the government, and the California District Court denied Aventis’ motion for summary judgment in a final order it issued on May 12, 2014. On June 9, 2014, at Aventis’ request, the California District Court issued an order certifying for appeal its order denying Aventis’ motion for summary judgment. On June 9, 2014, Aventis filed with the United States Court of Appeals for the Ninth Circuit, or the Ninth Circuit, a petition for permission to appeal the California District Court’s denial of Aventis’ motion for summary judgment, and the Company filed an opposition to Aventis’ petition on June 19, 2014. On August 22, 2014, the Ninth Circuit granted Aventis’ petition. The parties filed their respective appeal briefs with the Ninth Circuit. On November 10, 2016, the Ninth Circuit heard oral argument on the appeal. The California District Court set an evidentiary hearing for July 7, 2014 on the “original source” issue, a key element under the False Claims Act. The evidentiary hearing was conducted as scheduled, from July 7, 2014 through July 10, 2014. On July 13, 2015, the California District Court issued a ruling concluding that the Company is not an original source under the False Claims Act, and entered final judgment dismissing the case for lack of subject matter jurisdiction. On July 20, 2015, the Company filed with the Ninth Circuit a notice of appeal of the California District Court’s dismissal of the case, and Aventis filed a notice of cross-appeal on August 5, 2015. On November 12, 2015, Aventis filed a pleading asking that the California District Court impose various monetary penalties and fines against the Company, including disgorgement of enoxaparin revenues and attorneys’ fees expended by Aventis in this action, based on Aventis’s allegations that the Company engaged in sanctionable conduct. On November 23, 2015, the California District Court issued an order setting forth a procedure for sanctions proceedings as to the Company as well as its outside counsel. On December 24, 2015, the Company filed a pleading with the California District Court opposing the imposition of sanctions, and on January 20, 2016, Aventis filed a response pleading further pressing for the imposition of sanctions. On May 4, 2016, the California District Court issued three orders requesting that the Company and its outside counsel file a document showing cause as to why sanctions should not be imposed and to set up a conference call with the partiers and the court to discuss whether any discovery and/or a hearing is necessary. On June 13, 2016, the Company and its outside counsel each filed responses to the court’s order to show cause as to why sanctions should not be imposed. On July 21, 2016, Aventis filed a response contending that the court should impose sanctions. On February 10, 2017, the Court held a show cause hearing regarding the potential imposition of sanctions and took the matter under submission. On September 18, 2017, the District Court issued its decision that no sanctions will be imposed on either the Company or its counsel. On March 28, 2016, the Company filed its opening brief with the Ninth Circuit Court of Appeals setting forth detailed arguments as to why the False Claims Act litigation should not have been dismissed by the California District Court. On June 20, 2016, Aventis filed its principal brief in the appeal, responding to the Company’s arguments regarding dismissal of the False Claims Act litigation, and setting forth Aventis’s argument that it should be awarded attorneys’ fees and expenses. On September 19, 2016, the Company filed its reply brief to Aventis’s principal brief. On October 3, 2016, Aventis filed its reply brief in support of its cross-appeal of the District Court’s denial of attorneys’ fees. On November 10, 2016, the Ninth Circuit heard oral argument on the appeals. On May 11, 2017, the Ninth Circuit issued an opinion affirming the California District Court’s dismissal of the action for lack of subject matter jurisdiction; dismissing as moot Aventis’s appeal from the District Court’s denial of its motion for summary judgment on the issue of the adequacy of the Company’s notice letter to the government; reversing the District Court’s denial of Aventis’s motion for attorneys’ fees; and remanding the case to the District Court for resolution of the attorneys’ fees issue. On July 14, 2017, Aventis filed an application with the District Court for entitlement to attorneys’ fees and expenses. The Company intends to continue to vigorously defend against any such imposition of attorneys’ fees or sanctions. Momenta/Sandoz Antitrust Litigation On September 17, 2015, the Company initiated a lawsuit by filing a complaint in the California District Court against Momenta and Sandoz, or the Defendants. The Company’s complaint generally asserts that Defendants have engaged in certain types of illegal, monopolistic, and anticompetitive conduct giving rise to various causes of action against them. On December 9, 2015, Defendants filed a motion to dismiss and a motion to transfer the case to the District of Massachusetts. On January 4, 2016, the Company filed oppositions to both motions. On January 26, 2016, the California District Court granted Defendants’ motion to transfer and did not rule on Defendants’ motion to dismiss. Accordingly, the case was transferred to the District of Massachusetts. On February 9, 2016, the Company filed a writ of mandamus with the Ninth Circuit to attempt to appeal the California District Court’s granting of Defendants’ motion to transfer to the District of Massachusetts. The Ninth Circuit denied this petition on May 20, 2016, and as such the case will remain before the District of Massachusetts. On July 27, 2016, the Massachusetts District Court granted Defendants’ motion to dismiss based on antitrust immunity doctrine, without addressing the substantive merits of the claims. On August 25, 2016, the Company filed with the First Circuit Court of Appeals a notice of appeal of the Massachusetts District Court’s dismissal of the antitrust case. On October 31, 2016, the Company filed its appeal brief with the First Circuit. On December 5, 2016, Defendants filed their response brief with the First Circuit Court of Appeals. On December 19, 2016, the Company filed its rely brief with the First Circuit Court of Appeals, which concluded the briefing on this appeal. On February 9, 2017, the First Circuit Court of Appeals heard oral arguments. On March 6, 2017, the First Circuit Court of Appeals issued its decision, in which it held 3 to 0 that the District Court of Massachusetts erred in dismissing the Company’s antitrust case and sent the case back to the District Court to consider additional arguments. On April 20, 2017, Defendants filed their supplemental motion to dismiss and the Company filed its opposition on May 4, 2017. On March 19, 2018, the District Court entirely denied the Defendants’ motion to dismiss. On April 19, 2018, the Defendants filed a motion to seek interlocutory appeal of the District Court’s motion to dismiss opinion. The Company filed its opposition to interlocutory appeal on May 1, 2018. On March 19, 2018, the District Court granted the parties’ joint motion to extend the case schedule and accepted their proposed dates with a few modifications. Under the schedule, fact discovery will close on October 1, 2018. Summary judgment arguments are due on April 26, 2019; oppositions are due on June 14, 2019; and replies are due on July 10, 2019. Trial is scheduled for September 9, 2019. Other Litigation The Company is also subject to various other claims and lawsuits from time-to-time arising in the ordinary course of business. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In the opinion of management, the ultimate resolution of any such matters is not expected to have a material adverse effect on its financial position, results of operations, or cash flows; however, the results of litigation and claims are inherently unpredictable and the Company’s view of these matters may change in the future. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, and are prepared in accordance with the requirements of the SEC for interim reporting. Effective January 1, 2018, the Company retrospectively adopted Accounting Standard Update, or ASU, No. 2016-15 Classification of Certain Cash Receipts and Cash Payments . Certain amounts in the prior quarter’s condensed consolidated balance sheet and condensed consolidated statement of cash flows have been reclassified to conform to the current quarter presentation. This reclassification has no impact on net income or cash flows. All significant intercompany activity has been eliminated in the preparation of the condensed consolidated financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the consolidated financial position, results of operations, and cash flows of the Company. The Company’s subsidiaries include: (1) International Medication Systems, Limited, or IMS, (2) Armstrong Pharmaceuticals, Inc., or Armstrong, (3) Amphastar Nanjing Pharmaceuticals Inc., or ANP, (4) Nanjing Letop Fine Chemistry Co., Ltd., or Letop, (5) Nanjing Hanxin Medical Technology Co., Ltd., or Hanxin, (6) Nanjing Baixin Trading Co., Ltd., or Baixin, (7) Amphastar France Pharmaceuticals, S.A.S., or AFP, (8) Amphastar UK Ltd., or AUK, and (9) International Medication Systems (UK) Limited, or IMS UK. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The principal accounting estimates include determination of allowances for doubtful accounts and discounts, provision for chargebacks and rebates, provision for product returns, adjustment of inventory to their net realizable values, impairment of long-lived and intangible assets and goodwill, self-insured claims, workers’ compensation liabilities, litigation reserves, stock price volatilities for share-based compensation expense, valuation allowances for deferred tax assets, and liabilities for uncertain income tax positions. |
Foreign Currency | Foreign Currency The functional currency of the Company, its domestic subsidiaries, its Chinese subsidiary, ANP, and its U.K. subsidiary, AUK, is the U.S. dollar, or USD. ANP maintains its books of record in Chinese Yuan. These books are remeasured into the functional currency of USD using the current or historical exchange rates. The resulting currency remeasurement adjustments and other transactional foreign currency exchange gains and losses are reflected in the Company’s statements of operations. The Company’s French subsidiary, AFP, maintains its book of record in Euros. Its other Chinese subsidiaries maintain their books of record in Chinese Yuan. Its U.K. subsidiary IMS UK, maintains its book of record in Great Britain Pounds. These local currencies have been determined to be the subsidiaries’ respective functional currencies. These books of record are translated into USD using average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Equity is translated at the prevailing rate of exchange at the date of the equity transactions. Translation adjustments are reflected in stockholders’ equity and are included as a component of other accumulated comprehensive income (loss). The unrealized gains or losses of intercompany foreign currency transactions that are of a long-term investment nature are reported in other accumulated comprehensive income (loss). The unrealized gains of intercompany foreign currency transactions that are of a long-term investment nature for the three months ended March 31, 2018 and 2017 were $0.9 million, and a $0.5 million, respectively. Additionally, the Company does not undertake hedging transactions to cover its foreign currency exposure. |
Comprehensive Income (Loss) | Comprehensive Income (loss) For the three months ended March 31, 2018 and 2017, the Company included its foreign currency translation gain or loss as part of its comprehensive income (loss). Income tax expense of $0.3 million was allocated to other comprehensive income (loss) for the three months ended March 31, 2018. There was no material income tax expense (benefit) allocated to other comprehensive income (loss) for the three months ended March 31, 2017. |
Restricted Cash and Short-term Investments | Restricted Cash and Short-term Investments Restricted cash and short-term investments are collateral required for the Company to effect a standby letter of credit and to qualify for workers’ compensation self-insurance and are available to meet the Company’s workers’ compensation obligations on a current basis, as needed. As of March 31, 2018 and December 31, 2017, restricted cash and short-term investments include $1.9 million in cash and $2.3 million in certificates of deposit, respectively. The certificates of deposit have original maturities greater than three months and are classified as short-term investments. |
Financial Instruments | Financial Instruments The carrying amounts of cash and cash equivalents, short-term investments, restricted cash and short-term investments, accounts receivable, accounts payable, accrued expenses, and short-term borrowings approximate fair value due to the short maturity of these items. The majority of the Company’s long-term obligations consist of variable rate debt, and their carrying value approximates fair value as the stated borrowing rates are comparable to rates currently offered to the Company for instruments with similar maturities. However, the Company has one fixed-rate, long-term mortgage for which the carrying value differs from the fair value and is not remeasured on a recurring basis (see Note 12). The Company at times enters into fixed interest rate swap contracts to exchange the variable interest rates for fixed interest rates without the exchange of the underlying notional debt amounts. Such interest rate swap contracts are recorded at their fair values. |
Deferred Income Taxes | Deferred Income Taxes The Company utilizes the liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates. A valuation allowance is recorded when it is more likely than not that the deferred tax assets will not be realized. At March 31, 2018, the Company had not completed its accounting for the tax effects of the enactment of the Tax Cuts and Jobs Act of 2017, or the Tax Act. |
Business Combinations | Business Combinations If an acquired set of activities and assets is capable of being operated as a business consisting of inputs and processes from the viewpoint of a market participant, the asset acquired and liabilities assumed are a business. Business combinations are accounted for using the acquisition method of accounting, which requires an acquirer to recognize the assets acquired and the liabilities assumed at the acquisition date measured at their fair values as of that date. Fair value determinations are based on discounted cash flow analyses or other valuation techniques. In determining the fair value of the assets acquired and liabilities assumed in a material acquisition, the Company may utilize appraisals from third party valuation firms to determine fair values of some or all of the assets acquired and liabilities assumed, or may complete some or all of the valuations internally. In either case, the Company takes full responsibility for the determination of the fair value of the assets acquired and liabilities assumed. The value of goodwill reflects the excess of the fair value of the consideration conveyed to the seller over the fair value of the net assets received. Acquisition-related costs that the Company incurs to effect a business combination are expensed in the periods in which the costs are incurred. When the operations of the acquired businesses were not material to the Company's condensed consolidated financial statements, no pro forma presentations were disclosed. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 Leases , that is aimed at making leasing activities more transparent and comparable, and which requires substantially all leases be recognized by lessees on their balance sheets as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. This guidance will become effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019, and all annual and interim reporting periods thereafter. Early adoption is permitted. The Company is required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements for the reporting periods in which the guidance is adopted. While the Company continues to evaluate the provisions of ASC 842 to determine how it will be affected, the primary effect of adopting the new standard will be to record assets and obligations for current operating leases on its consolidated financial statements. Footnote 16 provides details on the Company’s current operating lease arrangements. The adoption of ASC 842 is not expected to have a material impact on the Company’s results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses , which is aimed at providing financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit. The standard update changes the impairment model for financial assets measured at amortized cost, requiring presentation at the net amount expected to be collected. The measurement of expected credit losses requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Available-for-sale debt securities with unrealized losses will be recorded through an allowance for credit losses. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020. Early adoption is permitted for interim or annual periods after December 31, 2019. The Company will be required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company does not believe the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04 S implifying the Test for Goodwill Impairment , which eliminates the requirement to calculate the implied fair value of goodwill. An entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The update also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2020, and applied on a prospective basis. Early adoption is permitted for interim and annual goodwill impairment testing dates after January 1, 2017. The Company currently does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In August 2017, the FASB issued ASU No. 2017-12 Targeted Improvements to Accounting for Hedging Activities , which amends the hedge accounting model in ASC 815 to enable entities to better portray the economics of their risk management activities in the financial statements and enhance the transparency and understandability of hedge results. The amendments also simplify the application of hedge accounting in certain situations. The new guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019. Early adoption is permitted. The Company does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU No. 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows entities to reclassify from accumulated other comprehensive income to retained earnings stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The guidance is effective for the Company’s interim and annual reporting periods during the year ending December 31, 2019. Early adoption is permitted. The Company does not believe that the adoption of this accounting guidance will have a material impact on its consolidated financial statements and related disclosures |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition | |
Schedule of chargeback provision analysis | Three Months Ended March 31, 2018 2017 (in thousands) Beginning balance $ 18,470 $ 39,709 Provision for chargebacks and rebates 25,334 58,606 Credits and payments issued to third parties (28,774) (76,242) Ending balance $ 15,030 $ 22,073 |
Schedule of product return liability analysis | Three Months Ended March 31, 2018 2017 (in thousands) Beginning balance $ 6,522 $ 3,143 Provision for product returns 747 1,062 Credits issued to third parties (498) (462) Ending balance $ 6,771 $ 3,743 |
Income (Loss) per Share (Tables
Income (Loss) per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income (Loss) per Share | |
Schedule of basic and diluted net income (loss) per share calculation | Three Months Ended March 31, 2018 2017 (in thousands, except per share data) Basic and dilutive numerator: Net income (loss) $ (7,246) $ 893 Denominator: Weighted-average shares outstanding — basic 46,514 46,069 Net effect of dilutive securities: Incremental shares from equity awards — 1,988 Weighted-average shares outstanding — diluted 46,514 48,057 Net income (loss) per share — basic $ (0.16) $ 0.02 Net income (loss) per share — diluted $ (0.16) $ 0.02 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting | |
Schedule of financial information by reporting segment | Three Months Ended March 31, 2018 2017 (in thousands) Net revenues: Finished pharmaceutical products $ 53,117 $ 55,934 API 5,276 736 Total net revenues 58,393 56,670 Gross profit: Finished pharmaceutical products 19,725 24,310 API (2,664) (1,482) Total gross profit 17,061 22,828 Operating expenses 26,979 21,424 Income (loss) from operations (9,918) 1,404 Non-operating income 888 100 Income (loss) before income taxes $ (9,030) $ 1,504 |
Schedule of net revenues in the finished pharmaceutical products segment | Three Months Ended March 31, 2018 2017 (in thousands) Finished pharmaceutical products net revenues: Lidocaine $ 9,782 $ 8,289 Phytonadione 9,181 7,886 Naloxone 8,927 10,939 Enoxaparin 7,007 10,410 Epinephrine 3,223 9,574 Medroxyprogesterone 2,706 — Other finished pharmaceutical products 12,291 8,836 Total finished pharmaceutical products net revenues $ 53,117 $ 55,934 |
Schedule of net revenues and carrying values of long-lived assets by geographic region | Net Revenue Long-Lived Assets Three Months Ended March 31, March 31, December 31, 2018 2017 2018 2017 (in thousands) United States $ 53,104 $ 55,930 $ 110,461 $ 110,235 China — — 43,323 41,078 France 5,289 740 38,131 34,026 United Kingdom — — — — Total $ 58,393 $ 56,670 $ 191,915 $ 185,339 |
Customer and Supplier Concent28
Customer and Supplier Concentration (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Customer and Supplier Concentration | |
Schedule of accounts receivable and net revenues by major customer | % of Total Accounts % of Net Receivable Revenue Three Months Ended March 31, December 31, March 31, 2018 2017 2018 2017 McKesson 22 % 22 % 28 % 26 % AmerisourceBergen 24 % 33 % 26 % 30 % Cardinal Health 20 % 12 % 23 % 24 % |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets | |
Schedule of weighted-average life, original cost, accumulated amortization and net book value by major class | Weighted-Average Accumulated Life (Years) Original Cost Amortization Net Book Value (in thousands) Definite-lived intangible assets Cortrosyn® product rights 12 $ 27,134 $ 26,688 $ 446 IMS (UK) international product rights 10 9,802 1,634 8,168 Patents 12 486 181 305 Land-use rights 39 2,540 436 2,104 Other intangible assets 4 69 50 19 Subtotal 12 40,031 28,989 11,042 Indefinite-lived intangible assets Trademark * 29,225 — 29,225 Goodwill - Finished pharmaceutical products * 4,583 — 4,583 Subtotal * 33,808 — 33,808 As of March 31, 2018 * $ 73,839 $ 28,989 $ 44,850 Weighted-Average Accumulated Life (Years) Original Cost Amortization Net Book Value (in thousands) Definite-lived intangible assets Cortrosyn® product rights 12 $ 27,134 $ 26,243 $ 891 IMS (UK) international product rights 10 9,440 1,337 8,103 Patents 12 486 170 316 Land-use rights 39 2,540 419 2,121 Other intangible assets 4 69 46 23 Subtotal 12 39,669 28,215 11,454 Indefinite-lived intangible assets Trademark * 29,225 — 29,225 Goodwill - Finished pharmaceutical products * 4,461 — 4,461 Subtotal * 33,686 — 33,686 As of December 31, 2017 * $ 73,355 $ 28,215 $ 45,140 * Intangible assets with indefinite lives have an indeterminable average life. |
Schedule of changes in carrying amounts of goodwill | March 31, December 31, 2018 2017 (in thousands) Beginning balance $ 4,461 $ 3,976 Currency translation and other adjustments 122 485 Ending balance $ 4,583 $ 4,461 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventories | |
Schedule of inventories | March 31, December 31, 2018 2017 (in thousands) Raw materials and supplies $ 22,272 $ 19,973 Work in process 21,796 22,469 Finished goods 18,712 21,167 Total inventories $ 62,780 $ 63,609 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant, and Equipment | |
Schedule of property, plant, and equipment | March 31, December 31, 2018 2017 (in thousands) Buildings $ 89,579 $ 89,124 Leasehold improvements 29,938 29,847 Land 7,148 7,110 Machinery and equipment 120,756 118,056 Furniture, fixtures, and automobiles 17,132 16,385 Construction in progress 63,959 58,145 Total property, plant, and equipment 328,512 318,667 Less accumulated depreciation (136,597) (133,328) Total property, plant, and equipment, net $ 191,915 $ 185,339 |
Accounts Payable and Accrued 32
Accounts Payable and Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounts Payable and Accrued Liabilities | |
Schedule of accounts payable and accrued liabilities | March 31, December 31, 2018 2017 (in thousands) Accrued customer fees and rebates $ 13,464 $ 15,981 Accrued payroll and related benefits 17,774 15,680 Accrued product returns, current portion 4,586 4,133 Other accrued liabilities 7,043 5,132 Total accrued liabilities 42,867 40,926 Accounts payable 15,631 16,629 Total accounts payable and accrued liabilities $ 58,498 $ 57,555 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt | |
Schedule of debt | March 31, December 31, 2018 2017 (in thousands) Loans with East West Bank Line of credit facility due December 2018 $ — $ — Equipment loan due January 2019 1,283 1,668 Mortgage payable due February 2021 3,556 3,577 Equipment loan due June 2021 3,980 4,286 Equipment line of credit due December 2022 — — Mortgage payable due October 2026 3,509 3,524 Mortgage payable due June 2027 8,903 8,936 Loans with Cathay Bank Line of credit facility due May 2018 — — Acquisition loan due April 2019 14,562 15,073 Mortgage payable due August 2027 7,752 7,795 Loans with Seine-Normandie Water Agency French government loan 1 paid off March 2018 — French government loan 2 due June 2020 88 French government loan 3 due July 2021 248 Payment Obligation to Merck 599 599 Equipment under Capital Leases 1,287 1,357 Total debt and capital leases 45,767 47,156 Less current portion of long-term debt and capital leases 6,061 6,312 Long-term debt and capital leases, net of current portion $ 39,706 $ 40,844 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes | |
Schedule of reconciliation of the statutory federal income tax rate | Three Months Ended March 31, 2018 2017 (in thousands) Income (loss) before taxes $ (9,030) $ 1,504 Income tax expense (benefit) (1,784) 611 Net income (loss) $ (7,246) $ 893 Income tax provision as a percentage of income before income taxes 19.8 % 40.6 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity | |
Summary of changes in stockholders' equity | Three Months Ended March 31, 2018 (in thousands) Stockholders’ equity as of December 31, 2017 $ 337,329 Beginning balance adjustment as a result of the adoption of new accounting standards 582 Net loss (7,246) Other comprehensive income 1,190 Net proceeds from equity plans (1,793) Share-based compensation expense 4,666 Purchase of treasury stock (7,624) Stockholders’ equity as of March 31, 2018 $ 327,104 |
Schedule of key assumptions to determine fair value of options | Three Months Ended March 31, 2018 2017 Average volatility 39.6 % 36.7 % Risk-free interest rate 2.7 % 2.2 % Weighted-average expected life in years 5.8 5.7 Dividend yield rate — % — % |
Schedule of the summary of option activity under all plans | Weighted-Average Weighted-Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term (Years) Value (1) (in thousands) Outstanding as of December 31, 2017 10,898,701 $ 14.65 Options granted 966,026 20.59 Options exercised (147,508) 12.61 Options cancelled (106,615) 13.02 Options expired (375) 14.66 Outstanding as of March 31, 2018 11,610,229 $ 15.19 5.02 $ 49,844 Exercisable as of March 31, 2018 8,122,678 $ 15.07 3.79 $ 36,557 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the estimated fair value of the Company’s common stock for those awards that have an exercise price below the estimated fair value at March 31, 2018. |
Schedule of information relating to options grants | Three Months Ended March 31, 2018 2017 (in thousands, except per share data) Weighted-average grant date fair value per option share $ 7.94 $ 4.87 Intrinsic value of options exercised 1,061 24 Cash received from options exercised 1,861 96 Total fair value of the options vested during the year 6,407 4,781 |
Schedule of the summary of nonvested options status | Weighted-Average Grant Date Options Fair Value Non-vested as of December 31, 2017 4,310,241 $ 4.21 Options granted 966,026 7.94 Options vested (1,682,101) 3.81 Options forfeited (106,615) 4.77 Non-vested as of March 31, 2018 3,487,551 5.41 |
Schedule of information relating to RSU grants and deliveries | Total Fair Market Value of RSUs Issued Total RSUs as Issued Compensation (1) (in thousands) RSUs outstanding at December 31, 2017 1,392,781 RSUs granted 387,551 $ 7,670 RSUs forfeited (40,473) RSUs vested (2) (480,586) RSUs outstanding at March 31, 2018 1,259,273 The total fair market value is derived from the number of RSUs granted times the current stock price on the date of grant. |
Schedule of recorded share-based compensation expense under all plans | Three Months Ended March 31, 2018 2017 (in thousands) Cost of revenues $ 1,160 $ 1,131 Operating expenses: Selling, distribution, and marketing 107 84 General and administrative 2,893 2,783 Research and development 506 453 Total share-based compensation $ 4,666 $ 4,451 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Summary of Significant Accounting Policies | ||
Gains and losses of intercompany foreign currency transactions | $ 0.9 | $ 0.5 |
Income tax expense allocated to other comprehensive income | 0.3 | |
Restricted cash | 1.9 | |
Certificates of deposit | 2.3 | |
Inventory adjustment to reflect net realizable value | $ 1.9 | $ 0.4 |
Revenue Recognition (Analysis o
Revenue Recognition (Analysis of the Chargeback Provision) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Beginning balance | $ 18,470 | $ 39,709 | $ 39,709 |
Provision for chargebacks and rebates | 25,334 | 58,606 | |
Credits and payments issued to third parties | (28,774) | (76,242) | |
Ending balance | 15,030 | $ 22,073 | 18,470 |
Accounts Receivable, Net | |||
Provision for chargebacks and rebates | 5,300 | 6,800 | |
Accounts Payable and Accrued Liabilities [Member] | |||
Provision for chargebacks and rebates | $ 9,700 | $ 11,700 |
Revenue Recognition (Analysis38
Revenue Recognition (Analysis of Product Return Liability) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Revenue Recognition | |||
Beginning balance | $ 6,522 | $ 3,143 | $ 3,143 |
Provision for product returns | 747 | 1,062 | |
Credits issued to third parties | (498) | (462) | |
Ending balance | 6,771 | $ 3,743 | 6,522 |
Sales not recognized in revenues due to insufficient information available to estimate a reasonable product return accrual | $ 1,000 | 1,200 | |
Aggregate product return rate | 1.30% | 1.10% | |
Return accrual included in other long-term liabilities | $ 2,200 | $ 2,400 |
Income (Loss) per Share (Narrat
Income (Loss) per Share (Narrative) (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Exercise Price of Excluded Securities | $ 22.44 | |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Shares | 11,610,229 | 2,376,234 |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Shares | 1,259,273 | |
Employee Stock Purchase Plan (ESPP) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Shares | 56,128 |
Income (Loss) per Share (Calcul
Income (Loss) per Share (Calculation of Basic and Diluted Net Income (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Basic and dilutive numerator: | ||
Net loss | $ (7,246) | $ 893 |
Denominator: | ||
Weighted-average shares outstanding—basic | 46,514 | 46,069 |
Net effect of dilutive securities: | ||
Incremental shares from equity awards | 1,988 | |
Weighted-average shares outstanding — diluted | 46,514 | 48,057 |
Net income (loss) per share — basic | $ (0.16) | $ 0.02 |
Net income (loss) per share — diluted | $ (0.16) | $ 0.02 |
Segment Reporting (Selected Fin
Segment Reporting (Selected Financial Information by Reporting Segment) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of Reportable Segments | segment | 2 | ||
Net revenues: | |||
Net Revenue | $ 58,393 | $ 56,670 | |
Gross Profit: | |||
Gross Profit | 17,061 | 22,828 | |
Operating expenses | 26,979 | 21,424 | |
Income (loss) from operations | (9,918) | 1,404 | |
Non-operating income (expenses) | 888 | 100 | |
Income (loss) before income taxes | (9,030) | 1,504 | |
Finished Pharmaceutical Products | |||
Net revenues: | |||
Net Revenue | 53,117 | 55,934 | |
Gross Profit: | |||
Gross Profit | 19,725 | 24,310 | |
Epinephrine | |||
Segment Reporting Information [Line Items] | |||
Net revenues recognized | $ 17,800 | ||
API | |||
Net revenues: | |||
Net Revenue | 5,276 | 736 | |
Gross Profit: | |||
Gross Profit | $ (2,664) | $ (1,482) |
Segment Reporting (Summary of N
Segment Reporting (Summary of Net Revenues by Product Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net Revenue | $ 58,393 | $ 56,670 |
Finished Pharmaceutical Products | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net Revenue | 53,117 | 55,934 |
Finished Pharmaceutical Products | Enoxaparin | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net Revenue | 7,007 | 10,410 |
Finished Pharmaceutical Products | Naloxone | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net Revenue | 8,927 | 10,939 |
Finished Pharmaceutical Products | Lidocaine | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net Revenue | 9,782 | 8,289 |
Finished Pharmaceutical Products | Phytonadione | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net Revenue | 9,181 | 7,886 |
Finished Pharmaceutical Products | Epinephrine | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net Revenue | 3,223 | 9,574 |
Finished Pharmaceutical Products | Medroxyprogesterone | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net Revenue | 2,706 | |
Finished Pharmaceutical Products | Other Finished Pharmaceutical Products | ||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||
Net Revenue | $ 12,291 | $ 8,836 |
Segment Reporting (Summary of R
Segment Reporting (Summary of Revenues and Long-Lived Assets by Geographic Region) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenue | $ 58,393 | $ 56,670 | |
Long-Lived Assets | 191,915 | $ 185,339 | |
UNITED STATES | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenue | 53,104 | 55,930 | |
Long-Lived Assets | 110,461 | 110,235 | |
CHINA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-Lived Assets | 43,323 | 41,078 | |
FRANCE | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net Revenue | 5,289 | $ 740 | |
Long-Lived Assets | $ 38,131 | $ 34,026 |
Customer and Supplier Concent44
Customer and Supplier Concentration (Details) - Customer Concentration Risk [Member] - item | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Revenue, Major Customer [Line Items] | |||
Number of major customers that are wholesale distributors | 3 | ||
Accounts Receivable, Net | |||
Revenue, Major Customer [Line Items] | |||
Number of major customers | 3 | 3 | |
Net Revenues | |||
Revenue, Major Customer [Line Items] | |||
Number of major customers | 3 | 3 | |
AmerisourceBergen | Accounts Receivable, Net | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 24.00% | 33.00% | |
AmerisourceBergen | Net Revenues | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 26.00% | 30.00% | |
Cardinal Health | Accounts Receivable, Net | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 20.00% | 12.00% | |
Cardinal Health | Net Revenues | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 23.00% | 24.00% | |
McKesson | Accounts Receivable, Net | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 22.00% | 22.00% | |
McKesson | Net Revenues | |||
Revenue, Major Customer [Line Items] | |||
Major Customers | 28.00% | 26.00% |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets (Summary of Intangible Assets) (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jan. 31, 2018USD ($) | Feb. 28, 2017USD ($) | Mar. 31, 2016item | Mar. 31, 2018USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Definite-lived intangible assets | ||||||||
Weighted-Average Life (Years) | 12 years | 12 years | ||||||
Finite-Lived Intangible Assets, Gross | $ 40,031 | $ 39,669 | ||||||
Accumulated Amortization | 28,989 | 28,215 | ||||||
Finite-Lived Intangible Assets, Net | 11,042 | 11,454 | ||||||
Indefinite-lived intangible assets | ||||||||
Goodwill recognized | 4,583 | 4,461 | $ 3,976 | |||||
Subtotal, Original Cost | 33,808 | 33,686 | ||||||
Subtotal, Net Book Value | 33,808 | 33,686 | ||||||
Balance, Original Cost | 73,839 | 73,355 | ||||||
Balance, Net Book Value | 44,850 | 45,140 | ||||||
Proceeds received from sale of ANDAs | 4,400 | $ 1,000 | ||||||
Hikma Pharmaceuticals PLC | ||||||||
Indefinite-lived intangible assets | ||||||||
Number of Injectable Products Acquired | item | 14 | |||||||
Number of Different Injectable Chemical Entities | item | 11 | |||||||
Proceeds received from sale of ANDAs | $ 4,400 | $ 1,000 | $ 1,000 | |||||
Royalty Fee Percentage | 2.00% | |||||||
Indemnification Liability Payable | $ 600 | |||||||
Gain recognized within operating (income) expenses | 2,600 | |||||||
Finished Pharmaceutical Products | ||||||||
Indefinite-lived intangible assets | ||||||||
Goodwill recognized | 4,583 | 4,461 | ||||||
Trademarks | ||||||||
Indefinite-lived intangible assets | ||||||||
Indefinite-lived intangible assets | $ 29,225 | $ 29,225 | ||||||
Product rights | ||||||||
Definite-lived intangible assets | ||||||||
Weighted-Average Life (Years) | 12 years | 12 years | ||||||
Finite-Lived Intangible Assets, Gross | $ 27,134 | $ 27,134 | ||||||
Accumulated Amortization | 26,688 | 26,243 | ||||||
Finite-Lived Intangible Assets, Net | $ 446 | $ 891 | ||||||
Patents | ||||||||
Definite-lived intangible assets | ||||||||
Weighted-Average Life (Years) | 12 years | 12 years | ||||||
Finite-Lived Intangible Assets, Gross | $ 486 | $ 486 | ||||||
Accumulated Amortization | 181 | 170 | ||||||
Finite-Lived Intangible Assets, Net | $ 305 | $ 316 | ||||||
Land-use rights | ||||||||
Definite-lived intangible assets | ||||||||
Weighted-Average Life (Years) | 39 years | 39 years | ||||||
Finite-Lived Intangible Assets, Gross | $ 2,540 | $ 2,540 | ||||||
Accumulated Amortization | 436 | 419 | ||||||
Finite-Lived Intangible Assets, Net | $ 2,104 | $ 2,121 | ||||||
Other intangible assets | ||||||||
Definite-lived intangible assets | ||||||||
Weighted-Average Life (Years) | 4 years | 4 years | ||||||
Finite-Lived Intangible Assets, Gross | $ 69 | $ 69 | ||||||
Accumulated Amortization | 50 | 46 | ||||||
Finite-Lived Intangible Assets, Net | $ 19 | $ 23 | ||||||
International Medication Systems (UK) Limited | Acquired international product rights | ||||||||
Definite-lived intangible assets | ||||||||
Weighted-Average Life (Years) | 10 years | 10 years | ||||||
Finite-Lived Intangible Assets, Gross | $ 9,802 | $ 9,440 | ||||||
Accumulated Amortization | 1,634 | 1,337 | ||||||
Finite-Lived Intangible Assets, Net | $ 8,168 | $ 8,103 |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets (Summary of Changes in the Carrying Amount of Goodwill) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Intangible Assets | ||
Beginning balance | $ 4,461 | $ 3,976 |
Currency translation and other adjustments | 122 | 485 |
Ending balance | $ 4,583 | $ 4,461 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Inventories | |||
Raw materials and supplies | $ 22,272 | $ 19,973 | |
Work in process | 21,796 | 22,469 | |
Finished goods | 18,712 | 21,167 | |
Total inventory, net | 62,780 | $ 63,609 | |
Inventory adjustment to reflect net realizable value | $ 1,900 | $ 400 |
Property, Plant, and Equipmen48
Property, Plant, and Equipment (Summary of Property, Plant, and Equipment) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | $ 328,512 | $ 318,667 |
Less accumulated depreciation and amortization | (136,597) | (133,328) |
Total property, plant, and equipment, net | 191,915 | 185,339 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 89,579 | 89,124 |
Leasehold improvement | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 29,938 | 29,847 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 7,148 | 7,110 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 120,756 | 118,056 |
Furniture, fixtures, and automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 17,132 | 16,385 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | 63,959 | 58,145 |
Equipment | Primatene Mist | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment | $ 2,200 | $ 2,300 |
Accounts Payable and Accrued 49
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Liabilities | ||
Accrued customer fees and rebates | $ 13,464 | $ 15,981 |
Accrued payroll and related benefits | 17,774 | 15,680 |
Accrued product returns, current portion | 4,586 | 4,133 |
Other accrued liabilities | 7,043 | 5,132 |
Total accrued liabilities | 42,867 | 40,926 |
Accounts payable | 15,631 | 16,629 |
Total accounts payable and accrued liabilities | $ 58,498 | $ 57,555 |
Debt (Schedule of Debt) (Detail
Debt (Schedule of Debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument | ||
Equipment under Capital Leases | $ 1,287 | $ 1,357 |
Total debt and capital leases | 45,767 | 47,156 |
Less current portion of long-term debt and capital leases | 6,061 | 6,312 |
Long-term debt and capital leases, net of current portion | 39,706 | 40,844 |
Equipment Loan - Due January 2019 | East West Bank | ||
Debt Instrument | ||
Long Term Debt | 1,283 | 1,668 |
Mortgage Payable - Due February 2021 | East West Bank | ||
Debt Instrument | ||
Long Term Debt | 3,556 | 3,577 |
Equipment Loan - Due June 2021 | East West Bank | ||
Debt Instrument | ||
Long Term Debt | 3,980 | 4,286 |
Mortgage Payable - Due October 2026 | East West Bank | ||
Debt Instrument | ||
Long Term Debt | 3,509 | 3,524 |
Mortgage Payable - Due June 2027 | East West Bank | ||
Debt Instrument | ||
Long Term Debt | 8,903 | 8,936 |
Acquisition Loan - Due April 2019 | Cathay Bank | ||
Debt Instrument | ||
Long Term Debt | 14,562 | 15,073 |
Mortgage Payable - Due August 2027 | Cathay Bank | ||
Debt Instrument | ||
Long Term Debt | 7,752 | 7,795 |
French Government Loan - Due March 2018 | Seine-Normandie Water Agency | ||
Debt Instrument | ||
Long Term Debt | 17 | |
French Government Loan - Due June 2020 | Seine-Normandie Water Agency | ||
Debt Instrument | ||
Long Term Debt | 88 | 85 |
French Government Loan - Due July 2021 | Seine-Normandie Water Agency | ||
Debt Instrument | ||
Long Term Debt | 248 | 239 |
Note Payable To Merck | ||
Debt Instrument | ||
Long Term Debt | $ 599 | $ 599 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Debt | ||
Long-term Debt and Capital Lease Obligations | $ 39,706 | $ 40,844 |
East West Bank | ||
Debt | ||
Interest rate swap, fair value | 400 | 100 |
Equipment under Capital Leases | ||
Debt | ||
Capital Leased Assets, Gross | $ 1,600 | $ 1,600 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Federal | ||
Tax Credit Carryforward [Line Items] | ||
Federal income tax rate | 35.00% | |
Forecast | ||
Tax Credit Carryforward [Line Items] | ||
Federal income tax rate | 21.00% | |
Forecast | Federal | ||
Tax Credit Carryforward [Line Items] | ||
Federal income tax rate | 21.00% |
Income Taxes (Summary of Income
Income Taxes (Summary of Income Before Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income (loss) before income taxes: | ||
Income (loss) before income taxes | $ (9,030) | $ 1,504 |
Income tax expense (benefit) | (1,784) | 611 |
Net income (loss) | $ (7,246) | $ 893 |
Income tax provision as a percentage of income before income taxes | 19.80% | 40.60% |
Income Taxes (ASU 2016-16) (Det
Income Taxes (ASU 2016-16) (Details) $ in Millions | Mar. 31, 2018USD ($) |
Accounting Standards Update 2016-16 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Deferred income tax assets | $ 0.5 |
Stockholders' Equity (Summary o
Stockholders' Equity (Summary of the Changes in Stockholders' Equity) (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
Stockholders' Equity | |||
Balance | $ 337,329 | $ 337,329 | |
Beginning balance adjustment as a result of new accounting standards | $ 582 | ||
Net loss | (7,246) | $ 893 | |
Other comprehensive income | 1,190 | ||
Net proceeds from equity plans | 1,793 | ||
Share-based compensation expense | 4,666 | ||
Treasury stock repurchase | (7,624) | ||
Balance | $ 327,104 |
Stockholders' Equity (2014 Empl
Stockholders' Equity (2014 Employee Stock Purchase Plan) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stockholders' Equity | ||
Allocated share based compensation | $ 4,666 | $ 4,451 |
Stockholders' Equity (Share Buy
Stockholders' Equity (Share Buyback Program) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | May 07, 2018 | |
Equity, Class of Treasury Stock [Line Items] | |||
Treasury Stock, Value, Acquired, Cost Method | $ 7,624 | ||
November 2014 Share Repurchase Plan | |||
Equity, Class of Treasury Stock [Line Items] | |||
Treasury Stock, Shares, Acquired (in Shares) | 407,604 | 532,894 | |
Treasury Stock, Value, Acquired, Cost Method | $ 7,600 | $ 8,200 | |
Subsequent Event | November 2014 Share Repurchase Plan | |||
Equity, Class of Treasury Stock [Line Items] | |||
Increase authorized for share buyback program | $ 20,000 |
Stockholders' Equity (The 2015
Stockholders' Equity (The 2015 Equity Incentive Plan) (Details) - The 2015 Equity Incentive Plan | 3 Months Ended |
Mar. 31, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | 4,782,238 |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 1,165,590 |
Stockholders' Equity (Key Assum
Stockholders' Equity (Key Assumptions Used in Determining Fair Value of Options Granted) (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stockholders' Equity | ||
Average volatility | 39.60% | 36.70% |
Risk-free interest rate | 2.70% | 2.20% |
Weighted-average expected life in years | 5 years 9 months 18 days | 5 years 8 months 12 days |
Dividend yield rate | 0.00% | 0.00% |
Stockholders' Equity (Summary60
Stockholders' Equity (Summary of Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Options | ||
Outstanding Options, Beginning of period | 10,898,701 | |
Options granted | 966,026 | |
Options exercised | (147,508) | |
Options cancelled | (106,615) | |
Options expired | (375) | |
Outstanding Options, End of period | 11,610,229 | |
Exercisable at the end of period | 8,122,678 | |
Weighted-Average Exercise Price | ||
Outstanding Exercise Price (in dollars per share) | $ 14.65 | |
Options granted (in dollars per share) | 20.59 | |
Options exercised (in dollars per share) | 12.61 | |
Options cancelled (in dollars per share) | 13.02 | |
Options expired (in dollars per share) | 14.66 | |
Outstanding Exercise Price (in dollars per share) | 15.19 | |
Exercisable at the end of period (in dollars per share) | $ 15.07 | |
Additional Disclosures | ||
Outstanding Contractual Term (in Years) | 5 years 7 days | |
Outstanding Intrinsic Value | $ 49,844 | |
Exercisable at the end of period (in Years) | 3 years 9 months 15 days | |
Exercisable aggregate intrinsic value | $ 36,557 | |
Allocated share based compensation | 4,666 | $ 4,451 |
Employee Stock Option | ||
Additional Disclosures | ||
Allocated share based compensation | 2,400 | 2,000 |
Employee Stock Option | Board of Directors | ||
Additional Disclosures | ||
Allocated share based compensation | $ 100 | $ 100 |
Stockholders' Equity (Informati
Stockholders' Equity (Information Relating to Option Grants and Exercises) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stockholders' Equity | ||
Weighted-average grant date fair value (in Dollars per share) | $ 7.94 | $ 4.87 |
Intrinsic value of options exercised | $ 1,061 | $ 24 |
Cash received | 1,861 | 96 |
Total fair value of the options vested during the year | $ 6,407 | $ 4,781 |
Stockholders' Equity (Summary62
Stockholders' Equity (Summary of Nonvested Options) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Options | ||
Nonvested at beginning of period | 4,310,241 | |
Options granted | 966,026 | |
Options vested | (1,682,101) | |
Options forfeited | (106,615) | |
Nonvested at end of period | 3,487,551 | |
Weighted-Average Grant Date Fair Value | ||
Nonvested at beginning of period (in dollars per share) | $ 4.21 | |
Options granted (in dollars per share) | 7.94 | $ 4.87 |
Options vested (in dollars per share) | 3.81 | |
Options forfeited (in dollars per share) | 4.77 | |
Nonvested at end of period (in dollars per share) | $ 5.41 | |
Employee Consultant And Directors Stock Options | ||
Weighted-Average Grant Date Fair Value | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 15.6 | |
Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 8 months 12 days |
Stockholders' Equity (Restricte
Stockholders' Equity (Restricted Stock Units) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding Contractual Term (in Years) | 5 years 7 days | |
Allocated share based compensation | $ 4,666 | $ 4,451 |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | |
Allocated share based compensation | $ 1,700 | 2,000 |
Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 9 months 18 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Units, Number of Shares of Common Stock Per Award (in Shares) | 1 | |
Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 17,200 | |
Board of Directors | Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated share based compensation | $ 100 | $ 100 |
Stockholders' Equity (Informa64
Stockholders' Equity (Information Relating to RSU Grants and Deliveries) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)shares | |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Total RSUs outstanding at the beginning of the period | 1,392,781 |
RSUs granted | 387,551 |
RSUs forfeited | (40,473) |
RSUs vested | (480,586) |
Total RSUs outstanding at the end of the period | 1,259,273 |
Stock surrendered to fulfill tax withholding obligations | 187,528 |
Restricted Stock Units Issued as Compensation | |
Total Fair Market Value of RSUs Issued | |
RSUs granted (in Dollars) | $ | $ 7,670 |
Stockholders' Equity (Equity Aw
Stockholders' Equity (Equity Awards to Consultants and Advisory Board Members) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stockholders' Equity | ||
Allocated share based compensation | $ 4,666 | $ 4,451 |
Stockholders' Equity (Share-Bas
Stockholders' Equity (Share-Based Compensation Expense Included in the Statement of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated share based compensation | $ 4,666 | $ 4,451 |
Cost of revenues | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated share based compensation | 1,160 | 1,131 |
Selling, distribution and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated share based compensation | 107 | 84 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated share based compensation | 2,893 | 2,783 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Allocated share based compensation | $ 506 | $ 453 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 15 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | |
Employee Benefits | ||||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 50.00% | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay | 6.00% | |||
Defined Contribution Plan, Employer Contribution Vesting Period | 4 years | |||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 0.3 | $ 0.3 | ||
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate | 1.60% | 1.60% | 1.60% | |
Defined Benefit Plan, Benefit Obligation | $ 2.3 | $ 2.3 | $ 2.1 | |
Pension Cost (Reversal of Cost) | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Supply Agreement with MannKind Corporation) (Details) - MannKind Corporation - Supply Commitment - Recombinant Human Insulin (RHI) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Supply Commitment [Line Items] | |
Supply Commitment, Cancellation Fee | $ 0.9 |
Sales | $ 3.2 |
Commitments and Contingencies69
Commitments and Contingencies (Collaboration Agreements) (Details) - Drug delivery system $ in Millions | 1 Months Ended | 3 Months Ended |
Oct. 31, 2017USD ($)item | Mar. 31, 2018USD ($)item | |
Collaborative Arrangement One [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Collaborative Agreement, Upfront Payment | $ 0.5 | |
Collaborative Agreement, Milestone Payments | 1.5 | |
Collaborative Agreement, Contingent Obligation | $ 0.5 | |
Collaborative Agreement, Contingent Purchase Obligation First 12 Months, Units | item | 1,000,000 | |
Purchase period | 12 months | |
Collaborative Arrangement Two [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Collaborative Agreement, Upfront Payment | $ 0.4 | |
Collaborative Agreement, Contingent Obligation | $ 1 | $ 1.2 |
Purchase period | 3 years | |
Collaborative Agreement, Amount | $ 1.6 | |
Collaborative Agreement, Contingent Purchase Obligation, Units | item | 100,000 |
Commitments and Contingencies70
Commitments and Contingencies (Operating Lease Agreements) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Leased Assets [Line Items] | ||
Operating Leases, Rent Expense | $ 1 | $ 0.9 |
Minimum | ||
Operating Leased Assets [Line Items] | ||
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 1 year | |
Maximum | ||
Operating Leased Assets [Line Items] | ||
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 6 years |
Commitments and Contingencies71
Commitments and Contingencies (Purchase Commitments) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2012 | Jan. 31, 2010 | Mar. 31, 2018 | Dec. 31, 2016 | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Maximum Royalty Amount Owed, Contingent On Sales of Products | $ 1.5 | |||
Commitments to Purchase Equipment and Raw Materials | ||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Long-term Purchase Commitment, Amount | $ 50 | |||
Commitment to invest | ANP | ||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Purchase Commitments Amount Fulfilled | $ 61 | |||
Land-use rights | Commitment to invest | ||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Finite-lived Intangible Assets Acquired | $ 1.3 | $ 1.2 | ||
Land-use rights | Commitment to develop land | ||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||
Contractual Obligation | $ 15 |
Litigation (Details)
Litigation (Details) $ in Millions | May 09, 2016USD ($) | May 04, 2016item | Oct. 31, 2011USD ($) | Sep. 21, 2011patent | Dec. 31, 2017USD ($) |
Enoxaparin Patent Litigation | |||||
Loss Contingencies [Line Items] | |||||
Number of Alleged Patent Infringements | patent | 2 | ||||
Fees and costs relating to a discovery motion | $ 0.4 | ||||
Litigation, Plaintiff Preliminary Injunction Bond, Amount | $ 100.1 | ||||
False Claims Act Litigation | |||||
Loss Contingencies [Line Items] | |||||
Number of orders issued by district court | item | 3 | ||||
Settled Litigation [Member] | Enoxaparin Patent Litigation | |||||
Loss Contingencies [Line Items] | |||||
Litigation Settlement, Amount | $ 0 |