Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 05, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Aquestive Therapeutics, Inc. | ||
Entity Central Index Key | 0001398733 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Address, State or Province | NJ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 102.3 | ||
Entity Common Stock, Shares Outstanding | 36,213,969 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 31,807 | $ 49,326 |
Trade and other receivables, net | 6,955 | 13,130 |
Inventories, net | 2,461 | 2,859 |
Prepaid expenses and other current assets | 3,402 | 2,999 |
Total current assets | 44,625 | 68,314 |
Property and equipment, net | 6,873 | 9,726 |
Right-of-use assets, net | 3,448 | 0 |
Intangible assets, net | 102 | 153 |
Other non-current assets | 7,836 | 286 |
Total assets | 62,884 | 78,479 |
Current liabilities: | ||
Accounts payable | 7,089 | 12,274 |
Accrued expenses | 8,569 | 5,475 |
Lease liabilities, current | 728 | 0 |
Deferred revenue | 693 | 806 |
Liability related to the sale of future revenue, current | 1,450 | 0 |
Loans payable, current | 2,575 | 0 |
Total current liabilities | 21,104 | 18,555 |
Loans payable, net | 34,329 | 60,338 |
Liability related to the sale of future revenue, net | 47,524 | 0 |
Lease liabilities | 2,846 | 0 |
Deferred revenue, net of current portion | 3,633 | 4,348 |
Other non-current liabilities | 1,945 | 1,360 |
Total liabilities | 111,381 | 84,601 |
Contingencies (note 20) | ||
Stockholders' deficit: | ||
Common stock, $0.001 par value. Authorized 250,000,000 shares; 34,569,254 and 33,562,885 shares issued and outstanding at December 31 2020 and 2019, respectively | 35 | 34 |
Additional paid-in capital | 137,725 | 124,318 |
Accumulated deficit | (186,257) | (130,474) |
Total stockholders' deficit | (48,497) | (6,122) |
Total liabilities and stockholders' deficit | $ 62,884 | $ 78,479 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Stockholders' deficit: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 34,569,254 | 33,562,885 |
Common stock, shares outstanding (in shares) | 34,569,254 | 33,562,885 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Consolidated Statements of Operations and Comprehensive Loss [Abstract] | ||
Revenues | $ 45,849 | $ 52,609 |
Costs and expenses: | ||
Manufacture and supply | 12,964 | 20,361 |
Research and development | 19,886 | 20,574 |
Selling, general and administrative | 55,892 | 64,342 |
Total costs and expenses | 88,742 | 105,277 |
Loss from operations | (42,893) | (52,668) |
Other income (expenses): | ||
Interest expense | (11,064) | (9,318) |
Interest expense related to the sale of future revenue | (1,958) | 0 |
Interest income and other income (expense), net | 132 | 636 |
Loss on the extinguishment of debt | 0 | (4,896) |
Net loss before income taxes | (55,783) | (66,246) |
Income taxes | 0 | 0 |
Net loss | (55,783) | (66,246) |
Comprehensive loss | $ (55,783) | $ (66,246) |
Net loss per share - basic and diluted (in dollars per share) | $ (1.66) | $ (2.61) |
Weighted-average number of common shares outstanding - basic and diluted (in shares) | 33,651,127 | 25,356,098 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total | Cumulative Effect, Period of Adoption, Adjustment [Member]Common Stock [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Additional Paid-in Capital [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Accumulated Deficit [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] |
Balance at Dec. 31, 2018 | $ 25 | $ 71,431 | $ (61,376) | $ 10,080 | ||||
Balance (ASU 2014-09 and ASU 2018-07 [Member]) at Dec. 31, 2018 | $ 0 | $ 20 | $ (2,852) | $ (2,832) | ||||
Balance (in shares) at Dec. 31, 2018 | 24,957,309 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Fair value of warrants issued | $ 0 | 6,800 | 0 | 6,800 | ||||
Common Stock issued upon warrant exercises | $ 1 | 0 | 1,821 | |||||
Common Stock issued upon warrant exercises | 1,820 | |||||||
Common Stock issued upon warrant exercises (in shares) | 428,571 | |||||||
Common Stock issued upon/under public equity offering | $ 8 | 37,827 | 0 | 37,835 | ||||
Common Stock issued upon/under public equity offering (in shares) | 8,050,000 | |||||||
Costs of public equity offering | $ 0 | (540) | 0 | (540) | ||||
Shares issued under employee stock purchase plan | $ 0 | 237 | 0 | 237 | ||||
Shares issued under employee stock purchase plan (in shares) | 56,378 | |||||||
Vested restricted stock units | $ 0 | (313) | 0 | (313) | ||||
Vested restricted stock units (in shares) | 70,627 | |||||||
Share-based compensation expense | $ 0 | 7,036 | 0 | 7,036 | ||||
Share-based compensation expense (in shares) | 0 | |||||||
Net loss | $ 0 | 0 | (66,246) | (66,246) | ||||
Balance at Dec. 31, 2019 | $ 34 | 124,318 | (130,474) | (6,122) | ||||
Balance (in shares) at Dec. 31, 2019 | 33,562,885 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Fair value of warrants issued | $ 0 | 735 | 0 | 735 | ||||
Common Stock issued upon warrant exercises (in shares) | 428,571 | |||||||
Common Stock issued upon/under public equity offering | $ 1 | 6,527 | 0 | 6,528 | ||||
Common Stock issued upon/under public equity offering (in shares) | 930,933 | |||||||
Costs of common stock issuance under public equity offering | $ 0 | (473) | 0 | (473) | ||||
Costs of common stock issuance under public equity offering (in shares) | 0 | |||||||
Shares issued under employee stock purchase plan | $ 0 | 158 | 0 | 158 | ||||
Shares issued under employee stock purchase plan (in shares) | 32,986 | |||||||
Exercise of stock options | $ 0 | 2 | 0 | 2 | ||||
Exercise of stock options (in shares) | 500 | |||||||
Vested restricted stock units | $ 0 | (99) | 0 | (99) | ||||
Vested restricted stock units (in shares) | 41,950 | |||||||
Share-based compensation expense | $ 0 | 6,557 | 0 | 6,557 | ||||
Share-based compensation expense (in shares) | 0 | |||||||
Net loss | $ 0 | 0 | (55,783) | (55,783) | ||||
Balance at Dec. 31, 2020 | $ 35 | $ 137,725 | $ (186,257) | $ (48,497) | ||||
Balance (in shares) at Dec. 31, 2020 | 34,569,254 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (55,783) | $ (66,246) |
Adjustments to reconcile net loss to net cash (used for) operating activities: | ||
Depreciation, amortization, and impairment | 3,443 | 2,905 |
Share-based compensation | 6,581 | 7,071 |
Amortization of debt issuance costs and discounts | 2,587 | 1,929 |
Interest expense related to the sale of future revenue | 1,938 | 0 |
Loss on the extinguishment of debt | 0 | 4,896 |
All other non-cash expenses | 188 | 359 |
Changes in operating assets and liabilities: | ||
Trade receivables and other receivables, net | 6,175 | (6,815) |
Inventories | 398 | 2,582 |
Prepaid expenses and other assets | (7,953) | (1,366) |
Accounts payable | (5,185) | (7,872) |
Accrued expenses and other liabilities | 2,980 | 746 |
Deferred revenue | (828) | 1,601 |
Net cash used for operating activities | (45,459) | (60,210) |
Cash flows from investing activities: | ||
Capital expenditures | (517) | (663) |
Net cash used for investing activities | (517) | (663) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock and warrant exercises | 6,215 | 39,317 |
Proceeds from sale of future revenue | 50,000 | 0 |
Proceeds from issuance of debt | 0 | 70,000 |
Debt repayment | (22,500) | (50,000) |
Payments for financing costs | (2,909) | (3,946) |
Premium paid to retire debt | (2,250) | (2,944) |
Payments for taxes on share-based compensation | (99) | (2,827) |
Net cash provided by financing activities | 28,457 | 49,600 |
Net decrease in cash and cash equivalents | (17,519) | (11,273) |
Cash and cash equivalents: | ||
Beginning of period | 49,326 | 60,599 |
End of period | 31,807 | 49,326 |
Supplemental disclosures of cash flow information: | ||
Cash payments for interest | 8,491 | 7,340 |
Net increase (decrease) in capital expenditures included in accounts payable and accrued expenses | (77) | 104 |
Deferred financing costs charged to additional paid in capital | 473 | 540 |
Warrants issued in connection with long-term debt | 735 | 6,800 |
Debt issued in lieu of prepayment penalty | $ 4,000 | $ 0 |
Company Overview and Equity Tra
Company Overview and Equity Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Company Overview and Equity Transactions [Abstract] | |
Company Overview and Equity Transactions | Note 1. Company Overview and Equity Transactions Company Overview Aquestive Therapeutics, Inc. (“Aquestive” or “the Company”) is a pharmaceutical company focused on identifying, developing and commercializing differentiated products to address unmet medical needs and solve therapeutic problems. The Company has commercialized one internally-developed proprietary product to date, has a commercial proprietary product pipeline focused on the treatment of diseases of the central nervous system, or CNS, and other unmet needs, and is developing orally administered complex molecules as alternatives to more invasive therapies. The Company is pursuing its business objectives through both in-licensing and out licensing arrangements, as well as the commercialization of its own products. Production facilities are located in Portage, Indiana, and corporate headquarters, sales and commercialization operations and primary research laboratory facilities are based in Warren, New Jersey. The Company’s major customer and primary commercialization licensee has global operations headquartered in the United Kingdom with principal operations in the United States; other customers are principally located in the United States. The Company is subject to risks common to companies in similar industries and stages of development, including, but not limited to, competition from larger companies, reliance on revenue from a limited number of products and customers, adequacy of existing and availability of additional operating and growth capital as and when required, uncertainty of regulatory approval for marketing its product candidates, reliance on a single manufacturing site, new technological innovations, dependence on key personnel, reliance on third-party service providers and sole source suppliers, dependence on patent-protected proprietary technology, ongoing government regulatory compliance requirements, dependence on the clinical and commercial success of its drug candidates, uncertainty of regulatory approval of its drug candidates, and uncertainty of broad adoption of its approved products, if any, by physicians and consumers. Aquestive is also subject to risks and uncertainties related to COVID-19 pandemic. Equity Transactions On September 11, 2019, the Company entered into an equity distribution agreement to offer shares of our common stock from time to time in an “at-the-market” offering. We may offer and sell shares of common stock for an aggregate offering price of up to $25,000. Beginning on November 20, 2020 through the year ended December 31, 2020, The Company sold 930,993 shares which provided net proceeds of approximately $6,055 after deducting commissions and other transaction costs of $473. No shares were sold pursuant to this “at-the-market” offering during 2019. On December 17, 2019, the Company received net proceeds of $37,835 after deducting underwriting discounts of $2,415 for the sale of 8,050,000 shares of common stock in a public offering. Professional fees and other costs of this offering totaled $540, in addition to the underwriting discounts. |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 12 Months Ended |
Dec. 31, 2020 | |
Basis of Presentation and Principles of Consolidation [Abstract] | |
Basis of Presentation and Principles of Consolidation | Note 2. Basis of Presentation and Principles of Consolidation These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC. The accounts of wholly owned subsidiaries are included in the consolidated financial statements. Other than corporate formation activities, no such subsidiaries have conducted any commercial, developmental or operational activities and none have customers or vendors. Certain reclassifications were made to conform to the current presentation. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and contingent liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions often involve assessments of matters that are inherently uncertain and accordingly actual results could differ from those estimates. Significant items subject to estimates and assumptions include those related to revenue recognition, inventory costs, allowances for rebates from proprietary product sales, allowances for sales returns, the useful lives of fixed assets, the valuations of warrants issued and of share-based compensation, and contingencies. Cash and Cash Equivalents The Company considers all short-term, highly liquid investments purchased with original maturities of three months or less to be cash equivalents. At December 31, 2020 and 2019, cash and cash equivalents consisted of cash in bank accounts and money market funds. Concentration of Credit Risk Cash and cash equivalents are maintained are held by federally insured financial institutions that management believes are of high credit quality. The Company has not experienced any losses in such accounts and such amounts may exceed federally-insured limits. Indivior, Sunovion, and three of the largest regional wholesalers represent our most significant customers and details on these relationships are outlined in Note 5. Trade Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company grants credit to customers in the normal course of business, but generally does not require collateral or any other security to support its receivables. The Company’s credit terms generally range from 30 to 60 days, depending on the customer and type of invoice. We perform a regular review of our customers’ credit risk and payment histories, including payments made subsequent to year-end. The Company evaluates the collectability of accounts receivable based on a combination of factors. In situations where changing circumstances indicate that a specific customer is unable to meet its financial obligations to the Company, a provision to the allowances for doubtful accounts is recorded against amounts due in order to reduce the net recognized receivable to the amount that is reasonably expected to be collected. For all other customers, a provision to the allowances for doubtful accounts is recorded based on factors including the length of time the receivables are past due, the current business environment and the Company’s historical experience. Provisions to the allowances for doubtful accounts are recorded to selling, general and administrative expenses. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. The allowance for doubtful accounts, associated with recoverability of accounts receivable, was $40 and $124 as of December 31, 2020 and 2019, respectively. Inventories Inventories, consisting of purchased materials, direct labor and manufacturing overhead, are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value. The Company regularly reviews its inventories for impairment and reserves are established when necessary. At each balance sheet date, the Company evaluates inventories for excess quantities, obsolescence and shelf life expiration. This evaluation includes analysis of historical sales levels by product, projections of future demand, the risk of competitive obsolescence for products, general market conditions, and a review of the shelf life expiration dates for products. To the extent that management determines there are excess or obsolete inventory or quantities with a shelf life that is too near its expiration for the Company to reasonably expect that it can sell those products, or use them in production, prior to their expiration, the Company records allowances to adjust the carrying value to estimated net realizable value as necessary. The Company expenses inventory related to our research and development activities when we purchase or manufacture it. Before the regulatory approval of our product candidates, we recognize research and development expense for the manufacture of drug products that could potentially be available to support the commercial launch of our drug candidates, if approved. Property and Equipment Property and equipment are stated at cost net of accumulated depreciation and amortization, which is computed by the straight-line method based on the estimated useful lives of the respective assets, as discussed below. Leasehold improvements are amortized over the shorter of the lease terms or the estimated useful lives of the leased assets. Maintenance and repair costs are charged to expense as incurred, and expenditures for major renewals and improvements are capitalized. Upon disposition of property and equipment, the related cost and accumulated depreciation and amortization are removed from the accounts, and any gain or loss is reflected in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The Company assesses the net book value of its property and equipment for impairment at least annually or when events or circumstances indicate that carrying amounts may not be recoverable in the ordinary course of its business. Intangible Assets Intangible assets include the costs of acquired composition and process technologies and the costs of purchased patents used in the manufacture of orally soluble film. The Company amortizes these assets using the straight-line method over the shorter of their legal lives or estimated useful lives. Impairment of Long-Lived Assets Long lived assets, such as property, plant, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In these circumstances, the Company compares undiscounted cash flows expected to be generated by that asset or asset group to the corresponding carrying amounts. If this comparison is indicative of impairment, an impairment charge is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered most appropriate. Leases Determination if an arrangement is a lease is made at inception. An arrangement is determined to contain a lease if the contract conveys the right to control the use of an identified property and equipment for a period of time in exchange for consideration. If we can benefit from the various underlying assets of a lease on their own or together with other resources that are readably available, or if the various underlying assets are neither highly dependent or highly interrelated with underlying assets in the arrangements, they are considered to be a separate lease component. In the event multiple underlying assets are identified, the lease consideration is allocated to the various components based on each on the component’s relative fair value. Operating lease assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent an obligation to make lease payments arising from the lease arrangement. Operating lease assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, in determining the operating lease liability, we use an estimate of our incremental borrowing rate. The calculation of the operating lease assets includes any lease payments made and excludes any lease incentives. Our lease terms may include options to extend or terminate the lease and are included when it is reasonably certain that we will exercise the option. We record operating lease assets and lease liabilities in our consolidated balance sheets. Lease expenses for lease payments is recognized on a straight-line bases over the lease term. Short-term leases, or leases that have a lease term of 12 months or less at consummation date, are excluded from this treatment and are recognized on a straight-line basis over the term of the lease. We have not entered into any material short-term lease or financing leases as of December 31, 2020. Liability Related to the Sale of Future Revenue The Company treats the liability related to the sale of future revenue as debt financing, amortized under the effective interest rate method over the estimated life of the related expected royalty stream. The liability related to the sale of future revenue and the related interest expense are based on our current estimates of future royalties expected to be paid over the life of the arrangement. The Company will periodically assess the expected royalty payments using a combination of internal projections and forecasts from external resources. To the extent our future estimates of royalty payments are greater or less than previous estimates or the interest timing of such payments is materially different than its previous estimates, the Company will prospectively recognize related interest expense. Royalty revenue related to the sale of future revenue is reflected as royalty revenue, and amortization of debt is reflected as interest expense related to the sale of future revenue in the Consolidated Statement of Operations and Comprehensive Loss. For further discussion of the sale of the future revenue, refer to Note 14, Sale of Future Revenue. Revenue Recognition The Company’s revenues include (i) sales of manufactured products pursuant to contracts with commercialization licensees, (ii) sales of its proprietary clobazam-based Sympazan oral film product used as a treatment for LGS-related seizures, (iii) license and royalty revenues and (iv) co-development and research fees generally in the form of milestone payments. See Note 5 for further details. Having adopted ASC 606, Revenue from Contracts with Customers, Manufacture and supply revenue Proprietary product sales, net . License and Royalty Revenue Royalty revenue is estimated and recognized when sales under supply agreements with commercial licensees are recorded, absent any contractual constraints or collectability uncertainties. Royalties based on sales of Suboxone and Zuplenz have been recorded in this manner. Co-development and Research Fees Revenue recognition arising from milestone payments is dependent upon the facts and circumstances surrounding the milestone payments. Milestone payments based on a non-sales metric such as a development-based milestone ( e.g. Contract Assets - in certain situations, customer contractual payment terms provide for invoicing in arrears. Accordingly, some, or all performance obligations may be completely satisfied before the customer may be invoiced under such agreements. In these situations, billing occurs after revenue recognition, which results in a contract asset supported by the estimated value of the completed portion of the performance obligation. These contract assets are reflected as a component of other receivables within Trade and other receivables within the Consolidated Balance Sheet. Contract Liabilities - in certain situations, customer contractual payment terms are structured to permit invoicing in advance of delivery of a good or service. In such instances, the customer’s cash payment may be received before satisfaction of some, or any, performance obligations that are specified. In these situations, billing occurs in advance of revenue recognition, which results in contract liabilities. These contract liabilities are reflected as deferred revenue within the Consolidated Balance Sheet. As remaining performance obligations are satisfied, an appropriate portion of the deferred revenue balance is credited to earnings. Research and Development Research and development, or R&D, expenses are recorded in accordance ASC 730 Research and Development Income Taxes Income taxes are recorded in accordance with FASB ASC Topic 740 Income Taxes, or ASC 740, which provides for deferred taxes using an asset and liability approach. Income taxes have been calculated on a separate tax return basis. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Tax benefits are recognized when it is more likely than not that a tax position will be sustained during an audit. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Uncertain tax positions are accounted for in accordance with the provision of ASC 740. When uncertain tax positions exist, the tax benefit is recognized to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. To date, the Company has not had any significant uncertain tax positions. Share-Based Compensation The Company records share-based compensation expenses for awards of stock options and restricted stock units (RSUs) under ASC 718, Compensation — Stock Compensation Compensation-Stock Compensation: Improvements to Non-employee Share-Based Payment Accounting, Equity-based Payments to Non-Employees The Company’s stock-based compensation includes grants of stock options and restricted stock units (RSUs) to employees, consultants and non-employee directors. Beginning in 2019, the Company also offered employees an opportunity to participate in an employee stock purchase plan. Expenses arising from these grants are recorded in the accompanying financial statements based on their grant date fair values as ratably earned during their respective vesting periods. The Company’s estimates of the fair value of options at their grant dates is based on the Black-Scholes option valuation model and considers various variables and assumptions, including: • the stock price at the grant date, • exercise price, • both the contractual and estimated expected term of the option, • an estimate of stock price volatility based on that of an industry peer group, • expected dividends, • no dividends for the foreseeable future, and • risk-free interest rate. These assumptions require estimates and judgements and changes in those inputs could impact the amount of expenses that are charged to earnings. The Company recognizes compensation expense for the fair value of restricted stock unit and stock option awards over the requisite service period of the award. All excess tax benefits, taxes and tax deficiencies from stock-based compensation are included in the provision for income taxes in the Consolidated Statement of Operations. Per Share Data Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is calculated by dividing net income available to common stockholders as adjusted for the effect of dilutive securities, if any, by the weighted average number of shares of common stock and dilutive common stock outstanding during the period. Potentially dilutive common shares include the shares of common stock issuable upon the exercise of outstanding stock options and warrants, the shares of issued but unvested RSUs and the purchase of shares from the Company’s employee stock purchase plan (using the treasury stock method). For all periods presented, potential common shares have been excluded from the calculation of EPS because their effect would be anti-dilutive. Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity that may result from transactions and economic events other than those with stockholders, such as unrealized gains or losses on investments. For the periods ending on December 31, 2020 and 2019, the Company’s comprehensive loss included only its net loss. Fair Value Measurements Certain assets and liabilities are reported on a recurring basis at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1 — Quoted prices in active markets for identical assets or liabilities. Cash and cash equivalents consisted of cash in bank checking accounts and money market funds which are all Level 1 assets. • Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. The Company currently has no Level 2 assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying amounts reported in the balance sheets for trade and other receivables, prepaid and other current assets, accounts payable, accrued expenses and deferred revenue approximate fair value based on the short-term maturity of these assets and liabilities. The Company granted warrants to certain Note Holders in connection with its debt repayment and debt refinancing during 2020 and 2019, respectively. Those warrants were valued based on Level 3 inputs and their fair value was based primarily on an independent third-party appraisal prepared as of the grant date consistent with generally-accepted valuation methods of the Uniform Standards of Professional Appraisal Practice, the American Society of Appraisers and the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation. The Company’s 12.5% Senior Secured Notes contain a repurchase offer or put option which gives holders of the option the right, but not the obligation, to receive a specified amount of future royalties up to a capped amount. This put option was valued based on Level 3 inputs and its fair value was based primarily on an independent third-party appraisal consistent with generally-accepted valuation methods of the Uniform Standards of Professional Appraisal Practice, the American Society of Appraisers and the American Institute of Certified Public Accountants Accounting and Valuation Guide. See Note 12 12.5% Senior Notes and Loans Payable for further discussion. Segment Information Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company manages its operations as a single segment for purposes of assessing performance and making operating decisions. Recent Accounting Pronouncements As a public emerging growth company, the Company has elected to take advantage of the extended transition period afforded by Jumpstart Our Business Startups Act for the implementation of new or revised accounting standards and, as a result, the Company will comply with new or revised accounting standards by the relevant dates on which adoption of such standards is required for public emerging growth companies. From time to time, new accounting pronouncements are issued by the FASB and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Recently Adopted Accounting Pronouncements: In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-02, Leases (Topic 842) The Company adopted and applied ASU 2016-02 on January 1, 2020 using the modified retrospective transition provisions of ASC 842 to leases in effect as of that date of adoption and recorded right-of-use assets totaling $4,048 and lease liabilities as adjusted for accrued lease payments, in the amount $4,224 based on an estimated incremental borrowing rate of 16.9%, representing the present value of remaining minimum lease payments. The assets and liabilities thus recorded were primarily those related to the Company’s leased plant, laboratory and corporate administrative facilities. The Company elected to apply the ASU-specified practical expedients and accordingly did not re-assess (i) whether its contracts contained a lease under the new definition of a lease, (ii) the classification of those leases, and (iii) initial direct costs of existing leases. In addition, the Company elected not to apply the hindsight expedient in the assessment of lease renewals and resultant term of leases. The Company also elected not to recognize a right-of-use asset and lease liability for those leases with a remaining lease term of 12 months or less. The adoption of ASU 2016-02 did not require a cumulative-effect adjustment to the opening balance of the accumulated deficit at the time of adoption. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts from Cash Payments In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework In January 2016, the FASB issued revised guidance governing accounting and reporting of financial instruments (ASU 2016-01) and in 2018 issued technical corrections (ASU 2018-03). This guidance requires that equity investments with readily determinable fair values that are classified as available-for-sale be measured at fair value with changes in value reflected in current earnings. This guidance also simplifies the impairment testing of equity investments without readily determinable fair values and alters certain disclosure requirements. ASU No. 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and 606 Recent Accounting Pronouncements Not Adopted as of December 31, 2020: In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivative and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company. |
Risks and Uncertainties
Risks and Uncertainties | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | Note 4. Risks and Uncertainties The Company’s cash requirements for 2021 and beyond include expenses related to continuing development and clinical evaluation of its products, manufacture and supply costs, costs of regulatory filings, patent prosecution expenses and litigation expenses, expenses related to commercialization of our products, as well as costs to comply with the requirements of being a public company operating in a highly regulated industry. As of December 31, 2020, we had $31,807 of cash and cash equivalents. As of December 31, 2020, Aquestive has experienced a history of net losses and the Company’s accumulated deficits totaled $186,257 which have been partially funded by gross margins from sales of commercialized licensed and proprietary products, license fees, milestone and royalty payments from our commercial licensees and co-development parties, and with the balance of the related funding requirements met by the Company’s equity and debt offerings, including the Senior Secured Notes due 2025 (the “12.5% Notes”). In 2019, the Company raised funding totaling $52,226, consisting of net proceeds of $13,110 from the refinancing of debt in July 2019, $37,295 from the public offering of 8,050,000 common shares in December 2019, and $1,821 from the exercise of warrants in connection with the debt financing. On November 3, 2020, we entered into a Purchase and Sale Agreement (the “Monetization Agreement”) with MAM Pangolin Royalty, LLC, an affiliate of Marathon Asset Management (“Marathon”). Under the terms of the Monetization Agreement, we sold all of our contractual rights to receive royalties and milestone payments due under the Sunovion License Agreement related to Sunovion’s apomorphine product, KYNMOBI ® ® Under the Monetization Agreement, additional aggregate contingent payments of up to $75,000 may be due to us upon the achievement of worldwide royalty and other commercial targets within a specified timeframe, which could result in total potential proceeds of $125,000. With the upfront proceeds of the monetization, we repaid $22,500 of the 12.5% Notes, and issued $4,000 of new 12.5% Notes in lieu of paying a prepayment premium on the early repayment of the 12.5% Notes, reducing the aggregate principal balance of 12.5% Notes outstanding to $51,500. In addition, the holders of the 12.5% Notes agreed to extend to December 31, 2021 our ability to access, at our option, and additional $30,000 of 12.5% Notes re-openers under the Indenture. The first $10,000 senior notes re-opener represents a commitment of such amount by current holders of 12.5% Notes, at our option, contingent upon FDA approval of our product candidate Libervant. A second $20,000 senior notes re-opener represents a right, at our option, to market to current holders of our 12.5% Notes, and/or other lenders, additional senior notes up to such amount, contingent upon FDA approval of Libervant for U.S. market access. If and to the extent that we access these re-openers, we will grant warrants to purchase up to 714,000 shares of common stock, with the strike price calculated based on the 30-day volume weighted average closing price of our common stock at the warrant grant date. In addition, as of the closing of this transaction, we issued to the holders of the 12.5% Notes warrants to purchase 143,000 shares of our common stock. The Company began utilizing its ATM facility in November 2020 which has generated net cash of approximately $6,055 as of December 31, 2020. This facility has approximately $18,472 available at December 31, 2020. The characteristics described above provide indications that the Company’s ability to execute its near-term business objectives and achieve profitability over the longer term cannot be assured. Further, management views the impact of COVID-19 on the economy, its industry, its customers and suppliers and its own operations as constantly evolving, the future effects of which continue to be highly uncertain and unpredictable. Due to current or future interruptions and possible disruptions in health services, operations of the United States Food and Drug Administration (“FDA”), freight and other transportation services, supply, manufacturing, workforce health, availability of acceptable capital, financial and asset monetization markets, and availability of essential human and business requirements, and unforeseeable financial difficulties of the Company’s customers or vendors, the severity, rapidity of the spread, and duration of the COVID-19 pandemic may be expected to negatively affect a great number of businesses across the various industries, including Aquestive. The Company may experience financial and operational adversity in such areas as preclinical, clinical trials, regulatory review and approval of various product candidates, customer demand for products and services, customers’, ability to pay for goods and services, supply of pharmaceutical ingredients and other raw materials from approved vendors, ongoing availability of an appropriate labor force and skilled professionals, and additional capital, financial or monetization markets. Subject to and absent any material adverse effect of these and other possible COVID-19 effects, the Company expects that its anticipated revenues from licensed and proprietary products, cash on hand, expense management initiatives, milestone payments under the Monetization Agreement, and access to equity markets, including its ATM facility and shelf registration statement would be adequate to meet expected operating needs as the Company continues to execute its business strategy, and access to appropriate financial markets for debt or equity financings, or a combination of these potential sources of funds, although management can provide no assurance that any of these sources of funding, either individually or in combination, will be available on reasonable terms, if at all. In addition, the Company may be required to utilize available financial resources sooner than expected. Management has based its expectation on assumptions that could change or prove to be inaccurate, either due to the impact of COVID-19 or to unrelated factors including factors arising in the capital markets, asset monetization markets, regulatory approval process, regulatory oversight and other factors. |
Revenues and Trade Receivables,
Revenues and Trade Receivables, Net | 12 Months Ended |
Dec. 31, 2020 | |
Revenues and Trade Receivables, Net [Abstract] | |
Revenues and Trade Receivables, Net | Note 5. Revenues and Trade Receivables, Net The Company’s revenue was comprised of the following: Year Ended December 31, 2020 2019 Manufacture and supply revenue $ 24,881 $ 38,739 License and royalty revenue 14,055 6,959 Co-development and research fees 1,264 4,042 Proprietary product sales, net 5,649 2,869 Revenues $ 45,849 $ 52,609 Disaggregation of Revenue The following table provides disaggregated net revenue by geographic area: Year Ended December 31, 2020 2019 United States $ 40,956 $ 48,293 Ex-United States 4,893 4,316 Revenues $ 45,849 $ 52,609 Ex-United States revenues are derived primarily from Indivior for product manufactured for markets outside of the United States. Accounts receivable, net consist of the following: December 31, 2020 2019 Accounts receivable $ 4,330 $ 9,094 Contract and other receivables 3,081 4,363 Less: allowance for bad debt (40 ) (124 ) Less: sales-related allowances (416 ) (203 ) Trade and other receivables, net $ 6,955 $ 13,130 Other receivables totaled $3,081 and $4,363 as of December 31, 2020 and 2019, respectively, consisting primarily of contract assets and reimbursable costs incurred on behalf of customers. Contract assets consist of products and services provided under specific contracts to customers for which earnings processes have been met prior to shipment of goods or full delivery of completed services. Sales-related allowances for both periods presented are estimated in relation to revenues recognized for sales of Sympazan. The following table presents the changes in the allowance for bad debt: December 31, 2020 2019 Allowance for doubtful accounts at beginning of year $ 124 $ 58 Additions charged to bad debt expense 198 66 Write-downs charged against the allowance (282 ) — Allowance for doubtful accounts at end of year $ 40 $ 124 The following table presents the changes in sales-related allowances: December 31, 2020 2019 Balance at December 31, 2019 $ 203 $ 104 Provision related to sales in 2020 731 244 Credits and payments (518 ) (145 ) Balance at December 31, 2020 $ 416 $ 203 Concentration of Major Customers Customers are considered major customers net revenue exceed 10% of total revenue for the period or outstanding receivable balances exceed 10% of total receivables. For the year ended December 31, 2020, two customers exceeded the 10% threshold for revenue which were Indivior, Inc. (“Indivior”) and Sunovion Pharmaceuticals Inc. (“Sunovion”) that represented 57% and 26%, respectively. As of December 31, 2020, four customers exceeded the 10% threshold for outstanding receivables which were Indivior, AmerisourceBergen, Sunovion, and Cardinal represented 53%, 14%, 13%, and 10%, respectively. Revenues provided by Indivior represented approximately 86% for the year ended December 31, 2019 and outstanding accounts receivable due from Indivior was approximately 80%. |
Material Agreements
Material Agreements | 12 Months Ended |
Dec. 31, 2020 | |
Material Agreements [Abstract] | |
Material Agreements | Note 6. Material Agreements Commercial Exploitation Agreement with Indivior In August 2008, the Company entered into a Commercial Exploitation Agreement with Reckitt Benckiser Pharmaceuticals, Inc. (with subsequent amendments collectively, the “Indivior License Agreement”). Reckitt Benckiser Pharmaceuticals, Inc. was later succeeded to in interest by Indivior, Inc. Pursuant to the Indivior License Agreement, the Company agreed to manufacture and supply Indivior’s requirements for Suboxone, a sublingual film formulation, both inside and outside the United States on an exclusive basis. Under the terms of the Indivior License Agreement, the Company is required to manufacture Suboxone in accordance with current Good Manufacturing Practice standards and according to the specifications and processes set forth in the related quality agreements the Company entered into with Indivior. Additionally, the Company is required to obtain Active Pharmaceutical Ingredients (“API”) for the manufacture of Suboxone directly from Indivior. The Indivior License Agreement specifies a minimum annual threshold quantity of Suboxone that the Company is obligated to fill and requires Indivior to provide the Company with a forecast of its requirements at various specified times throughout the year. The Indivior License Agreement provides for payment by Indivior of a purchase price per unit that is subject to adjustment based on the Company’s ability to satisfy minimum product thresholds. Additionally, in the event Indivior purchases certain large quantities of Suboxone during a specified period, Indivior will be entitled to scaled rebates on its purchases. In addition to the purchase price for the Suboxone supplied, Indivior is required to make certain single digit percentage royalty payments tied to net sales value (as provided for in the Indivior License Agreement) in each of the United States and in the rest of the world subject to annual maximum amounts and limited to the life of the related United States or international patents. In 2012, Indivior exercised its right to buy out its future royalty obligations in the United States under the Indivior License Agreement. Indivior remains obligated to pay royalties for all sales outside the United States. The Indivior License Agreement contains customary contractual termination provisions, including with respect to a filing for bankruptcy or corporate dissolution, an invalidation of the intellectual property surrounding Suboxone, and commission of a material breach of the Indivior License Agreement by either party. Additionally, Indivior may terminate the Indivior License Agreement if the FDA or other applicable regulatory authority declares the Company’s manufacturing site to no longer be suitable for the manufacture of Suboxone or Suboxone is no longer suitable to be manufactured due to health or safety reasons. The initial term of the Indivior License Agreement was seven years from the commencement date. Thereafter, the Indivior License Agreement automatically renews for successive one-year periods, unless either party provides the other with written notice of its intent not to renew at least one year prior to the expiration of the initial or renewal term. Supplemental Agreement with Indivior On September 24, 2017, the Company entered into an agreement with Indivior, or the Indivior Supplemental Agreement. Pursuant to the Indivior Supplemental Agreement, the Company conveyed to Indivior all existing and future rights in the settlement of various ongoing patent enforcement legal actions and disputes related to the Suboxone product. The Company also conveyed to Indivior the right to sublicense manufacturing and marketing capabilities to enable an Indivior licensed generic buprenorphine product to be produced and sold by parties unrelated to Indivior or Aquestive. Under the Indivior Supplemental Agreement, the Company is entitled to receive certain payments from Indivior commencing on the date of the agreement through January 1, 2023. Once paid, all payments made under the Indivior Supplemental Agreement are non-refundable. Through February 20, 2019, the at-risk launch date of the competing generic products of Dr. Reddy’s Labs and Alvogen, the Company received an aggregate of $40,750 from Indivior under the Indivior Supplemental Agreement. Further payments under this agreement were suspended until adjudication of related patent infringement litigation is finalized. If such litigation is successful, in addition to the amounts already received as described in the foregoing, the Company may receive up to an additional $34,250, consisting of (i) up to $33,000 in the aggregate from any combination of (a) performance or event-based milestone payments and (b) single digit percentage royalties on net revenue earned by Indivior on sales of Suboxone and (ii) an additional $1,250 that was earned through the issuance of additional process patent rights to the Company. The aggregate payments under this Indivior Supplemental Agreement are capped at $75,000. All payments made by Indivior to the Company pursuant to the Indivior Supplemental Agreement are in addition to, and not in place of, any amounts owed by Indivior to the Company pursuant to the Indivior License Agreement. Indivior’s payment obligations under the Indivior Supplemental Agreement are subject to certain factors affecting the market for Suboxone and may terminate prior to January 1, 2023 in the event certain contingencies relating to such market occur. License Agreement with Sunovion Pharmaceuticals, Inc. On April 1, 2016, the Company entered into a license agreement with Cynapsus Therapeutics Inc. (which was later succeeded to in interest by Sunovion Pharmaceuticals, Inc.), referred to as the Sunovion License Agreement, pursuant to which Sunovion obtained an exclusive, worldwide license (with the right to sub-license) to certain intellectual property, including existing and future patents and patent applications, covering all oral films containing apomorphine for the treatment of off episodes in Parkinson’s disease patients. Sunovion used this intellectual property to develop its apomorphine product KYNMOBI ® In consideration of the rights granted to Sunovion under the Sunovion License Agreement, the Company received aggregate payments totaling $22,000 to date. In addition to the upfront payment of $5,000, the Company has also earned an aggregate of $17,000 in connection with specified regulatory and development milestones in the United States and Europe (the “Initial Milestone Payments”), all of which of which has been received to date. With the Monetization Agreement, we are no longer entitled to receive certain contingent one-time milestone payments of $23,000 related to product availability and regulatory approval in Europe, certain one-time milestone payments based on the achievement of specific annual net sales thresholds of KYNMOBI ® ® Effective March 16, 2020, the Company entered into a first amendment (the “First Amendment”) to the Sunovion License Agreement. The Amendment was entered into for the primary purpose of amending the Sunovion License Agreement as follows: (i) including the United Kingdom and any other country currently in the European Union (EU) which later withdraws as a member country in the EU for purpose of determining the satisfaction of the condition triggering the obligation to pay the third milestone due under the Sunovion License Agreement, (ii) extending the date after which Sunovion has the right to terminate the Sunovion License Agreement for convenience form December 31 2024 to March 31, 2028, (iii) modifying the effective inception date of the first minimum annual royalty due from Sunovion to the Company form January 1, 2020 to April 1, 2020, and (iv) modifying the termination provision to reflect the Company’s waiver of the right to terminate the Sunovion License Agreement in the event that KYNMOBI ® On October 23, 2020, the Company amended the Sunovion License Agreement to clarify the parties’ agreement with respect to certain provisions in the License Agreement, specifically the date after which Sunovion has the right to terminate the License Agreement and the License Agreement and the rights and obligations of the parties regarding the prosecution and maintenance of the Company’s patents covered under the License Agreement. Purchase and Sale Agreement with an affiliate of Marathon Asset Management (“Marathon”) On November 3, 2020, we entered into a Purchase and Sale Agreement (the “Monetization Agreement”) with MAM Pangolin Royalty, LLC, an affiliate of Marathon Asset Management (“Marathon”). Under the terms of the Monetization Agreement, we sold all of our contractual rights to receive royalties and milestone payments due under the Sunovion License Agreement related to Sunovion’s apomorphine product, KYNMOBI ® ® Under the Monetization Agreement, additional aggregate contingent payments of up to $75,000 may be due to us upon the achievement of worldwide royalty and other commercial targets within a specified timeframe, which could result in total potential proceeds of $125,000 Refer to Note 14 Sale of Future Revenue for details of the accounting for the Monetization Agreement . Agreement to Terminate CLA with KemPharm In March 2012, the Company entered into an agreement with KemPharm, Inc. (“KemPharm”), to terminate a Collaboration and License Agreement entered into by the Company and KemPharm in April 2011. Under this termination arrangement, the Company has the right to participate in any and all value that KemPharm may derive from the commercialization or any other monetization of KP-415 and KP-484 compounds or their derivatives. Among these monetization transactions are those related to any business combinations involving KemPharm and collaborations, royalty arrangements, or other transactions from which KemPharm may realize value from these compounds. During September 2019, the Company received $1,000 from its 10% share of milestone payments paid to KemPharm, under its licensing of KP-415 and KP-484 to a third party. The Company has also received payment of $500 under this arrangement during June 2020, which is included in in License and royalty revenues for the twelve-months period ended December 31, 2020, in connection with the FDA’s acceptance of a New Drug Application (“NDA”) filing for KP-415. On March 2, 2021, KemPharm announced FDA approval of KP 415 (AZTARYS TM |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2020 | |
Inventory [Abstract] | |
Inventory | Note 7. Inventory Inventory consists of the following: December 31, 2020 2019 Raw material $ 789 $ 1,244 Packaging material 1,128 1,096 Finished goods 544 519 Total inventory $ 2,461 $ 2,859 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment, Net [Abstract] | |
Property and Equipment, Net | Note 8. Property and Equipment, Net December 31, Useful Lives 2020 2019 Machinery 3-15 years $ 21,333 $ 21,088 Furniture and fixtures 3-15 years 1,209 1,150 Leasehold improvements (a) 21,333 21,333 Computer, network equipment and software 3-7 years 2,999 2,787 Construction in progress 877 1,412 47,751 47,770 Less: accumulated depreciation and amortization (40,878 ) (38,044 ) Total property and equipment, net $ 6,873 $ 9,726 (a) Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives. Total depreciation and amortization related to property and equipment were $3,392 and $2,854 for the years ended December 31, 2020 and 2019, respectively. |
Right-of-Use Assets and Lease O
Right-of-Use Assets and Lease Obligations | 12 Months Ended |
Dec. 31, 2020 | |
Right-of-Use Assets and Lease Obligations [Abstract] | |
Right-of-Use Assets and Lease Obligations | Note 9. Right-of-Use Assets and Lease Obligations The Company leases all realty used as its production and warehouse facilities, corporate headquarters, commercialization operations center and research and laboratory facilities. The Company identifies a contract that contains a lease as one which conveys a right, either explicitly or implicitly, to control the use of an identified asset in exchange for consideration. None of these three leases include the characteristics specified in ASC 842, Leases, The Company does not recognize a right-to use asses and lease liability for short-term leases, which have terms of 12 months or less, on its consolidated balance sheet. For longer-term lease arrangements that are recognized on the Company’s consolidated balance sheet, the right-of-use asset and lease liability is initially measured at the commencement date based upon the present value of the lease payments due under the lease. These payments represent the combination of the fixed lease and fixed non-lease components that are due under the arrangement. The costs of associated with the Company’s short-term leases, as well as variable costs relating to the Company’s lease arrangements, are not material to the consolidated financial results. The implicit interest rates of the Company’s lease arrangements are generally not readily determinable and as such, the Company applies an incremental borrowing rate, which is established based upon the information available at the lease commencement date, to determine the present value of lease payments due under an arrangement. Measurement of the operating lease liability reflects an estimated discount rate of 16.9% applied to minimum lease payments, including expected renewals, based on the incremental borrowing rate experienced in the Company’s latest collateralized debt refinancing. Right-of-use assets recorded upon adoption of ASC 842 totaled $4,048. The Company’s lease costs recorded in manufacture and supply, research and development and selling, general and administrative expenses in its consolidated statements of income for the year-end December 31, 2020 was $1,671 including variable lease expenses such as common area maintenance and operating costs of $379 under the new lease accounting standard. Rental expense for all operating leases amounted to $1,613 in 2019. Cash payments arising from the Company’s lease arrangements are reflected on its consolidated statement of cash flows as outflows for operating activities. The Company’s payments due under its operating leases are as follow: Amount 2021 $ 1,287 2022 1,295 2023 944 2024 565 2025 565 2026 424 Total lease payments 5,080 Less: imputed interest (1,506 ) Total operating lease liabilities $ 3,574 The following schedule presents future minimum lease payments under operating leases as of December 31, 2019, including those derived from renewal options that are deemed noncancelable under FASB ASC Section 840-10-35, Leases - Subsequent Measurement Amount 2020 $ 1,274 2021 1,287 2022 1,153 2023 380 Thereafter — Total $ 4,094 |
Intangible Assets, Net and Othe
Intangible Assets, Net and Other non-current assets | 12 Months Ended |
Dec. 31, 2020 | |
Intangible Assets, Net and Other non-current assets [Abstract] | |
Intangible Assets, Net and Other non-current assets | Note 10. Intangible Assets, Net and Other non-current assets The following table provides the components of identifiable intangible assets, all of which are finite lived and other non-current assets: December 31, 2020 2019 Purchase technology-based intangible $ 2,358 $ 2,358 Purchased patent 509 509 2,867 2,867 Less: accumulated amortization (2,765 ) (2,714 ) Intangible assets, net 102 153 Royalty receivable 7,000 — Other 836 286 Total other non-current assets $ 7,836 $ 286 Amortization expense was $51 and $50 for each of the years ended December 31, 2020 and 2019, respectively. During the remaining life of the purchased patent, estimated annual amortization expense is $51 for each of the years from 2021 to 2022. During the second quarter of 2020, under the Sunovion License Agreement, the Company recognized $8,000 of royalty revenue and corresponding royalty receivable, related to the $1,000 annual minimum guaranteed royalty that is due in each of the next eight years. In connection with the Monetization Agreement, the Company performed an assessment under ASC 860 Transfer and Servicing |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | Note 11. Accrued Expenses Accrued expenses consisted of the following: December 31, 2020 2019 Accrued compensation $ 6,330 $ 3,758 Real estate and personal property taxes 316 300 Accrued distribution expenses 1,722 1,174 Other 201 243 Total accrued expenses $ 8,569 $ 5,475 |
12.5% Senior Secured Notes and
12.5% Senior Secured Notes and Loans Payable | 12 Months Ended |
Dec. 31, 2020 | |
12.5% Senior Secured Notes and Loans Payable [Abstract] | |
12.5% Senior Secured Notes and Loans Payable | Note 12. 12.5% Senior Secured Notes and Loans Payable 12.5% Senior Secured Notes - First Supplemental Indenture On November 3, 2020, the Company entered into the First Supplemental Indenture (the “Supplemental Indenture”) by and among the Company and U.S. Bank National Association, as Trustee (the “Trustee”) and Collateral Agent thereunder to the Indenture, dated as of July 15, 2019 (the “Base Indenture” and, as supplemented by the Supplemental Indenture, the “Indenture”), by and between the Company and the Trustee. Under the Supplemental Indenture, the Company repaid $22,500 of its $70,000 outstanding 12.5% Notes from the $40,000 upfront proceeds received from its Monetization of Future Revenue Stream associated with Sunovion’s KYNMOBI ® The Company accounted for the $22,500 debt repayment as a debt modification. The fees paid to lenders inclusive of (i) $2,250 early premium prepayment and (ii) $4,000 issuance of additional debt in lieu of paying a prepayment penalty have been recorded as additional debt discount, amortized over the remaining life of the Notes using the effective interest method. Loan origination costs of $220 associated with the new debt of were expensed as incurred. Existing deferred discounts and loan origination fees are amortized as an adjustment of interest expense over the remaining term of modified debt using the effective interest method. The Amendment contains a provision whereby as the Company receives any cash proceeds from the Permitted Apomorphine Monetization (the Monetization Proceeds), each Noteholder has the right to require the Company to repay all or any part of such Noteholder’s outstanding 12.5% Notes at a repurchase price in cash equal to 112.5% of the principle amount, plus accrued and unpaid interest. This repurchase offer is capped at 30% of the cash proceeds received by the Company as the contingent milestones are attained, if any, up through June 30, 2025. This repurchase offer or put option gives holders of the option the right, but not the obligation, to receive a specified amount of the future royalties up to the capped amount. A valuation study was performed by an independent third party appraiser. Based on the valuation study, the put option was valued at $535, of which $115 has been recorded in Accrued expenses and $420 has been recorded in Other non-current liabilities. The embedded put option is deemed to be a derivative under ASC 815 Derivatives and Hedging In addition, the holders of the 12.5% Notes have extended to December 31, 2021 from March 31, 2021, the Company’s ability to access, at the Company’s option, $30,000 of senior notes re-openers under the Indenture. The first $10,000 senior notes re-opener represents a commitment of such amount by current holders of 12.5% Notes, at the option of the Company, contingent upon FDA approval of the Company’s product candidate Libervant (diazepam) Bucca Film for the management of seizure clusters. A second $20,000 senior notes re-opener represents a right, at the Company’s option, to market to current holders of the Company’s 12.5% Notes, and/or other lenders, additional senior notes up to such amount, contingent upon FDA approval of Libervant for U.S. market access. The 12.5% Notes provide a stated fixed rate of 12.5%, payable quarterly in arrears, with the initial quarterly principal repayment of the Initial Notes due on September 30, 2021 and the final quarterly payment due at maturity on June 30, 2025. The Company has recorded $2,575 as Loan Payable, Current to reflect this obligation in its Consolidated Balance Sheet. Principal payments are scheduled to increase annually from 10% of the face amount of the debt then outstanding during the first four quarters to 40% of the initial loan principal during the final four quarters. A debt maturity table is presented below: 2021 $ 2,575 2022 7,725 2023 12,875 2024 18,025 2025 10,300 Total $ 51,500 The Company may elect, at its option, to prepay the 12.5% Notes at any time at premiums that range from 101.56% of outstanding principal if prepayment occurs on or after the fifth anniversary of the issue date of the Initial Notes to 112.50% if payment occurs during the third year after the issuance of the Notes. In the event that redemption occurs within the two years after the issuance of the 12.5% Notes, a make-whole fee is required, based on the present value of remaining interest payments using an agreed-upon discount rate linked to the then-current U.S. Treasury rate. The Indenture also includes change of control provisions under which the Company may be required to repurchase the 12.5% Notes at 101% of the remaining principal plus accrued interest at the election of the Lenders. The Company capitalizes legal and other third-party costs incurred in connection with obtaining debt as deferred debt issuance costs and applies the unamortized portion as a reduction of the outstanding face amount of the related loan in accordance with ASU 2015-3, Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs Collateral for the loan under the 12.5% Notes consists of a first priority lien on substantially all property and assets, including intellectual property, of the Company. This secured obligation provides payment rights that are senior to all existing and future subordinated indebtedness of the Company and provides Lenders with perfected security interests in substantially all of the Company’s assets. 12.5% Senior Secured Notes On July 15, 2019, the Company completed the private placement of up to $100,000 aggregate principal of its 12.5% Senior Secured Notes due 2025 (the “Notes”) and issued warrants for 2,000,000 shares of common stock (the “Warrants”), $0.001 per value per share, through its structuring agent, Morgan Stanley & Co., LLC, and entered into a purchase agreement and related indenture (the “Purchase Agreement” or “Indenture”) governing these Notes. The Company simultaneously entered into related agreements including a Collateral Agreement with U.S. Bank National Association, as trustee and collateral agent, and a Lien Subordination and Intercreditor Agreement for the benefit of Madryn Health Partners, other institutional noteholders (the “Noteholders”) and U.S. Bank National Association in dual roles providing terms governing an asset-based loan facility. Upon closing of the Indenture for the 12.5% Notes (“Indenture”), the Company issued $70,000 of the principal of the 12.5% Notes (the “Initial Notes”) along with the Warrants and rights of first offer (the “First Offer Rights”) to the lenders participating in this transaction for Notes and Warrants (the “Lenders”). Issuance of the Initial Notes and Warrants provided net proceeds of $66,082. Proceeds from issuance of the Initial Notes and Warrants were used to fully repay the Company’s $56,340 outstanding indebtedness to Perceptive Credit Holdings, LP, (the “Perceptive Loan”) related early repayment fees and legal and other fees incurred in obtaining this loan and executing this Indenture. Loans Payable - Perceptive In August 2016, the Company entered into a Loan Agreement and Guaranty with Perceptive Credit Opportunities Fund, LP (“Perceptive”) under which the total available facility of $50,000` had been borrowed as of March 2017. At closing, Perceptive received a warrant to purchase senior common equity interests representing 4.5% of the fully diluted common units of the Company on an as converted basis, which was automatically exercised in full at the time of the IPO (see also Note 13). In July 2019, the Perceptive Loan was paid in full in connection with the completion of the sale of the Initial Notes and Warrants described above. The early extinguishment of this debt resulted in a charge to 2019 earnings in the amount of $4,896, including an early retirement premium of $2,944 and the remaining balances of the unamortized loan discount and loan acquisition costs. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2020 | |
Warrants [Abstract] | |
Warrants | Note 13. Warrants Warrants Issued to 12.5% Senior Secured Noteholders Warrants were issued in conjunction with the First Supplemental Indenture to Noteholders as part of the 2020 Additional Notes described above expire on June 30, 2025 and entitle the Lenders to purchase 143,000 shares of the Company’s common stock at $0.001 per share and include specified registration rights. Management estimated the fair value of the Warrants to be $735, assisted by the an independent third-party appraiser. Warrants were issued in conjunction with the Initial Notes described above expire on June 30, 2025 and entitle the Lenders to purchase 2,000,000 shares of the Company’s common stock at $0.001 per share and include specified registration rights. Management estimated the fair value of the Warrants to be $6,800, assisted by an independent third-party appraiser. The fair value of these respective Warrants is treated as a debt discount, amortizable over the term of the Warrants, with the unamortized loan portion applied to reduce the face amount of the loan in the Company’s balance sheet. Additionally, since the Warrants issued do not provide warrant redemption or put rights within the control of the holders that could require the Company to make a payment of cash or other assets to satisfy the obligations under the Warrants, except in the case of a “cash change in control”, the fair value attributed to the Warrants is presented in additional-paid in capital in the accompanying Consolidated Balance Sheets. There were no Warrants exercised by either the holders of the 2020 Additional Notes nor the Initial Noteholders during the year ended December 31, 2020. Certain 12.5% Noteholders exercised warrants for the purchase of 428,571 shares of common stock, and proceeds totaling $1,821 were received on December 16, 2019. |
Sale of Future Revenue
Sale of Future Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Sale of Future Revenue [Abstract] | |
Sale of Future Revenue | Note 14. Sale of Future Revenue On November 3, 2020, we entered into a Purchase and Sale Agreement (the “Monetization Agreement”) with MAM Pangolin Royalty, LLC, an affiliate of Marathon Asset Management (“Marathon”). Under the terms of the Monetization Agreement, we sold all of our contractual rights to receive royalties and milestone payments due under the Sunovion License Agreement related to Sunovion’s apomorphine product, KYNMOBI ® ® Under the Monetization Agreement, additional aggregate contingent payments of up to $75,000 may be due to us upon the achievement of worldwide royalty and other commercial targets within a specified timeframe, which could result in total potential proceeds of $125,000. We recorded the upfront proceeds of $40,000 and subsequent first milestone of $10,000, reduced by $2,909 of transaction costs, as a liability related to the sale of future revenue that will be amortized using the effective interest method over the life of the Monetization Agreement. As future contingent payments are received, they will increase the balance of the liability related to the sale of future revenue. Although we sold all of our rights to receive royalties and milestones, as a result of our ongoing obligations related to the generation of these royalties, we will account for these royalties as revenue. Our ongoing obligations include the maintenance and defense of the intellectual property and to provide assistance to Marathon in executing a new license agreement for KYNMOBI ® During the second quarter of 2020, under the Sunovion License Agreement, the Company recognized $8,000 of royalty revenue and corresponding royalty receivable, related to the $1,000 annual minimum guaranteed royalty that is due in each of the next eight years. In connection with the Monetization Agreement, the Company performed an assessment under ASC 860, Transfer and Servicing As royalties are remitted to Marathon from Sunovion, the collection of the royalty receivable and balance of the liability related to the sale of future revenue will be effectively repaid over the life of the agreement. In order to determine the amortization of the liability related to the sale of future revenue, we are required to estimate the total amount of future royalty and milestone payments to Marathon over the life of the Monetization Agreement and contingent milestone payments from Marathon to the Company. The sum of future royalty payments less the $50,000 in proceeds received and future contingent payments will be recorded as interest expense over the life of the Monetization Agreement. At execution, the estimate of this total interest expense resulted in an effective annual interest rate of approximately 24.9%. This estimate contains significant assumptions that impact both the amount recorded at execution and the interest expense that will be recognized over the life of the Monetization Agreement. The Company will periodically assess the estimated royalty and milestone payments to Marathon from Sunovion and contingent milestone payments from Marathon to the Company. To the extent the amount or timing of such payments is materially different from the original estimates, an adjustment will be recorded prospectively to increase or decrease interest expense. There are a number of factors that could materially effect the amount and timing of royalty and milestone payments to Marathon from Sunovion, and correspondingly, the amount of interest expense recorded by the Company, most of which are not under our control. Such factors include, but are not limited to, changing standards of care, the initiation of competing products, manufacturing or other delays, generic competition, intellectual property matters, adverse events that result in government health authority imposed restrictions on the use of products, significant changes in foreign exchange rates as the royalties remitted to Marathon are made in U.S. dollars (USD) while a portion of the underlying sales of KYNMOBI ® The following table shows the activity of the Royalty Obligation since the transaction inception through December 31, 2020: Upfront proceeds from the sale of future revenue $ 40,000 Contingent payment from the sale of future revenue 10,000 Issuance costs (2,909 ) Amortization of issuance costs 20 Royalties related to the sale of future revenue (75 ) Interest expense related to the sale of future revenue 1,938 Liability related to the sale of future revenue, net (includes current portion of $1,450) $ 48,974 |
Other Non-Current Liabilities
Other Non-Current Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Other Non-Current Liabilities [Abstract] | |
Other Non-Current Liabilities | Note 15. Other Non-Current Liabilities The Company’s other non-current liabilities at December 31, 2020 of $1,945 consist of asset retirement obligations (“AROs”) of $1,525 and the fair value of the put option on the 12.5% Notes of $420. At December 31, 2019, the balance consisted of asset retirement obligations. AROs consists of estimated future spending related to removing certain leasehold improvements at its Portage, Indiana, laboratory, the Ameriplex production facility and the Warren, New Jersey, laboratory and returning all facilities to their original condition. Depreciation expense related to the ARO assets included in overall depreciation expense for the periods ended December 31, 2020 and 2019 were $24 and $24, respectively. Below is a schedule of activity in the Company’s liability for AROs for the year ended December 31, 2020 and 2019. Balance at December 31, 2018 $ 1,216 Additions — Accretion 144 Balance at December 31, 2019 1,360 Additions — Accretion 165 Balance at December 31, 2020 $ 1,525 |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Net Loss Per Share [Abstract] | |
Net Loss Per Share | Note 16. Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares. As a result of the Company’s net loss incurred for the year ended December 31, 2020 and 2019, all potentially dilutive instruments outstanding would have anti-dilutive effects on per-share calculations for this period. Therefore, basic and diluted net loss per share were the same for all periods presented as reflected below. Year Ended December 31, 2020 Year Ended December 31, 2019 Numerator: Net loss $ (55,783 ) $ (66,246 ) Denominator: Weighted-average number of common shares – basic and diluted 33,651,127 25,356,098 Loss per common share – basic and diluted $ (1.66 ) $ (2.61 ) As of December 31, 2020 and 2019, respectively, the Company’s potentially dilutive instruments included 3,258,192 and 2,231,092 options to purchase common shares and 13,491 and 73,839 unvested RSUs that were excluded from the computation of diluted weighted average shares outstanding because these securities had an antidilutive impact due to the losses reported. Similarly excluded as of December 31, 2020 and 2019 were potentially dilutive warrants for the purchase of 1,714,429 and 1,571,429 common shares, respectively. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | Note 17. Share-Based Compensation The Company provides certain employees, non-employee directors and consultants with performance incentives under the Aquestive Therapeutics, Inc. Equity Incentive Plan (the Plan), adopted by the Board of Directors on June 15, 2018. Under this Plan, the Company may grant restricted stock units, stock options, or other stock-based awards in order to align the long-term financial interests of selected participants with those of its stockholders, strengthen the commitment of such persons to the Company, and attract and retain competent and dedicated persons whose efforts will enhance long-term growth, profitability and share value. Restricted stock units and options that have been awarded are subject to graded vesting over a service period, which is typically three years. Compensation cost is recognized for these awards on a pro-rata basis over the requisite service period for each award granted. At December 31, 2020, there were approximately 0.7 million shares available for grant. The Company recognized share-based compensation in its Consolidated Statements of Operations during the periods presented as follows: Expense classification: Year Ended December 31, 2020 Year Ended December 31, 2019 Manufacture and supply $ 275 $ 231 Research and development 729 720 Selling, general and administrative 5,577 6,120 Total share-based compensation expenses $ 6,581 $ 7,071 Share-based compensation from: Restricted Stock Units (A) 806 1,863 Stock Options (B) 5,751 5,173 Employee Stock Purchase Plan (C) 24 35 Total share-based compensation expenses $ 6,581 $ 7,071 (A) Restricted Stock Units The following table summarizes the Company’s awards of restricted stock units for the year ended December 31, 2019 and 2020: Number of Units Weighted Average Grant Date Fair Value Per Share (In thousands) Unvested, December 31, 2018 205 $ 14.77 Granted — — Forfeited (6 ) — Vested (125 ) 14.94 Unvested, December 31, 2019 74 $ 14.64 Granted 4 7.54 Forfeited — — Vested (64 ) 14.88 Unvested, December 31, 2020 14 $ 11.38 The total grant date fair market value of shares vested in 2020 and 2019 was $958 and $1,863, respectively. As of December 31, 2020, there was approximately $122 of unrecognized compensation costs related to restricted stock units awarded and is expected to be recognized during 2021. The RSUs granted to employees are subject to a three-year graduated vesting schedule. These RSUs are not subject to performance-based criteria other than continued employment. (B) Stock option awards The following table summarizes the Company’s stock option activity for the period from December 31, 2018 through December 31, 2020: (in 000s, except share price data) Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding at December 31, 2018 1,033 $ 14.72 9.55 $ — Granted 1,258 $ 6.66 Forfeited (60 ) $ 5.78 Exercised — Outstanding at December 31, 2019 2,231 $ 10.42 8.94 $ 689 Granted 1,168 3.32 Forfeited (140 ) $ 4.36 Exercised — $ — Outstanding at December 31, 2020 3,259 $ 8.14 8.42 $ 2,978 Vested and expected to vest at December 31, 2020 3,035 $ 8.14 8.42 $ 2,758 Exercisable at December 31, 2020 1,235 $ 11.26 7.89 $ 403 The weighted average grant date fair value of stock options granted during 2020 and 2019 was $2.61 and $4.95, respectively. The fair values of stock options granted were estimated using the Black-Scholes model based on the following assumptions: Year Ended December 31, 2020 2019 Expected dividend yield 0% 0% Expected volatility 100% 85% — 106% Expected term (years) 5.50 — 6.10 5.50 — 6.10 Risk-free interest rate 0.33% — 1.69% 1.5% — 2.6% Exercise prices $ 1.54 — 7.86 $ 3.36 — 8.05 We anticipate reinvesting earnings for the foreseeable future in product development and other avenues of share-value growth and therefore used a dividend yield of zero. The estimate of volatility was determined based on the historical trading data of comparable public companies at the time of grant given the lack of sufficient history for our own publicly-traded common stock. The expected term of the award was calculated using the simplified method and weighted average was utilized taking into account the vesting periods and contractual life. The risk-free interest rates are derived from the U.S. Treasury yield curve in effect on the date of grant for instruments with a remaining term similar to the expected term of the options. As of December 31, 2020, $5,653 of total unrecognized compensation expenses related to non-vested stock options is expected to be recognized over a weighted average period of 1.3 years from the date of grant. These option grants provided a maximum contract term of 10 years from grant date, with a weighted average remaining contract life of 8.0 years. Options granted to senior management and key employees are subject to a three-year graded vesting schedule while options granted to the board of directors are subject to a one year cliff vesting schedule. These stock options are not subject to performance-based criteria other than continued employment. (C) Employee Stock Purchase Plan The Company’s Board of Directors adopted the Aquestive Therapeutics, Inc. Employee Stock Purchase Plan (ESPP) in June 2018, plan rollout began in late 2018, and initial employee purchases were made in 2019. The purpose of the ESPP is to help retain and motivate current employees, to attract new talent, and to provide eligible employees of the Company a convenient manner of purchasing shares of common stock at a discounted price at periodic intervals by means of accumulated payroll deductions. The Company may offer common stock purchase rights biannually under offerings that allow for the purchase of common stock at the lower of 85% of the fair value of shares on either the first or last day of the offering period. The offerings may, or may not, also provide tax advantages. Purchases made via a tax-advantaged offering are intended to qualify as purchases made within the meaning of Section 423 of the Internal Revenue Code. Offerings may run concurrently, or serially, and each offering will be treated as separate and distinct. Under the ESPP, a total of 250,000 shares of common stock were initially reserved for issuance. During 2020 and 2019, employees purchased 32,986 and 56,378 shares, respectively, through this plan. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note 18. Employee Benefit Plans The Company sponsors a defined-contribution 401(k) plan covering all full-time employees and makes matching employer contributions as defined by the terms of that plan. The Company may also make discretionary contributions. Total contributions made to the plan by the Company for the year ended December 31, 2020 and 2019 were $673 and $819, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes [Abstract] | |
Income Taxes | Note 19. Income Taxes From the period January 1, 2017 through October 31, 2017, the Company was a limited liability company (“LLC”) that passed through income and losses to its members for U.S. federal and state income tax purposes. From November 1, 2017 through December 31, 2018, the LLC elected to be taxed as a C corporation. On January 1, 2018, the LLC was converted into a Delaware corporation and treated as a C corporation for tax purposes. The tax effect of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts that give rise to the deferred tax assets and deferred tax liabilities as of December 31, 2020 and 2019 are as follows: December 31, 2020 2019 Deferred tax assets: Accounts receivable $ 112 $ 126 Inventory 4 69 Accrued expenses 353 835 NOL carryforwards 22,569 23,687 Interest limitation imposed by the TJCA 7,235 5,748 Stock Compensation 4,051 2,505 Other 1,229 783 Sale of Future Revenue 14,444 — Property and equipment 2,380 1,741 Orphan Drug and R&D Tax Credits 5,851 4,621 58,228 40,115 Deferred tax liabilities: Intangible assets (551 ) (58 ) Prepaid expenses (908 ) — (1,459 ) (58 ) Valuation Allowance (56,764 ) (40,057 ) Net deferred tax asset/(liability) $ — $ — At December 31, 2020 and 2019, the Company had federal net operating loss carryforwards of $81,556 and $85,905, respectively, a significant portion of which carryforward for an indefinite period. At December 31, 2020 and 2019, the Company also had state net operating loss carryforwards of $74,379 and $80,266, respectively. These state net operating losses carry forwards begin expiring in 2039 and 2038, respectively. As a result of the December 2017 U.S. Tax Cuts and Jobs Act (“TCJA”), updated regulations under section 163(j) create new limitations on deductible interest expense. The Company’s interest expense deduction under 163(j) will be limited for tax purposes based on a calculation of 30% of its EBITDA on a tax basis. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, which we refer to as the “U.S. CARES Act,” was signed into law. The U.S. CARES Act, among other things, includes provisions related to net operating loss carryback periods, modifications to the interest deduction limitation. The U.S. CARES Act increased the adjusted taxable income limitation from 30% to 50% for business interest deductions for tax years beginning in 2019 and 2020. This modification increased the allowable interest expense deduction and resulted in additional net operating loss (NOL) for the year 2019 and lower current taxable income (before NOL utilization) for the Company. Additionally, the U.S. CARES Act allowed us to fully offset the 2020 taxable income with prior years’ NOL carried forward. The Company has determined, based upon available evidence, that is more likely than not that the net deferred tax asset will not be realized and accordingly, has provided a full valuation allowance against its net deferred tax assets. Valuation allowances of $56,769, and $40,057 have been established at December 31, 2020 and 2019, respectively. The Company may also be subject to the net operating loss utilization provisions of Section 382 of the Internal Revenue Code due to ownership changes. As a result, the use of NOL carry forwards from the current and prior periods are subject to annual limitations. Entities are also required to evaluate, measure, recognize and disclose any uncertain income tax provisions taken on their income tax returns. The Company has analyzed its tax positions and has concluded that there were no uncertain positions as of December 31, 2020 and 2019. The Company did not have any unrecognized tax benefits and has not accrued any interest or penalties for the years ended December 31, 2020 and 2019. The Company’s U.S. federal and state net operating losses have occurred since its election to treat as a C Corporation in 2017 and as such, tax years subject to potential tax examination could apply from that date because the utilization of net operating losses from prior years opens the relevant year to audit by the IRS and/or state taxing authorities. In early 2020, the U.S. Internal Revenue Service began an examination of the Company’s federal income tax return for 2018. The Company does not expect to recognize a significant amount of additional tax expense as a result of concluding this examination. A reconciliation of income tax benefit and the amount computed by applying the statutory federal income tax rates of 21% to loss before taxes for the year ended December 31, 2020 and 2019, respectively, as follows: Year Ended December 31, 2020 2019 Income taxes at statutory rate 21.00 % 21.00 % Increase (decrease) resulting from: State income tax 6.81 6.76 Permanent differences (0.12 ) (0.04 ) Research & development credit 2.35 2.32 Return to provision — 0.98 Valuation allowance (30.04 ) (31.02 ) Effective tax rate 0.00 % 0.00 % On July 1, 2018, the New Jersey governor signed into law a bill which included significant changes to the New Jersey taxation of corporations. Chiefly, this legislation imposes a 2.5% surtax on taxpayers with allocated net income over $1 million for 2018 and 2019, and a 1.5% sur tax for taxpayers with allocated net income over $1 million for 2020 and 2021. Subsequently, on September 29, 2020, Assembly Bill 4721 extended the additional corporation business tax surtax of 2.5% for the tax years 2020 through 2023. In addition, the state is changing its filing requirements from separate entity reporting to combined reporting on a water’s edge basis. Further, there are changes to the state’s computation of its dividend received deduction and application of IRC section 163(j). The Company has considered these changes and does not believe this change in law will have a material impact due to availability of significant New Jersey NOL carryforwards to set off against future taxable income and a full valuation allowance against the net deferred tax assets. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Contingencies [Abstract] | |
Contingencies | Note 20. Contingencies Litigation and Contingencies From time to time, we have been and may again become involved in legal proceedings arising in the course of our business, including product liability, intellectual property, commercial litigation, or environmental or other regulatory matters. Patent-Related Litigation Indivior Inc., Indivior UK Ltd., and Aquestive Therapeutics, Inc. v. Dr. Reddy’s Labs. S.A. and Dr. Reddy’s Labs., Inc. On February 7, 2018, we and Indivior Inc. and Indivior UK Ltd. (collectively, “Indivior”) initiated a lawsuit against Dr. Reddy’s Laboratories S.A. and Dr. Reddy’s Laboratories, Inc. (collectively, “Dr. Reddy’s”) asserting infringement of U.S. Patent No. 9,855,221 (the “221 patent”). On April 3, 2018, we and Indivior initiated a separate lawsuit against Dr. Reddy’s asserting infringement of U.S. Patent No. 9,931,305 (the “’305 patent”). On May 29, 2018, the lawsuits regarding the ’221 and ’305 patents were consolidated which was originally initiated by Indivior against Dr. Reddy’s asserting infringement of U.S. Patent No. 9,687,454 (he “’454 patent”). On February 19, 2019, the Court granted the parties’ agreed stipulation to drop the ’221 patent from the case. On January 8, 2020, the Court entered a stipulated order of non-infringement of the ’305 patent based on the Court’s claim construction ruling, and we and Indivior preserved our rights to appeal the claim construction ruling. On November 22, 2019, Dr. Reddy’s filed an amended answer and counterclaims asserting conspiracy to monopolize against us and monopolization, attempted monopolization, and conspiracy to monopolize against Indivior under federal and New Jersey antitrust laws. The Court denied our motion to dismiss Dr. Reddy’s counterclaims on August 24, 2020. Fact discovery on Dr. Reddy’s antitrust counterclaims concluded on January 29, 2021. Expert discovery is ongoing and is scheduled to continue through the end of July 2021. Dispositive motions are currently due August 27, 2021. There is no trial date set. We are not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or losses, if any, in this matter. Indivior Inc., Indivior UK Ltd., and Aquestive Therapeutics, Inc. v. Teva Pharmaceuticals USA, Inc. On February 7, 2018, we and Indivior initiated a lawsuit against Teva Pharmaceuticals USA, Inc. (“Teva”) asserting infringement of the ’221 patent. On April 3, 2018, we and Indivior initiated a separate lawsuit against Teva asserting infringement of the ’305 patent. On May 29, 2018, the lawsuits regarding the ’221 and ’305 patents were consolidated which was originally initiated by Indivior against Teva asserting infringement of the ’454 patent. The parties agreed that the case would be governed by the final judgment against Dr. Reddy’s (described above). We are not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or losses, if any, in this matter. Indivior Inc., Indivior UK Ltd., and Aquestive Therapeutics, Inc. v. Alvogen Pine Brook LLC On September 14, 2017, Indivior initiated a lawsuit against Alvogen Pine Brook LLC (“Alvogen”) asserting infringement of the ’454 patent. On February 7, 2018, we and Indivior filed an Amended Complaint, adding us as a plaintiff and asserting infringement of U.S. Patent No. 9,855,221 (the “’221 patent”). On April 3, 2018, we and Indivior initiated a separate lawsuit against Alvogen asserting infringement of the ’305 patent. On May 29, 2018, the cases were consolidated. On February 26, 2019, the Court granted the parties’ agreed stipulation to drop the ’221 patent from the case. On January 9, 2020, the Court entered a stipulated order of non-infringement of the ’305 patent based on the Court’s claim construction ruling, and we and Indivior preserved our rights to appeal the claim construction ruling. On November 21, 2019, Alvogen filed an amended answer and counterclaims asserting monopolization, attempted monopolization, and conspiracy to monopolize against us and Indivior under federal and New Jersey antitrust laws. The court denied our motion to dismiss Alvogen’s counterclaims on August 24, 2020. On November 2, 2020, Alvogen filed a second amended answer and counterclaims, removing its allegations of monopolization and attempted monopolization against us and asserting only conspiracy to monopolize against us. Fact discovery on Alvogen’s antitrust counterclaims concluded on January 29, 2021. Expert discovery is ongoing and is scheduled to continue through the end of July 2021. Dispositive motions are currently due August 27, 2021. There is no trial date set. We are not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or losses, if any, in this matter. BioDelivery Sciences International, Inc. v. Reckitt Benckiser Pharmaceuticals, Inc., RB Pharmaceuticals Limited and MonoSol Rx, LLC On September 20, 2014, BioDelivery Sciences International, Inc. (“BDSI”) initiated a lawsuit against us and RB seeking a declaratory judgment of non-infringement and invalidity of U.S. Patent No. 8,475,832 (the “’832 patent”), U.S. Patent No. 7,897,080 (the “’080 patent”), and U.S. Patent No. 8,652,378 (the “’378 patent”). On December 12, 2014, BDSI voluntarily dismissed the ’378 patent from the case. On December 12, 2015, the parties jointly moved the Court for a stay of the case pending inter partes Reckitt Benckiser Pharmaceuticals, Inc. and MonoSol Rx, LLC v. BioDelivery Sciences International, Inc. and Quintiles Commercials US, Inc. On September 22, 2014, we and RB initiated a lawsuit against BDSI and Quintiles Commercial US, Inc. (“Quintiles”) asserting infringement of U.S. Patent No. 8,765,167 (the “’167 patent”) in the District of New Jersey (Civil Action No. 3:14-cv-5892). On July 22, 2015, the case was transferred to the Eastern District of North Carolina. BDSI filed requests for inter partes en banc Aquestive Therapeutics, Inc. v. BioDelivery Sciences International, Inc. On November 11, 2019, we initiated a lawsuit against BDSI asserting infringement of the ’167 patent in the Eastern District of North Carolina. On April 1, 2020, the Court denied BDSI’s motion to stay and its motion to dismiss the complaint. On April 16, 2020, BDSI filed its Answer and Counterclaims to the complaint, including counterclaims for non-infringement, invalidity, and unenforceability of the ’167 patent. On May 7, 2020, we filed a Motion to Dismiss BDSI’s unenforceability counterclaim and a Motion to Strike BDSI’s corresponding affirmative defenses. On May 28, 2020, BDSI amended its counterclaims and filed an Answer and Amended Counterclaims, which included additional allegations in support of BDSI’s unenforceability counterclaim. On June 25, 2020, we filed a Motion to Dismiss BDSI’s Amended Counterclaim for unenforceability and a Motion to Strike BDSI’s corresponding affirmative defense of unenforceability. BDSI filed its opposition to our Motion to Dismiss and Strike on July 16, 2020, and we filed our Reply on July 30, 2020. The parties are awaiting further action from the Court on our motion. We are not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or losses, if any, in this matter. Antitrust Litigation State of Wisconsin, et al. v. Indivior Inc., Reckitt Benckiser Healthcare (UK) Ltd., Indivior PLC, and MonoSol Rx, LLC On September 22, 2016, forty-one states and the District of Columbia, or the States, brought a lawsuit against Indivior and us in the U.S. District Court for the Eastern District of Pennsylvania alleging violations of federal and state antitrust statutes and state unfair trade and consumer protection laws relating to Indivior’s launch of Suboxone Sublingual Film in 2010 and seeking an injunction, civil penalties, and disgorgement. After filing the lawsuit, the case was consolidated for pre-trial purposes with the In re Suboxone (Buprenorphine Hydrochloride and Naloxone) Antitrust Litigation, MDL No. 2445, or the Suboxone MDL, a multidistrict litigation relating to putative class actions on behalf of various private plaintiffs against Indivior relating to its launch of Suboxone Sublingual Film. While we were not named as a defendant in the original Suboxone MDL cases, the action brought by the States alleges that we participated in an antitrust conspiracy with Indivior in connection with Indivior’s launch of Suboxone Sublingual Film and engaged in related conduct in violation of federal and state antitrust law. We moved to dismiss the States’ conspiracy claims, but by order dated October 30, 2017, the Court denied our motion to dismiss. We filed an answer denying the States’ claims on November 20, 2017. Daubert motions were filed on September 28, 2020, and oppositions were filed on October 19, 2020. There is no date set for an oral argument on the motions. Opening summary judgment briefs are due March 8, 2021, and responses to summary judgment motions are due April 8, 2021. No trial date has yet been set. We are not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter. Humana and Centene Action Humana Inc. v. Indivior Inc, Indivior Solutions Inc., Indivior PLC, Reckitt Benckiser Healthcare (UK) Ltd., and Aquestive Therapeutics, Inc. Centene Corporation, Wellcare Health Plans, Inc., New York Quality Healthcare Corporation d/b/a Fidelis Care, and Health Net, LLC v. Indivior Inc, Indivior Solutions Inc., Indivior PLC, Reckitt Benckiser Healthcare (UK) Ltd., and Aquestive Therapeutics, Inc. On September 18, 2020, Humana, Inc. (“Humana”), a health insurance payor, filed a lawsuit against us and Indivior in the Eastern District of Pennsylvania alleging facts similar to those at issue in the Antitrust Case and the Suboxone MDL described above, which lawsuit was assigned to the same judge that is presiding over Antitrust Case and Suboxone MDL. Humana’s Complaint alleges five causes of action against us, including conspiracy to violate the RICO Act, fraud under state law, unfair and deceptive trade practices under state law, insurance fraud, and unjust enrichment. On September 21, 2020, Centene Corporation (“Centene”) and other related insurance payors filed a similar lawsuit against us and Indivior in the Eastern District of Missouri. The counsel representing Humana is also representing Centene. On September 21, 2020, the Centene action was provisionally transferred to the Eastern District of Pennsylvania by the United States Judicial Panel on Multidistrict Litigation. On January 15, 2021, we filed a motion to dismiss the Centene and Humana complaints. The other defendants in the actions also filed motions to dismiss on the same date. Briefing on the motions to dismiss is currently scheduled to end on March 16, 2021. We are not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter. California Litgation Neurelis, Inc. v. Aquestive Therapeutics, Inc. On December 5, 2019, Neurelis filed a lawsuit against us in the Superior Court of California, County of San Diego alleging the following three causes of action: (1) Unfair Competition under California Business and Professional Code § 17200; (2) Defamation; and (3) Malicious Prosecution. Neurelis filed a First Amended Complaint on December 9, 2019, alleging the same three causes of action. We filed a Motion to Strike Neurelis’s Complaint under California’s anti-SLAPP (“strategic lawsuit against public participation”) statute on January 31, 2020, which Neurelis opposed. On August 6, 2020, the Court issued an order granting in part and denying in part our anti-SLAPP motion. We filed a notice of appeal to the California Court of Appeal on September 1, 2020, and Neurelis filed a notice of cross-appeal on October 5, 2020. We filed our opening appeal brief on January 27, 2021. Briefing on the appeal is currently scheduled to end on July 2, 2021, and there is no date yet set for a hearing on the appeal. The trial court proceedings remain stayed while the appeal is pending. We are not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter. |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Data (unaudited) [Abstract] | |
Quarterly Financial Data (unaudited) | Note 21. Quarterly Financial Data (unaudited) The following tables contain selected quarterly financial information from 2020 and 2019 (in thousands, except per share amounts). The Company believes that this information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Three Months Ended March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 Revenues $ 8,765 $ 21,675 $ 8,260 $ 7,149 Manufacture and supply 3,659 3,539 2,978 2,788 Total costs and expenses 22,626 21,280 22,041 22,795 Net loss (16,530 ) (2,334 ) (16,551 ) (20,368 ) Basic and diluted net loss per common share $ (0.49 ) $ (0.07 ) $ (0.49 ) $ (0.60 ) Three Months Ended March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Revenues $ 12,643 $ 11,129 $ 12,418 $ 16,419 Manufacture and supply 3,506 5,420 4,643 6,792 Total costs and expenses 25,717 29,817 23,420 26,323 Net loss (14,726 ) (20,472 ) (18,412 ) (12,636 ) Basic and diluted net loss per common share $ (0.59 ) $ (0.82 ) $ (0.74 ) $ (0.48 ) For periods in which the Company reported a net loss, potentially dilutive securities were excluded from the computation of per share amounts. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 22. Subsequent Events (A) License Agreement with Mitsubishi Tanabe On January 21, 2021, the Company entered into an exclusive license agreement with Mitsubishi Tanabe Pharma America, Inc. for the commercialization in the United States of Exservan® (riluzole), an oral film formulation of riluzole for treatment of amyotrophic lateral sclerosis (ALS). (B) Continued Utilization of the At-The-Market Facility The Company continued utilization of its At-The-Market facility from January 1 through March 5, 2021 and sold 1,644,715 shares which generated net proceeds of approximately $9,749. (C) Stockholder Class Action On March 1, 2021, a securities class action lawsuit was filed in the United States District Court of the District of New Jersey alleging that the Company and certain of its officers engaged in violations of the federal securities laws relating to public statements made by the Company relating to the approval of Libervant. We are not able to determine or predict the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter. |
Basis of Presentation and Pri_2
Basis of Presentation and Principles of Consolidation (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Basis of Presentation and Principles of Consolidation [Abstract] | |
Basis of Presentation and Principles of Consolidation | These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC. The accounts of wholly owned subsidiaries are included in the consolidated financial statements. Other than corporate formation activities, no such subsidiaries have conducted any commercial, developmental or operational activities and none have customers or vendors. Certain reclassifications were made to conform to the current presentation. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and contingent liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions often involve assessments of matters that are inherently uncertain and accordingly actual results could differ from those estimates. Significant items subject to estimates and assumptions include those related to revenue recognition, inventory costs, allowances for rebates from proprietary product sales, allowances for sales returns, the useful lives of fixed assets, the valuations of warrants issued and of share-based compensation, and contingencies. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term, highly liquid investments purchased with original maturities of three months or less to be cash equivalents. At December 31, 2020 and 2019, cash and cash equivalents consisted of cash in bank accounts and money market funds. |
Concentration of Credit Risk | Concentration of Credit Risk Cash and cash equivalents are maintained are held by federally insured financial institutions that management believes are of high credit quality. The Company has not experienced any losses in such accounts and such amounts may exceed federally-insured limits. Indivior, Sunovion, and three of the largest regional wholesalers represent our most significant customers and details on these relationships are outlined in Note 5. |
Trade Accounts Receivable | Trade Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company grants credit to customers in the normal course of business, but generally does not require collateral or any other security to support its receivables. The Company’s credit terms generally range from 30 to 60 days, depending on the customer and type of invoice. We perform a regular review of our customers’ credit risk and payment histories, including payments made subsequent to year-end. The Company evaluates the collectability of accounts receivable based on a combination of factors. In situations where changing circumstances indicate that a specific customer is unable to meet its financial obligations to the Company, a provision to the allowances for doubtful accounts is recorded against amounts due in order to reduce the net recognized receivable to the amount that is reasonably expected to be collected. For all other customers, a provision to the allowances for doubtful accounts is recorded based on factors including the length of time the receivables are past due, the current business environment and the Company’s historical experience. Provisions to the allowances for doubtful accounts are recorded to selling, general and administrative expenses. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. The allowance for doubtful accounts, associated with recoverability of accounts receivable, was $40 and $124 as of December 31, 2020 and 2019, respectively. |
Inventories | Inventories Inventories, consisting of purchased materials, direct labor and manufacturing overhead, are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value. The Company regularly reviews its inventories for impairment and reserves are established when necessary. At each balance sheet date, the Company evaluates inventories for excess quantities, obsolescence and shelf life expiration. This evaluation includes analysis of historical sales levels by product, projections of future demand, the risk of competitive obsolescence for products, general market conditions, and a review of the shelf life expiration dates for products. To the extent that management determines there are excess or obsolete inventory or quantities with a shelf life that is too near its expiration for the Company to reasonably expect that it can sell those products, or use them in production, prior to their expiration, the Company records allowances to adjust the carrying value to estimated net realizable value as necessary. The Company expenses inventory related to our research and development activities when we purchase or manufacture it. Before the regulatory approval of our product candidates, we recognize research and development expense for the manufacture of drug products that could potentially be available to support the commercial launch of our drug candidates, if approved. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost net of accumulated depreciation and amortization, which is computed by the straight-line method based on the estimated useful lives of the respective assets, as discussed below. Leasehold improvements are amortized over the shorter of the lease terms or the estimated useful lives of the leased assets. Maintenance and repair costs are charged to expense as incurred, and expenditures for major renewals and improvements are capitalized. Upon disposition of property and equipment, the related cost and accumulated depreciation and amortization are removed from the accounts, and any gain or loss is reflected in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The Company assesses the net book value of its property and equipment for impairment at least annually or when events or circumstances indicate that carrying amounts may not be recoverable in the ordinary course of its business. |
Intangible Assets | Intangible Assets Intangible assets include the costs of acquired composition and process technologies and the costs of purchased patents used in the manufacture of orally soluble film. The Company amortizes these assets using the straight-line method over the shorter of their legal lives or estimated useful lives. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long lived assets, such as property, plant, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In these circumstances, the Company compares undiscounted cash flows expected to be generated by that asset or asset group to the corresponding carrying amounts. If this comparison is indicative of impairment, an impairment charge is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered most appropriate. |
Leases | Leases Determination if an arrangement is a lease is made at inception. An arrangement is determined to contain a lease if the contract conveys the right to control the use of an identified property and equipment for a period of time in exchange for consideration. If we can benefit from the various underlying assets of a lease on their own or together with other resources that are readably available, or if the various underlying assets are neither highly dependent or highly interrelated with underlying assets in the arrangements, they are considered to be a separate lease component. In the event multiple underlying assets are identified, the lease consideration is allocated to the various components based on each on the component’s relative fair value. Operating lease assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent an obligation to make lease payments arising from the lease arrangement. Operating lease assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, in determining the operating lease liability, we use an estimate of our incremental borrowing rate. The calculation of the operating lease assets includes any lease payments made and excludes any lease incentives. Our lease terms may include options to extend or terminate the lease and are included when it is reasonably certain that we will exercise the option. We record operating lease assets and lease liabilities in our consolidated balance sheets. Lease expenses for lease payments is recognized on a straight-line bases over the lease term. Short-term leases, or leases that have a lease term of 12 months or less at consummation date, are excluded from this treatment and are recognized on a straight-line basis over the term of the lease. We have not entered into any material short-term lease or financing leases as of December 31, 2020. |
Liability Related to the Sale of Future Revenue | Liability Related to the Sale of Future Revenue The Company treats the liability related to the sale of future revenue as debt financing, amortized under the effective interest rate method over the estimated life of the related expected royalty stream. The liability related to the sale of future revenue and the related interest expense are based on our current estimates of future royalties expected to be paid over the life of the arrangement. The Company will periodically assess the expected royalty payments using a combination of internal projections and forecasts from external resources. To the extent our future estimates of royalty payments are greater or less than previous estimates or the interest timing of such payments is materially different than its previous estimates, the Company will prospectively recognize related interest expense. Royalty revenue related to the sale of future revenue is reflected as royalty revenue, and amortization of debt is reflected as interest expense related to the sale of future revenue in the Consolidated Statement of Operations and Comprehensive Loss. For further discussion of the sale of the future revenue, refer to Note 14, Sale of Future Revenue. |
Revenue Recognition | Revenue Recognition The Company’s revenues include (i) sales of manufactured products pursuant to contracts with commercialization licensees, (ii) sales of its proprietary clobazam-based Sympazan oral film product used as a treatment for LGS-related seizures, (iii) license and royalty revenues and (iv) co-development and research fees generally in the form of milestone payments. See Note 5 for further details. Having adopted ASC 606, Revenue from Contracts with Customers, Manufacture and supply revenue Proprietary product sales, net . License and Royalty Revenue Royalty revenue is estimated and recognized when sales under supply agreements with commercial licensees are recorded, absent any contractual constraints or collectability uncertainties. Royalties based on sales of Suboxone and Zuplenz have been recorded in this manner. Co-development and Research Fees Revenue recognition arising from milestone payments is dependent upon the facts and circumstances surrounding the milestone payments. Milestone payments based on a non-sales metric such as a development-based milestone ( e.g. Contract Assets - in certain situations, customer contractual payment terms provide for invoicing in arrears. Accordingly, some, or all performance obligations may be completely satisfied before the customer may be invoiced under such agreements. In these situations, billing occurs after revenue recognition, which results in a contract asset supported by the estimated value of the completed portion of the performance obligation. These contract assets are reflected as a component of other receivables within Trade and other receivables within the Consolidated Balance Sheet. Contract Liabilities - in certain situations, customer contractual payment terms are structured to permit invoicing in advance of delivery of a good or service. In such instances, the customer’s cash payment may be received before satisfaction of some, or any, performance obligations that are specified. In these situations, billing occurs in advance of revenue recognition, which results in contract liabilities. These contract liabilities are reflected as deferred revenue within the Consolidated Balance Sheet. As remaining performance obligations are satisfied, an appropriate portion of the deferred revenue balance is credited to earnings. |
Research and Development | Research and Development Research and development, or R&D, expenses are recorded in accordance ASC 730 Research and Development |
Income Taxes | Income Taxes Income taxes are recorded in accordance with FASB ASC Topic 740 Income Taxes, or ASC 740, which provides for deferred taxes using an asset and liability approach. Income taxes have been calculated on a separate tax return basis. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Tax benefits are recognized when it is more likely than not that a tax position will be sustained during an audit. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Uncertain tax positions are accounted for in accordance with the provision of ASC 740. When uncertain tax positions exist, the tax benefit is recognized to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. To date, the Company has not had any significant uncertain tax positions. |
Share-Based Compensation | Share-Based Compensation The Company records share-based compensation expenses for awards of stock options and restricted stock units (RSUs) under ASC 718, Compensation — Stock Compensation Compensation-Stock Compensation: Improvements to Non-employee Share-Based Payment Accounting, Equity-based Payments to Non-Employees The Company’s stock-based compensation includes grants of stock options and restricted stock units (RSUs) to employees, consultants and non-employee directors. Beginning in 2019, the Company also offered employees an opportunity to participate in an employee stock purchase plan. Expenses arising from these grants are recorded in the accompanying financial statements based on their grant date fair values as ratably earned during their respective vesting periods. The Company’s estimates of the fair value of options at their grant dates is based on the Black-Scholes option valuation model and considers various variables and assumptions, including: • the stock price at the grant date, • exercise price, • both the contractual and estimated expected term of the option, • an estimate of stock price volatility based on that of an industry peer group, • expected dividends, • no dividends for the foreseeable future, and • risk-free interest rate. These assumptions require estimates and judgements and changes in those inputs could impact the amount of expenses that are charged to earnings. The Company recognizes compensation expense for the fair value of restricted stock unit and stock option awards over the requisite service period of the award. All excess tax benefits, taxes and tax deficiencies from stock-based compensation are included in the provision for income taxes in the Consolidated Statement of Operations. |
Per Share Data | Per Share Data Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is calculated by dividing net income available to common stockholders as adjusted for the effect of dilutive securities, if any, by the weighted average number of shares of common stock and dilutive common stock outstanding during the period. Potentially dilutive common shares include the shares of common stock issuable upon the exercise of outstanding stock options and warrants, the shares of issued but unvested RSUs and the purchase of shares from the Company’s employee stock purchase plan (using the treasury stock method). For all periods presented, potential common shares have been excluded from the calculation of EPS because their effect would be anti-dilutive. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity that may result from transactions and economic events other than those with stockholders, such as unrealized gains or losses on investments. For the periods ending on December 31, 2020 and 2019, the Company’s comprehensive loss included only its net loss. |
Fair Value Measurements | Fair Value Measurements Certain assets and liabilities are reported on a recurring basis at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1 — Quoted prices in active markets for identical assets or liabilities. Cash and cash equivalents consisted of cash in bank checking accounts and money market funds which are all Level 1 assets. • Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. The Company currently has no Level 2 assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying amounts reported in the balance sheets for trade and other receivables, prepaid and other current assets, accounts payable, accrued expenses and deferred revenue approximate fair value based on the short-term maturity of these assets and liabilities. The Company granted warrants to certain Note Holders in connection with its debt repayment and debt refinancing during 2020 and 2019, respectively. Those warrants were valued based on Level 3 inputs and their fair value was based primarily on an independent third-party appraisal prepared as of the grant date consistent with generally-accepted valuation methods of the Uniform Standards of Professional Appraisal Practice, the American Society of Appraisers and the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation. The Company’s 12.5% Senior Secured Notes contain a repurchase offer or put option which gives holders of the option the right, but not the obligation, to receive a specified amount of future royalties up to a capped amount. This put option was valued based on Level 3 inputs and its fair value was based primarily on an independent third-party appraisal consistent with generally-accepted valuation methods of the Uniform Standards of Professional Appraisal Practice, the American Society of Appraisers and the American Institute of Certified Public Accountants Accounting and Valuation Guide. See Note 12 12.5% Senior Notes and Loans Payable for further discussion. |
Segment Information | Segment Information Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company manages its operations as a single segment for purposes of assessing performance and making operating decisions. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements As a public emerging growth company, the Company has elected to take advantage of the extended transition period afforded by Jumpstart Our Business Startups Act for the implementation of new or revised accounting standards and, as a result, the Company will comply with new or revised accounting standards by the relevant dates on which adoption of such standards is required for public emerging growth companies. From time to time, new accounting pronouncements are issued by the FASB and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Recently Adopted Accounting Pronouncements: In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2016-02, Leases (Topic 842) The Company adopted and applied ASU 2016-02 on January 1, 2020 using the modified retrospective transition provisions of ASC 842 to leases in effect as of that date of adoption and recorded right-of-use assets totaling $4,048 and lease liabilities as adjusted for accrued lease payments, in the amount $4,224 based on an estimated incremental borrowing rate of 16.9%, representing the present value of remaining minimum lease payments. The assets and liabilities thus recorded were primarily those related to the Company’s leased plant, laboratory and corporate administrative facilities. The Company elected to apply the ASU-specified practical expedients and accordingly did not re-assess (i) whether its contracts contained a lease under the new definition of a lease, (ii) the classification of those leases, and (iii) initial direct costs of existing leases. In addition, the Company elected not to apply the hindsight expedient in the assessment of lease renewals and resultant term of leases. The Company also elected not to recognize a right-of-use asset and lease liability for those leases with a remaining lease term of 12 months or less. The adoption of ASU 2016-02 did not require a cumulative-effect adjustment to the opening balance of the accumulated deficit at the time of adoption. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts from Cash Payments In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework In January 2016, the FASB issued revised guidance governing accounting and reporting of financial instruments (ASU 2016-01) and in 2018 issued technical corrections (ASU 2018-03). This guidance requires that equity investments with readily determinable fair values that are classified as available-for-sale be measured at fair value with changes in value reflected in current earnings. This guidance also simplifies the impairment testing of equity investments without readily determinable fair values and alters certain disclosure requirements. ASU No. 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and 606 Recent Accounting Pronouncements Not Adopted as of December 31, 2020: In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivative and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company. |
Revenues and Trade Receivable_2
Revenues and Trade Receivables, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenues and Trade Receivables, Net [Abstract] | |
Revenue | The Company’s revenue was comprised of the following: Year Ended December 31, 2020 2019 Manufacture and supply revenue $ 24,881 $ 38,739 License and royalty revenue 14,055 6,959 Co-development and research fees 1,264 4,042 Proprietary product sales, net 5,649 2,869 Revenues $ 45,849 $ 52,609 |
Disaggregation of Revenue | The following table provides disaggregated net revenue by geographic area: Year Ended December 31, 2020 2019 United States $ 40,956 $ 48,293 Ex-United States 4,893 4,316 Revenues $ 45,849 $ 52,609 |
Accounts Receivable, Net | Accounts receivable, net consist of the following: December 31, 2020 2019 Accounts receivable $ 4,330 $ 9,094 Contract and other receivables 3,081 4,363 Less: allowance for bad debt (40 ) (124 ) Less: sales-related allowances (416 ) (203 ) Trade and other receivables, net $ 6,955 $ 13,130 |
Changes in Allowance for Bad Debts | The following table presents the changes in the allowance for bad debt: December 31, 2020 2019 Allowance for doubtful accounts at beginning of year $ 124 $ 58 Additions charged to bad debt expense 198 66 Write-downs charged against the allowance (282 ) — Allowance for doubtful accounts at end of year $ 40 $ 124 |
Changes in Sales-related Allowances | The following table presents the changes in sales-related allowances: December 31, 2020 2019 Balance at December 31, 2019 $ 203 $ 104 Provision related to sales in 2020 731 244 Credits and payments (518 ) (145 ) Balance at December 31, 2020 $ 416 $ 203 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory [Abstract] | |
Inventory, net | Inventory consists of the following: December 31, 2020 2019 Raw material $ 789 $ 1,244 Packaging material 1,128 1,096 Finished goods 544 519 Total inventory $ 2,461 $ 2,859 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment, Net [Abstract] | |
Property and Equipment, Net | December 31, Useful Lives 2020 2019 Machinery 3-15 years $ 21,333 $ 21,088 Furniture and fixtures 3-15 years 1,209 1,150 Leasehold improvements (a) 21,333 21,333 Computer, network equipment and software 3-7 years 2,999 2,787 Construction in progress 877 1,412 47,751 47,770 Less: accumulated depreciation and amortization (40,878 ) (38,044 ) Total property and equipment, net $ 6,873 $ 9,726 (a) Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives. |
Right-of-Use Assets and Lease_2
Right-of-Use Assets and Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Right-of-Use Assets and Lease Obligations [Abstract] | |
Operating Lease Liabilities | The Company’s payments due under its operating leases are as follow: Amount 2021 $ 1,287 2022 1,295 2023 944 2024 565 2025 565 2026 424 Total lease payments 5,080 Less: imputed interest (1,506 ) Total operating lease liabilities $ 3,574 |
Future Minimum Lease Payments Under Operating Leases | The following schedule presents future minimum lease payments under operating leases as of December 31, 2019, including those derived from renewal options that are deemed noncancelable under FASB ASC Section 840-10-35, Leases - Subsequent Measurement Amount 2020 $ 1,274 2021 1,287 2022 1,153 2023 380 Thereafter — Total $ 4,094 |
Intangible Assets, Net and Ot_2
Intangible Assets, Net and Other non-current assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Intangible Assets, Net and Other non-current assets [Abstract] | |
Components of Identifiable Intangible Assets | The following table provides the components of identifiable intangible assets, all of which are finite lived and other non-current assets: December 31, 2020 2019 Purchase technology-based intangible $ 2,358 $ 2,358 Purchased patent 509 509 2,867 2,867 Less: accumulated amortization (2,765 ) (2,714 ) Intangible assets, net 102 153 Royalty receivable 7,000 — Other 836 286 Total other non-current assets $ 7,836 $ 286 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | Accrued expenses consisted of the following: December 31, 2020 2019 Accrued compensation $ 6,330 $ 3,758 Real estate and personal property taxes 316 300 Accrued distribution expenses 1,722 1,174 Other 201 243 Total accrued expenses $ 8,569 $ 5,475 |
12.5% Senior Secured Notes an_2
12.5% Senior Secured Notes and Loans Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
12.5% Senior Secured Notes and Loans Payable [Abstract] | |
Debt Maturity | A debt maturity table is presented below: 2021 $ 2,575 2022 7,725 2023 12,875 2024 18,025 2025 10,300 Total $ 51,500 |
Sale of Future Revenue (Tables)
Sale of Future Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Sale of Future Revenue [Abstract] | |
Activity of Royalty Obligation | The following table shows the activity of the Royalty Obligation since the transaction inception through December 31, 2020: Upfront proceeds from the sale of future revenue $ 40,000 Contingent payment from the sale of future revenue 10,000 Issuance costs (2,909 ) Amortization of issuance costs 20 Royalties related to the sale of future revenue (75 ) Interest expense related to the sale of future revenue 1,938 Liability related to the sale of future revenue, net (includes current portion of $1,450) $ 48,974 |
Other Non-Current Liabilities (
Other Non-Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Non-Current Liabilities [Abstract] | |
Liability for Asset Retirement Obligations | Below is a schedule of activity in the Company’s liability for AROs for the year ended December 31, 2020 and 2019. Balance at December 31, 2018 $ 1,216 Additions — Accretion 144 Balance at December 31, 2019 1,360 Additions — Accretion 165 Balance at December 31, 2020 $ 1,525 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Net Loss Per Share [Abstract] | |
Basic and Diluted Net Loss Per Share | As a result of the Company’s net loss incurred for the year ended December 31, 2020 and 2019, all potentially dilutive instruments outstanding would have anti-dilutive effects on per-share calculations for this period. Therefore, basic and diluted net loss per share were the same for all periods presented as reflected below. Year Ended December 31, 2020 Year Ended December 31, 2019 Numerator: Net loss $ (55,783 ) $ (66,246 ) Denominator: Weighted-average number of common shares – basic and diluted 33,651,127 25,356,098 Loss per common share – basic and diluted $ (1.66 ) $ (2.61 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-Based Compensation [Abstract] | |
Share-based Compensation Expense | The Company recognized share-based compensation in its Consolidated Statements of Operations during the periods presented as follows: Expense classification: Year Ended December 31, 2020 Year Ended December 31, 2019 Manufacture and supply $ 275 $ 231 Research and development 729 720 Selling, general and administrative 5,577 6,120 Total share-based compensation expenses $ 6,581 $ 7,071 Share-based compensation from: Restricted Stock Units (A) 806 1,863 Stock Options (B) 5,751 5,173 Employee Stock Purchase Plan (C) 24 35 Total share-based compensation expenses $ 6,581 $ 7,071 |
Restricted Stock Unit Awards | The following table summarizes the Company’s awards of restricted stock units for the year ended December 31, 2019 and 2020: Number of Units Weighted Average Grant Date Fair Value Per Share (In thousands) Unvested, December 31, 2018 205 $ 14.77 Granted — — Forfeited (6 ) — Vested (125 ) 14.94 Unvested, December 31, 2019 74 $ 14.64 Granted 4 7.54 Forfeited — — Vested (64 ) 14.88 Unvested, December 31, 2020 14 $ 11.38 |
Stock Option Activity | The following table summarizes the Company’s stock option activity for the period from December 31, 2018 through December 31, 2020: (in 000s, except share price data) Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Aggregate Intrinsic Value Outstanding at December 31, 2018 1,033 $ 14.72 9.55 $ — Granted 1,258 $ 6.66 Forfeited (60 ) $ 5.78 Exercised — Outstanding at December 31, 2019 2,231 $ 10.42 8.94 $ 689 Granted 1,168 3.32 Forfeited (140 ) $ 4.36 Exercised — $ — Outstanding at December 31, 2020 3,259 $ 8.14 8.42 $ 2,978 Vested and expected to vest at December 31, 2020 3,035 $ 8.14 8.42 $ 2,758 Exercisable at December 31, 2020 1,235 $ 11.26 7.89 $ 403 |
Valuation Assumptions for Determination of Fair Value of Options | The weighted average grant date fair value of stock options granted during 2020 and 2019 was $2.61 and $4.95, respectively. The fair values of stock options granted were estimated using the Black-Scholes model based on the following assumptions: Year Ended December 31, 2020 2019 Expected dividend yield 0% 0% Expected volatility 100% 85% — 106% Expected term (years) 5.50 — 6.10 5.50 — 6.10 Risk-free interest rate 0.33% — 1.69% 1.5% — 2.6% Exercise prices $ 1.54 — 7.86 $ 3.36 — 8.05 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes [Abstract] | |
Deferred Tax Assets and Liabilities | The tax effect of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts that give rise to the deferred tax assets and deferred tax liabilities as of December 31, 2020 and 2019 are as follows: December 31, 2020 2019 Deferred tax assets: Accounts receivable $ 112 $ 126 Inventory 4 69 Accrued expenses 353 835 NOL carryforwards 22,569 23,687 Interest limitation imposed by the TJCA 7,235 5,748 Stock Compensation 4,051 2,505 Other 1,229 783 Sale of Future Revenue 14,444 — Property and equipment 2,380 1,741 Orphan Drug and R&D Tax Credits 5,851 4,621 58,228 40,115 Deferred tax liabilities: Intangible assets (551 ) (58 ) Prepaid expenses (908 ) — (1,459 ) (58 ) Valuation Allowance (56,764 ) (40,057 ) Net deferred tax asset/(liability) $ — $ — |
Reconciliation of Income Tax Benefit | A reconciliation of income tax benefit and the amount computed by applying the statutory federal income tax rates of 21% to loss before taxes for the year ended December 31, 2020 and 2019, respectively, as follows: Year Ended December 31, 2020 2019 Income taxes at statutory rate 21.00 % 21.00 % Increase (decrease) resulting from: State income tax 6.81 6.76 Permanent differences (0.12 ) (0.04 ) Research & development credit 2.35 2.32 Return to provision — 0.98 Valuation allowance (30.04 ) (31.02 ) Effective tax rate 0.00 % 0.00 % |
Quarterly Financial Data (una_2
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Data (unaudited) [Abstract] | |
Selected Quarterly Financial Information | The following tables contain selected quarterly financial information from 2020 and 2019 (in thousands, except per share amounts). The Company believes that this information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Three Months Ended March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 Revenues $ 8,765 $ 21,675 $ 8,260 $ 7,149 Manufacture and supply 3,659 3,539 2,978 2,788 Total costs and expenses 22,626 21,280 22,041 22,795 Net loss (16,530 ) (2,334 ) (16,551 ) (20,368 ) Basic and diluted net loss per common share $ (0.49 ) $ (0.07 ) $ (0.49 ) $ (0.60 ) Three Months Ended March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Revenues $ 12,643 $ 11,129 $ 12,418 $ 16,419 Manufacture and supply 3,506 5,420 4,643 6,792 Total costs and expenses 25,717 29,817 23,420 26,323 Net loss (14,726 ) (20,472 ) (18,412 ) (12,636 ) Basic and diluted net loss per common share $ (0.59 ) $ (0.82 ) $ (0.74 ) $ (0.48 ) |
Company Overview and Equity T_2
Company Overview and Equity Transactions (Details) $ in Thousands | Dec. 17, 2019USD ($)shares | Dec. 31, 2020USD ($)Productshares | Dec. 31, 2019shares | Dec. 31, 2020USD ($)Product | Dec. 31, 2019USD ($)shares | Sep. 11, 2019USD ($) |
Company Overview [Abstract] | ||||||
Number of internally-developed proprietary products | Product | 1 | 1 | ||||
Equity Transactions [Abstract] | ||||||
Net proceeds from initial public offering | $ 6,215 | $ 39,317 | ||||
At-the-Market Offering [Member] | ||||||
Equity Transactions [Abstract] | ||||||
Number of common shares issued (in shares) | shares | 930,993 | 0 | ||||
Proceeds from issuance of common stock | $ 6,055 | |||||
Transcation costs | $ 473 | |||||
At-the-Market Offering [Member] | Maximum [Member] | ||||||
Equity Transactions [Abstract] | ||||||
Aggregate offering price | $ 25,000 | |||||
Public Offering [Member] | ||||||
Equity Transactions [Abstract] | ||||||
Number of common shares issued (in shares) | shares | 8,050,000 | 8,050,000 | ||||
Transcation costs | $ 540 | |||||
Net proceeds from initial public offering | 37,835 | $ 37,295 | ||||
Underwriting discounts | $ 2,415 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies, Concentration of Credit Risk (Details) | 12 Months Ended |
Dec. 31, 2020Wholesaler | |
Summary of Significant Accounting Policies [Abstract] | |
Number of largest regional wholesalers | 3 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, Trade Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Trade Accounts Receivable [Abstract] | |||
Allowance for doubtful accounts associated with accounts receivable | $ 40 | $ 124 | $ 58 |
Minimum [Member] | |||
Trade Accounts Receivable [Abstract] | |||
Trade receivables, period for credit term | 30 days | ||
Maximum [Member] | |||
Trade Accounts Receivable [Abstract] | |||
Trade receivables, period for credit term | 60 days |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Revenue Recognition (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Revenue from Contract with Customer [Abstract] | |||
Stockholders' equity | $ (48,497) | $ (6,122) | $ 10,080 |
Cumulative Effect, Period of Adoption, Adjustment [Member] | ASU 2014-09 and ASU 2018-07 [Member] | |||
Revenue from Contract with Customer [Abstract] | |||
Stockholders' equity | $ (2,832) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies, Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Nov. 03, 2020 |
Senior Secured Notes Due 2025 [Member] | ||
Fair Value of Financial Instruments [Abstract] | ||
Interest rate | 12.50% | 12.50% |
Level 2 [Member] | ||
Fair Value of Financial Instruments [Abstract] | ||
Assets, fair value | $ 0 | |
Liabilities, fair value | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies, Deferred Offering Costs and Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Recent Accounting Pronouncements [Abstract] | ||
Lease liabilities | $ 3,574 | |
Right-of-use assets, net | 3,448 | $ 0 |
ASU 2016-02 [Member] | ||
Recent Accounting Pronouncements [Abstract] | ||
Lease liabilities | 4,224 | |
Right-of-use assets, net | $ 4,048 | |
Incremental borrowing rate on lease payments | 16.90% |
Risks and Uncertainties (Detail
Risks and Uncertainties (Details) - USD ($) $ in Thousands | Nov. 03, 2020 | Dec. 17, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Risks and Uncertainties [Abstract] | ||||||
Cash and cash equivalents | $ 31,807 | $ 49,326 | $ 31,807 | $ 49,326 | ||
Accumulated deficit | $ (186,257) | $ (130,474) | (186,257) | (130,474) | ||
Funding raised | 52,226 | |||||
Procceds from issuance of debt | 0 | 70,000 | ||||
Net proceeds from initial public offering | 6,215 | 39,317 | ||||
Common Stock issued upon warrant exercises | 1,821 | |||||
Debt repayment | $ 22,500 | $ 50,000 | ||||
Number of shares callable by warrants (in shares) | 2,000,000 | 2,000,000 | ||||
Period of strike price calculated on weighted average closing price | 30 days | |||||
Warrants issued to purchase common stock (in shares) | 143,000 | |||||
Public Offering [Member] | ||||||
Risks and Uncertainties [Abstract] | ||||||
Number of common shares issued (in shares) | 8,050,000 | 8,050,000 | ||||
Net proceeds from initial public offering | $ 37,835 | $ 37,295 | ||||
At-the-Market Facility [Member] | ||||||
Risks and Uncertainties [Abstract] | ||||||
Number of common shares issued (in shares) | 930,993 | 0 | ||||
Proceeds from issuance of common stock | $ 6,055 | |||||
Remaining borrowing capacity available under ATM facility | 18,472 | $ 18,472 | ||||
Monetization Agreement [Member] | ||||||
Risks and Uncertainties [Abstract] | ||||||
Upfront payment received | $ 40,000 | 40,000 | ||||
Additional payment received through the achievement of first milestone | $ 10,000 | 10,000 | ||||
Aggregate payments received | 50,000 | 50,000 | ||||
Maximum amount of payments receivable under agreement | 125,000 | 125,000 | ||||
Monetization Agreement [Member] | Maximum [Member] | ||||||
Risks and Uncertainties [Abstract] | ||||||
Contingent payments | 75,000 | 75,000 | ||||
Senior Secured Notes Due 2025 [Member] | ||||||
Risks and Uncertainties [Abstract] | ||||||
Cash and cash equivalents | $ 31,807 | $ 31,807 | ||||
Interest rate | 12.50% | 12.50% | 12.50% | |||
Procceds from issuance of debt | $ 4,000 | $ 4,000 | $ 13,110 | |||
Debt repayment | 22,500 | 22,500 | ||||
Notes payable outstanding | $ 70,000 | $ 51,500 | 51,500 | |||
Additional borrowing capacity | $ 30,000 | $ 30,000 | ||||
Number of shares callable by warrants (in shares) | 714,000 | 714,000 | ||||
Senior Secured Notes Due 2025 [Member] | Maximum [Member] | ||||||
Risks and Uncertainties [Abstract] | ||||||
Additional borrowing capacity | $ 30,000 | $ 30,000 | ||||
Senior Secured Notes Due 2025 - First Additional Offering [Member] | ||||||
Risks and Uncertainties [Abstract] | ||||||
Additional borrowing capacity | $ 10,000 | $ 10,000 | ||||
Number of shares callable by warrants (in shares) | 143,000 | 143,000 | ||||
Senior Secured Notes Due 2025 - Second Additional Offering [Member] | ||||||
Risks and Uncertainties [Abstract] | ||||||
Additional borrowing capacity | $ 20,000 | $ 20,000 |
Revenues and Trade Receivable_3
Revenues and Trade Receivables, Net, Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue [Abstract] | ||||||||||
Revenues | $ 7,149 | $ 8,260 | $ 21,675 | $ 8,765 | $ 16,419 | $ 12,418 | $ 11,129 | $ 12,643 | $ 45,849 | $ 52,609 |
Manufacture and Supply Revenue [Member] | ||||||||||
Revenue [Abstract] | ||||||||||
Revenues | 24,881 | 38,739 | ||||||||
License and Royalty Revenue [Member] | ||||||||||
Revenue [Abstract] | ||||||||||
Revenues | 14,055 | 6,959 | ||||||||
Co-Development and Research Fees [Member] | ||||||||||
Revenue [Abstract] | ||||||||||
Revenues | 1,264 | 4,042 | ||||||||
Proprietary Product Sales, Net [Member] | ||||||||||
Revenue [Abstract] | ||||||||||
Revenues | $ 5,649 | $ 2,869 |
Revenues and Trade Receivable_4
Revenues and Trade Receivables, Net, Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues by Geographic Market [Abstract] | ||||||||||
Revenues | $ 7,149 | $ 8,260 | $ 21,675 | $ 8,765 | $ 16,419 | $ 12,418 | $ 11,129 | $ 12,643 | $ 45,849 | $ 52,609 |
United States [Member] | ||||||||||
Revenues by Geographic Market [Abstract] | ||||||||||
Revenues | 40,956 | 48,293 | ||||||||
Ex-United States [Member] | ||||||||||
Revenues by Geographic Market [Abstract] | ||||||||||
Revenues | $ 4,893 | $ 4,316 |
Revenues and Trade Receivable_5
Revenues and Trade Receivables, Net, Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Receivable, Net [Abstract] | |||
Accounts receivable | $ 4,330 | $ 9,094 | |
Contract and other receivables | 3,081 | 4,363 | |
Less: allowance for bad debt | (40) | (124) | $ (58) |
Less: sales-related allowances | (416) | (203) | |
Trade and other receivables, net | $ 6,955 | $ 13,130 |
Revenues and Trade Receivable_6
Revenues and Trade Receivables, Net, Changes in Allowance for Bad Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Allowance for doubtful accounts at beginning of year | $ 124 | $ 58 |
Additions charged to bad debt expense | 198 | 66 |
Write-downs charged against the allowance | (282) | 0 |
Allowance for doubtful accounts at end of year | $ 40 | $ 124 |
Revenues and Trade Receivable_7
Revenues and Trade Receivables, Net, Changes in Sales-Related Allowances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues and Trade Receivables, Net [Abstract] | ||
Beginning balance | $ 203 | $ 104 |
Provision related to sales in 2020 | 731 | 244 |
Credits and payments | (518) | (145) |
Ending balance | $ 416 | $ 203 |
Revenues and Trade Receivable_8
Revenues and Trade Receivables, Net, Concentration of Major Customers (Details) - Customer | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue [Member] | ||
Customer Concentration [Abstract] | ||
Number of customers exceeding 10% thresholds | 2 | |
Revenue [Member] | Indivior [Member] | ||
Customer Concentration [Abstract] | ||
Concentrations of risk | 57.00% | 86.00% |
Revenue [Member] | Sunovion [Member] | ||
Customer Concentration [Abstract] | ||
Concentrations of risk | 26.00% | |
Receivables [Member] | ||
Customer Concentration [Abstract] | ||
Number of customers exceeding 10% thresholds | 4 | |
Receivables [Member] | Indivior [Member] | ||
Customer Concentration [Abstract] | ||
Concentrations of risk | 53.00% | 80.00% |
Receivables [Member] | AmerisourceBergen [Member] | ||
Customer Concentration [Abstract] | ||
Concentrations of risk | 14.00% | |
Receivables [Member] | Sunovion [Member] | ||
Customer Concentration [Abstract] | ||
Concentrations of risk | 13.00% | |
Receivables [Member] | Cardinal [Member] | ||
Customer Concentration [Abstract] | ||
Concentrations of risk | 10.00% |
Material Agreements, Agreement
Material Agreements, Agreement with Indivior (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Feb. 20, 2019 | |
Commercial Exploitation Agreement with Indivior [Member] | ||
Commercial Exploitation Agreement [Abstract] | ||
License agreement term | 7 years | |
Automatic renewal period of agreement | 1 year | |
Notice period of intent not to renew agreement | 1 year | |
Supplemental Agreement with Indivior [Member] | ||
Supplemental Agreement [Abstract] | ||
Aggregate payments received | $ 40,750 | |
Receivable, process patent rights | $ 1,250 | |
Maximum payments under agreement | 75,000 | |
Supplemental Agreement with Indivior [Member] | Maximum [Member] | ||
Supplemental Agreement [Abstract] | ||
Contingent payments receivable in the future | 34,250 | |
Aggregate revenue receivable, milestone payments and royalties | $ 33,000 |
Material Agreements, License Ag
Material Agreements, License Agreement with Sunovion Pharmaceuticals (Details) - License Agreement with Sunovion Pharmaceuticals, Inc. [Member] - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2020 | |
License Agreement with Sunovion Pharmaceuticals, Inc. [Abstract] | ||
Payment receivable | $ 4,000 | |
Aggregate payments received | 22,000 | |
Upfront payment received | 5,000 | |
Aggregate milestone payments receivable | 17,000 | |
One-time milestone payment ,no longer entitled to receive | $ 23,000 | |
Royalty [Member] | ||
License Agreement with Sunovion Pharmaceuticals, Inc. [Abstract] | ||
Revenues | $ 8,000 | |
Royalty [Member] | Minimum [Member] | ||
License Agreement with Sunovion Pharmaceuticals, Inc. [Abstract] | ||
Revenues | $ 8,000 |
Material Agreements, Purchase a
Material Agreements, Purchase and Sale Agreement with an Affiliate of Marathon Asset Management (Details) - Purchase and Sale Agreement with an Affiliate of Marathon Asset Management [Member] - USD ($) $ in Thousands | Nov. 03, 2020 | Dec. 31, 2020 |
Purchase and Sale Agreement with an Affiliate of Marathon Asset Management [Abstract] | ||
Upfront payment received | $ 40,000 | $ 40,000 |
Additional payment received through the achievement of first milestone | $ 10,000 | 10,000 |
Aggregate payments received | 50,000 | |
Maximum amount of payments receivable upon achievement of targets | 125,000 | |
Maximum [Member] | ||
Purchase and Sale Agreement with an Affiliate of Marathon Asset Management [Abstract] | ||
Contingent payments receivable | $ 75,000 |
Material Agreements, Agreemen_2
Material Agreements, Agreement to Terminate CLA with KemPharm (Details) - Agreement to Terminate CLA with KemPharm [Member] - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2020 | |
Agreement to Terminate CLA with KemPharm [Abstract] | ||
Revenues | $ 1,000 | $ 500 |
Percentage share of milestone payments paid | 10.00% | |
Maximum payments under agreement | $ 4,800 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory [Abstract] | ||
Raw material | $ 789 | $ 1,244 |
Packaging material | 1,128 | 1,096 |
Finished goods | 544 | 519 |
Total inventory | $ 2,461 | $ 2,859 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 47,751 | $ 47,770 | |
Less: accumulated depreciation and amortization | (40,878) | (38,044) | |
Total property and equipment, net | 6,873 | 9,726 | |
Property Plant and Equipment Income Statement Disclosures [Abstract] | |||
Depreciation and amortization | 3,392 | 2,854 | |
Machinery [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 21,333 | 21,088 | |
Machinery [Member] | Minimum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Useful lives | 3 years | ||
Machinery [Member] | Maximum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Useful lives | 15 years | ||
Furniture and Fixtures [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 1,209 | 1,150 | |
Furniture and Fixtures [Member] | Minimum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Useful lives | 3 years | ||
Furniture and Fixtures [Member] | Maximum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Useful lives | 15 years | ||
Leasehold Improvements [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | [1] | $ 21,333 | 21,333 |
Computer, Network Equipment and Software [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 2,999 | 2,787 | |
Computer, Network Equipment and Software [Member] | Minimum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Useful lives | 3 years | ||
Computer, Network Equipment and Software [Member] | Maximum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Useful lives | 7 years | ||
Construction in Progress [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 877 | $ 1,412 | |
[1] | Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives. |
Right-of-Use Assets and Lease_3
Right-of-Use Assets and Lease Obligations (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)Lease | Dec. 31, 2019USD ($) | |
Right-of-Use Assets and Lease Obligations [Abstract] | ||
Number of leases | Lease | 3 | |
Lease, Cost [Abstract] | ||
Short term operating lease term | 12 months | |
Estimated discount rate | 16.90% | |
Right of use assets | $ 3,448 | $ 0 |
Lease cost | 1,671 | |
Variable lease expenses | 379 | |
Rent expense | 1,613 | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 | 1,287 | |
2022 | 1,295 | |
2023 | 944 | |
2024 | 565 | |
2025 | 565 | |
2026 | 424 | |
Total lease payments | 5,080 | |
Less: imputed interest | (1,506) | |
Total operating lease liabilities | 3,574 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2020 | 1,274 | |
2021 | 1,287 | |
2022 | 1,153 | |
2023 | 380 | |
Thereafter | 0 | |
Total | $ 4,094 | |
ASU 2016-02 [Member] | ||
Lease, Cost [Abstract] | ||
Right of use assets | 4,048 | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
Total operating lease liabilities | $ 4,224 | |
Minimum [Member] | ||
Lease, Cost [Abstract] | ||
Remaining lease term | 2 years 3 months | |
Maximum [Member] | ||
Lease, Cost [Abstract] | ||
Remaining lease term | 5 years 9 months |
Intangible Assets, Net and Ot_3
Intangible Assets, Net and Other non-current assets (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2020USD ($)Payment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Identifiable Intangible Assets [Abstract] | |||
Intangible assets, gross | $ 2,867 | $ 2,867 | |
Less: accumulated amortization | (2,765) | (2,714) | |
Intangible assets, net | 102 | 153 | |
Royalty receivable | 7,000 | 0 | |
Other | 836 | 286 | |
Total other non-current assets | 7,836 | 286 | |
Amortization expense | 51 | 50 | |
Estimated Annual Amortization Expense [Abstract] | |||
2021 | 51 | ||
2022 | $ 51 | ||
Sunovion Pharmaceuticals, Inc. [Member] | |||
Estimated Annual Amortization Expense [Abstract] | |||
Minimum annual royalty receivable | $ 1,000 | ||
Guaranteed royalty period | 8 years | ||
Number of annual royalty payments receivable | Payment | 7 | ||
Amount of first royalty receivable that reduces the existing annual minimum royalty | $ 1,000 | ||
Sunovion Pharmaceuticals, Inc. [Member] | Royalty [Member] | |||
Estimated Annual Amortization Expense [Abstract] | |||
Revenues | $ 8,000 | ||
Purchased Technology-Based Intangible [Member] | |||
Identifiable Intangible Assets [Abstract] | |||
Intangible assets, gross | $ 2,358 | 2,358 | |
Purchased Patent [Member] | |||
Identifiable Intangible Assets [Abstract] | |||
Intangible assets, gross | $ 509 | $ 509 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses [Abstract] | ||
Accrued compensation | $ 6,330 | $ 3,758 |
Real estate and personal property taxes | 316 | 300 |
Accrued distribution expenses | 1,722 | 1,174 |
Other | 201 | 243 |
Total accrued expenses | $ 8,569 | $ 5,475 |
12.5% Senior Secured Notes an_3
12.5% Senior Secured Notes and Loans Payable (Details) $ / shares in Units, $ in Thousands | Nov. 03, 2020USD ($)Lender | Jul. 15, 2019USD ($) | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) |
12.5% Senior Secured Notes [Abstract] | ||||
Repayment of note | $ 22,500 | $ 50,000 | ||
Proceeds from issuance of debt | 0 | 70,000 | ||
Premium paid to retire debt | 2,250 | 2,944 | ||
Loans payable | 2,575 | 0 | ||
Debt Maturity [Abstract] | ||||
2021 | 2,575 | |||
2022 | 7,725 | |||
2023 | 12,875 | |||
2024 | 18,025 | |||
2025 | 10,300 | |||
Total | 51,500 | |||
Amortization expense, deferred debt issuance costs and debt discounts | $ 2,587 | 1,929 | ||
Warrants issued (in shares) | shares | 2,000,000 | |||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.001 | |||
Net proceeds from issuance of initial notes, warrants and first offer rights | $ 66,082 | |||
Perceptive Credit Opportunities Fund, LP [Member] | Line of Credit [Member] | ||||
Debt Maturity [Abstract] | ||||
Payment of existing debt obligation | $ (56,340) | |||
Senior Secured Notes Due 2025 [Member] | ||||
12.5% Senior Secured Notes [Abstract] | ||||
Repayment of note | $ 22,500 | $ 22,500 | ||
Notes payable outstanding | $ 70,000 | $ 51,500 | ||
Interest rate | 12.50% | 12.50% | ||
Upfront proceeds received | $ 40,000 | |||
Number of lenders in lieu of paying prepayment premium | Lender | 2 | |||
Proceeds from issuance of debt | $ 4,000 | $ 4,000 | 13,110 | |
Premium paid to retire debt | 2,250 | |||
Loan origination costs | $ 220 | |||
Percentage of cash proceeds entitled to receive | 112.50% | |||
Percentage of cash proceeds | 30.00% | |||
Additional borrowing capacity | $ 30,000 | |||
Frequency of periodic principal payment | quarterly | |||
Debt maturity date | Jun. 30, 2025 | |||
Loans payable | $ 2,575 | |||
Annual percentage increase in principal payments during first four quarters | 10.00% | |||
Annual percentage increase of initial loan principal payments during final four quarters | 40.00% | |||
Debt Maturity [Abstract] | ||||
Redemption percentage of debt under change of control provisions | 101.00% | |||
Amortization expense, deferred debt issuance costs and debt discounts | $ 2,587 | 1,929 | ||
Unamortized deferred debt issuance cost and deferred debt discounts | 14,596 | $ 9,662 | ||
Principal amount | $ 70,000 | |||
Warrants issued (in shares) | shares | 714,000 | |||
Senior Secured Notes Due 2025 [Member] | Minimum [Member] | ||||
Debt Maturity [Abstract] | ||||
Elective redemption percentage of debt | 101.56% | |||
Senior Secured Notes Due 2025 [Member] | Maximum [Member] | ||||
12.5% Senior Secured Notes [Abstract] | ||||
Additional borrowing capacity | $ 30,000 | |||
Debt Maturity [Abstract] | ||||
Elective redemption percentage of debt | 112.50% | |||
Principal amount | $ 100,000 | |||
Senior Secured Notes Due 2025 [Member] | Put Option [Member] | ||||
12.5% Senior Secured Notes [Abstract] | ||||
Fair value of put option | $ 535 | 420 | ||
Senior Secured Notes Due 2025 [Member] | Put Option [Member] | Accrued Expenses [Member] | ||||
12.5% Senior Secured Notes [Abstract] | ||||
Fair value of put option | 115 | |||
Senior Secured Notes Due 2025 [Member] | Put Option [Member] | Other Noncurrent Liabilities [Member] | ||||
12.5% Senior Secured Notes [Abstract] | ||||
Fair value of put option | $ 420 | |||
Senior Secured Notes Due 2025 - First Additional Offering [Member] | ||||
12.5% Senior Secured Notes [Abstract] | ||||
Additional borrowing capacity | $ 10,000 | |||
Debt Maturity [Abstract] | ||||
Warrants issued (in shares) | shares | 143,000 | |||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.001 | |||
Senior Secured Notes Due 2025 - Second Additional Offering [Member] | ||||
12.5% Senior Secured Notes [Abstract] | ||||
Additional borrowing capacity | $ 20,000 |
12.5 % Senior Secured Notes and
12.5 % Senior Secured Notes and Loans Payable, Perceptive (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Abstract] | ||
Loss on extinguishment of debt | $ 0 | $ (4,896) |
Prepayment premiums paid | 2,250 | $ 2,944 |
Perceptive Credit Opportunities Fund, LP [Member] | Line of Credit [Member] | ||
Line of Credit Facility [Abstract] | ||
Credit facility, maximum borrowing capacity | $ 50,000 | |
Warrant to purchase senior common equity interest ratio to fully diluted common units | 4.50% |
Warrants (Details)
Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Nov. 03, 2020 | |
Warrants [Abstract] | |||
Number of shares received upon automatic exercise of warrant (in shares) | 2,000,000 | ||
Warrant exercise price (in dollars per share) | $ 0.001 | ||
Change in fair value of warrant | $ 6,800 | ||
Exercise of warrants (in shares) | 0 | ||
Proceeds from warrant exercises | $ 1,821 | ||
Common Stock [Member] | |||
Warrants [Abstract] | |||
Common Stock issued upon warrant exercises (in shares) | 428,571 | 428,571 | |
Senior Secured Notes Due 2025 [Member] | |||
Warrants [Abstract] | |||
Interest rate | 12.50% | 12.50% | |
Debt maturity date | Jun. 30, 2025 | ||
Number of shares received upon automatic exercise of warrant (in shares) | 714,000 | ||
Senior Secured Notes Due 2025 - First Additional Offering [Member] | |||
Warrants [Abstract] | |||
Number of shares received upon automatic exercise of warrant (in shares) | 143,000 | ||
Warrant exercise price (in dollars per share) | $ 0.001 | ||
Change in fair value of warrant | $ 735 |
Sale of Future Revenue (Details
Sale of Future Revenue (Details) - USD ($) $ in Thousands | Nov. 03, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Sale of Future Revenue [Abstract] | ||||
Proceeds from sale of future revenue | $ 50,000 | $ 0 | ||
Activity of Royalty Obligation [Abstract] | ||||
Issuance costs | (2,909) | (3,946) | ||
Interest expense related to the sale of future revenue | 1,938 | 0 | ||
Liability related to the sale of future revenue, current | 1,450 | $ 0 | ||
Purchase and Sale Agreement with an Affiliate of Marathon Asset Management [Member] | ||||
Sale of Future Revenue [Abstract] | ||||
Upfront payment received | $ 40,000 | 40,000 | ||
Additional payment received through the achievement of first milestone | 10,000 | 10,000 | ||
Aggregate payments received | 50,000 | |||
Maximum amount of payments receivable under agreement | $ 125,000 | |||
Effective annual interest rate | 24.90% | |||
Activity of Royalty Obligation [Abstract] | ||||
Upfront proceeds from the sale of future revenue | 40,000 | $ 40,000 | ||
Contingent payment from the sale of future revenue | $ 10,000 | 10,000 | ||
Issuance costs | (2,909) | |||
Amortization of issuance costs | 20 | |||
Royalties related to the sale of future revenue | (75) | |||
Interest expense related to the sale of future revenue | 1,938 | |||
Liability related to the sale of future revenue, net (includes current portion of $1,450) | 48,974 | |||
Liability related to the sale of future revenue, current | 1,450 | |||
Purchase and Sale Agreement with an Affiliate of Marathon Asset Management [Member] | Royalty [Member] | ||||
Sale of Future Revenue [Abstract] | ||||
Proceeds from sale of future revenue | 50,000 | |||
Purchase and Sale Agreement with an Affiliate of Marathon Asset Management [Member] | Maximum [Member] | ||||
Sale of Future Revenue [Abstract] | ||||
Contingent payments receivable | 75,000 | |||
License Agreement with Sunovion Pharmaceuticals, Inc. [Member] | ||||
Sale of Future Revenue [Abstract] | ||||
Upfront payment received | 5,000 | |||
Aggregate payments received | $ 22,000 | |||
Guaranteed royalty period | 8 years | |||
Activity of Royalty Obligation [Abstract] | ||||
Upfront proceeds from the sale of future revenue | $ 5,000 | |||
License Agreement with Sunovion Pharmaceuticals, Inc. [Member] | Royalty [Member] | ||||
Sale of Future Revenue [Abstract] | ||||
Revenues | $ 8,000 | |||
License Agreement with Sunovion Pharmaceuticals, Inc. [Member] | Minimum [Member] | ||||
Sale of Future Revenue [Abstract] | ||||
Guaranteed royalty revenue | 1,000 | |||
License Agreement with Sunovion Pharmaceuticals, Inc. [Member] | Minimum [Member] | Royalty [Member] | ||||
Sale of Future Revenue [Abstract] | ||||
Revenues | $ 8,000 |
Other Non-Current Liabilities_2
Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Nov. 03, 2020 | |
Other Non Current Liabilities [Abstract] | |||
Other non-current liabilities | $ 1,945 | $ 1,360 | |
Depreciation expense related to ARO | 24 | 24 | |
Asset Retirement Obligation [Roll Forward] | |||
Balance at beginning of period | 1,360 | 1,216 | |
Additions | 0 | 0 | |
Accretion | 165 | 144 | |
Balance at ending of period | $ 1,525 | $ 1,360 | |
Senior Secured Notes Due 2025 [Member] | |||
Other Non Current Liabilities [Abstract] | |||
Interest rate | 12.50% | 12.50% | |
Put Option [Member] | Senior Secured Notes Due 2025 [Member] | |||
Other Non Current Liabilities [Abstract] | |||
Fair value of put option | $ 420 | $ 535 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator [Abstract] | ||||||||||
Net loss | $ (20,368) | $ (16,551) | $ (2,334) | $ (16,530) | $ (12,636) | $ (18,412) | $ (20,472) | $ (14,726) | $ (55,783) | $ (66,246) |
Denominator [Abstract] | ||||||||||
Weighted-average number of common shares - basic and diluted (in shares) | 33,651,127 | 25,356,098 | ||||||||
Loss per common share - basic and diluted (in dollars per share) | $ (0.60) | $ (0.49) | $ (0.07) | $ (0.49) | $ (0.48) | $ (0.74) | $ (0.82) | $ (0.59) | $ (1.66) | $ (2.61) |
Dilutive Instruments [Abstract] | ||||||||||
Anti-dilutive securities excluded from computation of diluted net loss per share (in shares) | 1,714,429 | 1,571,429 | ||||||||
Stock Options [Member] | ||||||||||
Dilutive Instruments [Abstract] | ||||||||||
Anti-dilutive securities excluded from computation of diluted net loss per share (in shares) | 3,258,192 | 2,231,092 | ||||||||
Restricted Stock Units Unvested [Member] | ||||||||||
Dilutive Instruments [Abstract] | ||||||||||
Anti-dilutive securities excluded from computation of diluted net loss per share (in shares) | 13,491 | 73,839 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Share-based Compensation expenses [Abstract] | ||||
Total share-based compensation expenses | $ 6,581 | $ 7,071 | ||
Performance Unit and Option Awards [Abstract] | ||||
Shares available for grant (in shares) | 700,000 | |||
Manufacture and Supply [Member] | ||||
Share-based Compensation expenses [Abstract] | ||||
Total share-based compensation expenses | $ 275 | 231 | ||
Research and Development [Member] | ||||
Share-based Compensation expenses [Abstract] | ||||
Total share-based compensation expenses | 729 | 720 | ||
Selling, General and Administrative [Member] | ||||
Share-based Compensation expenses [Abstract] | ||||
Total share-based compensation expenses | $ 5,577 | 6,120 | ||
Restricted Stock Units [Member] | ||||
Share-based Compensation expenses [Abstract] | ||||
Service period | 3 years | |||
Total share-based compensation expenses | [1] | $ 806 | $ 1,863 | |
Number of Units [Roll Forward] | ||||
Unvested, at beginning of period (in shares) | 74,000 | 205,000 | ||
Granted (in shares) | 4,000 | 0 | ||
Forfeited (in shares) | 0 | (6,000) | ||
Vested (in shares) | (64,000) | (125,000) | ||
Unvested, at end of period (in shares) | 14,000 | 74,000 | 205,000 | |
Weighted Average Grant Date Fair Value Per Share [Abstract] | ||||
Unvested, Balance at beginning of period (in dollars per share) | $ 14.64 | $ 14.77 | ||
Granted (in dollars per share) | 7.54 | 0 | ||
Forfeited (in dollars per share) | 0 | 0 | ||
Vested (in dollars per share) | 14.88 | 14.94 | ||
Unvested, Balance at end of period (in dollars per share) | 11.38 | 14.64 | $ 14.77 | |
Aggregate Intrinsic Value [Abstract] | ||||
Weighted average grant date fair value (in dollars per share) | $ 7.54 | $ 0 | ||
Additional Disclosures [Abstract] | ||||
Grant date fair value | $ 958 | $ 1,863 | ||
Compensation Cost Not yet Recognized [Abstract] | ||||
Unrecognized stock-based compensation expense | $ 122 | |||
Restricted Stock Units [Member] | Senior Management and Board [Member] | ||||
Additional Disclosures [Abstract] | ||||
Vesting period | 3 years | |||
Restricted Stock Units [Member] | Key Employees [Member] | ||||
Additional Disclosures [Abstract] | ||||
Vesting period | 3 years | |||
Stock Options [Member] | ||||
Share-based Compensation expenses [Abstract] | ||||
Service period | 3 years | |||
Total share-based compensation expenses | [2] | $ 5,751 | $ 5,173 | |
Weighted Average Grant Date Fair Value Per Share [Abstract] | ||||
Granted (in dollars per share) | $ 2.61 | $ 4.95 | ||
Number of Options [Roll Forward] | ||||
Outstanding at beginning of period (in shares) | 2,231,000 | 1,033,000 | ||
Granted (in shares) | 1,168,000 | 1,258,000 | ||
Forfeited (in shares) | (140,000) | (60,000) | ||
Exercised (in shares) | 0 | 0 | ||
Outstanding at end of period (in shares) | 3,259,000 | 2,231,000 | 1,033,000 | |
Vested or expected to vest at end of period (in shares) | 3,035,000 | |||
Exercisable at end of period (in shares) | 1,235,000 | |||
Weighted Average Exercise Price [Abstract] | ||||
Outstanding at beginning of period (in dollars per share) | $ 10.42 | $ 14.72 | ||
Granted (in dollars per share) | 3.32 | 6.66 | ||
Forfeited (in dollars per share) | 4.36 | 5.78 | ||
Outstanding at end of period (in dollars per share) | 8.14 | $ 10.42 | $ 14.72 | |
Vested or expected to vest at end of period (in dollars per share) | 8.14 | |||
Exercisable at end of period (in dollars per share) | $ 11.26 | |||
Weighted Average Remaining Contractual Term in Years [Abstract] | ||||
Outstanding at end of period | 8 years 5 months 1 day | 8 years 11 months 8 days | 9 years 6 months 18 days | |
Vested or expected to vest at end of period | 8 years 5 months 1 day | |||
Exercisable at end of period | 7 years 10 months 20 days | |||
Aggregate Intrinsic Value [Abstract] | ||||
Intrinsic value of options exercised | $ 0 | |||
Outstanding at end of period | 2,978 | $ 689 | $ 0 | |
Vested or expected to vest at end of period | 2,758 | |||
Exercisable at end of period | $ 403 | |||
Weighted average grant date fair value (in dollars per share) | $ 2.61 | $ 4.95 | ||
Fair Value Assumptions [Abstract] | ||||
Expected dividend yield | 0.00% | 0.00% | ||
Expected volatility | 100.00% | |||
Exercise prices (in dollars per share) | $ 3.32 | $ 6.66 | ||
Compensation Cost Not yet Recognized [Abstract] | ||||
Unrecognized stock-based compensation expense | $ 5,653 | |||
Unrecognized compensation cost, recognition period | 1 year 3 months 18 days | |||
Term of award | 10 years | |||
Stock Options [Member] | Minimum [Member] | ||||
Weighted Average Exercise Price [Abstract] | ||||
Granted (in dollars per share) | $ 1.54 | $ 3.36 | ||
Fair Value Assumptions [Abstract] | ||||
Expected volatility | 85.00% | |||
Expected term (in years) | 5 years 6 months | 5 years 6 months | ||
Risk-free interest rate | 0.33% | 1.50% | ||
Exercise prices (in dollars per share) | $ 1.54 | $ 3.36 | ||
Stock Options [Member] | Maximum [Member] | ||||
Weighted Average Exercise Price [Abstract] | ||||
Granted (in dollars per share) | $ 7.86 | $ 8.05 | ||
Fair Value Assumptions [Abstract] | ||||
Expected volatility | 106.00% | |||
Expected term (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days | ||
Risk-free interest rate | 1.69% | 2.60% | ||
Exercise prices (in dollars per share) | $ 7.86 | $ 8.05 | ||
Stock Options [Member] | Key Employees [Member] | ||||
Additional Disclosures [Abstract] | ||||
Vesting period | 3 years | |||
Stock Options [Member] | Board of Directors [Member] | ||||
Additional Disclosures [Abstract] | ||||
Vesting period | 1 year | |||
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation expenses [Abstract] | ||||
Total share-based compensation expenses | [3] | $ 24 | $ 35 | |
Employee Stock Purchase Plan [Abstract] | ||||
Purchase price of common stock as percentage of fair market value | 85.00% | |||
Number of shares reserved for issuance (in shares) | 250,000 | |||
Shares issued under employee stock purchase plan (in shares) | 32,986 | 56,378 | ||
[1] | Restricted Stock Units | |||
[2] | Stock option awards | |||
[3] | Employee Stock Purchase Plan |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Employee Benefit Plans [Abstract] | ||
Contributions by the employer | $ 673 | $ 819 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred tax assets [Abstract] | ||
Accounts receivable | $ 112 | $ 126 |
Inventory | 4 | 69 |
Accrued expenses | 353 | 835 |
NOL carryforwards | 22,569 | 23,687 |
Interest limitation imposed by the TJCA | 7,235 | 5,748 |
Stock Compensation | 4,051 | 2,505 |
Other | 1,229 | 783 |
Sale of Future Revenue | 14,444 | 0 |
Property and equipment | 2,380 | 1,741 |
Orphan Drug and R&D Tax Credits | 5,851 | 4,621 |
Deferred tax assets | 58,228 | 40,115 |
Deferred tax liabilities [Abstract] | ||
Intangible assets | (551) | (58) |
Prepaid expenses | (908) | 0 |
Deferred tax liabilities | (1,459) | (58) |
Valuation Allowance | (56,769) | (40,057) |
Net deferred tax asset/(liability) | 0 | 0 |
Unrecognized Tax Benefits [Abstract] | ||
Unrecognized tax benefits | 0 | 0 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued [Abstract] | ||
Penalties and interest accrued | $ 0 | $ 0 |
Reconciliation of Income Tax Benefit [Abstract] | ||
Income taxes at statutory rate | 21.00% | 21.00% |
Increase (decrease) resulting from [Abstract] | ||
State income tax | 6.81% | 6.76% |
Permanent differences | (0.12%) | (0.04%) |
Research & development credit | 2.35% | 2.32% |
Return to provision | 0.00% | 0.98% |
Valuation allowance | (30.04%) | (31.02%) |
Effective tax rate | 0.00% | 0.00% |
Federal [Member] | ||
Deferred tax liabilities [Abstract] | ||
Operating loss carryforwards | $ 81,566 | $ 85,905 |
State [Member] | ||
Deferred tax liabilities [Abstract] | ||
Operating loss carryforwards | $ 74,379 | $ 80,266 |
Contingencies (Details)
Contingencies (Details) | 12 Months Ended |
Dec. 31, 2020StatesCase | |
Litigation and Contingencies [Abstract] | |
Number of states in the antitrust litigation | States | 41 |
Humana and Centene Actions [Member] | |
Litigation and Contingencies [Abstract] | |
Number of causes alleged | 5 |
California Complaint [Member] | |
Litigation and Contingencies [Abstract] | |
Number of causes alleged | 3 |
Quarterly Financial Data (una_3
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Quarterly Financial Data (unaudited) [Abstract] | ||||||||||
Revenues | $ 7,149 | $ 8,260 | $ 21,675 | $ 8,765 | $ 16,419 | $ 12,418 | $ 11,129 | $ 12,643 | $ 45,849 | $ 52,609 |
Manufacture and supply | 2,788 | 2,978 | 3,539 | 3,659 | 6,792 | 4,643 | 5,420 | 3,506 | 12,964 | 20,361 |
Total costs and expenses | 22,795 | 22,041 | 21,280 | 22,626 | 26,323 | 23,420 | 29,817 | 25,717 | 88,742 | 105,277 |
Net loss | $ (20,368) | $ (16,551) | $ (2,334) | $ (16,530) | $ (12,636) | $ (18,412) | $ (20,472) | $ (14,726) | $ (55,783) | $ (66,246) |
Basic and diluted net loss per common share (in dollars per share) | $ (0.60) | $ (0.49) | $ (0.07) | $ (0.49) | $ (0.48) | $ (0.74) | $ (0.82) | $ (0.59) | $ (1.66) | $ (2.61) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] $ in Thousands | 2 Months Ended |
Mar. 05, 2021USD ($)shares | |
Continued Utilization of the At-The-Market Facility [Abstract] | |
Shares issued At-The-Market facility (in shares) | shares | 1,644,715 |
Net proceeds from sale At-The-Market facility | $ | $ 9,749 |