Neos Therapeutics (NEOS) 10-K 18 Mar 19 2018 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Mar. 11, 2019	Jun. 30, 2018
Document and Entity Information
Entity Registrant Name	Neos Therapeutics, Inc.
Entity Central Index Key	0001467652
Trading Symbol	neos
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Public Float			$ 177.9
Entity Common Stock, Shares Outstanding		49,710,677
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Current Assets:
Cash and cash equivalents	$ 46,478,000	$ 31,969,000
Short-term investments		18,448,000
Accounts receivable, net of allowances for chargebacks and cash discounts of $1,865 and $1,154 at December 31, 2018 and December 31, 2017, respectively	27,801,000	13,671,000
Inventories	10,367,000	11,732,000
Other current assets	4,032,000	3,575,000
Total current assets	88,678,000	79,395,000
Property and equipment, net	7,914,000	8,203,000
Intangible assets, net	14,616,000	16,348,000
Other assets	149,000	162,000
Total assets	111,357,000	104,108,000
Current Liabilities:
Accounts payable	12,730,000	11,460,000
Accrued expenses	35,818,000	20,944,000
Current portion of long-term debt	8,557,000	896,000
Total current liabilities	57,105,000	33,300,000
Long-Term Liabilities:
Long-term debt, net of current portion	43,217,000	58,938,000
Derivative liability	2,017,000	1,660,000
Deferred rent	989,000	1,083,000
Other long-term liabilities	184,000	180,000
Total long-term liabilities	46,407,000	61,861,000
Stockholders' Equity (Deficit):
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding at December 31, 2018 and December 31, 2017
Common stock, $0.001 par value, 100,000,000 authorized at December 31, 2018 and December 31, 2017; 49,710,104 and 49,676,303 issued and outstanding, respectively, at December 31, 2018; 29,030,757 and 28,996,956 issued and outstanding, respectively, at December 31, 2017	50,000	29,000
Treasury stock, at cost, 33,801 shares at December 31, 2018 and December 31, 2017	(352,000)	(352,000)
Additional paid-in capital	325,130,000	274,584,000
Accumulated deficit	(316,983,000)	(265,308,000)
Accumulated other comprehensive loss		(6,000)
Total stockholders' equity	7,845,000	8,947,000
Total liabilities and stockholders' equity	$ 111,357,000	$ 104,108,000

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED BALANCE SHEETS
Receivables allowances for chargebacks and cash discounts (in dollars)	$ 1,865	$ 1,154
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	100,000,000	100,000,000
Common stock, issued shares	49,710,104	29,030,757
Common stock, outstanding shares	49,676,303	28,996,956
Treasury stock, shares	33,801	33,801

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenues:
Net product sales	$ 49,988	$ 27,132	$ 10,033
Net product sales	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Cost of goods sold	$ 26,928	$ 14,030	$ 11,734
Cost of goods sold	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Gross profit (loss)	$ 23,060	$ 13,102	$ (1,701)
Research and development expenses	8,508	8,957	12,207
Selling and marketing expenses	44,133	46,881	49,291
General and administrative expenses	13,915	13,805	12,625
Loss from operations	(43,496)	(56,541)	(75,824)
Interest expense	(8,974)	(10,085)	(6,937)
Loss on debt extinguishment			(1,187)
Other income, net	795	854	1,197
Net loss	$ (51,675)	$ (65,772)	$ (82,751)
Weighted average common shares outstanding used to compute net loss per share, basic and diluted	32,288,555	24,751,091	16,052,390
Net loss per share of common stock, basic and diluted	$ (1.60)	$ (2.66)	$ (5.16)

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Comprehensive Income (loss)
Net loss	$ (51,675)	$ (65,772)	$ (82,751)
Other comprehensive loss:
Gain (loss) on short-term investments	6	(5)	2
Reclassification of gains included in net loss			(3)
Total other comprehensive income (loss)	6	(5)	(1)
Comprehensive loss	$ (51,669)	$ (65,777)	$ (82,752)

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive (Loss) Income	Total
Balance, beginning at Dec. 31, 2015	$ 16	$ (171)	$ 195,314	$ (116,785)		$ 78,374
Balance, beginning (in shares) at Dec. 31, 2015	16,025,155	(9,197)
Increase (Decrease) in Stockholders Equity
Proceeds from exercise of options and warrants			13			13
Proceeds from exercise of options and warrants (in shares)	54,747
Purchase of treasury stock		$ (61)				(61)
Purchase of treasury stock (in shares)		(9,709)
Share-based compensation expense			3,460			3,460
Net unrealized loss on investments					$ (1)	(1)
Net loss				(82,751)		(82,751)
Balance, ending at Dec. 31, 2016	$ 16	$ (232)	198,787	(199,536)	(1)	(966)
Balance, ending (in shares) at Dec. 31, 2016	16,079,902	18,906
Increase (Decrease) in Stockholders Equity
Issuance of common stock, net of issuance costs	$ 12		64,548			64,560
Issuance of common stock, net of issuance costs (in shares)	12,019,639
Issuance of common stock upon conversion of convertible notes	$ 1		6,585			6,586
Issuance of common stock upon conversion of convertible notes (in shares)	929,967
Purchase of treasury stock		$ (120)				(120)
Purchase of treasury stock (in shares)		(14,895)
Share-based compensation expense			4,051			4,051
Recognition of beneficial conversion feature on convertible notes			613			613
Conversion of Redeemable Preferred Stock (in shares)	1,249
Net unrealized loss on investments					(5)	(5)
Net loss				(65,772)		(65,772)
Balance, ending at Dec. 31, 2017	$ 29	$ (352)	274,584	(265,308)	(6)	8,947
Balance, ending (in shares) at Dec. 31, 2017	29,030,757	(33,801)
Increase (Decrease) in Stockholders Equity
Issuance of common stock, net of issuance costs	$ 21		47,271			47,292
Issuance of common stock, net of issuance costs (in shares)	20,651,524
Issuance of common stock upon RSU conversion (in shares)	26,991
Shares issued from exercise of stock options (in shares)	832
Payroll tax withheld for release of RSUs			(46)			(46)
Share-based compensation expense			3,321			3,321
Net unrealized loss on investments					$ 6	6
Net loss				(51,675)		(51,675)
Balance, ending at Dec. 31, 2018	$ 50	$ (352)	$ 325,130	$ (316,983)		$ 7,845
Balance, ending (in shares) at Dec. 31, 2018	49,710,104	33,801

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash Flows From Operating Activities:
Net loss	$ (51,675)	$ (65,772)	$ (82,751)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense	3,321	4,051	3,460
Depreciation and amortization of property and equipment	1,750	1,363	1,598
Amortization of patents and other intangible assets	1,737	1,660	1,662
Changes in fair value of earnout, derivative and warrant liabilities	(387)	(509)	18
Amortization of senior debt discounts	961	1,316	406
Amortization of short-term investment purchase discounts	(131)	(126)	(156)
Deferred interest on debt		2,111	4,738
Loss on debt extinguishment			942
Gain on sale of equipment		(23)	(922)
Other adjustments	48	(91)	5
Changes in operating assets and liabilities:
Accounts receivable	(14,130)	(7,536)	(2,232)
Inventories	1,365	(6,190)	(3,022)
Deferred contract sales organization fees		720	(123)
Other assets	(444)	(414)	(1,278)
Accounts payable	1,270	3,008	2,377
Accrued expenses	14,874	13,171	4,632
Net cash used in operating activities	(41,441)	(53,261)	(70,646)
Cash Flows From Investing Activities:
Purchases of short-term investments	(17,906)	(48,015)	(66,088)
Sales and maturities of short-term investments	36,491	45,118	50,816
Proceeds from sale-leaseback of equipment		3,222
Capital expenditures	(1,361)	(2,497)	(3,550)
Intangible asset expenditures	(5)	(361)	(500)
Net cash provided by (used in) investing activities	17,219	(2,533)	(19,322)
Cash Flows From Financing Activities:
Proceeds from Deerfield debt note, net of fees			58,419
Payment of senior debt and fee			26,063
Proceeds from sale of equipment			415
Proceeds from the issuance of common stock, net of issuance costs	47,292	64,560	13
Payments made on borrowings	(8,425)	(989)	(9,166)
Payments made to purchase treasury stock		(120)	(61)
Payment of payroll taxes withheld for releases of restricted stock units	(46)
Payments made on behalf of Deerfield	(90)	(40)
Net cash provided by financing activities	38,731	63,411	23,557
Increase (decrease) in cash and cash equivalents	14,509	7,617	(66,411)
Cash and Cash Equivalents:
Beginning	31,969	24,352	90,763
Ending	46,478	31,969	24,352
Supplemental Disclosure of Noncash Transactions:
Exit Fee liability incurred in connection with Second Amendment to Facility	750
Derivative liability incurred in connection with First Amendment to Facility	611	2,107
Capital lease liability from purchase of equipment	105
Issuance of senior secured convertible notes in lieu of interest payment		6,586
Issuance of common stock upon conversion of senior secured convertible notes		6,586
Capital lease liability from sale-leaseback transactions		3,222
Prepaid assets included in accounts payable		654
Beneficial conversion feature incurred on convertible notes		613
Deferred contract sales organization fees			597
Supplemental Cash Flow Information:
Interest paid	$ 8,158	$ 6,769	$ 2,857

Organization and nature of oper

Organization and nature of operations	12 Months Ended
	Dec. 31, 2018
Organization and nature of operations
Organization and nature of operations	Note 1. Organization and nature of operations Neos Therapeutics, Inc., a Delaware corporation, and its subsidiaries (the “Company”) is a fully integrated pharmaceutical company. The Company has developed a broad, proprietary modified-release drug delivery technology that enables the manufacture of single and multiple ingredient extended-release pharmaceuticals in patient- and caregiver-friendly orally disintegrating tablet and liquid suspension dosage forms. The Company has a pipeline of extended-release pharmaceuticals including three approved products for the treatment of attention deficit hyperactivity disorder (“ADHD”). Adzenys XR-ODT was approved by the US Food and Drug Administration (the “FDA”) on January 27, 2016 and launched commercially on May 16, 2016. The Company received approval from the FDA for Cotempla XR-ODT, its methylphenidate XR-ODT for the treatment of ADHD in patients 6 to 17 years old, on June 19, 2017, and the Company initiated an early experience program with limited product availability on September 5, 2017 before launching this product nationwide on October 2, 2017. Also, the Company received approval from the FDA for Adzenys ER oral suspension (“Adzenys ER”) on September 15, 2017 and launched this product on February 26, 2018. In addition, the Company manufactures and markets a generic Tussionex (hydrocodone and chlorpheniramine) (“generic Tussionex”), extended-release liquid suspension for the treatment of cough and upper respiratory symptoms of a cold. In addition to its marketed products, the Company is developing NT-0400, its XR-ODT product candidate for nausea and vomiting and NT0502, its product candidate for the treatment of sialorrhea.

Summary of significant accounti

Summary of significant accounting policies	12 Months Ended
	Dec. 31, 2018
Summary of significant accounting policies
Summary of significant accounting policies	Note 2. Summary of significant accounting policies Basis of Presentation: The consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and with the rules and regulations of the Securities and Exchange Commission (“SEC”). Principles of consolidation: The consolidated financial statements include the accounts of the Company and its four wholly-owned subsidiaries. All significant intercompany transactions have been eliminated. Use of estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. Concentration of credit risk : Accounts receivable subjects the Company to concentrations of credit risk. Accounts receivable were due from fourteen customers in the years ended December 31, 2018 and 2017, respectively. Three customers accounted for 96% and 94% of the accounts receivable at December 31, 2018 and 2017, respectively. There were fifteen, fourteen and thirteen customers that accounted for all gross revenue in the years ended December 31, 2018, 2017 and 2016, respectively. Of which, three customers accounted for 93% of the gross revenue for the years ended December 31, 2018 and 2017, respectively, and two customers accounted for 82% of the gross revenue for the year ended December 31, 2016. Segment information : Operating segments are defined as components of an enterprise 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 views its operations and manages its business in one operating segment, which is the development, manufacturing and commercialization of pharmaceuticals. Reclassifications: In 2017, the Company reclassified certain patents from Other assets to Intangible assets, net as reported on the condensed consolidated balance sheets. There was no impact to the Company’s consolidated statements of operations. Liquidity: During 2018, 2017 and 2016, the Company produced operating losses and used cash to fund operations. Management intends to achieve profitability through revenue growth from pharmaceutical products developed with its extended-release technologies. The Company does not anticipate it will be profitable until after the successful commercialization of its approved products, Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER. In November 2018, the Company completed an offering of its common stock and restructured its outstanding debt to reduce and possibly delay the amount of principal payable in cash. Accordingly, management has performed the review required for going concern accounting and believes the Company presently has sufficient liquidity to continue to operate for the next twelve months after the filing of this Report on Form 10-K. Cash equivalents: The Company invests its available cash balances in bank deposits and money market funds. The Company considers highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company’s primary objectives for investment of available cash are the preservation of capital and the maintenance of liquidity. Short-term investments: Short-term investments, if any, consist of debt securities that have original maturities greater than three months but less than or equal to one year and are classified as available-for-sale securities. Such securities are carried at estimated fair value, with any unrealized holding gains or losses reported, net of material tax effects reported, as accumulated other comprehensive income or loss, which is a separate component of stockholders’ equity (deficit). Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are included in other income in the consolidated results of operations. A decline in the market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in fair value charged to earnings in that period, and a new cost basis for the security is established. Dividend and interest income are recognized in other income when earned. The cost of securities sold is calculated using the specific identification method. The Company places all investments with government agencies, or corporate institutions whose debt is rated as investment grade. The Company classifies all available-for-sale marketable securities with maturities greater than one year from the balance sheet date, if any, as non-current assets. Allowance for doubtful accounts : The allowance for doubtful accounts is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management determines the adequacy of the allowance based on reviews of individual accounts, historical losses, existing economic conditions and estimates based on management’s judgments in specific matters. Accounts are written off as they are deemed uncollectible based on periodic review of the accounts. There is no allowance for doubtful accounts at December 31, 2018 or December 31, 2017, as management believes that all receivables are fully collectible. Inventories: In 2016, inventories were stated at the lower of cost (first in, first out) or market and, effective January 1, 2017, inventory is now required to be measured at the lower of cost (first in, first out) or net realizable value. The change to stating inventories at the lower of cost or net realizable value in 2017 was adopted prospectively and did not have a significant effect on the Company’s ongoing financial reporting as valuing inventory at the lower of cost or net realizable value approximated the prior policy of valuing inventory at the lower of cost or market. Inventories have been reduced by an allowance for excess and obsolete inventories. Cost elements include material, labor and manufacturing overhead. Inventories consist of raw materials, work in process and finished goods. Until objective and persuasive evidence exists that regulatory approval has been received and future economic benefit is probable, pre-launch inventories are expensed into research and development. Manufacturing costs for the production of Adzenys XR-ODT incurred after the January 27, 2016 FDA approval date, for the production of Cotempla XR-ODT incurred after June 30, 2017, following the FDA approval date of June 19, 2017, and for the production of Adzenys ER incurred after September 30, 2017, following the FDA approval date of September 15, 2017, are being capitalized into inventory. Property and equipment: Property and equipment is recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from three to ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the respective lease term or the estimated useful lives of the assets. Intangible assets: Intangible assets subject to amortization, which principally include proprietary modified-release drug delivery technology, the costs to acquire the rights to Tussionex Abbreviated New Drug Application and patents, are recorded at cost and amortized over the estimated lives of the assets, which primarily range from 10 to 20 years. The Company estimates that the patents it has filed have a future beneficial value. Therefore, costs associated with filing for its patents are capitalized. Once the patent is approved and commercial revenue realized, the costs associated with the patent are amortized over the useful life of the patent. If the patent is not approved, the costs will be expensed. Impairment of long-lived assets : Long-lived assets such as property and equipment and intangibles subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable. Such assets are also evaluated for impairment in light of the Company’s continuing losses. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. No impairment charges were recorded for the years ended December 31, 2018, 2017 or 2016. Derivative liabilities: The Company evaluates its debt and equity issuances to determine if those contracts or embedded components of those contracts qualify as derivatives requiring separate recognition in the Company’s financial statements. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability and the change in fair value is recorded in other income (expense) in the consolidated results of operations. In circumstances where there are multiple embedded instruments that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within twelve months of the balance sheet date. When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption and are classified in interest expense in the consolidated results of operations. Revenue recognition: Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company makes estimates of the net sales price, including estimates of variable consideration (e.g., savings offers, prompt payment discounts, product returns, wholesaler fees, wholesaler chargebacks and estimated rebates) to be incurred on the selling price of the respective product sales, and recognizes the estimated amount as revenue when it transfers control of the product to its customers (e.g., upon delivery). Variable consideration is determined using either an expected value or a most likely amount method. The estimate of variable consideration is also subject to a constraint such that some or all of the estimated amount of variable consideration will only be included in the transaction price to the extent that it is probable that a significant reversal of revenue (in the context of the contract) will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Estimating variable consideration and the related constraint will require the use of significant management judgment and other market data. The Company provides for prompt payment discounts, wholesaler fees and wholesaler chargebacks based on customer contractual stipulations. The Company analyzes recent product return history and other market data obtained from its third party logistics providers (“3PLs”) to determine a reliable return rate. Additionally, management analyzes historical savings offers and rebate payments based on patient prescriptions dispensed for Adzenys XR ODT, Cotempla XR ODT and Adzenys ER and information obtained from third party providers to determine these respective variable considerations. The Company sells its generic Tussionex, Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER to a limited number of pharmaceutical wholesalers, all subject to rights of return. Pharmaceutical wholesalers buy drug products directly from manufacturers. Title to the product passes upon delivery to the wholesalers, when the risks and rewards of ownership are assumed by the wholesaler (freight on board destination). These wholesalers then resell the product to retail customers such as food, drug and mass merchandisers. Disaggregation of revenue The following table disaggregates the Company’s net product sales by product: Year Ended December 31, 2018 2017 2016 (in thousands) Adzenys XR-ODT $ 26,631 $ 20,377 $ 3,803 Cotempla XR-ODT 19,014 1,590 — Adzenys ER (27) — — Generic Tussionex 4,370 5,165 6,230 $ 49,988 $ 27,132 $ 10,033 Net product sales Net product sales represent total gross product sales less gross to net sales adjustments. Gross to net sales adjustments for branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER include savings offers, prompt payment discounts, wholesaler fees, estimated rebates to be incurred on the selling price of the respective product sales and estimated allowances for product returns. Gross to net sales adjustments for generic Tussionex include prompt payment discounts, estimated allowances for product returns, wholesaler fees, estimated government rebates and estimated chargebacks to be incurred on the selling price of generic Tussionex related to the respective product sales. The Company recognizes total gross product sales less gross to net sales adjustments as revenue based on shipments from 3PLs to the Company’s wholesaler customers. Savings offers for branded products The Company offers savings programs for Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER to patients covered under commercial payor plans in which the cost of a prescription to such patients is discounted. The Company records the amount of redeemed savings offers based on information from third-party providers against the estimated discount recorded as accrued expenses. The estimated discount is recorded as a gross to net sales adjustments at the time revenue is recognized. Prompt payment discounts Prompt payment discounts are based on standard programs with wholesalers and are recorded as a discount allowance against accounts receivable and as a gross to net sales adjustments at the time revenue is recognized. Wholesale distribution fees Wholesale distribution fees are based on definitive contractual agreements for the management of the Company’s products by wholesalers and are recorded as accrued expenses and as a gross to net sales adjustment at the time revenue is recognized. Rebates The Company’s branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER are subject to commercial managed care and government managed Medicare and Medicaid programs whereby discounts and rebates are provided to participating managed care organizations and federal and/or state governments. Calculations related to rebate accruals of branded products are estimated based on information from third-party providers. The Company’s generic Tussionex product is subject to state government-managed Medicaid programs whereby discounts and rebates are provided to participating state governments. Generic Tussionex government rebates are estimated based upon rebate payment data available from sales of the Company’s generic Tussionex product over the past three years. Estimated rebates are recorded as accrued expenses and as a gross to net sales adjustments at the time revenue is recognized. Historical trends of estimated rebates will be continually monitored and may result in future adjustments to such estimates. Product returns Wholesalers’ contractual return rights are limited to defective product, product that was shipped in error, product ordered by customer in error, product returned due to overstock, product returned due to dating or product returned due to recall or other changes in regulatory guidelines. The return policy for expired product allows the wholesaler to return such product starting six months prior to expiry date to twelve months post expiry date. Estimated returns are recorded as accrued expenses and as a gross to net sales adjustments at the time revenue is recognized. The Company analyzed recent branded product return history and other market data obtained from the Company’s 3PLs as well as data available from sales of its branded products to determine a reliable return rate for branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER. Generic Tussionex product returns were estimated based upon return data available from sales of the Company’s generic Tussionex product over the past three years. Wholesaler chargebacks for generic product The Company’s generic Tussionex products are subject to certain programs with wholesalers whereby pricing on products is discounted below wholesaler list price to participating entities. These entities purchase products through wholesalers at the discounted price, and the wholesalers charge the difference between their acquisition cost and the discounted price back to the Company. Estimated chargebacks are recorded as a discount allowance against accounts receivable and as a gross to net sales adjustments at the time revenue is recognized based on information provided by third parties. Due to estimates and assumptions inherent in determining the amount of generic Tussionex returns, rebates and chargebacks, the actual amount of returns, claims for rebates and chargebacks may be different from the estimates, at which time reserves would be adjusted accordingly. Wholesale distribution fees and the allowance for prompt pay discounts are recorded at the time of shipment and such fees and allowances are recorded in the same period that the related revenue is recognized. Research and development costs: Research and development costs are charged to operations when incurred and include salaries and benefits, facilities costs, overhead costs, raw materials, laboratory and clinical supplies, clinical trial costs, contract services, fees paid to regulatory authorities for review and approval of the Company’s product candidates and other related costs. During the third quarter of 2016, the Company reclassified its approved product and facility regulatory fees out of research and development expense and into cost of sales commensurate with the commercial launch of Adzenys XR-ODT. The Company has reclassified all such applicable regulatory fees for prior quarters and prior years out of research and development expense and into cost of goods sold in accordance with this approach. Distribution expenses: Costs invoiced to the Company by its third party logistics firm are classified as cost of goods sold in the consolidated statements of operations. Shipping and handling costs: Amounts billed to customers for shipping and handling fees for the delivery of goods are classified as cost of goods sold in the consolidated statements of operations. Advertising costs: Advertising costs are comprised of print and electronic media placements that are expensed as incurred. The Company recognized advertising costs of $0.6 million, $0.4 million and $7.4 million during the years ended December 31, 2018, 2017 and 2016 respectively. Share-based compensation: Share-based compensation awards, including grants of employee stock options, restricted stock, restricted stock units (“RSUs”) and modifications to existing stock options, are recognized in the statement of operations based on their fair values. Compensation expense related to awards to employees is recognized on a straight-line basis, based on the grant date fair value, over the requisite service period of the award, which is generally the vesting term. The fair value of the Company’s stock-based awards to employees and directors is estimated using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (1) the expected stock price volatility, (2) the expected term of the award, (3) the risk-free interest rate and (4) expected dividends. For performance-based stock awards, compensation expense is recognized on a straight-line basis, based on the grant date fair value, over the performance period or through the vesting date, whichever is longer. Management monitors the probability of achievement of the performance conditions and adjusts stock-based compensation expense, if necessary. After the closing of the Company’s IPO, the Company’s board of directors has determined the fair value of each share of underlying common stock based on the closing price of the Company’s common stock as reported by the NASDAQ Global Market on the date of grant. Under ASU No. 2017-09 guidance for accounting for share-based payments, the Company has elected to continue estimating forfeitures at the time of grant and, if necessary, revise the estimate in subsequent periods if actual forfeitures differ from those estimates. Ultimately, the actual expense recognized over the vesting period will only be for those options that vest. The adoption of this standard in 2017 did not have a material impact on the Company’s business, financial position, results of operations or liquidity. Beginning in July 2016, the Company began recording stock compensation expense in the same income statement line as the cash compensation of the employee with the option in accordance with Staff Accounting Bulletin (“SAB”) Topic 14 due to the increased number and amount of options and option compensation. Paragraph IV litigation costs: Legal costs incurred by the Company in the enforcement of the Company’s intellectual property rights are charged to expense as incurred. Income taxes: Income taxes are accounted for using the liability method, under which deferred taxes are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax laws that will be in effect when the differences are expected to reverse. Management evaluates the Company’s tax positions in accordance with guidance on accounting for uncertainty in income taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not that the position will be sustained upon examination. As of December 31, 2018 and 2017, the Company has unrecognized tax benefits associated with uncertain tax positions in the consolidated financial statements. These uncertain tax positions were netted against net operating losses (NOL’s) with no separate reserve for uncertain tax positions required. Deferred tax assets should be reduced by a valuation allowance if current evidence indicates that it is considered more likely than not that these benefits will not be realized. In evaluating the objective evidence that historical results provide, the Company considered that three years of cumulative operating losses was significant negative evidence outweighing projections for future taxable income. Therefore, at December 31, 2018 and 2017, the Company determined that it is more likely than not that the deferred tax assets will not be realized. Accordingly, the Company has recorded a valuation allowance to reduce deferred tax assets to zero. The Company may not ever be able to realize the benefit of some or all of the federal and state loss carryforwards, either due to ongoing operating losses or due to ownership changes, which limit the usefulness of the loss carryforwards. Recent accounting pronouncements: In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The standard is effective for public entities for the fiscal years ending after December 15, 2020, with early adoption permitted for the removed disclosures and delayed adoption permitted for the new disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company is currently evaluating the impact of adopting ASU 2018-13 on its consolidated financial statements. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740) – Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which was issued to state the income tax accounting implications of the Tax Cuts and Jobs Act of 2017 (the “TCJA”). The guidance clarifies the measurement period timeframe, changes in subsequent reporting periods and reporting requirements as a result of the TCJA. The measurement period begins in the period that includes the TCJA’s enactment date, which was December 22, 2017, and as a result the Company has reflected the impact of this ASU on the deferred tax calculation as of December 31, 2017. In February 2018, the FASB issued ASU No. 2018-02, Income Statement –Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA, and requires certain disclosures about stranded tax effects. ASU 2018-02 is effective for entities for fiscal years beginning after December 15, 2018 with early adoption permitted, and shall be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the corporate income tax rate in the TCJA is recognized. This standard became effective for the Company standard on January 1, 2019. The adoption of this standard will not have a material impact on the Company’s consolidated results of operations or financial position. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting . This ASU clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the modification. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. This standard became effective for the Company on January 1, 2018. The adoption of this standard did not have a material impact on the Company’s consolidated results of operations or financial position. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU was designed to reduce the diversity in practice of how the eight specified items are presented and classified in the statement of cash flows, including debt prepayment or debt extinguishment costs. The amendments are effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those years. This standard became effective for the Company on January 1, 2018. The adoption of this standard did not have a significant effect on the Company’s ongoing financial reporting as the Company had classified its debt prepayment and debt extinguishment costs in the Condensed Consolidated Statements of Cash Flows in accordance with the amendments. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (the “New Lease Standard”). Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) a right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. In January, July and December 2018, the FASB issued additional amendments to the new lease guidance relating to, transition, and clarification. The July 2018 amendment, ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, provides an optional transition method that allows entities to elect to apply the standard prospectively at its effective date, versus recasting the prior periods presented. Pursuant to ASU No. 2018-11, the Company will elect to use the effective date approach at transition. Therefore, no adjustments will be made to amounts in prior period financial statements. Capital leases will be accounted for in substantially the same manner as capital leases are accounted for under existing GAAP. Operating leases will be accounted for in a manner similar to operating leases under existing GAAP, except that lessees will recognize a lease liability and a lease asset for all of those leases. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt this standard on the effective date of January 1, 2019. The Company is substantially complete with its evaluation of the new standard as it relates to its operating lease disclosed in Note 15 “Commitments and Contingencies”. The remaining steps in the implementation process include finalizing lease liability and right of use asset schedules and the review and evaluation of disclosures and presentation in the Company’s financial statements. In addition, an evaluation of whether there are existing contracts that may contain embedded leases has been performed and the Company is evaluating the impact of its findings. However, it does not expect that the identification of any embedded leases will result in a material impact to the consolidated financial statements and disclosures upon the adoption of this standard. In addition, the Company made an accounting policy election to combine the lease and non-lease components and the short-term lease practical expedients allowed under ASC 842. The adoption of ASC 842 will lead to an increase in the assets and liabilities recorded on the balance sheets primarily due to the lease agreement attributable to leased office space. This New Lease Standard will not have a material impact on the Company’s balance sheets, consolidated statements of comprehensive loss or cash flows from operations. The Company will continue to monitor additional modifications, clarifications or interpretations undertaken by the FASB that may impact its current conclusions and will expand its analysis to include any new lease arrangements initiated prior to adoption. We expect to recognize approximately $3.0 million to $4.8 million of additional assets and corresponding liabilities on our balance sheet as of the beginning of fiscal 2019 and will record any cumulative effect of adopting the New Lease Standard as an adjustment to the opening balance of Retained Earnings. We do not expect that any adjustment to Retained Earnings at adoption will have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (the “New Revenue Standard”). The New Revenue Standard replaces transaction and industry-specific revenue recognition guidance under current U.S. GAAP with a principles-based approach for determining revenue recognition. The New Revenue Standard requires an entity to recognize the amount of revenue based on the value of transferred goods or services to customers. There is also additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The New Revenue Standard became effective for the Company on January 1, 2018. For purposes of providing com

Net loss per share

Net loss per share	12 Months Ended
	Dec. 31, 2018
Net loss per share
Net loss per share	Note 3. Net loss per share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and common share equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. Potentially dilutive securities, which include warrants, outstanding stock options under the stock option plan and shares issuable in future periods, such as RSU awards, have been excluded from the computation of diluted net loss per share as they would be anti-dilutive. For all periods presented, there is no difference in the number of shares used to compute basic and diluted shares outstanding due to the Company’s net loss position. Restricted stock is considered legally issued and outstanding on the grant date, while RSUs are not considered legally issued and outstanding until the RSUs vest. Once the RSUs are vested, equivalent common shares will be issued or issuable to the grantee and therefore the RSUs are not considered for inclusion in total common shares issued and outstanding until vested. The following potentially dilutive securities outstanding were excluded from consideration in the computation of diluted net loss per share of common stock for the years ended December 31, 2018, 2017 and 2016, respectively, because including them would have been anti-dilutive: December 31, 2018 2017 2016 Series C Redeemable Convertible Preferred Stock Warrants (as converted) 70,833 70,833 70,833 Stock options outstanding 3,446,885 2,454,973 2,107,344 RSUs granted, not released 75,314 85,000 —

Fair value of financial instrum

Fair value of financial instruments	12 Months Ended
	Dec. 31, 2018
Fair value of financial instruments
Fair value of financial instruments	Note 4. Fair value of financial instruments The Company records financial assets and liabilities at fair value. The carrying amounts of certain financial assets and liabilities including cash and cash equivalents, accounts receivable, other current assets, accounts payable, accrued liabilities and deferred revenue, approximated their fair value due to their short maturities. The remaining financial instruments were reported on the Company’s consolidated balance sheets at amounts that approximate current fair values based on market based assumptions and inputs. As a basis for categorizing inputs, the Company uses a three tier fair value hierarchy, which prioritizes the inputs used to measure fair value from market based assumptions to entity specific assumptions as follows: Level 1: Unadjusted quoted prices for identical assets in an active market. Level 2: Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full-term of the asset. Level 3: Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset. The following table presents the hierarchy for the Company’s financial instruments measured at fair value on a recurring basis for the indicated dates: Fair Value as of December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 27,419 $ 19,059 $ — $ 46,478 Total financial assets $ 27,419 $ 19,059 $ — $ 46,478 Earnout liability $ — $ — $ 37 $ 37 Derivative liability (see Note 11) — — 2,017 2,017 Total financial liabilities $ — $ — $ 2,054 $ 2,054 Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 31,969 $ — $ — $ 31,969 Short-term investments — 18,448 — 18,448 Total financial assets $ 31,969 $ 18,448 $ — $ 50,417 Earnout liability $ — $ — $ 170 $ 170 Derivative liability (see Note 11) — — 1,660 1,660 Total financial liabilities $ — $ — $ 1,830 $ 1,830 The Company’s Level 1 assets included bank deposits, certificates of deposit and actively traded money market funds with an original maturity of 90 days or less at December 31, 2018 and 2017. Asset values were considered to approximate fair value due to their short-term nature. The Company’s Level 2 assets included commercial paper and corporate bonds with maturities of less than one year that are not actively traded which were classified as available-for-sale securities. The level 2 cash equivalents consist of U.S. agency bonds and corporate commercial paper that mature in less than 90 days which are valued using quoted prices and other data values. The estimated fair values of these securities were determined by third parties using valuation techniques that incorporate standard observable inputs and assumptions such as quoted prices for similar assets, benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids/offers and other pertinent reference data. The Company’s cash and cash equivalents and short-term investments had quoted prices at December 31, 2018 and 2017 as shown below: December 31, 2018 Amortized Unrealized Market Cost Loss Value (in thousands) Bank deposits and money market funds $ 27,419 $ — $ 27,419 Financial and corporate debt securities 19,059 — 19,059 $ 46,478 $ — $ 46,478 December 31, 2017 Amortized Unrealized Market Cost Loss Value (in thousands) Bank deposits and money market funds $ 31,969 $ — $ 31,969 Financial and corporate debt securities 18,454 (6) 18,448 $ 50,423 $ (6) $ 50,417 The Company’s Level 3 liability included the fair value of the earnout liability and the fair value of the Deerfield Private Design Fund III, L.P. and Deerfield Special Situations Fund, L.P. derivative liability at December 31, 2018 and 2017. The fair value of the earnout liability was determined after taking into consideration valuations using the Monte Carlo method based on assumptions at December 31, 2017 and revised at December 31, 2018. These revisions were primarily due to an updated revenue forecast for the Company’s generic Tussionex and the use of a directly-calculated revenue volatility of 42% based on data for potential comparable publicly-traded companies in the generic drug manufacturing space including the Company, whereas previously an unlevered equity volatility of 50% had been selected. Significant changes to these assumptions would result in increases/decreases to the fair value of the earnout liability. The methodologies and significant inputs used in the determination of the fair value of the earnout liability were as follows: December 31, 2018 December 31, 2017 Earnout Liability Earnout Liability Date of Valuation 12/31/2018 12/31/2017 Valuation Method Monte Carlo Monte Carlo Volatility (annual) 42% 42% Risk‑free rate (annual) 2.53% - 3.29% 1.62% ‑ 2.88% Time period from valuation until end of earnout .5 ‑ 9.5 .5 ‑ 9.5 Earnout Target 1 (thousands) $13,700 $13,700 Earnout Target 2 (thousands) $18,200 $18,200 Discount rate 21.35% - 21.68% 14.72% ‑ 15.98% Fair value of liability at valuation date (thousands) $37 $170 The fair value of the derivative liability was determined after taking into consideration valuations using the Monte Carlo method based on assumptions at December 31, 2018 and 2017. There were no significant changes in the pricing assumptions during the year ended December 31, 2018. The methodologies and significant inputs used in the determination of the fair value of the debt derivative liability were as follows: Derivative Liability Date of Valuation 12/31/2018 12/31/2017 Valuation Method Monte Carlo Monte Carlo Volatility (annual) N/A N/A Time period from valuation until maturity of debt (yrs.) 3.4 4.4 Cumulative probability of a change in control prepayment implied by model 25.1% 27% Cumulative probability of other accelerated prepayments implied by model 13.7% 17% Discount rate 23.12% 16.20% Fair value of liability at valuation date (thousands) $2,017 $1,660 Significant changes to these assumptions in the preceding valuation tables would result in increases/decreases to the fair value of the earnout liability and derivative liability. Changes in Level 3 liabilities measured at fair value for the periods indicated were as follows: Level 3 Liabilities (in thousands) Balance at December 31, 2016 $ 232 Addition of Deerfield derivative liability 2,107 Change in fair value (509) Balance at December 31, 2017 1,830 Change in fair value 224 Balance at December 31, 2018 $ 2,054

Inventories

Inventories	12 Months Ended
	Dec. 31, 2018
Inventories
Inventories	Note 5. Inventories Inventories at the indicated dates consist of the following: December 31, 2018 2017 (in thousands) Raw materials $ 3,845 $ 3,476 Work in progress 2,704 6,155 Finished goods 4,259 2,470 Inventory at cost 10,808 12,101 Inventory reserve (441) (369) $ 10,367 $ 11,732

Property and equipment

Property and equipment	12 Months Ended
	Dec. 31, 2018
Property and equipment
Property and equipment	Note 6. Property and equipment Property and equipment, net at the indicated dates consists of the following: December 31, 2018 2017 (in thousands) Assets under capital lease $ 3,327 $ 3,222 Leasehold improvements 4,340 4,195 Manufacturing, packaging and lab equipment 6,821 5,300 Office furniture and equipment 2,164 1,656 Assets under construction 188 1,056 16,840 15,429 Accumulated depreciation and amortization (including $633 and $157 at December 31, 2018 and 2017, respectively, applicable to capital leases) (8,926) (7,226) $ 7,914 $ 8,203 Depreciation and amortization expense related to property and equipment was $1,750,000, $1,363,000 and $1,598,000 for the years ended December 31, 2018, 2017 and 2016, respectively. Depreciation and amortization expense is recorded in cost of goods sold, research and development, or general and administrative expenses in the accompanying consolidated statements of operations. As noted in Note 7, the Company sold and leased back a substantial portion of its operating assets in a series of capital lease transactions. On October 20, 2016, the Company utilized a third party auctioneer to conduct an auction of certain fully-depreciated equipment assets, resulting in net proceeds of approximately $415,000 which were paid during the fourth quarter of 2016 and were recorded as a gain on sale and included in other income (loss) in the Company’s consolidated statement of operations.

Sale-leaseback transaction

Sale-leaseback transaction	12 Months Ended
	Dec. 31, 2018
Sale-leaseback transaction
Sale-leaseback transaction	Note 7. Sale-leaseback transaction The Company accounts for the sale and leaseback transactions discussed below as capital leases under the provisions of Accounting Standards Codification Topic 840-40, Leases—Sale Leaseback Transactions . Accordingly, the leased assets are recorded in property and equipment and the capitalized lease obligations are included in long-term liabilities at the present value of the future lease payments in accordance with the terms of the lease (see Note 12). Lease payments are applied using the effective interest rate inherent in the leases. Depreciation of the property and equipment is included within depreciation and amortization in the consolidated statements of operations and consolidated statements of cash flows. In 2012, the Company negotiated financing arrangements with Essex Capital Corporation (“Essex”) which provided for the sale-leaseback of up to $6.5 million of the Company’s property and equipment with a bargain purchase option at the end of the respective lease. These financing arrangements were executed in five separate tranches that occurred in February, July and November 2013, and March 2014. The two February leases and the July lease had been fully satisfied before 2017. The November 2013 leases for a total of $1.0 million of assets expired in April 2017 and the related $161,000 gain was fully amortized at that time and the $100,000 lease buy-out option liability was fully satisfied. The March 2014 lease for $795,000 of assets expired in September 2017 and the related $116,000 gain was fully amortized at that time and the lease buy-out option liability of $79,000 was fully satisfied. In February 2017, the Company entered into an agreement with Essex for the sale-leaseback of newly acquired assets of up to $5.0 million to finance its capital expenditures. Each lease under this master agreement is for an initial term of 36 months and has an option to purchase the equipment at the end of the respective lease that management considers to be a bargain purchase option. Under this agreement, the Company entered into leases and sold assets with a total capitalized cost of $481,000 and $2,742,000 at effective interest rates of 14.3% and 14.9% on February 13, 2017 and June 30, 2017, respectively. The February sale resulted in net gains of $14,000 which has been deferred and is being amortized over the 36-month term of the lease. There was no gain or loss on the June 2017 sale. For the years ended December 31, 2018, 2017 and 2016, approximately $5,000, $44,000 and $507,000, respectively, of the net gain on sale-leasebacks was recognized in other income on the condensed consolidated statements of operations.

Intangible assets

Intangible assets	12 Months Ended
	Dec. 31, 2018
Intangible assets
Intangible assets	Note 8. Intangible assets Major components of intangible assets, net at the indicated dates consist of the following: December 31, 2018 2017 (in thousands) Proprietary modified-release drug delivery technology $ 15,600 $ 15,600 Tussionex ANDA 4,829 4,829 CPI profit sharing 2,043 2,043 Patents 2,307 2,302 Other 1,035 1,035 25,814 25,809 Accumulated amortization (11,198) (9,461) $ 14,616 $ 16,348 As part of the June 15, 2009 reorganization of the Company as Neos Therapeutics, Inc., the Company performed a purchase price allocation analysis. The proprietary modified-release drug delivery technology was valued at $15.6 million based on projected cash flows expected to be generated from this technology. The $15.6 million is being amortized over 20 years. On August 28, 2014, the Company completed an acquisition of the rights to Tussionex ANDA from Cornerstone and Coating Place, Inc. ("CPI") which was accounted for as an asset acquisition. Prior to the acquisition, the Company, Cornerstone and CPI shared profits generated by the sale and manufacture of the product under a development and manufacturing agreement, and Cornerstone had commercialization rights to the product. The Company paid $4.2 million to Cornerstone to buy out their rights to commercialize and derive future profits from the product and entered into an agreement whereby Cornerstone transferred certain assets associated with the product to the Company. Legal fees of $90,000 associated with this buyout agreement have been capitalized as part of the purchase price. Additional estimated earnout costs due to Cornerstone of $589,000, recorded at fair value by the Company based upon a valuation provided by a third-party valuation firm, were capitalized as part of the purchase price of this intangible asset. This earnout amount was revalued at December 31, 2018, 2017 and 2016, resulting in a $133,000 decrease, a $62,000 decrease and an $18,000 increase in the estimated fair value of the earnout, respectively, which is recorded in other income (expense), net in the Company’s consolidated statements of operations. In addition, the Company paid $2.0 million to CPI to buy out their rights to future profits from the collaboration and entered into an agreement whereby CPI will continue to supply a component of the product. Legal fees of $43,000 associated with this buyout agreement have been capitalized as part of the purchase price of this intangible asset. These two intangible assets have an expected life of ten years and are being amortized on a straight-line basis beginning September 2014. Patents utilized in the manufacturing of the Company’s generic Tussionex product which total $352,000 are being amortized over their expected useful life of 10 years. Patents utilized in the manufacturing of Adzenys XR-ODT which total $599,000 are being amortized over their expected useful life, including $535,000 being amortized for approximately 16 years beginning with the approval of Adzenys XR-ODT on January 27, 2016 and $64,000 being amortized for approximately 15 years beginning in December 2017. Patents utilized in the manufacturing of Cotempla XR-ODT which total $83,000 are being amortized over their expected useful life of approximately 15 years, beginning with the approval of Cotempla XR-ODT on June 19, 2017. Patents utilized in the manufacturing of Adzenys ER which total $451,000 are being amortized over their expected useful life of approximately 15 years, beginning with the approval of Adzenys ER on September 15, 2017. Total amortization expense for intangible assets was $1,737,000, $1,660,000 and 1,662,000 for each of the years ended December 31, 2018, 2017 and 2016. Aggregate amortization of intangible assets for each of the next five years and thereafter is as follows: Year ending December 31, (in thousands) 2019 $ 1,737 2020 1,737 2021 1,737 2022 1,737 2023 1,642 Thereafter 5,205 $ 13,795

Income taxes

Income taxes	12 Months Ended
	Dec. 31, 2018
Income taxes
Income taxes	Note 9. Income taxes The Company applies FASB ASC topic 740, "Income Taxes" or ASC 740 which addresses the determination of whether tax benefits claimed, or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company is generally subject to tax examination for a period of three years after tax returns are filed. Therefore, the statute of limitations remains open for tax years 2015 and forward. However, when a company has net operating loss carryovers, those tax years remain open until three years after the net operating losses are utilized. Therefore, the tax years remain open back to 2004. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act of 2017. The legislation significantly changes U.S. tax law by, among other things, lowering the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Cuts and Jobs Act of 2017, the Company revalued its ending net deferred tax assets at December 31, 2017 and recognized a assets with a corresponding reduction in the valuation allowance. The significant components of deferred income tax assets and liabilities consist of the following: December 31, 2018 2017 (in thousands) Deferred Tax Assets: Net operating loss $ 37,818 $ 32,193 Share-based compensation 1,757 1,340 R&D tax credit 2,378 1,696 Other reserves 1,616 1,069 Capital lease liability 390 563 State deferreds 1,236 397 Inventory 103 829 Accrued rebates 4,902 561 Other current assets — 319 Other 2,456 2,597 Total deferred tax assets 52,656 41,564 Deferred Tax Liabilities: Intangible assets (1,571) (1,846) Property and equipment (999) (747) Total deferred tax liabilities (2,570) (2,593) Valuation allowance (50,086) (38,971) Net deferred tax asset (liability) $ — $ — At December 31, 2018, the Company has gross federal net operating loss carry-forwards of $275,628,000 and research and development credits of $2,493,000, which begin to expire in 2024. The Company has tax effected state net operating loss carry-forwards of $3,166,000 and $3,136,000 at December 31, 2018 and 2017, respectively. Utilization of the net operating loss carry-forwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended and similar state provisions. The Company has performed an analysis to determine the impact of any ownership change(s) under Section 382 of the Internal Revenue Code. Due to an ownership change in 2017, the amount of federal net operating loss that will expire unused due to the Section 382 limitation is $98,009,000 . The amount of federal research and development credit that will expire unused is $350,000. The deferred tax assets and related valuation allowances for both carryforwards have been reduced accordingly. It has been determined that the Company did not undergo an ownership change in 2018 and therefore there was no further impact to the ability of the Company to utilize the carryforward of the federal net operating loss or the federal research and development tax credit beyond those limits previously established by prior ownership changes. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company has no accrued interest related to its uncertain tax positions as they all relate to timing differences that would adjust the Company’s net operating loss carryforward and do not require recognition. As a result of these timing differences, at December 31, 2018 and December 31, 2017, the Company had gross unrecognized tax benefits related to uncertain tax positions of $3,956,000 and $7,261,000, respectively. The Company has no other tax positions taken or expected to be taken that would significantly increase or decrease unrecognized tax benefits within 12 months of the reporting date. Changes in unrecognized benefits in any given year are recorded as a component of deferred tax expense. A tabular rollforward of the Company’s gross unrecognized tax benefits is below: December 31, 2018 2017 (in thousands) Beginning Balance $ 7,261 $ 5,081 Decrease based on tax positions taken during a current period (3,305) 2,180 Ending Balance $ 3,956 $ 7,261 The Company has recorded a valuation allowance of $50,086,000 at December 31, 2018 and $38,971,000 at December 31, 2017 to fully reserve its net deferred tax assets. The Company has assessed the likelihood that the deferred tax assets will be realized and determined that it is more likely than not that all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Due to the uncertainty of realizing the deferred tax asset, the Company has placed a valuation allowance against the entire deferred tax asset. The Company may not ever be able to realize the benefit of some or all of the federal and state loss carryforwards, either due to ongoing operating losses or due to ownership changes, which limit the usefulness of the loss carryforwards. The change in the valuation allowance was a increase of 11,118,000 and an decrease of $29,037,000 for the years ended December 31, 2018 and December 2017, respectively. As a result of the TCJA reduction in the U.S. corporate income tax rate, the Company reduced its deferred tax assets in 2017 by $20,547,000 with a corresponding reduction in the valuation allowance. A reconciliation of the Company’s Federal statutory tax rate of 21% to the Company’s effective income tax rate is as follows: Year Ended December 31, 2018 2017 U.S. Statutory Tax Rate 21 % 34 % Change in Valuation Allowance (21.5) % 44 % Deferred Tax Adjustments 0 % (47) % Federal Rate Change 0 % (31) % State tax expense, net 1.8 % 2 % Provision to Return and Other Adjustments (1.3) % (2) % Tax Expense / (Benefit) 0 % 0 %

Accrued expenses

Accrued expenses	12 Months Ended
	Dec. 31, 2018
Accrued expenses
Accrued expenses	Note 10. Accrued expenses Accrued expenses as of December 31, 2018 and 2017 consist of the following: December 31, December 31, 2018 2017 (in thousands) Accrued savings offers $ 11,289 $ 7,168 Accrued rebates 7,762 4,008 Accrued customer returns 5,157 2,711 Accrued payroll and benefits 4,555 2,534 Accrued wholesaler fees 4,249 2,345 Other accrued expenses 2,806 2,178 Total accrued expenses $ 35,818 $ 20,944

Long-term debt

Long-term debt	12 Months Ended
	Dec. 31, 2018
Long-term debt
Long-term debt	Note 11. Long-term debt Long-term debt at the indicated dates consists of the following: December 31, 2018 2017 (in thousands) Deerfield senior secured credit facility, net of discount of $3,334 and $2,843, respectively $ 49,916 $ 57,156 Capital leases, maturing through November 2022 1,858 2,678 51,774 59,834 Less current portion (8,557) (896) Long-term debt $ 43,217 $ 58,938 Senior secured credit facility: On May 11, 2016, the Company entered into a $60.0 million senior secured credit facility (the “Facility”) with Deerfield Private Design Fund III, L.P. (66 2 / 3 % of Facility) and Deerfield Special Situations Fund, L.P. (33 1 / 3 % of Facility) (collectively, “Deerfield”), as lenders. In February 2017, the Company closed an underwritten public offering of 5,750,000 shares of its common stock at a public offering price of $5.00 per share (see Note 12). Deerfield, the Company’s senior lender, participated in the purchase of the Company’s common shares as part of this public offering, and as a result, was classified as a related party at the time of the corresponding transactions. Approximately $33 million of the $60.0 million Facility proceeds was used to prepay the existing $24.3 million principal and $0.1 million of accrued interest related to the senior Loan and Security Agreement (the “LSA”) with Hercules Technology III, L.P., (“Hercules”), the $1.1 million LSA end of term fee, a LSA prepayment charge of $243,000 and the $5.9 million of principal and $1.3 million of interest on the 10% amended and restated subordinated note (the “Note”) that was issued by the Company to Essex, which were otherwise payable in 2016 and 2017. Principal on the Facility was due in three equal annual installments beginning in May 2019 and continuing through May 2021, with a final payment of principal, interest and all other obligations under the Facility due May 11, 2022. Interest is due quarterly beginning in June 2016, at a rate of 12.95% per year. The Company had an option, which it exercised, to defer payment of each of the first four interest payments, adding such amounts to the outstanding loan principal. The aggregate $6.6 million in deferred interest payments (the “Accrued Interest”) was due and payable on June 1, 2017. Borrowings under the Facility are collateralized by substantially all of the Company’s assets, except the assets under capital lease.The terms of the Facility require the Company to maintain cash on deposit of not less than $5.0 million. On June 1, 2017 (the “Amendment Date”), the Company and Deerfield entered into a First Amendment (the “Amendment”) to the Facility which extended the date to repay the Accrued Interest under the Facility to June 1, 2018 (the “PIK Maturity Date”), which could have been extended to June 1, 2019 at the election of the Company if certain conditions had been met as specified in the Amendment. However, as described below, the accrued interest amount was converted into shares of common stock. The right to payment of the Accrued Interest was memorialized in the form of senior secured convertible notes (the “Convertible Notes”) issued to Deerfield on the Amendment Date. Interest was due quarterly at a rate of 12.95% per year. The principal amount of the Convertible Notes issued under the Amendment and all accrued and unpaid interest thereon was to become due and payable upon written notice from Deerfield, and if either (a) the Company did not meet certain quarterly sales milestones specified in the Amendment or (b) the Company had not received and publicly announced FDA approval of the new drug applications on or before the applicable Prescription Drug User Fee Act (the “PDUFA”) goal date as set forth on the schedules to Amendment. Per the Amendment, the Company will prepay all of the outstanding obligations under the Facility and the Convertible Notes upon the occurrence of a change in control or a sale of substantially all of the Company’s assets and liabilities. The Amendment increased the staggered prepayment fees for prepayments due upon a change of control or any other prepayment made or required to be made by the Company by 300 basis points from June 1, 2017 through the period ending prior to May 11, 2020 for the change in control prepayment fees and through the period ending prior to May 11, 2022 for any other prepayments, respectively (the “Prepayment Premiums”). Such Prepayment Premiums, as amended, range from 12.75% to 2%. The $6.6 million of Convertible Notes was convertible into shares of the Company’s common stock at the noteholder’s option at any time up to the close of business on the date that is five days prior to the PIK Maturity Date. The per share conversion price was the greater of (a) 95% of the average of the volume weighted average prices per share of the Company’s common stock on the NASDAQ Global Market for the three trading day period immediately preceding such conversion, and (b) $7.00. Deerfield cannot own more than 9.985% of the Company’s outstanding shares at any one time, and the aggregate conversion cannot exceed 19.9% of the Company’s outstanding common stock as of June 1, 2017. On October 26, 2017, Deerfield provided a conversion notice electing to convert the entire $6.6 million of Convertible Notes into shares of the Company’s common stock at a conversion price of $7.08 per share. The conversion price was based on 95% of the average of the volume weighted average prices per share of the Company’s common stock on the NASDAQ Global Market for the three trading day period immediately preceding such conversion. This resulted in issuing 929,967 shares of the Company’s common stock to Deerfield on this date and the Convertible Notes were cancelled. In conjunction with the Amendment to the Facility and the related issuance of the Convertible Notes, the Company entered into a Registration Rights Agreement (the “Registration Agreement”) which required the Company to file a registration statement with the SEC to register the shares of common stock issued or issuable upon conversion of the Convertible Notes (the “Conversion Shares”) (subject to certain adjustment for stock split, dividend or other distribution, recapitalization or similar events,the “Registrable Securities”) within 30 days from June 1, 2017, which was to become effective per the SEC no later than 75 days thereafter. The Company filed a registration statement on Form S-3 to comply with the Registration Agreement on June 30, 2017, which became effective on July 11, 2017. This filing covered 940,924 shares, which is the number of shares that would be issued at the floor conversion rate of $7.00 per share. The Company is also required to, among other things, maintain the effectiveness of such registration statement, continue to file the required SEC filings on a timely basis, use its best efforts to ensure that the registered securities are listed on each securities exchange on which securities of the same class or series as issued by the Company are then listed and comply with any Financial Industry Regulatory Authority (“FINRA“) requests. The Company’s obligations with respect to each registration end at the date which is the earlier of (a) when all of the Registrable Securities covered by such registration have been sold or (b) when Deerfield or any of its transferees or assignees under the Registration Agreement cease to hold any Registrable Securities. For each registration, the Company shall bear all reasonable expenses, other than underwriting discounts and commissions, and shall reimburse Deerfield or any assignee or transferee for up to $25,000 in legal fees. The Company had satisfied all of its obligations under this Registration Agreement and did not pay any damages pursuant to this agreement; therefore, no liability had been recorded (see Note 15), and as of September 30, 2018, Deerfield or any of its transferees or assignees under the Registration Agreement reported that it had ceased to hold any Registrable Securities. The Company has accounted for the Amendment as a debt modification as the instruments were not substantially different; therefore, the remaining debt discount on the original Facility is being amortized using the effective interest method over the remaining term of the modified debt. The Company evaluated the Amendment together with the Convertible Notes to determine if those contracts or embedded components of those contracts qualified as derivatives requiring separate recognition. This evaluation identified a derivative liability of $2.1 million for the fair value of the change in control and other accelerated payment features as the prepayment fees resulted in premiums that were greater than 10%. As of December 31, 2018, the fair value of the derivative is $2.0 million (see Note 4). As the change in control and other accelerated payments terms, including the prepayment fees, were applied to the entire debt per the terms of the amended Facility, the corresponding debt discount will be amortized using the effective interest method over the remaining term of the Facility. The fees paid to or on behalf of the creditor for the debt modification totaled $40,000 and were recorded as additional debt discount on the amended Facility to be amortized to interest expense using the effective interest method over the term of the Facility. The Company’s evaluation also determined that the embedded conversion options should not be bifurcated as derivatives from the Convertible Notes host instruments. Therefore, the Company recorded a $0.6 million discount to the convertible notes for the intrinsic value of the embedded conversion option based upon the difference between the fair value of the underlying common stock on June 1, 2017 and the effective conversion price embedded in the Convertible Notes, which will be amortized using the effective interest method to interest expense over the one-year term of the Convertible Notes. The Company recorded a $0.6 million corresponding credit to a beneficial conversion feature classified as additional paid in capital on June 1,2017 in stockholders’ (deficit) equity in the Company’s financial statements. In connection with the Facility, the Company paid a $1,350,000 yield enhancement fee to Deerfield, approximately $173,000 of legal costs to the Company’s attorneys and $58,000 of legal costs on behalf of Deerfield’s attorneys, all of which were recorded as debt discount and amortized over the six-year term of the Facility, using the effective interest method. On November 5, 2018, the Company and Deerfield entered into an amendment (the “Second Amendment”) to the Facility pursuant to which the Company agreed to pay $7.5 million of principal under the Facility otherwise due in May 2019 upon completion of an underwritten public offering of the Company’s shares of its common stock for gross proceeds of at least $30.0 million, plus additional shares of the Company’s shares of its common stock for additional gross proceeds of at least $4.5 million (the “November Offering”). The remaining $52.5 million of principal under the Facility is due as follows: $7.5 million on May 11, 2019, $15.0 million on May 11, 2020 (the “2020 Principal Payment”), $15.0 million on May 11, 2021 and $15.0 million on May 11, 2022; provided, that the 2020 Principal Payment due date shall be extended to May 11, 2021 or May 11, 2022 subject to certain achievement of net sales. If all or any of the principal are prepaid or required to be prepaid under the Second Agreement prior to December 31, 2021, then the Company shall pay, in addition to such prepayment and accrued interest thereon, a prepayment premium equal to 6.25% of the amount of principal prepaid. Additionally, the Company shall pay all interest which, absent such prepayment, would have accrued on the principal prepaid through May 11, 2020 in connection with a prepayment due to a Change of Control of the Company or through December 31, 2020 in connection with any other prepayment , whether voluntary or in an Event of Default. If such prepayment occurs after December 31, 2021 then no prepayment premium is due. In addition, upon the payment in full of the Obligations (whether voluntarily, in the connection with a Change of Control or an Event of Default and whether before, at the time of or after the Maturity Date, Pursuant to the Second Amendment, upon the effectiveness thereof, the Company amended and restated its outstanding notes under the Second Agreement in the form of senior secured convertible notes (the “ In conjunction with the Second Amendment to the Facility and the related issuance of the A&R Notes, the Company entered into a Registration Rights Agreement (the “Second Registration Agreement”) which required the Company to file a registration statement with the SEC to register the shares of common stock issued or issuable upon conversion of the A&R Notes within 30 days from November 5, 2018, which was to become effective per the SEC no later than 75 days thereafter. The filing deadline was subsequently extended to December 21, 2018. The Company filed a registration statement on Form S-3 to comply with the Second Registration Agreement on December 11, 2018, which became effective on December 20, 2018. This filing covered 3,796,668 shares, which is the maximum number of shares that may be converted. The Company is also required to, among other things, maintain the effectiveness of such registration statement, continue to file the required SEC filings on a timely basis, use its best efforts to ensure that the registered securities are listed on each securities exchange on which securities of the same class or series as issued by the Company are then listed and comply with any FINRA requests. The Company’s obligations with respect to each registration end at the date which is the earlier of (a) when all of the Registrable Securities covered by such registration have been sold or (b) when Deerfield or any of its transferees or assignees under the Second Registration Agreement cease to hold any Registrable Securities. For each registration, the Company shall bear all reasonable expenses, other than underwriting discounts and commissions, and shall reimburse Deerfield or any assignee or transferee for up to $25,000 in legal fees. The Company had satisfied all of its obligations under the Second Registration Agreement and did not pay any damages pursuant to this agreement; therefore, no liability had been recorded (see Note 15). Pursuant to the A&R Notes, if the Company fails to provide the number of Conversion Shares, then the Company would have to pay damages to Deerfield or subsequent holder or any designee for each day after the third business day after receipt of notice of conversion that such conversion is not timely effected. The Facility also contains certain customary nonfinancial covenants, including limitations on the Company’s ability to transfer assets, engage in a change of control, merge or acquire with or into another entity, incur additional indebtedness and distribute assets to shareholders. Upon an event of default, the lenders may declare all outstanding obligations accrued under the Facility to be immediately due and payable, and exercise its security interests and other rights. As of December 31, 2018, the Company was in compliance with the covenants under the Facility. Debt discount amortization for the Facility, including the Amendment after June 1, 2017, was calculated using the effective interest rates of 15.03% on the original facility debt and 25.35% on the Convertible Notes and after the Second Amendment on November 5, 2018, using the effective interest rate of 16.69%, charged to interest expense and totaled $961,000 and $1,316,000 for the years ended December 31, 2018 and 2017, respectively. Senior debt: In March 2014, the Company entered into the LSA, which was subsequently amended in August 2014, September 2014, December 2014 and June 2015. As amended, the LSA provided a total commitment of $25.0 million, available in four draws. Borrowings under the LSA were collateralized by substantially all of the Company’s assets, except the Company’s intellectual property and assets under capital lease. The first draw of $10.0 million, (“Tranche 1”), was issued during March 2014 and was used in its entirety to repay outstanding principal under a previous credit facility. The second draw of $5.0 million, (“Tranche 2”), was issued during September 2014. The third draw (“Tranche 3”) in the amount of $5.0 million was issued in March 2015, and the fourth and final draw (“Tranche 4”) in the amount of $5.0 million was issued in June 2015. Each draw was to be repaid in monthly installments, comprised of interest-only monthly payments until May 2016, when installments of interest and principal calculated over a thirty-month amortization period commenced. A balloon payment of the entire principal balance outstanding on October 1, 2017 and all accrued but unpaid interest thereunder was due and payable on October 1, 2017. The interest rate was 9% per annum for Tranche 1 and Tranche 4 and 10.5% per annum for Tranche 2 and Tranche 3. An end of term charge of $1.1 million was payable at the earliest to occur of (1) October 1, 2017, (2) the date the Company prepaid its outstanding Secured Obligations, as defined therein, or (3) the date the Secured Obligations became due and payable. As such, the end of term charge of $1.1 million was paid on May 11, 2016 when the Company prepaid its outstanding Secured Obligations, as defined therein. In connection with the LSA, the Company issued the Hercules Warrants which consisted of 60,000 Series C warrants in March 2014 and 110,000 Series C warrants in September 2014 at the then current price of $5.00 per share. The Hercules Warrants became warrants with a term of five years for the purchase of 70,833 shares of common stock at a price of $12.00 per share upon the closing of the Company’s IPO and were therefore reclassified from warrant liability to Additional Paid in Capital within Stockholders’ Equity at July 22, 2015. LSA end of term charge amortization totaled $121,000 for the year ended December 31, 2016. LSA debt discount amortization charged to interest expense totaled $104,000 for the year ended December 30, 2016. The early prepayment of the LSA with some of the proceeds from the Facility resulted in a $1,187,000 loss on debt extinguishment which is separately shown in the consolidated statement of operations for the year ended December 31, 2016. 10% subordinated note: The Company had a Note in the aggregate principal amount of $5.9 million that was issued by the Company to Essex which was to mature in March 2017. Interest was to be accrued and added to the principal balance until such time as the Company achieved positive EBITDA for three consecutive months. During the year ended December 31, 2016, interest expense of $263,000 was accrued. On May 11, 2016, the Company prepaid the $5.9 million outstanding aggregate principal and $1.3 million in accrued and unpaid interest. Capital lease obligations: Capital lease obligations consist of sale-leaseback and equipment leases, both of which include options to purchase. As described in Notes 7 and 17, during the years ended December 31, 2017, 2014 and 2013, the Company entered into agreements with Essex for the sale‑leaseback of existing and newly acquired assets with a total capitalized cost of $3.2 million, $795,000 and $5.5 million, respectively, which are classified as capital leases. The approximate imputed interest rate on these leases is 14.9%, 14.5% and 14.5%, respectively. Total interest expense on all capital leases was $341,000, $263,000 and 204,000 for the years ended December 31, 2018, 2017 and 2016 respectively. Future capital lease obligations were included in the long-term liabilities on the ompany’s condensed consolidated balance sheets. Future minimum capital lease payments through the years ending December 31, 2022 are as follows: Year ending: December 31, (in thousands) 2019 $ 1,257 2020 798 2021 21 2022 20 Total minimum lease payments $ 2,096 Less amount representing interest (238) Future minimum lease payments $ 1,858 Future principal payments of long-term debt, including capital leases, are as follows: Year ending: December 31, (in thousands) 2019 $ 8,557 2020 15,761 2021 15,020 2022 15,770 Future principal payments $ 55,108 Less unamortized debt discount (3,334) Less current portion of long-term debt (8,557) Total long-term debt $ 43,217

Common stock

Common stock	12 Months Ended
	Dec. 31, 2018
Common stock
Common stock	Note 12. Common stock On July 28, 2015, the Company closed its initial public offering (“IPO”) whereby the Company sold 5,520,000 shares of common stock, at a public offering price of $15.00 per share, which includes 720,000 shares of common stock resulting from the underwriters’ exercise of their over‑allotment option at the IPO price on July 23, 2015. Proceeds from the Company’s IPO, net of underwriting discounts and commissions and other offering costs, were $75.0 million. In connection with the IPO, the Company’s Board of Directors approved a 1‑for‑2.4 reverse stock split of the Company’s common stock which also resulted in a proportional adjustment to the conversion ratios of the preferred stock and the preferred stock warrants. All references to common stock and per share amounts in these condensed financial statements and accompanying footnotes have been retroactively adjusted for all periods presented to give effect to this reverse stock split. In February 2017, the Company closed an underwritten public offering of 5,750,000 shares of its common stock at a public offering price of $5.00 per share, which included 750,000 shares of its common stock resulting from the underwriters’ exercise of their over-allotment option on February 17, 2017. Deerfield, the Company’s senior lender, participated in the purchase of the Company’s common shares as part of this public offering, and as a result, was classified as a related party at the time of the corresponding transactions. The net proceeds to the Company from this offering, after deducting underwriting discounts and commissions and other offering expenses payable by the Company, were approximately $26.7 million. On June 30, 2017, the Company closed an underwritten public offering of 4,800,000 shares of its common stock at a public offering price of $6.25 per share for total proceeds of $30.0 million before estimated offering costs of $0.2 million. The Company also granted the underwriters a 30-day option to purchase up to an additional 720,000 shares of its common stock which was exercised in full on July 26, 2017. The net proceeds to the Company through July 26, 2017 from this offering, after deducting offering expenses payable by the Company, were approximately $34.3 million. The shares of common stock for both the June 2017 and February 2017 offerings were offered pursuant to a shelf registration statement on Form S-3, including a base prospectus, filed by the Company on August 1, 2016, and declared effective by the SEC on August 12, 2016. This shelf registration statement covers the offering, issuance and sale by the Company of up to an aggregate of $125.0 million of its common stock, preferred stock, debt securities, warrants and/or units (the “Shelf”). The Company simultaneously entered into a sales agreement with Cowen and Company, LLC, as sales agent, to provide for the offering, issuance and sale by the Company of up to $40.0 million of its common stock from time to time in “at-the-market” offerings under the Shelf (the “Sales Agreement”). During the year ended December 31, 2017, the Company sold an aggregate 749,639 shares of common stock under the Sales Agreement, at an average sale price of approximately $5.01 per share for gross proceeds of $3.7 million and net proceeds of $3.6 million and paying total compensation to the sales agent of approximately $0.1 million. On October 26, 2017, Deerfield provided a conversion notice electing to convert the entire $6.6 million of Convertible Notes into shares of the Company’s common stock at a conversion price of $7.08 per share. The conversion price was based on 95% of the average of the volume weighted average prices per share of the Company’s common stock on the NASDAQ Global Market for the three trading day period immediately preceding such conversion. This resulted in issuing 929,967 shares of the Company’s common stock to Deerfield on this date and the Convertible Notes were cancelled. During the year ended December 31, 2018, the Company sold an aggregate 651,525 shares of common stock under the Sales Agreement, at an average sale price of approximately $6.25 per share for gross proceeds of $4.1 million and net proceeds of $3.9 million and paying total compensation to the sales agent and other costs of approximately $0.2 million. On November 5, 2018, the Company filed Supplement No. 1 to the prospectus dated August 12, 2016, which reduced the size of the continuous offering by the Company under such prospectus relating to the offering of Common Stock pursuant to the Sales Agreement. Following the reduction, the Company is authorized to issue up to $7,825,113 of its common stock pursuant to the Sales Agreement (inclusive of amounts previously sold thereunder prior to the date hereof). Aggregate gross proceeds of sales of the Company’s common stock under the Sales Agreement total $7,825,113, and sales of common stock under the Sales Agreement have been suspended. On November 8, 2018, the Company closed an underwritten public offering of 19,999,999 shares of its common stock at a public offering price of $2.30 per share, which includes 2,608,695 shares of its common stock resulting from the underwriters’ exercise of their over-allotment option at the public offering price. The net proceeds to the Company from this offering, after deducting underwriting discounts and commissions and other offering expenses payable by the Company were approximately $43.4 million. This offering met the criteria for the November Offering. As of December 31, 2018, $5.2 million of the Company’s common stock, preferred stock, debt securities, warrants and/or units remained available to be sold pursuant to the Shelf. During the year ended December 31, 2018, the Company issued 26,991 shares of common stock pursuant to the conversion of vested RSUs and 832 shares of common stock pursuant to the exercise of vested stock options.

Share-based Compensation

Share-based Compensation	12 Months Ended
	Dec. 31, 2018
Share-based Compensation
Share-based Compensation	Note 13. Share-based Compensation Share-based Compensation Plans In July 2015, the Company adopted the Neos Therapeutics, Inc. 2015 Stock Option and Incentive Plan (“2015 Plan”) which became effective immediately prior to the closing of the IPO and initially had 767,330 shares of common stock reserved for issuance. On January 1, 2016 and each January 1 thereafter, the number of shares of common stock reserved and available for issuance under the 2015 Plan shall be cumulatively increased by five percent of the number of shares of stock issued and outstanding on the immediately preceding December 31 or such lesser number of shares determined by the administrator of the 2015 Plan. Accordingly, on January 1,2019, 2018 and 2017, the Company added 2,483,815 shares,1,449,847 shares and 803,049 shares, respectively, to the option pool. The 2015 Plan superseded the Neos Therapeutics, Inc. 2009 Equity Plan (“2009 Plan”), originally adopted in November 2009 and which had 1,375,037 shares reserved and available for issuance. Effective upon closing of the IPO, the Company’s board of directors determined not to grant any further awards under the 2009 Plan. The shares of common stock underlying any awards that are forfeited, canceled, reacquired by the Company prior to vesting, satisfied without the issuance of stock or otherwise terminated (other than by exercise) under the 2009 Plan will be added to the shares of common stock available under the 2015 Plan. This number is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. The 2015 Plan is administered by the Company’s compensation committee. The Company’s compensation committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants and to determine the specific terms and conditions of each award, subject to the provisions of the 2015 Plan. The Company’s compensation committee may delegate authority to grant certain awards to the Company’s chief executive officer. Through December 31, 2018, the Company has granted options, restricted stock and RSUs. The exercise price per share for the stock covered by a stock award granted shall be determined by the administrator at the time of grant but shall not be less than 100 percent of the fair market value on the date of grant. Unexercised stock awards under the 2015 Plan expire after the earlier of 10 years or termination of employment, except in the case of any unexercised vested options, which generally expire 90 days after termination of employment. The 2009 Plan allowed the Company to grant options to purchase shares of the Company’s common stock and to grant restricted stock awards to members of its management and selected members of the Company’s board of directors. Restricted stock awards are recorded as deferred compensation and amortized into compensation expense, on a straight-line basis over a defined vesting period ranging from 1 to 48 months. Options were granted to officers, employees, nonemployee directors and consultants, and independent contractors of the Company. The Company also granted performance based awards to selected management. The performance options vested over a three-year period based on achieving certain operational milestones and the remaining options vest in equal increments over periods ranging from two to four years. Unexercised options under the 2009 Plan expire after the earlier of 10 years or termination of employment, except in the case of any unexercised vested options, which generally expire 90 days after termination of employment. All terminated options are available for reissuance under the 2015 Plan. Since the inception of the 2015 Plan through December 31, 2018, 82,635 shares related to forfeited 2009 Plan options were added to the shares available under the 2015 Plan. During year ended December 31, 2018, 73,331 shares related to forfeited 2009 Plan options were added to the shares available under the 2015 Plan. As of December 31, 2018, 1,793,905 shares of common stock remain available for grant under the 2015 Plan. In June 2018, the Company adopted the Neos Therapeutics, Inc. 2018 Inducement Plan (the “Inducement Plan”) which had 800,000 shares of common stock reserved and available for issuance. The Inducement Plan allows the Company to grant equity awards to induce highly-qualified prospective officers and employees who are not currently employed by the Company to accept employment and provide them with a proprietary interest in the Company. The Inducement Plan is administered by the Company’s compensation committee. The exercise price per share for the stock covered by a stock award granted pursuant to the Inducement Plan shall be determined by the administrator at the time of grant but shall not be less than 100 percent of the fair market value on the date of grant. Unexercised stock awards under the Inducement Plan expire after 10 years following the grant date. Under the Company’s employment agreement dated June 27, 2018 with Gerald McLaughlin, the Company’s Chief Executive Officer, the Company granted Mr. McLaughlin, under the Inducement Plan, an option to purchase 600,000 shares of the Company’s common stock, which vests in equal annual installments over four years from Mr. McLaughlin’s start date. In addition, on July 30, 2018, the Company granted Mr. McLaughlin, under the Inducement Plan, an option to purchase 200,000 shares of the Company’s common stock. The shares underlying this option shall vest subject to certain performance metrics to be evaluated for the fiscal year ending December 31, 2019. As of December 31, 2018, no shares of common stock remain available for grant under the Inducement Plan. Share-based Compensation Expense The Company has reported share-based compensation expense for the years ended December 31, 2018, 2017 and 2016, respectively, in its condensed consolidated statements of operations as follows: Year Ended December 31, 2018 2017 2016 (in thousands) Cost of goods sold $ 470 $ 390 $ 311 Research and development 344 394 304 Selling and marketing 731 913 723 General and administrative 1,776 2,354 2,122 $ 3,321 $ 4,051 $ 3,460 The total share based compensation expense included in the table above is attributable to stock options and RSUs of $3.1 million and $261,000, respectively, for the year ended December 31, 2018. The total share based compensation expense included in the table above is attributable to stock options,RSUs and restricted stock of $3.9 million, $86,000 and $71,000,respectively, for the year ended December 31, 2017. The total share based compensation expense included in the table above is attributable to stock options and restricted stock of $3.4 million and $91,000, respectively, for the year ended December 31, 2016. As of December 31, 2018, there was $5.1 million of compensation costs adjusted for any estimated forfeitures, related to non-vested stock options and RSUs granted under the Company’s equity incentive plans not yet recognized in the Company’s financial statements. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.5 years for stock options and 2.9 years for RSUs. There is no unrecognized compensation cost associated with grants of restricted stock. Stock Options During the year ended December 31, 2018, the Company’s board of directors granted 953,539 options under the 2015 Plan. In June and July 2018, the Company granted 600,000 and 200,000 options, respectively, under the Inducement Plan to Gerald McLaughlin, the Company’s Chief Executive Officer, at an exercise price of $6.20 and $5.55 per share, respectively. The Company estimates the fair value of all stock options on the grant date by applying the Black-Scholes option pricing valuation model. The application of this valuation model involves assumptions that are highly subjective, judgmental and sensitive in the determination of compensation cost. Prior to the IPO, given the absence of an active market for the Company’s common stock prior to its IPO, the Company’s board of directors was required to estimate the fair value of its common stock at the time of each option grant primarily based upon valuations performed by a third-party valuation firm. The weighted-average key assumptions used in determining the fair value of options granted during the period indicated are as follows: Year Ended December 31, 2018 2017 2016 Estimated dividend yield 0 % 0 % 0 % Expected stock price volatility 60 % 60 % 60 % Weighted-average risk-free interest rate 2.75 % 2.01 % 1.18 % Expected life of option in years 6.13 6.06 6.15 Weighted-average option fair value at grant $ 3.930 $ 4.090 $ 5.800 A summary of outstanding and exercisable options as of December 31, 2018, 2017 and 2016, and the activity from December 31, 2015 through December 31, 2018, is presented below: Number of Weighted-Average Intrinsic Options Exercise Price Value (in thousands) Outstanding at December 31, 2015 1,352,283 $ 13.607 $ 964 Exercisable at December 31, 2015 229,000 $ 3.385 $ 2,504 Granted 859,257 10.385 — Exercised (10,886) 1.231 — Expired, forfeited or cancelled (93,310) 17.780 — Outstanding at December 31, 2016 2,107,344 $ 12.173 $ 1,128 Exercisable at December 31, 2016 595,424 $ 9.715 $ 881 Granted 570,432 7.220 — Exercised (1,249) 0.223 — Expired, forfeited or cancelled (221,554) 10.325 — Outstanding at December 31, 2017 2,454,973 $ 11.195 $ 4,764 Exercisable at December 31, 2017 1,137,766 $ 10.919 $ 2,890 Granted 1,753,539 6.786 — Exercised (832) 0.320 — Expired, forfeited or cancelled (760,795) 11.281 — Outstanding at December 31, 2018 3,446,885 $ 8.935 $ 70 Exercisable at December 31, 2018 1,643,011 $ 10.627 $ 70 The weighted-average remaining contractual life of options outstanding and exercisable on December 31, 2018 was 7.9 and 6.6 years, respectively. The option exercise price for all options granted in the year ended December 31, 2018 ranged from $4.76 to $10.40 per share. Restricted Stock Units On May 1, 2017, the Company granted 78,750 RSUs to members of its management which vest in four equal annual installments, beginning May 1, 2018. On October 2, 2017, the Company granted 6,250 RSUs to a member of its management which vest in four equal annual installments, beginning October 2, 2018. On March 1, 2018, the Company granted 93,750 RSUs to members of its management which vest in four equal annual installments, beginning March 1, 2019. The Company satisfies its RSUs by issuing the Company’s common shares when RSUs vest and are issued. In addition, when RSUs vest and are issued, RSU recipients may elect to have the Company withhold units as consideration for the tax withholding obligation for their vested RSUs. During the year ended December 31, 2018, 33,748 vested RSUs were converted into an equivalent 26,991 shares of common stock. The Company withheld 6,757 shares of its common stock to partially satisfy tax withholding obligations upon vesting of the RSUs for the year ended December 31, 2018. A summary of outstanding RSUs as of December 31, 2018 and 2017 and the activity from December 31, 2017 through December 31, 2018, is presented below: Number of Weighted-Average RSUs Fair Value Outstanding at December 31, 2016 — $ — Granted 85,000 7.15 Exercised — — Expired, forfeited or cancelled — — Outstanding at December 31, 2017 85,000 $ 7.15 Granted 93,750 8.30 Converted (26,991) 7.34 Withheld for tax obligation (6,757) 7.34 Expired, forfeited or cancelled (69,688) 7.77 Outstanding at December 31, 2018 75,314 $ 7.93 Restricted stock The Company did not issue any shares of restricted stock for the years ended December 31, 2018, 2017 and 2016. On October 16, 2017, October 17, 2016 and October 16, 2015, 14,895 shares, 9,709 shares and 9,197 shares, respectively, of restricted stock were surrendered by the holder to the Company to cover taxes associated with vesting of restricted stock. The Company had no unvested restricted stock as of December 31, 2018 and 2017, and had 35,513 shares of unvested restricted stock with a weighted average fair value of $2.55 as of December 31, 2016. For the years ended December 31, 2018, 2017 and 2016, there were no shares of restricted stock granted or forfeited.

Treasury stock

Treasury stock	12 Months Ended
	Dec. 31, 2018
Treasury stock
Treasury stock	Note 14. Treasury stock The Company has the authority to repurchase common stock from former employees, officers, directors or other persons who performed services for the Company at the lower of the original purchase price or the then-current fair market value. On October 16, 2017, October 17, 2016 and October 16, 2015, 14,895 shares, 9,709 shares and 9,197 shares, respectively, of restricted stock were surrendered by the holder to the Company to cover taxes associated with vesting of restricted stock and such shares were added back into the treasury stock of the Company, increasing total treasury stock to 33,801 shares as of December 31, 2017 and 2018. On February 19, 2015, the Company’s board of directors approved the cancellation of the Company’s 55,905 shares of treasury stock which had been repurchased at the original purchase price of $0.002 in 2013.

Commitments and contingencies

Commitments and contingencies	12 Months Ended
	Dec. 31, 2018
Commitments and contingencies
Commitments and contingencies	Note 15. Commitments and contingencies Registration Payment Arrangement: On November 5, 2018 , in conjunction with the Second Amendment to the Facility and the related issuance of the Convertible Notes, the Company entered into the Registration Agreement which required the Company to file a registration statement with the SEC to register the Registrable Securities (see Note 8) within 30 days from November 5, 2018, which was to become effective per the SEC no later than 75 days thereafter. The filing deadline was subsequently extended to December 21, 2018. The Company filed a registration statement on Form S-3 to comply with the Registration Agreement on December 11, 2018, which became effective on December 20, 2018. This filing covered 3,796,668 shares, which is the number of shares that would be issued up to the Exchange Cap as (defined in the agreement). The Company is also required to, among other things, maintain the effectiveness of such registration statement, continue to file the required SEC filings on a timely basis, use its best efforts to ensure that the registered securities are listed on each securities exchange on which securities of the same class or series as issued by the Company are then listed and comply with any FINRA requests. Upon any Registration Failure, the Company shall pay additional damages to the Holder for each 30-day period (prorated for any partial period) after the date of such Registration Failure in an amount in cash equal to two percent of the original principal amount of the Convertible Notes. The Company’s obligations with respect to each registration end at the date which is the earlier of (a) when all of the Registrable Securities covered by such registration have been sold or (b) when Deerfield or any of its transferees or assignees under the Registration Agreement cease to hold any of the Registrable Securities. For each registration filing, the Company shall bear all reasonable expenses, other than underwriting discounts and commissions, and shall reimburse Deerfield or any assignee or transferee for up to $25,000 in legal fees. The Company currently expects to satisfy all of its obligations under the Registration Agreement and does not expect to pay any damages pursuant to this agreement; therefore, no liability has been recorded. Patent Infringement Litigation: On October 31, 2017, the Company received a paragraph IV certification from Teva Pharmaceuticals USA, Inc. (“Teva”) advising the Company that Teva has filed an ANDA with the FDA for a generic version of Cotempla XR-ODT, in connection with seeking to market its product prior to the expiration of patents covering Cotempla XR-ODT. The certification notice alleged that the three U.S. patents listed in the FDA’s Orange Book for Cotempla XR-ODT, one with an expiration date in April 2026 and two with expiration dates in June 2032, will not be infringed by Teva’s proposed product, are invalid and/or are unenforceable. On December 13, 2017, the Company filed a patent infringement lawsuit in federal district court in the District of Delaware against Teva alleging that Teva infringed the Company’s Cotempla XR-ODT patents by submitting to the FDA an ANDA seeking to market a generic version of Cotempla XR-ODT prior to the expiration of the Company’s patents. This lawsuit automatically stayed, or barred, the FDA from approving Teva’s ANDA for 30 months or until a district court decision that is adverse to the asserted patents is rendered, whichever is earlier. On December 21, 2018, the Company entered into a Settlement Agreement (the “Teva Settlement Agreement”) and a Licensing Agreement (the “Teva Licensing Agreement” and collectively with the Settlement Agreement, the “Teva Agreement”) with Teva. The Teva Agreement resolved all ongoing litigation involving the Company’s Cotempla XR-ODT patents and Teva’s ANDA. Under the Teva Agreement, the Company granted Teva the right to manufacture and market its generic version of Cotempla XR-ODT under the ANDA beginning on July 1, 2026, or earlier under certain circumstances. A stipulation and order of dismissal was entered by the U.S. District Court for the District of Delaware. The Teva Agreement has been submitted to the applicable governmental agencies. On July 25, 2016, the Company received a paragraph IV certification from Actavis Laboratories FL, Inc. (“Actavis”) advising the Company that Actavis had filed an Abbreviated New Drug Application (“ANDA”) with the FDA for a generic version of Adzenys XR-ODT. The certification notice alleged that the four U.S. patents listed in the FDA’s Orange Book for Adzenys XR-ODT, one with an expiration date in April 2026 and three with expiration dates in June 2032, will not be infringed by Actavis’s proposed product, are invalid and/or are unenforceable. On September 1, 2016, the Company filed a patent infringement lawsuit in federal district court against Actavis alleging that Actavis infringed the Company’s Adzenys XR-ODT patents by submitting to the FDA an ANDA seeking to market a generic version of Adzenys XR-ODT prior to the expiration of the Company’s patents. On October 17, 2017, the Company entered into a Settlement Agreement (the “Actavis Settlement Agreement”) and a Licensing Agreement (the “Actavis Licensing Agreement” and collectively with the Actavis Settlement Agreement, the “Actavis Agreement”) with Actavis. The Actavis Agreement resolved all ongoing litigation involving the Company’s Adzenys XR-ODT patents and Actavis’s ANDA. Under the Actavis Agreement, the Company granted Actavis the right to manufacture and market its generic version of Adzenys XR-ODT under the ANDA beginning on September 1, 2025, or earlier under certain circumstances. A stipulation and order of dismissal was entered by the U.S. District Court for the District of Delaware. The Actavis Agreement has been submitted to the applicable governmental agencies . Other Litigation: On March 7, 2018, the Company received a citation advising the Company that the County of Harris Texas (the “County”) filed a lawsuit on December 13, 2017 against the Company and various other alleged manufacturers, promoters, sellers and distributors of opioid pharmaceutical products. Through this lawsuit, the County seeks to recoup as damages some of the expenses it allegedly has incurred to combat opioid use and addiction. The County also seeks punitive damages, disgorgement of profits and attorneys’ fees. While the Company believes that the lawsuit is without merit and intends to vigorously defend against it, the Company is not able to predict at this time whether this proceeding will have a material impact on its results of operations. Defined contribution plans : The Company maintains a defined contribution plan covering substantially all employees under the provisions of Section 401(k) of the Internal Revenue Code (“Code”). As the Company has elected a Safe-Harbor provision for the 401(k) Plan, participants are always fully vested in their employer contributions. Employees may contribute annually up to the lesser of 50% of their compensation or the applicable limit established by the Code. Effective January 1, 2015, the Company amended its 401(k) plan to provide a Company matching contribution on 100% of a participant’s contribution for the first 3% of their salary deferral and 50% of the next 2% of their salary deferral. For the years ended December 31, 2018, 2017 and 2016, the Company recorded $576,000, $419,000 and $371,000, respectively, of expense for 401(k) contributions. Operating leases : The Company leases its Grand Prairie, Texas office space and manufacturing facility under an operating lease which expires in 2024. In addition, the Company has a 60-month lease for office space in Blue Bell, Pennsylvania for its commercial operations which commenced on May 1, 2016. Total future minimum lease payments under these operating leases with noncancelable terms are as follows: Year ending December 31, (in thousands) 2019 $ 1,107 2020 1,161 2021 1,057 2022 1,055 2023 1,055 Thereafter 1,106 Future minimum lease payments $ 6,541 The Company accounts for rent expense on long-term operating leases on a straight-line basis over the life of the lease resulting in a deferred rent balance of $989,000 and $1,083,000 at December 31, 2018 and December 31, 2017, respectively. The Company is also liable for a share of operating expenses for both premises as defined in the lease agreements. The Company’s share of these operating expenses for both locations was $206,000 and $243,000 for the years ended December 31, 2018 and 2017. Rent expense for these leases, excluding the share of operating expenses, was $1,011,000, $1,010,000 and $1,011,000 for the years ended December 31, 2018, 2017 and 2016, respectively. Cash incentive bonus plan: In July 2015, the Company adopted the Senior Executive Cash Incentive Bonus Plan (“Bonus Plan”). The Bonus Plan provides for cash payments based upon the attainment of performance targets established by the Company’s compensation committee. The payment targets will be related to financial and operational measures or objectives with respect to the Company, or corporate performance goals, as well as individual targets. The Company has recorded $666,000, $701,000 and $464,000 of compensation expense for the years ended December 31, 2018, 2017 and 2016, respectively, under the Bonus Plan.

License agreements

License agreements	12 Months Ended
	Dec. 31, 2018
License agreements
License agreements	Note 16. License agreements On December 21, 2018, the Company entered into the Teva Agreement with Teva . Under the Teva Licensing Agreement, the Company granted Teva a non-exclusive license to certain patents owned by the Company by which Teva has the right to manufacture and market its generic version of Cotempla XR-ODT under its ANDA beginning on July 1, 2026, or earlier under certain circumstances. The Teva Licensing Agreement has been submitted to the applicable governmental agencies (see Note 15). On October 23, 2018, the Company entered into an Exclusive License Agreement (“NeuRx License”) with NeuRx Pharmaceuticals LLC for the exclusive worldwide right to research, develop, manufacture, make, have made, use, distribute, sell, have sold, offer for sale, import, export and otherwise commercialize NRX-101 for the treatment, prevention and diagnosis of any and all diseases and conditions. The NeuRx License provides for an upfront payment of $175,000, development and milestone payments and royalties based on annual net sales, as defined in the agreement. Royalties are to be paid on a country-by-country and licensed product-by-licensed product basis, during the period of time beginning on the first commercial sale of such licensed product in such country and continuing until the later of: (i) the expiration of the last-to-expire valid claim in any licensed patent in such country that covers such licensed product in such country; and/or (ii) expiration of regulatory exclusivity of such licensed product in such country. On October 17, 2017, the Company entered into the Actavis Agreement with Actavis. Under the Actavis Licensing Agreement, the Company granted Actavis a non-exclusive license to certain patents owned by the Company by which Actavis has the right to manufacture and market its generic version of Adzenys XR-ODT under its ANDA beginning on September 1, 2025, or earlier under certain circumstances. The Actavis Licensing Agreement has been submitted to the applicable governmental agencies (see Note 15). On July 23, 2014, the Company entered into a Settlement Agreement and an associated License Agreement (the “2014 License Agreement”) with Shire LLC (“Shire”) for a non-exclusive license to certain patents for certain activities with respect to the Company’s New Drug Application (the “NDA”) No. 204326 for an extended-release orally disintegrating amphetamine polistirex tablet. In accordance with the terms of the 2014 License Agreement, following the receipt of the approval from the FDA for Adzenys XR-ODT, the Company paid a lump sum, non-refundable license fee of an amount less than $1.0 million in February 2016. The Company is paying a single digit royalty on net sales of Adzenys XR-ODT during the life of the patents. On January 26, 2017, the Company sent a letter to Shire, notifying Shire that the Company has made a Paragraph IV certification to the FDA that in the Company’s opinion and to the best of its knowledge, the patents owned by Shire that purportedly cover the Company’s Adzenys ER are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of Adzenys ER. On March 6, 2017, the Company entered into a License Agreement (the “2017 License Agreement”) with Shire, pursuant to which Shire granted the Company a non-exclusive license to certain patents owned by Shire for certain activities with respect to the Company’s NDA No. 204325 for an extended-release amphetamine liquid suspension. In accordance with the terms of the 2017 License Agreement, following the receipt of the approval from the FDA for Adzenys ER, the Company paid a lump sum, non-refundable license fee of an amount less than $1.0 million in October 2017. The Company will also pay a single digit royalty on net sales of Adzenys ER during the life of the relevant Shire patents. Such license fees are capitalized as an intangible asset and are amortized into cost of goods sold over the life of the longest associated patent. The royalties are recorded as cost of goods sold in the same period as the net sales upon which they are calculated. Additionally, each of the 2014 and 2017 License Agreements contains a covenant from Shire not to file a patent infringement suit against the Company alleging that Adzenys XR-ODT or Adzenys ER, respectively, infringes the Shire patents.

Related party transactions

Related party transactions	12 Months Ended
	Dec. 31, 2018
Related party transactions
Related party transactions	Note 17. Related party transactions In February 2017, the Company closed an underwritten public offering of 5,750,000 shares of its common stock at a public offering price of $5.00 per share, which includes 750,000 shares of the Company’s common stock resulting from the underwriters’ exercise of their over-allotment option at the public offering price on February 17, 2017 (see Note 12). On June 30, 2017, the Company closed an underwritten public offering of 4,800,000 shares of its common stock at a public offering price of $6.25 per share for total proceeds of $30.0 million before estimated offering costs of $0.2 million. The Company also granted the underwriters a 30-day option to purchase up to an additional 720,000 shares of its common stock (see Note 12). Deerfield, the Company’s senior lender, participated in the purchase of the Company’s common shares as part of both public offerings, and as a result, is classified as a related party. The Company is obligated under a $60.0 million senior secured credit Facility that was issued by the Company to Deerfield. On June 1, 2017, the Company and Deerfield entered into an Amendment to the Company’s existing Facility with Deerfield which extended the date to repay the Accrued Interest under the Facility to June 1, 2018, which may have been extended to June 1, 2019 at the election of the Company if certain conditions have been met as specified in the Amendment. The right to payment of the Accrued Interest was memorialized in the form of Convertible Notes issued to Deerfield on the Amendment Date. On October 26, 2017, Deerfield provided a conversion notice electing to convert the entire $6.6 million of Convertible Notes into shares of the Company’s common stock at a conversion price of $7.08 per share. The conversion price was based on 95% of the average of the volume weighted average prices per share of the Company’s common stock on the NASDAQ Global Market for the three trading day period immediately preceding such conversion. This resulted in issuing 929,967 shares of the Company’s common stock to Deerfield on this date and the Convertible Notes were cancelled. On November 5, 2018, the Company and Deerfield entered into the Second Amendment to the Facility pursuant to which the Company agreed to pay $7.5 million of principal under the Facility otherwise due in May 2019 upon completion of the November Offering. The Second Amendment provides an option for the $15.0 million principal on the Facility due in May 2020 to be paid in either May 2021 or May 2022 upon the achievement of certain revenue milestones as described in the Second Amendment. Also, pursuant to the Second Amendment, the Company amended and restated its outstanding notes under the Facility in the form of senior secured convertible notes. The Company has the right to pay principal and future interest in shares of Common Stock not to exceed 2,135,625 shares in the aggregate. Additionally, subject to the terms of the amended and restated convertible notes, Deerfield has the right to convert the remaining principal under the Facility into shares of Common Stock not to exceed 3,796,668 shares in the aggregate at a conversion price of 95% of the greater of the average of the volume weighted average price per share of the Common Stock for the three trading day period immediately preceding such conversion and $10.00. On November 8, 2018, the Company closed an underwritten public offering of 19,999,999 shares of its common stock at a public offering price of $2.30 per share, which includes 2,608,695 shares of its common stock resulting from the underwriters’ exercise of their over-allotment option at the public offering price. The net proceeds to the Company from this offering, after deducting underwriting discounts and commissions and other offering expenses payable by the Company were approximately $43.4 million. Deerfield also participated in the purchase of the Company’s common shares as part of this offerings (see Note 11).

Selected Quarterly Financial Da

Selected Quarterly Financial Data (Unaudited)	12 Months Ended
	Dec. 31, 2018
Selected Quarterly Financial Data (Unaudited)
Selected Quarterly Financial Data (Unaudited)	Note 18. Selected Quarterly Financial Data (Unaudited) The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Operating results for these periods are not necessarily indicative of the operating results for a full year. Historical results are not necessarily indicative of results to be expected in future periods. Selected quarterly financial data for years ended December 31, 2018 and 2017, are as follows (in thousands, except share and per share amounts): Quarter Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 Net sales(1) $ 10,729 $ 11,363 $ 12,503 $ 15,393 Gross profit(1) 5,508 4,376 5,546 7,631 Net loss attributable to common stock $ (14,436) $ (15,207) $ (12,695) $ (9,337) Weighted average common shares outstanding used to compute net loss per share, basic and diluted (2) 28,996,956 29,008,909 29,625,792 41,415,358 Net loss per share of common stock, basic and fully diluted (3): $ (0.50) $ (0.52) $ (0.43) $ (0.23) Quarter Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Net sales (1) $ 5,631 $ 5,179 $ 7,100 $ 9,222 Gross profit (1) 881 2,362 4,277 5,582 Net loss attributable to common stock $ (17,221) $ (18,645) $ (16,254) $ (13,652) Weighted average common shares outstanding used to compute net loss per share, basic and diluted (2) 19,624,712 22,613,382 27,884,983 28,746,608 Net loss per share of common stock, basic and fully diluted (3): $ (0.88) $ (0.82) $ (0.58) $ (0.47) (1) The Company began selling Adzenys XR-ODT on May 16, 2016, initiated an early experience program for Cotempla XR-ODT with limited product availability on September 5, 2017 before launching this product nationwide on October 2, 2017 and launched Adzenys ER on February 26, 2018. Net product sales represent total gross product sales less gross to net sales adjustments. Gross to net sales adjustments for branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER include savings offers, prompt payment discounts, wholesaler fees, estimated rebates to be incurred on the selling price of the respective product sales and estimated allowances for product returns. The Company began selling generic Tussionex in August 2014. Gross to net sales adjustments for generic Tussionex include prompt payment discounts, estimated allowances for product returns, wholesaler fees, estimated government rebates and estimated chargebacks to be incurred on the selling price of generic Tussionex related to the respective product sales. The Company recognizes total gross product sales less gross to net sales adjustments as revenue based on shipments from 3PLs to the Company’s wholesaler customers. Also, the net loss amounts reflect the sales and marketing expenses associated with the commercialization of Adzenys XR‑ODT, Cotempla XR-ODT and Adzenys ER. (2) In February 2017, the Company closed an underwritten public offering of 5,750,000 shares of its common stock at a public offering price of $5.00 per share, which included 750,000 shares of its common stock resulting from the underwriters’ exercise of their over-allotment option on February 17, 2017. On June 30, 2017, the Company closed an underwritten public offering of 4,800,000 shares of the its common stock at a public offering price of $6.25 per share for total proceeds of $30.0 million before estimated offering costs of $0.2 million. The Company also granted the underwriters a 30-day option to purchase up to an additional 720,000 shares of its common stock which was exercised in full on July 26, 2017. On October 26, 2017, Deerfield provided a conversion notice electing to convert the entire $6.6 million of Convertible Notes into shares of the Company’s common stock at a conversion price of $7.08 per share. The conversion price was based on 95% of the average of the volume weighted average prices per share of the Company’s common stock on the NASDAQ Global Market for the three trading day period immediately preceding such conversion. This resulted in issuing 929,967 shares of the Company’s common stock to Deerfield on this date and the Convertible Notes were cancelled. On November 8, 2018, the Company closed an underwritten public offering of 19,999,999 shares of its common stock at a public offering price of $2.30 per share, which includes 2,608,695 shares of its common stock resulting from the underwriters’ exercise of their over-allotment option at the public offering price. These transactions produced a significant increase in the number of shares outstanding which will impact the year-over-year comparability of the Company’s loss per share calculations. (3) Loss per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly loss per share may not necessarily equal the total for the year.

Subsequent event

Subsequent event	12 Months Ended
	Dec. 31, 2018
Subsequent event
Subsequent event	Note 19. Subsequent event On January 1, 2019, in accordance with the Evergreen Provisions of the 2015 Plan, the Company added 2,483,815 shares to the option pool, increasing the total number of shares reserved and available for issuance under the 2015 Plan to 4,277,720 shares.

SCHEDULE II - VALUATION AND QUA

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS	12 Months Ended
	Dec. 31, 2018
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS	SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance Additions at charged to Deductions Balance beginning costs and and at end of of period expenses Payments period For the year ended December 31, 2018 Allowance for chargebacks (1) $ 816 $ 8,565 $ (8,067) $ 1,314 Allowance for cash discounts (1) 337 3,519 (3,305) 551 Sales offers (2) 7,168 71,303 (67,183) 11,288 Reserve for wholesaler fees (2) 2,345 17,414 (15,510) 4,249 Reserve for returns (2) 2,711 3,803 (1,357) 5,157 Rebates (2) 4,008 18,746 (14,991) 7,763 For the year ended December 31, 2017 Allowance for chargebacks (1) $ 779 $ 10,146 $ (10,109) $ 816 Allowance for cash discounts (1) 171 1,814 (1,648) 337 Sales offers (2) 2,070 30,978 (25,880) 7,168 Reserve for wholesaler fees (2) 509 8,244 (6,408) 2,345 Reserve for returns (2) 1,157 1,792 (238) 2,711 Rebates (2) 544 7,837 (4,373) 4,008 For the year ended December 31, 2016 Allowance for chargebacks (1) 940 10,504 (10,665) 779 Allowance for cash discounts (1) 99 772 (700) 171 Sales offers (2) — 5,816 (3,746) 2,070 Reserve for wholesaler fees (2) 361 2,838 (2,690) 509 Reserve for returns (2) 429 764 (36) 1,157 Rebates (2) 110 519 (85) 544 (1) Shown as a reduction of accounts receivable and gross sales as indicated in column heading. (2) Shown as accrued expenses and a reduction of gross sales.

Summary of significant accoun_2

Summary of significant accounting policies (Policies)	12 Months Ended
	Dec. 31, 2018
Summary of significant accounting policies
Basis of presentation	Basis of Presentation: The consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and with the rules and regulations of the Securities and Exchange Commission (“SEC”).
Principles of consolidation	Principles of consolidation: The consolidated financial statements include the accounts of the Company and its four wholly-owned subsidiaries. All significant intercompany transactions have been eliminated.
Use of estimates	Use of estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates.
Concentration of credit risk	Concentration of credit risk : Accounts receivable subjects the Company to concentrations of credit risk. Accounts receivable were due from fourteen customers in the years ended December 31, 2018 and 2017, respectively. Three customers accounted for 96% and 94% of the accounts receivable at December 31, 2018 and 2017, respectively. There were fifteen, fourteen and thirteen customers that accounted for all gross revenue in the years ended December 31, 2018, 2017 and 2016, respectively. Of which, three customers accounted for 93% of the gross revenue for the years ended December 31, 2018 and 2017, respectively, and two customers accounted for 82% of the gross revenue for the year ended December 31, 2016.
Segment information	Segment information : Operating segments are defined as components of an enterprise 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 views its operations and manages its business in one operating segment, which is the development, manufacturing and commercialization of pharmaceuticals.
Reclassifications	Reclassifications: In 2017, the Company reclassified certain patents from Other assets to Intangible assets, net as reported on the condensed consolidated balance sheets. There was no impact to the Company’s consolidated statements of operations.
Liquidity	Liquidity: During 2018, 2017 and 2016, the Company produced operating losses and used cash to fund operations. Management intends to achieve profitability through revenue growth from pharmaceutical products developed with its extended-release technologies. The Company does not anticipate it will be profitable until after the successful commercialization of its approved products, Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER. In November 2018, the Company completed an offering of its common stock and restructured its outstanding debt to reduce and possibly delay the amount of principal payable in cash. Accordingly, management has performed the review required for going concern accounting and believes the Company presently has sufficient liquidity to continue to operate for the next twelve months after the filing of this Report on Form 10-K.
Cash equivalents	Cash equivalents: The Company invests its available cash balances in bank deposits and money market funds. The Company considers highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company’s primary objectives for investment of available cash are the preservation of capital and the maintenance of liquidity.
Short-term investments	Short-term investments: Short-term investments, if any, consist of debt securities that have original maturities greater than three months but less than or equal to one year and are classified as available-for-sale securities. Such securities are carried at estimated fair value, with any unrealized holding gains or losses reported, net of material tax effects reported, as accumulated other comprehensive income or loss, which is a separate component of stockholders’ equity (deficit). Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are included in other income in the consolidated results of operations. A decline in the market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in fair value charged to earnings in that period, and a new cost basis for the security is established. Dividend and interest income are recognized in other income when earned. The cost of securities sold is calculated using the specific identification method. The Company places all investments with government agencies, or corporate institutions whose debt is rated as investment grade. The Company classifies all available-for-sale marketable securities with maturities greater than one year from the balance sheet date, if any, as non-current assets.
Allowance for doubtful accounts	Allowance for doubtful accounts : The allowance for doubtful accounts is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management determines the adequacy of the allowance based on reviews of individual accounts, historical losses, existing economic conditions and estimates based on management’s judgments in specific matters. Accounts are written off as they are deemed uncollectible based on periodic review of the accounts. There is no allowance for doubtful accounts at December 31, 2018 or December 31, 2017, as management believes that all receivables are fully collectible.
Inventories	Inventories: In 2016, inventories were stated at the lower of cost (first in, first out) or market and, effective January 1, 2017, inventory is now required to be measured at the lower of cost (first in, first out) or net realizable value. The change to stating inventories at the lower of cost or net realizable value in 2017 was adopted prospectively and did not have a significant effect on the Company’s ongoing financial reporting as valuing inventory at the lower of cost or net realizable value approximated the prior policy of valuing inventory at the lower of cost or market. Inventories have been reduced by an allowance for excess and obsolete inventories. Cost elements include material, labor and manufacturing overhead. Inventories consist of raw materials, work in process and finished goods. Until objective and persuasive evidence exists that regulatory approval has been received and future economic benefit is probable, pre-launch inventories are expensed into research and development. Manufacturing costs for the production of Adzenys XR-ODT incurred after the January 27, 2016 FDA approval date, for the production of Cotempla XR-ODT incurred after June 30, 2017, following the FDA approval date of June 19, 2017, and for the production of Adzenys ER incurred after September 30, 2017, following the FDA approval date of September 15, 2017, are being capitalized into inventory.
Property and equipment	Property and equipment: Property and equipment is recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from three to ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the respective lease term or the estimated useful lives of the assets.
Intangible assets	Intangible assets: Intangible assets subject to amortization, which principally include proprietary modified-release drug delivery technology, the costs to acquire the rights to Tussionex Abbreviated New Drug Application and patents, are recorded at cost and amortized over the estimated lives of the assets, which primarily range from 10 to 20 years. The Company estimates that the patents it has filed have a future beneficial value. Therefore, costs associated with filing for its patents are capitalized. Once the patent is approved and commercial revenue realized, the costs associated with the patent are amortized over the useful life of the patent. If the patent is not approved, the costs will be expensed.
Impairment of long-lived assets	Impairment of long-lived assets : Long-lived assets such as property and equipment and intangibles subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable. Such assets are also evaluated for impairment in light of the Company’s continuing losses. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. No impairment charges were recorded for the years ended December 31, 2018, 2017 or 2016.
Derivative liabilities	Derivative liabilities: The Company evaluates its debt and equity issuances to determine if those contracts or embedded components of those contracts qualify as derivatives requiring separate recognition in the Company’s financial statements. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability and the change in fair value is recorded in other income (expense) in the consolidated results of operations. In circumstances where there are multiple embedded instruments that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within twelve months of the balance sheet date. When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption and are classified in interest expense in the consolidated results of operations.
Revenue recognition	Revenue recognition: Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company makes estimates of the net sales price, including estimates of variable consideration (e.g., savings offers, prompt payment discounts, product returns, wholesaler fees, wholesaler chargebacks and estimated rebates) to be incurred on the selling price of the respective product sales, and recognizes the estimated amount as revenue when it transfers control of the product to its customers (e.g., upon delivery). Variable consideration is determined using either an expected value or a most likely amount method. The estimate of variable consideration is also subject to a constraint such that some or all of the estimated amount of variable consideration will only be included in the transaction price to the extent that it is probable that a significant reversal of revenue (in the context of the contract) will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Estimating variable consideration and the related constraint will require the use of significant management judgment and other market data. The Company provides for prompt payment discounts, wholesaler fees and wholesaler chargebacks based on customer contractual stipulations. The Company analyzes recent product return history and other market data obtained from its third party logistics providers (“3PLs”) to determine a reliable return rate. Additionally, management analyzes historical savings offers and rebate payments based on patient prescriptions dispensed for Adzenys XR ODT, Cotempla XR ODT and Adzenys ER and information obtained from third party providers to determine these respective variable considerations. The Company sells its generic Tussionex, Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER to a limited number of pharmaceutical wholesalers, all subject to rights of return. Pharmaceutical wholesalers buy drug products directly from manufacturers. Title to the product passes upon delivery to the wholesalers, when the risks and rewards of ownership are assumed by the wholesaler (freight on board destination). These wholesalers then resell the product to retail customers such as food, drug and mass merchandisers. Disaggregation of revenue The following table disaggregates the Company’s net product sales by product: Year Ended December 31, 2018 2017 2016 (in thousands) Adzenys XR-ODT $ 26,631 $ 20,377 $ 3,803 Cotempla XR-ODT 19,014 1,590 — Adzenys ER (27) — — Generic Tussionex 4,370 5,165 6,230 $ 49,988 $ 27,132 $ 10,033 Net product sales Net product sales represent total gross product sales less gross to net sales adjustments. Gross to net sales adjustments for branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER include savings offers, prompt payment discounts, wholesaler fees, estimated rebates to be incurred on the selling price of the respective product sales and estimated allowances for product returns. Gross to net sales adjustments for generic Tussionex include prompt payment discounts, estimated allowances for product returns, wholesaler fees, estimated government rebates and estimated chargebacks to be incurred on the selling price of generic Tussionex related to the respective product sales. The Company recognizes total gross product sales less gross to net sales adjustments as revenue based on shipments from 3PLs to the Company’s wholesaler customers. Savings offers for branded products The Company offers savings programs for Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER to patients covered under commercial payor plans in which the cost of a prescription to such patients is discounted. The Company records the amount of redeemed savings offers based on information from third-party providers against the estimated discount recorded as accrued expenses. The estimated discount is recorded as a gross to net sales adjustments at the time revenue is recognized. Prompt payment discounts Prompt payment discounts are based on standard programs with wholesalers and are recorded as a discount allowance against accounts receivable and as a gross to net sales adjustments at the time revenue is recognized. Wholesale distribution fees Wholesale distribution fees are based on definitive contractual agreements for the management of the Company’s products by wholesalers and are recorded as accrued expenses and as a gross to net sales adjustment at the time revenue is recognized. Rebates The Company’s branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER are subject to commercial managed care and government managed Medicare and Medicaid programs whereby discounts and rebates are provided to participating managed care organizations and federal and/or state governments. Calculations related to rebate accruals of branded products are estimated based on information from third-party providers. The Company’s generic Tussionex product is subject to state government-managed Medicaid programs whereby discounts and rebates are provided to participating state governments. Generic Tussionex government rebates are estimated based upon rebate payment data available from sales of the Company’s generic Tussionex product over the past three years. Estimated rebates are recorded as accrued expenses and as a gross to net sales adjustments at the time revenue is recognized. Historical trends of estimated rebates will be continually monitored and may result in future adjustments to such estimates. Product returns Wholesalers’ contractual return rights are limited to defective product, product that was shipped in error, product ordered by customer in error, product returned due to overstock, product returned due to dating or product returned due to recall or other changes in regulatory guidelines. The return policy for expired product allows the wholesaler to return such product starting six months prior to expiry date to twelve months post expiry date. Estimated returns are recorded as accrued expenses and as a gross to net sales adjustments at the time revenue is recognized. The Company analyzed recent branded product return history and other market data obtained from the Company’s 3PLs as well as data available from sales of its branded products to determine a reliable return rate for branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER. Generic Tussionex product returns were estimated based upon return data available from sales of the Company’s generic Tussionex product over the past three years. Wholesaler chargebacks for generic product The Company’s generic Tussionex products are subject to certain programs with wholesalers whereby pricing on products is discounted below wholesaler list price to participating entities. These entities purchase products through wholesalers at the discounted price, and the wholesalers charge the difference between their acquisition cost and the discounted price back to the Company. Estimated chargebacks are recorded as a discount allowance against accounts receivable and as a gross to net sales adjustments at the time revenue is recognized based on information provided by third parties. Due to estimates and assumptions inherent in determining the amount of generic Tussionex returns, rebates and chargebacks, the actual amount of returns, claims for rebates and chargebacks may be different from the estimates, at which time reserves would be adjusted accordingly. Wholesale distribution fees and the allowance for prompt pay discounts are recorded at the time of shipment and such fees and allowances are recorded in the same period that the related revenue is recognized.
Research and development costs	Research and development costs: Research and development costs are charged to operations when incurred and include salaries and benefits, facilities costs, overhead costs, raw materials, laboratory and clinical supplies, clinical trial costs, contract services, fees paid to regulatory authorities for review and approval of the Company’s product candidates and other related costs. During the third quarter of 2016, the Company reclassified its approved product and facility regulatory fees out of research and development expense and into cost of sales commensurate with the commercial launch of Adzenys XR-ODT. The Company has reclassified all such applicable regulatory fees for prior quarters and prior years out of research and development expense and into cost of goods sold in accordance with this approach.
Distribution expenses	Distribution expenses: Costs invoiced to the Company by its third party logistics firm are classified as cost of goods sold in the consolidated statements of operations.
Shipping and handling costs	Shipping and handling costs: Amounts billed to customers for shipping and handling fees for the delivery of goods are classified as cost of goods sold in the consolidated statements of operations.
Advertising costs	Advertising costs: Advertising costs are comprised of print and electronic media placements that are expensed as incurred. The Company recognized advertising costs of $0.6 million, $0.4 million and $7.4 million during the years ended December 31, 2018, 2017 and 2016 respectively.
Share-based compensation	Share-based compensation: Share-based compensation awards, including grants of employee stock options, restricted stock, restricted stock units (“RSUs”) and modifications to existing stock options, are recognized in the statement of operations based on their fair values. Compensation expense related to awards to employees is recognized on a straight-line basis, based on the grant date fair value, over the requisite service period of the award, which is generally the vesting term. The fair value of the Company’s stock-based awards to employees and directors is estimated using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (1) the expected stock price volatility, (2) the expected term of the award, (3) the risk-free interest rate and (4) expected dividends. For performance-based stock awards, compensation expense is recognized on a straight-line basis, based on the grant date fair value, over the performance period or through the vesting date, whichever is longer. Management monitors the probability of achievement of the performance conditions and adjusts stock-based compensation expense, if necessary. After the closing of the Company’s IPO, the Company’s board of directors has determined the fair value of each share of underlying common stock based on the closing price of the Company’s common stock as reported by the NASDAQ Global Market on the date of grant. Under ASU No. 2017-09 guidance for accounting for share-based payments, the Company has elected to continue estimating forfeitures at the time of grant and, if necessary, revise the estimate in subsequent periods if actual forfeitures differ from those estimates. Ultimately, the actual expense recognized over the vesting period will only be for those options that vest. The adoption of this standard in 2017 did not have a material impact on the Company’s business, financial position, results of operations or liquidity. Beginning in July 2016, the Company began recording stock compensation expense in the same income statement line as the cash compensation of the employee with the option in accordance with Staff Accounting Bulletin (“SAB”) Topic 14 due to the increased number and amount of options and option compensation.
Paragraph IV litigation costs	. Paragraph IV litigation costs: Legal costs incurred by the Company in the enforcement of the Company’s intellectual property rights are charged to expense as incurred.
Income taxes	Income taxes: Income taxes are accounted for using the liability method, under which deferred taxes are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax laws that will be in effect when the differences are expected to reverse. Management evaluates the Company’s tax positions in accordance with guidance on accounting for uncertainty in income taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not that the position will be sustained upon examination. As of December 31, 2018 and 2017, the Company has unrecognized tax benefits associated with uncertain tax positions in the consolidated financial statements. These uncertain tax positions were netted against net operating losses (NOL’s) with no separate reserve for uncertain tax positions required. Deferred tax assets should be reduced by a valuation allowance if current evidence indicates that it is considered more likely than not that these benefits will not be realized. In evaluating the objective evidence that historical results provide, the Company considered that three years of cumulative operating losses was significant negative evidence outweighing projections for future taxable income. Therefore, at December 31, 2018 and 2017, the Company determined that it is more likely than not that the deferred tax assets will not be realized. Accordingly, the Company has recorded a valuation allowance to reduce deferred tax assets to zero. The Company may not ever be able to realize the benefit of some or all of the federal and state loss carryforwards, either due to ongoing operating losses or due to ownership changes, which limit the usefulness of the loss carryforwards.
Recent accounting pronouncements	Recent accounting pronouncements: In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The standard is effective for public entities for the fiscal years ending after December 15, 2020, with early adoption permitted for the removed disclosures and delayed adoption permitted for the new disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company is currently evaluating the impact of adopting ASU 2018-13 on its consolidated financial statements. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740) – Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which was issued to state the income tax accounting implications of the Tax Cuts and Jobs Act of 2017 (the “TCJA”). The guidance clarifies the measurement period timeframe, changes in subsequent reporting periods and reporting requirements as a result of the TCJA. The measurement period begins in the period that includes the TCJA’s enactment date, which was December 22, 2017, and as a result the Company has reflected the impact of this ASU on the deferred tax calculation as of December 31, 2017. In February 2018, the FASB issued ASU No. 2018-02, Income Statement –Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA, and requires certain disclosures about stranded tax effects. ASU 2018-02 is effective for entities for fiscal years beginning after December 15, 2018 with early adoption permitted, and shall be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the corporate income tax rate in the TCJA is recognized. This standard became effective for the Company standard on January 1, 2019. The adoption of this standard will not have a material impact on the Company’s consolidated results of operations or financial position. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting . This ASU clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the modification. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. This standard became effective for the Company on January 1, 2018. The adoption of this standard did not have a material impact on the Company’s consolidated results of operations or financial position. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU was designed to reduce the diversity in practice of how the eight specified items are presented and classified in the statement of cash flows, including debt prepayment or debt extinguishment costs. The amendments are effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those years. This standard became effective for the Company on January 1, 2018. The adoption of this standard did not have a significant effect on the Company’s ongoing financial reporting as the Company had classified its debt prepayment and debt extinguishment costs in the Condensed Consolidated Statements of Cash Flows in accordance with the amendments. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (the “New Lease Standard”). Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) a right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. In January, July and December 2018, the FASB issued additional amendments to the new lease guidance relating to, transition, and clarification. The July 2018 amendment, ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, provides an optional transition method that allows entities to elect to apply the standard prospectively at its effective date, versus recasting the prior periods presented. Pursuant to ASU No. 2018-11, the Company will elect to use the effective date approach at transition. Therefore, no adjustments will be made to amounts in prior period financial statements. Capital leases will be accounted for in substantially the same manner as capital leases are accounted for under existing GAAP. Operating leases will be accounted for in a manner similar to operating leases under existing GAAP, except that lessees will recognize a lease liability and a lease asset for all of those leases. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt this standard on the effective date of January 1, 2019. The Company is substantially complete with its evaluation of the new standard as it relates to its operating lease disclosed in Note 15 “Commitments and Contingencies”. The remaining steps in the implementation process include finalizing lease liability and right of use asset schedules and the review and evaluation of disclosures and presentation in the Company’s financial statements. In addition, an evaluation of whether there are existing contracts that may contain embedded leases has been performed and the Company is evaluating the impact of its findings. However, it does not expect that the identification of any embedded leases will result in a material impact to the consolidated financial statements and disclosures upon the adoption of this standard. In addition, the Company made an accounting policy election to combine the lease and non-lease components and the short-term lease practical expedients allowed under ASC 842. The adoption of ASC 842 will lead to an increase in the assets and liabilities recorded on the balance sheets primarily due to the lease agreement attributable to leased office space. This New Lease Standard will not have a material impact on the Company’s balance sheets, consolidated statements of comprehensive loss or cash flows from operations. The Company will continue to monitor additional modifications, clarifications or interpretations undertaken by the FASB that may impact its current conclusions and will expand its analysis to include any new lease arrangements initiated prior to adoption. We expect to recognize approximately $3.0 million to $4.8 million of additional assets and corresponding liabilities on our balance sheet as of the beginning of fiscal 2019 and will record any cumulative effect of adopting the New Lease Standard as an adjustment to the opening balance of Retained Earnings. We do not expect that any adjustment to Retained Earnings at adoption will have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (the “New Revenue Standard”). The New Revenue Standard replaces transaction and industry-specific revenue recognition guidance under current U.S. GAAP with a principles-based approach for determining revenue recognition. The New Revenue Standard requires an entity to recognize the amount of revenue based on the value of transferred goods or services to customers. There is also additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The New Revenue Standard became effective for the Company on January 1, 2018. For purposes of providing comparable periods upon adoption, the Company applied the full retrospective transition method, which required the Company to restate each prior reporting period presented. The impact of the New Revenue Standard relates to the Company’s accounting for branded net product sales. There are no changes to the net product sales of generic Tussionex revenue since the Company has estimated product returns since inception of recognizing revenue in August 2014. As a result, the Company revised its results for branded net product sales revenue which commenced in May 2016 with the launch of Adzenys XR-ODT for the years ended December 31, 2016 and 2017 and applicable interim periods within those years, as if the New Revenue Standard had been effective for those periods. The Company implemented internal controls and key system functionality to enable the preparation of financial information and reached conclusions on key accounting assessments related to the New Revenue Standard, including management’s assessment that the impact of accounting for costs incurred to obtain a contract is immaterial. Under the New Revenue Standard, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. Therefore, the Company is required to make estimates of the net sales price, including estimates of variable consideration (e.g., savings offers, prompt payment discounts, product returns, wholesaler fees and estimated rebates) to be incurred on the selling price of the respective branded product sales, and recognize the estimated amount as revenue, when it transfers control of the product to its customers (e.g., upon shipment or delivery). Variable consideration must be determined using either an expected value or most likely amount method. The estimate of variable consideration is also subject to a constraint such that some or all of the estimated amount of variable consideration will only be included in the transaction price to the extent that it is probable that a significant reversal of revenue (in the context of the contract) will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Estimating variable consideration and the related constraint require the use of significant management judgment and other market data. To implement the New Revenue Standard, the Company analyzed recent branded product return history and other market data obtained from its 3PLs as well as data available from sales of its branded products to determine a reliable return rate. Additionally, management analyzed historical savings offers, prompt payment discounts, wholesaler fees and rebates payments based on patient prescriptions dispensed of Adzenys XR-ODT, Cotempla XR-ODT , Adzenys ER and information obtained from third-party providers to determine these respective variable considerations. Management has concluded that estimates of the above variable considerations are reasonably constrained, and estimates can be used for recognizing branded total gross product sales less gross to net sales adjustments as revenue beginning January 1, 2018. The Company had restated it’s Consolidated Financial Statements for the years ended on December 31, 2017 and 2016 in the 8-K filed with SEC on December 11, 2018 for the adoption of the New Revenue Standard. Refer to Impacts to Previously Reported Results below for the impact of adoption of the New Revenue Standard included in the Company’s condensed consolidated statements of operations. Adoption of the New Revenue Standard resulted in the recognition of additional net branded product sales revenue of $2.1 million and $0.9 million for years ended December 31, 2017 and 2016, respectively, partially offset by associated increased cost of goods sold of $1.6 million and $0.3 million, respectively. As a result, the net loss reported was reduced by $0.5 million and $0.6 million reflecting the gross profit from the accelerated revenue and associated cost of goods sold for years ended December 31, 2017 and 2016, respectively. The net loss per share of common stock, basic and diluted reported was improved by $0.02 and $0.03 per share for December 31, 2017 and 2016, respectively. The adoption of the New Revenue Standard reduced the net operating loss carry forward for 2017 and 2016, respectively; however, there was no impact to the provision for income taxes because the Company’s deferred tax asset benefits are fully reserved for December 31, 2017 and 2016, respectively. In addition, adoption of the New Revenue Standard resulted in a decrease in reported total current assets by $3.2 million as of December 31, 2017, due to the elimination of deferred cost of goods sold and wholesaler fees. Reported total current liabilities decreased by $4.3 million as of December 31, 2017, due to the elimination of deferred revenue partially offset by increases in accrued expenses for contract obligations related to savings offers, product returns and rebates. See Impacts of New Revenue Standard to Previously Reported Results below for the impact of adoption of the New Revenue Standard on the Company’s consolidated financial statements. Impacts of New Revenue Standard to Previously Reported Results Adoption of the new revenue standard impacted the Company’s reported results as follows: Year Ended December, 31 2017 2016 New New Revenue Revenue As Standard As As Standard As Condensed consolidated statements of operations: Reported Adjustment Adjusted Reported Adjustment Adjusted (In thousands, except per share data) Revenue: net product sales $ 25,018 $ 2,114 $ 27,132 $ 9,154 $ 879 $ 10,033 Cost of goods sold 12,391 1,639 14,030 11,437 297 11,734 Gross profit (loss) 12,627 475 13,102 (2,283) 582 (1,701) Net loss attributable to common stock (66,247) 475 (65,772) (83,333) 582 (82,751) Net loss per share of common stock, basic and diluted (2.68) 0.02 (2.66) (5.19) 0.03 (5.16) December 31, 2017 New Revenue As Standard As Condensed consolidated statements of balance sheet: Reported Adjustment Adjusted Inventories $ 13,459 $ (1,727) $ 11,732 Other current assets 5,093 (1,518) 3,575 Total current assets 82,640 (3,245) 79,395 Accrued expenses 10,570 10,374 20,944 Deferred revenue 14,676 (14,676) — Total current liabilities 37,602 (4,302) 33,300 Accumulated deficit (266,365) 1,057 (265,308) Total liabilities and stockholder's equity 107,353 (3,245) 104,108 Adoption of the New Revenue Standard had no impact to cash from or used in operating, financing, or investing on the Company’s consolidated statements of cash flows.

Summary of significant accoun_3

Summary of significant accounting policies (Tables)	12 Months Ended
	Dec. 31, 2018
Summary of significant accounting policies
Schedule of disaggregation of revenue	Year Ended December 31, 2018 2017 2016 (in thousands) Adzenys XR-ODT $ 26,631 $ 20,377 $ 3,803 Cotempla XR-ODT 19,014 1,590 — Adzenys ER (27) — — Generic Tussionex 4,370 5,165 6,230 $ 49,988 $ 27,132 $ 10,033
Schedule of impacts to reported results due to new revenue standard	Year Ended December, 31 2017 2016 New New Revenue Revenue As Standard As As Standard As Condensed consolidated statements of operations: Reported Adjustment Adjusted Reported Adjustment Adjusted (In thousands, except per share data) Revenue: net product sales $ 25,018 $ 2,114 $ 27,132 $ 9,154 $ 879 $ 10,033 Cost of goods sold 12,391 1,639 14,030 11,437 297 11,734 Gross profit (loss) 12,627 475 13,102 (2,283) 582 (1,701) Net loss attributable to common stock (66,247) 475 (65,772) (83,333) 582 (82,751) Net loss per share of common stock, basic and diluted (2.68) 0.02 (2.66) (5.19) 0.03 (5.16) December 31, 2017 New Revenue As Standard As Condensed consolidated statements of balance sheet: Reported Adjustment Adjusted Inventories $ 13,459 $ (1,727) $ 11,732 Other current assets 5,093 (1,518) 3,575 Total current assets 82,640 (3,245) 79,395 Accrued expenses 10,570 10,374 20,944 Deferred revenue 14,676 (14,676) — Total current liabilities 37,602 (4,302) 33,300 Accumulated deficit (266,365) 1,057 (265,308) Total liabilities and stockholder's equity 107,353 (3,245) 104,108

Net loss per share (Tables)

Net loss per share (Tables)	12 Months Ended
	Dec. 31, 2018
Net loss per share
Schedule of potentially dilutive securities excluded in the computation of diluted net loss per share	December 31, 2018 2017 2016 Series C Redeemable Convertible Preferred Stock Warrants (as converted) 70,833 70,833 70,833 Stock options outstanding 3,446,885 2,454,973 2,107,344 RSUs granted, not released 75,314 85,000 —

Fair value of financial instr_2

Fair value of financial instruments (Tables)	12 Months Ended
	Dec. 31, 2018
Fair value of financial instruments
Schedule of hierarchy for financial instruments measured at fair value on a recurring basis	Fair Value as of December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 27,419 $ 19,059 $ — $ 46,478 Total financial assets $ 27,419 $ 19,059 $ — $ 46,478 Earnout liability $ — $ — $ 37 $ 37 Derivative liability (see Note 11) — — 2,017 2,017 Total financial liabilities $ — $ — $ 2,054 $ 2,054 Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 31,969 $ — $ — $ 31,969 Short-term investments — 18,448 — 18,448 Total financial assets $ 31,969 $ 18,448 $ — $ 50,417 Earnout liability $ — $ — $ 170 $ 170 Derivative liability (see Note 11) — — 1,660 1,660 Total financial liabilities $ — $ — $ 1,830 $ 1,830
Schedule of cash and cash equivalents and short-term investments	December 31, 2018 Amortized Unrealized Market Cost Loss Value (in thousands) Bank deposits and money market funds $ 27,419 $ — $ 27,419 Financial and corporate debt securities 19,059 — 19,059 $ 46,478 $ — $ 46,478 December 31, 2017 Amortized Unrealized Market Cost Loss Value (in thousands) Bank deposits and money market funds $ 31,969 $ — $ 31,969 Financial and corporate debt securities 18,454 (6) 18,448 $ 50,423 $ (6) $ 50,417
Schedule of changes in Level 3 liabilities measured at fair value	Level 3 Liabilities (in thousands) Balance at December 31, 2016 $ 232 Addition of Deerfield derivative liability 2,107 Change in fair value (509) Balance at December 31, 2017 1,830 Change in fair value 224 Balance at December 31, 2018 $ 2,054
Earnout liability
Fair value of financial instruments
Methodologies and significant inputs used in determination of fair value	December 31, 2018 December 31, 2017 Earnout Liability Earnout Liability Date of Valuation 12/31/2018 12/31/2017 Valuation Method Monte Carlo Monte Carlo Volatility (annual) 42% 42% Risk‑free rate (annual) 2.53% - 3.29% 1.62% ‑ 2.88% Time period from valuation until end of earnout .5 ‑ 9.5 .5 ‑ 9.5 Earnout Target 1 (thousands) $13,700 $13,700 Earnout Target 2 (thousands) $18,200 $18,200 Discount rate 21.35% - 21.68% 14.72% ‑ 15.98% Fair value of liability at valuation date (thousands) $37 $170
Derivative liability
Fair value of financial instruments
Methodologies and significant inputs used in determination of fair value	Derivative Liability Date of Valuation 12/31/2018 12/31/2017 Valuation Method Monte Carlo Monte Carlo Volatility (annual) N/A N/A Time period from valuation until maturity of debt (yrs.) 3.4 4.4 Cumulative probability of a change in control prepayment implied by model 25.1% 27% Cumulative probability of other accelerated prepayments implied by model 13.7% 17% Discount rate 23.12% 16.20% Fair value of liability at valuation date (thousands) $2,017 $1,660

Inventories (Tables)

Inventories (Tables)	12 Months Ended
	Dec. 31, 2018
Inventories
Schedule of inventories	December 31, 2018 2017 (in thousands) Raw materials $ 3,845 $ 3,476 Work in progress 2,704 6,155 Finished goods 4,259 2,470 Inventory at cost 10,808 12,101 Inventory reserve (441) (369) $ 10,367 $ 11,732

Property and equipment (Tables)

Property and equipment (Tables)	12 Months Ended
	Dec. 31, 2018
Property and equipment
Schedule of property and equipment, net	December 31, 2018 2017 (in thousands) Assets under capital lease $ 3,327 $ 3,222 Leasehold improvements 4,340 4,195 Manufacturing, packaging and lab equipment 6,821 5,300 Office furniture and equipment 2,164 1,656 Assets under construction 188 1,056 16,840 15,429 Accumulated depreciation and amortization (including $633 and $157 at December 31, 2018 and 2017, respectively, applicable to capital leases) (8,926) (7,226) $ 7,914 $ 8,203

Intangible assets (Tables)

Intangible assets (Tables)	12 Months Ended
	Dec. 31, 2018
Intangible assets
Schedule of intangible assets, net	December 31, 2018 2017 (in thousands) Proprietary modified-release drug delivery technology $ 15,600 $ 15,600 Tussionex ANDA 4,829 4,829 CPI profit sharing 2,043 2,043 Patents 2,307 2,302 Other 1,035 1,035 25,814 25,809 Accumulated amortization (11,198) (9,461) $ 14,616 $ 16,348
Schedule of aggregate amortization of intangible assets	Year ending December 31, (in thousands) 2019 $ 1,737 2020 1,737 2021 1,737 2022 1,737 2023 1,642 Thereafter 5,205 $ 13,795

Income taxes (Tables)

Income taxes (Tables)	12 Months Ended
	Dec. 31, 2018
Income taxes
Schedule of significant components of deferred income tax assets and liabilities	December 31, 2018 2017 (in thousands) Deferred Tax Assets: Net operating loss $ 37,818 $ 32,193 Share-based compensation 1,757 1,340 R&D tax credit 2,378 1,696 Other reserves 1,616 1,069 Capital lease liability 390 563 State deferreds 1,236 397 Inventory 103 829 Accrued rebates 4,902 561 Other current assets — 319 Other 2,456 2,597 Total deferred tax assets 52,656 41,564 Deferred Tax Liabilities: Intangible assets (1,571) (1,846) Property and equipment (999) (747) Total deferred tax liabilities (2,570) (2,593) Valuation allowance (50,086) (38,971) Net deferred tax asset (liability) $ — $ —
Schedule of gross unrecognized tax benefits	December 31, 2018 2017 (in thousands) Beginning Balance $ 7,261 $ 5,081 Decrease based on tax positions taken during a current period (3,305) 2,180 Ending Balance $ 3,956 $ 7,261
Schedule of reconciliation of Federal statutory tax rate	Year Ended December 31, 2018 2017 U.S. Statutory Tax Rate 21 % 34 % Change in Valuation Allowance (21.5) % 44 % Deferred Tax Adjustments 0 % (47) % Federal Rate Change 0 % (31) % State tax expense, net 1.8 % 2 % Provision to Return and Other Adjustments (1.3) % (2) % Tax Expense / (Benefit) 0 % 0 %

Accrued expenses (Tables)

Accrued expenses (Tables)	12 Months Ended
	Dec. 31, 2018
Accrued expenses
Schedule of accrued expenses	December 31, December 31, 2018 2017 (in thousands) Accrued savings offers $ 11,289 $ 7,168 Accrued rebates 7,762 4,008 Accrued customer returns 5,157 2,711 Accrued payroll and benefits 4,555 2,534 Accrued wholesaler fees 4,249 2,345 Other accrued expenses 2,806 2,178 Total accrued expenses $ 35,818 $ 20,944

Long-term debt (Tables)

Long-term debt (Tables)	12 Months Ended
	Dec. 31, 2018
Long-term debt
Schedule of long-term debt	December 31, 2018 2017 (in thousands) Deerfield senior secured credit facility, net of discount of $3,334 and $2,843, respectively $ 49,916 $ 57,156 Capital leases, maturing through November 2022 1,858 2,678 51,774 59,834 Less current portion (8,557) (896) Long-term debt $ 43,217 $ 58,938
Schedule of future minimum capital lease payments	Year ending: December 31, (in thousands) 2019 $ 1,257 2020 798 2021 21 2022 20 Total minimum lease payments $ 2,096 Less amount representing interest (238) Future minimum lease payments $ 1,858
Schedule of future principal payments of long-term debt including capital leases	Year ending: December 31, (in thousands) 2019 $ 8,557 2020 15,761 2021 15,020 2022 15,770 Future principal payments $ 55,108 Less unamortized debt discount (3,334) Less current portion of long-term debt (8,557) Total long-term debt $ 43,217

Share-based Compensation (Table

Share-based Compensation (Tables)	12 Months Ended
	Dec. 31, 2018
Share-based Compensation
Schedule of share-based compensation expense	Year Ended December 31, 2018 2017 2016 (in thousands) Cost of goods sold $ 470 $ 390 $ 311 Research and development 344 394 304 Selling and marketing 731 913 723 General and administrative 1,776 2,354 2,122 $ 3,321 $ 4,051 $ 3,460
Schedule of weighted-average key assumptions used in determining fair value of options granted	Year Ended December 31, 2018 2017 2016 Estimated dividend yield 0 % 0 % 0 % Expected stock price volatility 60 % 60 % 60 % Weighted-average risk-free interest rate 2.75 % 2.01 % 1.18 % Expected life of option in years 6.13 6.06 6.15 Weighted-average option fair value at grant $ 3.930 $ 4.090 $ 5.800
Summary of outstanding and exercisable options	Number of Weighted-Average Intrinsic Options Exercise Price Value (in thousands) Outstanding at December 31, 2015 1,352,283 $ 13.607 $ 964 Exercisable at December 31, 2015 229,000 $ 3.385 $ 2,504 Granted 859,257 10.385 — Exercised (10,886) 1.231 — Expired, forfeited or cancelled (93,310) 17.780 — Outstanding at December 31, 2016 2,107,344 $ 12.173 $ 1,128 Exercisable at December 31, 2016 595,424 $ 9.715 $ 881 Granted 570,432 7.220 — Exercised (1,249) 0.223 — Expired, forfeited or cancelled (221,554) 10.325 — Outstanding at December 31, 2017 2,454,973 $ 11.195 $ 4,764 Exercisable at December 31, 2017 1,137,766 $ 10.919 $ 2,890 Granted 1,753,539 6.786 — Exercised (832) 0.320 — Expired, forfeited or cancelled (760,795) 11.281 — Outstanding at December 31, 2018 3,446,885 $ 8.935 $ 70 Exercisable at December 31, 2018 1,643,011 $ 10.627 $ 70
Summary of outstanding RSUs	Number of Weighted-Average RSUs Fair Value Outstanding at December 31, 2016 — $ — Granted 85,000 7.15 Exercised — — Expired, forfeited or cancelled — — Outstanding at December 31, 2017 85,000 $ 7.15 Granted 93,750 8.30 Converted (26,991) 7.34 Withheld for tax obligation (6,757) 7.34 Expired, forfeited or cancelled (69,688) 7.77 Outstanding at December 31, 2018 75,314 $ 7.93

Commitments and contingencies (

Commitments and contingencies (Tables)	12 Months Ended
	Dec. 31, 2018
Commitments and contingencies
Schedule of future minimum lease payments	Year ending December 31, (in thousands) 2019 $ 1,107 2020 1,161 2021 1,057 2022 1,055 2023 1,055 Thereafter 1,106 Future minimum lease payments $ 6,541

Selected Quarterly Financial _2

Selected Quarterly Financial Data (Unaudited) (Tables)	12 Months Ended
	Dec. 31, 2018
Selected Quarterly Financial Data (Unaudited)
Schedule of selected quarterly financial data	Selected quarterly financial data for years ended December 31, 2018 and 2017, are as follows (in thousands, except share and per share amounts): Quarter Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 Net sales(1) $ 10,729 $ 11,363 $ 12,503 $ 15,393 Gross profit(1) 5,508 4,376 5,546 7,631 Net loss attributable to common stock $ (14,436) $ (15,207) $ (12,695) $ (9,337) Weighted average common shares outstanding used to compute net loss per share, basic and diluted (2) 28,996,956 29,008,909 29,625,792 41,415,358 Net loss per share of common stock, basic and fully diluted (3): $ (0.50) $ (0.52) $ (0.43) $ (0.23) Quarter Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Net sales (1) $ 5,631 $ 5,179 $ 7,100 $ 9,222 Gross profit (1) 881 2,362 4,277 5,582 Net loss attributable to common stock $ (17,221) $ (18,645) $ (16,254) $ (13,652) Weighted average common shares outstanding used to compute net loss per share, basic and diluted (2) 19,624,712 22,613,382 27,884,983 28,746,608 Net loss per share of common stock, basic and fully diluted (3): $ (0.88) $ (0.82) $ (0.58) $ (0.47) (1) The Company began selling Adzenys XR-ODT on May 16, 2016, initiated an early experience program for Cotempla XR-ODT with limited product availability on September 5, 2017 before launching this product nationwide on October 2, 2017 and launched Adzenys ER on February 26, 2018. Net product sales represent total gross product sales less gross to net sales adjustments. Gross to net sales adjustments for branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER include savings offers, prompt payment discounts, wholesaler fees, estimated rebates to be incurred on the selling price of the respective product sales and estimated allowances for product returns. The Company began selling generic Tussionex in August 2014. Gross to net sales adjustments for generic Tussionex include prompt payment discounts, estimated allowances for product returns, wholesaler fees, estimated government rebates and estimated chargebacks to be incurred on the selling price of generic Tussionex related to the respective product sales. The Company recognizes total gross product sales less gross to net sales adjustments as revenue based on shipments from 3PLs to the Company’s wholesaler customers. Also, the net loss amounts reflect the sales and marketing expenses associated with the commercialization of Adzenys XR‑ODT, Cotempla XR-ODT and Adzenys ER. (2) In February 2017, the Company closed an underwritten public offering of 5,750,000 shares of its common stock at a public offering price of $5.00 per share, which included 750,000 shares of its common stock resulting from the underwriters’ exercise of their over-allotment option on February 17, 2017. On June 30, 2017, the Company closed an underwritten public offering of 4,800,000 shares of the its common stock at a public offering price of $6.25 per share for total proceeds of $30.0 million before estimated offering costs of $0.2 million. The Company also granted the underwriters a 30-day option to purchase up to an additional 720,000 shares of its common stock which was exercised in full on July 26, 2017. On October 26, 2017, Deerfield provided a conversion notice electing to convert the entire $6.6 million of Convertible Notes into shares of the Company’s common stock at a conversion price of $7.08 per share. The conversion price was based on 95% of the average of the volume weighted average prices per share of the Company’s common stock on the NASDAQ Global Market for the three trading day period immediately preceding such conversion. This resulted in issuing 929,967 shares of the Company’s common stock to Deerfield on this date and the Convertible Notes were cancelled. On November 8, 2018, the Company closed an underwritten public offering of 19,999,999 shares of its common stock at a public offering price of $2.30 per share, which includes 2,608,695 shares of its common stock resulting from the underwriters’ exercise of their over-allotment option at the public offering price. These transactions produced a significant increase in the number of shares outstanding which will impact the year-over-year comparability of the Company’s loss per share calculations. (3) Loss per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly loss per share may not necessarily equal the total for the year.

Organization and nature of op_2

Organization and nature of operations (Details)	12 Months Ended
	Dec. 31, 2018item
Organization and nature of operations
Number of approved product	3

Summary of significant accoun_4

Summary of significant accounting policies (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018USD ($)subsidiary	Sep. 30, 2018USD ($)	Jun. 30, 2018USD ($)	Mar. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Sep. 30, 2017USD ($)	Jun. 30, 2017USD ($)	Mar. 31, 2017USD ($)	Dec. 31, 2018USD ($)segmentsubsidiarycustomer	Dec. 31, 2017USD ($)customer	Dec. 31, 2016USD ($)customer
Summary of significant accounting policies
Number of operating segments | segment									1
Concentration of credit risk
Allowance for doubtful accounts	$ 0				$ 0				$ 0	$ 0
Impairment of long-lived assets
Impairment charges									0	0	$ 0
Disaggregation of revenue
Revenues	15,393	$ 12,503	$ 11,363	$ 10,729	$ 9,222	$ 7,100	$ 5,179	$ 5,631	$ 49,988	27,132	10,033
Product returns
Return time period for expired product prior to expiry date									6 months
Return time period for expired product after expiry date									12 years
Return period of Tusioness product (in years)									3 years
Advertising costs
Advertising costs									$ 600	$ 400	$ 7,400
Income taxes
Deferred tax assets, net of valuation allowance	$ 0								$ 0
Accounts Receivable | Customer Concentration Risk
Concentration of credit risk
Concentration Risk, Number | customer									14	14
Accounts Receivable | Customer Concentration Risk | Major Customers
Concentration of credit risk
Concentration Risk, Number | customer									3	3
Concentration Risk, Percentage									96.00%	94.00%
Revenues And Deferred Revenues | Customer Concentration Risk
Concentration of credit risk
Concentration Risk, Number | customer									15	14	13
Revenues And Deferred Revenues | Customer Concentration Risk | Major Customers
Concentration of credit risk
Concentration Risk, Number | customer									3	3	2
Concentration Risk, Percentage									93.00%	93.00%	82.00%
Adzenys XR-ODT
Disaggregation of revenue
Revenues									$ 26,631	$ 20,377	$ 3,803
Cotempla XR-ODT
Intangible assets
Useful life										15 years
Disaggregation of revenue
Revenues									19,014	$ 1,590
Adzenys ER
Intangible assets
Useful life										15 years
Disaggregation of revenue
Revenues									(27)
Generic Tussionex
Intangible assets
Useful life										10 years
Disaggregation of revenue
Revenues									$ 4,370	$ 5,165	$ 6,230
Minimum
Property and equipment
Property and equipment - Useful life									3 years
Intangible assets
Useful life									10 years
Maximum
Property and equipment
Property and equipment - Useful life									10 years
Intangible assets
Useful life									20 years
Wholly-owned subsidiaries
Summary of significant accounting policies
Number of wholly-owned subsidiaries | subsidiary	4								4

Summary of significant accoun_5

Summary of significant accounting policies - Recent accounting pronouncements (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Jan. 01, 2019
consolidated statements of operations
Net product sales	$ 15,393	$ 12,503	$ 11,363	$ 10,729	$ 9,222	$ 7,100	$ 5,179	$ 5,631	$ 49,988	$ 27,132	$ 10,033
Net product sales	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Cost of goods sold									$ 26,928	$ 14,030	$ 11,734
Cost of goods sold									us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Gross profit	$ 7,631	$ 5,546	$ 4,376	$ 5,508	$ 5,582	$ 4,277	$ 2,362	$ 881	$ 23,060	$ 13,102	$ (1,701)
Net loss attributable to common stock	$ (9,337)	$ (12,695)	$ (15,207)	$ (14,436)	$ (13,652)	$ (16,254)	$ (18,645)	$ (17,221)
Net loss per share of common stock, basic and diluted	$ (0.23)	$ (0.43)	$ (0.52)	$ (0.50)	$ (0.47)	$ (0.58)	$ (0.82)	$ (0.88)	$ (1.60)	$ (2.66)	$ (5.16)
Condensed consolidated balance sheet
Inventories	$ 10,367				$ 11,732				$ 10,367	$ 11,732
Other current assets	4,032				3,575				4,032	3,575
Total current assets	88,678				79,395				88,678	79,395
Accrued expenses	35,818				20,944				35,818	20,944
Total current liabilities	57,105				33,300				57,105	33,300
Accumulated deficit	(316,983)				(265,308)				(316,983)	(265,308)
Total liabilities and stockholders' equity	$ 111,357				104,108				$ 111,357	104,108
ASU 2016-02 | Adjustment | Minimum
Leases
Recognition of additional operating lease assets due to adoption of New Lease Standard												$ 3,000
Recognition of additional operating lease liabilities due to adoption of New Lease Standard												3,000
ASU 2016-02 | Adjustment | Maximum
Leases
Recognition of additional operating lease assets due to adoption of New Lease Standard												4,800
Recognition of additional operating lease liabilities due to adoption of New Lease Standard												$ 4,800
As Reported
consolidated statements of operations
Net product sales										25,018	$ 9,154
Cost of goods sold										12,391	11,437
Gross profit										12,627	(2,283)
Net loss attributable to common stock										$ (66,247)	$ (83,333)
Net loss per share of common stock, basic and diluted										$ (2.68)	$ (5.19)
Condensed consolidated balance sheet
Inventories					13,459					$ 13,459
Other current assets					5,093					5,093
Total current assets					82,640					82,640
Accrued expenses					10,570					10,570
Deferred revenue					14,676					14,676
Total current liabilities					37,602					37,602
Accumulated deficit					(266,365)					(266,365)
Total liabilities and stockholders' equity					107,353					107,353
New Revenue Standard Adjustment | ASU 2014-09
consolidated statements of operations
Net product sales										2,114	$ 879
Cost of goods sold										1,639	297
Gross profit										475	582
Net loss attributable to common stock										$ 475	$ 582
Net loss per share of common stock, basic and diluted										$ 0.02	$ 0.03
Condensed consolidated balance sheet
Inventories					(1,727)					$ (1,727)
Other current assets					(1,518)					(1,518)
Total current assets					(3,245)					(3,245)
Accrued expenses					10,374					10,374
Deferred revenue					(14,676)					(14,676)
Total current liabilities					(4,302)					(4,302)
Accumulated deficit					1,057					1,057
Total liabilities and stockholders' equity					(3,245)					(3,245)
As Adjusted | ASU 2014-09
consolidated statements of operations
Net product sales										27,132	$ 10,033
Cost of goods sold										14,030	11,734
Gross profit										13,102	(1,701)
Net loss attributable to common stock										$ (65,772)	$ (82,751)
Net loss per share of common stock, basic and diluted										$ (2.66)	$ (5.16)
Condensed consolidated balance sheet
Inventories					11,732					$ 11,732
Other current assets					3,575					3,575
Total current assets					79,395					79,395
Accrued expenses					20,944					20,944
Total current liabilities					33,300					33,300
Accumulated deficit					(265,308)					(265,308)
Total liabilities and stockholders' equity					$ 104,108					$ 104,108

Net loss per share (Details)

Net loss per share (Details) - shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Warrants | Series C Redeemable Convertible Preferred Stock Warrants (as converted)
Net loss per share
Potentially dilutive shares excluded in the computation of diluted net loss per share	70,833	70,833	70,833
Stock options outstanding
Net loss per share
Potentially dilutive shares excluded in the computation of diluted net loss per share	3,446,885	2,454,973	2,107,344
RSUs
Net loss per share
Potentially dilutive shares excluded in the computation of diluted net loss per share	75,314	85,000

Fair value of financial instr_3

Fair value of financial instruments - Hierarchy (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Hierarchy for financial instruments measured at fair value on a recurring basis
Short-term investments		$ 18,448
Derivative liability	$ 2,017	1,660
Recurring basis | Fair Value
Hierarchy for financial instruments measured at fair value on a recurring basis
Cash and cash equivalents	46,478	31,969
Short-term investments		18,448
Total financial assets	46,478	50,417
Earnout liability	37	170
Derivative liability	2,017	1,660
Total financial liabilities	2,054	1,830
Recurring basis | Fair Value | Level 1
Hierarchy for financial instruments measured at fair value on a recurring basis
Cash and cash equivalents	27,419	31,969
Total financial assets	27,419	31,969
Recurring basis | Fair Value | Level 2
Hierarchy for financial instruments measured at fair value on a recurring basis
Cash and cash equivalents	19,059
Short-term investments		18,448
Total financial assets	19,059	18,448
Recurring basis | Fair Value | Level 3
Hierarchy for financial instruments measured at fair value on a recurring basis
Earnout liability	37	170
Derivative liability	2,017	1,660
Total financial liabilities	$ 2,054	$ 1,830

Fair value of financial instr_4

Fair value of financial instruments - Cash and cash equivalents and short-term investments (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Cash and cash equivalents and short-term investments
Amortized Cost	$ 46,478	$ 50,423
Unrealized Gain / (Loss)		(6)
Market Value	46,478	50,417
Bank deposits and money market funds
Cash and cash equivalents and short-term investments
Amortized Cost	27,419	31,969
Market Value	27,419	31,969
Financial and corporate debt securities
Cash and cash equivalents and short-term investments
Amortized Cost	19,059	18,454
Unrealized Gain / (Loss)		(6)
Market Value	$ 19,059	$ 18,448

Fair value of financial instr_5

Fair value of financial instruments - Earnout liability and Derivative liability (Details) - Recurring basis - Level 3 $ in Thousands	Dec. 31, 2018USD ($)Yitem	Dec. 31, 2017USD ($)Yitem	Jun. 30, 2017USD ($)Yitem
Earnout liability
Methodologies and significant inputs used in the determination of the fair value
Valuation Method Monte Carlo	neos:MonteCarloApproachValuationTechniqueMember	neos:MonteCarloApproachValuationTechniqueMember
Fair value of liability at valuation date (thousands) | $	$ 37	$ 170
Earnout liability | Volatility (annual)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	42	42
Earnout liability | Earnout Target 1 (thousands)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	13,700,000	13,700,000
Earnout liability | Earnout Target 2 (thousands)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	18,200,000	18,200,000
Earnout liability | Maximum | Risk-free rate (annual)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	3.29	2.88
Earnout liability | Maximum | Time period from valuation until end of earnout (in years)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	9.5	9.5
Earnout liability | Maximum | Discount rate (in percent)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	21.68	15.98
Earnout liability | Minimum | Risk-free rate (annual)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	2.53	1.62
Earnout liability | Minimum | Time period from valuation until end of earnout (in years)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability | Y	0.5	0.5
Earnout liability | Minimum | Discount rate (in percent)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	21.35	14.72
Derivative liability
Methodologies and significant inputs used in the determination of the fair value
Valuation Method Monte Carlo	neos:MonteCarloApproachValuationTechniqueMember		neos:MonteCarloApproachValuationTechniqueMember
Fair value of liability at valuation date (thousands) | $	$ 2,017		$ 1,660
Derivative liability | Time period from valuation until end of earnout (in years)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability | Y	3.400		4.4
Derivative liability | Cumulative probability of a change in control prepayment implied by model (in percent)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	25.1		27
Derivative liability | Cumulative probability of other accelerated prepayments implied by model (in percent)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	13.7		17
Derivative liability | Discount rate (in percent)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	23.12		16.20

Fair value of financial instr_6

Fair value of financial instruments - Changes in Level 3 (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Changes in Level 3 liabilities measured at fair value
Balance at beginning of period	$ 1,830	$ 232
Addition of Deerfield derivative liability		2,107
Change in fair value	224	(509)
Balance at end of period	$ 2,054	$ 1,830

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Inventories
Raw materials	$ 3,845	$ 3,476
Work in progress	2,704	6,155
Finished goods	4,259	2,470
Inventory at cost	10,808	12,101
Inventory reserve	(441)	(369)
Inventories net	$ 10,367	$ 11,732

Property and equipment (Details

Property and equipment (Details) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property and equipment
Property and equipment gross		$ 16,840,000	$ 15,429,000
Accumulated depreciation and amortization (including $633 and $157 at December 31, 2018 and 2017, respectively, applicable to capital leases)		(8,926,000)	(7,226,000)
Property and equipment, net		7,914,000	8,203,000
Depreciation and amortization expense		1,750,000	1,363,000	$ 1,598,000
Accumulated depreciation and amortization of capital lease		633,000	157,000
Net proceeds of depreciated equipment				$ 415,000
Assets under capital lease
Property and equipment
Property and equipment gross		3,327,000	3,222,000
Leasehold improvements
Property and equipment
Property and equipment gross		4,340,000	4,195,000
Manufacturing, packaging and lab equipment
Property and equipment
Property and equipment gross		6,821,000	5,300,000
Office furniture and equipment
Property and equipment
Property and equipment gross		2,164,000	1,656,000
Assets under construction
Property and equipment
Property and equipment gross		$ 188,000	$ 1,056,000
Equipment
Property and equipment
Net proceeds of depreciated equipment	$ 415,000

Sale-leaseback transaction (Det

Sale-leaseback transaction (Details) - Related Party Sale-leaseback Transactions	Feb. 13, 2017USD ($)	Jun. 30, 2017USD ($)	Feb. 28, 2017USD ($)	Feb. 13, 2017	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Mar. 31, 2014tranche	Sep. 30, 2017USD ($)	Apr. 30, 2017USD ($)	Dec. 31, 2012USD ($)
Other income, net
Sale-leaseback transaction
Net gain recognized in period on sale leaseback transaction					$ 5,000	$ 44,000	$ 507,000
Transaction One
Sale-leaseback transaction
Number of tranches | tranche								5
Maximum amount authorized under sale and leaseback transaction											$ 6,500,000
Lease 4 November 2013
Sale-leaseback transaction
Original value of assets for which lease expired										$ 1,000,000
Cumulative gain recognized										161,000
Original value of lease buy-out option liability										$ 100,000
Lease 5 March 2014
Sale-leaseback transaction
Original value of assets for which lease expired									$ 795,000
Cumulative gain recognized									116,000
Original value of lease buy-out option liability									$ 79,000
Transaction Two
Sale-leaseback transaction
Maximum amount authorized under sale and leaseback transaction			$ 5,000,000
Lease term			36 months
Proceeds from sale of assets	$ 481,000	$ 2,742,000
Imputed interest rate on lease (as a percent)	14.30%	14.90%
Net gain on sale leaseback			$ 14,000
Amortization period				36 months
Net gain recognized in period on sale leaseback transaction		$ 0

Intangible assets (Details)

Intangible assets (Details) - USD ($)	Aug. 28, 2014	Jun. 15, 2009	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Intangible assets
Intangible assets, gross			$ 25,814,000	$ 25,809,000
Accumulated amortization			(11,198,000)	(9,461,000)
Intangible assets, net			14,616,000	16,348,000
Payment made to acquire asset			5,000	361,000	$ 500,000
Amortization expense			1,737,000	1,660,000	1,662,000
Aggregate amortization of intangible assets for each of the next five years and thereafter
2019			1,737,000
2020			1,737,000
2021			1,737,000
2022			1,737,000
2023			1,642,000
Thereafter			5,205,000
Finite lived intangible assets, net			13,795,000
Proprietary modified-release drug delivery technology
Intangible assets
Intangible assets, gross			15,600,000	15,600,000
Amount of finite-lived intangibles		$ 15,600,000
Useful life		20 years
Tussionex ANDA
Intangible assets
Intangible assets, gross			4,829,000	4,829,000
Payment made to acquire asset	$ 4,200,000
Legal fees	90,000
Earnout fair value	589,000
Tussionex ANDA | Other income (expense)
Intangible assets
Increase (decrease) in fair value of earnout liability			(133,000)	(62,000)	$ 18,000
CPI Profit Sharing
Intangible assets
Intangible assets, gross			2,043,000	2,043,000
Payment made to acquire asset	2,000,000
Legal fees	$ 43,000
Patents
Intangible assets
Intangible assets, gross			2,307,000	2,302,000
Other
Intangible assets
Intangible assets, gross			$ 1,035,000	$ 1,035,000
Tussionex ANDA and CPI profit sharing
Intangible assets
Useful life	10 years

Intangible assets - Patents (De

Intangible assets - Patents (Details)	12 Months Ended
	Dec. 31, 2017USD ($)
Generic Tussionex
Intangible assets
Patents being amortized	$ 352,000
Useful life	10 years
Adzenys XR-ODT
Intangible assets
Patents being amortized	$ 599,000
Cotempla XR-ODT
Intangible assets
Patents being amortized	$ 83,000
Useful life	15 years
Adzenys ER
Intangible assets
Patents being amortized	$ 451,000
Useful life	15 years
Patents being amortized on January 27, 2016 | Adzenys XR-ODT
Intangible assets
Patents being amortized	$ 535,000
Useful life	16 years
Patents being amortized on December 2017 | Adzenys XR-ODT
Intangible assets
Patents being amortized	$ 64,000
Useful life	15 years

Income taxes - Deferred Taxes (

Income taxes - Deferred Taxes (Details) - USD ($) $ in Thousands	Dec. 21, 2017	Dec. 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Income taxes
Reduction of federal income tax rate	35.00%	21.00%	21.00%	34.00%
Reduction of deferred tax expense				$ 20,600
Deferred Tax Assets:
Net operating loss		$ 37,818	$ 37,818	32,193
Share-based compensation		1,757	1,757	1,340
R&D tax credit		2,378	2,378	1,696
Other reserves		1,616	1,616	1,069
Capital lease liability		390	390	563
State deferreds		1,236	1,236	397
Inventory		103	103	829
Accrued rebates		4,902	4,902	561
Other current assets				319
Other		2,456	2,456	2,597
Total deferred tax assets		52,656	52,656	41,564
Deferred Tax Liabilities:
Intangible assets		(1,571)	(1,571)	(1,846)
Property and equipment		(999)	(999)	(747)
Total deferred tax liabilities		(2,570)	(2,570)	(2,593)
Valuation allowance		$ (50,086)	$ (50,086)	$ (38,971)

Income taxes - Tax Carry-forwar

Income taxes - Tax Carry-forwards and Unrecognized Tax Benefits (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Unrecognized tax benefits
Accrued interest related to uncertain tax positions	$ 0
Roll forward of gross unrecognized tax benefits
Beginning Balance	7,261,000	$ 5,081,000
Increase/(Decrease) based on tax positions taken during a prior period	(3,305,000)	2,180,000
Ending Balance	3,956,000	7,261,000
Federal
Tax carryforwards and uncertainties
Net operating loss carry-forwards	275,628,000
Net operating loss carryforward that will expire unused		98,009,000
State
Tax carryforwards and uncertainties
Net operating loss carry-forwards	3,166,000	$ 3,136,000
Research and development credits
Tax carryforwards and uncertainties
Tax credits carry-forwards	2,493,000
Research and development credits | Federal
Tax carryforwards and uncertainties
Tax credit carryforwards that will expire unused	$ 350,000

Income taxes - Valuation Allowa

Income taxes - Valuation Allowance (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Income taxes
(Decrease) increase in valuation allowance	$ 11,118,000	$ (29,037,000)
Reduction of deferred tax assets		$ 20,547,000

Income taxes - Reconciliation o

Income taxes - Reconciliation of Tax Rate (Details)	Dec. 21, 2017	Dec. 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Income taxes
U.S. Statutory Tax Rate	35.00%	21.00%	21.00%	34.00%
Change in Valuation Allowance		(21.50%)		44.00%
Deferred Tax Adjustments		0.00%		(47.00%)
Federal Rate Change		0.00%		(31.00%)
State tax expense, net		1.80%		2.00%
Provision to Return and Other Adjustments		(1.30%)		(2.00%)
Tax Expense / (Benefit)		0.00%		0.00%

Accrued expenses (Details)

Accrued expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Accrued expenses
Accrued savings offers	$ 11,289	$ 7,168
Accrued rebates	7,762	4,008
Accrued customer returns	5,157	2,711
Accrued payroll and benefits	4,555	2,534
Accrued wholesaler fees	4,249	2,345
Other accrued expenses	2,806	2,178
Total accrued expenses	$ 35,818	$ 20,944

Long-term debt - Summary (Detai

Long-term debt - Summary (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Long-term debt
Long-term debt and capital lease obligations, including current maturities	$ 51,774	$ 59,834
Less current portion	(8,557)	(896)
Long-term debt	43,217	58,938
Debt instrument, unamortized discount
Unamortized discount on debt	3,334
Debt issued to entities affiliated with Deerfield | Senior Secured Credit Facility
Long-term debt
Long-term debt and capital lease obligations, including current maturities	49,916	57,156
Debt instrument, unamortized discount
Unamortized discount on debt	3,334	2,843
Capital leases, maturing through November 2022
Long-term debt
Long-term debt and capital lease obligations, including current maturities	$ 1,858	$ 2,678

Long-term debt - Senior Secured

Long-term debt - Senior Secured Credit facility (Details)

Nov. 08, 2018$ / sharesshares

Nov. 05, 2018USD ($)item$ / sharesshares

Oct. 26, 2017USD ($)$ / sharesshares

Jun. 30, 2017USD ($)$ / sharesshares

Jun. 01, 2017USD ($)item$ / shares

May 11, 2016USD ($)iteminstallment

Jun. 30, 2017USD ($)$ / sharesshares

Feb. 28, 2017$ / sharesshares

Dec. 31, 2018USD ($)shares

Dec. 31, 2017USD ($)shares

Dec. 31, 2016USD ($)

Dec. 31, 2014USD ($)

Long-term debt

Proceeds from debt

$ 58,419,000

Debt discount amortization

$ 961,000

$ 1,316,000

406,000

Derivative liability

2,017,000

1,660,000

Unamortized discount on debt

$ 3,334,000

Recognition of beneficial conversion feature on convertible notes

$ 613,000

Payment of senior debt and fee

26,063,000

Senior Notes and Subordinated Debt

Long-term debt

Repayments of debt

$ 33,000,000

Senior debt (Hercules LSA)

Long-term debt

Interest paid

100,000

Payments of end of term fee

1,100,000

Debt discount amortization

104,000

Payment of senior debt and fee

24,300,000

Prepayment penalty

243,000

Senior Secured Convertible Note

Long-term debt

Face amount of debt issued

$ 6,600,000

Interest rate (as a percent)

12.95%

Term of debt (in years)

1 year

Effective interest rate during debt term (as a percent)

16.69%

25.35%

Time period before debt maturity when debt conversion option expires

5 days

Increase in prepayment fee (in basis points)

300

Conversion price, expressed as a percentage of stock price

95.00%

Number of trading days used to determine conversion stock price

3 days

Unamortized discount on debt

$ 600,000

Recognition of beneficial conversion feature on convertible notes

$ 600,000

Maximum percentage of stock for note holder

9.985%

Maximum percentage of stock for aggregate conversion

19.90%

Common Stock

Long-term debt

Issuance of common stock, net of issuance costs (in shares) | shares

20,651,524

12,019,639

Underwritten Public Offering | Common Stock

Long-term debt

Issuance of common stock, net of issuance costs (in shares) | shares

19,999,999

4,800,000

4,800,000

5,750,000

Public offering price (in dollars per share) | $ / shares

$ 2.30

$ 6.25

$ 6.25

$ 5

Gross proceeds from issuance of stock

$ 30,000,000

$ 30,000,000

Minimum | Senior Secured Convertible Note

Long-term debt

Prepayment fee of debt (in percentage)

2.00%

Conversion price | $ / shares

$ 7

Minimum | Common Stock

Long-term debt

Gross proceeds from issuance of stock

$ 4,500,000

Minimum | Underwritten Public Offering | Common Stock

Long-term debt

Gross proceeds from issuance of stock

30,000,000

Maximum | Senior Secured Convertible Note

Long-term debt

Prepayment fee of debt (in percentage)

12.75%

Senior Secured Credit Facility | Registration Agreement

Long-term debt

Maximum reimbursable legal fees

$ 25,000

Liability recorded for expected unmet agreement obligations

$ 0

Senior Secured Credit Facility | Debt issued to entities affiliated with Deerfield

Long-term debt

Face amount of debt issued

60,000,000

Proceeds from debt

$ 60,000,000

Number of equal annual installments | installment

3

Interest rate (as a percent)

12.95%

Deferred interest payments

$ 6,600,000

Number of first interest payments for which the reporting entity has the option to defer | item

4

Debt yield enhancement fee

$ 1,350,000

Debt legal costs

25,000

Term of debt (in years)

6 years

Minimum cash on deposit to maintain under debt arrangement

$ 5,000,000

Effective interest rate during debt term (as a percent)

15.03%

Debt discount amortization

$ 961,000

$ 1,316,000

Unamortized discount on debt

$ 3,334,000

$ 2,843,000

Senior Secured Credit Facility | Debt issued to entities affiliated with Deerfield | Company's Attorneys

Long-term debt

Debt legal costs

173,000

Senior Secured Credit Facility | Debt issued to entities affiliated with Deerfield | On Behalf Of Deerfield's Attorneys

Long-term debt

Debt legal costs

$ 58,000

Senior Secured Credit Facility | Deerfield Private Design Found III, LP

Long-term debt

Debt borrowing structure (as a percent)

66.67%

Senior Secured Credit Facility | Deerfield Special Situations Fund, LP

Long-term debt

Debt borrowing structure (as a percent)

33.33%

Senior Secured Credit Facility | Senior Secured Convertible Note

Long-term debt

Derivative liability

$ 2,100,000

Minimum premiums as percent required to treat as derivative

10.00%

Payment of debt modification fee

$ 40,000

Maximum time period to register shares per agreement

30 days

Maximum time period for registration to become effective per agreement

75 days

Senior Secured Credit Facility | Minimum | Senior Secured Convertible Note

Long-term debt

Conversion price | $ / shares

$ 7

Senior Secured Credit Facility | Maximum | Senior Secured Convertible Note

Long-term debt

Number of shares which may be issued for conversion of convertible notes | item

940,924

Second Amendment Facility Due in May 2019 | Debt issued to entities affiliated with Deerfield

Long-term debt

Face amount of debt issued

$ 52,500,000

Prepayment of premium amount (as a percent)

6.25%

Non-refundable exit fee

$ 750,239

Payment of senior debt and fee

$ 7,500,000

Second Amendment Facility Due in May 2019 | Common Stock | Debt issued to entities affiliated with Deerfield

Long-term debt

Share price, percentage of Last Bid Price

93.00%

Principal payment (in dollars per shares) | $ / shares

$ 3

Ownership Cap percentage

4.985%

Number of trading days used to determine conversion stock price

10 days

Second Amendment Facility Due in May 2019 | 2019 | Debt issued to entities affiliated with Deerfield

Long-term debt

Face amount of debt issued

$ 7,500,000

Second Amendment Facility Due in May 2019 | 2020 | Debt issued to entities affiliated with Deerfield

Long-term debt

Face amount of debt issued

15,000,000

Second Amendment Facility Due in May 2019 | 2021 | Debt issued to entities affiliated with Deerfield

Long-term debt

Face amount of debt issued

15,000,000

Second Amendment Facility Due in May 2019 | 2022 | Debt issued to entities affiliated with Deerfield

Long-term debt

Face amount of debt issued

$ 15,000,000

Second Amendment Facility Due in May 2019 | Maximum | Common Stock | Debt issued to entities affiliated with Deerfield

Long-term debt

Number of shares issued upon conversion of debt | shares

2,135,625

Second Amendment Facility Due in May 2020 | Common Stock | Debt issued to entities affiliated with Deerfield

Long-term debt

Ownership Cap percentage

4.985%

Conversion price | $ / shares

$ 10

Conversion price, expressed as a percentage of stock price

95.00%

Number of trading days used to determine conversion stock price

3 days

Second Amendment Facility Due in May 2020 | Maximum | Common Stock | Debt issued to entities affiliated with Deerfield

Long-term debt

Percentage of principal amount available for conversion

50.00%

Number of shares issued upon conversion of debt | shares

3,796,668

Conversion price, expressed as a percentage of stock price

83.00%

Number of shares which may be issued for conversion of convertible notes | item

3,796,668

Essex Capital Corporation, as Investor | 10% subordinated note payable

Long-term debt

Face amount of debt issued

$ 5,900,000

Repayments of debt

5,900,000

$ 5,900,000

Interest paid

$ 1,300,000

Interest accrued

$ 263,000

Interest rate (as a percent)

10.00%

10.00%

Conversion Of Convertible Notes | Senior Secured Convertible Note

Long-term debt

Amount of debt converted into stock

$ 6,600,000

Number of shares issued upon conversion of debt | shares

929,967

Conversion price | $ / shares

$ 7.08

Conversion price, expressed as a percentage of stock price

95.00%

Number of trading days used to determine conversion stock price

3 days

Conversion Of Convertible Notes | Senior Secured Credit Facility

Long-term debt

Amount of debt converted into stock

$ 6,600,000

Number of shares issued upon conversion of debt | shares

929,967

Conversion price | $ / shares

$ 7.08

Conversion price, expressed as a percentage of stock price

95.00%

Number of trading days used to determine conversion stock price

3 days

3 days

Long-term debt - Senior Debt (D

Long-term debt - Senior Debt (Details)

May 11, 2016USD ($)

Jul. 22, 2015$ / sharesshares

Sep. 25, 2014USD ($)$ / sharesshares

Mar. 28, 2014USD ($)item$ / sharesshares

May 31, 2016

Jun. 30, 2015USD ($)

Mar. 31, 2015USD ($)

Dec. 31, 2018USD ($)

Dec. 31, 2017USD ($)

Dec. 31, 2016USD ($)

Sep. 30, 2014

Mar. 31, 2014

Long-term debt

Loss on debt extinguishment

$ (1,187,000)

Debt discount amortization

$ 961,000

$ 1,316,000

406,000

Senior debt (Hercules LSA)

Long-term debt

Maximum borrowing capacity per agreement

$ 25,000,000

Number of draws available per debt agreement | item

4

Term of interest and principal payments, which commence at a later date

30 months

LSA end of term fee due upon prepayment or repayment

$ 1,100,000

Payments of end of term fee

$ 1,100,000

End of term charge amortization

121,000

Loss on debt extinguishment

1,187,000

Debt discount amortization

$ 104,000

Senior debt (Hercules LSA) | Tranche 1

Long-term debt

Draws from senior debt note

$ 10,000,000

Interest rate (as a percent)

9.00%

Senior debt (Hercules LSA) | Tranche 1 | Series C Warrants Issued with Senior Debt

Long-term debt

Warrants issued (in shares) | shares

60,000

Exercise price (in dollars per share) | $ / shares

$ 5

Senior debt (Hercules LSA) | Tranche 2

Long-term debt

Draws from senior debt note

$ 5,000,000

Interest rate (as a percent)

10.50%

Senior debt (Hercules LSA) | Tranche 2 | Series C Warrants Issued with Senior Debt

Long-term debt

Warrants issued (in shares) | shares

110,000

Exercise price (in dollars per share) | $ / shares

$ 5

Senior debt (Hercules LSA) | Tranche 3

Long-term debt

Draws from senior debt note

$ 5,000,000

Interest rate (as a percent)

10.50%

Senior debt (Hercules LSA) | Tranche 4

Long-term debt

Draws from senior debt note

$ 5,000,000

Interest rate (as a percent)

9.00%

Conversion, initial public offering | Common Stock Warrants

Long-term debt

Warrants issued (in shares) | shares

70,833

Exercise price (in dollars per share) | $ / shares

$ 12

Warrants Term

5 years

Long-term debt - Subordinated R

Long-term debt - Subordinated Related Party Note (Details) - USD ($)	May 11, 2016	Dec. 31, 2016	Dec. 31, 2014	Dec. 31, 2018
10% subordinated note payable | Essex Capital Corporation, as Investor
Long-term debt
Interest rate (as a percent)	10.00%			10.00%
Face amount of debt issued	$ 5,900,000
Repayments of debt	5,900,000		$ 5,900,000
Interest paid	$ 1,300,000
Interest accrued		$ 263,000
Senior Secured Credit Facility | Debt issued to entities affiliated with Deerfield
Long-term debt
Interest rate (as a percent)	12.95%
Face amount of debt issued	$ 60,000,000

Long-term debt - Capital Lease

Long-term debt - Capital Lease Obligations to Related Party (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2014	Dec. 31, 2013
Essex sale-leaseback transactions | Transaction One
Long-term debt
Imputed interest rate on lease (as a percent)	14.90%	14.50%	14.50%
Capital leases, maturing through November 2022
Long-term debt
Interest expense	$ 341,000	$ 263,000	$ 204,000
Capital leases, maturing through November 2022 | Essex sale-leaseback transactions | Transaction One
Long-term debt
Existing assets under sale-leaseback transaction					$ 5,500,000
Newly acquired assets under sale-leaseback transaction				$ 795,000
Capital leases, maturing through November 2022 | Essex sale-leaseback transactions | Transaction Two
Long-term debt
Newly acquired assets under sale-leaseback transaction		$ 3,200,000

Long-term debt - Future Minimum

Long-term debt - Future Minimum Capital Lease Payments (Details) $ in Thousands	Dec. 31, 2018USD ($)
Future minimum capital lease payments
2019	$ 1,257
2020	798
2021	21
2022	20
Total minimum lease payments	2,096
Less amount representing interest	(238)
Future minimum lease payments	$ 1,858

Long-term debt - Future Princip

Long-term debt - Future Principal Payments (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Future principal payments of long-term debt including capital leases
2019	$ 8,557
2020	15,761
2021	15,020
2022	15,770
Future principal payments	55,108
Less unamortized debt discount	(3,334)
Less current portion of long-term debt	(8,557)	$ (896)
Total long-term debt	$ 43,217	$ 58,938

Common stock - Public Offerings

Common stock - Public Offerings (Details) $ / shares in Units, $ in Thousands	Nov. 08, 2018USD ($)$ / sharesshares	Jul. 26, 2017USD ($)	Jun. 30, 2017USD ($)$ / sharesshares	Feb. 17, 2017USD ($)shares	Jul. 28, 2015USD ($)$ / sharesshares	Jun. 30, 2017USD ($)$ / sharesshares	Feb. 28, 2017$ / sharesshares	Dec. 31, 2018USD ($)shares	Dec. 31, 2017USD ($)shares	Dec. 31, 2016USD ($)
Public offerings and related transactions
Net proceeds from issuance of stock | $								$ 47,292	$ 64,560	$ 13
Reverse stock split ratio					0.4167
Common Stock
Public offerings and related transactions
Issuance of common stock, net of issuance costs (in shares) | shares								20,651,524	12,019,639
Common Stock | IPO
Public offerings and related transactions
Issuance of common stock, net of issuance costs (in shares) | shares					5,520,000
Public offering price (in dollars per share) | $ / shares					$ 15
Net proceeds from issuance of stock | $					$ 75,000
Common Stock | Underwritten Public Offering
Public offerings and related transactions
Issuance of common stock, net of issuance costs (in shares) | shares	19,999,999		4,800,000			4,800,000	5,750,000
Public offering price (in dollars per share) | $ / shares	$ 2.30		$ 6.25			$ 6.25	$ 5
Gross proceeds from issuance of stock | $			$ 30,000			$ 30,000
Payments of stock issuance costs | $			$ 200			$ 200
Term of option to purchase share			30 days			30 days
Net proceeds from issuance of stock | $	$ 43,400	$ 34,300		$ 26,700
Shares offered to underwriters under option granted (in shares) | shares			720,000			720,000
Common Stock | Over-allotment option
Public offerings and related transactions
Issuance of common stock, net of issuance costs (in shares) | shares	2,608,695			750,000	720,000

Common stock - Shelf Registrati

Common stock - Shelf Registration Statement and offer under sales agreement (Details) - USD ($)	Nov. 08, 2018	Nov. 05, 2018	Oct. 26, 2017	Jul. 26, 2017	Jun. 30, 2017	Feb. 17, 2017	Jul. 28, 2015	Jun. 30, 2017	Feb. 28, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Aug. 01, 2016
Shelf registration statement
Net proceeds from issuance of stock										$ 47,292,000	$ 64,560,000	$ 13,000
Value of securities which remain available to be sold pursuant to the shelf										$ 5,200,000
Maximum
Shelf registration statement
Authorized amount to raise capital as per shelf registration statement													$ 125,000,000
Sales Agreement | Maximum | Cowen and Company LLC
Shelf registration statement
Authorized amount for issuance of common stock as per shelf registration statement													$ 40,000,000
Common Stock
Shelf registration statement
Shares issued										20,651,524	12,019,639
Stock Issued During Period, Shares, Conversion Of Restricted Stock Units										26,991
Stock Issued During Period Shares Conversion of Stock Options										832
Common Stock | Sales Agreement
Shelf registration statement
Gross proceeds from issuance of stock		$ 7,825,113
Maximum authorized amount in continuous offering		$ 7,825,113
Sales Agreement | Common Stock
Shelf registration statement
Shares issued										651,525	749,639
Sales agreement offering price (in dollars per share)										$ 6.25	$ 5.01
Gross proceeds from issuance of stock										$ 4,100,000	$ 3,700,000
Net proceeds from issuance of stock										3,900,000	3,600,000
Payments of stock issuance costs										$ 200,000	$ 100,000
Public offering price (in dollars per share)										$ 6.25	$ 5.01
Underwritten Public Offering | Common Stock
Shelf registration statement
Shares issued	19,999,999				4,800,000			4,800,000	5,750,000
Sales agreement offering price (in dollars per share)	$ 2.30				$ 6.25			$ 6.25	$ 5
Net proceeds from issuance of stock	$ 43,400,000			$ 34,300,000		$ 26,700,000
Payments of stock issuance costs					$ 200,000			$ 200,000
Public offering price (in dollars per share)	$ 2.30				$ 6.25			$ 6.25	$ 5
Over-allotment option | Common Stock
Shelf registration statement
Shares issued	2,608,695					750,000	720,000
Conversion Of Convertible Notes | Senior Secured Convertible Notes
Shelf registration statement
Amount of debt converted into stock			$ 6,600,000
Conversion price			$ 7.08
Conversion price, expressed as a percentage of stock price			95.00%
Number of trading days used to determine conversion stock price			3 days
Number of shares of stock into which debt was converted			929,967

Share-based Compensation - Plan

Share-based Compensation - Plan Information (Details) - shares

Jan. 01, 2019

Jan. 01, 2018

Oct. 16, 2017

Jan. 01, 2017

Oct. 17, 2016

Oct. 16, 2015

Jun. 30, 2018

Dec. 31, 2018

Dec. 31, 2018

Jan. 01, 2016

Jul. 31, 2015

Nov. 30, 2009

Stock options outstanding | Performance based

Stock options, restricted stock and performance stock options

Vesting period

3 years

Stock options | Minimum

Stock options, restricted stock and performance stock options

Vesting period

2 years

Stock options | Maximum

Stock options, restricted stock and performance stock options

Vesting period

4 years

Restricted stock

Stock options, restricted stock and performance stock options

Shares surrendered by holder to cover taxes associated with vesting

14,895

9,709

9,197

Neos Therapeutics, Inc. 2009 Equity Plan

Stock options, restricted stock and performance stock options

Shares reserved for issuance under the plan

1,375,037

Shares related to forfeited prior plan options transferred into shares available under current plan

73,331

Neos Therapeutics, Inc. 2009 Equity Plan | Stock options

Stock options, restricted stock and performance stock options

Expiration period

10 years

Expiration period of unexercised vested award after termination of employment

90 days

Neos Therapeutics, Inc. 2009 Equity Plan | Restricted stock | Minimum

Stock options, restricted stock and performance stock options

Vesting period

1 month

Neos Therapeutics, Inc. 2009 Equity Plan | Restricted stock | Maximum

Stock options, restricted stock and performance stock options

Vesting period

48 months

Neos Therapeutics, Inc. 2015 Stock Option and Incentive Plan

Stock options, restricted stock and performance stock options

Shares reserved for issuance under the plan

767,330

Increase to the number of shares reserved and available for issuance as a percentage of outstanding common stock (as a percent)

5.00%

Increase in number of shares reserved and available for issuance

1,449,847

803,049

Stock option exercise price, minimum expressed as percentage of fair market value on grant date

100.00%

Shares related to forfeited prior plan options transferred into shares available under current plan

82,635

Shares available for grant

1,793,905

1,793,905

Neos Therapeutics, Inc. 2015 Stock Option and Incentive Plan | Subsequent event

Stock options, restricted stock and performance stock options

Shares reserved for issuance under the plan

4,277,720

Increase in number of shares reserved and available for issuance

2,483,815

Neos Therapeutics, Inc. 2015 Stock Option and Incentive Plan | Stock options

Stock options, restricted stock and performance stock options

Expiration period

10 years

Expiration period of unexercised vested award after termination of employment

90 days

Neos Therapeutics, Inc 2018 Inducement Plan

Stock options, restricted stock and performance stock options

Shares reserved for issuance under the plan

800,000

Shares available for grant

0

0

Neos Therapeutics, Inc 2018 Inducement Plan | Stock options

Stock options, restricted stock and performance stock options

Stock option exercise price, minimum expressed as percentage of fair market value on grant date

100.00%

Expiration period

10 years

Share-based Compensation - Expe

Share-based Compensation - Expense Allocation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Expense
Total compensation cost	$ 3,321	$ 4,051	$ 3,460
Cost of goods sold
Share-based Compensation Expense
Total compensation cost	470	390	311
Research and development
Share-based Compensation Expense
Total compensation cost	344	394	304
Selling and marketing
Share-based Compensation Expense
Total compensation cost	731	913	723
General and administrative
Share-based Compensation Expense
Total compensation cost	$ 1,776	$ 2,354	$ 2,122

Share-based Compensation - Ex_2

Share-based Compensation - Expense Other (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Expense
Total compensation cost	$ 3,321,000	$ 4,051,000	$ 3,460,000
Unrecognized compensation cost	5,100,000
Stock options
Share-based Compensation Expense
Total compensation cost	$ 3,100,000	3,900,000	3,400,000
Compensation cost not yet recognized, period for recognition	2 years 6 months
RSUs
Share-based Compensation Expense
Total compensation cost	$ 261,000	86,000
Compensation cost not yet recognized, period for recognition	2 years 10 months 24 days
Restricted stock
Share-based Compensation Expense
Total compensation cost		$ 71,000	$ 91,000
Unrecognized compensation cost	$ 0

Share-based Compensation - Assu

Share-based Compensation - Assumptions Used in Determining Fair Value of Options (Details) - Stock options - $ / shares	1 Months Ended		12 Months Ended
	Jul. 31, 2018	Jun. 30, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Stock options, restricted stock and performance stock options
Options granted (in shares)			1,753,539	570,432	859,257
Exercise price (in dollars per share)			$ 6.786	$ 7.220	$ 10.385
Weighted average key assumptions used in determining the fair value of options granted
Estimated dividend yield (as a percent)			0.00%	0.00%	0.00%
Volatility (annual) (as a percent)			60.00%	60.00%	60.00%
Expected life of option in years			6 years 1 month 17 days	6 years 22 days	6 years 1 month 24 days
Weighted-average option fair value at grant (in dollars per share)			$ 3.930	$ 4.090	$ 5.800
Weighted average
Weighted average key assumptions used in determining the fair value of options granted
Weighted-average risk-free interest rate (as a percent)			2.75%	2.01%	1.18%
Minimum
Stock options, restricted stock and performance stock options
Exercise price (in dollars per share)			$ 4.76
Maximum
Stock options, restricted stock and performance stock options
Exercise price (in dollars per share)			$ 10.40
Neos Therapeutics, Inc. 2015 Stock Option and Incentive Plan
Stock options, restricted stock and performance stock options
Options granted (in shares)			953,539
Neos Therapeutics, Inc 2018 Inducement Plan | Chief Executive Officer
Stock options, restricted stock and performance stock options
Options granted (in shares)	200,000	600,000
Exercise price (in dollars per share)	$ 5.55	$ 6.20

Share-based Compensation - Opti

Share-based Compensation - Options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Summary of number of outstanding and exercisable options and the activity
Outstanding at beginning of year (in shares)	2,454,973	2,107,344	1,352,283
Exercisable at beginning of year (in shares)	1,137,766	595,424	229,000
Granted (in shares)	1,753,539	570,432	859,257
Exercised (in shares)	(832)	(1,249)	(10,886)
Expired, forfeited or cancelled (in shares)	(760,795)	(221,554)	(93,310)
Outstanding at end of period (in shares)	3,446,885	2,454,973	2,107,344
Exercisable at end of period (in shares)	1,643,011	1,137,766	595,424
Summary of weighted-average exercise price of outstanding and exercisable options and the activity
Outstanding at beginning of year (in dollars per share)	$ 11.195	$ 12.173	$ 13.607
Exercisable at beginning of year (in dollars per share)	10.919	9.715	3.385
Exercise price (in dollars per share)	6.786	7.220	10.385
Exercised (in dollars per share)	0.320	0.223	1.231
Expired, forfeited or cancelled (in dollars per share)	11.281	10.325	17.780
Outstanding at end of period (in dollars per share)	8.935	11.195	12.173
Exercisable at end of period (in dollars per share)	$ 10.627	$ 10.919	$ 9.715
Summary of intrinsic value of outstanding and exercisable options and other information
Intrinsic value, outstanding options	$ 70	$ 4,764	$ 1,128	$ 964
Intrinsic value, exercisable options	$ 70	$ 2,890	$ 881	$ 2,504
Weighted average remaining contractual life of options outstanding	7 years 10 months 24 days
Weighted-average remaining contractual life of options exercisable	6 years 7 months 6 days
Minimum
Summary of weighted-average exercise price of outstanding and exercisable options and the activity
Exercise price (in dollars per share)	$ 4.76
Maximum
Summary of weighted-average exercise price of outstanding and exercisable options and the activity
Exercise price (in dollars per share)	$ 10.40

Share-based Compensation - RSUs

Share-based Compensation - RSUs (Details)	Mar. 01, 2019	Oct. 02, 2018shares	Oct. 02, 2017shares	May 01, 2017shares	Dec. 31, 2018$ / sharesshares	Dec. 31, 2017$ / sharesshares
RSUs
Summary of outstanding equity instruments and activity
Outstanding at beginning of year (in equity instruments)					85,000
Granted (in equity instruments)		93,750	6,250	78,750	93,750	85,000
Converted (in equity instruments)					(26,991)
Withheld for tax obligation (in equity instruments)					(6,757)
Expired, forfeited or cancelled (in equity instruments)					(69,688)
Outstanding at end of period (in equity instruments)					75,314	85,000
Summary of weighted-average fair value
Outstanding at beginning of year (in dollars per equity instrument) | $ / shares					$ 7.15
Granted (in dollars per equity instrument) | $ / shares					$ 8.30	$ 7.15
Converted (in dollars per equity instrument) | $ / shares					7.34
Withheld for tax obligation ( in dollars per equity instrument) | $ / shares					7.34
Expired, forfeited or cancelled (in dollars per equity instrument) | $ / shares					$ 7.77
Outstanding at end of period (in dollars per equity instrument) | $ / shares					$ 7.93	$ 7.15
Restricted Stock
Vested units converted to common stock (in shares)					33,748
Four equal tranches | RSUs
Stock options, restricted stock and performance stock options
Vesting period	4 years		4 years	4 years
Common Stock
Restricted Stock
Shares converted					26,991
Shares surrendered by holder to cover taxes associated with vesting					6,757

Share-based Compensation - Rest

Share-based Compensation - Restricted Stock (Details) - Restricted stock - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Stock options, restricted stock and performance stock options
Shares issued	0	0	0
Unvested restricted stock outstanding (in shares)			35,513
Weighted average fair value of nonvested restricted stock (in dollars per share)			$ 2.55
Shares granted	0	0	0
Shares forfeited	0	0	0

Treasury stock (Details)

Treasury stock (Details) - $ / shares	Oct. 16, 2017	Oct. 17, 2016	Oct. 16, 2015	Feb. 19, 2015	Dec. 31, 2018	Dec. 31, 2017
Treasury stock
Shares of treasury stock held					33,801	33,801
Cancellation of treasury stock				55,905
Original purchase price of treasury stock (in dollars per share)				$ 0.002
Restricted stock
Treasury stock
Shares surrendered by holder to cover taxes associated with vesting	14,895	9,709	9,197

Commitments and contingencies -

Commitments and contingencies - Registration Payment Arrangement (Details)	Nov. 05, 2018USD ($)item$ / shares	Jun. 01, 2017USD ($)	Dec. 31, 2018USD ($)
Second Amendment Facility Due in May 2020 | Debt issued to entities affiliated with Deerfield | Common Stock
Registration Payment Arrangement
Conversion price | $ / shares	$ 10
Second Amendment Facility Due in May 2020 | Debt issued to entities affiliated with Deerfield | Common Stock | Maximum
Registration Payment Arrangement
Number of shares which may be issued for conversion of convertible notes | item	3,796,668
Registration Agreement | Senior Secured Convertible Notes
Registration Payment Arrangement
Time period after date of any Registration Failure during which additional damages are required to be paid	30 days
Additional damages payable upon any Registration Failure, as percent of original principal amount of debt	2.00%
Maximum reimbursable legal fees	$ 25,000
Registration Agreement | Senior Secured Credit Facility
Registration Payment Arrangement
Maximum reimbursable legal fees		$ 25,000
Liability recorded for expected unmet agreement obligations			$ 0

Commitments and contingencies_2

Commitments and contingencies - Patent Infringement Litigation (Details)	Oct. 31, 2017
Actavis
Patent infringement litigation
Time Period For Which FDA Approval is Barred Upon Commencement Of Lawsuit	30 months

Commitments and contingencies_3

Commitments and contingencies - Defined Contribution Plans (Details) - USD ($)	Jan. 01, 2015	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Defined Contribution Plans
Maximum employee annual contribution (as a percent)		50.00%
Expense on defined contribution plans		$ 576,000	$ 419,000	$ 371,000
First Tier Contributions
Defined Contribution Plans
Employer's match of of employee contributions (as a percent)	100.00%
Percentage of match by employer (as a percent)	3.00%
Second Tier Contributions
Defined Contribution Plans
Employer's match of of employee contributions (as a percent)	50.00%
Percentage of match by employer (as a percent)	2.00%

Commitments and contingencies_4

Commitments and contingencies - Operating Lease, Cash Incentive Bonus Plan, Inducement Option Grant (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Future minimum operating lease payments
2019	$ 1,107,000
2020	1,161,000
2021	1,057,000
2022	1,055,000
2023	1,055,000
Thereafter	1,106,000
Future minimum lease payments	6,541,000
Deferred rent balance	989,000	$ 1,083,000
Rent expense, share of operating expenses	206,000	243,000	$ 243,000
Bonus Expenses	666,000	701,000	464,000
Grand Prairie Lease Plus Blue Bell Lease
Future minimum operating lease payments
Rent expense, excluding share of operating expenses	$ 1,011,000	$ 1,010,000	$ 1,011,000
Blue Bell, Pennsylvania
Commitments
Term of operating lease	60 months

License agreements (Details)

License agreements (Details) - USD ($)	Oct. 23, 2018	Oct. 31, 2017	Feb. 29, 2016
Shire LLC | NDA 204326 | Maximum
License agreements
Payment of non-refundable license fee			$ 1,000,000
Shire LLC | NDA 204325 | Maximum
License agreements
Payment of non-refundable license fee		$ 1,000,000
NeuRx License
License agreements
Upfront payment to be paid	$ 175,000

Related party transactions (Det

Related party transactions (Details) - USD ($) $ / shares in Units, $ in Thousands

Nov. 08, 2018

Nov. 05, 2018

Oct. 26, 2017

Jul. 26, 2017

Jun. 30, 2017

Feb. 17, 2017

Jul. 28, 2015

Jun. 30, 2017

Feb. 28, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Stock transaction disclosures

Payment of facility

$ 26,063

Principal repayment to be paid

$ 90

$ 40

Net proceeds from issuance of stock

$ 47,292

$ 64,560

$ 13

Common Stock

Stock transaction disclosures

Issuance of common stock, net of issuance costs (in shares)

20,651,524

12,019,639

Underwritten Public Offering | Common Stock

Stock transaction disclosures

Issuance of common stock, net of issuance costs (in shares)

19,999,999

4,800,000

4,800,000

5,750,000

Public offering price (in dollars per share)

$ 2.30

$ 6.25

$ 6.25

$ 5

Term of option to purchase share

30 days

30 days

Shares offered to underwriters under option granted (in shares)

720,000

720,000

Net proceeds from issuance of stock

$ 43,400

$ 34,300

$ 26,700

Over-allotment option | Common Stock

Stock transaction disclosures

Issuance of common stock, net of issuance costs (in shares)

2,608,695

750,000

720,000

Senior Secured Credit Facility | Conversion Of Convertible Notes

Stock transaction disclosures

Number of shares issued upon conversion of debt

929,967

Amount of debt converted into stock

$ 6,600

Conversion price

$ 7.08

Conversion price, expressed as a percentage of stock price

95.00%

Number of trading days used to determine conversion stock price

3 days

3 days

Debt issued to entities affiliated with Deerfield | Second Amendment Facility Due in May 2019

Stock transaction disclosures

Payment of facility

$ 7,500

Debt issued to entities affiliated with Deerfield | Second Amendment Facility Due in May 2019 | Common Stock

Stock transaction disclosures

Number of trading days used to determine conversion stock price

10 days

Debt issued to entities affiliated with Deerfield | Second Amendment Facility Due in May 2019 | Maximum | Common Stock

Stock transaction disclosures

Number of shares issued upon conversion of debt

2,135,625

Debt issued to entities affiliated with Deerfield | Second Amendment Facility Due in May 2020

Stock transaction disclosures

Principal repayment to be paid

$ 15,000

Debt issued to entities affiliated with Deerfield | Second Amendment Facility Due in May 2020 | Common Stock

Stock transaction disclosures

Conversion price

$ 10

Conversion price, expressed as a percentage of stock price

95.00%

Number of trading days used to determine conversion stock price

3 days

Debt issued to entities affiliated with Deerfield | Second Amendment Facility Due in May 2020 | Maximum | Common Stock

Stock transaction disclosures

Number of shares issued upon conversion of debt

3,796,668

Conversion price, expressed as a percentage of stock price

83.00%

Investor | Debt issued to entities affiliated with Deerfield | Senior Secured Credit Facility

Related party transactions

Face amount of debt at time of related party stock purchase

$ 60,000

Selected Quarterly Financial _3

Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Selected Quarterly Financial Information
Net product sales	$ 15,393	$ 12,503	$ 11,363	$ 10,729	$ 9,222	$ 7,100	$ 5,179	$ 5,631	$ 49,988	$ 27,132	$ 10,033
Net product sales	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Gross profit (loss)	$ 7,631	$ 5,546	$ 4,376	$ 5,508	$ 5,582	$ 4,277	$ 2,362	$ 881	$ 23,060	$ 13,102	$ (1,701)
Net loss attributable to common stock	$ (9,337)	$ (12,695)	$ (15,207)	$ (14,436)	$ (13,652)	$ (16,254)	$ (18,645)	$ (17,221)
Weighted average common shares outstanding used to compute net loss per share, basic and diluted	41,415,358	29,625,792	29,008,909	28,996,956	28,746,608	27,884,983	22,613,382	19,624,712	32,288,555	24,751,091	16,052,390
Net loss per share of common stock, basic and fully diluted	$ (0.23)	$ (0.43)	$ (0.52)	$ (0.50)	$ (0.47)	$ (0.58)	$ (0.82)	$ (0.88)	$ (1.60)	$ (2.66)	$ (5.16)

Selected Quarterly Financial _4

Selected Quarterly Financial Data (Unaudited) - Explanatory Information (Details) - USD ($) $ / shares in Units, $ in Millions	Nov. 08, 2018	Nov. 05, 2018	Oct. 26, 2017	Jun. 30, 2017	Feb. 17, 2017	Jul. 28, 2015	Jun. 30, 2017	Feb. 28, 2017	Dec. 31, 2018	Dec. 31, 2017
Conversion Of Convertible Notes | Senior Secured Credit Facility
Selected Quarterly Financial Data (Unaudited)
Amount of debt converted into stock			$ 6.6
Conversion price			$ 7.08
Conversion price, expressed as a percentage of stock price			95.00%
Number of trading days used to determine conversion stock price		3 days	3 days
Number of shares of stock into which debt was converted			929,967
Common Stock
Selected Quarterly Financial Data (Unaudited)
Issuance of common stock, net of issuance costs (in shares)									20,651,524	12,019,639
Common Stock | Over-allotment option
Selected Quarterly Financial Data (Unaudited)
Issuance of common stock, net of issuance costs (in shares)	2,608,695				750,000	720,000
Common Stock | Underwritten Public Offering
Selected Quarterly Financial Data (Unaudited)
Issuance of common stock, net of issuance costs (in shares)	19,999,999			4,800,000			4,800,000	5,750,000
Public offering price (in dollars per share)	$ 2.30			$ 6.25			$ 6.25	$ 5
Gross proceeds from issuance of stock				$ 30			$ 30
Payments of stock issuance costs				$ 0.2			$ 0.2
Term of option to purchase share				30 days			30 days
Shares offered to underwriters under option granted (in shares)				720,000			720,000

Subsequent event (Details)

Subsequent event (Details) - Neos Therapeutics, Inc. 2015 Stock Option and Incentive Plan - shares	Jan. 01, 2019	Jan. 01, 2018	Jan. 01, 2017	Jul. 31, 2015
Subsequent event
Increase in number of shares reserved and available for issuance		1,449,847	803,049
Shares reserved for issuance under the plan				767,330
Subsequent event
Subsequent event
Increase in number of shares reserved and available for issuance	2,483,815
Shares reserved for issuance under the plan	4,277,720

Schedule II - VALUATION AND Q_2

Schedule II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Allowance for chargebacks
Movement in valuation and qualifying accounts
Balance at beginning of period	$ 816	$ 779	$ 940
Additions charged to costs and expenses	8,565	10,146	10,504
Deductions and Payments	(8,067)	(10,109)	(10,665)
Balance at end of period	1,314	816	779
Allowance for cash discounts
Movement in valuation and qualifying accounts
Balance at beginning of period	337	171	99
Additions charged to costs and expenses	3,519	1,814	772
Deductions and Payments	(3,305)	(1,648)	(700)
Balance at end of period	551	337	171
Sales offers
Movement in valuation and qualifying accounts
Balance at beginning of period	7,168	2,070
Additions charged to costs and expenses	71,303	30,978	5,816
Deductions and Payments	(67,183)	(25,880)	(3,746)
Balance at end of period	11,288	7,168	2,070
Reserve for wholesaler fees
Movement in valuation and qualifying accounts
Balance at beginning of period	2,345	509	361
Additions charged to costs and expenses	17,414	8,244	2,838
Deductions and Payments	(15,510)	(6,408)	(2,690)
Balance at end of period	4,249	2,345	509
Reserve for returns
Movement in valuation and qualifying accounts
Balance at beginning of period	2,711	1,157	429
Additions charged to costs and expenses	3,803	1,792	764
Deductions and Payments	(1,357)	(238)	(36)
Balance at end of period	5,157	2,711	1,157
Rebates
Movement in valuation and qualifying accounts
Balance at beginning of period	4,008	544	110
Additions charged to costs and expenses	18,746	7,837	519
Deductions and Payments	(14,991)	(4,373)	(85)
Balance at end of period	$ 7,763	$ 4,008	$ 544