Neos Therapeutics (NEOS) 10-Q 9 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 04, 2017
Document and Entity Information
Entity Registrant Name	Neos Therapeutics, Inc.
Entity Central Index Key	1,467,652
Trading Symbol	neos
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		28,080,635
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current Assets:
Cash and cash equivalents	$ 57,362	$ 24,352
Short-term investments	21,262	15,430
Accounts receivable, net of allowances for chargebacks and cash discounts of $2,477 and $950, respectively	5,669	6,135
Inventories	6,080	5,767
Deferred contract sales organization fees	312	720
Other current assets	2,376	2,865
Total current assets	93,061	55,269
Property and equipment, net	8,223	7,076
Intangible assets, net	16,879	17,647
Other assets	185	150
Total assets	118,348	80,142
Current Liabilities:
Accounts payable	8,290	7,798
Accrued expenses	8,414	5,264
Deferred revenue	6,893	3,662
Current portion of long-term debt	7,022	4,921
Total current liabilities	30,619	21,645
Long-Term Liabilities:
Long-term debt, net of current portion	59,001	58,599
Derivative liability	2,086
Deferred rent	1,128	1,174
Other Long-term liabilities	198	272
Total long-term liabilities	62,413	60,045
Stockholders' Equity (Deficit):
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding at June 30, 2017 and December 31, 2016
Common stock, $0.001 par value, 100,000,000 authorized at June 30, 2017 and December 31, 2016; 27,379,541 and 27,360,635 issued and outstanding at June 30, 2017, respectively; 16,079,902 and 16,060,996 issued and outstanding at December 31, 2016, respectively	27	16
Treasury stock, at cost, 18,906 shares at June 30, 2017 and December 31, 2016	(232)	(232)
Additional paid-in capital	261,409	198,787
Accumulated deficit	(235,882)	(200,118)
Accumulated other comprehensive loss	(6)	(1)
Total stockholders' equity (deficit)	25,316	(1,548)
Total liabilities and stockholders' equity	$ 118,348	$ 80,142

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
CONDENSED CONSOLIDATED BALANCE SHEETS
Receivables allowance for chargebacks and cash discounts (in dollars)	$ 2,477	$ 950
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	27,379,541	16,079,902
Common stock, outstanding shares	27,360,635	16,060,996
Treasury stock, shares	18,906	18,906

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues:
Net product sales	$ 4,909	$ 1,485	$ 10,536	$ 4,068
Cost of goods sold	2,576	2,343	7,191	5,099
Gross profit (loss)	2,333	(858)	3,345	(1,031)
Research and development	3,692	3,748	5,416	5,724
Selling and marketing expenses	11,706	16,229	22,412	22,653
General and administrative expenses	3,316	3,169	6,854	6,460
Loss from operations	(16,381)	(24,004)	(31,337)	(35,868)
Interest expense	(2,390)	(1,604)	(4,602)	(2,617)
Loss on debt extinguishment		(1,187)		(1,187)
Other income, net	97	256	175	519
Net loss	$ (18,674)	$ (26,539)	$ (35,764)	$ (39,153)
Weighted average common shares outstanding
Weighted average common shares outstanding used to compute net loss per share, basic and diluted	22,613,382	16,050,138	21,127,303	16,037,728
Net loss per share of common stock, basic and diluted
Net loss per share of common stock, basic and diluted	$ (0.83)	$ (1.65)	$ (1.69)	$ (2.44)

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Comprehensive Income (loss)
Net loss	$ (18,674)	$ (26,539)	$ (35,764)	$ (39,153)
Other comprehensive (loss) income:
Net unrealized (loss) gain on short-term investments	(3)	(21)	(5)	38
Total other comprehensive (loss) income	(3)	(21)	(5)	38
Comprehensive loss	$ (18,677)	$ (26,560)	$ (35,769)	$ (39,115)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total
Balance, beginning at Dec. 31, 2016	$ 16	$ (232)	$ 198,787	$ (200,118)	$ (1)	$ (1,548)
Balance, beginning (in shares) at Dec. 31, 2016	16,079,902	(18,906)
Increase (Decrease) in Stockholders Equity
Issuance of common stock, net of issuance costs	$ 11		60,076			60,087
Issuance of common stock, net of issuance costs (in shares)	11,299,639
Share-based compensation expense			1,933			1,933
Beneficial conversion feature on convertible notes			613			613
Net unrealized loss on investments					(5)	(5)
Net loss				(35,764)		(35,764)
Balance, ending at Jun. 30, 2017	$ 27	$ (232)	$ 261,409	$ (235,882)	$ (6)	$ 25,316
Balance, ending (in shares) at Jun. 30, 2017	27,379,541	(18,906)

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash Flows From Operating Activities:
Net loss	$ (35,764)	$ (39,153)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense	1,933	1,430
Depreciation and amortization of property and equipment	643	929
Amortization of intangible assets	817	835
Deferred interest on debt	2,111	668
Amortization of senior debt discounts	245	261
Loss on debt extinguishment		942
Gain on sale of equipment	(33)	(415)
Other adjustments	(95)	109
Changes in operating assets and liabilities:
Accounts receivable	466	(1,756)
Inventories	(313)	(1,907)
Deferred contract sales organization fees	720	(166)
Other assets	454	(159)
Accounts payable	180	(1,884)
Accrued expenses	3,150	6,048
Deferred revenue	3,231	2,614
Net cash used in operating activities	(22,255)	(31,604)
Cash Flows From Investing Activities:
Purchases of short-term investments	(26,821)	(38,232)
Sales and maturities of short-term investments	21,021
Proceeds from sale-leaseback of equipment	3,222
Capital expenditures	(1,776)	(2,653)
Intangible asset expenditures	(49)	(607)
Net cash used in investing activities	(4,403)	(41,492)
Cash Flows From Financing Activities:
Proceeds from the issuance of common stock, net of issuance costs	60,087
Proceeds from Deerfield debt note, net of fees		58,420
Payment of senior debt and fee		(26,063)
Payments made on borrowings	(379)	(8,151)
Proceeds from exercise of stock options and warrants		13
Payments made on behalf of Deerfield	(40)
Net cash provided by financing activities	59,668	24,219
Increase (decrease) in cash and cash equivalents	33,010	(48,877)
Cash and Cash Equivalents:
Beginning	24,352	90,763
Ending	57,362	41,886
Supplemental Disclosure of Noncash Transactions:
Issuance of senior secured convertible notes	6,586
Capital lease liability from sale-leaseback transactions	3,222
Derivative liability incurred in connection with First Amendment to Facility	2,043
Beneficial conversion feature incurred on convertible notes	613
Deferred contract sales organization fees	312	359
Supplemental Cash Flow Information:
Interest paid	$ 2,249	$ 2,787

Organization and nature of oper

Organization and nature of operations	6 Months Ended
	Jun. 30, 2017
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 two approved products and one proprietary product candidate in late stage development 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. Also, 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 plans to launch this product in the fall of 2017. 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.

Summary of significant accounti

Summary of significant accounting policies	6 Months Ended
	Jun. 30, 2017
Summary of significant accounting policies
Summary of significant accounting policies	Note 2. Summary of significant accounting policies Basis of presentation: The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes necessary for a complete presentation of financial position, results of operations, and cash flows. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of results of operations for and financial condition as of the end of the interim period have been included. Results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results for the year ending December 31, 2017 or any period thereafter. The audited consolidated financial statements as of and for the year ended December 31, 2016 included information and footnotes necessary for such presentation and were included in the Neos Therapeutics, Inc. Annual Report on Form 10-K and filed with the SEC on March 15, 2017. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016. Principles of consolidation: At June 30, 2017 and December 31, 2016 and for the three and six months ended June 30, 2017 and 2016, the condensed 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. Reclassifications: Certain reclassifications have been made to the prior year’s condensed consolidated financial statements to conform to the current period’s presentation. Liquidity: During 2016 and the six months ended June 30, 2017, 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 and Cotempla XR-ODT, or, if approved, its ADHD product candidate. 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-Q. 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 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 any tax effects reported, as accumulated other comprehensive income or loss, which is a separate component of stockholders’ equity. Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are included in other income (expense) 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. Inventories: Inventories are stated at the lower of cost (first in, first out) or market in 2016 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, finished goods and deferred cost of goods sold. The cost of sales associated with the deferred product revenues are recorded as deferred costs of goods sold that are released from inventory into cost of goods sold as the deferred revenue is recognized into revenue. 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 are being capitalized into inventory and manufacturing costs for the production of Cotempla XR-ODT incurred after June 30, 2017, following the FDA approval date of June 19, 2017, will be capitalized into inventory. 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 the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument 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. 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 (“Tussionex ANDA”) and patents, are recorded at cost and amortized over the estimated lives of the assets, which primarily range from 10 to 20 years. Revenue recognition: Revenue is generated from product sales, recorded on a net sales basis. Product revenue is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) price to the buyer is fixed and determinable; and (4) collectability is reasonably assured. Revenue from sales transactions where the buyer has the right to return the product is recognized at the time of sale only if (1) the price to the buyer is substantially fixed or determinable at the date of sale, (2) the buyer has paid for the product, or the buyer is obligated to pay for the product and the obligation is not contingent on resale of the product, (3) the buyer’s obligation to pay would not be changed in the event of theft or physical destruction or damage of the product, (4) the buyer acquiring the product for resale has economic substance apart from that provided by the Company, (5) the Company does not have significant obligations for future performance to directly bring about resale of the product by the buyer, and (6) the amount of future returns can be reasonably estimated. The Company sells its commercial products 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. The Company has a limited sales history for Adzenys XR-ODT and no sales history for Cotempla XR-ODT, and has determined that at this time it cannot reliably estimate expected returns of the product at the time of shipment to wholesalers. Accordingly, the Company defers or will defer recognition of revenue on product shipments of Adzenys XR-ODT and Cotempla XR-ODT, respectively, until the right of return no longer exists, which occurs at the earlier of the time Adzenys XR-ODT and Cotempla XR-ODT units are dispensed through patient prescriptions or expiration of the right of return. The Company calculates and expects to calculate patient prescriptions dispensed of Adzenys XR-ODT and Cotempla XR-ODT, respectively, using an analysis of third-party information. Net product sales Net product sales for the Company’s products represent total gross product sales less gross to net sales adjustments. Gross to net sales adjustments include savings offers, prompt payment discounts, wholesaler fees and estimated allowances for product returns, rebates and chargebacks to be incurred on the selling price of the respective product sales. Wholesale distribution fees based on definitive contractual agreements are incurred on the management of these products by wholesalers and are recorded within net sales for generic Tussionex and as deferred wholesale distribution fees in other current assets for Adzenys XR-ODT and/or Cotempla XR-ODT. The deferred wholesale distribution fees for Adzenys XR-ODT are and Cotempla XR-ODT will be later recorded within net product sales when revenue associated with those fees is recognized. The Company estimates and records gross to net sales adjustments for product returns, rebates and chargebacks based upon analysis of third-party information, including information obtained from the Company’s third party logistics providers (“3PLs”), with respect to its inventory levels and sell-through to the wholesalers’ customers, for savings offers from data available from third parties regarding savings offers processed for prescriptions written for the Company’s products, and, for generic Tussionex, experience reported by the Company’s previous commercialization partners. Due to estimates and assumptions inherent in determining the amount of returns, rebates and chargebacks, the actual amount of returns and 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 and all other accruals are recorded in the same period that the related revenue is recognized. Savings offers The Company offers or expects to offer savings programs for Adzenys XR-ODT and Cotempla XR-ODT, respectively, to patients covered under commercial payor plans in which the cost of a prescription to such patients is discounted. The Company records the amount redeemed based on information from third-party providers and recognizes the discount as a reduction of revenue in the same period the related revenue is recognized. 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. Generic Tussionex product returns are estimated based upon data available from sales of the Company’s product by its former commercialization partner and from actual experience as reported by retailers. Historical trend of returns will be continually monitored and may result in future adjustments to such estimates. Rebates The Company’s products 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. Estimated rebates payable under such programs are recorded as a reduction of revenue at the time revenues are recorded. Calculations related to these rebate accruals are estimated based on information from third-party providers. Historical trend of such rebates will be continually monitored and may result in future adjustments to such estimates. Wholesaler chargebacks The Company’s 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. Chargebacks are accounted for by establishing an accrual in an amount equal to the Company’s estimate of chargeback claims at the time of product sale based on information provided by third parties. Due to estimates and assumptions inherent in determining the amount of chargebacks, the actual amount of claims for chargebacks may be different from estimates, which may result in adjustments to such reserves. 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. Advertising costs: Advertising costs are comprised of print and electronic media placements that are expensed as incurred. The Company recognized advertising costs of $10,000 and $248,000 during the three and six months ended June 30, 2017, respectively, and advertising costs of $120,000 during the six months ended June 30, 2016. There were no advertising costs during the three months ended June 30, 2016. 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. Due to the previous lack of a public market for the trading of its common stock and a lack of company-specific historical and implied volatility data, the Company had, prior to the IPO, historically utilized third party valuation analyses to determine the fair value. 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 new 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. The Company has reclassified all prior quarters’ amounts out of general and administrative expense to the appropriate income statement line in accordance with this approach. 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 June 30, 2017 and December 31, 2016, 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. At June 30, 2017 and December 31, 2016, based on the level of historical operating results and projections for the taxable income for the future, the Company has determined that it is more likely than not that the deferred tax assets 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, management has 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 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“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. The Company believes the amendments will not have a significant effect on its ongoing financial reporting as the Company has classified its debt prepayment and debt extinguishment costs in the Consolidated Statements of Cash Flows in accordance with the amendments. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . 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 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. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The Company is evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance replaces transaction-and industry-specific revenue recognition guidance under current U.S. GAAP with a principles-based approach for determining revenue recognition. The new guidance 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 customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The standard becomes effective for the Company beginning in the first quarter of 2018. Earlier application is permitted in 2017. In March and April 2016, the FASB issued new guidance intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. The guidance permits the use of either a retrospective or cumulative effect transition method. The Company has a limited sales history for Adzenys XR-ODT and no sales history for Cotempla XR-ODT and has determined that at this time it cannot reliably estimate historical returns of the product at the time of delivery to wholesalers, when title to the asset transfers and the customer is invoiced. The Company is assessing other market data obtained from its third party logistics companies to determine a reliable return rate. The Company expects the impact of this new standard will accelerate revenue based on satisfaction of the performance obligation upon delivery at a point in time when the customer obtains control of the asset. For purposes of providing comparable periods upon adoption, the Company is considering a retrospective transition method. From time to time, additional new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Net loss per share

Net loss per share	6 Months Ended
	Jun. 30, 2017
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 as of June 30, 2017 and 2016 were excluded from consideration in the computation of diluted net loss per share of common stock for the six months ended June 30, 2017 and 2016, respectively, because including them would have been anti-dilutive: June 30, 2017 2016 Senior Secured Convertible Notes — registered conversion shares not issued — Series C Redeemable Convertible Preferred Stock Warrants (as converted) Stock options outstanding RSU’s granted, not issued or outstanding —

Fair value of financial instrum

Fair value of financial instruments	6 Months Ended
	Jun. 30, 2017
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 condensed 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 June 30, 2017 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ $ $ — $ Short-term investments — — Earnout liability — — Derivative liability (see Note 7) — — $ $ $ $ Fair Value as of December 31, 2016 Level 1 Level 2 Level 3 Total (in thousands) Cash-and cash equivalents $ $ $ — $ Short-term investments — — Earnout liability — — $ $ $ $ The Company’s Level 1 assets included bank deposits, certificates of deposit and actively traded money market funds with a maturity of 90 days or less at June 30, 2017 and December 31, 2016. 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 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 June 30, 2017 as shown below: June 30, 2017 Amortized Unrealized Market Cost Gain / (Loss) Value (in thousands) Bank deposits and money market funds $ $ — $ Financial and corporate debt securities ) $ $ ) $ December 31, 2016 Amortized Unrealized Market Cost Gain / (Loss) Value (in thousands) Bank deposits and money market funds $ $ — $ Financial and corporate debt securities ) $ $ ) $ The Company’s Level 3 liability included the fair value of the earnout liability at June 30, 2017 and December 31, 2016 and the fair value of the Deerfield derivative liability at June 30, 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, 2016 and revised at June 30, 2017. These revisions were primarily for the updated revenue forecast for the Company’s generic Tussionex and the use of a directly calculated 42% revenue volatility 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 fair value of the derivative liability was determined after taking into consideration valuations using the Monte Carlo method based on assumptions at June 1, 2017 and June 30, 2017. The methodologies and significant inputs used in the determination of the fair value of the debt derivative liability were as follows: June 30, 2017 Initial Valuation (in thousands) (in thousands) Date of Valuation 6/30/2017 6/1/2017 Valuation Method Monte Carlo Monte Carlo Volatility (annual) 50% 50% Time period from valuation until maturity of debt (yrs.) 4.864 4.943 Cumulative probability of a change in control prepayment implied by model 28% 28% Cumulative probability of other accelerated prepayments implied by model 17% 17% Discount rate 15.98% 15.87% Fair value of liability at valuation date $2,086 $2,043 Significant changes to these assumptions would result in increases/decreases to the fair value of the earnout and debt derivative liabilities. 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 $ Change in fair value — Balance at March 31, 2017 $ Addition of Deerfield derivative liability Change in fair value ) Balance at June 30, 2017 $

Inventories

Inventories	6 Months Ended
	Jun. 30, 2017
Inventories
Inventories	Note 5. Inventories Inventories at the indicated dates consist of the following: June 30, December 31, 2017 2016 (in thousands) Raw materials $ $ Work in progress Finished goods Deferred cost of goods sold Inventory at cost Inventory reserve ) ) $ $ The deferred cost of goods sold relates to Adzenys XR-ODT and will be recognized when the associated revenue is recognized.

Sale-leaseback transaction

Sale-leaseback transaction	6 Months Ended
	Jun. 30, 2017
Sale-leaseback transaction
Sale-leaseback transaction	Note 6. Sale-leaseback transaction The Company accounts for the sale and leaseback transactions discussed below as capital leases. 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 7 for further details). 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 condensed consolidated statements of operations and condensed consolidated statements of cash flows. In 2012, the Company negotiated financing arrangements with a related party 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. In the aggregate, the Company sold groups of assets for $795,000 and $5.5 million, which resulted in a net gains of approximately $116,000 and $2.7 million, in the years ended December 31, 2014 and 2013, respectively, and executed capital leases for these assets with repurchase options at the end of each respective lease term. Gains on the transactions are recognized on a straight-line basis over each respective 42-month lease term. The two February 2013 and the November 2013 leases for a total of $3.5 million and $1.0 million of assets expired in July 2016 and April 2017, respectively, and the related $2.6 million and $161,000 gains, respectively, were fully amortized at that time and the $385,000 and $100,000 lease buy-out option liabilities, respectively, were fully satisfied. The July 2013 lease for a total of $1.0 million of assets expired in December 2016 and the related $0.1 million loss had been recorded at inception of the lease and the $100,000 lease buy-out option liability was fully satisfied. In February 2017, the Company entered into an agreement with a related party 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 will be for an initial term of 36 months and will have 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 three months ended June 30, 2017 and 2016, approximately $13,000 and $206,000, respectively, and for the six months ended June 30, 2017 and 2016 approximately $33,000 and $415,000, respectively, of the net gain on sale-leasebacks was recognized in other income on the condensed consolidated statements of operations.

Long-term debt

Long-term debt	6 Months Ended
	Jun. 30, 2017
Long-term debt
Long-term debt	Note 7. Long-term debt Long-term debt at the indicated dates consists of the following: June 30, December 31, 2017 2016 (in thousands) Deerfield senior secured credit facility, net of discount of $3,246 and $1,401, respectively $ $ Senior secured convertible notes due June 1, 2018, net of discount of $606 — Capital leases, maturing through June 2020 Less current portion ) Long-term debt $ $ Senior secured credit facility: On May 11, 2016, the Company entered into a $60.0 million senior secured credit facility (“Facility”) with Deerfield Private Design Fund III, L.P. (66 2/3% of loan) and Deerfield Special Situations Fund, L.P. (33 1/3% of Loan) (“Deerfield”), as lenders. On February 8, 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 8). 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, is now classified as a related party. Approximately $33 million of the $60 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 (“LSA”) with Hercules Technology III, L.P., (“Hercules”), the $1.1 million LSA end of term fee, an LSA prepayment charge of $243,000 and the $5.9 million of principal and $1.3 million of interest on the 10% related party amended and restated subordinated note (“Note”) that was issued by the Company to Essex Capital Corporation (“Essex”), which were otherwise payable in 2016 and 2017. Principal on the Facility is 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 (“Accrued Interest”) was to be paid in cash on June 1, 2017. Borrowings under the Facility are collateralized by substantially all of the Company’s assets, except the assets under capital lease, and the Company will 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 may be 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 Senior Secured Convertible Notes (the “Convertible Notes”) issued to Deerfield on the Amendment Date. Interest is 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 shall become due and payable upon written notice from Deerfield, and if either (a) the Company does not meet certain quarterly sales milestones specified in the Amendment or (b) the Company has not received and publicly announced FDA approval of the new drug applications on or before the applicable 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 may be converted 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 will be 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. In conjunction with the Amendment to the Facility and the related issuance of the Convertible Notes, the Company entered into a Registration Rights Agreement (“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 (“Conversion Shares”) (subject to certain adjustment for stock split, dividend or other distribution, recapitalization or similar events, “Registrable Securities”) (See Note 7) within 30 days from June 1, 2017, which is to become effective per the SEC no later than 75 days thereafter. Such filing was made on June 30, 2017 and 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 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 transferee or assignee 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 currently expects to satisfy all of its obligations under this Registration Agreement and does not expect to pay any damages pursuant to this agreement; therefore, no liability has been recorded (See Note 11). 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 $2.0 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% (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 in stockholders’ equity (deficit) 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. Borrowings under the Facility are collateralized by substantially all of the Company’s assets, except the Company’s assets under capital lease, and the Company will maintain cash on deposit of not less than $5.0 million. Pursuant to the Convertible Notes, if the Company shall fail to provide the number of conversion shares, then the Company shall pay damages to Deerfield or subsequent holder or any designee (“Holder”) for each day after the third business day after receipt of notice of conversion (“Share Delivery Date”) 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 June 30, 2017, the Company was in compliance with the covenants under the Facility and the Convertible Notes. 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 23.80% on the Convertible Notes, charged to interest expense and totaled $163,000 and $245,000 for the three and six months ended June 30, 2017, respectively, and $36,000 for both the three and six months ended June 30, 2016. 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. In June 2015, the fourth and final draw of $5.0 million, (“Tranche 4”), was issued prior to meeting the Tranche 4 milestones, which were met in July 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 $38,000 and $121,000 for the three and six months ended June 30, 2016, respectively. LSA debt discount amortization charged to interest expense totaled $33,000 and $104,000 for the three and six months ended June 30, 2016, respectively. 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 three and six months ended June 30, 2016. 10% subordinated related party 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 three and six months ended June 30, 2016, interest expense of $87,000 and $263,000, respectively, 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 to related party: As described in Notes 6 and 13, during the six months ended June 30, 2017 and the years ended December 31, 2014 and 2013, the Company entered into agreements with a related party 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. Interest expense on these leases was $22,000 and $42,000 for the three and six months ended June 30, 2017, respectively, and $61,000 and $139,000 for the three and six months ended June 30, 2016, respectively. Future principal payments of long-term debt including capital leases are as follows: Period ending: June 30, (in thousands) 2018 $ 2019 2020 2021 2022 Future principal payments $ Less unamortized debt discount related to long-term debt ) Less current portion of long-term debt ) Total long-term debt $

Common stock

Common stock	6 Months Ended
	Jun. 30, 2017
Common stock
Common stock	Note 8. Common stock On February 8, 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, is now classified as a related party. 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 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. 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 (see Note 14). 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 us on August 1, 2016, and declared effective by the Securities and Exchange Commission (“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 three-month period ended March 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 in February 2017 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. No sales have been made under the Sales Agreement during the three-month period ended June 30, 2017. As of July 26, 2017, $62.5 million of the Company’s common stock, preferred stock, debt securities, warrants and/or units remained available to be sold pursuant to the Shelf, including $36.2 million of the Company’s common stock which remained available to be sold under the Sales Agreement, subject to certain conditions specified therein.

Share-based Compensation

Share-based Compensation	6 Months Ended
	Jun. 30, 2017
Share-based Compensation
Share-based Compensation	Note 9. 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, 2017 and 2016, the Company added 803,049 shares and 800,797 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 June 30, 2017, 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, 2016, 7,500 shares related to forfeited 2009 Plan options and 18,906 shares related to the surrender of restricted stock were added to the shares available under the 2015 Plan. During the six months ended June 30, 2017, 971 shares related to forfeited 2009 Plan options were added to the shares available under the 2015 Plan. As of June 30, 2017, 685,119 shares of common stock remain available for grant under the 2015 Plan. Share-based Compensation Expense The Company has reported share-based compensation expense for the three and six months ended June 30, 2017 and 2016, respectively, in its condensed consolidated statements of operations as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Cost of goods sold $ $ $ $ Research and development Selling and marketing expenses General and administrative expenses $ $ $ $ The total share based compensation expense included in the table above is attributable to stock options, RSUs and restricted stock of $0.9 million, $21,000 and $23,000, for the three months ended June 30, 2017, respectively and $1.9 million, $21,000, $45,000, for the six months ended June 30, 2017, respectively. The total share based compensation expense included in the table above is attributable to stock options and restricted stock of $0.8 million and $23,000, for the three months ended June 30, 2016, respectively, and $1.4 million and $45,000, for the six months ended June 30, 2016, respectively. As of June 30, 2017, there was $7.8 million of compensation costs adjusted for any estimated forfeitures, related to non-vested stock options, RSUs, and restricted stock 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, 3.8 years for RSUs, and 0.3 years for restricted stock. Stock Options During the six months ended June 30, 2017, the Company’s board of directors granted 413,250 options. 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: Six Months Ended June 30, 2017 Estimated dividend yield % Expected stock price volatility % Weighted-average risk-free interest rate % Expected life of option in years Weighted-average option fair value at grant $ A summary of outstanding and exercisable options as of June 30, 2017 and December 31, 2016 and the activity from December 31, 2016 through June 30, 2017, is presented below: Weighted- Number of Average Intrinsic Options Exercise Price Value (in thousands) Outstanding at December 31, 2016 $ $ Exercisable at December 31, 2016 $ $ Granted $ Exercised — — Expired, forfeited or cancelled ) Outstanding at June 30, 2017 $ $ Exercisable at June 30, 2017 $ $ The weighted-average remaining contractual life of options outstanding and exercisable on June 30, 2017 was 8.3 and 7.5 years, respectively. The option exercise price for all options granted January 1, 2017 through June 30, 2017 was $7.00 per share. The weighted-average remaining contractual life of options outstanding and exercisable on December 31, 2016 was 8.5 and 7.6 years, respectively. The option exercise price for all options granted in the year ended December 31, 2016 ranged from $8.84 to $10.96 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. The Company had not issued any RSUs previously. A summary of outstanding RSUs as of June 30, 2017 and December 31, 2016 and the activity from December 31, 2016 through June 30, 2017, is presented below: Weighted- Number of Average RSUs Fair Value Outstanding at December 31, 2016 — $ — Granted $ Exercised — — Expired, forfeited or cancelled — — Outstanding at June 30, 2017 $ The weighted-average remaining contractual life of RSUs outstanding on June 30, 2017 was 9.8 years. Restricted stock: The Company did not issue any shares of restricted stock for the six months ended June 30, 2017, or for the year ended December 31, 2016. At June 30, 2017, there was $26,000 of unrecognized compensation cost related to restricted stock, which is expected to be recognized over 3.5 months. No vested restricted stock awards were settled during the six months ended June 30, 2017. The Company had 35,513 shares of unvested restricted stock with a weighted average fair value of $2.55 as of June 30, 2017 and December 31, 2016. For the six months ended June 30, 2017, there were no shares of restricted stock granted, vested or forfeited.

Treasury stock

Treasury stock	6 Months Ended
	Jun. 30, 2017
Treasury stock
Treasury stock	Note 10. 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 17, 2016, 9,709 shares 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 18,906 shares.

Commitments and contingencies

Commitments and contingencies	6 Months Ended
	Jun. 30, 2017
Commitments and contingencies
Commitments and contingencies	Note 11. Commitments and contingencies Registration Payment Arrangement— On June 1, in conjunction with the 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 7) within 30 days from June 1, 2017, which is to become effective per the SEC no later than 75 days thereafter. Such filing was made on June 30, 2017 and 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 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 transferee or assignee 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. In accordance with the Convertible Notes, if the Company shall fail to provide the number of conversion shares, then the Company shall pay damages to the Holders for each day after the third business day after the Share Delivery Date that such conversion is not timely effected. The damages, as stated in the Convertible Notes, are an amount equal to two percent of the product of (I) the number of Conversion Shares not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled and (II) the volume weighted average price of the Company’s common stock on the Share Delivery Date. Alternatively, in lieu of the foregoing damages, at the written election of the Holder, if, on or after the applicable date of delivery via facsimile or electronic mail of a notice of conversion , the Holder purchases shares of the Company’s common stock to deliver in satisfaction of a sale by such Holder of Conversion Shares that such Holder anticipated receiving from the Company (such purchased shares, “Buy-In Shares”), the Company shall be obligated to promptly pay to such Holder (in addition to all other available remedies that the Holder may otherwise have), 110% of the amount by which (A) such Holder’s total purchase price (including brokerage commissions, if any) for such Buy-In Shares exceeds (B) the net proceeds received by such Holder from the sale of the number of shares equal to up to the number of Conversion Shares such Holder was entitled to receive but had not received on the Share Delivery Date. If the Company fails to pay the additional damages within five (5) Business Days of the date incurred, then the Holder entitled to such payments shall have the right to require the Company, upon written notice, to immediately issue, in lieu of such cash damages, the number of Shares equal to the quotient of (X) the aggregate amount of the damages payments described herein divided by (Y) the Conversion Price specified by the Holder in the notice of conversion. Patent infringement litigation: On July 25, 2016, the Company received a paragraph IV certification from Actavis Laboratories FL, Inc. (“Actavis”) advising the Company that Actavis has filed an Abbreviated New Drug Application (“ANDA”) with the FDA for a generic version of Adzenys XR-ODT. The certification notice alleges 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. This case alleges 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. This lawsuit automatically stayed, or barred, the FDA from approving Actavis’s ANDA for 30 months or until a district court decision that is adverse to the asserted patents is rendered, whichever is earlier. The Company intends to vigorously enforce its intellectual property rights relating to Adzenys XR-ODT. The Company cannot predict the timing or outcome of these proceedings. Operating lease: The Company leases its Grand Prairie, Texas office space and manufacturing facility under an operating lease which expires in 2024. In addition, in December 2015, the Company executed a 60-month lease for office space in Blue Bell, Pennsylvania for its commercial operations, which commenced on May 1, 2016. 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 $1.1 million at June 30, 2017 and $1.2 million at December 31, 2016, 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 was $62,000 and $121,000 for the three and six months ended June 30, 2017, respectively, and $59,000 and $116,000 for the three and six months ended June 30, 2016, respectively. Rent expense, excluding the share of operating expenses, for the three and six months ended June 30, 2017 was $252,000 and $504,000, respectively, and $252,000 and $505,000 for the three and six months ended June 30, 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 $291,000 and $618,000 of bonus expense for the three and six months ended June 30, 2017 and $291,000 and $543,000 of bonus expense for the three and six months ended June 30, 2016, respectively.

License agreements

License agreements	6 Months Ended
	Jun. 30, 2017
License agreements
License agreements	Note 12. License agreements On July 23, 2014, the Company entered into a Settlement Agreement and an associated License Agreement (the “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 No. 204326 for an extended-release orally disintegrating amphetamine polistirex tablet (“Neos NDA”). In accordance with the terms of the 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 on February 26, 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 NT-0201 product candidate are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use or sale of NT-0201. On March 6, 2017, the Company entered into a 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 New Drug Application No. 204325 for NT-0201. Under the terms of the agreement, the Company must pay a lump sum, non-refundable license fee of an amount less than $1.0 million due no later than thirty days after receiving regulatory approval by the FDA of the Company’s NDA for NT-0201. The Company will also pay a single digit royalty on net sales of the NT-0201 during the life of the relevant Shire patents. Additionally, the license agreement contains a covenant from Shire not to file a patent infringement suit against the Company alleging that NT-0201 infringes the Shire patents. Upon payment, such license fees are capitalized as an intangible asset and are amortized 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.

Related party transactions

Related party transactions	6 Months Ended
	Jun. 30, 2017
Related party transactions
Related party transactions	Note 13. Related party transactions As described in Note 6, in February 2017, the Company entered into an agreement with a related party for the sale-leaseback of newly acquired assets of up to $5.0 million to finance the Company’s capital expenditures. Each lease under this master agreement will be for an initial term of 36 months and will have an option to purchase the equipment at the end of the respective lease that management considers to be bargain purchase option. Under this master 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. Also, in 2012, the Company negotiated financing arrangements with the same related party that provided for the sale-leaseback of up to $6.5 million of the Company’s property and equipment. From the 2012 financing arrangements, the Company has a lease obligation remaining of $121,000 and $445,000 at June 30, 2017 and December 31, 2016, respectively. The total lease obligation under all related party financing arrangements was $3,289,000 and $445,000 at June 30, 2017 and December 31, 2016, respectively. On February 8, 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 8). 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 8). 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 now 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 be 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. (See Note 7).

Subsequent events

Subsequent events	6 Months Ended
	Jun. 30, 2017
Subsequent events
Subsequent events	Note 14. Subsequent events The underwriters exercised their option to purchase 720,000 shares of our common stock on July 26, 2017. The total net proceeds to the Company from the June 30, 2017 offering including net proceeds from the exercise of the underwriter’s option shares, after deducting offering expenses payable by the Company, were approximately $34.3 million.

Summary of significant accoun22

Summary of significant accounting policies (Policies)	6 Months Ended
	Jun. 30, 2017
Summary of significant accounting policies
Basis of presentation	Basis of presentation: The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes necessary for a complete presentation of financial position, results of operations, and cash flows. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of results of operations for and financial condition as of the end of the interim period have been included. Results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results for the year ending December 31, 2017 or any period thereafter. The audited consolidated financial statements as of and for the year ended December 31, 2016 included information and footnotes necessary for such presentation and were included in the Neos Therapeutics, Inc. Annual Report on Form 10-K and filed with the SEC on March 15, 2017. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016.
Principles of consolidation	Principles of consolidation: At June 30, 2017 and December 31, 2016 and for the three and six months ended June 30, 2017 and 2016, the condensed 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.
Reclassifications	Reclassifications: Certain reclassifications have been made to the prior year’s condensed consolidated financial statements to conform to the current period’s presentation.
Liquidity	Liquidity: During 2016 and the six months ended June 30, 2017, 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 and Cotempla XR-ODT, or, if approved, its ADHD product candidate. 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-Q.
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 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 any tax effects reported, as accumulated other comprehensive income or loss, which is a separate component of stockholders’ equity. Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are included in other income (expense) 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.
Inventories	Inventories: Inventories are stated at the lower of cost (first in, first out) or market in 2016 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, finished goods and deferred cost of goods sold. The cost of sales associated with the deferred product revenues are recorded as deferred costs of goods sold that are released from inventory into cost of goods sold as the deferred revenue is recognized into revenue. 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 are being capitalized into inventory and manufacturing costs for the production of Cotempla XR-ODT incurred after June 30, 2017, following the FDA approval date of June 19, 2017, will be capitalized into inventory.
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 the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument 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.
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 (“Tussionex ANDA”) and patents, are recorded at cost and amortized over the estimated lives of the assets, which primarily range from 10 to 20 years.
Revenue recognition	Revenue recognition: Revenue is generated from product sales, recorded on a net sales basis. Product revenue is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) price to the buyer is fixed and determinable; and (4) collectability is reasonably assured. Revenue from sales transactions where the buyer has the right to return the product is recognized at the time of sale only if (1) the price to the buyer is substantially fixed or determinable at the date of sale, (2) the buyer has paid for the product, or the buyer is obligated to pay for the product and the obligation is not contingent on resale of the product, (3) the buyer’s obligation to pay would not be changed in the event of theft or physical destruction or damage of the product, (4) the buyer acquiring the product for resale has economic substance apart from that provided by the Company, (5) the Company does not have significant obligations for future performance to directly bring about resale of the product by the buyer, and (6) the amount of future returns can be reasonably estimated. The Company sells its commercial products 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. The Company has a limited sales history for Adzenys XR-ODT and no sales history for Cotempla XR-ODT, and has determined that at this time it cannot reliably estimate expected returns of the product at the time of shipment to wholesalers. Accordingly, the Company defers or will defer recognition of revenue on product shipments of Adzenys XR-ODT and Cotempla XR-ODT, respectively, until the right of return no longer exists, which occurs at the earlier of the time Adzenys XR-ODT and Cotempla XR-ODT units are dispensed through patient prescriptions or expiration of the right of return. The Company calculates and expects to calculate patient prescriptions dispensed of Adzenys XR-ODT and Cotempla XR-ODT, respectively, using an analysis of third-party information.
Net product sales	Net product sales Net product sales for the Company’s products represent total gross product sales less gross to net sales adjustments. Gross to net sales adjustments include savings offers, prompt payment discounts, wholesaler fees and estimated allowances for product returns, rebates and chargebacks to be incurred on the selling price of the respective product sales. Wholesale distribution fees based on definitive contractual agreements are incurred on the management of these products by wholesalers and are recorded within net sales for generic Tussionex and as deferred wholesale distribution fees in other current assets for Adzenys XR-ODT and/or Cotempla XR-ODT. The deferred wholesale distribution fees for Adzenys XR-ODT are and Cotempla XR-ODT will be later recorded within net product sales when revenue associated with those fees is recognized. The Company estimates and records gross to net sales adjustments for product returns, rebates and chargebacks based upon analysis of third-party information, including information obtained from the Company’s third party logistics providers (“3PLs”), with respect to its inventory levels and sell-through to the wholesalers’ customers, for savings offers from data available from third parties regarding savings offers processed for prescriptions written for the Company’s products, and, for generic Tussionex, experience reported by the Company’s previous commercialization partners. Due to estimates and assumptions inherent in determining the amount of returns, rebates and chargebacks, the actual amount of returns and 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 and all other accruals are recorded in the same period that the related revenue is recognized.
Savings offers	Savings offers The Company offers or expects to offer savings programs for Adzenys XR-ODT and Cotempla XR-ODT, respectively, to patients covered under commercial payor plans in which the cost of a prescription to such patients is discounted. The Company records the amount redeemed based on information from third-party providers and recognizes the discount as a reduction of revenue in the same period the related revenue is recognized.
Product returns	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. Generic Tussionex product returns are estimated based upon data available from sales of the Company’s product by its former commercialization partner and from actual experience as reported by retailers. Historical trend of returns will be continually monitored and may result in future adjustments to such estimates.
Rebates	Rebates The Company’s products 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. Estimated rebates payable under such programs are recorded as a reduction of revenue at the time revenues are recorded. Calculations related to these rebate accruals are estimated based on information from third-party providers. Historical trend of such rebates will be continually monitored and may result in future adjustments to such estimates.
Wholesaler chargebacks	Wholesaler chargebacks The Company’s 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. Chargebacks are accounted for by establishing an accrual in an amount equal to the Company’s estimate of chargeback claims at the time of product sale based on information provided by third parties. Due to estimates and assumptions inherent in determining the amount of chargebacks, the actual amount of claims for chargebacks may be different from estimates, which may result in adjustments to such reserves.
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.
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 $10,000 and $248,000 during the three and six months ended June 30, 2017, respectively, and advertising costs of $120,000 during the six months ended June 30, 2016. There were no advertising costs during the three months ended June 30, 2016.
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. Due to the previous lack of a public market for the trading of its common stock and a lack of company-specific historical and implied volatility data, the Company had, prior to the IPO, historically utilized third party valuation analyses to determine the fair value. 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 new 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. The Company has reclassified all prior quarters’ amounts out of general and administrative expense to the appropriate income statement line in accordance with this approach.
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 June 30, 2017 and December 31, 2016, 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. At June 30, 2017 and December 31, 2016, based on the level of historical operating results and projections for the taxable income for the future, the Company has determined that it is more likely than not that the deferred tax assets 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, management has 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 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“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. The Company believes the amendments will not have a significant effect on its ongoing financial reporting as the Company has classified its debt prepayment and debt extinguishment costs in the Consolidated Statements of Cash Flows in accordance with the amendments. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . 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 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. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The Company is evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance replaces transaction-and industry-specific revenue recognition guidance under current U.S. GAAP with a principles-based approach for determining revenue recognition. The new guidance 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 customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The standard becomes effective for the Company beginning in the first quarter of 2018. Earlier application is permitted in 2017. In March and April 2016, the FASB issued new guidance intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. The guidance permits the use of either a retrospective or cumulative effect transition method. The Company has a limited sales history for Adzenys XR-ODT and no sales history for Cotempla XR-ODT and has determined that at this time it cannot reliably estimate historical returns of the product at the time of delivery to wholesalers, when title to the asset transfers and the customer is invoiced. The Company is assessing other market data obtained from its third party logistics companies to determine a reliable return rate. The Company expects the impact of this new standard will accelerate revenue based on satisfaction of the performance obligation upon delivery at a point in time when the customer obtains control of the asset. For purposes of providing comparable periods upon adoption, the Company is considering a retrospective transition method. From time to time, additional new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Net loss per share (Tables)

Net loss per share (Tables)	6 Months Ended
	Jun. 30, 2017
Net loss per share
Schedule of potentially dilutive securities excluded in the computation of diluted net loss per share	June 30, 2017 2016 Senior Secured Convertible Notes — registered conversion shares not issued — Series C Redeemable Convertible Preferred Stock Warrants (as converted) Stock options outstanding RSU’s granted, not issued or outstanding —

Fair value of financial instr24

Fair value of financial instruments (Tables)	6 Months Ended
	Jun. 30, 2017
Fair value of financial instruments
Schedule of hierarchy for financial instruments measured at fair value on a recurring basis	Fair Value as of June 30, 2017 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ $ $ — $ Short-term investments — — Earnout liability — — Derivative liability (see Note 7) — — $ $ $ $ Fair Value as of December 31, 2016 Level 1 Level 2 Level 3 Total (in thousands) Cash-and cash equivalents $ $ $ — $ Short-term investments — — Earnout liability — — $ $ $ $
Schedule of cash and cash equivalents and short-term investments	June 30, 2017 Amortized Unrealized Market Cost Gain / (Loss) Value (in thousands) Bank deposits and money market funds $ $ — $ Financial and corporate debt securities ) $ $ ) $ December 31, 2016 Amortized Unrealized Market Cost Gain / (Loss) Value (in thousands) Bank deposits and money market funds $ $ — $ Financial and corporate debt securities ) $ $ ) $
Schedule of changes in Level 3 liabilities measured at fair value	Level 3 Liabilities (in thousands) Balance at December 31, 2016 $ Change in fair value — Balance at March 31, 2017 $ Addition of Deerfield derivative liability Change in fair value ) Balance at June 30, 2017 $
Derivative liability
Fair value of financial instruments
Methodologies and significant inputs used in determination of fair value	June 30, 2017 Initial Valuation (in thousands) (in thousands) Date of Valuation 6/30/2017 6/1/2017 Valuation Method Monte Carlo Monte Carlo Volatility (annual) 50% 50% Time period from valuation until maturity of debt (yrs.) 4.864 4.943 Cumulative probability of a change in control prepayment implied by model 28% 28% Cumulative probability of other accelerated prepayments implied by model 17% 17% Discount rate 15.98% 15.87% Fair value of liability at valuation date $2,086 $2,043

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Jun. 30, 2017
Inventories
Schedule of inventories	June 30, December 31, 2017 2016 (in thousands) Raw materials $ $ Work in progress Finished goods Deferred cost of goods sold Inventory at cost Inventory reserve ) ) $ $

Long-term debt (Tables)

Long-term debt (Tables)	6 Months Ended
	Jun. 30, 2017
Long-term debt
Schedule of long-term debt	June 30, December 31, 2017 2016 (in thousands) Deerfield senior secured credit facility, net of discount of $3,246 and $1,401, respectively $ $ Senior secured convertible notes due June 1, 2018, net of discount of $606 — Capital leases, maturing through June 2020 Less current portion ) Long-term debt $ $
Schedule of future principal payments of long-term debt, including capital leases	Period ending: June 30, (in thousands) 2018 $ 2019 2020 2021 2022 Future principal payments $ Less unamortized debt discount related to long-term debt ) Less current portion of long-term debt ) Total long-term debt $

Share-based Compensation (Table

Share-based Compensation (Tables)	6 Months Ended
	Jun. 30, 2017
Share-based Compensation
Schedule of share-based compensation expense	Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 (in thousands) Cost of goods sold $ $ $ $ Research and development Selling and marketing expenses General and administrative expenses $ $ $ $
Schedule of weighted-average key assumptions used in determining fair value of options granted	Six Months Ended June 30, 2017 Estimated dividend yield % Expected stock price volatility % Weighted-average risk-free interest rate % Expected life of option in years Weighted-average option fair value at grant $
Summary of outstanding and exercisable options	Weighted- Number of Average Intrinsic Options Exercise Price Value (in thousands) Outstanding at December 31, 2016 $ $ Exercisable at December 31, 2016 $ $ Granted $ Exercised — — Expired, forfeited or cancelled ) Outstanding at June 30, 2017 $ $ Exercisable at June 30, 2017 $ $
Summary of outstanding RSUs	Weighted- Number of Average RSUs Fair Value Outstanding at December 31, 2016 — $ — Granted $ Exercised — — Expired, forfeited or cancelled — — Outstanding at June 30, 2017 $

Organization and nature of op28

Organization and nature of operations (Details)	6 Months Ended
	Jun. 30, 2017product
Organization and nature of operations
Number of approved product	2
Number of proprietary product candidates	1

Summary of significant accoun29

Summary of significant accounting policies (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2017USD ($)subsidiary	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)subsidiary	Jun. 30, 2016USD ($)	Dec. 31, 2016USD ($)subsidiary
Product returns
Return time period for expired product prior to expiry date			6 months
Return time period for expired product after expiry date			12 months
Advertising costs
Advertising costs	$ 10,000	$ 0	$ 248,000	$ 120,000
Income taxes
Deferred tax assets, net of valuation allowance	$ 0		$ 0		$ 0
Wholly-owned subsidiaries
Significant accounting policies
Number of wholly-owned subsidiaries | subsidiary	4		4		4
Minimum
Intangible assets
Useful life			10 years
Maximum
Intangible assets
Useful life			20 years

Net loss per share (Details)

Net loss per share (Details) - shares	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Senior Secured Convertible Notes
Net loss per share
Potentially dilutive shares excluded in the computation of diluted net loss per share	940,924
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
Employee stock options
Net loss per share
Potentially dilutive shares excluded in the computation of diluted net loss per share	2,357,123	1,909,460
RSU's
Net loss per share
Potentially dilutive shares excluded in the computation of diluted net loss per share	78,750

Fair value of financial instr31

Fair value of financial instruments - Hierarchy (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Hierarchy for financial instruments measured at fair value on a recurring basis
Short-term investments	$ 21,262	$ 15,430
Derivative liability	2,086
Recurring basis | Fair Value
Hierarchy for financial instruments measured at fair value on a recurring basis
Cash and cash equivalents	57,362	24,352
Short-term investments	21,262	15,430
Earnout liability	177	232
Derivative liability	2,086
Financial instruments measured at fair value on a recurring basis	80,887	40,014
Recurring basis | Fair Value | Level 1
Hierarchy for financial instruments measured at fair value on a recurring basis
Cash and cash equivalents	52,664	17,917
Financial instruments measured at fair value on a recurring basis	52,664	17,917
Recurring basis | Fair Value | Level 2
Hierarchy for financial instruments measured at fair value on a recurring basis
Cash and cash equivalents	4,698	6,435
Short-term investments	21,262	15,430
Financial instruments measured at fair value on a recurring basis	25,960	21,865
Recurring basis | Fair Value | Level 3
Hierarchy for financial instruments measured at fair value on a recurring basis
Earnout liability	177	232
Derivative liability	2,086
Financial instruments measured at fair value on a recurring basis	$ 2,263	$ 232

Fair value of financial instr32

Fair value of financial instruments - Cash and cash equivalents and short-term investments (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Cash and cash equivalents and short-term investments
Amortized cost of cash and cash equivalents and short-term investments	$ 78,630	$ 39,783
Unrealized gain / (loss) of cash and cash equivalents and short-term investments	(6)	(1)
Market value of cash and cash equivalents and short-term investments	78,624	39,782
Bank deposits and money market funds
Cash and cash equivalents and short-term investments
Amortized cost of cash and cash equivalents and short-term investments	52,664	17,917
Market value of cash and cash equivalents and short-term investments	52,664	17,917
Financial and corporate debt securities
Cash and cash equivalents and short-term investments
Amortized cost of cash and cash equivalents and short-term investments	25,966	21,866
Unrealized gain / (loss) of cash and cash equivalents and short-term investments	(6)	(1)
Market value of cash and cash equivalents and short-term investments	$ 25,960	$ 21,865

Fair value of financial instr33

Fair value of financial instruments - Earnout liability and Derivative liability (Details) - Recurring basis - Level 3 - Monte Carlo - USD ($) $ in Thousands	Jun. 01, 2017	Jun. 30, 2017	Jun. 30, 2017
Earnout liability
Methodologies and significant inputs used in the determination of the fair value
Revenue volatility			42.00%
Equity volatility			50.00%
Derivative liability
Methodologies and significant inputs used in the determination of the fair value
Volatility (as a percent)	50.00%	50.00%
Time period from valuation until end of earnout	4 years 11 months 10 days	4 years 10 months 11 days
Cumulative probability of a change in control prepayment implied by model	28.00%	28.00%
Cumulative probability of other accelerated prepayments implied by model	17.00%	17.00%
Discount rate	15.87%	15.98%
Fair value of liability at valuation date	$ 2,043	$ 2,086	$ 2,086

Fair value of financial instr34

Fair value of financial instruments - Changes in Level 3 (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2017	Mar. 31, 2017
Changes in Level 3 liabilities measured at fair value
Balance at beginning of period	$ 232	$ 232
Addition of Deerfield derivative liability	2,043
Changes in fair value	(12)
Balance at end of period	$ 2,263	$ 232

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Inventories
Raw materials	$ 2,086	$ 1,672
Work in progress	1,507	2,546
Finished goods	2,187	2,060
Deferred cost of goods sold	558	225
Inventory at cost	6,338	6,503
Inventory reserve	(258)	(736)
Inventories net	$ 6,080	$ 5,767

Sale-leaseback transaction (Det

Sale-leaseback transaction (Details) - Related Party Sale-leaseback Transactions

1 Months Ended

3 Months Ended

6 Months Ended

12 Months Ended

14 Months Ended

Jun. 30, 2017USD ($)

Feb. 28, 2017USD ($)

Dec. 31, 2016USD ($)

Mar. 31, 2014USD ($)

Jun. 30, 2017USD ($)

Jun. 30, 2016USD ($)

Jun. 30, 2017USD ($)

Jun. 30, 2016USD ($)

Dec. 31, 2014USD ($)

Dec. 31, 2013USD ($)

Mar. 31, 2014tranche

Apr. 30, 2017USD ($)

Jul. 31, 2016USD ($)

Dec. 31, 2012USD ($)

Other income, net

Sale-leaseback transaction

Net gain recognized in period on sale leaseback transaction

$ 13,000

$ 206,000

$ 33,000

$ 415,000

Transaction One

Sale-leaseback transaction

Maximum amount authorized under sale and leaseback transaction

$ 6,500,000

Number of tranches | tranche

5

Proceeds from sale of assets

$ 795,000

$ 5,500,000

Deferred gain

$ 116,000

$ 2,700,000

Lease term

42 months

Imputed interest rate on lease (as a percent)

14.50%

14.50%

Leases 1 & 2 February 2013

Sale-leaseback transaction

Original value of assets for which lease expired

$ 3,500,000

Cumulative gain recognized

2,600,000

Original value of lease buy-out option liability

$ 385,000

Lease 3 July 2013

Sale-leaseback transaction

Original value of assets for which lease expired

$ 1,000,000

Loss recognized

100,000

Original value of lease buy-out option liability

$ 100,000

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

Transaction Two

Sale-leaseback transaction

Maximum amount authorized under sale and leaseback transaction

$ 5,000,000

Proceeds from sale of assets

$ 2,742,000

$ 481,000

Lease term

36 months

Imputed interest rate on lease (as a percent)

14.90%

14.30%

Amortization period

36 months

36 months

Net gain on sale leaseback

$ 14,000

Net gain recognized in period on sale leaseback transaction

$ 0

Long-term debt - Summary (Detai

Long-term debt - Summary (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Long-term debt
Long-term debt and capital lease obligations, including current maturities	$ 66,023	$ 63,520
Less current portion	(7,022)	(4,921)
Total long-term debt	59,001	58,599
Debt instrument, unamortized discount
Unamortized discount on debt	3,852
Senior Secured Convertible Notes Due 2018
Long-term debt
Long-term debt and capital lease obligations, including current maturities	5,980
Debt instrument, unamortized discount
Unamortized discount on debt	606
Debt issued to entities affiliated with Deerfield | Senior Secured Credit Facility
Long-term debt
Long-term debt and capital lease obligations, including current maturities	56,754	63,075
Debt instrument, unamortized discount
Unamortized discount on debt	3,246	1,401
Capital leases
Long-term debt
Long-term debt and capital lease obligations, including current maturities	$ 3,289	$ 445

Long-term debt - Senior Secured

Long-term debt - Senior Secured Credit facility (Details)	Jun. 30, 2017USD ($)$ / sharesshares	Jun. 01, 2017USD ($)item$ / shares	Feb. 17, 2017shares	Feb. 08, 2017$ / sharesshares	May 11, 2016USD ($)iteminstallment	Jun. 30, 2017USD ($)$ / shares	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)$ / sharesshares	Jun. 30, 2016USD ($)	Dec. 31, 2016USD ($)
Long-term debt
Proceeds from debt									$ 58,420,000
payment of senior debt and fee									26,063,000
Debt discount amortization								$ 245,000	261,000
Derivative liability	$ 2,086,000					$ 2,086,000		2,086,000
Unamortized discount on debt	$ 3,852,000					$ 3,852,000		3,852,000
Beneficial conversion feature on convertible notes								$ 613,000
Senior Notes and Subordinated Debt
Long-term debt
Repayments of debt					$ 33,000,000
Senior debt (Hercules LSA)
Long-term debt
payment of senior debt and fee					24,300,000
Interest paid					100,000
Payments of end of term fee					1,100,000
Prepayment charges					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)		23.80%						23.80%
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 percent of stock price		95.00%
Number of trading days used to determine conversion stock price		3 days
Unamortized discount on debt		$ 600,000
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%
Senior Secured Convertible Note | Registration Agreement
Long-term debt
Liability recorded for expected unmet agreement obligations		$ 0
Common Stock
Long-term debt
Issuance of common stock, net of issuance costs (in shares) | shares								11,299,639
Underwritten Public Offering | Common Stock
Long-term debt
Issuance of common stock, net of issuance costs (in shares) | shares	4,800,000			5,750,000
Public offering price (in dollars per share) | $ / shares	$ 6.25			$ 5		$ 6.25		$ 6.25
Over-allotment option | Common Stock
Long-term debt
Issuance of common stock, net of issuance costs (in shares) | shares			750,000
Minimum | Senior Secured Convertible Note
Long-term debt
Prepayment fee of debt (in percentage)		12.75%
Conversion price | $ / shares		$ 7
Maximum | Senior Secured Convertible Note
Long-term debt
Prepayment fee of debt (in percentage)		2.00%
Senior Secured Credit Facility | Registration Agreement
Long-term debt
Maximum Reimbursable Legal Fees		$ 25,000
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
Date of first required principal payment					May 1, 2019
Number of equal annual installments | installment					4
Interest rate (as a percent)					12.95%
Number of first interest payments for which the reporting entity has the option to defer | item					4
Interest accrued		6,600,000
Debt yield enhancement fee					$ 1,350,000
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%			15.03%
Debt discount amortization						$ 163,000	$ 36,000	$ 245,000	36,000
Unamortized discount on debt	$ 3,246,000					$ 3,246,000		$ 3,246,000		$ 1,401,000
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 Fund 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		$ 2,000,000
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
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
Interest paid					$ 1,300,000
Interest rate (as a percent)					10.00%
Interest accrued							$ 87,000		$ 263,000

Long-term debt - Senior Debt (D

Long-term debt - Senior Debt (Details)	May 11, 2016USD ($)	Jul. 28, 2015$ / sharesshares	Jun. 10, 2015USD ($)	Mar. 13, 2015USD ($)	Sep. 25, 2014USD ($)$ / sharesshares	Mar. 28, 2014USD ($)item$ / sharesshares	May 31, 2016	Jun. 30, 2016USD ($)	Jun. 30, 2016USD ($)
Long-term debt
Loss on debt extinguishment								$ (1,187,000)	$ (1,187,000)
Senior debt (Hercules LSA)
Long-term debt
Maximum borrowing capacity per agreement						$ 25,000,000
Number of draws available per debt agreement | item						4
Interest paid	$ 100,000
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								38,000	121,000
Fair value adjustment of warrants (reduction) increase								$ 33,000	$ 104,000
Loss on debt extinguishment	$ 1,187,000
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) - 10% subordinated note payable - Essex Capital Corporation, as Investor - USD ($)	May 11, 2016	Jun. 30, 2016	Jun. 30, 2016
Long-term debt
Interest rate (as a percent)	10.00%
Face amount of debt issued	$ 5,900,000
Repayments of debt	5,900,000
Interest paid	$ 1,300,000
Interest accrued		$ 87,000	$ 263,000

Long-term debt - Capital Lease

Long-term debt - Capital Lease Obligations to Related Party (Details) - USD ($)	1 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Feb. 28, 2017	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2014	Dec. 31, 2013
Related Party Sale-leaseback Transactions | Transaction One
Long-term debt
Imputed interest rate on lease (as a percent)							14.50%	14.50%
Related Party Sale-leaseback Transactions | Transaction Two
Long-term debt
Imputed interest rate on lease (as a percent)	14.90%	14.30%
Capital leases
Long-term debt
Interest expense			$ 22,000	$ 61,000	$ 42,000	$ 139,000
Capital leases | Related Party 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 | Related Party Sale-leaseback Transactions | Transaction Two
Long-term debt
Newly acquired assets under sale-leaseback transaction	$ 3,200,000		$ 3,200,000		$ 3,200,000

Long-term debt - Future Princip

Long-term debt - Future Principal Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Future principal payments of long-term debt, including capital leases
2,018	$ 7,628
2,019	15,965
2,020	16,282
2,021	15,000
2,022	15,000
Future principal payments	69,875
Less unamortized debt discount related to long-term debt	(3,852)
Less current portion of long-term debt	(7,022)	$ (4,921)
Total long-term debt	$ 59,001	$ 58,599

Common stock - Public Offerings

Common stock - Public Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 30, 2017	Feb. 17, 2017	Feb. 17, 2017	Feb. 08, 2017	Jun. 30, 2017	Jul. 26, 2017
Public offerings and related transactions
Net proceeds from issuance of stock					$ 60,087
Common Stock
Public offerings and related transactions
Issuance of common stock, net of issuance costs (in shares)					11,299,639
Common Stock | Underwritten Public Offering
Public offerings and related transactions
Issuance of common stock, net of issuance costs (in shares)	4,800,000			5,750,000
Public offering price (in dollars per share)	$ 6.25			$ 5	$ 6.25
Share offered to underwriters under option granted (in shares)	720,000				720,000
Term of option offered to underwriters	30 days				30 days
Gross proceeds from issuance of stock	$ 30,000				$ 30,000
Stock issuance costs	$ 200				$ 200
Net proceeds from issuance of stock		$ 26,700				$ 34,300
Common Stock | Over-allotment option
Public offerings and related transactions
Issuance of common stock, net of issuance costs (in shares)			750,000

Common stock - Shelf Registrati

Common stock - Shelf Registration Statement and offer under sales agreement (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2017	Jul. 26, 2017	Aug. 01, 2016
Shelf registration statement
Net proceeds from issuance of stock			$ 60,087
Value of Securities which remain available to be sold pursuant to the Shelf				$ 62,500
Maximum
Shelf registration statement
Authorized amount to raise capital as per shelf registration statement					$ 125,000
Sales Agreement | Maximum | Cowen and Company LLC
Shelf registration statement
Authorized amount for issuance of common stock as per shelf registration statement					$ 40,000
Common Stock
Shelf registration statement
Shares issued			11,299,639
Common Stock | Sales Agreement
Shelf registration statement
Value of common stock which remains available to be sold under the Sales Agreement				$ 36,200
Sales Agreement | Common Stock
Shelf registration statement
Shares issued	0	749,639
Sales Agreement offering price (in dollars per share)		$ 5.01
Gross proceeds from issuance of stock		$ 3,700
Net proceeds from issuance of stock		3,600
Stock issuance costs		$ 100

Share-based Compensation - Plan

Share-based Compensation - Plan Information (Details)	Jan. 01, 2017shares	Jan. 01, 2016shares	Jun. 30, 2017shares	Dec. 31, 2016shares	Jul. 31, 2015shares	Nov. 30, 2009shares
Employee stock options | 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
Neos Therapeutics, Inc. 2009 Equity Plan
Stock options, restricted stock and performance stock options
Shares reserved for issuance under the plan						1,375,037
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	803,049	800,797
Stock option exercise price, minimum expressed as percentage of fair market value on grant date			100
Shares related to forfeited prior plan options transferred into shares available under current plan			971	7,500
Share of restricted stock transferred into shares available under current plan				18,906
Shares available for grant			685,119
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

Share-based Compensation - Expe

Share-based Compensation - Expense Allocation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation
Total compensation cost	$ 948	$ 807	$ 1,933	$ 1,430
Cost of goods sold
Share-based Compensation
Total compensation cost	87	73	171	142
Research and development
Share-based Compensation
Total compensation cost	105	83	184	134
Selling and marketing expenses
Share-based Compensation
Total compensation cost	217	182	413	322
General and administrative expenses
Share-based Compensation
Total compensation cost	$ 539	$ 469	$ 1,165	$ 832

Share-based Compensation - Ex47

Share-based Compensation - Expense Other (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation
Total compensation cost	$ 948,000	$ 807,000	$ 1,933,000	$ 1,430,000
Unrecognized compensation cost	7,800,000		7,800,000
Stock options
Share-based Compensation
Total compensation cost	900,000	800,000	$ 1,900,000	1,400,000
Compensation cost not yet recognized, period for recognition			2 years 6 months
RSU's
Share-based Compensation
Total compensation cost	21,000		$ 21,000
Compensation cost not yet recognized, period for recognition			3 years 9 months 18 days
Restricted stock
Share-based Compensation
Total compensation cost	23,000	$ 23,000	$ 45,000	$ 45,000
Unrecognized compensation cost	$ 26,000		$ 26,000
Compensation cost not yet recognized, period for recognition			3 months 15 days

Share-based Compensation - Assu

Share-based Compensation - Assumptions Used in Determining Fair Value of Options (Details) - Stock options	6 Months Ended
	Jun. 30, 2017$ / shares
Weighted average key assumptions used in determining the fair value of options granted
Estimated dividend yield (as a percent)	0.00%
Expected stock price volatility (as a percent)	60.00%
Weighted-average risk-free interest rate (as a percent)	2.01%
Expected life of option in years	6 years 3 months
Weighted-average option fair value at grant (in dollars per share)	$ 4.02

Share-based Compensation - Opti

Share-based Compensation - Options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Summary of number of outstanding and exercisable options and the activity
Outstanding at beginning of year (in shares)	2,107,344
Exercisable at beginning of year (in shares)	595,424
Granted (in shares)	413,250
Expired, forfeited or cancelled (in shares)	(163,471)
Outstanding at end of period (in shares)	2,357,123	2,107,344
Exercisable at end of period (in shares)	893,869	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)	$ 12.17
Exercisable at beginning of year (in dollars per share)	9.72
Granted (in dollars per share)	7
Expired, forfeited or cancelled (in dollars per share)	10.53
Outstanding at end of period (in dollars per share)	11.38	$ 12.17
Exercisable at end of period (in dollars per share)	$ 9.87	$ 9.72
Summary of intrinsic value of outstanding and exercisable options and other information
Intrinsic value, outstanding options	$ 1,708	$ 1,128
Intrinsic value, exercisable options	$ 1,319	$ 881
Weighted average remaining contractual life of options outstanding	8 years 3 months 18 days	8 years 6 months
Weighted-average remaining contractual life of options exercisable	7 years 6 months	7 years 7 months 6 days
Minimum
Summary of weighted-average exercise price of outstanding and exercisable options and the activity
Granted (in dollars per share)		$ 8.84
Maximum
Summary of weighted-average exercise price of outstanding and exercisable options and the activity
Granted (in dollars per share)		$ 10.96

Share-based Compensation - RSUs

Share-based Compensation - RSUs (Details) - RSU's - $ / shares	May 01, 2017	Jun. 30, 2017
Summary of outstanding equity instruments and activity
Granted (in equity instruments)	78,750	78,750
Outstanding at end of period (in equity instruments)		78,750
Summary of weighted-average fair value
Granted (in dollars per equity instrument)		$ 7
Outstanding at end of period (in dollars per equity instrument)		$ 7
Summary of intrinsic value
Weighted average remaining contractual life of equity instruments outstanding		9 years 9 months 18 days
Four equal tranches
Stock options, restricted stock and performance stock options
Vesting period	4 years

Share-based Compensation - Rest

Share-based Compensation - Restricted Stock (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Stock options, restricted stock and performance stock options
Unrecognized compensation cost	$ 7,800,000
Restricted stock
Stock options, restricted stock and performance stock options
Shares issued	0	0
Unrecognized compensation cost	$ 26,000
Compensation cost not yet recognized, period for recognition	3 months 15 days
Vested restricted stock awards settled (in shares)	0
Unvested restricted stock outstanding (in shares)	35,513	35,513
Weighted average fair value of nonvested restricted stock (in dollars per share)	$ 2.55	$ 2.55
Shares granted	0
Shares vested	0
Shares forfeited	0

Treasury stock (Details)

Treasury stock (Details) - shares	Oct. 17, 2016	Jun. 30, 2017	Dec. 31, 2016
Treasury stock
Shares of treasury stock held		18,906	18,906
Restricted stock
Treasury stock
Shares surrendered by holder to cover taxes associated with vesting	9,709

Commitments and contingencies -

Commitments and contingencies - Registration Payment Arrangement (Details) - Senior Secured Convertible Notes - Registration Agreement	Jun. 01, 2017USD ($)item$ / shares
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
Liability recorded for expected unmet agreement obligations	$ 0
Damages payable as percentage of defined calculation (as a percent)	2
Obligation payable to holder as percentage of difference between purchase and sale of Buy-In Shares, as defined (as a percent)	110
Number of business days available for payment of additional damages	5 days
Minimum
Registration Payment Arrangement
Conversion price | $ / shares	$ 7
Maximum
Registration Payment Arrangement
Number of shares which may be issued for conversion of convertible notes | item	940,924

Commitments and contingencies54

Commitments and contingencies - Patent Infringement Litigation (Details) - Actavis	Jul. 25, 2016patent
Patent infringement litigation
Number Of Patents that Actavis Laboratories, Inc. alleges Will Not Be Infringed Upon	4
Number Of Patents that Actavis Laboratories, Inc. alleges Will Not Be Infringed Upon Which Expire In April 2026	1
Number Of Patents that Actavis Laboratories, Inc. alleges Will Not Be Infringed Upon Which Expire In June 2032	3
Time Period For Which FDA Approval is Barred Upon Commencement Of Lawsuit	30 months

Commitments and contingencies55

Commitments and contingencies - Operating Lease, Cash Incentive Bonus Plan (Details) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Dec. 31, 2015	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Commitments
Deferred rent balance		$ 1,128,000		$ 1,128,000		$ 1,174,000
Bonus Expenses		291,000	$ 291,000	618,000	$ 543,000
Grand Prairie Lease Plus Blue Bell Lease
Commitments
Rent expense, share of operating expenses		62,000	59,000	121,000	116,000
Rent expense, excluding share of operating expenses		$ 252,000	$ 252,000	$ 504,000	$ 505,000
Blue Bell, Pennsylvania
Commitments
Term of operating lease	60 months

License agreements (Details)

License agreements (Details) - Shire LLC - USD ($) $ in Millions	Mar. 06, 2017	Feb. 26, 2016
NDA 204326 | Maximum
License agreements
Payment of non-refundable license fee		$ 1
NDA for NT-0201
License agreements
Maximum period for payment of license fee after regulatory approval by FDA	30 days
NDA for NT-0201 | Maximum
License agreements
Non refundable license fee required per agreement	$ 1

Related party transactions - Sa

Related party transactions - Sale-leaseback (Details) - Related Party Sale-leaseback Transactions - USD ($)	1 Months Ended			12 Months Ended
	Jun. 30, 2017	Feb. 28, 2017	Mar. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2016	Dec. 31, 2012
Related party transactions
Capital Lease Obligations	$ 3,289,000					$ 445,000
Transaction One
Related party transactions
Maximum amount authorized under sale and leaseback transaction							$ 6,500,000
Proceeds from sale of assets			$ 795,000		$ 5,500,000
Imputed interest rate on lease (as a percent)				14.50%	14.50%
Capital Lease Obligations	121,000					$ 445,000
Transaction Two
Related party transactions
Maximum amount authorized under sale and leaseback transaction		$ 5,000,000
Lease term		P36M
Proceeds from sale of assets	$ 2,742,000	$ 481,000
Imputed interest rate on lease (as a percent)	14.90%	14.30%

Related party transactions - De

Related party transactions - Debt (Details) - USD ($) $ / shares in Units, $ in Millions	Jun. 30, 2017	Feb. 17, 2017	Feb. 08, 2017	Jun. 30, 2017
Common Stock
Stock transaction disclosures
Issuance of common stock, net of issuance costs (in shares)				11,299,639
Underwritten Public Offering | Common Stock
Stock transaction disclosures
Issuance of common stock, net of issuance costs (in shares)	4,800,000		5,750,000
Public offering price (in dollars per share)	$ 6.25		$ 5	$ 6.25
Proceeds from Issuance of Common Stock	$ 30			$ 30
Payments of Stock Issuance Costs	$ 0.2			$ 0.2
Term of option offered to underwriters	30 days			30 days
Share offered to underwriters under option granted (in shares)	720,000			720,000
Over-allotment option | Common Stock
Stock transaction disclosures
Issuance of common stock, net of issuance costs (in shares)		750,000
Senior Secured Credit Facility | Debt issued to entities affiliated with Deerfield | Investor
Related party transactions
Face amount of debt at time of related party stock purchase			$ 60

Subsequent events (Details)

Subsequent events (Details) - USD ($) $ in Thousands	Jul. 26, 2017	Jun. 30, 2017	Feb. 17, 2017	Feb. 08, 2017	Jun. 30, 2017	Jul. 26, 2017
Subsequent events
Net proceeds from issuance of stock					$ 60,087
Common Stock
Subsequent events
Issuance of common stock, net of issuance costs (in shares)					11,299,639
Underwritten Public Offering | Common Stock
Subsequent events
Issuance of common stock, net of issuance costs (in shares)		4,800,000		5,750,000
Net proceeds from issuance of stock			$ 26,700			$ 34,300
Subsequent event | Underwritten Public Offering | Common Stock
Subsequent events
Issuance of common stock, net of issuance costs (in shares)	720,000
Net proceeds from issuance of stock						$ 34,300