Neos Therapeutics (NEOS) 10-K 13 Mar 20 2019 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Mar. 06, 2020	Jun. 30, 2019
Cover [Abstract]
Document Type	10-K
Document Period End Date	Dec. 31, 2019
Entity Registrant Name	Neos Therapeutics, Inc.
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Interactive Data Current	Yes
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		49,743,122
Entity Public Float			$ 63.5
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity Central Index Key	0001467652
Amendment Flag	false
Entity Ex Transition Period	true

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current Assets:
Cash and cash equivalents	$ 16,830	$ 46,478
Short-term investments	8,064
Accounts receivable, net of allowances for chargebacks and cash discounts of $4,848 and $1,865 at December 31, 2019 and 2018, respectively	26,563	27,801
Inventories	11,010	10,367
Prepaid expenses and other current assets	4,092	4,032
Total current assets	66,559	88,678
Property and equipment, net	7,345	7,914
Operating lease right-of-use assets	3,044
Intangible assets, net	12,543	14,616
Other assets	1,382	149
Total assets	90,873	111,357
Current Liabilities:
Accounts payable	6,650	12,730
Accrued expenses	40,188	35,818
Current portion of operating lease liabilities	681
Current portion of long-term debt	15,836	8,557
Total current liabilities	63,355	57,105
Long-Term Liabilities:
Long-term debt, net of current portion	29,099	43,217
Operating lease liabilities	3,254
Derivative liability	1,135	2,017
Deferred rent		989
Other long-term liabilities	160	184
Total long-term liabilities	33,648	46,407
Stockholders' (Deficit) Equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding at December 31, 2019 and 2018
Common stock, $0.001 par value, 100,000,000 shares authorized at December 31, 2019 and 2018; 49,766,472 and 49,732,671 shares issued and outstanding, respectively, at December 31, 2019; 49,710,104 and 49,676,303 shares issued and outstanding, respectively, at December 31, 2018	50	50
Treasury stock, at cost, 33,801 shares at December 31, 2019 and 2018	(352)	(352)
Additional paid-in capital	328,056	325,130
Accumulated deficit	(333,885)	(316,983)
Accumulated other comprehensive loss	1
Total stockholders’ (deficit) equity	(6,130)	7,845
Total liabilities and stockholders’ (deficit) equity	$ 90,873	$ 111,357

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
CONDENSED CONSOLIDATED BALANCE SHEETS
Receivables allowances for chargebacks and cash discounts (in dollars)	$ 4,848	$ 1,865
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	100,000,000	100,000,000
Common stock, issued shares	49,766,472	49,710,104
Common stock, outstanding shares	49,732,671	49,676,303
Treasury stock, shares	33,801	33,801

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenues:
Net product sales	$ 64,649	$ 49,988	$ 27,132
Net product sales	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Cost of goods sold	$ 25,123	$ 26,928	$ 14,030
Cost of goods sold	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Gross profit	$ 39,526	$ 23,060	$ 13,102
Research and development expenses	8,582	8,508	8,957
Selling and marketing expenses	28,122	44,133	46,881
General and administrative expenses	13,237	13,915	13,805
Loss from operations	(10,415)	(43,496)	(56,541)
Interest expense	(8,009)	(8,974)	(10,085)
Other income, net	1,533	795	854
Loss before income taxes	(16,891)	(51,675)	(65,772)
Income tax expense (benefit)	11
Net loss	$ (16,902)	$ (51,675)	$ (65,772)
Weighted average common shares outstanding used to compute net loss per share, basic and diluted	49,723,772	32,288,555	24,751,091
Net loss per share of common stock, basic and diluted	$ (0.34)	$ (1.60)	$ (2.66)

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Comprehensive Income (loss)
Net loss	$ (16,902)	$ (51,675)	$ (65,772)
Other comprehensive income (loss):
Net unrealized gain (loss) on short-term investments	1	6	(5)
Total other comprehensive income (loss)	1	6	(5)
Comprehensive loss	$ (16,901)	$ (51,669)	$ (65,777)

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss), Net	Total
Balance, beginning at Dec. 31, 2016	$ 16	$ (232)	$ 198,787	$ (199,536)	$ (1)
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	$ 12		64,548
Issuance of common stock, net of issuance costs (in shares)	12,019,639
Shares issued for exercise of stock options (in shares)	1,249
Purchase of treasury stock		$ (120)
Purchase of treasury stock (in shares)		(14,895)
Recognition of beneficial conversion feature on convertible notes			613			$ 613
Share-based compensation expense			4,051
Conversion of Redeemable Preferred Stock	$ 1		6,585
Issuance of common stock upon conversion of convertible notes (in shares)	929,967
Net unrealized gain (loss) on investments					(5)	(5)
Net loss				(65,772)		(65,772)
Balance, ending at Dec. 31, 2017	$ 29	$ (352)	274,584	(265,308)	(6)	8,947
Balance, ending (in shares) at Dec. 31, 2017	29,030,757	(33,801)
Increase (Decrease) in Stockholders Equity
Issuance of common stock, net of issuance costs	$ 21		47,271
Issuance of common stock, net of issuance costs (in shares)	20,651,524
Issuance of common stock upon RSU conversion	26,991
Shares issued for exercise of stock options (in shares)	832
Payroll tax withheld for RSU releases			(46)
Share-based compensation expense			3,321
Net unrealized gain (loss) on investments					6	6
Net loss				(51,675)		(51,675)
Balance, ending at Dec. 31, 2018	$ 50	$ (352)	325,130	(316,983)		$ 7,845
Balance, ending (in shares) at Dec. 31, 2018	49,710,104	(33,801)				49,710,104
Increase (Decrease) in Stockholders Equity
Issuance of common stock upon RSU conversion	20,328
Shares issued for exercise of stock options			11
Shares issued for exercise of stock options (in shares)	36,040
Payroll tax withheld for RSU releases			(2)
Share-based compensation expense			2,917
Net unrealized gain (loss) on investments					1	$ 1
Net loss				(16,902)		(16,902)
Balance, ending at Dec. 31, 2019	$ 50	$ (352)	$ 328,056	$ (333,885)	$ 1	$ (6,130)
Balance, ending (in shares) at Dec. 31, 2019	49,766,472	(33,801)				49,766,472

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash Flows From Operating Activities:
Net loss	$ (16,902)	$ (51,675)	$ (65,772)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense	2,917	3,321	4,051
Depreciation and amortization of property and equipment	2,059	1,750	1,363
Amortization of patents and other intangiable assets	2,132	1,737	1,660
Changes in fair value of earnout, derivative and warrant liabilities	(958)	(387)	(509)
Amortization of senior debt issuance costs and discounts	1,469	961	1,316
Amortization of short-term investment purchase discounts	(90)	(131)	(126)
Deferred interest on debt			2,111
(Gain) loss on sale of equipment	(3)		(23)
Other adjustments	(12)	48	(91)
Changes in operating assets and liabilities:
Accounts receivable	1,238	(14,130)	(7,536)
Inventories	(643)	1,365	(6,190)
Deferred contract sales organization fees			720
Other assets	(63)	(444)	(414)
Accounts payable	(6,197)	1,270	3,008
Accrued expenses	4,368	14,874	13,171
Operating lease liabilities	(98)
Net cash used in operating activities	(10,783)	(41,441)	(53,261)
Cash Flows From Investing Activities:
Purchases of short-term investments	(17,231)	(17,906)	(48,015)
Sales and maturities of short-term investments	9,258	36,491	45,118
Proceeds from sale-leaseback of equipment			3,222
Proceeds from sale of equipment	2
Capital expenditures	(1,088)	(1,361)	(2,497)
Intangible asset expenditures	(59)	(5)	(361)
Net cash (used in) provided by investing activities	(9,118)	17,219	(2,533)
Cash Flows From Financing Activities:
Proceeds from the issuance of common stock, net of issuance costs	11	47,292	64,560
Payments made on borrowings	(8,598)	(8,425)	(989)
Proceeds from short-term line of credit	14,000
Payments made on short-term line of credit	(14,000)
Payment of debt financing costs	(1,158)	(90)	(40)
Payments made to purchase treasury stock			(120)
Payment of payroll taxes withheld for releases of restricted stock units	(2)	(46)
Net cash (used in) provided by financing activities	(9,747)	38,731	63,411
(Decrease) increase in cash and cash equivalents	(29,648)	14,509	7,617
Cash and Cash Equivalents:
Beginning	46,478	31,969	24,352
Ending	16,830	46,478	31,969
Supplemental Disclosure of Noncash Transactions:
Acquired equipment under finance lease	406
Finance lease liability from purchase of equipment	406	105
Derivative liability incurred in connection with Loan and Security Agreement	69
Deferred debt financing costs included in accounts payable and accrued expenses	119
Exit Fee liability incurred in connection with Second Amendment to Facility		750
Derivative Liability incurred in connection with Amendments to Facility		611	2,107
Prepaid assets included in accounts payable and accrued expenses			654
Issuance of senior secured convertible notes in lieu of interest payment			6,586
Issuance of common stock upon conversion of senior secured convertible notes			6,586
Capital lease liability from sale-leaseback transactions			3,222
Beneficial conversion feature incurred on convertible notes			613
Supplemental Cash Flow Information:
Interest paid	$ 6,565	$ 8,158	$ 6,769

Organization and nature of oper

Organization and nature of operations	12 Months Ended
	Dec. 31, 2019
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 (“XR”) pharmaceuticals in patient- and caregiver-friendly orally disintegrating tablet (“ODT”) and oral suspension dosage forms. The Company has a pipeline of extended-release pharmaceuticals including three products approved by the U.S. Food and Drug Administration (the “FDA”) for the treatment of attention deficit hyperactivity disorder (“ADHD”). Adzenys XR-ODT was approved by the FDA in January 2016 and launched commercially in May 2016. The Company received approval from the FDA for Cotempla XR-ODT, its methylphenidate XR-ODT for the treatment of ADHD in patients 6 to 17 years old, in June 2017, and commercially launched in September 2017. Also, the Company received approval from the FDA for Adzenys ER oral suspension (“Adzenys ER”) in September 2017 and commercially launched this product in February 2018. In addition, the Company manufactures and markets a generic Tussionex (hydrocodone and chlorpheniramine) (“generic Tussionex”), extended-release oral suspension for the treatment of cough and upper respiratory symptoms of a cold. In addition to its marketed products, the Company is developing NT0502, its product candidate for the treatment of sialorrhea.

Summary of significant accounti

Summary of significant accounting policies	12 Months Ended
	Dec. 31, 2019
Summary of significant accounting policies
Summary of significant accounting policies	Note 2. Summary of significant accounting policies Basis of Presentation: The consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and with the rules and regulations of the Securities and Exchange Commission (“SEC”). Principles of consolidation: The consolidated financial statements include the accounts of the Company and its four wholly-owned subsidiaries. All significant intercompany transactions have been eliminated. Use of estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. Concentration of credit risk : Accounts receivable subjects the Company to concentrations of credit risk. Accounts receivable were due from thirteen and fourteen customers in the years ended December 31, 2019 and 2018, respectively. Three customers accounted for 96% of the accounts receivable at December 31, 2019 and 2018. There were fifteen customers that accounted for all gross revenue in the years ended December 31, 2019 and 2018, and fourteen customers that accounted for all gross revenue in the year ended December 31, 2017. Three customers accounted for 94% of the gross revenue for the years ended December 31, 2019, and 93% of the gross revenue for the years ended December 31, 2018 and 2017. Segment information : Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the development, manufacturing and commercialization of pharmaceuticals. Liquidity: During 2019, 2018 and 2017, the Company incurred operating losses and used cash to fund operations. Management intends to achieve profitability through revenue growth from its currently marketed pharmaceutical products. The Company does not anticipate it will be profitable until such time as revenues from Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER increase substantially over the current levels. In November 2018, the Company completed an offering of its common stock and restructured its outstanding debt which reduced the amount of principal payable in cash. On October 2, 2019, the Company entered into a senior secured credit agreement with Encina Business Credit, LLC (“Encina”) as agent for the lenders (the “Loan Agreement”), in which Encina will extend up to $25.0 million in secured Revolving Loans to the Company, of which up to $2.5 million may be available for short-term swingline loans, against 85% of eligible accounts receivables. Accordingly, management has performed the review required for going concern accounting and believes the Company presently has sufficient liquidity to continue to operate for the next twelve months after the filing of this Report on Form 10-K. Cash equivalents: The Company invests its available cash balances in bank deposits and money market funds. The Company considers highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company’s primary objectives for investment of available cash are the preservation of capital and the maintenance of liquidity. Short-term investments: Short-term investments, if any, consist of debt securities that have original maturities greater than three months but less than or equal to one year and are classified as available-for-sale securities. Such securities are carried at estimated fair value, with any unrealized holding gains or losses reported, net of material tax effects reported, as accumulated other comprehensive income or loss, which is a separate component of stockholders’ (deficit) equity. Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are included in other income in the consolidated results of operations. A decline in the market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in fair value charged to earnings in that period, and a new cost basis for the security is established. Dividend and interest income are recognized in other income when earned. The cost of securities sold is calculated using the specific identification method. The Company places all investments with government agencies, or corporate institutions whose debt is rated as investment grade. The Company classifies all available-for-sale marketable securities with maturities greater than one year from the balance sheet date, if any, as non-current assets. Allowance for doubtful accounts : The allowance for doubtful accounts is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management determines the adequacy of the allowance based on reviews of individual accounts, historical losses, existing economic conditions and estimates based on management’s judgments in specific matters. Accounts are written off as they are deemed uncollectible based on periodic review of the accounts. There is no allowance for doubtful accounts at December 31, 2019 or 2018, as management believes that all receivables are fully collectible. Inventories: Inventories are measured at the lower of cost (first in, first out) or net realizable value. Inventories have been reduced by an allowance for excess and obsolete inventories. Cost elements include material, labor and manufacturing overhead. Inventories consist of raw materials, work in process and finished goods. Until objective and persuasive evidence exists that regulatory approval has been received and future economic benefit is probable, pre-launch inventories are expensed into research and development. Manufacturing costs for the production of Adzenys XR-ODT incurred after the January 27, 2016 FDA approval date, for the production of Cotempla XR-ODT incurred after June 30, 2017, following the FDA approval date of June 19, 2017, and for the production of Adzenys ER incurred after September 30, 2017, following the FDA approval date of September 15, 2017, are being capitalized into inventory. Property and equipment : Property and equipment is recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from three to ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the respective lease term or the estimated useful lives of the assets. Leases: At the inception of an arrangement, the Company determines if an arrangement is, or contains, a lease based on the unique facts and circumstances present in such arrangement. Lease classification, recognition, and measurement are then determined at the lease commencement date. For arrangements that contain a lease, the Company will (i) identify lease and non-lease components, (ii) determine the consideration in the contract, (iii) determine whether the lease is an operating or financing lease, and (iv) recognize lease right-of-use (“ROU”) assets and liabilities. Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company uses the implicit interest rate when readily determinable and uses the Company’s incremental borrowing rate when the implicit rate is not readily determinable based upon the information available at the lease commencement date in determining the present value of the lease payments. Fixed lease payments are recognized over the expected term of the lease using the effective interest method. Variable lease expenses that are not considered fixed, or in substance fixed, are expensed as incurred. Fixed and variable lease expense on operating leases are recognized within cost of goods sold and operating expenses in the Company’s consolidated statements of operations. ROU asset amortization and interest costs on financing leases are recorded within cost of goods sold and interest expense, respectively, in the Company’s consolidated statements of operations. The Company have elected the short-term lease exemption and recognizes a short-term lease expense over lease term of 12 months or less. Operating leases are included in operating lease ROU assets, current portion of operating lease liabilities and operating lease liabilities in the Company’s consolidated balance sheets. Financing leases are included in property and equipment, net, current portion of long-term debt and long-term debt, net of current portion in the Company’s consolidated balance sheets. Intangible assets: Intangible assets subject to amortization, which principally include proprietary modified-release drug delivery technology, the costs to acquire the rights to Tussionex Abbreviated New Drug Application and patents, are recorded at cost and amortized over the estimated lives of the assets, which primarily range from 10 to 20 years. The Company estimates that the patents it has filed have a future beneficial value. Therefore, costs associated with filing for its patents are capitalized. Once the patent is approved and commercial revenue realized, the costs associated with the patent are amortized over the useful life of the patent. If the patent is not approved, the costs will be expensed. For new product candidates, patent applications and related expenses are expensed as incurred. Impairment of long-lived assets : Long-lived assets such as property and equipment and intangibles subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable. Such assets are also evaluated for impairment in light of the Company’s continuing losses. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. No impairment charges were recorded for the years ended December 31, 2019, 2018 or 2017. Debt issuance costs and discounts: Debt issuance costs reflect fees paid to lenders, as compensation for services beyond their role as a creditor, and third parties whose costs are directly related to issuing debt and that otherwise would not be incurred. Amounts paid to the lender as a reduction in the proceeds received are considered a component of the discount on the issuance and not an issuance cost. Debt issuance costs and discounts related to term loans are reported as a direct deduction from the outstanding debt and amortized over the term of the debt using the effective interest method as additional interest expense. Debt issuance costs related to a line of credit facility are accounted for in accordance with ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, in which the Company elects to defer and present debt issuance costs as an asset and are recorded at cost and subsequently amortized over the term of the line of credit as additional interest expense. The unamortized debt issuance costs related to a line of credit facility is included in other assets in the consolidated balance sheets. 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, net in the consolidated results of operations. In circumstances where there are multiple embedded instruments that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within twelve months of the balance sheet date. When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption and are classified in interest expense in the consolidated results of operations. Revenue recognition: Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company makes estimates of the net sales price, including estimates of variable consideration (e.g., savings offers, prompt payment discounts, product returns, wholesaler fees, wholesaler chargebacks and estimated rebates) to be incurred on the selling price of the respective product sales, and recognizes the estimated amount as revenue when it transfers control of the product to its customers (e.g., upon delivery). Variable consideration is determined using either an expected value or a most likely amount method. The estimate of variable consideration is also subject to a constraint such that some or all of the estimated amount of variable consideration will only be included in the transaction price to the extent that it is probable that a significant reversal of revenue (in the context of the contract) will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Estimating variable consideration and the related constraint requires the use of significant management judgment and other market data. The Company provides for prompt payment discounts, wholesaler fees and wholesaler chargebacks based on customer contractual stipulations. The Company analyzes recent product return history and other market data obtained from its third party logistics providers (“3PLs”) to determine a reliable return rate. Additionally, management analyzes historical savings offers and rebate payments based on patient prescriptions dispensed for Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER and information obtained from third party providers to determine these respective variable considerations. The Company sells its generic Tussionex, Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER to a limited number of pharmaceutical wholesalers, all subject to rights of return. Pharmaceutical wholesalers buy drug products directly from manufacturers. Title to the product passes upon delivery to the wholesalers, when the risks and rewards of ownership are assumed by the wholesaler (freight on board destination). These wholesalers then resell the product to retail customers such as food, drug and mass merchandisers. Contract Balances Contract assets primarily relate to our right to consideration in exchange for products transferred to a customer in which our right to consideration is dependent upon the customer selling these products. As of December 31, 2019, contract assets of $27,000 was included in other current assets in the consolidated balance sheets. The Company had no contract asset as of December 31, 2018. As of December 31, 2019 and 2018, the Company had no contract liability. Disaggregation of revenue The following table disaggregates the Company’s net product sales by product: Year Ended December 31, 2019 2018 2017 (in thousands) Adzenys XR-ODT $ 31,213 $ 26,631 $ 20,377 Cotempla XR-ODT 25,649 19,014 1,590 Adzenys ER 834 (27) — Generic Tussionex 6,953 4,370 5,165 $ 64,649 $ 49,988 $ 27,132 Net product sales Net product sales represent total gross product sales less gross to net sales adjustments. Gross to net sales adjustments for branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER include savings offers, prompt payment discounts, wholesaler fees, estimated rebates to be incurred on the selling price of the respective product sales and estimated allowances for product returns. Gross to net sales adjustments for generic Tussionex include prompt payment discounts, estimated allowances for product returns, wholesaler fees, estimated government rebates and estimated chargebacks to be incurred on the selling price of generic Tussionex related to the respective product sales. The Company recognizes total gross product sales less gross to net sales adjustments as revenue based on shipments from 3PLs to the Company’s wholesaler customers. Savings offers for branded products The Company offers savings programs for Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER to patients covered under commercial payor plans in which the cost of a prescription to such patients is discounted. The amount of redeemed savings offers is recorded based on information from third-party providers against the estimated discount recorded as accrued expenses. The estimated discount is recorded as a gross to net sales adjustments at the time revenue is recognized. Prompt payment discounts Prompt payment discounts are based on standard programs with wholesalers and are recorded as a discount allowance against accounts receivable and as a gross to net sales adjustments at the time revenue is recognized. Wholesale distribution fees Wholesale distribution fees are based on definitive contractual agreements for the management of the Company’s products by wholesalers and are recorded as accrued expenses and as a gross to net sales adjustment at the time revenue is recognized. Rebates The Company’s branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER are subject to commercial managed care and government managed Medicare and Medicaid programs whereby discounts and rebates are provided to participating managed care organizations and federal and/or state governments. Calculations related to rebate accruals of branded products are estimated based on information from third-party providers. The Company’s generic Tussionex product is subject to state government-managed Medicaid programs whereby discounts and rebates are provided to participating state governments. Generic Tussionex government rebates are estimated based upon rebate payment data available from sales of the Company’s generic Tussionex product over the past three years. Estimated rebates are recorded as accrued expenses and as a gross to net sales adjustment at the time revenue is recognized. Historical trends of estimated rebates will be regularly monitored, which may result in adjustment to such estimates in the future. Product returns Wholesalers’ contractual return rights are limited to defective product, product that was shipped in error, product ordered by customer in error, product returned due to overstock, product returned due to dating or product returned due to recall or other changes in regulatory guidelines. The return policy for expired product allows the wholesaler to return such product starting six months prior to expiry date to twelve months post expiry date. Estimated returns are recorded as accrued expenses and as a gross to net sales adjustments at the time revenue is recognized. The Company analyzed recent branded product return data to determine a reliable return rate for branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER. Generic Tussionex product returns were estimated based upon return data available from sales of the Company’s generic Tussionex product over the past three years. Wholesaler chargebacks for generic product The Company’s generic Tussionex products are subject to certain programs with wholesalers whereby pricing on products is discounted below wholesaler list price to participating entities. These entities purchase products through wholesalers at the discounted price, and the wholesalers charge the difference between their acquisition cost and the discounted price back to the Company. Estimated chargebacks are recorded as a discount allowance against accounts receivable and as a gross to net sales adjustments at the time revenue is recognized based on information provided by third parties. Due to estimates and assumptions inherent in determining the amount of returns, rebates and chargebacks, the actual amount of returns, claims for rebates and chargebacks may be different from the estimates, at which time reserves would be adjusted accordingly. Wholesale distribution fees and the allowance for prompt pay discounts are recorded at the time of shipment and such fees and allowances are recorded in the same period that the related revenue is recognized. Distribution expenses: Costs invoiced to the Company by its third party logistics firm are classified as cost of goods sold in the consolidated statements of operations. Shipping and handling costs: Amounts billed to customers for shipping and handling fees for the delivery of goods are classified as cost of goods sold in the consolidated statements of operations. 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. Advertising costs: Advertising costs are comprised of print and electronic media placements that are expensed as incurred. There was no advertising costs recognized during the year ended December 31, 2019. The Company recognized advertising costs of $0.6 million and $0.4 million during the years ended December 31, 2018 and 2017 respectively. Share-based compensation: Share-based compensation awards, including grants of 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 stock-based awards is recognized on a straight-line basis, based on the grant date fair value, over the requisite service period of the award, which is generally the vesting term. The fair value of the Company’s stock-based awards to employees and directors is estimated using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (1) the expected stock price volatility, (2) the expected term of the award, (3) the risk-free interest rate and (4) expected dividends. For performance-based stock awards, compensation expense is recognized on a straight-line basis, based on the grant date fair value, over the performance period or through the vesting date, whichever is longer. Management monitors the probability of achievement of the performance conditions and adjusts stock-based compensation expense, if necessary. Since the Company’s initial public offering (“IPO”) in July 2015, the Company’s board of directors has determined the fair value of each share of underlying common stock based on the closing price of the Company’s common stock as reported by the NASDAQ Global Market on the date of grant. Under ASU No. 2017-09 guidance for accounting for share-based payments, the Company has elected to continue estimating forfeitures at the time of grant and, if necessary, revise the estimate in subsequent periods if actual forfeitures differ from those estimates. Ultimately, the actual expense recognized over the vesting period will only be for those options that vest. Paragraph IV litigation costs: Legal costs incurred by the Company in the enforcement of the Company’s intellectual property rights are charged to expense as incurred. Income taxes: Income taxes are accounted for using the liability method, under which deferred taxes are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax laws that will be in effect when the differences are expected to reverse. Management evaluates the Company’s tax positions in accordance with guidance on accounting for uncertainty in income taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not that the position will be sustained upon examination. As of December 31, 2019 and 2018, the Company has unrecognized tax benefits associated with uncertain tax positions in the consolidated financial statements. These uncertain tax positions were netted against net operating losses (NOL’s) with no separate reserve for uncertain tax positions required. Deferred tax assets should be reduced by a valuation allowance if current evidence indicates that it is considered more likely than not that these benefits will not be realized. In evaluating the objective evidence that historical results provide, the Company considered that three years of cumulative operating losses was significant negative evidence outweighing projections for future taxable income. Therefore, at December 31, 2019 and 2018, the Company determined that it is more likely than not that the deferred tax assets will not be realized. Accordingly, the Company has recorded a valuation allowance to reduce deferred tax assets to zero. The Company may not ever be able to realize the benefit of some or all of the federal and state loss carryforwards, either due to ongoing operating losses or due to ownership changes, which limit the usefulness of the loss carryforwards. Recent accounting pronouncements: In December 2019, the FASB issued ASU No. 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , enhances and simplifies various aspects of the income tax accounting guidance including the elimination of certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for foreign basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company elected to early adopt ASU 2019-12 on its consolidated financial statements for the period ended December 31, 2019. The adoption of this standard did not have a material impact on the Company’s consolidated results of operations or financial position. In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2018-13, Disclosure Framework -Changes to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The standard is effective for public entities for the fiscal years ending after December 15, 2020, with early adoption permitted for the removed disclosures and delayed adoption permitted for the new disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company is currently evaluating the impact of adopting ASU 2018-13 on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a write-down. The standard is effective for public entities that are smaller reporting companies, as defined by the SEC, for the fiscal years beginning after December 15, 2022, with early adoption permitted through a modified retrospective approach. The Company has evaluated the impact of adopting ASU 2016-13 and determined that the adoption will be immaterial to the consolidated financial statements. The Company will adopt ASU 2016-13 on January 1, 2023. In February 2018, the FASB issued ASU No. 2018-02, Income Statement –Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA, and requires certain disclosures about stranded tax effects. ASU 2018-02 is effective for entities for fiscal years beginning after December 15, 2018 with early adoption permitted, and shall be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the corporate income tax rate in the TCJA is recognized. This standard became effective for the Company on January 1, 2019. The adoption of this standard did not have a material impact on the Company’s consolidated results of operations or financial position. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (the “New Lease Standard”). The New Lease Standard supersedes the lease guidance under FASB Accounting Standards Codification ("ASC") Topic 840, Leases (“Prior GAAP”), resulting in the creation of FASB ASC Topic 842, Leases. Under the new guidance, lessees are required to recognize in the statement of financial position the following for all finance and operating 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 ROU asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. In January, July and December 2018, the FASB issued additional amendments to the new lease guidance relating to, transition, and clarification. The July 2018 amendment, ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, provides an optional transition method that allows entities to elect to apply the standard using the modified retrospective transition method, which did not require the Company to adjust comparative periods. The Company adopted this standard on the effective date of January 1, 2019 and elected to use the modified retrospective transition method approach at transition. Therefore, no adjustments are made to amounts in prior period financial statements. In addition, the Company elected the following practical expedients: 1) the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allows the Company to carry forward the historical lease classification; 2) the land easements practical expedient, which allows

Net loss per share

Net loss per share	12 Months Ended
	Dec. 31, 2019
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 plans and shares issuable in future periods, such as RSU awards, have been excluded from the computation of diluted net loss per share as they would be anti-dilutive. For all periods presented, there is no difference in the number of shares used to compute basic and diluted shares outstanding due to the Company’s net loss position. Restricted stock is considered legally issued and outstanding on the grant date, while RSUs are not considered legally issued and outstanding until the RSUs vest. Once the RSUs are vested, equivalent common shares will be issued or issuable to the grantee and therefore the RSUs are not considered for inclusion in total common shares issued and outstanding until vested. The following potentially dilutive securities outstanding were excluded from consideration in the computation of diluted net loss per share of common stock for the years ended December 31, 2019, 2018 and 2017, respectively, because including them would have been anti-dilutive: December 31, 2019 2018 2017 Series C Redeemable Convertible Preferred Stock Warrants (as converted) 70,833 70,833 70,833 Stock options outstanding 4,430,966 3,446,885 2,454,973 RSUs outstanding 54,063 75,314 85,000

Fair value of financial instrum

Fair value of financial instruments	12 Months Ended
	Dec. 31, 2019
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 and accrued liabilities, approximated their fair value due to their short-term maturities. The remaining financial instruments were reported on the Company’s consolidated balance sheets at amounts that approximate current fair values based on market based assumptions and inputs. As a basis for categorizing inputs, the Company uses a three tier fair value hierarchy, which prioritizes the inputs used to measure fair value from market based assumptions to entity specific assumptions as follows: Level 1: Unadjusted quoted prices for identical assets in an active market. Level 2: Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full-term of the asset. Level 3: Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset. The following table presents the hierarchy for the Company’s financial instruments measured at fair value on a recurring basis for the indicated dates: Fair Value as of December 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 12,338 $ 4,492 $ — $ 16,830 Short-term investments 1,261 6,803 — 8,064 Total financial assets $ 13,599 $ 11,295 $ — $ 24,894 Earnout liability $ — $ — $ 30 $ 30 Derivative liabilities (see Note 11) — — 1,135 1,135 Total financial liabilities $ — $ — $ 1,165 $ 1,165 Fair Value as of December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 27,419 $ 19,059 $ — $ 46,478 Total financial assets $ 27,419 $ 19,059 $ — $ 46,478 Earnout liability $ — $ — $ 37 $ 37 Derivative liability (see Note 11) — — 2,017 2,017 Total financial liabilities $ — $ — $ 2,054 $ 2,054 The Company’s Level 1 assets included bank deposits, certificates of deposit and actively traded money market funds with an original maturity of 90 days or less at December 31, 2019 and 2018. Asset values were considered to approximate fair value due to their short-term nature. The Company’s Level 2 assets included commercial paper and corporate bonds with maturities of less than one year that are not actively traded which were classified as available-for-sale securities. The level 2 cash equivalents consist of U.S. agency bonds and corporate commercial paper that mature in less than 90 days which are valued using quoted prices and other data values. The estimated fair values of these securities were determined by third parties using valuation techniques that incorporate standard observable inputs and assumptions such as quoted prices for similar assets, benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids/offers and other pertinent reference data. The Company’s cash and cash equivalents and short-term investments had quoted prices at December 31, 2019 and 2018 as shown below: December 31, 2019 Amortized Unrealized Market Cost Gain / (Loss) Value (in thousands) Bank deposits and money market funds $ 13,599 $ — $ 13,599 Financial and corporate debt securities 11,294 1 11,295 $ 24,893 $ 1 $ 24,894 December 31, 2018 Amortized Unrealized Market Cost Gain / (Loss) Value (in thousands) Bank deposits and money market funds $ 27,419 $ — $ 27,419 Financial and corporate debt securities 19,059 — 19,059 $ 46,478 $ — $ 46,478 The Company’s Level 3 liabilities included the fair value of the earnout liability and the fair values of the Encina and Deerfield derivative liabilities at December 31, 2019. As of December 31, 2018, the Company’s Level-3 liabilities included the fair value of the earnout liability and the fair value of the Deerfield derivative liability. 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, 2018 and revised at December 31, 2019. These revisions were primarily due to an updated revenue forecast for the Company’s generic Tussionex and the use of a directly-calculated revenue volatility of 36% based on data for potential comparable publicly-traded companies in the generic drug manufacturing space including the Company at December 31, 2019, versus a similarly directly-calculated revenue volatility of 42% at December 31, 2018. Significant changes to these assumptions would result in increases/decreases to the fair value of the earnout liability. The methodologies and significant inputs used in the determination of the fair value of the earnout liability were as follows: Earnout Liability Date of Valuation 12/31/2019 12/31/2018 Valuation Method Monte Carlo Monte Carlo Volatility (annual) Risk‑free rate (annual) 1.53% - 2.58% 2.53% - 3.29% Time period from valuation until end of earnout 0.5 ‑ 9.5 0.5 ‑ 9.5 Earnout Target 1 (thousands) $ 13,700 $ 13,700 Earnout Target 2 (thousands) $ 18,200 $ 18,200 Discount rate 22.88% - 23.35% 21.35% - 21.68% Fair value of liability at valuation date (thousands) $ 30 $ 37 The fair value of the Encina derivative liability was determined after taking into consideration valuations using the Probability Weighted Discounted Cash Flow method based on assumptions at the initial valuation date of October 2, 2019 and at December 31, 2019. The fair value of the Deerfield derivative liability was determined after taking into consideration valuations using the Monte Carlo method based on assumptions at December 31, 2019 and 2018. The methodologies and significant inputs used in the determination of the fair value of the debt derivative liabilities were as follows: Encina Derivative Liability Deerfield Derivative Liability Date of Valuation 12/31/2019 10/02/2019 12/31/2019 12/31/2018 Valuation Method Discounted Cash Flow Discounted Cash Flow Monte Carlo Monte Carlo Volatility (annual) N/A N/A N/A N/A Time period from valuation until maturity of debt (yrs.) 2.4 2.6 2.4 3.4 Cumulative probability of a change in control prepayment implied by model 23.9 % 24.7 % 23 % 25.1 % Cumulative probability of other accelerated prepayments implied by model N/A N/A 10 % 13.7 % Discount rate 6.0 % 6.0 % 25.34 % 23.12 % Fair value of liability at valuation date (thousands) $ 66 $ 69 $ 1,069 $ 2,017 Significant changes to these assumptions would result in increases/decreases to the fair value of the earnout liability and 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, 2017 1,830 Change in fair value Balance at December 31, 2018 2,054 Addition of Encina derivative liability Change in fair value Balance at December 31, 2019 $ 1,165

Inventories

Inventories	12 Months Ended
	Dec. 31, 2019
Inventories
Inventories	Note 5. Inventories Inventories at the indicated dates consist of the following: December 31, 2019 2018 (in thousands) Raw materials $ 3,679 $ 3,845 Work in process 935 2,704 Finished goods 7,082 4,259 Inventory at cost 11,696 10,808 Inventory reserve (686) (441) $ 11,010 $ 10,367

Property and equipment

Property and equipment	12 Months Ended
	Dec. 31, 2019
Property and equipment
Property and equipment	Note 6. Property and equipment Property and equipment, net at the indicated dates consists of the following: December 31, 2019 2018 (in thousands) Assets under finance lease $ 3,733 $ 3,327 Leasehold improvements 4,392 4,340 Manufacturing, packaging and lab equipment 7,088 6,821 Office furniture and equipment 1,888 2,164 Assets under construction 731 188 17,832 16,840 Accumulated depreciation and amortization (including $1,153 and $633 at December 31, 2019 and 2018 respectively, applicable to finance leases) (10,487) (8,926) $ 7,345 $ 7,914 Depreciation and amortization expense related to property and equipment was $2,059,000, $1,750,000 and $1,363,000 for the years ended December 31, 2019, 2018 and 2017, respectively. Depreciation and amortization expense is recorded in cost of goods sold, research and development, or general and administrative expenses in the accompanying consolidated statements of operations. As noted in Note 7, the Company sold and leased back a substantial portion of its operating assets in a series of capital lease transactions.

Sale-leaseback transaction

Sale-leaseback transaction	12 Months Ended
	Dec. 31, 2019
Sale-leaseback transaction
Sale-leaseback transaction	Note 7. Sale-leaseback transaction For periods prior to January 1, 2019, the Company accounted for the sale and leaseback transactions as capital leases. With the adoption of the New Lease Standard, these transactions are classified as finance 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 12). Lease payments are applied using the effective interest rate inherent in the leases. Depreciation of the property and equipment is included within depreciation and amortization in the consolidated statements of operations and consolidated statements of cash flows. In 2012, the Company negotiated financing arrangements with Essex Capital Corporation (“Essex”) which provided for the sale-leaseback of up to $6.5 million of the Company’s property and equipment with a bargain purchase option at the end of the respective lease. These financing arrangements were executed in five separate tranches that occurred in February, July and November 2013, and March 2014. The two February leases and the July lease had been fully satisfied before 2017. The November 2013 leases for a total of $1.0 million of assets expired in April 2017 and the related $161,000 gain was fully amortized at that time and the $100,000 lease buy-out option liability was fully satisfied. The March 2014 lease for $795,000 of assets expired in September 2017 and the related $116,000 gain was fully amortized at that time and the lease buy-out option liability of $79,000 was fully satisfied. In February 2017, the Company entered into an agreement with Essex for the sale-leaseback of newly acquired assets of up to $5.0 million to finance its capital expenditures. Each lease under this master agreement is for an initial term of 36 months and has an option to purchase the equipment at the end of the respective lease that management considers to be a bargain purchase option. Under this agreement, the Company entered into leases and sold assets with a total capitalized cost of $481,000 and $2,742,000 at effective interest rates of 14.3% and 14.9% on February 13, 2017 and June 30, 2017, respectively. The February sale resulted in net gains of $14,000 which has been deferred and fully amortized over the 36-month term of the lease. There was no gain or loss on the June 2017 sale. As of December 31, 2019, there was no unamortized deferred gain related to these transactions. For the years ended December 31, 2019, 2018 and 2017, approximately $6,000, $5,000 and $44,000, respectively, of the net gain on sale-leasebacks was recognized in other income, net in the consolidated statements of operations.

Intangible assets

Intangible assets	12 Months Ended
	Dec. 31, 2019
Intangible assets
Intangible assets	Note 8. Intangible assets Major components of intangible assets, net at the indicated dates consist of the following: December 31, 2019 2018 (in thousands) Proprietary modified-release drug delivery technology $ 15,600 $ 15,600 Tussionex ANDA 4,829 4,829 CPI profit sharing 2,043 2,043 Patents 1,971 2,307 Other 1,035 1,035 25,478 25,814 Accumulated amortization (12,935) (11,198) $ 12,543 $ 14,616 As part of the June 15, 2009 reorganization of the Company as Neos Therapeutics, Inc., the Company performed a purchase price allocation analysis. The proprietary modified-release drug delivery technology was valued at $15.6 million based on projected cash flows expected to be generated from this technology. The $15.6 million is being amortized on a straight-line basis over 20 years. On August 28, 2014, the Company completed an acquisition of the rights to Tussionex ANDA from Cornerstone and Coating Place, Inc. ("CPI") which was accounted for as an asset acquisition. Prior to the acquisition, the Company, Cornerstone and CPI shared profits generated by the sale and manufacture of the product under a development and manufacturing agreement, and Cornerstone had commercialization rights to the product. The Company paid $4.2 million to Cornerstone to buy out their rights to commercialize and derive future profits from the product and entered into an agreement whereby Cornerstone transferred certain assets associated with the product to the Company. Legal fees of $90,000 associated with this buyout agreement have been capitalized as part of the purchase price. Additional estimated earnout costs due to Cornerstone of $589,000, recorded at fair value by the Company based upon a valuation provided by a third-party valuation firm, were capitalized as part of the purchase price of this intangible asset. This earnout amount was revalued at December 31, 2019, 2018 and 2017, resulting in a $7,000, $133,000 and $62,000 decrease in the estimated fair value of the earnout, respectively, which is recorded in other income (expense), net in the Company’s consolidated statements of operations. In addition, the Company paid $2.0 million to CPI to buy out their rights to future profits from the collaboration and entered into an agreement whereby CPI will continue to supply a component of the product. Legal fees of $43,000 associated with this buyout agreement have been capitalized as part of the purchase price of this intangible asset. These two intangible assets have an expected life of ten years and are being amortized on a straight-line basis beginning September 2014. Patents utilized in the manufacturing of the Company’s generic Tussionex product which total $352,000 are being amortized over their expected useful life of 10 years. Patents utilized in the manufacturing of Adzenys XR-ODT which total $599,000 are being amortized over their expected useful life, including $535,000 being amortized for approximately 16 years beginning with the approval of Adzenys XR-ODT on January 27, 2016 and $64,000 being amortized for approximately 15 years beginning in December 2017. Patents utilized in the manufacturing of Cotempla XR-ODT which total $83,000 are being amortized over their expected useful life of approximately 15 years, beginning with the approval of Cotempla XR-ODT on June 19, 2017. Patents utilized in the manufacturing of Adzenys ER which total $451,000 are being amortized over their expected useful life of approximately 15 years, beginning with the approval of Adzenys ER on September 15, 2017. Patent filing costs capitalized, for which the Company estimated to have future value, were $486,000 as at December 31, 2019. Once the patent is approved and commercial revenue realized, the costs associated with the patent are amortized over the useful life of the patent. Total amortization expense for intangible assets was $1,737,000, $1,737,000 and 1,660,000 for the years ended December 31, 2019, 2018 and 2017, respectively. In addition, during the year ended December 31, 2019, the Company wrote-off $395,000 of capitalized patent filing costs. Aggregate amortization of intangible assets for each of the next five years and thereafter is as follows: Year ending December 31, (in thousands) 2020 $ 1,737 2021 1,737 2022 1,737 2023 1,642 2024 1,333 Thereafter 3,871 $ 12,057

Income taxes

Income taxes	12 Months Ended
	Dec. 31, 2019
Income taxes
Income taxes	Note 9. Income taxes The Company applies FASB ASC topic 740, "Income Taxes" or ASC 740 which addresses the determination of whether tax benefits claimed, or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company is generally subject to tax examination for a period of three years after tax returns are filed. Therefore, the statute of limitations remains open for tax years 2016 and forward. However, when a company has net operating loss carryovers, those tax years remain open until three years after the net operating losses are utilized. Therefore, the tax years remain open back to 2004. Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. The significant components of deferred income tax assets and liabilities consist of the following: December 31, 2019 2018 (in thousands) Deferred Tax Assets: Net operating loss $ 37,747 $ 37,819 Share-based compensation 2,113 1,757 Research and development tax credit 1,947 2,378 Other reserves 2,238 1,270 Finance lease liability 156 390 Operating lease liability 826 208 State deferred 1,518 1,236 Inventory 90 103 Accrued rebates 5,862 4,902 Interest expense carryover 1,143 1,296 Other 914 952 Total deferred tax assets 54,554 52,311 Deferred Tax Liabilities: Intangible assets (1,230) (1,226) Right-of-use asset (639) — Property and equipment (873) (999) Total deferred tax liabilities (2,742) (2,225) Valuation allowance 51,812 50,086 Net deferred tax asset (liability) $ — $ — At December 31, 2019, the Company had gross federal net operating loss carry-forwards of $280,072,000, of which $34,611,000 have no expiration date; the utilization of these net operating loss carryforwards is limited to 80% of taxable income in any given year. The Company also had federal net operating loss carryforwards of approximately $245,461,000 which begin to expire in 2024. At December 31, 2019, the Company had research and development credits of $2,686,000, which begin to expire in 2024. The Company had tax effected state net operating loss carry-forwards of $2,958,000 and $3,166,000 at December 31, 2019 and 2018, respectively. Utilization of the net operating loss carry-forwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended and similar state provisions. The Company has performed an analysis to determine the impact of any ownership change(s) under Section 382 of the Internal Revenue Code. Due to an ownership change in 2017, the amount of federal net operating loss that will expire unused due to the Section 382 limitation is $98,009,000. The amount of federal research and development credit that will expire unused is $350,000. The deferred tax assets and related valuation allowances for both carryforwards have been reduced accordingly. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company has no accrued interest related to its uncertain tax positions as they all relate to timing differences that would adjust the Company’s net operating loss carryforward, interest expense carryover or research and development credit carryover and therefore do not require recognition. As a result of these timing differences, at December 31, 2019 and 2018, the Company had gross unrecognized tax benefits related to uncertain tax positions of $8,646,000 and $3,956,000, respectively. In 2019, the Company performed an analysis of its historic research and development credits and recorded a new uncertain tax position related to these credits, which is reflected in the chart below. The Company has no other tax positions taken or expected to be taken that would significantly increase or decrease unrecognized tax benefits within 12 months of the reporting date. Changes in unrecognized benefits in any given year are recorded as a component of deferred tax expense. A tabular rollforward of the Company’s gross unrecognized tax benefits is below: December 31, 2019 2018 (in thousands) Beginning Balance $ 3,956 $ 7,261 Increase resulting from current period tax positions 6,872 5,458 Decrease resulting from current period tax positions (2,182) (8,763) Ending Balance $ 8,646 $ 3,956 The Company has recorded a valuation allowance of $51,812,000 and $50,086,000 at December 31, 2019 and 2018, respectively, to fully reserve its net deferred tax assets. The Company has assessed the likelihood that the deferred tax assets will be realized and determined that it is more likely than not that all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Due to the uncertainty of realizing the deferred tax asset, the Company has placed a valuation allowance against the entire deferred tax asset. The Company may not ever be able to realize the benefit of some or all of the federal and state loss carryforwards, either due to ongoing operating losses or due to ownership changes, which limit the usefulness of the loss carryforwards. The change in the valuation allowance was an increase of $1,726,000 and $11,118,000 for the years ended December 31, 2019 and December 2018, respectively. The Company has recorded current income tax expense of $11,000 for the year ended December 31, 2019. There was neither income tax expense nor benefit recorded for the year ended December 31, 2018 and 2017. A reconciliation of the Company’s Federal statutory tax rate of 21% to the Company’s effective income tax rate is as follows: Year Ended December 31, 2019 2018 U.S. Statutory Tax Rate 21 % 21 % Change in Valuation Allowance (10.2) % (21.5) % State Tax Expense, net 0.9 % 1.8 % Research and Development Tax Credit 0.9 % 0.5 % Uncertain Tax Position - Research and Development Tax Credit (3.4) % % Permanent Difference - Interest Expense (7.8) % % Provision to Return, Other Permanent Differences and Other Adjustments (1.4) % (1.8) % Income Tax Expense (Benefit) % %

Accrued expenses

Accrued expenses	12 Months Ended
	Dec. 31, 2019
Accrued expenses
Accrued expenses	Note 10. Accrued expenses Accrued expenses as of December 31, 2019 and 2018 consist of the following: December 31, December 31, 2019 2018 (in thousands) Accrued savings offers $ 16,790 $ 11,289 Accrued rebates 6,109 7,762 Accrued customer returns 5,122 5,157 Accrued wholesaler fees 5,014 4,249 Accrued payroll and benefits 4,485 4,555 Other accrued expenses 2,668 2,806 Total accrued expenses $ 40,188 $ 35,818

Debt

Debt	12 Months Ended
	Dec. 31, 2019
Debt
Debt	Note 11. Debt Short-term line of credit On October 2, 2019, the Company entered into the Loan Agreement with Encina. Under the Loan Agreement, Encina will extend up to $25.0 million in secured revolving loans to the Company (the “Revolving Loans”), of which up to $2.5 million may be available for short-term swingline loans, against 85% of eligible accounts receivable. The Revolving Loans bear variable interest through maturity at the one-month London Interbank Offered Rate (“LIBOR”), plus an applicable margin of 4.50%. In addition, the Company is required to pay an unused line fee of 0.50% of the average unused portion of the maximum revolving facility amount during the immediately preceding month. Interest is payable monthly in arrears, upon a prepayment of a loan and on the maturity date. The maturity date under the Loan Agreement is May 11, 2022. In the event that, for any reason, all or any portion of the lenders' commitment to make revolving loans is terminated prior to the scheduled maturity date, in addition to the payment of the principal amount and all unpaid accrued interest and other amounts due thereon, the Company is required to pay to the lender a prepayment fee equal to (i) 2.0% of the revolving loan commitment if such event occurs on or before October 2, 2020, (ii) 1.0% of the revolving loan commitment if such event occurs after October 2, 2020 but on or before October 2, 2021, and (iii) 0.5% of the revolving loan commitment if such event occurs after October 2, 2021 but before May 11, 2022. The Company may permanently terminate the revolving loan facility by prepaying all outstanding principal amounts and all unpaid accrued interest and other amounts due thereon, subject to at least five business days prior notice to the lender and the payment of a prepayment fee as described above. The Loan Agreement contains customary affirmative covenants, negative covenants and events of default, as defined in the Loan Agreement, including covenants and restrictions that, among other things, require the Company to satisfy certain capital expenditure and other financial covenants, and restrict the Company’s ability to incur liens, incur additional indebtedness, engage in mergers and acquisitions or make asset sales without the prior written consent of the Lenders. A failure to comply with these covenants could permit the Lenders to declare the Company’s obligations under the Loan Agreement, together with accrued interest and fees, to be immediately due and payable, plus any applicable additional amounts relating to a prepayment or termination, as described above. As of December 31, 2019, the Company was in compliance with the covenants under the Loan Agreement. In connection with the Loan Agreement, the Company evaluated to determine if the embedded components in the agreement qualified as derivatives requiring separate recognition. This evaluation identified a derivative liability of $69,000 for the fair value of the additional interest contingent upon a change in control. As of December 31, 2019, the fair value of the derivative was $66,000 (see Note 4). Total interest expense on the short-term line of credit, including deferred financing costs amortization, was $184,000 for the year ended December 31, 2019. The Company incurred $1.3 million in financing costs, which are recorded as deferred financing costs and amortized over the term of the revolving loan as additional interest expense using an effective interest rate of 6.56%. During the year ended December 31, 2019, deferred financing cost amortization of $116,000 was charged to interest expense. The unamortized cost of $1.2 million as of December 31, 2019 was included in other assets in the consolidated balance Sheets. As of December 31, 2019, the Company had no borrowing outstanding under the Revolving Loan and had $17.1 million available for borrowing. Long-term debt Long-term debt at the indicated dates consists of the following: December 31, 2019 2018 (in thousands) Deerfield senior secured credit facility, net of discount of $1,982 and $3,334, respectively $ 43,768 $ 49,916 Financing and capital leases, maturing through May 2024 1,167 1,858 44,935 51,774 Less current portion (15,836) (8,557) Long-term debt $ 29,099 $ 43,217 Senior secured credit facility: On May 11, 2016, the Company entered into a $60.0 million senior secured credit facility (the “Facility”) with Deerfield Private Design Fund III, L.P. (66 2/3% of Facility) and Deerfield Special Situations Fund, L.P. (33 1/3% of Facility) (collectively, “Deerfield”), as lenders. In February 2017, the Company closed an underwritten public offering of 5,750,000 shares of its common stock at a public offering price of $5.00 per share (see Note 13). Deerfield, the Company’s senior lender, participated in the purchase of the Company’s common shares as part of this public offering, and as a result, was classified as a related party at the time of the corresponding transactions. Principal on the Facility was due in three equal annual installments beginning in May 2019 and continuing through May 2021, with a final payment of principal, interest and all other obligations under the Facility due May 11, 2022. Interest is due quarterly beginning in June 2016, at a rate of 12.95% per year. The Company had an option, which it exercised, to defer payment of each of the first four interest payments, adding such amounts to the outstanding loan principal. The aggregate $6.6 million in deferred interest payments (the “Accrued Interest”) was due and payable on June 1, 2017. Borrowings under the Facility are collateralized by substantially all of the Company’s assets, except the assets under capital lease. The terms of the Facility require the Company to maintain cash on deposit of not less than $5.0 million. On June 1, 2017 (the “Amendment Date”), the Company and Deerfield entered into a First Amendment (the “Amendment”) to the Facility which extended the date to repay the Accrued Interest under the Facility to June 1, 2018 (the “PIK Maturity Date”), which could have been extended to June 1, 2019 at the election of the Company if certain conditions had been met as specified in the Amendment. However, as described below, the accrued interest amount was converted into shares of common stock. The right to payment of the Accrued Interest was memorialized in the form of senior secured convertible notes (the “Convertible Notes”) issued to Deerfield on the Amendment Date. Interest was due quarterly at a rate of 12.95% per year. The principal amount of the Convertible Notes issued under the Amendment and all accrued and unpaid interest thereon was to become due and payable upon written notice from Deerfield, and if either (a) the Company did not meet certain quarterly sales milestones specified in the Amendment or (b) the Company had not received and publicly announced FDA approval of the new drug applications on or before the applicable Prescription Drug User Fee Act goal date as set forth on the schedules to the 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, ranged from 12.75% to 2%. The $6.6 million of Convertible Notes was convertible into shares of the Company’s common stock at the noteholder’s option at any time up to the close of business on the date that was five days prior to the PIK Maturity Date. The per share conversion price was the greater of (a) 95% of the average of the volume weighted average prices per share of the Company’s common stock on the NASDAQ Global Market for the three trading day period immediately preceding such conversion, and (b) $7.00. Deerfield cannot own more than 9.985% of the Company’s outstanding shares at any one time, and the aggregate conversion cannot exceed 19.9% of the Company’s outstanding common stock as of June 1, 2017. On October 26, 2017, Deerfield provided a conversion notice electing to convert the entire $6.6 million of Convertible Notes into shares of the Company’s common stock at a conversion price of $7.08 per share. The conversion price was based on 95% of the average of the volume weighted average prices per share of the Company’s common stock on the NASDAQ Global Market for the three trading day period immediately preceding such conversion. This resulted in issuing 929,967 shares of the Company’s common stock to Deerfield on this date and the Convertible Notes were cancelled. The Company has filed a registration statement with the SEC covering the registration of these shares, as noted below. In conjunction with the Amendment to the Facility and the related issuance of the Convertible Notes, the Company entered into a Registration Rights Agreement (the “Registration Agreement”) which required the Company to file a registration statement with the SEC to register the shares of common stock issued or issuable upon conversion of the Convertible Notes (the “Conversion Shares”) (subject to certain adjustment for stock split, dividend or other distribution, recapitalization or similar events, the “Registrable Securities”) within 30 days from June 1, 2017, which was to become effective per the SEC no later than 75 days thereafter. The Company filed a registration statement on Form S-3 to comply with the Registration Agreement on June 30, 2017, which became effective on July 11, 2017. This filing covered 940,924 shares, which is the number of shares that would be issued at the floor conversion rate of $7.00 per share. The Company was also required to, among other things, maintain the effectiveness of such registration statement, continue to file the required SEC filings on a timely basis, use its best efforts to ensure that the registered securities are listed on each securities exchange on which securities of the same class or series as issued by the Company are then listed and comply with any Financial Industry Regulatory Authority (“FINRA”) requests. The Company’s obligations with respect to each registration end at the date which was the earlier of (a) when all of the Registrable Securities covered by such registration have been sold or (b) when Deerfield or any of its transferees or assignees under the Registration Agreement cease to hold any Registrable Securities. For each registration, the Company bore all reasonable expenses, other than underwriting discounts and commissions, and was to reimburse Deerfield or any assignee or transferee for up to $25,000 in legal fees. The Company had satisfied all of its obligations under this Registration Agreement and did not pay any damages pursuant to this agreement; therefore, no liability had been recorded (see Note 13), and as of September 30, 2018, Deerfield or any of its transferees or assignees under the Registration Agreement reported that it had ceased to hold any Registrable Securities. The Company has accounted for the Amendment as a debt modification as the instruments were not substantially different; therefore, the remaining debt discount on the original Facility is being amortized using the effective interest method over the remaining term of the modified debt. The Company evaluated the Amendment together with the Convertible Notes to determine if those contracts or embedded components of those contracts qualified as derivatives requiring separate recognition. This evaluation identified a derivative liability of $2.1 million for the fair value of the change in control and other accelerated payment features as the prepayment fees resulted in premiums that were greater than 10%. As of December 31, 2019, the fair value of the derivative was $1.1 million (see Note 4). As the change in control and other accelerated payments terms, including the prepayment fees, were applied to the entire debt per the terms of the amended Facility, the corresponding debt discount will be amortized using the effective interest method over the remaining term of the Facility. The fees paid to or on behalf of the creditor for the debt modification totaled $40,000 and were recorded as additional debt discount on the amended Facility to be amortized to interest expense using the effective interest method over the term of the Facility. The Company’s evaluation also determined that the embedded conversion options should not be bifurcated as derivatives from the Convertible Notes host instruments. Therefore, the Company recorded a $0.6 million discount to the convertible notes for the intrinsic value of the embedded conversion option based upon the difference between the fair value of the underlying common stock on June 1, 2017 and the effective conversion price embedded in the Convertible Notes, which was amortized using the effective interest method to interest expense over the one-year term of the Convertible Notes. The Company recorded a $0.6 million corresponding credit to a beneficial conversion feature classified as additional paid in capital on June 1, 2017 in stockholders’ (deficit) equity in the Company’s financial statements. In connection with the Facility, the Company paid a $1,350,000 yield enhancement fee to Deerfield, approximately $173,000 of legal costs to the Company’s attorneys and $58,000 of legal costs on behalf of Deerfield’s attorneys, all of which were recorded as debt discount and amortized over the six-year term of the Facility, using the effective interest method. On November 5, 2018, the Company and Deerfield entered into an amendment (the “Second Amendment”) to the Facility pursuant to which the Company agreed to pay $7.5 million of principal under the Facility otherwise due in May 2019 upon completion of an underwritten public offering of the Company’s shares of its common stock for gross proceeds of at least $30.0 million, plus additional shares of the Company’s shares of its common stock for additional gross proceeds of at least $4.5 million (the “November Offering”). The remaining $52.5 million of principal under the Facility was and is due as follows: $7.5 million on May 11, 2019, $15.0 million on May 11, 2020 (the “2020 Principal Payment”), $15.0 million on May 11, 2021 and $15.0 million on May 11, 2022; provided, that the 2020 Principal Payment due date shall be extended to May 11, 2021 or May 11, 2022 subject to certain achievement of annual net sales during periods ending December 31, 2019 and 2020, respectively. The net sales milestone was not met for the period ending December 31, 2019. If all or any of the principal are prepaid or required to be prepaid under the Second Agreement prior to December 31, 2021, then the Company shall pay, in addition to such prepayment and accrued interest thereon, a prepayment premium equal to 6.25% of the amount of principal prepaid. Additionally, the Company shall pay all interest which, absent such prepayment, would have accrued on the principal prepaid through May 11, 2020 in connection with a prepayment due to a Change of Control of the Company or through December 31, 2020 in connection with any other prepayment, whether voluntary or in an Event of Default. If such prepayment occurs after December 31, 2021 then no prepayment premium is due. In addition, upon the payment in full of the Obligations, whether voluntarily, in the connection with a Change of Control or an Event of Default and whether before, at the time of or after the Maturity Date, Pursuant to the term of the Facility, as amended, a $7.5 million principal payment was paid in cash in May 2019 and, the remaining principal outstanding as of December 31, 2019 was $45.0 million. Pursuant to the Second Amendment, upon the effectiveness thereof, the Company amended and restated its outstanding notes under the Second Agreement in the form of senior secured convertible notes (the “ In conjunction with the Second Amendment to the Facility and the related issuance of the A&R Notes, the Company entered into a Registration Rights Agreement (the “Second Registration Agreement”) pursuant to which the Company was required to file a registration statement with the SEC to register the Conversion Shares within 30 days from November 5, 2018, which was to become effective per the SEC no later than 75 days thereafter. The filing deadline was subsequently extended to December 21, 2018. The Company filed a registration statement on Form S-3 to comply with the Second Registration Agreement on December 11, 2018, which became effective on December 20, 2018. This filing covered 3,796,668 shares, which is the maximum number of shares that may be converted. The Company is also required to, among other things, maintain the effectiveness of such registration statement, continue to file the required SEC filings on a timely basis, use its best efforts to ensure that the registered securities are listed on each securities exchange on which securities of the same class or series as issued by the Company are then listed and comply with any FINRA requests. The Company’s obligations with respect to each registration end at the date which is the earlier of (a) when all of the Registrable Securities covered by such registration have been sold or (b) when Deerfield or any of its transferees or assignees under the Second Registration Agreement cease to hold any Registrable Securities. For each registration, the Company shall bear all reasonable expenses, other than underwriting discounts and commissions, and shall reimburse Deerfield or any assignee or transferee for up to $25,000 in legal fees. The Company expects to satisfy all of its obligations under the Second Registration Agreement and did not expect to pay any damages pursuant to this agreement; therefore, no liability had been recorded (see Note 16). On October 2, 2019, in connection with the Loan Agreement with Encina, the Company entered into a fourth amendment to the Facility (the “Fourth Amendment”) with Deerfield. Under the Fourth Amendment, the Company restated its representations and warranties made under the Facility and made additional representations and warranties consistent with those in the Loan Agreement. In addition, the affirmative covenants, negative covenants and events of default contained in the Facility were expanded to conform to applicable provisions in the Loan Agreement. The Fourth Amendment was neither a modification nor an extinguishment and had no change in cash flows, and as such, it did not have a material effect on the Company’s financial statements. Pursuant to the A&R Notes, if the Company fails to provide the number of Conversion Shares, then the Company would have to pay damages to Deerfield or subsequent holder or any designee for each day after the third business day after receipt of notice of conversion that such conversion is not timely effected. The Facility also contains certain customary nonfinancial covenants, including limitations on the Company’s ability to transfer assets, engage in a change of control, merge or acquire with or into another entity, incur additional indebtedness and distribute assets to shareholders. Upon an event of default, the lenders may declare all outstanding obligations accrued under the Facility to be immediately due and payable, and exercise its security interests and other rights. As of December 31, 2019, the Company was in compliance with the covenants under the Facility. Total interest expense on the Facility, including debt discount amortization, was $7,620,000, $8,693,000 and $9,882,000 for the year ended December 31, 2019, 2018 and 2017, respectively. Debt discount amortization for the Facility, including the Amendment after June 1, 2017, was calculated using the effective interest rates of 15.03% on the original facility debt and 25.35% on the Convertible Notes and after the Second Amendment on November 5, 2018, using the effective interest rate of 16.69%, charged to interest expense and totaled $1,353,000, $961,000 and $1,316,000 for the years ended December 31, 2019, 2018 and 2017, respectively. Financing and Capital lease obligations: Financing and capital lease obligations consist of sale-leaseback and equipment leases, both of which include options to purchase and were classified as finance leases as of December 31, 2019 and capital leases as of December 31, 2018. As described in Note 7, during the years ended December 31, 2017, the Company entered into agreements with Essex for the sale‑leaseback of newly acquired assets with a total capitalized cost of $3.2 million. The approximate imputed interest rate on these leases is 14.9%. In addition, during the year ended December 31, 2019 and 2018, the Company entered into equipment leases with a total capitalized cost of $0.4 million and $0.1 million, respectively. The interest rate on these leases is 6.5% and 5.3%, respectively. Interest expense on these leases was $214,000, $341,000 and $263,000 for the years ended December 31, 2019, 2018 and 2017, respectively. Future principal payments of long-term debt, including financing leases, are as follows: Period ending: December 31, (in thousands) 2020 $ 15,836 2021 15,099 2022 15,854 2023 89 2024 39 Future principal payments $ 46,917 Less unamortized debt discount (1,982) Less current portion of long-term debt (15,836) Total long-term debt, net of current portion $ 29,099

Leases

Leases	12 Months Ended
	Dec. 31, 2019
Leases
Leases	Note 12. Leases The Company leases real estate, warehouses and certain equipment. The Company determines if an arrangement is a lease at inception. Leases with an initial term of 12 months or less ("short-term leases") are not recorded on the consolidated balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Company's operating leases do not provide an implicit rate of return, the Company considered its other similar term collateralized financing arrangements, including the Essex sale-leaseback and equipment leases, certain vendor-direct equipment financing and the Deerfield debt facility, as amended, to determine its incremental borrowing rate. Operating lease ROU assets are comprised of the lease liability plus prepaid rents and are reduced by lease incentives and deferred rents. The Company has lease agreements with non-lease components which are not bifurcated. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years. The exercise of a lease renewal option typically occurs at the discretion of both parties. Certain leases also include options to purchase the leased property. For purposes of calculating operating lease liabilities, lease terms are deemed not to include options to extend the lease termination until it is reasonably certain that the Company will exercise that option. Certain of the Company's lease agreements include payments adjusted periodically for fair market value and certain other percentage increases. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. The components of lease expenses are as follows: Year Ended December 31, 2019 Statement of Operations Classification (in thousands) Lease cost: Operating lease cost $ 1,071 Cost of goods sold and operating expenses Short-term lease cost 37 Cost of goods sold and operating expenses Variable lease cost 217 Cost of goods sold and operating expenses Finance lease cost: Amortization of leased assets 520 Cost of goods sold Interest on lease liabilities 214 Interest expense Total net lease cost $ 2,059 Supplemental consolidated balance sheet information related leases is as follows: December 31, 2019 Balance Sheet Classification (in thousands) Leases: Assets: Operating lease assets $ 3,044 Operating lease right-of-use assets Finance lease assets 2,580 Property, plant and equipment, net Total leased assets $ 5,624 Liabilities: Current: Operating leases $ 681 Current portion of operating lease liabilities Finance leases 836 Current portion of long-term debt Noncurrent: Operating leases 3,254 Operating lease liabilities Finance leases 331 Long-term debt, net of current portion Total lease liabilities $ 5,102 December 31, 2019 Weighted-Average Remaining Lease Term (years) Operating lease assets 4.7 Finance lease assets 1.8 Weighted-Average Discount Rate Operating lease assets 15.0 % Finance lease assets 11.8 % Supplemental consolidated cash flow information related to leases is as follows: Year Ended December 31, 2019 (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,168 Operating cash flows from finance leases 214 Financing cash flows from finance leases 1,098 ROU assets obtained in exchange for new finance lease liabilities 406 ROU assets obtained in exchange for new operating lease liabilities $ 135 Maturities of lease liabilities are as follows: December 31, 2019 Operating Leases Finance Leases (in thousands) 2020 $ 1,226 $ 894 2021 1,118 117 2022 1,060 115 2023 1,055 95 2024 1,106 40 Total lease payments $ 5,565 $ 1,261 Less amount representing interest (1,630) (94) Total lease obligations $ 3,935 $ 1,167 Disclosure related to periods prior to adoption of ASU 2016-02 Future minimum lease payments under non-cancelable rental and leases agreements which had initial or remaining term in excess of one year are as follows: December 31, 2018 Operating Leases Capital Leases (in thousands) 2019 $ 1,180 $ 1,257 2020 1,195 798 2021 1,062 21 2022 1,055 20 2023 1,055 — Later years 1,106 — Minimum lease commitment $ 6,653 $ 2,096 Less amount representing interest (238) Present value of net minimum lease obligations $ 1,858

Common stock

Common stock	12 Months Ended
	Dec. 31, 2019
Common Stock.
Common stock	Note 13. Common stock On August 1, 2016, the Company filed a shelf registration statement on Form S-3, which was declared effective by the SEC on August 12, 2016. This shelf registration statement covered 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 “2016 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 2016 Shelf (the “Cowen Sales Agreement”). In February 2017, the Company closed an underwritten public offering of 5,750,000 shares of its common stock under the 2016 Shelf 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. Deerfield participated in the purchase of the Company’s common shares as part of this public offering, and as a result, was classified as a related party at the time of the corresponding transactions. The net proceeds to the Company from this offering, after deducting underwriting discounts and commissions and other offering expenses payable by the Company, were approximately $26.7 million. On June 30, 2017, the Company closed an underwritten public offering of 4,800,000 shares of its common stock under the 2016 Shelf 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 underwriter 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. During the year ended December 31, 2017, the Company sold an aggregate 749,639 shares of common stock under the Cowen Sales Agreement, at an average sale price of approximately $5.01 per share for gross proceeds of $3.7 million and net proceeds of $3.6 million and paying total compensation to the sales agent of approximately $0.1 million. On October 26, 2017, Deerfield provided a conversion notice electing to convert the entire $6.6 million of Convertible Notes into shares of the Company’s common stock at a conversion price of $7.08 per share. The conversion price was based on 95% of the average of the volume weighted average prices per share of the Company’s common stock on the NASDAQ Global Market for the three trading day period immediately preceding such conversion. This resulted in issuing 929,967 shares of the Company’s common stock to Deerfield on this date and the Convertible Notes were cancelled. During the year ended December 31, 2018, the Company sold an aggregate 651,525 shares of common stock under the Cowen Sales Agreement, at an average sale price of approximately $6.25 per share for gross proceeds of $4.1 million and net proceeds of $3.9 million and paying total compensation to the sales agent and other costs of approximately $0.2 million. On November 5, 2018, the Company filed Supplement No. 1 to the prospectus dated August 12, 2016, which reduced the size of the continuous offering by the Company under such prospectus relating to the offering of Common Stock pursuant to the Sales Agreement. Following the reduction, the Company was authorized to issue up to $7,825,113 of its common stock pursuant to the Sales Agreement (inclusive of amounts previously sold thereunder prior to the date hereof). Aggregate gross proceeds of sales of the Company’s common stock under the Sales Agreement total $7,825,113, and sales of common stock under the Sales Agreement have been suspended. The Cowen Sales Agreement terminated with the expiration of the 2016 Shelf on August 12, 2019. On November 8, 2018, the Company closed an underwritten public offering of 19,999,999 shares of its common stock at a public offering price of $2.30 per share, which includes 2,608,695 shares of its common stock resulting from the underwriters’ exercise of their over-allotment option at the public offering price. The net proceeds to the Company from this offering, after deducting underwriting discounts and commissions and other offering expenses payable by the Company were approximately $43.4 million. This offering met the criteria for the November Offering. During the year ended December 31, 2019, the Company issued 20,328 shares of common stock pursuant to the conversion of vested RSUs and 36,040 shares of common stock pursuant to the exercise of vested stock options. During the year ended December 31, 2018, the Company issued 26,991 shares of common stock pursuant to the conversion of vested RSUs and 832 shares of common stock pursuant to the exercise of vested stock options. On March 18, 2019, the Company filed a shelf registration statement covering the offering, issuance and sale by the Company of up to an aggregate of $100.0 million of its common stock, preferred stock, debt securities, warrants and/or units (the “2019 Shelf”), which was declared effective by the SEC on May 1, 2019. Effective as of August 12, 2019, the 2016 Shelf is no longer available for further primary offerings or sales of the Company’s securities. The Company simultaneously entered into a sales agreement with Cantor Fitzgerald & Co., as sales agent, to provide for the offering, issuance and sale by the Company of up to $30.0 million of its common stock from time to time in “at-the-market” offerings under the 2019 Shelf (the “Cantor Sales Agreement”). No sales have been made under the Cantor Sales Agreement during the year ended December 31, 2019. As of December 31, 2019, $100.0 million of the Company’s common stock, preferred stock, debt securities, warrants and/or units remained available to be sold pursuant to the 2019 Shelf, including $30.0 million of the Company’s common stock which remained available to be sold under the Cantor Sales Agreement, subject to certain conditions specified therein.

Share-based Compensation

Share-based Compensation	12 Months Ended
	Dec. 31, 2019
Share-based Compensation
Share-based Compensation	Note 14. 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 common stock 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, 2020, 2019 and 2018, the Company added 2,486,633 shares, 2,483,815 shares and 1,449,847 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, which has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants and to determine the specific terms and conditions of each award, subject to the provisions of the 2015 Plan. The Company’s Compensation Committee may delegate authority to grant certain awards to the Company’s chief executive officer. Through December 31, 2019, the Company has granted options, restricted stock and RSUs under the 2015 Plan, or previously, the 2009 Plan. 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 vested 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, 2019, 433,864 shares related to forfeited 2009 Plan options were added to the shares available under the 2015 Plan. During year ended December 31, 2019, 351,229 shares related to forfeited 2009 Plan options were added to the shares available under the 2015 Plan. As of December 31, 2019, 3,257,599 shares of common stock remain available for grant under the 2015 Plan. In June 2018, the Company adopted the Neos Therapeutics, Inc. 2018 Inducement Plan (the “Inducement Plan”) which had 800,000 shares of common stock reserved and available for issuance. The Inducement Plan allows the Company to grant equity awards to induce highly-qualified prospective officers and employees who are not currently employed by the Company to accept employment and provide them with a proprietary interest in the Company. The Inducement Plan is administered by the Company’s compensation committee. The exercise price per share for the stock covered by a stock award granted pursuant to the Inducement Plan shall be determined by the administrator at the time of grant but shall not be less than 100 percent of the fair market value on the date of grant. Unexercised stock awards under the Inducement Plan expire after 10 years following the grant date. Under the Company’s employment agreement dated June 27, 2018 with Gerald McLaughlin, the Company’s Chief Executive Officer, the Company granted Mr. McLaughlin, under the Inducement Plan, an option to purchase 600,000 shares of the Company’s common stock, which vests in equal annual installments over four years from Mr. McLaughlin’s start date. In addition, on July 30, 2018, the Company granted Mr. McLaughlin, under the Inducement Plan, an option to purchase 200,000 shares of the Company’s common stock. The shares underlying this option shall vest subject to certain performance metrics to be evaluated for the fiscal year ending December 31, 2019. As of December 31, 2019, no shares of common stock remain available for grant under the Inducement Plan. Share-based Compensation Expense The Company has reported share-based compensation expense for the years ended December 31, 2019, 2018 and 2017, respectively, in its consolidated statements of operations as follows: Year Ended December 31, 2019 2018 2017 (in thousands) Cost of goods sold $ 473 $ 470 $ 390 Research and development 340 344 394 Selling and marketing 293 731 913 General and administrative 1,811 1,776 2,354 $ 2,917 $ 3,321 $ 4,051 The total share based compensation expense included in the table above is attributable to stock options and RSUs of $2.7 million and $159,000, respectively, for the year ended December 31, 2019. The total share based compensation expense included in the table above is attributable to stock options and RSUs of $3.1 million, $261,000, respectively, for the year ended December 31, 2018. The total share based compensation expense included in the table above is attributable to stock options, RSUs and restricted stock of $3.9 million, $86,000 and $71,000, respectively, for the year ended December 31, 2017. Excess tax benefit from share-based compensation was $12,700 for the year ended December 31, 2019 and, was negligible for the year ended December 31, 2018. As of December 31, 2019, there was $3.5 million of compensation costs adjusted for any estimated forfeitures, related to non-vested stock options and RSUs granted under the Company’s equity incentive plans not yet recognized in the Company’s financial statements. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.5 years for stock options and 1.9 years for RSUs. There is no unrecognized compensation cost associated with grants of restricted stock. Stock Options During the year ended December 31, 2019, the Company granted 2,119,708 options under the 2015 Plan. In June 2018 and July 2018, the Company granted 600,000 and 200,000 options, respectively, under the Inducement Plan to Gerald McLaughlin, the Company’s Chief Executive Officer, at an exercise price of $6.20 and $5.55 per share, respectively. The Company estimates the fair value of all stock options on the grant date by applying the Black-Scholes option pricing valuation model. The application of this valuation model involves assumptions that are highly subjective, judgmental and sensitive in the determination of compensation cost. Prior to the IPO, given the absence of an active market for the Company’s common stock prior to its IPO, the Company’s board of directors was required to estimate the fair value of its common stock at the time of each option grant primarily based upon valuations performed by a third-party valuation firm. The weighted-average key assumptions used in determining the fair value of options granted during the period indicated are as follows: Year Ended December 31, 2019 2018 2017 Estimated dividend yield 0 % 0 % 0 % Expected stock price volatility 60 % 60 % 60 % Weighted-average risk-free interest rate 2.44 % 2.75 % 2.01 % Expected life of option in years 6.08 6.13 6.06 Weighted-average option fair value at grant $ 1.24 $ 3.93 $ 4.09 A summary of outstanding and exercisable options as of December 31, 2019, 2018 and 2017, and the activity from December 31, 2017 through December 31, 2019, is presented below: Weighted- Number of Average Intrinsic Options Exercise Price Value (in thousands) Outstanding at December 31, 2017 2,454,973 $ 11.195 $ 4,764 Exercisable at December 31, 2017 1,137,766 $ 10.919 $ 2,890 Granted 1,753,539 $ 6.786 Exercised (832) 0.320 Expired, forfeited or cancelled (760,795) 11.281 Outstanding at December 31, 2018 3,446,885 $ 8.935 $ 70 Exercisable at December 31, 2018 1,643,011 $ 10.627 $ 70 Granted 2,119,708 $ 2.163 Exercised (36,040) 0.320 Expired, forfeited or cancelled (1,099,587) 9.816 Outstanding at December 31, 2019 4,430,966 $ 5.551 $ 53 Exercisable at December 31, 2019 1,518,972 $ 8.735 $ 31 The weighted-average remaining contractual life of options outstanding and exercisable on December 31, 2019 was 8.2 and 6.9 years, respectively. The option exercise price for all options granted in the year ended December 31, 2019 ranged from $1.36 to $3.14 per share. The weighted-average remaining contractual life of options outstanding and exercisable on December 31, 2018 was 7.9 and 6.6 years, respectively. The option exercise price for all options granted in the year ended December 31, 2018 ranged from $4.76 to $10.40 per share. Restricted Stock Units On May 1, 2017, the Company granted 78,750 RSUs to members of its management which vest in four equal annual installments, beginning May 1, 2018. On October 2, 2017, the Company granted 6,250 RSUs to a member of its management that vest in four equal annual installments, beginning October 2, 2018. On March 1, 2018, the Company granted 93,750 RSUs to members of its management that vest in four equal annual installments, beginning March 1, 2019. The Company satisfies its RSUs by issuing shares of the Company’s common stock when RSUs vest and are issued. In addition, when RSUs vest and are issued, RSU recipients may elect to have the Company withhold units as consideration for the tax withholding obligation for their vested RSUs. During the year ended December 31, 2019, 21,251 vested RSUs were converted into an equivalent 20,328 shares of common stock. The Company withheld 923 shares of its common stock to partially satisfy tax withholding obligations upon vesting of the RSUs for the year ended December 31, 2019. A summary of outstanding RSUs as of December 31, 2019, 2018 and 2017 and the activity from December 31, 2017 through December 31, 2019, is presented below: Weighted- Number of Average RSUs Fair Value Outstanding at December 31, 2017 85,000 $ 7.15 Granted 93,750 8.30 Vested (33,748) 7.34 Expired, forfeited or cancelled (69,688) 7.77 Outstanding at December 31, 2018 75,314 $ 7.93 Granted — — Vested (21,251) 7.86 Expired, forfeited or cancelled — — Outstanding at December 31, 2019 54,063 $ 7.96 Restricted stock The Company did not issue any shares of restricted stock for the years ended December 31, 2019, 2018 and 2017. No vested restricted stock awards were settled during the year ended December 31, 2019. The Company had no unvested restricted stock as of December 31, 2019 and 2018. For the years ended December 31, 2019, 2018 and 2017, there were no shares of restricted stock granted or forfeited.

Treasury stock

Treasury stock	12 Months Ended
	Dec. 31, 2019
Treasury stock.
Treasury stock	Note 15. Treasury stock The Company has the authority to repurchase common stock from former employees, officers, directors or other persons who performed services for the Company at the lower of the original purchase price or the then-current fair market value. On October 16, 2017, October 17, 2016 and October 16, 2015, 14,895 shares, 9,709 shares and 9,197 shares, respectively, of restricted stock were surrendered by the holder to the Company to cover taxes associated with vesting of restricted stock and such shares were added back into the treasury stock of the Company, increasing total treasury stock to 33,801 shares as of December 31, 2019 and 2018.

Commitments and contingencies

Commitments and contingencies	12 Months Ended
	Dec. 31, 2019
Commitments and contingencies
Commitments and contingencies	Note 16. Commitments and contingencies Registration Payment Arrangement: On November 5, 2018, in conjunction with the Second Amendment to the Facility and the related issuance of the Convertible Notes, the Company entered into the Registration Agreement which required the Company to file a registration statement with the SEC to register the Registrable Securities (see Note 11) within 30 days from November 5, 2018, which was to become effective per the SEC no later than 75 days thereafter. The filing deadline was subsequently extended to December 21, 2018. The Company filed a registration statement on Form S-3 to comply with the Registration Agreement on December 11, 2018, which became effective on December 20, 2018. This filing covered 3,796,668 shares, which is the number of shares that would be issued up to the Exchange Cap as (defined in the agreement). The Company is also required to, among other things, maintain the effectiveness of such registration statement, continue to file the required SEC filings on a timely basis, use its best efforts to ensure that the registered securities are listed on each securities exchange on which securities of the same class or series as issued by the Company are then listed and comply with any FINRA requests. Upon any Registration Failure, the Company shall pay additional damages to the Holder for each 30-day period (prorated for any partial period) after the date of such Registration Failure in an amount in cash equal to two percent of the original principal amount of the Convertible Notes. The Company’s obligations with respect to each registration end at the date which is the earlier of (a) when all of the Registrable Securities covered by such registration have been sold or (b) when Deerfield or any of its transferees or assignees under the Registration Agreement cease to hold any of the Registrable Securities. For each registration filing, the Company shall bear all reasonable expenses, other than underwriting discounts and commissions, and shall reimburse Deerfield or any assignee or transferee for up to $25,000 in legal fees. The Company currently expects to satisfy all of its obligations under the Registration Agreement and does not expect to pay any damages pursuant to this agreement; therefore, no liability has been recorded. Patent Infringement Litigation: On October 31, 2017, the Company received a paragraph IV certification from Teva Pharmaceuticals USA, Inc. (“Teva”) advising the Company that Teva has filed an Abbreviated New Drug Application (“ANDA”) with the FDA for a generic version of Cotempla XR-ODT, in connection with seeking to market its product prior to the expiration of patents covering Cotempla XR-ODT. On December 13, 2017, the Company filed a patent infringement lawsuit in federal district court in the District of Delaware against Teva alleging that Teva infringed the Company’s Cotempla XR-ODT patents. On December 21, 2018, the Company entered into a Settlement Agreement (the “Teva Settlement Agreement”) and a Licensing Agreement (the “Teva Licensing Agreement” and collectively with the Teva Settlement Agreement, the “Teva Agreement”) with Teva that resolved all ongoing litigation involving the Company’s Cotempla XR-ODT patents and Teva’s ANDA. Under the Teva Agreement, the Company granted Teva the right to manufacture and market its generic version of Cotempla XR-ODT under the ANDA beginning on July 1, 2026, or earlier under certain circumstances. A stipulation and order of dismissal was entered by the U.S. District Court for the District of Delaware. The Teva Agreement has been submitted to the applicable governmental agencies. On July 25, 2016, the Company received a paragraph IV certification from Actavis Laboratories FL, Inc. (“Actavis”) advising the Company that Actavis had filed an ANDA with the FDA for a generic version of Adzenys XR-ODT. On September 1, 2016, the Company filed a patent infringement lawsuit in federal district court against Actavis alleging that Actavis infringed the Company’s Adzenys XR-ODT patents. On October 17, 2017, the Company entered into a Settlement Agreement (the “Actavis Settlement Agreement”) and a Licensing Agreement (the “Actavis Licensing Agreement” and collectively with the Actavis Settlement Agreement, the “Actavis Agreement”) with Actavis that resolved all ongoing litigation involving the Company’s Adzenys XR-ODT patents and Actavis’s ANDA. Under the Actavis Agreement, the Company granted Actavis the right to manufacture and market its generic version of Adzenys XR-ODT under the ANDA beginning on September 1, 2025, or earlier under certain circumstances. A stipulation and order of dismissal was entered by the U.S. District Court for the District of Delaware. The Actavis Agreement has been submitted to the applicable governmental agencies . Other Litigation: On March 7, 2018 and April 18, 2019, the Company received citations advising the Company that the County of Harris Texas (“Harris County”) and the County of Walker Texas (“Walker County”) filed lawsuits on December 13, 2017 and January 11, 2019, respectively, against the Company and various other alleged manufacturers, promoters, sellers and distributors of opioid pharmaceutical products. Through these lawsuits, each of Harris County and Walker County seek to recoup as damages some of the expenses they allegedly have incurred to combat opioid use and addiction. Each of Harris County and Walker County also seeks punitive damages, disgorgement of profits and attorneys’ fees. Defined contribution plans : The Company maintains a defined contribution plan covering substantially all employees under the provisions of Section 401(k) of the Internal Revenue Code (“Code”). As the Company has elected a Safe-Harbor provision for the 401(k) Plan, participants are always fully vested in their employer contributions. Employees may contribute annually up to the lesser of 50% of their compensation or the applicable limit established by the Code. Effective January 1, 2015, the Company amended its 401(k) plan to provide a Company matching contribution on 100% of a participant’s contribution for the first 3% of their salary deferral and 50% of the next 2% of their salary deferral. For the years ended December 31, 2019, 2018 and 2017, the Company recorded $577,000, $576,000 and $419,000, respectively, of expense for 401(k) contributions. 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 additional office space in Blue Bell, Pennsylvania which commenced on May 1, 2016. Prior to the adoption of the New Lease Standard on January 1, 2019, the Company accounted for rent expense on long-term operating leases on a straight-line basis over the life of the lease resulting in a deferred rent balance of $989,000 at December 31, 2018. The Company adopted ASU No. 2016-02 at January 1, 2019 and recognized an operating lease liability of $4.3 million under the New Lease Standard (See Note 2 and 12). 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 $217,000, $206,000 and $243,000 for the years ended December 31, 2019, 2018 and 2017, respectively. Rent expense for these leases, excluding the share of operating expenses, was $1,011,000, $1,011,000 and $1,010,000 for the years ended December 31, 2019, 2018 and 2017, 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 $1,567,000, $666,000 and $701,000 of compensation expense for the years ended December 31, 2019, 2018 and 2017, respectively, under the Bonus Plan.

License agreements

License agreements	12 Months Ended
	Dec. 31, 2019
License agreements
License agreements	Note 17. License agreements On October 23, 2018, the Company entered into an Exclusive License Agreement (“NeuRx License”) with NeuRx Pharmaceuticals LLC (“NeuRx”), pursuant to which NeuRx granted the Company an exclusive, worldwide, royalty-bearing license to research, develop, manufacture, and commercialize certain pharmaceutical products containing NeuRx’s proprietary compound designated as NRX-101, referred to by the Company as NT0502. NT0502 is a new chemical entity that is being developed by the Company for the treatment of sialorrhea, which is excessive salivation or drooling. Under the NeuRx License, the Company made an upfront payment of $175,000 to NeuRx upon the execution of the agreement and may in the future be required to make certain development and milestone payments and royalties based on annual net sales, as defined in the NeuRx License. Royalties are to be paid on a country-by-country and licensed product-by-licensed product basis, during the period of time beginning on the first commercial sale of such licensed product in such country and continuing until the later of: (i) the expiration of the last-to-expire valid claim in any licensed patent in such country that covers such licensed product in such country; and/or (ii) expiration of regulatory exclusivity of such licensed product in such country. Under the Teva Licensing Agreement, the Company granted Teva a non-exclusive license to certain patents owned by the Company by which Teva has the right to manufacture and market its generic version of Cotempla XR-ODT under its ANDA beginning on July 1, 2026, or earlier under certain circumstances. The Teva Licensing Agreement has been submitted to the applicable governmental agencies (see Note 16). Under the Actavis Licensing Agreement, the Company granted Actavis a non-exclusive license to certain patents owned by the Company by which Actavis has the right to manufacture and market its generic version of Adzenys XR-ODT under its ANDA beginning on September 1, 2025, or earlier under certain circumstances. The Actavis Licensing Agreement has been submitted to the applicable governmental agencies (see Note 16). On July 23, 2014, the Company entered into a Settlement Agreement and an associated License Agreement (the “2014 License Agreement”) with Shire LLC (“Shire”) for a non-exclusive license to certain patents for certain activities with respect to the Company’s New Drug Application (the “NDA”) No. 204326 for an extended-release orally disintegrating amphetamine polistirex tablet. In accordance with the terms of the 2014 License Agreement, following the receipt of the approval from the FDA for Adzenys XR-ODT, the Company paid a lump sum, non-refundable license fee of an amount less than $1.0 million in February 2016. The Company is paying a single digit royalty on net sales of Adzenys XR-ODT during the life of the patents. On March 6, 2017, the Company entered into a License Agreement (the “2017 License Agreement”) with Shire, pursuant to which Shire granted the Company a non-exclusive license to certain patents owned by Shire for certain activities with respect to the Company’s NDA No. 204325 for an extended-release amphetamine oral suspension. In accordance with the terms of the 2017 License Agreement, following the receipt of the approval from the FDA for Adzenys ER, the Company paid a lump sum, non-refundable license fee of an amount less than $1.0 million in October 2017. The Company is paying a single digit royalty on net sales of Adzenys ER during the life of the patents. Such license fees are capitalized as an intangible asset and are amortized into cost of goods sold over the life of the longest associated patent. The royalties are recorded as cost of goods sold in the same period as the net sales upon which they are calculated. Additionally, each of the 2014 and 2017 License Agreements contains a covenant from Shire not to file a patent infringement suit against the Company alleging that Adzenys XR-ODT or Adzenys ER, respectively, infringes the Shire patents.

Related party transactions

Related party transactions	12 Months Ended
	Dec. 31, 2019
Related party transactions
Related party transactions	Note 18. Related party transactions In February 2017, the Company closed an underwritten public offering of 5,750,000 shares of its common stock at a public offering price of $5.00 per share, which includes 750,000 shares of the Company’s common stock resulting from the underwriters’ exercise of their over-allotment option at the public offering price on February 17, 2017. 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 underwriter a 30-day option to purchase up to an additional 720,000 shares of its common stock. Deerfield, the Company’s senior lender, participated in the purchase of the Company’s common shares as part of both public offerings, and as a result, is classified as a related party. The Company is obligated under a $60.0 million senior secured credit Facility that was issued by the Company to Deerfield. On June 1, 2017, the Company and Deerfield entered into an Amendment to the Company’s existing Facility with Deerfield which extended the date to repay the Accrued Interest under the Facility to June 1, 2018, which may have been extended to June 1, 2019 at the election of the Company if certain conditions have been met as specified in the Amendment. The right to payment of the Accrued Interest was memorialized in the form of Convertible Notes issued to Deerfield on the Amendment Date. On October 26, 2017, Deerfield provided a conversion notice electing to convert the entire $6.6 million of Convertible Notes into shares of the Company’s common stock at a conversion price of $7.08 per share. The conversion price was based on 95% of the average of the volume weighted average prices per share of the Company’s common stock on the NASDAQ Global Market for the three trading day period immediately preceding such conversion. This resulted in issuing 929,967 shares of the Company’s common stock to Deerfield on this date and the Convertible Notes were cancelled (see Note 11). On November 5, 2018, the Company and Deerfield entered into the Second Amendment to the Facility pursuant to which the Company agreed to pay $7.5 million of principal under the Facility otherwise due in May 2019 upon completion of the November Offering. The Second Amendment provides an option for the $15.0 million principal on the Facility due in May 2020 to be paid in either May 2021 or May 2022 upon the achievement of certain revenue milestones as described in the Second Amendment. Also, pursuant to the Second Amendment, the Company amended and restated its outstanding notes under the Facility in the form of senior secured convertible notes. The Company has the right to pay principal and future interest in shares of Common Stock not to exceed 2,135,625 shares in the aggregate. Additionally, subject to the terms of the amended and restated convertible notes, Deerfield has the right to convert the remaining principal under the Facility into shares of Common Stock not to exceed 3,796,668 shares in the aggregate at a conversion price ranging from 95% to 83% of the greater of the average of the volume weighted average price per share of the Common Stock for the three trading day period immediately preceding such conversion and $10.00. On November 8, 2018, the Company closed an underwritten public offering of 19,999,999 shares of its common stock at a public offering price of $2.30 per share, which includes 2,608,695 shares of its common stock resulting from the underwriters’ exercise of their over-allotment option at the public offering price. The net proceeds to the Company from this offering, after deducting underwriting discounts and commissions and other offering expenses payable by the Company were approximately $43.4 million. Deerfield also participated in the purchase of the Company’s common shares as part of this offering (see Note 11).

Selected Quarterly Financial Da

Selected Quarterly Financial Data (Unaudited)	12 Months Ended
	Dec. 31, 2019
Selected Quarterly Financial Data (Unaudited)
Selected Quarterly Financial Data (Unaudited)	Note 19. Selected Quarterly Financial Data (Unaudited) The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Operating results for these periods are not necessarily indicative of the operating results for a full year. Historical results are not necessarily indicative of results to be expected in future periods. Selected quarterly financial data for years ended December 31, 2019 and 2018, are as follows (in thousands, except share and per share amounts): Quarter Ended March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Net product sales $ 14,634 $ 15,643 $ 17,540 $ 16,832 Gross profit 8,238 10,544 11,093 9,651 Net loss attributable to common stock $ (7,600) $ (3,763) $ (2,051) $ (3,488) Weighted average common shares outstanding used to compute net loss per share, basic and diluted (1) 49,703,563 49,727,718 49,730,755 49,732,654 Net loss per share of common stock, basic and fully diluted (2): $ (0.15) $ (0.08) $ (0.04) $ (0.07) Quarter Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 Net product sales $ 10,729 $ 11,363 $ 12,503 $ 15,393 Gross profit 5,508 4,376 5,546 7,631 Net loss attributable to common stock $ (14,436) $ (15,207) $ (12,695) $ (9,337) Weighted average common shares outstanding used to compute net loss per share, basic and diluted (1) 28,996,956 29,008,909 29,625,792 41,415,358 Net loss per share of common stock, basic and fully diluted (2): $ (0.50) $ (0.52) $ (0.43) $ (0.23) (1) On November 8, 2018, the Company closed an underwritten public offering of 19,999,999 shares of its common stock at a public offering price of $2.30 per share, which includes 2,608,695 shares of its common stock resulting from the underwriters’ exercise of their over-allotment option at the public offering price. In addition, in 2018, the Company sold 651,525 shares of common stock under the Cowen Sales Agreement, at an average sale price of approximately $6.25 per share. These transactions produced a significant increase in the number of shares outstanding which will impact the year-over-year comparability of the Company’s loss per share calculations. (2) Loss per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly loss per share may not necessarily equal the total for the year.

Subsequent event

Subsequent event	12 Months Ended
	Dec. 31, 2019
Subsequent event.
Subsequent event	Note 20. Subsequent event On January 1, 2020, in accordance with the Evergreen Provisions of the 2015 Plan, the Company added 2,486,633 shares to the option pool, increasing the total number of shares reserved and available for issuance under the 2015 Plan to 5,744,232 shares. Effective as of January 1, 2020, Deerfield Special Situations Fund, L.P., one of the lenders which made available 33 1/3% of the Facility, assigned to Deerfield Partners, L.P. all of its rights under the Facility, including its rights with respect to an amended and restated senior secured convertible Note with an original issuance date of May 11, 2016 and amendment and restatement date of November 8, 2018, and Deerfield Partners, L.P. is assuming the obligations of Deerfield Special Situations Fund, L.P. under the Loan Documents. Deerfield Partners, L.P. is an investment fund managed by Deerfield Management, L.P. and, accordingly, is a permitted assignee under the Facility Agreement. The assignment has no impact on the Company’s financial statements.

SCHEDULE II - VALUATION AND QUA

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS	12 Months Ended
	Dec. 31, 2019
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS	SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance Additions at charged to Deductions Balance beginning costs and and at end of of period expenses Payments period For the year ended December 31, 2019 Allowance for chargebacks (1) $ 1,314 $ 12,135 $ (9,299) $ 4,150 Allowance for cash discounts (1) 551 3,801 (3,654) 698 Savings offers (2) 11,288 69,540 (64,038) 16,790 Reserve for wholesaler fees (2) 4,249 17,225 (16,460) 5,014 Reserve for returns (2) 5,157 3,299 (3,334) 5,122 Rebates (2) 7,763 17,355 (19,009) 6,109 For the year ended December 31, 2018 Allowance for chargebacks (1) $ 816 $ 8,565 $ (8,067) $ 1,314 Allowance for cash discounts (1) 337 3,519 (3,305) 551 Savings offers (2) 7,168 71,303 (67,183) 11,288 Reserve for wholesaler fees (2) 2,345 17,414 (15,510) 4,249 Reserve for returns (2) 2,711 3,803 (1,357) 5,157 Rebates (2) 4,008 18,746 (14,991) 7,763 For the year ended December 31, 2017 Allowance for chargebacks (1) $ 779 $ 10,146 $ (10,109) $ 816 Allowance for cash discounts (1) 171 1,814 (1,648) 337 Savings offers (2) 2,070 30,978 (25,880) 7,168 Reserve for wholesaler fees (2) 509 8,244 (6,408) 2,345 Reserve for returns (2) 1,157 1,792 (238) 2,711 Rebates (2) 544 7,837 (4,373) 4,008 (1) Shown as a reduction of accounts receivable and gross sales as indicated in column heading. (2) Shown as accrued expenses and a reduction of gross sales.

Summary of significant accoun_2

Summary of significant accounting policies (Policies)	12 Months Ended
	Dec. 31, 2019
Summary of significant accounting policies
Basis of presentation	Basis of Presentation: The consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and with the rules and regulations of the Securities and Exchange Commission (“SEC”).
Principles of consolidation	Principles of consolidation: The consolidated financial statements include the accounts of the Company and its four wholly-owned subsidiaries. All significant intercompany transactions have been eliminated.
Use of estimates	Use of estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates.
Concentration of credit risk	Concentration of credit risk : Accounts receivable subjects the Company to concentrations of credit risk. Accounts receivable were due from thirteen and fourteen customers in the years ended December 31, 2019 and 2018, respectively. Three customers accounted for 96% of the accounts receivable at December 31, 2019 and 2018. There were fifteen customers that accounted for all gross revenue in the years ended December 31, 2019 and 2018, and fourteen customers that accounted for all gross revenue in the year ended December 31, 2017. Three customers accounted for 94% of the gross revenue for the years ended December 31, 2019, and 93% of the gross revenue for the years ended December 31, 2018 and 2017.
Segment information	Segment information : Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the development, manufacturing and commercialization of pharmaceuticals.
Liquidity	Liquidity: During 2019, 2018 and 2017, the Company incurred operating losses and used cash to fund operations. Management intends to achieve profitability through revenue growth from its currently marketed pharmaceutical products. The Company does not anticipate it will be profitable until such time as revenues from Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER increase substantially over the current levels. In November 2018, the Company completed an offering of its common stock and restructured its outstanding debt which reduced the amount of principal payable in cash. On October 2, 2019, the Company entered into a senior secured credit agreement with Encina Business Credit, LLC (“Encina”) as agent for the lenders (the “Loan Agreement”), in which Encina will extend up to $25.0 million in secured Revolving Loans to the Company, of which up to $2.5 million may be available for short-term swingline loans, against 85% of eligible accounts receivables. Accordingly, management has performed the review required for going concern accounting and believes the Company presently has sufficient liquidity to continue to operate for the next twelve months after the filing of this Report on Form 10-K.
Cash equivalents	Cash equivalents: The Company invests its available cash balances in bank deposits and money market funds. The Company considers highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company’s primary objectives for investment of available cash are the preservation of capital and the maintenance of liquidity.
Short-term investments	Short-term investments: Short-term investments, if any, consist of debt securities that have original maturities greater than three months but less than or equal to one year and are classified as available-for-sale securities. Such securities are carried at estimated fair value, with any unrealized holding gains or losses reported, net of material tax effects reported, as accumulated other comprehensive income or loss, which is a separate component of stockholders’ (deficit) equity. Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are included in other income in the consolidated results of operations. A decline in the market value of any available-for-sale security below cost that is deemed to be other-than-temporary results in a reduction in fair value charged to earnings in that period, and a new cost basis for the security is established. Dividend and interest income are recognized in other income when earned. The cost of securities sold is calculated using the specific identification method. The Company places all investments with government agencies, or corporate institutions whose debt is rated as investment grade. The Company classifies all available-for-sale marketable securities with maturities greater than one year from the balance sheet date, if any, as non-current assets.
Allowance for doubtful accounts	Allowance for doubtful accounts : The allowance for doubtful accounts is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management determines the adequacy of the allowance based on reviews of individual accounts, historical losses, existing economic conditions and estimates based on management’s judgments in specific matters. Accounts are written off as they are deemed uncollectible based on periodic review of the accounts. There is no allowance for doubtful accounts at December 31, 2019 or 2018, as management believes that all receivables are fully collectible.
Inventories	Inventories: Inventories are measured at the lower of cost (first in, first out) or net realizable value. Inventories have been reduced by an allowance for excess and obsolete inventories. Cost elements include material, labor and manufacturing overhead. Inventories consist of raw materials, work in process and finished goods. Until objective and persuasive evidence exists that regulatory approval has been received and future economic benefit is probable, pre-launch inventories are expensed into research and development. Manufacturing costs for the production of Adzenys XR-ODT incurred after the January 27, 2016 FDA approval date, for the production of Cotempla XR-ODT incurred after June 30, 2017, following the FDA approval date of June 19, 2017, and for the production of Adzenys ER incurred after September 30, 2017, following the FDA approval date of September 15, 2017, are being capitalized into inventory.
Property and equipment	Property and equipment : Property and equipment is recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from three to ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the respective lease term or the estimated useful lives of the assets.
Leases	Leases: At the inception of an arrangement, the Company determines if an arrangement is, or contains, a lease based on the unique facts and circumstances present in such arrangement. Lease classification, recognition, and measurement are then determined at the lease commencement date. For arrangements that contain a lease, the Company will (i) identify lease and non-lease components, (ii) determine the consideration in the contract, (iii) determine whether the lease is an operating or financing lease, and (iv) recognize lease right-of-use (“ROU”) assets and liabilities. Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company uses the implicit interest rate when readily determinable and uses the Company’s incremental borrowing rate when the implicit rate is not readily determinable based upon the information available at the lease commencement date in determining the present value of the lease payments. Fixed lease payments are recognized over the expected term of the lease using the effective interest method. Variable lease expenses that are not considered fixed, or in substance fixed, are expensed as incurred. Fixed and variable lease expense on operating leases are recognized within cost of goods sold and operating expenses in the Company’s consolidated statements of operations. ROU asset amortization and interest costs on financing leases are recorded within cost of goods sold and interest expense, respectively, in the Company’s consolidated statements of operations. The Company have elected the short-term lease exemption and recognizes a short-term lease expense over lease term of 12 months or less. Operating leases are included in operating lease ROU assets, current portion of operating lease liabilities and operating lease liabilities in the Company’s consolidated balance sheets. Financing leases are included in property and equipment, net, current portion of long-term debt and long-term debt, net of current portion in the Company’s consolidated balance sheets.
Intangible assets	Intangible assets: Intangible assets subject to amortization, which principally include proprietary modified-release drug delivery technology, the costs to acquire the rights to Tussionex Abbreviated New Drug Application and patents, are recorded at cost and amortized over the estimated lives of the assets, which primarily range from 10 to 20 years. The Company estimates that the patents it has filed have a future beneficial value. Therefore, costs associated with filing for its patents are capitalized. Once the patent is approved and commercial revenue realized, the costs associated with the patent are amortized over the useful life of the patent. If the patent is not approved, the costs will be expensed. For new product candidates, patent applications and related expenses are expensed as incurred.
Impairment of long-lived assets	Impairment of long-lived assets : Long-lived assets such as property and equipment and intangibles subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable. Such assets are also evaluated for impairment in light of the Company’s continuing losses. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. No impairment charges were recorded for the years ended December 31, 2019, 2018 or 2017.
Debt issuance costs and discounts	Debt issuance costs and discounts: Debt issuance costs reflect fees paid to lenders, as compensation for services beyond their role as a creditor, and third parties whose costs are directly related to issuing debt and that otherwise would not be incurred. Amounts paid to the lender as a reduction in the proceeds received are considered a component of the discount on the issuance and not an issuance cost. Debt issuance costs and discounts related to term loans are reported as a direct deduction from the outstanding debt and amortized over the term of the debt using the effective interest method as additional interest expense. Debt issuance costs related to a line of credit facility are accounted for in accordance with ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, in which the Company elects to defer and present debt issuance costs as an asset and are recorded at cost and subsequently amortized over the term of the line of credit as additional interest expense. The unamortized debt issuance costs related to a line of credit facility is included in other assets in the consolidated balance sheets.
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, net in the consolidated results of operations. In circumstances where there are multiple embedded instruments that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within twelve months of the balance sheet date. When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption and are classified in interest expense in the consolidated results of operations.
Revenue recognition	Revenue recognition: Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company makes estimates of the net sales price, including estimates of variable consideration (e.g., savings offers, prompt payment discounts, product returns, wholesaler fees, wholesaler chargebacks and estimated rebates) to be incurred on the selling price of the respective product sales, and recognizes the estimated amount as revenue when it transfers control of the product to its customers (e.g., upon delivery). Variable consideration is determined using either an expected value or a most likely amount method. The estimate of variable consideration is also subject to a constraint such that some or all of the estimated amount of variable consideration will only be included in the transaction price to the extent that it is probable that a significant reversal of revenue (in the context of the contract) will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Estimating variable consideration and the related constraint requires the use of significant management judgment and other market data. The Company provides for prompt payment discounts, wholesaler fees and wholesaler chargebacks based on customer contractual stipulations. The Company analyzes recent product return history and other market data obtained from its third party logistics providers (“3PLs”) to determine a reliable return rate. Additionally, management analyzes historical savings offers and rebate payments based on patient prescriptions dispensed for Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER and information obtained from third party providers to determine these respective variable considerations. The Company sells its generic Tussionex, Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER to a limited number of pharmaceutical wholesalers, all subject to rights of return. Pharmaceutical wholesalers buy drug products directly from manufacturers. Title to the product passes upon delivery to the wholesalers, when the risks and rewards of ownership are assumed by the wholesaler (freight on board destination). These wholesalers then resell the product to retail customers such as food, drug and mass merchandisers. Contract Balances Contract assets primarily relate to our right to consideration in exchange for products transferred to a customer in which our right to consideration is dependent upon the customer selling these products. As of December 31, 2019, contract assets of $27,000 was included in other current assets in the consolidated balance sheets. The Company had no contract asset as of December 31, 2018. As of December 31, 2019 and 2018, the Company had no contract liability. Disaggregation of revenue The following table disaggregates the Company’s net product sales by product: Year Ended December 31, 2019 2018 2017 (in thousands) Adzenys XR-ODT $ 31,213 $ 26,631 $ 20,377 Cotempla XR-ODT 25,649 19,014 1,590 Adzenys ER 834 (27) — Generic Tussionex 6,953 4,370 5,165 $ 64,649 $ 49,988 $ 27,132 Net product sales Net product sales represent total gross product sales less gross to net sales adjustments. Gross to net sales adjustments for branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER include savings offers, prompt payment discounts, wholesaler fees, estimated rebates to be incurred on the selling price of the respective product sales and estimated allowances for product returns. Gross to net sales adjustments for generic Tussionex include prompt payment discounts, estimated allowances for product returns, wholesaler fees, estimated government rebates and estimated chargebacks to be incurred on the selling price of generic Tussionex related to the respective product sales. The Company recognizes total gross product sales less gross to net sales adjustments as revenue based on shipments from 3PLs to the Company’s wholesaler customers. Savings offers for branded products The Company offers savings programs for Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER to patients covered under commercial payor plans in which the cost of a prescription to such patients is discounted. The amount of redeemed savings offers is recorded based on information from third-party providers against the estimated discount recorded as accrued expenses. The estimated discount is recorded as a gross to net sales adjustments at the time revenue is recognized. Prompt payment discounts Prompt payment discounts are based on standard programs with wholesalers and are recorded as a discount allowance against accounts receivable and as a gross to net sales adjustments at the time revenue is recognized. Wholesale distribution fees Wholesale distribution fees are based on definitive contractual agreements for the management of the Company’s products by wholesalers and are recorded as accrued expenses and as a gross to net sales adjustment at the time revenue is recognized. Rebates The Company’s branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER are subject to commercial managed care and government managed Medicare and Medicaid programs whereby discounts and rebates are provided to participating managed care organizations and federal and/or state governments. Calculations related to rebate accruals of branded products are estimated based on information from third-party providers. The Company’s generic Tussionex product is subject to state government-managed Medicaid programs whereby discounts and rebates are provided to participating state governments. Generic Tussionex government rebates are estimated based upon rebate payment data available from sales of the Company’s generic Tussionex product over the past three years. Estimated rebates are recorded as accrued expenses and as a gross to net sales adjustment at the time revenue is recognized. Historical trends of estimated rebates will be regularly monitored, which may result in adjustment to such estimates in the future. Product returns Wholesalers’ contractual return rights are limited to defective product, product that was shipped in error, product ordered by customer in error, product returned due to overstock, product returned due to dating or product returned due to recall or other changes in regulatory guidelines. The return policy for expired product allows the wholesaler to return such product starting six months prior to expiry date to twelve months post expiry date. Estimated returns are recorded as accrued expenses and as a gross to net sales adjustments at the time revenue is recognized. The Company analyzed recent branded product return data to determine a reliable return rate for branded Adzenys XR-ODT, Cotempla XR-ODT and Adzenys ER. Generic Tussionex product returns were estimated based upon return data available from sales of the Company’s generic Tussionex product over the past three years. Wholesaler chargebacks for generic product The Company’s generic Tussionex products are subject to certain programs with wholesalers whereby pricing on products is discounted below wholesaler list price to participating entities. These entities purchase products through wholesalers at the discounted price, and the wholesalers charge the difference between their acquisition cost and the discounted price back to the Company. Estimated chargebacks are recorded as a discount allowance against accounts receivable and as a gross to net sales adjustments at the time revenue is recognized based on information provided by third parties. Due to estimates and assumptions inherent in determining the amount of returns, rebates and chargebacks, the actual amount of returns, claims for rebates and chargebacks may be different from the estimates, at which time reserves would be adjusted accordingly. Wholesale distribution fees and the allowance for prompt pay discounts are recorded at the time of shipment and such fees and allowances are recorded in the same period that the related revenue is recognized.
Distribution expenses	Distribution expenses: Costs invoiced to the Company by its third party logistics firm are classified as cost of goods sold in the consolidated statements of operations.
Shipping and handling costs	Shipping and handling costs: Amounts billed to customers for shipping and handling fees for the delivery of goods are classified as cost of goods sold in the consolidated statements of operations.
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.
Advertising costs	Advertising costs: Advertising costs are comprised of print and electronic media placements that are expensed as incurred. There was no advertising costs recognized during the year ended December 31, 2019. The Company recognized advertising costs of $0.6 million and $0.4 million during the years ended December 31, 2018 and 2017 respectively.
Share-based compensation	Share-based compensation: Share-based compensation awards, including grants of 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 stock-based awards is recognized on a straight-line basis, based on the grant date fair value, over the requisite service period of the award, which is generally the vesting term. The fair value of the Company’s stock-based awards to employees and directors is estimated using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (1) the expected stock price volatility, (2) the expected term of the award, (3) the risk-free interest rate and (4) expected dividends. For performance-based stock awards, compensation expense is recognized on a straight-line basis, based on the grant date fair value, over the performance period or through the vesting date, whichever is longer. Management monitors the probability of achievement of the performance conditions and adjusts stock-based compensation expense, if necessary. Since the Company’s initial public offering (“IPO”) in July 2015, the Company’s board of directors has determined the fair value of each share of underlying common stock based on the closing price of the Company’s common stock as reported by the NASDAQ Global Market on the date of grant. Under ASU No. 2017-09 guidance for accounting for share-based payments, the Company has elected to continue estimating forfeitures at the time of grant and, if necessary, revise the estimate in subsequent periods if actual forfeitures differ from those estimates. Ultimately, the actual expense recognized over the vesting period will only be for those options that vest.
Paragraph IV litigation costs	Paragraph IV litigation costs: Legal costs incurred by the Company in the enforcement of the Company’s intellectual property rights are charged to expense as incurred.
Income taxes	Income taxes: Income taxes are accounted for using the liability method, under which deferred taxes are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax laws that will be in effect when the differences are expected to reverse. Management evaluates the Company’s tax positions in accordance with guidance on accounting for uncertainty in income taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not that the position will be sustained upon examination. As of December 31, 2019 and 2018, the Company has unrecognized tax benefits associated with uncertain tax positions in the consolidated financial statements. These uncertain tax positions were netted against net operating losses (NOL’s) with no separate reserve for uncertain tax positions required. Deferred tax assets should be reduced by a valuation allowance if current evidence indicates that it is considered more likely than not that these benefits will not be realized. In evaluating the objective evidence that historical results provide, the Company considered that three years of cumulative operating losses was significant negative evidence outweighing projections for future taxable income. Therefore, at December 31, 2019 and 2018, the Company determined that it is more likely than not that the deferred tax assets will not be realized. Accordingly, the Company has recorded a valuation allowance to reduce deferred tax assets to zero. The Company may not ever be able to realize the benefit of some or all of the federal and state loss carryforwards, either due to ongoing operating losses or due to ownership changes, which limit the usefulness of the loss carryforwards.
Recent accounting pronouncements	Recent accounting pronouncements: In December 2019, the FASB issued ASU No. 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , enhances and simplifies various aspects of the income tax accounting guidance including the elimination of certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for foreign basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company elected to early adopt ASU 2019-12 on its consolidated financial statements for the period ended December 31, 2019. The adoption of this standard did not have a material impact on the Company’s consolidated results of operations or financial position. In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2018-13, Disclosure Framework -Changes to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The standard is effective for public entities for the fiscal years ending after December 15, 2020, with early adoption permitted for the removed disclosures and delayed adoption permitted for the new disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company is currently evaluating the impact of adopting ASU 2018-13 on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a write-down. The standard is effective for public entities that are smaller reporting companies, as defined by the SEC, for the fiscal years beginning after December 15, 2022, with early adoption permitted through a modified retrospective approach. The Company has evaluated the impact of adopting ASU 2016-13 and determined that the adoption will be immaterial to the consolidated financial statements. The Company will adopt ASU 2016-13 on January 1, 2023. In February 2018, the FASB issued ASU No. 2018-02, Income Statement –Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA, and requires certain disclosures about stranded tax effects. ASU 2018-02 is effective for entities for fiscal years beginning after December 15, 2018 with early adoption permitted, and shall be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the corporate income tax rate in the TCJA is recognized. This standard became effective for the Company on January 1, 2019. The adoption of this standard did not have a material impact on the Company’s consolidated results of operations or financial position. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (the “New Lease Standard”). The New Lease Standard supersedes the lease guidance under FASB Accounting Standards Codification ("ASC") Topic 840, Leases (“Prior GAAP”), resulting in the creation of FASB ASC Topic 842, Leases. Under the new guidance, lessees are required to recognize in the statement of financial position the following for all finance and operating 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 ROU asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. In January, July and December 2018, the FASB issued additional amendments to the new lease guidance relating to, transition, and clarification. The July 2018 amendment, ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, provides an optional transition method that allows entities to elect to apply the standard using the modified retrospective transition method, which did not require the Company to adjust comparative periods. The Company adopted this standard on the effective date of January 1, 2019 and elected to use the modified retrospective transition method approach at transition. Therefore, no adjustments are made to amounts in prior period financial statements. In addition, the Company elected the following practical expedients: 1) the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allows the Company to carry forward the historical lease classification; 2) the land easements practical expedient, which allows the Company to carry forward the accounting treatment for land easements on existing agreements; 3) the short-term lease practical expedient, which allows the Company to exclude short-term leases from recognition in the consolidated balance sheets; and 4) The adoption of this accounting standard resulted in the recording of Operating lease ROU assets and Operating lease liabilities of $3.4 million and $4.3 million, respectively, as of January 1, 2019. The difference between the operating lease assets and liabilities was recorded as an adjustment to deferred rent for $0.9 million relating to real estate leases. The adoption of ASU 2016-02 had no impact on Accumulated Deficit. The Company implemented additional internal controls to identify lease contracts and enable the preparation of financial information related to the New Lease Standard. See Note 12 for additional information.

Summary of significant accoun_3

Summary of significant accounting policies (Tables)	12 Months Ended
	Dec. 31, 2019
Summary of significant accounting policies
Schedule of disaggregation of revenue	Year Ended December 31, 2019 2018 2017 (in thousands) Adzenys XR-ODT $ 31,213 $ 26,631 $ 20,377 Cotempla XR-ODT 25,649 19,014 1,590 Adzenys ER 834 (27) — Generic Tussionex 6,953 4,370 5,165 $ 64,649 $ 49,988 $ 27,132

Net loss per share (Tables)

Net loss per share (Tables)	12 Months Ended
	Dec. 31, 2019
Net loss per share
Schedule of potentially dilutive securities excluded in the computation of diluted net loss per share	December 31, 2019 2018 2017 Series C Redeemable Convertible Preferred Stock Warrants (as converted) 70,833 70,833 70,833 Stock options outstanding 4,430,966 3,446,885 2,454,973 RSUs outstanding 54,063 75,314 85,000

Fair value of financial instr_2

Fair value of financial instruments (Tables)	12 Months Ended
	Dec. 31, 2019
Fair value of financial instruments
Schedule of hierarchy for financial instruments measured at fair value on a recurring basis	Fair Value as of December 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 12,338 $ 4,492 $ — $ 16,830 Short-term investments 1,261 6,803 — 8,064 Total financial assets $ 13,599 $ 11,295 $ — $ 24,894 Earnout liability $ — $ — $ 30 $ 30 Derivative liabilities (see Note 11) — — 1,135 1,135 Total financial liabilities $ — $ — $ 1,165 $ 1,165 Fair Value as of December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents $ 27,419 $ 19,059 $ — $ 46,478 Total financial assets $ 27,419 $ 19,059 $ — $ 46,478 Earnout liability $ — $ — $ 37 $ 37 Derivative liability (see Note 11) — — 2,017 2,017 Total financial liabilities $ — $ — $ 2,054 $ 2,054
Schedule of cash and cash equivalents and short-term investments	December 31, 2019 Amortized Unrealized Market Cost Gain / (Loss) Value (in thousands) Bank deposits and money market funds $ 13,599 $ — $ 13,599 Financial and corporate debt securities 11,294 1 11,295 $ 24,893 $ 1 $ 24,894 December 31, 2018 Amortized Unrealized Market Cost Gain / (Loss) Value (in thousands) Bank deposits and money market funds $ 27,419 $ — $ 27,419 Financial and corporate debt securities 19,059 — 19,059 $ 46,478 $ — $ 46,478
Schedule of changes in Level 3 liabilities measured at fair value	Level 3 Liabilities (in thousands) Balance at December 31, 2017 1,830 Change in fair value Balance at December 31, 2018 2,054 Addition of Encina derivative liability Change in fair value Balance at December 31, 2019 $ 1,165
Earnout liability
Fair value of financial instruments
Methodologies and significant inputs used in determination of fair value	Earnout Liability Date of Valuation 12/31/2019 12/31/2018 Valuation Method Monte Carlo Monte Carlo Volatility (annual) Risk‑free rate (annual) 1.53% - 2.58% 2.53% - 3.29% Time period from valuation until end of earnout 0.5 ‑ 9.5 0.5 ‑ 9.5 Earnout Target 1 (thousands) $ 13,700 $ 13,700 Earnout Target 2 (thousands) $ 18,200 $ 18,200 Discount rate 22.88% - 23.35% 21.35% - 21.68% Fair value of liability at valuation date (thousands) $ 30 $ 37
Derivative liability
Fair value of financial instruments
Methodologies and significant inputs used in determination of fair value	Encina Derivative Liability Deerfield Derivative Liability Date of Valuation 12/31/2019 10/02/2019 12/31/2019 12/31/2018 Valuation Method Discounted Cash Flow Discounted Cash Flow Monte Carlo Monte Carlo Volatility (annual) N/A N/A N/A N/A Time period from valuation until maturity of debt (yrs.) 2.4 2.6 2.4 3.4 Cumulative probability of a change in control prepayment implied by model 23.9 % 24.7 % 23 % 25.1 % Cumulative probability of other accelerated prepayments implied by model N/A N/A 10 % 13.7 % Discount rate 6.0 % 6.0 % 25.34 % 23.12 % Fair value of liability at valuation date (thousands) $ 66 $ 69 $ 1,069 $ 2,017

Inventories (Tables)

Inventories (Tables)	12 Months Ended
	Dec. 31, 2019
Inventories
Schedule of inventories	December 31, 2019 2018 (in thousands) Raw materials $ 3,679 $ 3,845 Work in process 935 2,704 Finished goods 7,082 4,259 Inventory at cost 11,696 10,808 Inventory reserve (686) (441) $ 11,010 $ 10,367

Property and equipment (Tables)

Property and equipment (Tables)	12 Months Ended
	Dec. 31, 2019
Property and equipment
Schedule of property and equipment, net	December 31, 2019 2018 (in thousands) Assets under finance lease $ 3,733 $ 3,327 Leasehold improvements 4,392 4,340 Manufacturing, packaging and lab equipment 7,088 6,821 Office furniture and equipment 1,888 2,164 Assets under construction 731 188 17,832 16,840 Accumulated depreciation and amortization (including $1,153 and $633 at December 31, 2019 and 2018 respectively, applicable to finance leases) (10,487) (8,926) $ 7,345 $ 7,914

Intangible assets (Tables)

Intangible assets (Tables)	12 Months Ended
	Dec. 31, 2019
Intangible assets
Schedule of intangible assets, net	December 31, 2019 2018 (in thousands) Proprietary modified-release drug delivery technology $ 15,600 $ 15,600 Tussionex ANDA 4,829 4,829 CPI profit sharing 2,043 2,043 Patents 1,971 2,307 Other 1,035 1,035 25,478 25,814 Accumulated amortization (12,935) (11,198) $ 12,543 $ 14,616
Schedule of aggregate amortization of intangible assets	Year ending December 31, (in thousands) 2020 $ 1,737 2021 1,737 2022 1,737 2023 1,642 2024 1,333 Thereafter 3,871 $ 12,057

Income taxes (Tables)

Income taxes (Tables)	12 Months Ended
	Dec. 31, 2019
Income taxes
Schedule of significant components of deferred income tax assets and liabilities	December 31, 2019 2018 (in thousands) Deferred Tax Assets: Net operating loss $ 37,747 $ 37,819 Share-based compensation 2,113 1,757 Research and development tax credit 1,947 2,378 Other reserves 2,238 1,270 Finance lease liability 156 390 Operating lease liability 826 208 State deferred 1,518 1,236 Inventory 90 103 Accrued rebates 5,862 4,902 Interest expense carryover 1,143 1,296 Other 914 952 Total deferred tax assets 54,554 52,311 Deferred Tax Liabilities: Intangible assets (1,230) (1,226) Right-of-use asset (639) — Property and equipment (873) (999) Total deferred tax liabilities (2,742) (2,225) Valuation allowance 51,812 50,086 Net deferred tax asset (liability) $ — $ —
Schedule of gross unrecognized tax benefits	December 31, 2019 2018 (in thousands) Beginning Balance $ 3,956 $ 7,261 Increase resulting from current period tax positions 6,872 5,458 Decrease resulting from current period tax positions (2,182) (8,763) Ending Balance $ 8,646 $ 3,956
Schedule of reconciliation of Federal statutory tax rate	Year Ended December 31, 2019 2018 U.S. Statutory Tax Rate 21 % 21 % Change in Valuation Allowance (10.2) % (21.5) % State Tax Expense, net 0.9 % 1.8 % Research and Development Tax Credit 0.9 % 0.5 % Uncertain Tax Position - Research and Development Tax Credit (3.4) % % Permanent Difference - Interest Expense (7.8) % % Provision to Return, Other Permanent Differences and Other Adjustments (1.4) % (1.8) % Income Tax Expense (Benefit) % %

Accrued expenses (Tables)

Accrued expenses (Tables)	12 Months Ended
	Dec. 31, 2019
Accrued expenses
Schedule of accrued expenses	December 31, December 31, 2019 2018 (in thousands) Accrued savings offers $ 16,790 $ 11,289 Accrued rebates 6,109 7,762 Accrued customer returns 5,122 5,157 Accrued wholesaler fees 5,014 4,249 Accrued payroll and benefits 4,485 4,555 Other accrued expenses 2,668 2,806 Total accrued expenses $ 40,188 $ 35,818

Debt (Tables)

Debt (Tables)	12 Months Ended
	Dec. 31, 2019
Debt
Schedule of long-term debt	December 31, 2019 2018 (in thousands) Deerfield senior secured credit facility, net of discount of $1,982 and $3,334, respectively $ 43,768 $ 49,916 Financing and capital leases, maturing through May 2024 1,167 1,858 44,935 51,774 Less current portion (15,836) (8,557) Long-term debt $ 29,099 $ 43,217
Schedule of future principal payments of long-term debt including financing leases	Period ending: December 31, (in thousands) 2020 $ 15,836 2021 15,099 2022 15,854 2023 89 2024 39 Future principal payments $ 46,917 Less unamortized debt discount (1,982) Less current portion of long-term debt (15,836) Total long-term debt, net of current portion $ 29,099

Leases (Tables)

Leases (Tables)	12 Months Ended
	Dec. 31, 2019
Leases
Schedule of lease expense	Year Ended December 31, 2019 Statement of Operations Classification (in thousands) Lease cost: Operating lease cost $ 1,071 Cost of goods sold and operating expenses Short-term lease cost 37 Cost of goods sold and operating expenses Variable lease cost 217 Cost of goods sold and operating expenses Finance lease cost: Amortization of leased assets 520 Cost of goods sold Interest on lease liabilities 214 Interest expense Total net lease cost $ 2,059
Schedule of balance sheet information related to leases	December 31, 2019 Balance Sheet Classification (in thousands) Leases: Assets: Operating lease assets $ 3,044 Operating lease right-of-use assets Finance lease assets 2,580 Property, plant and equipment, net Total leased assets $ 5,624 Liabilities: Current: Operating leases $ 681 Current portion of operating lease liabilities Finance leases 836 Current portion of long-term debt Noncurrent: Operating leases 3,254 Operating lease liabilities Finance leases 331 Long-term debt, net of current portion Total lease liabilities $ 5,102
Schedule of weighted average lease term and discount rates	December 31, 2019 Weighted-Average Remaining Lease Term (years) Operating lease assets 4.7 Finance lease assets 1.8 Weighted-Average Discount Rate Operating lease assets 15.0 % Finance lease assets 11.8 %
Schedule of supplemental cash flow information related to leases	Year Ended December 31, 2019 (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,168 Operating cash flows from finance leases 214 Financing cash flows from finance leases 1,098 ROU assets obtained in exchange for new finance lease liabilities 406 ROU assets obtained in exchange for new operating lease liabilities $ 135
Schedule of lease liability maturity	December 31, 2019 Operating Leases Finance Leases (in thousands) 2020 $ 1,226 $ 894 2021 1,118 117 2022 1,060 115 2023 1,055 95 2024 1,106 40 Total lease payments $ 5,565 $ 1,261 Less amount representing interest (1,630) (94) Total lease obligations $ 3,935 $ 1,167
Schedule of future minimum lease payments prior to adoption of ASU 2016-02	December 31, 2018 Operating Leases Capital Leases (in thousands) 2019 $ 1,180 $ 1,257 2020 1,195 798 2021 1,062 21 2022 1,055 20 2023 1,055 — Later years 1,106 — Minimum lease commitment $ 6,653 $ 2,096 Less amount representing interest (238) Present value of net minimum lease obligations $ 1,858

Share-based Compensation (Table

Share-based Compensation (Tables)	12 Months Ended
	Dec. 31, 2019
Share-based Compensation
Schedule of share-based compensation expense	Year Ended December 31, 2019 2018 2017 (in thousands) Cost of goods sold $ 473 $ 470 $ 390 Research and development 340 344 394 Selling and marketing 293 731 913 General and administrative 1,811 1,776 2,354 $ 2,917 $ 3,321 $ 4,051
Schedule of weighted-average key assumptions used in determining fair value of options granted	Year Ended December 31, 2019 2018 2017 Estimated dividend yield 0 % 0 % 0 % Expected stock price volatility 60 % 60 % 60 % Weighted-average risk-free interest rate 2.44 % 2.75 % 2.01 % Expected life of option in years 6.08 6.13 6.06 Weighted-average option fair value at grant $ 1.24 $ 3.93 $ 4.09
Summary of outstanding and exercisable options	Weighted- Number of Average Intrinsic Options Exercise Price Value (in thousands) Outstanding at December 31, 2017 2,454,973 $ 11.195 $ 4,764 Exercisable at December 31, 2017 1,137,766 $ 10.919 $ 2,890 Granted 1,753,539 $ 6.786 Exercised (832) 0.320 Expired, forfeited or cancelled (760,795) 11.281 Outstanding at December 31, 2018 3,446,885 $ 8.935 $ 70 Exercisable at December 31, 2018 1,643,011 $ 10.627 $ 70 Granted 2,119,708 $ 2.163 Exercised (36,040) 0.320 Expired, forfeited or cancelled (1,099,587) 9.816 Outstanding at December 31, 2019 4,430,966 $ 5.551 $ 53 Exercisable at December 31, 2019 1,518,972 $ 8.735 $ 31
Summary of outstanding RSUs	Weighted- Number of Average RSUs Fair Value Outstanding at December 31, 2017 85,000 $ 7.15 Granted 93,750 8.30 Vested (33,748) 7.34 Expired, forfeited or cancelled (69,688) 7.77 Outstanding at December 31, 2018 75,314 $ 7.93 Granted — — Vested (21,251) 7.86 Expired, forfeited or cancelled — — Outstanding at December 31, 2019 54,063 $ 7.96

Selected Quarterly Financial _2

Selected Quarterly Financial Data (Unaudited) (Tables)	12 Months Ended
	Dec. 31, 2019
Selected Quarterly Financial Data (Unaudited)
Schedule of selected quarterly financial data	Selected quarterly financial data for years ended December 31, 2019 and 2018, are as follows (in thousands, except share and per share amounts): Quarter Ended March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Net product sales $ 14,634 $ 15,643 $ 17,540 $ 16,832 Gross profit 8,238 10,544 11,093 9,651 Net loss attributable to common stock $ (7,600) $ (3,763) $ (2,051) $ (3,488) Weighted average common shares outstanding used to compute net loss per share, basic and diluted (1) 49,703,563 49,727,718 49,730,755 49,732,654 Net loss per share of common stock, basic and fully diluted (2): $ (0.15) $ (0.08) $ (0.04) $ (0.07) Quarter Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 Net product sales $ 10,729 $ 11,363 $ 12,503 $ 15,393 Gross profit 5,508 4,376 5,546 7,631 Net loss attributable to common stock $ (14,436) $ (15,207) $ (12,695) $ (9,337) Weighted average common shares outstanding used to compute net loss per share, basic and diluted (1) 28,996,956 29,008,909 29,625,792 41,415,358 Net loss per share of common stock, basic and fully diluted (2): $ (0.50) $ (0.52) $ (0.43) $ (0.23) (1) On November 8, 2018, the Company closed an underwritten public offering of 19,999,999 shares of its common stock at a public offering price of $2.30 per share, which includes 2,608,695 shares of its common stock resulting from the underwriters’ exercise of their over-allotment option at the public offering price. In addition, in 2018, the Company sold 651,525 shares of common stock under the Cowen Sales Agreement, at an average sale price of approximately $6.25 per share. These transactions produced a significant increase in the number of shares outstanding which will impact the year-over-year comparability of the Company’s loss per share calculations. Loss per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly loss per share may not necessarily equal the total for the year.

Organization and nature of op_2

Organization and nature of operations (Details)	12 Months Ended
	Dec. 31, 2019item
Organization and nature of operations
Number of approved product	3

Summary of significant accoun_4

Summary of significant accounting policies (Details)	3 Months Ended								12 Months Ended
	Dec. 31, 2019USD ($)subsidiary	Sep. 30, 2019USD ($)	Jun. 30, 2019USD ($)	Mar. 31, 2019USD ($)	Dec. 31, 2018USD ($)	Sep. 30, 2018USD ($)	Jun. 30, 2018USD ($)	Mar. 31, 2018USD ($)	Dec. 31, 2019USD ($)segmentsubsidiarycustomer	Dec. 31, 2018USD ($)customer	Dec. 31, 2017USD ($)customer
Summary of significant accounting policies
Number of operating segments | segment									1
Concentration of credit risk;
Allowance for doubtful accounts	$ 0				$ 0				$ 0	$ 0
Impairment of long-lived assets
Impairment charges									0	0	$ 0
Disaggregation of revenue
Revenues	16,832,000	$ 17,540,000	$ 15,643,000	$ 14,634,000	15,393,000	$ 12,503,000	$ 11,363,000	$ 10,729,000	64,649,000	49,988,000	27,132,000
Contract assets					0					0
Contract liability	0				$ 0				$ 0	0
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									$ 0	$ 600,000	$ 400,000
Income taxes
Deferred tax assets, net of valuation allowance	0								0
Other Current Assets
Disaggregation of revenue
Contract assets	$ 27,000								$ 27,000
Accounts Receivable | Customer Concentration Risk
Concentration of credit risk;
Concentration Risk, Number | customer									13	14
Accounts Receivable | Customer Concentration Risk | Major Customers
Concentration of credit risk;
Concentration Risk, Number | customer									3	3
Concentration Risk, Percentage									96.00%	96.00%
Revenues And Deferred Revenues | Customer Concentration Risk
Concentration of credit risk;
Concentration Risk, Number | customer									15	15	14
Revenues And Deferred Revenues | Customer Concentration Risk | Major Customers
Concentration of credit risk;
Concentration Risk, Number | customer									3	3	3
Concentration Risk, Percentage									94.00%	93.00%	93.00%
Adzenys XR-ODT
Disaggregation of revenue
Revenues									$ 31,213,000	$ 26,631,000	$ 20,377,000
Cotempla XR-ODT
Intangible assets
Intangible assets - Useful life									15 years
Disaggregation of revenue
Revenues									$ 25,649,000	19,014,000	1,590,000
Adzenys ER
Intangible assets
Intangible assets - Useful life									15 years
Disaggregation of revenue
Revenues									$ 834,000	(27,000)
Generic Tussionex
Intangible assets
Intangible assets - Useful life									10 years
Disaggregation of revenue
Revenues									$ 6,953,000	$ 4,370,000	$ 5,165,000
Minimum
Property and equipment
Property and equipment - Useful life									3 years
Intangible assets
Intangible assets - Useful life									10 years
Maximum
Property and equipment
Property and equipment - Useful life									10 years
Intangible assets
Intangible assets - Useful life									20 years
Wholly-owned subsidiaries
Summary of significant accounting policies
Number of wholly-owned subsidiaries | subsidiary	4								4

Summary of significant accoun_5

Summary of significant accounting policies - Recent accounting pronouncements (Details) - USD ($) $ in Thousands	Jan. 01, 2019	Dec. 31, 2019	Dec. 31, 2018
Lease, Cost [Abstract]
Operating lease right-of-use assets		$ 3,044
Total lease obligations		$ 3,935
Deferred rent			$ 989
ASU 2016-02
Lease, Cost [Abstract]
Total lease obligations	$ 4,300
Deferred rent	$ 900
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]		true
ASU 2018-11
Lease, Cost [Abstract]
Lease, practical expedients package	true
Lease, practical expedient land easement	true
Operating lease right-of-use assets	$ 3,400
Total lease obligations	$ 4,300
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true
ASU 2018-02
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]	true

Summary of significant accoun_6

Summary of significant accounting policies - Liquidity (Details) $ in Millions	Oct. 02, 2019USD ($)
Revolving Credit Facility
Short-term Debt [Line Items]
Borrowing availability against eligible accounts receivable (as a percent)	85.00%
Revolving Credit Facility | Loan Agreement
Short-term Debt [Line Items]
Maximum borrowing capacity as per agreement	$ 25
Short Term Swingline Loan | Loan Agreement
Short-term Debt [Line Items]
Maximum borrowing capacity as per agreement	$ 2.5

Net loss per share (Details)

Net loss per share (Details) - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Warrants | Series C Redeemable Convertible Preferred Stock Warrants (as converted)
Net loss per share
Potentially dilutive shares excluded in the computation of diluted net loss per share	70,833	70,833	70,833
Stock options outstanding
Net loss per share
Potentially dilutive shares excluded in the computation of diluted net loss per share	4,430,966	3,446,885	2,454,973
RSUs outstanding
Net loss per share
Potentially dilutive shares excluded in the computation of diluted net loss per share	54,063	75,314	85,000

Fair value of financial instr_3

Fair value of financial instruments - Hierarchy (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Hierarchy for financial instruments measured at fair value on a recurring basis
Short-term investments	$ 8,064
Derivative liability (see Note 11)	1,135	$ 2,017
Recurring basis | Fair Value
Hierarchy for financial instruments measured at fair value on a recurring basis
Cash and cash equivalents	16,830	46,478
Short-term investments	8,064
Total financial assets	24,894	46,478
Earnout liability	30	37
Derivative liability (see Note 11)	1,135	2,017
Total financial liabilities	1,165	2,054
Recurring basis | Fair Value | Level 1
Hierarchy for financial instruments measured at fair value on a recurring basis
Cash and cash equivalents	12,338	27,419
Short-term investments	1,261
Total financial assets	13,599	27,419
Recurring basis | Fair Value | Level 2
Hierarchy for financial instruments measured at fair value on a recurring basis
Cash and cash equivalents	4,492	19,059
Short-term investments	6,803
Total financial assets	11,295	19,059
Recurring basis | Fair Value | Level 3
Hierarchy for financial instruments measured at fair value on a recurring basis
Earnout liability	30	37
Derivative liability (see Note 11)	1,135	2,017
Total financial liabilities	$ 1,165	$ 2,054

Fair value of financial instr_4

Fair value of financial instruments - Cash and cash equivalents and short-term investments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Cash and cash equivalents and short-term investments
Amortized Cost	$ 24,893	$ 46,478
Unrealized Gain / (Loss)	1
Market Value	24,894	46,478
Bank deposits and money market funds
Cash and cash equivalents and short-term investments
Amortized Cost	13,599	27,419
Market Value	13,599	27,419
Financial and corporate debt securities
Cash and cash equivalents and short-term investments
Amortized Cost	11,294	19,059
Unrealized Gain / (Loss)	1
Market Value	$ 11,295	$ 19,059

Fair value of financial instr_5

Fair value of financial instruments - Earnout liability (Details) - Earnout liability $ in Thousands	Dec. 31, 2019USD ($)Y	Dec. 31, 2018USD ($)Y
Volatility (annual)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	36	42
Recurring basis | Level 3
Methodologies and significant inputs used in the determination of the fair value
Valuation Method Monte Carlo	us-gaap:ValuationTechniqueOptionPricingModelMember	us-gaap:ValuationTechniqueOptionPricingModelMember
Fair value of liability at valuation date	$ 30	$ 37
Recurring basis | Level 3 | Volatility (annual)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	36	42
Recurring basis | Level 3 | Earnout Target 1 (thousands)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	13,700	13,700
Recurring basis | Level 3 | Earnout Target 2 (thousands)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	18,200	18,200
Recurring basis | Level 3 | Maximum | Risk-free rate (annual)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	2.58	3.29
Recurring basis | Level 3 | Maximum | Time period from valuation until end of earnout (in years)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability | Y	9.5	9.5
Recurring basis | Level 3 | Maximum | Discount rate (in percent)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	23.35	21.68
Recurring basis | Level 3 | Minimum | Risk-free rate (annual)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	1.53	2.53
Recurring basis | Level 3 | Minimum | Time period from valuation until end of earnout (in years)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability | Y	0.5	0.5
Recurring basis | Level 3 | Minimum | Discount rate (in percent)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	22.88	21.35

Fair value of financial instr_6

Fair value of financial instruments - Derivative liability (Details) - Recurring basis - Level 3 $ in Thousands	Dec. 31, 2019USD ($)Y	Oct. 02, 2019USD ($)Y	Dec. 31, 2018USD ($)Y
Encina
Methodologies and significant inputs used in the determination of the fair value
Valuation Method	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Fair value of liability at valuation date | $	$ 66	$ 69
Encina | Time period from valuation until end of earnout (in years)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability | Y	2.4	2.6
Encina | Cumulative probability of a change in control prepayment implied by model (in percent)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	23.9	24.7
Encina | Discount rate (in percent)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	6	6
Deerfield
Methodologies and significant inputs used in the determination of the fair value
Valuation Method	us-gaap:ValuationTechniqueOptionPricingModelMember		us-gaap:ValuationTechniqueOptionPricingModelMember
Fair value of liability at valuation date | $	$ 1,069		$ 2,017
Deerfield | Time period from valuation until end of earnout (in years)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability | Y	2.4		3.4
Deerfield | Cumulative probability of a change in control prepayment implied by model (in percent)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	23		25.10
Deerfield | Cumulative probability of other accelerated prepayments implied by model (in percent)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	10		13.70
Deerfield | Discount rate (in percent)
Methodologies and significant inputs used in the determination of the fair value
Derivative Liability	25.34		23.12

Fair value of financial instr_7

Fair value of financial instruments - Changes in Level 3 (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Changes in Level 3 liabilities measured at fair value
Balance at beginning of period	$ 2,054	$ 1,830
Addition of Deerfield derivative liability	69
Change in fair value	(958)	224
Balance at end of period	$ 1,165	$ 2,054

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Inventories
Raw materials	$ 3,679	$ 3,845
Work in process	935	2,704
Finished goods	7,082	4,259
Inventory at cost	11,696	10,808
Inventory reserve	(686)	(441)
Inventories net	$ 11,010	$ 10,367

Property and equipment (Details

Property and equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Property and equipment
Property and equipment gross	$ 17,832	$ 16,840
Accumulated depreciation and amortization (including $1,153 and $633 at December 31, 2019 and 2018 respectively, applicable to finance leases)	(10,487)	(8,926)
Property and equipment, net	7,345	7,914
Depreciation and amortization of property and equipment	2,059	1,750	$ 1,363
Finance lease accumulated depreciation and amortization	1,153	633
Assets under finance lease
Property and equipment
Property and equipment gross	3,733	3,327
Leasehold improvements
Property and equipment
Property and equipment gross	4,392	4,340
Manufacturing, packaging and lab equipment
Property and equipment
Property and equipment gross	7,088	6,821
Office furniture and equipment
Property and equipment
Property and equipment gross	1,888	2,164
Assets under construction
Property and equipment
Property and equipment gross	$ 731	$ 188

Sale-leaseback transaction (Det

Sale-leaseback transaction (Details) - Related Party Sale-leaseback Transactions	Feb. 13, 2017USD ($)	Jun. 30, 2017USD ($)	Feb. 28, 2017USD ($)	Feb. 13, 2017	Dec. 31, 2019USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Mar. 31, 2014USD ($)tranche	Apr. 30, 2017USD ($)	Feb. 23, 2017USD ($)	Dec. 31, 2012USD ($)
Other income, net
Sale-leaseback transaction
Net gain recognized in period on sale leaseback transaction						$ 5,000	$ 44,000
Net gain on sale leaseback recognized in other income					$ 6,000
Transaction One
Sale-leaseback transaction
Number of tranches | tranche								5
Maximum amount authorized under sale and leaseback transaction											$ 6,500,000
Lease 4 November 2013
Sale-leaseback transaction
Original value of assets for which lease expired									$ 1,000,000
Cumulative gain recognized									161,000
Original value of lease buy-out option liability									$ 100,000
Lease 5 March 2014
Sale-leaseback transaction
Original value of assets for which lease expired								$ 795,000
Cumulative gain recognized								116,000
Original value of lease buy-out option liability								$ 79,000
Transaction Two
Sale-leaseback transaction
Maximum amount authorized under sale and leaseback transaction			$ 5,000,000
Lease term			36 months
Proceeds from sale of assets	$ 481,000	$ 2,742,000
Imputed interest rate on lease (as a percent)	14.30%	14.90%
Net gain on sale leaseback		$ 0								$ 14,000
Amortization period				36 months

Intangible assets (Details)

Intangible assets (Details) - USD ($)	Aug. 28, 2014	Jun. 15, 2009	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Intangible assets
Accumulated amortization			$ (12,935,000)	$ (11,198,000)
Intangible assets, net			12,543,000	14,616,000
Write off of capitalized patent filing costs			395,000
Payment made to acquire asset			59,000	5,000	$ 361,000
Intangible assets, gross			25,478,000	25,814,000
Amortization expense			1,737,000	1,737,000	1,660,000
Aggregate amortization of intangible assets for each of the next five years and thereafter
2020			1,737,000
2021			1,737,000
2022			1,737,000
2023			1,642,000
2024			1,333,000
Thereafter			3,871,000
Finite lived intangible assets, net			12,057,000
Proprietary modified-release drug delivery technology
Intangible assets
Amount of finite-lived intangibles		$ 15,600,000
Intangible assets - Useful life		20 years
Intangible assets, gross			15,600,000	15,600,000
Tussionex ANDA
Intangible assets
Payment made to acquire asset	$ 4,200,000
Legal fees	90,000
Earnout fair value	589,000
Intangible assets, gross			4,829,000	4,829,000
Tussionex ANDA | Other income (expense)
Intangible assets
Increase (decrease) in fair value of earnout liability			(7,000)	(133,000)	$ (62,000)
CPI Profit Sharing
Intangible assets
Payment made to acquire asset	2,000,000
Legal fees	$ 43,000
Intangible assets, gross			2,043,000	2,043,000
Patents
Intangible assets
Intangible assets, gross			1,971,000	2,307,000
Other
Intangible assets
Intangible assets, gross			$ 1,035,000	$ 1,035,000
Tussionex ANDA and CPI profit sharing
Intangible assets
Intangible assets - Useful life	10 years

Intangible assets - Patents (De

Intangible assets - Patents (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Intangible assets
Intangible assets, gross	$ 25,478,000	$ 25,814,000
Generic Tussionex
Intangible assets
Patents being amortized	$ 352,000
Intangible assets - Useful life	10 years
Adzenys XR-ODT
Intangible assets
Patents being amortized	$ 599,000
Cotempla XR-ODT
Intangible assets
Patents being amortized	$ 83,000
Intangible assets - Useful life	15 years
Adzenys ER
Intangible assets
Patents being amortized	$ 451,000
Intangible assets - Useful life	15 years
Patents
Intangible assets
Intangible assets, gross	$ 1,971,000	$ 2,307,000
Patents being amortized on January 27, 2016 | Adzenys XR-ODT
Intangible assets
Patents being amortized	$ 535,000
Intangible assets - Useful life	16 years
Patents being amortized on December 2017 | Adzenys XR-ODT
Intangible assets
Patents being amortized	$ 64,000
Intangible assets - Useful life	15 years
Capitalized Patent Filing Costs
Intangible assets
Intangible assets, gross	$ 486,000

Income taxes - Deferred Taxes (

Income taxes - Deferred Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income taxes
Reduction of federal income tax rate	21.00%	21.00%
Deferred Tax Assets:
Net operating loss	$ 37,747	$ 37,819
Share-based compensation	2,113	1,757
Research and development tax credit	1,947	2,378
Other reserves	2,238	1,270
Finance lease liability	156	390
Operating lease liability	826	208
State deferred	1,518	1,236
Inventory	90	103
Accrued rebates	5,862	4,902
Interest expense carryover	1,143	1,296
Other	914	952
Total deferred tax assets	54,554	52,311
Deferred Tax Liabilities:
Intangible assets	(1,230)	(1,226)
Right-of-use asset	(639)
Property and equipment	(873)	(999)
Total deferred tax liabilities	(2,742)	(2,225)
Valuation allowance	$ 51,812	$ 50,086

Income taxes - Tax Carry-forwar

Income taxes - Tax Carry-forwards and Unrecognized Tax Benefits (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Unrecognized tax benefits
Accrued interest related to uncertain tax positions	$ 0
Roll forward of gross unrecognized tax benefits
Beginning Balance	3,956,000	$ 7,261,000
Increase based on tax positions taken during a current period	6,872,000	5,458,000
Decrease based on tax positions taken during the current period	(2,182,000)	(8,763,000)
Ending Balance	8,646,000	3,956,000
Federal
Tax carryforwards and uncertainties
Net operating loss carry-forwards	280,072,000
Net operating loss carry-forwards with no expiration date	$ 34,611,000
Percentage of taxable income which limits the utilization of net operating loss carryforwards	80.00%
Net operating loss carry-forward subject to expiration beginning 2024	$ 245,461,000
Net operating loss carryforward that will expire unused	98,009,000
State
Tax carryforwards and uncertainties
Net operating loss carry-forwards	2,958,000	$ 3,166,000
Research and development credits
Tax carryforwards and uncertainties
Tax credits carry-forwards	2,686,000
Research and development credits | Federal
Tax carryforwards and uncertainties
Tax credit carryforwards that will expire unused	$ 350,000

Income taxes - Valuation Allowa

Income taxes - Valuation Allowance (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income taxes
Increase (decrease) in valuation allowance	$ 1,726,000	$ 11,118,000
Income Tax Expense (Benefit)	$ 11,000

Income taxes - Reconciliation o

Income taxes - Reconciliation of Tax Rate (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income taxes
U.S. Statutory Tax Rate	21.00%	21.00%
Change in Valuation Allowance	(10.20%)	(21.50%)
State tax expense, net	0.90%	1.80%
Research and Development Tax Credit	0.90%	0.50%
Uncertain Tax Position - Research and Development Tax Credit	(3.40%)	0.00%
Permanent Difference - Interest Expense	(7.80%)	0.00%
Provision to Return, Permanent Differences and Other Adjustments	(1.40%)	(1.80%)
Tax Expense / (Benefit)	0.00%	0.00%

Accrued expenses (Details)

Accrued expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Accrued expenses
Accrued savings offers	$ 16,790	$ 11,289
Accrued rebates	6,109	7,762
Accrued customer returns	5,122	5,157
Accrued wholesaler fees	5,014	4,249
Accrued payroll and benefits	4,485	4,555
Other accrued expenses	2,668	2,806
Total accrued expenses	$ 40,188	$ 35,818

Debt - Short-term line of credi

Debt - Short-term line of credit (Details) - USD ($)	Oct. 02, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Long-term debt
Derivative liability		$ 1,135,000	$ 2,017,000
Interest Expense		8,009,000	8,974,000	$ 10,085,000
Senior Secured Credit Facility
Long-term debt
Interest Expense		$ 7,620,000	$ 8,693,000	$ 9,882,000
Revolving Credit Facility
Long-term debt
Borrowing availability against eligible accounts receivable (as a percent)	85.00%
Loan Agreement
Long-term debt
Covenant compliance		As of December 31, 2019, the Company was in compliance with the covenants under the Loan Agreement
Loan Agreement | Senior Secured Credit Facility
Long-term debt
Derivative liability	$ 69,000	$ 66,000
Loan Agreement | Revolving Credit Facility
Long-term debt
Line of Credit Facility, Initiation Date	Oct. 2, 2019
Maximum borrowing capacity as per agreement	$ 25,000,000
Unused line fee (as a percent)	0.50%
Line of credit, maturity date	May 11, 2022
Interest Expense		184,000
Financing costs		$ 1,300,000
Debt instrument interest percentage		6.56%
Amortization of Financing Costs		$ 116,000
Short-term line of credit outstanding		0
Line of Credit Facility Remaining Borrowing Capacity		17,100,000
Loan Agreement | Revolving Credit Facility | Other Noncurrent Assets
Long-term debt
Unamortized costs		$ 1,200,000
Loan Agreement | Short Term Swingline Loan
Long-term debt
Maximum borrowing capacity as per agreement	$ 2,500,000
Prepayment occurs on or before October 2, 2020 | Revolving Credit Facility
Long-term debt
Prepayment fee	2.00%
Prepayment occurs after October 2, 2020 but before October 2, 2021 | Revolving Credit Facility
Long-term debt
Prepayment fee	1.00%
Prepayment occurs after October 2, 2021 but before May 11, 2022 | Revolving Credit Facility
Long-term debt
Prepayment fee	0.50%
One Month Libor Rate | Revolving Credit Facility
Long-term debt
Interest rate	4.50%

Debt - Summary (Details)

Debt - Summary (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Long-term debt
Long term debt and finance lease obligations, including current maturities	$ 44,935	$ 51,774
Less current portion of long term debt	(15,836)	(8,557)
Long-term debt, net of current	29,099	43,217
Debt instrument, unamortized discount
Unamortized discount on debt	1,982
Debt issued to entities affiliated with Deerfield | Senior Secured Credit Facility
Long-term debt
Long term debt and finance lease obligations, including current maturities	43,768	49,916
Debt instrument, unamortized discount
Unamortized discount on debt	1,982	3,334
Financing and capital leases, maturing through May 2024 | Senior Secured Credit Facility
Long-term debt
Long term debt and finance lease obligations, including current maturities	$ 1,167	$ 1,858

Debt - Senior Secured Credit fa

Debt - Senior Secured Credit facility (Details)	Nov. 08, 2018$ / sharesshares	Nov. 05, 2018USD ($)EquityInstruments$ / sharesshares	Oct. 26, 2017USD ($)$ / sharesshares	Jun. 01, 2017USD ($)EquityInstruments$ / shares	May 11, 2016USD ($)iteminstallment	May 31, 2019USD ($)	Jun. 30, 2017USD ($)$ / sharesshares	Feb. 28, 2017$ / sharesshares	Dec. 31, 2019USD ($)	Dec. 31, 2018USD ($)shares	Dec. 31, 2017USD ($)shares
Long-term debt
Derivative liability									$ 1,135,000	$ 2,017,000
Unamortized discount on debt									1,982,000
Recognition of beneficial conversion feature on convertible notes											$ 613,000
Interest Expense									$ 8,009,000	$ 8,974,000	$ 10,085,000
Debt issued to entities affiliated with Deerfield
Long-term debt
Debt Instrument, Covenant Compliance									As of December 31, 2019, the Company was in compliance with the covenants under the Facility.
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)									25.35%
Time period before debt maturity when debt conversion option expires				5 days
Increase in prepayment fee (in basis points)				300
Conversion price, expressed as a percentage of stock price				95.00%
Number of trading days used to determine conversion stock price				3 days
Unamortized discount on debt				$ 600,000
Recognition of beneficial conversion feature on convertible notes				$ 600,000
Maximum percentage of stock for note holder				9.985%
Maximum percentage of stock for aggregate conversion				19.90%
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										20,651,524	12,019,639
Underwritten Public Offering | Common Stock
Long-term debt
Issuance of common stock, net of issuance costs (in shares) | shares	19,999,999						4,800,000	5,750,000
Public offering price (in dollars per share) | $ / shares	$ 2.30						$ 6.25	$ 5
Gross proceeds from issuance of stock							$ 30,000,000
Minimum | Senior Secured Convertible Note
Long-term debt
Prepayment fee of debt (in percentage)				2.00%
Conversion price | $ / shares				$ 7
Minimum | Common Stock
Long-term debt
Gross proceeds from issuance of stock		4,500,000
Minimum | Underwritten Public Offering | Common Stock
Long-term debt
Gross proceeds from issuance of stock		30,000,000
Maximum | Senior Secured Convertible Note
Long-term debt
Prepayment fee of debt (in percentage)				12.75%
Senior Secured Credit Facility
Long-term debt
Maximum reimbursable legal fees				$ 25,000
Interest Expense									$ 7,620,000	$ 8,693,000	$ 9,882,000
Senior Secured Credit Facility | Debt issued to entities affiliated with Deerfield
Long-term debt
Face amount of debt issued					$ 60,000,000
Date of first installment of principal payment					May 1, 2019
Number of equal annual installments | installment					3
Interest rate (as a percent)					12.95%
Deferred interest payments				6,600,000
Number of first interest payments for which the reporting entity has the option to defer | item					4
Debt yield enhancement fee					$ 1,350,000
Debt legal costs		$ 25,000
Term of debt (in years)					6 years
Minimum cash on deposit to maintain under debt arrangement					$ 5,000,000
Effective interest rate during debt term (as a percent)		16.69%							15.03%
Debt discount amortization									$ 1,353,000	961,000	$ 1,316,000
Unamortized discount on debt									1,982,000	$ 3,334,000
Senior Secured Credit Facility | Debt issued to entities affiliated with Deerfield | Company's Attorneys
Long-term debt
Debt legal costs					173,000
Senior Secured Credit Facility | Debt issued to entities affiliated with Deerfield | On Behalf Of Deerfield's Attorneys
Long-term debt
Debt legal costs					$ 58,000
Senior Secured Credit Facility | Deerfield Private Design Found III, LP
Long-term debt
Debt borrowing structure (as a percent)					66.67%
Senior Secured Credit Facility | Deerfield Special Situations Fund, LP
Long-term debt
Debt borrowing structure (as a percent)					33.33%
Senior Secured Credit Facility | Senior Secured Convertible Note
Long-term debt
Derivative liability				$ 2,100,000
Minimum premiums as percent required to treat as derivative				10.00%
Payment of debt modification fee				$ 40,000
Maximum time period to register shares per agreement		30 days		30 days
Maximum time period for registration to become effective per agreement		75 days		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 | EquityInstruments				940,924
Second Amendment Facility Due in May 2019 | Debt issued to entities affiliated with Deerfield
Long-term debt
Face amount of debt issued		$ 52,500,000
Prepayment of premium amount (as a percent)		6.25%
Non-refundable exit fee		$ 750,239
Payment of senior debt and fee		$ 7,500,000				$ 7,500,000
Principal outstanding									$ 45,000,000
Second Amendment Facility Due in May 2019 | Common Stock | Debt issued to entities affiliated with Deerfield
Long-term debt
Share price, percentage of Last Bid Price		93.00%
Principal payment (in dollars per shares) | $ / shares		$ 3
Ownership Cap percentage		4.985%
Number of trading days used to determine conversion stock price		10 days
Second Amendment Facility Due in May 2019 | 2019 | Debt issued to entities affiliated with Deerfield
Long-term debt
Face amount of debt issued		$ 7,500,000
Second Amendment Facility Due in May 2019 | 2020 | Debt issued to entities affiliated with Deerfield
Long-term debt
Face amount of debt issued		15,000,000
Second Amendment Facility Due in May 2019 | 2021 | Debt issued to entities affiliated with Deerfield
Long-term debt
Face amount of debt issued		15,000,000
Second Amendment Facility Due in May 2019 | 2022 | Debt issued to entities affiliated with Deerfield
Long-term debt
Face amount of debt issued		$ 15,000,000
Second Amendment Facility Due in May 2019 | Maximum | Common Stock | Debt issued to entities affiliated with Deerfield
Long-term debt
Number of shares issued upon conversion of debt | shares		2,135,625
Second Amendment Facility Due in May 2020 | Common Stock | Debt issued to entities affiliated with Deerfield
Long-term debt
Ownership Cap percentage		4.985%
Conversion price | $ / shares		$ 10
Conversion price, expressed as a percentage of stock price		95.00%
Number of trading days used to determine conversion stock price		3 days
Second Amendment Facility Due in May 2020 | Maximum | Common Stock | Debt issued to entities affiliated with Deerfield
Long-term debt
Percentage of principal amount available for conversion		50.00%
Number of shares issued upon conversion of debt | shares		3,796,668
Conversion price, expressed as a percentage of stock price		83.00%
Number of shares which may be issued for conversion of convertible notes | EquityInstruments		3,796,668
Conversion Of Convertible Notes | Senior Secured Credit Facility
Long-term debt
Amount of debt converted into stock			$ 6,600,000
Number of shares issued upon conversion of debt | shares			929,967
Conversion price | $ / shares			$ 7.08
Conversion price, expressed as a percentage of stock price			95.00%
Number of trading days used to determine conversion stock price			3 days

Debt - Financing and Capital Le

Debt - Financing and Capital Lease Obligations (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Essex sale-leaseback transactions | Transaction One
Long-term debt
Imputed interest rate on lease (as a percent)			14.90%
Financing and capital leases, maturing through May 2024 | Equipment lease
Long-term debt
Newly acquired asset under equipment lease	$ 400,000	$ 100,000
Interest rate on lease (as a percent)	6.50%	5.30%
Financing and capital leases, maturing through May 2024 | Essex sale-leaseback transactions | Transaction Two
Long-term debt
Newly acquired assets under sale-leaseback transaction			$ 3,200,000
Finance Lease
Long-term debt
Interest on lease liabilities	$ 214,000	$ 341,000	$ 263,000

Debt - Future Principal Payment

Debt - Future Principal Payments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Maturities Of Longterm Debt And Finance Lease Obligations Abstract
2020	$ 15,836
2021	15,099
2022	15,854
2023	89
2024	39
Long-term debt and capital lease obligations, including current maturities	46,917
Less unamortized debt discount	(1,982)
Less current portion of long term debt	(15,836)	$ (8,557)
Long-term debt, net of current	$ 29,099	$ 43,217

Leases (Details)

Leases (Details)	12 Months Ended
	Dec. 31, 2019
Leases
Lessee, Operating Lease, Existence of Option to Extend [true false]	true
Minimum
Leases
Term of operating lease	1 year
Maximum
Leases
Term of operating lease	10 years

Leases - Lease expense (Details

Leases - Lease expense (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019USD ($)
Lease cost:
Operating lease cost	$ 1,071
Short-term lease cost	37
Variable lease cost	217
Finance lease cost:
Total net lease cost	2,059
Cost of goods sold
Finance lease cost:
Amortization of leased assets	520
Interest Expense.
Finance lease cost:
Interest on lease liabilities	$ 214

Leases - Consolidated balance s

Leases - Consolidated balance sheet information (Details) $ in Thousands	Dec. 31, 2019USD ($)
Balance sheet information related to leases
Operating lease assets	$ 3,044
Finance lease assets	$ 2,580
Finance Lease, Assets (Balance Sheet Location)	us-gaap:PropertyPlantAndEquipmentNet
Total leased assets	$ 5,624
Operating Lease, Current Liabilities	681
Finance Lease, Current Liabilities	$ 836
Finance Lease, Current Liabilities (Balance Sheet Location)	us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent
Operating Lease, Non-current Liabilities	$ 3,254
Finance Lease, Non-current Liabilities	$ 331
Finance Lease, Non-current Liabilities (Balance Sheet Location)	us-gaap:LongTermDebtAndCapitalLeaseObligations
Total lease liabilities	$ 5,102

Leases - Schedule of Weighted A

Leases - Schedule of Weighted Average Remaining Lease Term and Discount Rate Information (Details)	Dec. 31, 2019
Leases
Operating Lease, Weighted average remaining lease term (in years)	4 years 8 months 12 days
Finance Lease, Weighted average remaining lease term (in years)	1 year 9 months 18 days
Operating Lease, Weighted average discount rate (as a percent)	15.00%
Finance Lease, Weighted average discount rate (as a percent)	11.80%

Leases - Supplemental cash flow

Leases - Supplemental cash flow information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019USD ($)
Leases
Operating cash flows from operating leases	$ 1,168
Operating cash flows from finance leases	214
Financing cash flows from finance leases	1,098
ROU assets obtained in exchange for new finance lease liabilities	406
ROU assets obtained in exchange for new operating lease liabilities	$ 135

Leases - Future minimum rental

Leases - Future minimum rental payments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Operating Leases
2020	$ 1,226
2021	1,118
2022	1,060
2023	1,055
2024	1,106
Total lease payments	5,565
Less amount representing interest	(1,630)
Total lease obligations	3,935
2019		$ 1,180
2020		1,195
2021		1,062
2022		1,055
2023		1,055
Later years		1,106
Total lease payments		6,653
Finance Leases
2020	894
2021	117
2022	115
2023	95
2024	40
Total lease payments	1,261
Less amount representing interest	(94)
Total lease obligations	$ 1,167
2019		1,257
2020		798
2021		21
2022		20
Minimum lease commitment		2,096
Less amount representing interest		(238)
Present value of net minimum lease obligations		$ 1,858

Common stock - Shelf Registrati

Common stock - Shelf Registration Statement and Public Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands	Nov. 08, 2018	Jul. 26, 2017	Feb. 17, 2017	Jun. 30, 2017	Feb. 28, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Aug. 01, 2016
Public offerings and related transactions
Net proceeds from issuance of stock						$ 11	$ 47,292	$ 64,560
Common Stock
Public offerings and related transactions
Issuance of common stock, net of issuance costs (in shares)							20,651,524	12,019,639
Common Stock | Underwritten Public Offering
Public offerings and related transactions
Issuance of common stock, net of issuance costs (in shares)	19,999,999			4,800,000	5,750,000
Public offering price (in dollars per share)	$ 2.30			$ 6.25	$ 5
Gross proceeds from issuance of stock				$ 30,000
Payments of stock issuance costs				$ 200
Term of option to purchase share				30 days
Net proceeds from issuance of stock	$ 43,400	$ 34,300			$ 26,700
Shares offered to underwriters under option granted (in shares)				720,000
Common Stock | Over-allotment option
Public offerings and related transactions
Issuance of common stock, net of issuance costs (in shares)	2,608,695		750,000
Common Stock | Sales Agreement
Public offerings and related transactions
Issuance of common stock, net of issuance costs (in shares)							651,525	749,639
Public offering price (in dollars per share)							$ 6.25	$ 5.01
Payments of stock issuance costs							$ 200	$ 100
Net proceeds from issuance of stock							$ 3,900	$ 3,600
Maximum
Public offerings and related transactions
Authorized amount to raise capital as per shelf registration statement									$ 125,000
Cowen and Company LLC | Maximum
Public offerings and related transactions
Authorized amount for issuance of common stock as per shelf registration statement									$ 40,000

Common stock - Offer under sale

Common stock - Offer under sales agreement (Details) - USD ($)	Nov. 08, 2018	Nov. 05, 2018	Oct. 26, 2017	Jul. 26, 2017	Feb. 17, 2017	Jun. 30, 2017	Feb. 28, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Mar. 18, 2019
Shelf registration statement
Net proceeds from issuance of stock								$ 11,000	$ 47,292,000	$ 64,560,000
Cantor Sales Agreement | Maximum | Cantor Fitzgerald & Co
Shelf registration statement
Authorized amount for issuance of common stock as per second shelf registration statement											$ 30,000,000
Value of common stock which remains available to be sold under the sales agreement								$ 30,000,000
Common Stock
Shelf registration statement
Issuance of common stock, net of issuance costs (in shares)									20,651,524	12,019,639
Issuance of common stock upon RSU conversion								20,328	26,991
Shares issued upon the exercise of outstanding stock options								36,040	832	1,249
Common Stock | Cantor Sales Agreement
Shelf registration statement
Issuance of common stock, net of issuance costs (in shares)								0
Sales Agreement | Common Stock
Shelf registration statement
Issuance of common stock, net of issuance costs (in shares)									651,525	749,639
Sales agreement offering price (in dollars per share)									$ 6.25	$ 5.01
Gross proceeds from issuance of stock		$ 7,825,113							$ 4,100,000	$ 3,700,000
Net proceeds from issuance of stock									3,900,000	3,600,000
Payments of stock issuance costs									$ 200,000	$ 100,000
Maximum authorized amount in continuous offering		$ 7,825,113
Underwritten Public Offering | Common Stock
Shelf registration statement
Issuance of common stock, net of issuance costs (in shares)	19,999,999					4,800,000	5,750,000
Sales agreement offering price (in dollars per share)	$ 2.30					$ 6.25	$ 5
Net proceeds from issuance of stock	$ 43,400,000			$ 34,300,000			$ 26,700,000
Payments of stock issuance costs						$ 200,000
Over-allotment option | Common Stock
Shelf registration statement
Issuance of common stock, net of issuance costs (in shares)	2,608,695				750,000
2019 Shelf
Shelf registration statement
Value of securities which remain available to be sold pursuant to the shelf								$ 100,000,000
2019 Shelf | Maximum
Shelf registration statement
Authorized amount to raise capital as per second shelf registration statement											$ 100,000,000
Conversion Of Convertible Notes | Senior Secured Convertible Notes
Shelf registration statement
Amount of debt converted into stock			$ 6,600,000
Conversion price			$ 7.08
Conversion price, expressed as a percentage of stock price			95.00%
Number of trading days used to determine conversion stock price			3 days
Number of shares of stock into which debt was converted			929,967

Share-based Compensation - Plan

Share-based Compensation - Plan Information (Details) - shares	Jan. 01, 2020	Jan. 01, 2019	Jul. 30, 2018	Jun. 27, 2018	Jan. 01, 2018	Jun. 30, 2018	Dec. 31, 2019	Dec. 31, 2019	Jan. 01, 2016	Jul. 31, 2015	Nov. 30, 2009
Stock options outstanding | Performance based
Stock options, restricted stock and performance stock options
Vesting period							3 years
Stock options | Minimum
Stock options, restricted stock and performance stock options
Vesting period							2 years
Stock options | Maximum
Stock options, restricted stock and performance stock options
Vesting period							4 years
Neos Therapeutics, Inc. 2009 Equity Plan
Stock options, restricted stock and performance stock options
Shares reserved for issuance under the plan											1,375,037
Shares related to forfeited prior plan options transferred into shares available under current plan							351,229
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		2,483,815			1,449,847
Stock option exercise price, minimum expressed as percentage of fair market value on grant date							100.00%
Shares related to forfeited prior plan options transferred into shares available under current plan								433,864
Shares reserved and available for issuance							3,257,599	3,257,599
Neos Therapeutics, Inc. 2015 Stock Option and Incentive Plan | Subsequent event
Stock options, restricted stock and performance stock options
Increase in number of shares reserved and available for issuance	2,486,633
Shares reserved and available for issuance	5,744,232
Neos Therapeutics, Inc. 2015 Stock Option and Incentive Plan | Stock options
Stock options, restricted stock and performance stock options
Expiration period							10 years
Expiration period of unexercised vested award after termination of employment							90 days
Neos Therapeutics, Inc 2018 Inducement Plan
Stock options, restricted stock and performance stock options
Shares reserved for issuance under the plan						800,000
Stock option exercise price, minimum expressed as percentage of fair market value on grant date						100.00%
Shares reserved and available for issuance							0	0
Neos Therapeutics, Inc 2018 Inducement Plan | Stock options
Stock options, restricted stock and performance stock options
Expiration period						10 years
Neos Therapeutics, Inc 2018 Inducement Plan | Stock options | Chief Executive Officer
Stock options, restricted stock and performance stock options
Vesting period				4 years
Vested shares of the common stock subject to the option vests in equal installments over four years (in shares)			200,000	600,000

Share-based Compensation - Expe

Share-based Compensation - Expense Allocation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Expense
Total compensation cost	$ 2,917	$ 3,321	$ 4,051
Cost of goods sold.
Share-based Compensation Expense
Total compensation cost	473	470	390
Research and development
Share-based Compensation Expense
Total compensation cost	340	344	394
Selling and marketing
Share-based Compensation Expense
Total compensation cost	293	731	913
General and administrative
Share-based Compensation Expense
Total compensation cost	$ 1,811	$ 1,776	$ 2,354

Share-based Compensation - Ex_2

Share-based Compensation - Expense Other (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Expense
Total compensation cost	$ 2,917,000	$ 3,321,000	$ 4,051,000
Excess tax benefit from share-based compensation	12,700
Unrecognized compensation cost	3,500,000
Stock options
Share-based Compensation Expense
Total compensation cost	$ 2,700,000	3,100,000	3,900,000
Compensation cost not yet recognized, period for recognition	2 years 6 months
RSUs outstanding
Share-based Compensation Expense
Total compensation cost	$ 159,000	$ 261,000	86,000
Compensation cost not yet recognized, period for recognition	1 year 10 months 24 days
Restricted stock
Share-based Compensation Expense
Total compensation cost			$ 71,000
Unrecognized compensation cost	$ 0

Share-based Compensation - Assu

Share-based Compensation - Assumptions Used in Determining Fair Value of Options (Details) - Stock options - $ / shares	1 Months Ended		12 Months Ended
	Jul. 31, 2018	Jun. 30, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock options, restricted stock and performance stock options
Options granted (in shares)			2,119,708	1,753,539
Granted (in dollars per share)			$ 2.163	$ 6.786
Weighted average key assumptions used in determining the fair value of options granted
Estimated dividend yield (as a percent)			0.00%	0.00%	0.00%
Expected stock price volatility (as a percent)			60.00%	60.00%	60.00%
Weighted-average risk-free interest rate (as a percent)			2.44%	2.75%	2.01%
Expected life of option in years			6 years 29 days	6 years 1 month 17 days	6 years 22 days
Weighted-average option fair value at grant (in dollars per share)			$ 1.24	$ 3.93	$ 4.09
Neos Therapeutics, Inc. 2015 Stock Option and Incentive Plan
Stock options, restricted stock and performance stock options
Options granted (in shares)			2,119,708
Neos Therapeutics, Inc 2018 Inducement Plan | Chief Executive Officer
Stock options, restricted stock and performance stock options
Options granted (in shares)	200,000	600,000
Granted (in dollars per share)	$ 5.55	$ 6.20

Share-based Compensation - Opti

Share-based Compensation - Options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Summary of number of outstanding and exercisable options and the activity
Outstanding at beginning of year (in shares)	3,446,885	2,454,973
Exercisable at beginning of year (in shares)	1,643,011	1,137,766
Granted (in shares)	2,119,708	1,753,539
Exercised (in shares)	(36,040)	(832)
Expired, forfeited or cancelled (in shares)	(1,099,587)	(760,795)
Outstanding at end of period (in shares)	4,430,966	3,446,885	2,454,973
Exercisable at end of period (in shares)	1,518,972	1,643,011	1,137,766
Summary of weighted-average exercise price of outstanding and exercisable options and the activity
Outstanding at beginning of year (in dollars per share)	$ 8.935	$ 11.195
Exercisable at beginning of year (in dollars per share)	10.627	10.919
Granted (in dollars per share)	2.163	6.786
Exercised (in dollars per share)	0.320	0.320
Expired, forfeited or cancelled (in dollars per share)	9.816	11.281
Outstanding at end of period (in dollars per share)	5.551	8.935	$ 11.195
Exercisable at end of period (in dollars per share)	$ 8.735	$ 10.627	$ 10.919
Summary of intrinsic value of outstanding and exercisable options and other information
Intrinsic value, outstanding options	$ 53	$ 70	$ 4,764
Intrinsic value, exercisable options	$ 31	$ 70	$ 2,890
Weighted average remaining contractual life of options outstanding	8 years 2 months 12 days	7 years 10 months 24 days
Weighted-average remaining contractual life of options exercisable	6 years 10 months 24 days	6 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)	$ 1.36	$ 4.76
Maximum
Summary of weighted-average exercise price of outstanding and exercisable options and the activity
Granted (in dollars per share)	$ 3.14	$ 10.40

Share-based Compensation _ Rest

Share-based Compensation – Restricted Stock Units (Details) - RSUs outstanding - shares	Mar. 01, 2018	Oct. 02, 2017	May 01, 2017	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted	93,750	6,250	78,750		93,750
Shares vested				21,251	33,748
Shares converted				20,328
Shares withheld for tax obligation				923
Four equal tranches
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years	4 years	4 years

Share-based Compensation - Summ

Share-based Compensation - Summary of Outstanding RSUs (Details) - RSUs outstanding - $ / shares	Mar. 01, 2018	Oct. 02, 2017	May 01, 2017	Dec. 31, 2019	Dec. 31, 2018
Summary of outstanding equity instruments and activity
Outstanding at beginning of year (in equity instruments)				75,314	85,000
Granted (in equity instruments)	93,750	6,250	78,750		93,750
Vested (in equity instruments)				(21,251)	(33,748)
Expired, forfeited or cancelled (in equity instruments)					(69,688)
Outstanding at end of period (in equity instruments)				54,063	75,314
Summary of weighted-average fair value
Outstanding at beginning of year (in dollars per equity instrument)				$ 7.93	$ 7.15
Granted (in dollars per equity instrument)					8.30
Vested (in dollars per equity instrument)				7.86	7.34
Expired, forfeited or cancelled (in dollars per equity instrument)					7.77
Outstanding at end of period (in dollars per equity instrument)				$ 7.96	$ 7.93

Share-based Compensation - Rest

Share-based Compensation - Restricted Stock (Details) - Restricted stock - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock options, restricted stock and performance stock options
Shares issued	0	0	0
Vested restricted stock awards settled (in shares)	0
Unvested restricted stock outstanding (in shares)	0	0
Shares granted	0	0	0
Shares forfeited	0	0	0

Treasury stock (Details)

Treasury stock (Details) - shares	Oct. 16, 2017	Oct. 17, 2016	Oct. 16, 2015	Dec. 31, 2019	Dec. 31, 2018
Treasury stock
Shares of treasury stock held				33,801	33,801
Restricted stock
Treasury stock
Shares surrendered by holder to cover taxes associated with vesting	14,895	9,709	9,197

Commitments and contingencies -

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

Commitments and contingencies_2

Commitments and contingencies - Defined Contribution Plans (Details) - USD ($)	Jan. 01, 2015	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Contribution Plans
Maximum employee annual contribution (as a percent)		50.00%
Expense on defined contribution plans		$ 577,000	$ 576,000	$ 419,000
First Tier Contributions
Defined Contribution Plans
Employer's match of of employee contributions (as a percent)	100.00%
Percentage of match by employer (as a percent)	3.00%
Second Tier Contributions
Defined Contribution Plans
Employer's match of of employee contributions (as a percent)	50.00%
Percentage of match by employer (as a percent)	2.00%

Commitments and contingencies_3

Commitments and contingencies - Operating Lease, Cash Incentive Bonus Plan, Inducement Option Grant (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2019	Dec. 31, 2015
Commitments
Total lease obligations	$ 3,935,000
Deferred rent balance		$ 989,000
Bonus Expenses	1,567,000	666,000	$ 701,000
Grand Prairie Lease Plus Blue Bell Lease
Commitments
Rent expense, share of operating expenses	217,000	206,000	243,000
Rent expense, excluding share of operating expenses		$ 1,011,000	$ 1,010,000
Rent expense, excluding share of operating expenses	$ 1,011,000
Blue Bell, Pennsylvania
Commitments
Term of operating lease					60 months
ASU 2016-02
Commitments
Total lease obligations				$ 4,300,000
Deferred rent balance				$ 900,000

License agreements (Details)

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

Related party transactions (Det

Related party transactions (Details) - USD ($) $ / shares in Units, $ in Thousands	Nov. 08, 2018	Nov. 05, 2018	Oct. 26, 2017	Jul. 26, 2017	Feb. 17, 2017	May 31, 2019	Jun. 30, 2017	Feb. 28, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock transaction disclosures
Net proceeds from issuance of stock									$ 11	$ 47,292	$ 64,560
Common Stock
Stock transaction disclosures
Issuance of common stock, net of issuance costs (in shares)										20,651,524	12,019,639
Underwritten Public Offering | Common Stock
Stock transaction disclosures
Issuance of common stock, net of issuance costs (in shares)	19,999,999						4,800,000	5,750,000
Public offering price (in dollars per share)	$ 2.30						$ 6.25	$ 5
Proceeds from issuance of common stock							$ 30,000
Payments of stock issuance costs							$ 200
Term of option to purchase share							30 days
Shares offered to underwriters under option granted (in shares)							720,000
Net proceeds from issuance of stock	$ 43,400			$ 34,300				$ 26,700
Over-allotment option | Common Stock
Stock transaction disclosures
Issuance of common stock, net of issuance costs (in shares)	2,608,695				750,000
Senior Secured Credit Facility | Conversion Of Convertible Notes
Stock transaction disclosures
Number of shares issued upon conversion of debt			929,967
Amount of debt converted into stock			$ 6,600
Conversion price			$ 7.08
Conversion price, expressed as a percentage of stock price			95.00%
Number of trading days used to determine conversion stock price			3 days
Debt issued to entities affiliated with Deerfield | Second Amendment Facility Due in May 2019
Stock transaction disclosures
Payment of facility		$ 7,500				$ 7,500
Debt issued to entities affiliated with Deerfield | Second Amendment Facility Due in May 2019 | Common Stock
Stock transaction disclosures
Number of trading days used to determine conversion stock price		10 days
Debt issued to entities affiliated with Deerfield | Second Amendment Facility Due in May 2020
Stock transaction disclosures
Principal repayment to be paid		$ 15,000
Debt issued to entities affiliated with Deerfield | Second Amendment Facility Due in May 2020 | Common Stock
Stock transaction disclosures
Conversion price		$ 10
Conversion price, expressed as a percentage of stock price		95.00%
Number of trading days used to determine conversion stock price		3 days
Investor | Debt issued to entities affiliated with Deerfield | Senior Secured Credit Facility
Related party transactions
Face amount of debt at time of related party stock purchase								$ 60,000

Selected Quarterly Financial _3

Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Selected Quarterly Financial Information
Net product sales	$ 16,832	$ 17,540	$ 15,643	$ 14,634	$ 15,393	$ 12,503	$ 11,363	$ 10,729	$ 64,649	$ 49,988	$ 27,132
Net product sales	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember	us-gaap:ProductMember
Gross profit	$ 9,651	$ 11,093	$ 10,544	$ 8,238	$ 7,631	$ 5,546	$ 4,376	$ 5,508	$ 39,526	$ 23,060	$ 13,102
Net loss attributable to common stock	$ (3,488)	$ (2,051)	$ (3,763)	$ (7,600)	$ (9,337)	$ (12,695)	$ (15,207)	$ (14,436)
Weighted average common shares outstanding used to compute net loss per share, basic and diluted	49,732,654	49,730,755	49,727,718	49,703,563	41,415,358	29,625,792	29,008,909	28,996,956	49,723,772	32,288,555	24,751,091
Net loss per share of common stock, basic and fully diluted	$ (0.07)	$ (0.04)	$ (0.08)	$ (0.15)	$ (0.23)	$ (0.43)	$ (0.52)	$ (0.50)	$ (0.34)	$ (1.60)	$ (2.66)

Selected Quarterly Financial _4

Selected Quarterly Financial Data (Unaudited) - Explanatory Information (Details) - $ / shares	Nov. 08, 2018	Feb. 17, 2017	Jun. 30, 2017	Feb. 28, 2017	Dec. 31, 2018	Dec. 31, 2017
Cowen Sales Agreement
Selected Quarterly Financial Data (Unaudited)
Issuance of common stock, net of issuance costs (in shares)					651,525
Public offering price (in dollars per share)					$ 6.25
Common Stock
Selected Quarterly Financial Data (Unaudited)
Issuance of common stock, net of issuance costs (in shares)					20,651,524	12,019,639
Common Stock | Over-allotment option
Selected Quarterly Financial Data (Unaudited)
Issuance of common stock, net of issuance costs (in shares)	2,608,695	750,000
Common Stock | Underwritten Public Offering
Selected Quarterly Financial Data (Unaudited)
Issuance of common stock, net of issuance costs (in shares)	19,999,999		4,800,000	5,750,000
Public offering price (in dollars per share)	$ 2.30		$ 6.25	$ 5

Subsequent event (Details)

Subsequent event (Details) - Neos Therapeutics, Inc. 2015 Stock Option and Incentive Plan - shares	Jan. 01, 2020	Jan. 01, 2019	Jan. 01, 2018	Dec. 31, 2019
Subsequent event
Increase in number of shares reserved and available for issuance		2,483,815	1,449,847
Shares reserved and available for issuance				3,257,599
Subsequent event
Subsequent event
Increase in number of shares reserved and available for issuance	2,486,633
Shares reserved and available for issuance	5,744,232

Schedule II - VALUATION AND Q_2

Schedule II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Allowance for chargebacks
Movement in valuation and qualifying accounts
Balance at beginning of period	$ 1,314	$ 816	$ 779
Additions charged to costs and expenses	12,135	8,565	10,146
Deductions and Payments	(9,299)	(8,067)	(10,109)
Balance at end of period	4,150	1,314	816
Allowance for cash discounts
Movement in valuation and qualifying accounts
Balance at beginning of period	551	337	171
Additions charged to costs and expenses	3,801	3,519	1,814
Deductions and Payments	(3,654)	(3,305)	(1,648)
Balance at end of period	698	551	337
Savings offers
Movement in valuation and qualifying accounts
Balance at beginning of period	11,288	7,168	2,070
Additions charged to costs and expenses	69,540	71,303	30,978
Deductions and Payments	(64,038)	(67,183)	(25,880)
Balance at end of period	16,790	11,288	7,168
Reserve for wholesaler fees
Movement in valuation and qualifying accounts
Balance at beginning of period	4,249	2,345	509
Additions charged to costs and expenses	17,225	17,414	8,244
Deductions and Payments	(16,460)	(15,510)	(6,408)
Balance at end of period	5,014	4,249	2,345
Reserve for returns
Movement in valuation and qualifying accounts
Balance at beginning of period	5,157	2,711	1,157
Additions charged to costs and expenses	3,299	3,803	1,792
Deductions and Payments	(3,334)	(1,357)	(238)
Balance at end of period	5,122	5,157	2,711
Rebates
Movement in valuation and qualifying accounts
Balance at beginning of period	7,763	4,008	544
Additions charged to costs and expenses	17,355	18,746	7,837
Deductions and Payments	(19,009)	(14,991)	(4,373)
Balance at end of period	$ 6,109	$ 7,763	$ 4,008