Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 20, 2015 | Jun. 30, 2014 |
Document And Entity Information [Abstract] | |||
Document Type | 10-K/A | ||
Amendment Flag | TRUE | ||
AmendmentDescription | Explantory Note: The sole purpose of this Amendment No.1 to our Annual Report on Form 10-K for the year ended December 31, 2014, originally filed with the Securities and Exchange Commission on February 27, 2015 (the "Original Filing") is to correct a clerical error that resulted in the filing of an incorrect version of Exhibit 101 to the Form 10-K, which contains the XBRL (eXtensible Business Reporting Language) Interactive Data File for the financial statements and notes included in Part IV, Item 15 of the Form 10-K. No other changes have been made to the Form 10-K. This Form 10-K/A does not modify or update any previously reported financial statements or other disclosures in the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Form 10-K, which continues to speak as of the original filing date of the Original Filing. | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | HZNP | ||
Entity Registrant Name | HORIZON PHARMA PLC | ||
Entity Central Index Key | 1492426 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 125,100,210 | ||
Entity Public Float | $1 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | $218,807 | $80,480 |
Restricted cash | 738 | 738 |
Accounts receivable, net | 73,915 | 15,958 |
Inventories, net | 16,865 | 8,701 |
Prepaid expenses and other current assets | 14,370 | 4,888 |
Deferred tax assets, current | 1,530 | |
Total current assets | 326,225 | 110,765 |
Property and equipment, net | 7,241 | 3,780 |
Intangible assets, net | 704,833 | 131,094 |
In-process research and development | 66,000 | |
Deferred tax assets, net, non-current | 18,761 | |
Other assets | 11,564 | 6,957 |
TOTAL ASSETS | 1,134,624 | 252,596 |
CURRENT LIABILITIES: | ||
Convertible debt, net | 48,334 | |
Accounts payable | 21,011 | 9,921 |
Accrued expenses | 46,625 | 15,926 |
Accrued trade discounts and rebates | 76,115 | 8,123 |
Accrued royalties-current portion | 25,325 | 8,010 |
Deferred tax liabilities, net | 721 | |
Deferred revenues-current portion | 1,261 | 1,330 |
Total current liabilities | 219,392 | 43,310 |
LONG-TERM LIABILITIES: | ||
Convertible debt, net of current | 297,169 | 110,762 |
Long-term debt, net | 297,169 | |
Derivative liability | 109,410 | |
Accrued royalties, net of current | 48,887 | 24,982 |
Deferred revenues, net of current | 8,144 | 9,686 |
Deferred tax liabilities, net, non-current | 19,570 | 3,362 |
Other long-term liabilities | 1,258 | 166 |
Total long-term liabilities | 375,028 | 258,368 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' EQUITY: | ||
Ordinary shares, $0.0001 nominal value; 300,000,000 shares authorized; 125,425,853 and 66,097,417 shares issued at December 31, 2014 and 2013, respectively, and 124,041,487 and 66,097,417 shares outstanding at December 31, 2014 and 2013, respectively | 13 | 7 |
Treasury stock, 384,366 ordinary shares at December 31, 2014 | -4,585 | |
Additional paid-in capital | 1,269,858 | 410,430 |
Accumulated other comprehensive loss | -4,363 | -2,403 |
Accumulated deficit | -720,719 | -457,116 |
Total shareholders' equity (deficit) | 540,204 | -49,082 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,134,624 | 252,596 |
Developed Technology [Member] | ||
CURRENT ASSETS: | ||
Intangible assets, net | 696,963 | 131,094 |
Other Intangible Assets [Member] | ||
CURRENT ASSETS: | ||
Intangible assets, net | $7,870 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, nominal value | $0.00 | $0.00 |
Ordinary shares, shares authorized | 300,000,000 | 300,000,000 |
Ordinary shares, shares issued | 125,425,853 | 66,097,417 |
Ordinary shares, shares outstanding | 124,041,487 | 66,097,417 |
Treasury stock, ordinary shares | 384,366 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
REVENUES: | |||
Net sales | $296,955 | $74,016 | $18,844 |
Cost of goods sold | 78,753 | 14,625 | 11,875 |
Gross profit | 218,202 | 59,391 | 6,969 |
OPERATING EXPENSES: | |||
Research and development | 17,460 | 10,084 | 16,837 |
Sales and marketing | 120,276 | 68,595 | 49,561 |
General and administrative | 88,957 | 23,566 | 19,444 |
Total operating expenses | 226,693 | 102,245 | 85,842 |
Operating loss | -8,491 | -42,854 | -78,873 |
OTHER (EXPENSE) INCOME, NET: | |||
Interest expense, net | -23,826 | -12,774 | -11,552 |
Foreign exchange (loss) gain | -3,905 | 1,206 | 489 |
Loss on derivative fair value | -214,995 | -69,300 | |
Loss on induced conversion and debt extinguishment | -29,390 | -26,404 | -2,973 |
Bargain purchase gain | 22,171 | ||
Other, net | -11,251 | -56 | |
Total other expense, net | -261,196 | -107,272 | -14,092 |
Loss before benefit for income taxes | -269,687 | -150,126 | -92,965 |
BENEFIT FOR INCOME TAXES | -6,084 | -1,121 | -5,171 |
NET LOSS | -263,603 | -149,005 | -87,794 |
NET LOSS PER ORDINARY SHARE - Basic and diluted | ($3.15) | ($2.34) | ($2.26) |
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING - Basic and diluted | 83,751,129 | 63,657,924 | 38,871,422 |
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX | |||
Foreign currency translation adjustments | -1,960 | 969 | 416 |
Other comprehensive (loss) income | -1,960 | 969 | 416 |
COMPREHENSIVE LOSS | ($265,563) | ($148,036) | ($87,378) |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (Deficit) (USD $) | Total | Ordinary Shares [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
In Thousands, except Share data | ||||||
Beginning balance at Dec. 31, 2011 | $45,912 | $2 | $270,015 | ($3,788) | ($220,317) | |
Beginning balance, shares at Dec. 31, 2011 | 19,627,744 | |||||
Issuance of ordinary shares in conjunction with equity financing offerings, net of underwriting fees and issuance costs | 128,079 | 4 | 128,075 | |||
Issuance of ordinary shares in conjunction with equity financing offerings, net of underwriting fees and issuance costs, shares | 38,672,579 | |||||
Issuance of common stock in conjunction with vesting of restricted stock units and stock option exercises, shares | 74,050 | |||||
Issuance of ordinary shares in conjunction with ESPP purchases | 287 | 287 | ||||
Issuance of ordinary shares in conjunction with option exercises and ESPP purchases, shares | 106,955 | |||||
Stock-based compensation | 4,661 | 4,661 | ||||
Issuance of ordinary shares in conjunction with warrant exercises | 154 | 154 | ||||
Issuance of ordinary shares in conjunction with warrant exercises, shares | 1,990,919 | |||||
Issuance of warrants in connection with notes payable | 9,188 | 9,188 | ||||
Issuance of ordinary shares in connection with notes payable amendment | 5,075 | 5,075 | ||||
Issuance of ordinary shares in connection with notes payable amendment, shares | 1,250,000 | |||||
Currency translation adjustment | 416 | 416 | ||||
Net loss | -87,794 | -87,794 | ||||
Ending balance at Dec. 31, 2012 | 105,978 | 6 | 417,455 | -3,372 | -308,111 | |
Ending balance, shares at Dec. 31, 2012 | 61,722,247 | |||||
Issuance of ordinary shares in conjunction with equity financing offerings, net of underwriting fees and issuance costs | 5,998 | 1 | 5,997 | |||
Issuance of ordinary shares in conjunction with equity financing offerings, net of underwriting fees and issuance costs, shares | 2,448,575 | |||||
Issuance of common stock in conjunction with vesting of restricted stock units and stock option exercises | 161 | 161 | ||||
Issuance of common stock in conjunction with vesting of restricted stock units and stock option exercises, shares | 340,029 | |||||
Issuance of common stock in conjunction with option exercises and ESPP purchases | 478 | 478 | ||||
Issuance of common stock in conjunction with option exercises and ESPP purchases, shares | 225,820 | |||||
Stock-based compensation | 5,014 | 5,014 | ||||
Issuance of ordinary shares in conjunction with warrant exercises, shares | 1,360,746 | |||||
Purchase of capped calls | -18,675 | -18,675 | ||||
Currency translation adjustment | 969 | 969 | ||||
Net loss | -149,005 | -149,005 | ||||
Ending balance at Dec. 31, 2013 | -49,082 | 7 | 410,430 | -2,403 | -457,116 | |
Ending balance, shares at Dec. 31, 2013 | 66,097,417 | |||||
Issuance of ordinary shares in connection with Vidara merger | 387,799 | 3 | 387,796 | |||
Issuance of ordinary shares in connection with Vidara merger, shares | 31,350,000 | |||||
Issuance of ordinary shares in conjunction with inducement of convertible notes | 78,439 | 2 | 78,437 | |||
Issuance of ordinary shares in conjunction with inducement of convertible notes, Shares | 16,594,793 | |||||
Reclassification of derivative liability | 324,405 | 324,405 | ||||
Issuance of common stock in conjunction with vesting of restricted stock units and stock option exercises | 1,612 | 1,612 | ||||
Issuance of common stock in conjunction with vesting of restricted stock units and stock option exercises, shares | 864,780 | |||||
Issuance of common stock in conjunction with option exercises and ESPP purchases | 1,674 | 1,674 | ||||
Issuance of common stock in conjunction with option exercises and ESPP purchases, shares | 536,543 | |||||
Stock-based compensation | 13,197 | 13,197 | ||||
Issuance of ordinary shares in conjunction with warrant exercises | 38,461 | 1 | 38,460 | |||
Issuance of ordinary shares in conjunction with warrant exercises, shares | 8,990,120 | |||||
Proceeds from capped call transactions | 9,385 | -4,585 | 13,970 | |||
Proceeds from capped call transactions, Shares | 384,366 | |||||
Treasury stock purchase | -123 | -123 | ||||
Treasury stock purchase, shares | 7,800 | |||||
Treasury stock retirement | 123 | -123 | ||||
Treasury stock retirement , shares | -7,800 | -7,800 | ||||
Currency translation adjustment | -1,960 | -1,960 | ||||
Net loss | -263,603 | -263,603 | ||||
Ending balance at Dec. 31, 2014 | $540,204 | $13 | ($4,585) | $1,269,858 | ($4,363) | ($720,719) |
Ending balance, shares at Dec. 31, 2014 | 124,425,853 | 384,366 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | ($263,603) | ($149,005) | ($87,794) |
Adjustments to reconcile net loss to net cash used in (provided by) operating activities: | |||
Remeasurement of VIMOVO and ACTIMMUNE royalty liabilities | 10,660 | ||
Depreciation and amortization expense | 34,009 | 9,310 | 5,538 |
Share-based compensation | 13,198 | 5,014 | 4,661 |
Bargain purchase gain | -22,171 | ||
Loss on derivative revaluation | 214,995 | 69,300 | |
Royalty accretion | 9,020 | ||
Loss on debt extinguishment | 11,709 | 12,881 | |
Paid in kind interest expense | 2,225 | 2,607 | |
Amortization of debt discount and deferred financing costs | 9,273 | 4,364 | 2,740 |
Foreign exchange loss (gain) | 3,905 | -1,206 | -489 |
Loss on disposal of assets | 11 | 76 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | -46,183 | -12,491 | -1,087 |
Inventories | 7,173 | -3,426 | -4,022 |
Prepaid expenses and other current assets | -9,208 | -1,240 | -543 |
Accounts payable | 9,383 | 3,908 | -2,209 |
Accrued trade discounts and rebates | 54,090 | 6,962 | 7,260 |
Accrued expenses | -1,270 | 980 | -208 |
Deferred revenues | -562 | -1,145 | 2,616 |
Deferred income taxes | -7,516 | -1,186 | -5,206 |
Other non-current assets and liabilities | 636 | 468 | -581 |
Net cash provided by (used in) operating activities | 27,549 | -54,287 | -76,641 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Payments for acquisitions, net of cash acquired | -224,220 | -35,000 | |
Purchases of property and equipment | -3,500 | -1,198 | -1,336 |
Change in restricted cash | 63 | -50 | |
Net cash used in investing activities | -227,720 | -36,135 | -1,386 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from the issuance of debt, net of underwriting fees and issuance costs | 286,966 | 143,598 | 55,578 |
Proceeds from the issuance of ordinary shares in connection with warrant exercises | 38,461 | 154 | |
Proceeds from settlement of capped call transactions | 9,385 | ||
Proceeds from the issuance of ordinary shares through ESPP programs and stock option exercises | 3,473 | 639 | 287 |
Repayment of notes payable | -64,844 | -19,788 | |
Purchase of capped calls | -18,675 | ||
Proceeds from the issuance of ordinary shares under an ATM agreement, net of issuance costs | 5,998 | ||
Proceeds from equity finance offerings, net of offering costs | 128,077 | ||
Net cash provided by financing activities | 338,285 | 66,716 | 164,308 |
Effect of foreign exchange rate changes on cash | 213 | 99 | -160 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 138,327 | -23,607 | 86,121 |
CASH AND CASH EQUIVALENTS, beginning of the year | 80,480 | 104,087 | 17,966 |
CASH AND CASH EQUIVALENTS, end of the year | 218,807 | 80,480 | 104,087 |
Supplemental cash flow information: | |||
Cash paid for interest | 14,109 | 8,573 | 7,554 |
Cash paid for income taxes | 37 | 44 | 57 |
Cash paid for induced conversion and debt extinguishment | 16,690 | 12,152 | 2,124 |
Supplemental non-cash flow information: | |||
Contingent liabilities assumed in acquisition | 33,600 | 32,992 | |
Intangble assets acquired in acquisition | 679,100 | 67,705 | |
Accrued capital expenditures | 1,463 | ||
Conversion of Convertible Senior Notes to ordinary shares | $89,015 |
Basis_of_Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of Presentation | NOTE 1 – BASIS OF PRESENTATION |
On September 19, 2014, the businesses of Horizon Pharma, Inc. (“HPI”) and Vidara Therapeutics International Public Limited Company (“Vidara”) were combined in a merger transaction (the “Merger”), accounted for as a reverse acquisition under the acquisition method of accounting for business combinations, with HPI treated as the acquiring company in the Merger for accounting purposes. As part of the Merger, a wholly-owned subsidiary of Vidara merged with and into HPI, with HPI surviving the Merger as a wholly-owned subsidiary of Vidara and Vidara changed its name to Horizon Pharma plc (“New Horizon” or the “Company”). Upon the consummation of the Merger, the historical financial statements of HPI became the Company’s historical financial statements. Accordingly, the historical financial statements of HPI are included in the comparative prior periods. | |
Business Overview | |
The Company is a specialty biopharmaceutical company focused on improving patients’ lives by identifying, developing, acquiring or in-licensing and commercializing differentiated products that address unmet medical needs. The Company markets a portfolio of products in arthritis, inflammation and orphan diseases. The Company’s U.S. marketed products are ACTIMMUNE ® (interferon gamma-1b), DUEXIS ® (ibuprofen/famotidine), PENNSAID® (diclofenac sodium topical solution) 2% w/w (“PENNSAID 2%”), RAYOS® (prednisone) delayed-release tablets and VIMOVO® (naproxen/esomeprazole magnesium). The Company developed DUEXIS and RAYOS/LODOTRA®, acquired the U.S. rights to VIMOVO from AstraZeneca AB (“AstraZeneca”) in November 2013, acquired the U.S. rights to ACTIMMUNE as a result of the Merger, and acquired the U.S. rights to PENNSAID 2% from Nuvo Research Inc. (“Nuvo”) in October 2014. The Company markets its products in the United States through a combined field sales force of approximately 375 representatives consisting of approximately 325 primary care sales representatives and 50 sales representatives in its specialty and orphan diseases business areas. The Company’s strategy is to develop, acquire or in-license additional innovative medicines or acquire companies, such as the addition of ACTIMMUNE through the recently-completed Merger and the acquisition of the U.S. rights to PENNSAID 2% from Nuvo. | |
The Company is a public limited company formed under the laws of Ireland. As a result of the Merger, the Company operates through a number of international and U.S. subsidiaries with principal business purposes to either hold intellectual property assets, perform research and development or manufacturing operations, serve as distributors of the Company’s products, or provide services and financial support to the Company. The Company’s international operations are conducted primarily through HZNP Limited, which is responsible for research and development for ACTIMMUNE and PENNSAID 2%, Horizon Pharma Ireland Limited, which is responsible for manufacturing ACTIMMUNE and PENNSAID 2% and other products the Company may potentially acquire, and Horizon Pharma AG, a company organized under the laws of Switzerland, along with its wholly-owned subsidiary Horizon Pharma GmbH, a company organized under the laws of Germany, together which are responsible for manufacturing RAYOS/LODTORA, and for international sales of LODOTRA. The Company’s U.S. operations are conducted primarily through Horizon Pharma USA, Inc. which is responsible for research and development and manufacturing of DUEXIS and VIMOVO, and distribution in the U.S. market of DUEXIS, VIMOVO and RAYOS, and other products the Company may potentially acquire, such as the recently acquired PENNSAID 2%, as well as through HZNP USA Inc. which is responsible for distribution of ACTIMMUNE in the United States. Unless otherwise indicated or the context otherwise requires, references to the “Company”, “New Horizon”, “we”, “us” and “our” refer to Horizon Pharma plc and its consolidated subsidiaries, including its predecessor, HPI. All references to “Vidara” are references to Horizon Pharma plc (formerly known as Vidara Therapeutics International Public Limited Company) and its consolidated subsidiaries prior to the effective time of the Merger on September 19, 2014. The disclosures in this report relating to the pre-Merger business of Horizon Pharma plc, unless noted as being the business of Vidara prior to the Merger, pertain to the business of HPI prior to the Merger. | |
On April 23, 2011, the U.S. Food and Drug Administration (“FDA”) approved DUEXIS, a proprietary tablet formulation containing a fixed-dose combination of ibuprofen and famotidine in a single pill. DUEXIS is indicated for the relief of signs and symptoms of rheumatoid arthritis (“RA”), osteoarthritis (“OA”) and to decrease the risk of developing upper gastrointestinal ulcers in patients who are taking ibuprofen for these indications. The Company began marketing DUEXIS to physicians in December 2011. In June 2012, the Company licensed DUEXIS rights in Latin America to Grünenthal S.A., a private company focused on the promotion of pain products. | |
The Company’s second approved product in the United States, RAYOS, known as LODOTRA outside the United States, is a proprietary delayed-release formulation of low-dose prednisone, first approved in Europe in March 2009, for the treatment of moderate to severe, active RA in adults, particularly when accompanied by morning stiffness. On July 26, 2012, the FDA approved RAYOS for the treatment of RA, polymyalgia rheumatica (“PMR”), psoriatic arthritis, ankylosing spondylitis (“AS”), asthma and chronic obstructive pulmonary disease and a number of other conditions. The Company is focusing its promotion of RAYOS in the United States on rheumatology indications, including RA and PMR. The Company began marketing RAYOS to a subset of U.S. rheumatologists in December 2012 and began the full launch in late January 2013 to the majority of U.S. rheumatologists and key primary care physicians. LODOTRA is currently marketed outside the United States, excluding Japan and Canada, by the Company’s distribution partner, Mundipharma International Corporation Limited (“Mundipharma”). | |
On November 18, 2013, the Company entered into agreements with AstraZeneca pursuant to which the Company acquired from AstraZeneca and its affiliates certain intellectual property and other assets, and assumed from AstraZeneca and its affiliates certain liabilities, each with respect to VIMOVO, and obtained rights to develop other pharmaceutical products that contain gastroprotective agents in a single fixed combination oral solid dosage form with non-steroidal anti-inflammatory drugs (“NSAIDs”) in the United States. VIMOVO is a proprietary fixed-dose multi-layer delayed-release tablet combining an enteric-coated naproxen, an NSAID, core and an immediate-release esomeprazole, a proton pump inhibitor, layer surrounding the core. VIMOVO was originally developed by Pozen Inc. (“Pozen”) together with AstraZeneca pursuant to an exclusive global collaboration and license agreement under which AstraZeneca and Pozen agreed to co-develop VIMOVO and AstraZeneca obtained exclusive rights to commercialize VIMOVO worldwide. On April 30, 2010, the FDA approved VIMOVO for the relief of the signs and symptoms of OA, RA, and AS and to decrease the risk of developing gastric ulcers in patients at risk of developing NSAID-associated gastric ulcers. | |
Under the asset purchase agreement with AstraZeneca, the Company acquired certain existing assets and rights necessary to commercialize VIMOVO in the United States including, among other things, the investigational new drug application (“IND”) and new drug application (“NDA”) for VIMOVO in the United States, AstraZeneca’s interest in certain patents covering VIMOVO in the United States and certain promotional materials and records related to VIMOVO in the United States. In addition, AstraZeneca assigned to the Company its amended and restated collaboration and license agreement for the United States with Pozen, pursuant to which AstraZeneca has in-licensed from Pozen certain patents and know-how of Pozen covering VIMOVO in the United States. For accounting purposes, the acquisition of the U.S. rights to VIMOVO was treated as a business combination. Collectively, these transactions are referred to as the “VIMOVO Acquisition.” | |
In December 2013, as a result of its acquisition of the U.S. rights to VIMOVO, the Company began recognizing revenues under the transition agreement with AstraZeneca. The Company announced the availability of Horizon-labeled VIMOVO on January 2, 2014, at which time it also began marketing with its primary care sales force and began direct recording VIMOVO revenue. | |
On March 18, 2014, the Company, Vidara Therapeutics Holdings LLC, a Delaware limited liability company (“Vidara Holdings”), Vidara, Hamilton Holdings (USA), Inc., a Delaware corporation and an indirect wholly-owned subsidiary of Vidara (“U.S. HoldCo”), and Hamilton Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of U.S. HoldCo (“Merger Sub”), entered into a Transaction Agreement and Plan of Merger (the “Merger Agreement”). Upon consummation of the Merger on September 19, 2014 (the “Closing”), the security holders of HPI (excluding the holders of HPI’s convertible notes) owned approximately 74% of the Company and Vidara Holdings owned approximately 26% of the Company. At the Closing, New Horizon made a cash payment of $210.9 million to Vidara Holdings and $2.7 million to Citibank N.A. as escrow agent under an escrow agreement associated with the Merger. | |
In connection with the Merger, on June 17, 2014, the Company entered into a senior secured credit facility with certain lenders and Citibank, N.A., as administrative agent and collateral agent, that provided the Company with $300.0 million in financing over a five-year period (the “Senior Secured Credit Facility”). The Company borrowed the full $300.0 million available under the Senior Secured Credit Facility on September 19, 2014 and used a portion of the proceeds to provide the cash payment of $213.6 million for the Merger and to pay certain transaction related expenses, and is using the balance for general corporate purposes. | |
As a result of the Merger, the Company began marketing ACTIMMUNE, a bioengineered form of interferon gamma-1b, a protein that acts as a biologic response modifier, in the United States. ACTIMMUNE is approved by the FDA for use in children and adults with chronic granulomatous disease (“CGD”) and severe, malignant osteopetrosis (“SMO”). ACTIMMUNE is indicated for reducing the frequency and severity of serious infections associated with CGD and for delaying time to disease progression in patients with SMO. The FDA has agreed to the primary endpoint for a Phase 3 study that will evaluate ACTIMMUNE in the treatment of Friedreich’s Ataxia (“FA”). In February 2015, the Company submitted an IND application and anticipates the Phase 3 clinical study related to FA will begin enrolling patients in the second quarter of 2015. | |
On October 17, 2014, the Company acquired the U.S. rights to PENNSAID 2% from Nuvo for $45.0 million in cash. PENNSAID 2% is approved in the United States for the treatment of the pain of OA of the knee(s). As part of the acquisition, the Company entered into an eight-year exclusive supply agreement with Nuvo. The Company began marketing PENNSAID 2% in January 2015. In connection with the PENNSAID 2% acquisition, the Company expanded its primary care sales force by 75 additional representatives. Effective January 1, 2015, the Company’s primary care representatives are now marketing DUEXIS, PENNSAID 2% and VIMOVO. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Accounting Policies [Abstract] | |||||
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Basis of Presentation | |||||
The accompanying consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the instructions for Form 10-K and Article 3 of Regulation S-X. The consolidated financial statements include the accounts of the Company and its wholly-owned consolidated subsidiaries. | |||||
Principles of Consolidation | |||||
The consolidated financial statements include the Company’s accounts and those of its wholly-owned subsidiaries in the United States, Ireland, Bermuda, Luxembourg, Switzerland, Germany and the United Kingdom. All intercompany accounts and transactions have been eliminated. Additionally, certain reclassifications have been made to prior period financial statements to conform to the current period presentation. | |||||
During the second quarter of 2014, the Company changed its income statement presentation to present net sales rather than presenting gross sales minus sales discounts and allowances. The revised presentation has no effect on net sales, gross margin dollars, net income, cash flows, working capital or shareholders’ equity amounts previously reported, and will not affect such amounts in future periods. | |||||
During the first quarter of 2014, the Company recorded an out of period correction of $1.6 million resulting in a reduction to its distribution service fees related to prior periods. This correction to distribution service fees was recorded as an increase in net sales within the Company’s condensed consolidated statements of comprehensive loss for the year ended December 31, 2014. The Company has evaluated the impact of the reduction in distribution service fees to prior reporting periods and has determined it was immaterial. | |||||
Segment Information | |||||
The Company operates as one segment. Management uses one measure of profitability and does not segment its business for internal reporting. | |||||
Use of Estimates | |||||
The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||
Foreign Currency Translation and Transactions | |||||
The reporting currency of the Company and its subsidiaries is the U.S. dollar. | |||||
The U.S. dollar is the functional currency for the Company’s U.S. based businesses and its subsidiaries in Ireland, Bermuda and Luxembourg. Other foreign subsidiaries have the following functional currencies: Switzerland (Euro), Germany (Euro) and U.K. (British Pound). Foreign currency-denominated assets and liabilities of these subsidiaries are translated into U.S. dollars based on exchange rates prevailing at the end of the period, revenues and expenses are translated at average exchange rates prevailing during the corresponding period, and shareholders’ equity (deficit) accounts are translated at historical exchange rates as of the date of any equity transaction. The effects of foreign exchange gains and losses arising from the translation of assets and liabilities of those entities where the functional currency is not the U.S. dollar are included as a component of accumulated other comprehensive income (loss). | |||||
Gains and losses resulting from foreign currency translations are reflected within the Company’s results of operations. During the year ended December 31, 2014, the Company recorded a loss from foreign currency translations of $3.9 million, compared to a gain from foreign currency translations during the year ended December 31, 2013 of $1.2 million. The Company does not currently utilize and has not in the past utilized any foreign currency hedging strategies to mitigate the effect of its foreign currency exposure. | |||||
Revenue Recognition | |||||
Revenue is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price is fixed or determinable; and collectability is reasonably assured. Some of the Company’s agreements contain multiple elements and in accordance with these agreements, the Company may be eligible for upfront license fees, marketing or commercial milestones and payment for product deliveries. | |||||
Revenue from product deliveries | |||||
The Company recognizes revenue from the delivery of its products when delivery has occurred, title has transferred, the selling price is fixed or determinable, collectability is reasonably assured and the Company has no further performance obligations. In addition, revenue is only recognized when the right of return no longer exists (which is the earlier of the product being dispensed through patient prescriptions or the expiration of the right of return) or when product returns can be reasonably estimated. Due to the Company’s ability to reasonably estimate and determine allowances for product returns, rebates and discounts based on its own internal data for DUEXIS and RAYOS or data relating to prior sales of VIMOVO and ACTIMMUNE received in connection with the acquisition of those products, the Company recognizes revenue at the point of sale to wholesale pharmaceutical distributors and retail chains for all currently distributed products. | |||||
Revenue from upfront license fees | |||||
The Company recognizes revenues from the receipt of non-refundable, upfront license fees. In situations where the licensee is able to obtain stand-alone value from the license and no further performance obligations exist on the Company’s part, revenues are recognized on the earlier of when payments are received or collection is reasonably assured. Where continuing involvement by the Company is required in the form of technology transfer, product manufacturing or technical support, revenues are deferred and recognized over the term of the agreement. | |||||
Revenue from milestone receipts | |||||
Milestone payments are recognized as revenue based on achievement of the associated milestones, as defined in the relevant agreements. Revenue from a milestone achievement is recognized when earned, as evidenced by acknowledgment from the Company’s partner, provided that (1) the milestone event is substantive and its achievability was not reasonably assured at the inception of the agreement, (2) the milestone represents the culmination of an earnings process and (3) the milestone payment is non-refundable. If any of these criteria are not met, revenue from the milestone achievement is recognized over the remaining minimum period of the Company’s performance obligations under the agreement. | |||||
The Company anticipates revenues will continue to result from distribution, marketing, manufacturing and supply agreements with third parties in Europe and certain Asian, Latin American and other countries with respect to LODOTRA. | |||||
Under the manufacturing and supply agreements with Mundipharma Medical Company (“Mundipharma Medical”), Mundipharma Medical agreed to purchase LODOTRA exclusively from the Company at a price based on a specified percentage of the average net selling price (“ANSP”) for sales in a given country, subject to a minimum price. Mundipharma Medical has a nine-month period from purchase date to request an ANSP adjustment. If the ANSP is lower than the actual purchase price, then Mundipharma Medical would receive a price adjustment. Revenue for products sold to Mundipharma Medical is recognized upon delivery at the minimum price, as no contractual right of return exists. The difference between the actual selling price and the minimum price is recorded as deferred revenue until such time as adjustments for product returns, rebates and discounts can be reliably estimated or the nine-month ANSP adjustment period passes, at which time any previously deferred revenue would be recognized as revenue. As of December 31, 2014 and 2013, deferred revenues related to the sale of LODOTRA were $0.7 million and $0.6 million, respectively. Additionally, as of December 31, 2014 and 2013, deferred revenues related to milestone and upfront payments received under existing agreements were $7.1 million and $8.7 million, respectively. | |||||
Contractual Allowances | |||||
Product Sales Discounts and Allowances | |||||
The Company records allowances for product returns, rebates and discounts at the time of sale to wholesale pharmaceutical distributors and national and regional retail chains. The Company is required to make significant judgments and estimates in determining some of these allowances. If actual results differ from its estimates, the Company will be required to make adjustments to these allowances in the future. | |||||
Product Launch Discounts | |||||
The Company has offered additional discounts to wholesale distributors for product purchased at the time of product launch. The Company has recorded these discounts as an allowance against accounts receivable and a reduction of revenue when orders were placed. | |||||
Customer Rebates | |||||
The Company participates in certain commercial rebate programs. Under these rebate programs, the Company pays a rebate to the commercial entity or third-party administrator of the program. The Company accrues estimated rebates based on contract prices, estimated percentages of product sold to qualified patients and estimated levels of inventory in the distribution channel and records the rebate as a reduction of revenue. | |||||
Distribution Service Fees | |||||
The Company includes distribution service fees paid to its wholesalers for distribution and inventory management services as a reduction to revenue. The Company accrues estimated fees based on contractually determined amounts, typically as a percentage of revenue, as a reduction of revenue. | |||||
Co-Pay Assistance | |||||
The Company offers discount card and other programs such as our PME program to patients under which the patient receives a discount on his or her prescription. In certain circumstances when a patient’s prescription is rejected by a managed care vendor, the Company will pay for the full cost of the prescription. The Company reimburses pharmacies for this discount through third-party vendors. The Company accrues estimated costs for co-pay assistance based on contract prices, estimated percentages of product sold to qualified patients and estimated levels of inventory in the distribution channel and records the rebate as a reduction of revenue. The Company records the total amount of estimated costs for co-pay assistance for sales recorded in the period as a reduction of revenue. | |||||
Sales Returns | |||||
Consistent with industry practice, the Company maintains a return policy that allows customers to return product within a specified period prior to and subsequent to the product expiration date. Generally, product may be returned for a period beginning six months prior to its expiration date and up to one year after its expiration date. The right of return expires on the earlier of one year after the product expiration date or the time that the product is dispensed to the patient. The majority of product returns result from product dating, which falls within the range set by the Company’s policy, and are settled through the issuance of a credit to the customer. The estimate of the provision for returns is based upon the Company’s historical experience with actual returns, which is applied to the level of sales for the period that corresponds to the period during which the customer may return product. This period is known to the Company based on the shelf life of products at the time of shipment. The Company records sales returns as an allowance against accounts receivable and a reduction of revenue. | |||||
Prompt Pay Discounts | |||||
As an incentive for prompt payment, the Company offers a 2% cash discount to customers. The Company expects that all customers will comply with the contractual terms to earn the discount. The Company records the discount as an allowance against accounts receivable and a reduction of revenue. | |||||
Government Rebates and Chargebacks | |||||
Government Rebates | |||||
The Company participates in certain federal government rebate programs, such as Medicare and Medicaid. The Company accrues estimated rebates based on percentages of product sold to qualified patients, estimated rebate percentages and estimated levels of inventory in the distribution channel that will be sold to qualified patients and records the rebates as a reduction of revenue. | |||||
Government Chargebacks | |||||
The Company provides discounts to federal government qualified entities with whom the Company has contracted. These federal entities purchase products from the wholesale pharmaceutical distributors at a discounted price, and the wholesale pharmaceutical distributors then charge back to the Company the difference between the current retail price and the contracted price that the federal entities paid for the products. The Company accrues estimated chargebacks based on contract prices and sell-through sales data obtained from third party information and records the chargeback as a reduction of revenue. | |||||
Bad Debt Expense | |||||
The Company’s products are sold to wholesale pharmaceutical distributors and retail chains. The Company monitors its accounts receivable balances to determine the impact, if any, of such factors as changes in customer concentration, credit risk and the realizability of its accounts receivable, and records a bad debt reserve when applicable. The Company had established an immaterial reserve for bad debt expense for the year ended December 31, 2014. For the years ended December 31, 2013 and 2012, the Company did not record a bad debt expense related to its accounts receivable balances. | |||||
Cost of Goods Sold | |||||
The Company recognizes cost of goods sold in connection with its sale of ACTIMMUNE, DUEXIS, RAYOS/LODOTRA and VIMOVO. | |||||
Cost of goods sold for ACTIMMUNE includes all costs directly related to the acquisition of ACTIMMUNE from the Company’s third party manufacturer, including freight charges and other direct expenses such as insurance and amortization of intellectual property, royalty accretion expense and any changes in estimate associated with the contingent royalty liability as described in the accrued contingent royalty accounting policy below. | |||||
Cost of goods sold for DUEXIS includes all costs directly related to the purchase of product from the Company’s third party manufacturers, including freight charges and costs of distribution service fees. | |||||
Cost of goods sold for LODOTRA includes raw material costs, costs associated with third parties who manufacture LODOTRA for the Company, supply chain costs, manufacturing overhead costs, amortization of developed technology, royalty payments to third parties for the use of certain licensed patents and applicable taxes. | |||||
Cost of goods sold for RAYOS includes all costs directly related to the purchase of product from the Company’s third party manufacturers, including freight charges, amortization of developed technology and royalty payments to third parties for the use of certain licensed patents and applicable taxes. | |||||
Cost of goods sold for VIMOVO includes all costs directly related to the acquisition of product from AstraZeneca and/or a third-party manufacturer, amortization of intellectual property, royalty accretion expense and any changes in estimate associated with the contingent royalty liability as described in the accrued contingent royalty accounting policy below. | |||||
Until the Company began recognizing revenue at the point of sale of DUEXIS to the wholesalers in the fourth quarter of 2012, it also deferred the related DUEXIS cost of goods sold and recorded such amounts as other current assets until revenue was recognized | |||||
Inventories | |||||
Inventories are stated at the lower of cost or market value, using the first-in, first-out convention. Inventories consist of raw materials, work-in-process and finished goods. The Company has entered into manufacturing and supply agreements for the manufacture or purchase of raw materials and production supplies. The Company’s inventories include the direct purchase cost of materials and supplies and manufacturing overhead costs. As of December 31, 2014 and 2013, the Company had inventories of $16.9 million and $8.7 million, respectively. | |||||
Inventories exclude product sample inventory, which is included in other current assets and is expensed as a component of sales and marketing expense when provided to physicians or healthcare providers. As of December 31, 2014 and 2013, the Company had product sample inventory of $4.0 million and $1.3 million, respectively. | |||||
Preclinical Studies and Clinical Trial Accruals | |||||
The Company’s preclinical studies and clinical trials have historically been conducted by third-party contract research organizations and other vendors. Preclinical study and clinical trial expenses are based on the services received from these contract research organizations and vendors. Payments depend on factors such as the milestones accomplished, successful enrollment of certain numbers of patients and site initiation. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company adjusts the accrual accordingly. To date, the Company has had no significant adjustments to accrued clinical expenses. | |||||
Net Loss Per Share | |||||
Basic net loss per share is computed by dividing net loss by the weighted-average number of ordinary shares outstanding during the period. For the periods presented, the Company’s potential dilutive shares, which include shares issuable upon the exercise of outstanding stock options, unvested restricted stock units, warrants to purchase ordinary shares and ordinary shares associated with the potential conversion of the Company’s 5.00% Convertible Senior Notes due 2018 (“Convertible Senior Notes”) have not been included in the computation of diluted net loss per share for the periods presented in which there is a net loss as the result would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. | |||||
Cash and Cash Equivalents | |||||
Cash and cash equivalents primarily consist of cash balances and money market funds. Cash and cash equivalents were $218.8 million and $80.5 million as of December 31, 2014 and 2013, respectively. The Company’s policy is to invest excess cash in money market funds, which are generally of a short-term duration based upon operating requirements. | |||||
Restricted Cash | |||||
Restricted cash consists of balances included in interest-bearing money market accounts required by a vendor for the Company’s sponsored employee credit card program and by the lessor for the Company’s office in Deerfield, Illinois. As of each of December 31, 2014 and 2013, the Company had restricted cash of $0.7 million. | |||||
Fair Value of Financial Instruments | |||||
The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses, approximate their fair values due to their short maturities. | |||||
At December 31, 2013 and at the final measurement date of June 27, 2014, the estimated fair value of the Company’s derivative liability related to the convertible portion of the Convertible Senior Notes was derived utilizing the binomial lattice approach for the valuation of convertible instruments. Assumptions used in the calculation included, among others, determining the appropriate credit spread using benchmarking analysis and solving for the implied credit spread, calculating the fair value of the stock component using a discounted risk free rate and borrowing cost and calculating the fair value of the note component using a discounted credit adjusted discount rate. Based on the assumptions used to determine the fair value of the derivative liability associated with the Convertible Senior Notes, the Company concluded that these inputs were Level 3 inputs. | |||||
Business Combinations | |||||
The Company accounts for business combinations in accordance with the pronouncement guidance in ASC 805, Business Combinations, in which acquired assets and liabilities are measured at their respective estimated fair values as of the acquisition date. The Company may be required, as in the case of intangible assets, contingent royalties or derivatives, to determine the fair value associated with these amounts by estimating the fair value using an income approach under the discounted cash flow method, which may include revenue projections and other assumptions made by the Company to determine the fair value. | |||||
Property and Equipment, Net | |||||
Property and equipment are stated at cost less accumulated depreciation. Depreciation is recognized using the straight-line method over the estimated useful lives of the related assets for financial reporting purposes and an accelerated method for income tax reporting purposes. Upon retirement or sale of an asset, the cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operations. Repair and maintenance costs are charged to expenses as incurred and improvements are capitalized. | |||||
Leasehold improvements are amortized on a straight-line basis over the term of the applicable lease, or the useful life of the assets, whichever is shorter. | |||||
Depreciation and amortization periods for the Company’s property and equipment are as follows: | |||||
Machinery and equipment | 5-7 years | ||||
Furniture and fixtures | 3-5 years | ||||
Computer equipment | 3 years | ||||
Software | 3 years | ||||
Trade show equipment | 3 years | ||||
Software includes internal-use software acquired and modified to meet the Company’s internal requirements. Amortization commences when the software is ready for its intended use. | |||||
Intangible Assets | |||||
Definite-lived intangible assets are amortized over their estimated useful lives. The Company reviews its intangible assets when events or circumstances may indicate that the carrying value of these assets exceeds their fair value. The Company measures fair value based on the estimated future discounted cash flows associated with these assets in addition to other assumptions and projections that the Company deems to be reasonable and supportable. The estimated useful lives for all identified intangible assets that are subject to amortization are as follows: | |||||
Intangible Asset | Estimated Useful Life | ||||
ACTIMMUNE developed technology | 13 years | ||||
LODOTRA and RAYOS developed technology | 12 years | ||||
PENNSAID 2% developed technology | 6 years | ||||
VIMOVO intellectual property | 5 years | ||||
Customer relationships | 10 years | ||||
Indefinite-lived intangible assets consist of capitalized in-process research and development (“IPR&D”). IPR&D assets represent capitalized incomplete research projects that the Company acquired through business combinations. Such assets are initially measured at their acquisition date fair values and are tested for impairment, until completion or abandonment of R&D efforts associated with the projects. An IPR&D asset is considered abandoned when R&D efforts associated with the asset have ceased, and there are no plans to sell or license the asset or derive value from the asset. At that point, the asset is considered to be disposed of and is written off. Upon successful completion of each project, the Company will make a determination about the then-remaining useful life of the intangible asset and begin amortization. The Company tests its indefinite-lived intangibles, including IPR&D assets, for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. | |||||
Research and Development Expenses | |||||
Research and development expenses include, but are not limited to, payroll and other personnel expenses, consultant expenses, expenses incurred under agreements with contract research organizations to conduct clinical trials and expenses incurred to manufacture clinical trial materials. | |||||
Sales and Marketing Expenses | |||||
Sales and marketing expenses consist principally of payroll of sales representatives and marketing and support staff, travel and other personnel-related expenses, marketing materials and distributed sample inventories. In addition, sales and marketing expenses include the Company’s medical affairs expenses, which consist of expenses related to scientific publications, health outcomes, biostatistics, medical education and information, and medical communications. | |||||
Concentration of Credit Risk and Other Risks and Uncertainties | |||||
Financial instruments that may potentially subject the Company to significant concentrations of credit risk consist of cash and cash equivalents. The Company’s cash and cash equivalents are invested in deposits with various banks in the United States, Ireland, Bermuda, Switzerland and Germany that management believes are creditworthy. At times, deposits in these banks may exceed the amount of insurance provided on such deposits. To date, the Company has not experienced any losses on its deposits of cash and cash equivalents. | |||||
The purchase cost of ACTIMMUNE under a contract with Boehringer Ingelheim as well as sales contracts relating to LODOTRA are principally denominated in Euros and are subject to significant foreign currency risk. The Company also incurs certain operating expenses in currencies other than the U.S. dollar in relation to its Ireland operations and other foreign subsidiaries, including Horizon Pharma AG; therefore, the Company is subject to volatility in cash flows due to fluctuations in foreign currency exchange rates, particularly changes in the Euro. To date, the Company has not entered into any hedging contracts since exchange rate fluctuations have had minimal impact on its results of operations and cash flows. | |||||
To achieve profitable operations, the Company must successfully develop, obtain regulatory approval for, manufacture and market its products and product candidates, and/or acquire or in-license products from third parties. There can be no assurance that any additional products can be developed, will be approved for marketing by the regulatory authorities, or can be manufactured at an acceptable cost and with appropriate performance characteristics or that any new or existing products can be successfully marketed, acquired or in-licensed by the Company. These factors could have a material adverse effect on the Company’s operations. | |||||
The Company relies on third parties to manufacture its commercial supplies of ACTIMMUNE, DUEXIS, PENNSAID 2%, RAYOS/LODOTRA, and VIMOVO. The commercialization of any of its products or product candidates could be stopped, delayed or made less profitable if those third parties fail to provide the Company with sufficient quantities of product or fail to do so at acceptable quality levels or prices. | |||||
The Company is required to maintain compliance with applicable Swiss laws with respect to its Swiss subsidiary, Horizon Pharma AG, including laws requiring maintenance of equity in the subsidiary to avoid overindebtedness, which requires Horizon Pharma AG to maintain assets in excess of its liabilities. The Company reviews on a regular basis whether its Swiss subsidiary is overindebted. As of December 31, 2014, Horizon Pharma AG was not overindebted. However, Horizon Pharma AG has previously been overindebted, including at December 31, 2013, primarily as a result of operating losses at the subsidiary. The Company will continue to monitor and review Horizon Pharma AG’s financial position and, as necessary, will address any overindebtedness until such time as Horizon Pharma AG generates positive income at a statutory level, which could require the Company to have cash at Horizon Pharma AG in excess of its near-term operating needs and could affect the Company’s ability to have sufficient cash at its other operating subsidiaries to meet its near-term operating needs. As of December 31, 2014 and 2013, Horizon Pharma AG had cash and cash equivalents of $3.0 million and $3.5 million, respectively. Based upon the cash and cash equivalents held by Horizon Pharma AG as of December 31, 2014 and 2013, the Company does not expect that its financial position or results of operations will be materially affected by any need to address overindebtedness at Horizon Pharma AG. To date, the overindebtedness of Horizon Pharma AG has not resulted in the need to divert material cash resources from the Company’s other operating subsidiaries. | |||||
Historically, the Company’s accounts receivable balances have been highly concentrated with a select number of customers, consisting primarily of large wholesale pharmaceutical distributors who, in turn, sell the products to pharmacies, hospitals and other customers. For the year ended December 31, 2014, the Company’s top five customers, American Specialty Pharmacy, Inc., AmerisourceBergen, Cardinal Health, Inc., McKesson Corporation and Rochester Drug Company accounted for approximately 86% of total consolidated gross sales. For the year ended December 31, 2013, the Company’s top five customers, AmerisourceBergen, Cardinal Health, Inc., McKesson Corporation, Mundipharma and Rochester Drug Company, accounted for approximately 89% of total consolidated gross sales. | |||||
In addition, five customers, American Specialty Pharmacy, Inc., AmerisourceBergen, Cardinal Health, Inc., McKesson Corporation and Rochester Drug accounted for approximately 80% of the Company’s total outstanding accounts receivable balances at December 31, 2014. As of December 31, 2013, AmerisourceBergen, Cardinal Health, Inc., Halsted Pharmacy, McKesson Corporation and Rochester Drug Company, accounted for approximately 85% of the Company’s total outstanding accounts receivable balances. | |||||
Comprehensive Income (Loss) | |||||
Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss) (“OCI”). OCI includes certain changes in shareholders’ equity that are excluded from net income (loss), which consist of foreign currency translation adjustments. In February 2013, the Company adopted on a prospective basis Financial Accounting Standards Board (“FASB”) Accounting Standards Update 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated OCI on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. As of December 31, 2014 and 2013, accumulated other comprehensive loss was $4.4 million and $2.4 million, respectively. | |||||
Stock-Based Compensation | |||||
The Company accounts for stock-based compensation using the fair value method. The fair value of awards granted is estimated at the date of grant and recognized as expense on a straight-line basis over the requisite service period with the offsetting credit to additional paid-in capital. For awards with service and/or performance conditions, the total amount of compensation expense to be recognized is based on the number of awards expected to vest and is adjusted to reflect those awards that do ultimately vest. For awards with performance conditions, the Company recognizes the compensation expense if and when the Company concludes that it is probable that the performance condition will be achieved. The Company reassesses the probability of achieving the performance condition at each reporting date. | |||||
The Company also accounts for stock options issued to non-employees based on the stock options’ estimated fair value. The fair value of equity awards granted to non-employees are re-measured at each reporting date, and the resulting change in the fair value associated with such awards, if any, is recognized as a corresponding increase or reduction to stock-based compensation during the period. | |||||
Accrued Contingent Royalties | |||||
The Company’s accrued contingent royalties consist of the contingent royalty obligations assumed by the Company related to the Company’s acquisitions of the U.S. rights to VIMOVO and related to ACTIMMUNE. At the time of each acquisition, the Company assigned an estimated fair value to its contingent liability for royalties. The estimated royalty liability was based on anticipated revenue streams utilizing the income approach under the discounted cash flow method. The estimated liability for royalties is increased over time to reflect the change in its present value and accretion expense is recorded as part of cost of goods sold. The Company evaluates the adequacy of the estimated contingent royalty liability at least annually, or whenever events or changes in circumstances indicate that an evaluation of the estimate is necessary. As part of any evaluation, the Company adjusts the carrying value of the liability to the present value of the revised estimated cash flows using the original discount rate. Any decrease or increase to the liability is recorded as an increase or reduction in cost of goods sold. The royalty liability is included in current and long-term accrued royalties on the consolidated balance sheets. | |||||
New Accounting Pronouncements | |||||
From time to time, the Company adopts, as of the specified effective date, new accounting pronouncements issued by the FASB or other standard setting bodies. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption. | |||||
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU No. 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). ASU No. 2014-15 provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations in the financial statement footnotes. ASU No. 2014-15 is effective for annual reporting periods ending after December 15, 2016 and to annual and interim periods thereafter. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of ASU No. 2014-15 to its consolidated financial statements and related disclosures. | |||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606): Revenue from Contracts with Customers, which supersedes all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The new standard will be effective for the Company on January 1, 2017 and early adoption is not permitted. The new standard permits the use of either the retrospective or cumulative effect transition method on adoption. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures, including which transition method it will adopt. | |||||
In November 2014, the FASB issued ASU No. 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity. ASU No. 2014-16 clarifies how current guidance should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. In addition, ASU No. 2014-16 clarifies that in evaluating the nature of a host contract, an entity should assess the substance of the relevant terms and features (that is, the relative strength of the debt-like or equity-like terms and features given the facts and circumstances) when considering how to weight those terms and features. The effects of initially adopting ASU No. 2014-16 should be applied on a modified retrospective basis to existing hybrid financial instruments issued in a form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods. ASU No. 2014-16 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the impact of adoption of ASU No. 2014-16 on our consolidated financial statements and related disclosures. |
Earnings_Loss_Per_Share
Earnings (Loss) Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Earnings (Loss) Per Share | NOTE 3 – EARNINGS (LOSS) PER SHARE | ||||||||||||
The following table presents basic and diluted loss per share for the years ended December 31, 2014, 2013 and 2012 as follows (in thousands, except share and per share data): | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Basic and diluted earnings per share calculation: | |||||||||||||
Net loss | $ | (263,603 | ) | $ | (149,005 | ) | $ | (87,794 | ) | ||||
Weighted average of common shares outstanding | 83,751,129 | 63,657,924 | 38,871,422 | ||||||||||
Basic and diluted net loss per share | $ | (3.15 | ) | $ | (2.34 | ) | $ | (2.26 | ) | ||||
The following outstanding securities in the table below were excluded from the computation of diluted loss per share for the years ended December 31, 2014, 2013 and 2012 due to being potentially anti-dilutive: | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Stock options | 7,027,683 | 4,411,080 | 2,746,918 | ||||||||||
Restricted stock units | 1,618,502 | 934,005 | 457,158 | ||||||||||
Warrants | 6,683,811 | 16,114,746 | 17,480,243 | ||||||||||
Convertible Senior Notes | 11,369,398 | 13,164,951 | — |
Business_Acquisitions
Business Acquisitions | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||
Business Acquisitions | NOTE 4 – BUSINESS ACQUISITIONS | ||||||||||||||||||||||||
PENNSAID 2% acquisition | |||||||||||||||||||||||||
On October 17, 2014, the Company acquired the U.S. rights to PENNSAID 2% from Nuvo for $45.0 million in cash. PENNSAID 2% is approved in the United States for the treatment of the pain of OA of the knee(s). The Company began marketing PENNSAID 2% in January 2015, and as such no sales or cost of goods sold were recognized in 2014. | |||||||||||||||||||||||||
As part of the acquisition, the Company entered into an eight-year exclusive supply agreement with Nuvo to manufacture and supply PENNSAID 2% to the Company. The initial term of the supply agreement is through December 31, 2022, but the agreement may be terminated earlier by either party for any uncured material breach by the other party of its obligations under the supply agreement or upon the bankruptcy or similar proceeding of the other party. | |||||||||||||||||||||||||
Pursuant to ASC Topic 805, Business Combinations, the Company accounted for the acquisition of the U.S. rights to PENNSAID 2% under the acquisition method of accounting, in which the Company recognized and accounted for the acquisition of the U.S. rights to PENNSAID 2% as a business combination. Using this methodology, the Company allocated the entire purchase price of $45.0 million to a developed technology intangible asset. | |||||||||||||||||||||||||
The valuation of the developed technology intangible asset was based on management’s estimates, forecasted financial information and reasonable and supportable assumptions. The allocation was generally based on the Company’s estimated fair value of the rights to payments with respect to U.S. revenue associated with PENNSAID 2% which were acquired in the transaction. This estimated fair value was determined using the income approach under the discounted cash flow method. Significant assumptions used in valuing the developed technology intangible asset included revenue projections through 2021 based on assumptions relating to pricing and reimbursement rates, market size and market penetration rates and cost of goods sold based on current manufacturing experience, general and administrative expenses, sales and marketing expenses, and research and development expenses for clinical and regulatory support. The calculated value of the PENNSAID 2% developed technology intangible asset is amortized using the straight-line method over an estimated useful life of 6 years, which is the period in which the majority of the benefits from such developed technology will be recognized. | |||||||||||||||||||||||||
Vidara acquisition | |||||||||||||||||||||||||
On March 18, 2014, the Company, Vidara Holdings, Vidara, U.S. HoldCo and Merger Sub, entered into the Merger Agreement. The Merger Agreement provided for the merger of Merger Sub with and into HPI, with HPI continuing as the surviving corporation and as a wholly-owned, indirect subsidiary of Vidara, with Vidara converting to a public limited company and changing its name to Horizon Pharma plc. | |||||||||||||||||||||||||
At the effective time of the Merger on September 19, 2014 (the “Effective Time”), (i) each share of HPI’s common stock issued and outstanding was converted into one ordinary share of New Horizon; (ii) each equity plan of HPI was assumed by New Horizon and each outstanding option under HPI’s equity plans was converted into an option to acquire the number of ordinary shares of New Horizon equal to the number of common stock underlying such option immediately prior to the Effective Time at the same exercise price per share as such option of HPI, and each other stock award that was outstanding under HPI’s equity plans was converted into a right to receive, on substantially the same terms and conditions as were applicable to such equity award before the Effective Time, the number of ordinary shares of New Horizon equal to the number of shares of HPI’s common stock subject to such stock award immediately prior to the Effective Time; (iii) each warrant to acquire HPI’s common stock outstanding immediately prior to the Effective Time and not terminated as of the Effective Time was converted into a warrant to acquire, on substantially the same terms and conditions as were applicable under such warrant before the Effective Time, the number of ordinary shares of New Horizon equal to the number of shares of HPI’s common stock underlying such warrant immediately prior to the Effective Time; and (iv) the Convertible Senior Notes of HPI remained outstanding and, pursuant to a supplemental indenture entered into effective as of the Effective Time, have become convertible into the same number of ordinary shares of New Horizon at the same conversion rate in effect immediately prior to the Effective Time. Vidara Holdings retained ownership of 31,350,000 ordinary shares of New Horizon at the Effective Time. Upon consummation of the Merger (the “Closing”), the security holders of HPI (excluding the holders of HPI’s Convertible Senior Notes) owned approximately 74% of New Horizon and Vidara Holdings owned approximately 26% of New Horizon. At the Closing, New Horizon made a cash payment of $210.9 million to Vidara Holdings and $2.7 million to Citibank N.A. as escrow agent under an escrow agreement associated with the Merger. | |||||||||||||||||||||||||
The total consideration for the acquisition of Vidara was $601.4 million representing the $387.8 million market value of the 31,350,000 New Horizon ordinary shares that were held by prior Vidara shareholders immediately following the closing of the Merger plus the cash consideration of $213.6 million. The value of the New Horizon ordinary shares of $387.8 million is based on the September 18, 2014 closing stock price of HPI common stock of $12.37, the last closing price prior to the effective time of the Merger. | |||||||||||||||||||||||||
Pursuant to ASC Topic 805, Business Combinations, the Company accounted for the Merger as a reverse acquisition, under the acquisition method of accounting, with HPI treated as the acquiring company for accounting purposes. Identifiable assets and liabilities of Vidara, including identifiable intangible assets, were recorded based on their estimated fair values as of the date of the closing of the Merger. The excess of the fair value of the net assets acquired over the value of consideration was recorded as a bargain purchase gain. The following table summarizes the preliminary fair values assigned to the assets acquired and the liabilities assumed by the Company pursuant to the Merger, along with the resulting bargain purchase gain (in thousands): | |||||||||||||||||||||||||
Allocation | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 34,401 | |||||||||||||||||||||||
Accounts receivable, net | 11,838 | ||||||||||||||||||||||||
Inventories | 15,422 | ||||||||||||||||||||||||
Other receivable—net working capital adjustment | 195 | ||||||||||||||||||||||||
Prepaid expenses | 138 | ||||||||||||||||||||||||
Property and equipment | 289 | ||||||||||||||||||||||||
Deferred tax assets | 2,907 | ||||||||||||||||||||||||
Customer relationships | 8,100 | ||||||||||||||||||||||||
In-process research and development | 66,000 | ||||||||||||||||||||||||
Developed technology | 560,000 | ||||||||||||||||||||||||
Accounts payable | (1,781 | ) | |||||||||||||||||||||||
Accrued expenses and other current liabilities | (32,372 | ) | |||||||||||||||||||||||
Contingent royalties | (33,600 | ) | |||||||||||||||||||||||
Other liabilities | (775 | ) | |||||||||||||||||||||||
Deferred tax liabilities | (7,170 | ) | |||||||||||||||||||||||
Bargain purchase gain | (22,171 | ) | |||||||||||||||||||||||
Fair value of consideration paid | $ | 601,421 | |||||||||||||||||||||||
The fair value of the developed technology, IPR&D, customer relationships and contingent royalties, along with any associated deferred tax assets or liabilities, are pending final valuations being performed with assistance by an independent appraisal firm. | |||||||||||||||||||||||||
Inventories acquired included raw materials and finished goods. Fair value of finished goods has been determined based on the estimated selling price, net of selling costs and a margin on the selling costs. Fair value of raw materials has been estimated to equal the replacement cost. A step up in the value of inventory of $14.2 million was recorded in connection with the Merger. As of December 31, 2014, the remaining balance of ACTIMMUNE inventory step-up was $3.2 million. | |||||||||||||||||||||||||
Other tangible assets and liabilities were valued at their respective carrying amounts as management believes that these amounts approximate their current fair values. | |||||||||||||||||||||||||
Identifiable intangible assets and liabilities acquired included developed technology, in-process research and development and customer relationships. The fair value of intangible assets is based on management’s estimates, forecasted financial information and reasonable and supportable assumptions. Estimated useful lives are based on the time periods during which the intangibles are expected to result in incremental cash flows. | |||||||||||||||||||||||||
Developed technology intangible assets reflect the estimated value of Vidara’s rights to the marketed ACTIMMUNE product as of the acquisition date. The fair value of developed technology was determined using an income approach. The income approach explicitly recognizes that the fair value of an asset is premised upon the expected receipt of future economic benefits such as earnings and cash inflows based on sales projections and estimated direct costs for ACTIMMUNE. Indications of value are developed by discounting these benefits to their present value at a discount rate of 15% that reflects the return requirements of the market. The fair value of developed technology was recorded as an intangible asset as of the acquisition date and subsequently amortized over an estimated remaining life of 13 years. | |||||||||||||||||||||||||
IPR&D is related to one R&D project for the application of ACTIMMUNE in the treatment of FA, that was incomplete at the time of the Merger. IPR&D is considered separable from the business as the project could be sold to a third party. The fair value of IPR&D was determined using an income approach. The income approach explicitly recognizes that the fair value of an asset is premised upon the expected receipt of future economic benefits such as earnings and cash inflows based on sales projections and estimated direct costs. Indications of value are developed by discounting these benefits to their present value at a discount rate of 33% that reflects the return requirements of the market. The fair value of the IPR&D was recorded as an indefinite-lived intangible asset and will be tested for impairment until completion or abandonment of R&D efforts associated with the project. In February 2015, the Company submitted an IND application for a Phase 3 study that will evaluate ACTIMMUNE in the treatment of FA and the Company plans to begin the Phase 3 study in the second quarter of 2015 in collaboration with the Friedreich’s Ataxia Research Alliance and the investigators and clinics of Friedreich’s Ataxia Research Alliance’s Collaborative Clinical Research Network in FA. | |||||||||||||||||||||||||
Customer relationships intangible assets reflect the estimated value of Vidara’s customer base for ACTIMMUNE. Vidara’s customers as of the acquisition date were predominantly a small group of retail pharmacies with demand for ACTIMMUNE. As such, a significant portion of revenue growth is expected to be generated from existing customers as of the acquisition date. Management assessed the historical customer trends to identify the anticipated attrition. The fair value of customer relationships was recorded as an intangible asset as of the acquisition date and subsequently amortized over an estimated remaining life of 10 years. | |||||||||||||||||||||||||
The Company has assigned a fair value to a contingent liability for royalties potentially payable under previously existing royalty and licensing agreements related to ACTIMMUNE. The royalties are payable under the terms of the license agreement with Genentech Inc., which was the original developer of ACTIMMUNE and under the terms of its agreement with Connetics Corporation (which was the predecessor parent company to InterMune and is now part of GlaxoSmithKline). See footnote 14 for details of the percentages payable under both license agreements. The initial fair value of this liability of $33.6 million was determined using a discounted cash flow analysis incorporating the estimated future cash flows of royalty payments resulting from future sales. The discount rates used were the same as for the fair value of the intangible assets. The estimated liability for royalties will be increased over time to reflect the change in its present value and accretion expense will be recorded as part of cost of goods sold. The estimated liability will be periodically assessed based on events and circumstances and any change will be recorded in New Horizon’s consolidated statement of operations. During the fourth quarter of 2014, as the result of a price increase for ACTIMMUNE approved to take effect on January 1, 2015, the Company reassessed the value of the estimated royalty liability and recorded a charge of $1.3 million to cost of goods sold to increase the carrying value of the contingent royalties to reflect the updated estimates. | |||||||||||||||||||||||||
Deferred tax assets and liabilities arise from acquisition accounting where book values of certain assets and liabilities differ from their tax bases. Deferred tax assets and liabilities are recorded at the currently enacted rates which will be in effect at the time when the temporary differences are expected to reverse in the country where the underlying assets and liabilities are located (United States or Bermuda). Customer relationships intangible assets are located in the United States where a U.S. tax rate of 39% is being utilized and a deferred tax liability is recorded. Developed technology and IPR&D assets are located in Bermuda which does not levy corporate income taxes; accordingly, no deferred tax liabilities were recorded related to these intangible assets. | |||||||||||||||||||||||||
The excess of the estimated fair values of net assets acquired over the acquisition consideration paid has been recorded as a bargain purchase gain in the condensed consolidated statement of comprehensive income. As previously stated, the total consideration included a fixed number of New Horizon ordinary shares. The bargain purchase gain of $22.2 million is primarily the result of the decrease in the market value of our ordinary shares from the time that the Merger Agreement was signed to the Effective Time of the Merger. | |||||||||||||||||||||||||
For the year ended December 31, 2014, the Company recognized $25.3 million of ACTIMMUNE net sales. | |||||||||||||||||||||||||
VIMOVO acquisition | |||||||||||||||||||||||||
On November 18, 2013, the Company entered into agreements with AstraZeneca and Pozen pursuant to which the Company acquired from AstraZeneca and its affiliates certain intellectual property and other assets, and assumed from AstraZeneca and its affiliates certain liabilities, each with respect to VIMOVO, and obtained rights to develop other pharmaceutical products that contain gastroprotective agents in a single fixed combination oral solid dosage form with NSAIDs, in the United States. VIMOVO, a proprietary fixed-dose multi-layer delayed-release tablet combining an enteric-coated naproxen, an NSAID, core and an immediate-release esomeprazole, a proton pump inhibitor, layer surrounding the core, was approved by the FDA in 2010 for the relief of the signs and symptoms of OA, RA and AS, and to decrease the risk of developing gastric ulcers in patients at risk of developing NSAID-associated gastric ulcers. | |||||||||||||||||||||||||
Pursuant to the transactions contemplated by the asset purchase agreement, the Company acquired certain existing assets and rights necessary to commercialize VIMOVO in the United States including, among other things, the IND and NDA for VIMOVO in the United States, AstraZeneca’s interest in certain patents covering VIMOVO in the United States and certain promotional materials and records related to VIMOVO in the United States. In consideration for the U.S. rights to VIMOVO, the Company paid to AstraZeneca a one-time upfront cash payment of $35.0 million. The Company is also entitled to the benefit of a covenant not to sue granted by Merck Sharp & Dohme Corp. and certain of its affiliates (collectively, “Merck”) to AstraZeneca, with respect to certain patents owned by AstraZeneca but exclusively licensed to Merck, that cover the manufacture and commercialization of VIMOVO in the United States. In addition, AstraZeneca assigned to the Company its amended and restated collaboration and license agreement for the United States with Pozen pursuant to which AstraZeneca has in-licensed from Pozen certain patents and know-how of Pozen covering VIMOVO in the United States. The terms of the amended and restated collaboration and license agreement for the United States with Pozen (the “Pozen license agreement”) are described below. | |||||||||||||||||||||||||
In November 2013, in connection with the closing of the transactions contemplated by the asset purchase agreement, the Company also entered into a license agreement with AstraZeneca, a supply agreement with AstraZeneca’s affiliate, AstraZeneca LP, and certain other agreements that are described below. The Company also executed a transition agreement with AstraZeneca pursuant to which AstraZeneca transitioned to the Company regulatory and commercial responsibility for VIMOVO in the United States. From the closing of the transaction until December 31, 2013, AstraZeneca continued to commercialize VIMOVO in the United States under AstraZeneca’s existing pricing and paid to the Company the net profits recognized on sales of VIMOVO in the United States. Beginning January 2, 2014, the Company commenced commercialization of VIMOVO in the United States on its own behalf and under new pricing for VIMOVO. The Company is responsible for and controls matters relating to VIMOVO in the United States, including responsibility for commercialization of VIMOVO in the United States, responsibility for ongoing developmental and regulatory activities with respect to VIMOVO in the United States and responsibility for the current VIMOVO litigation with respect to the patents the Company purchased under the asset purchase agreement and the patents the Company licensed from Pozen under the Pozen license agreement. AstraZeneca is responsible for and retains control of VIMOVO outside the United States. | |||||||||||||||||||||||||
In connection with the closing of the transactions contemplated by the asset purchase agreement, the Company entered into a license agreement with AstraZeneca (the “AstraZeneca license agreement”), pursuant to which AstraZeneca granted the Company an exclusive license under certain intellectual property (including patents, know-how, trademarks, copyrights and domain names) of AstraZeneca and its affiliates to develop, manufacture and commercialize VIMOVO in the United States. AstraZeneca also granted the Company a non-exclusive license under certain intellectual property of AstraZeneca and its affiliates to manufacture, import, export and perform research and development activities with respect to VIMOVO outside the United States but solely for purposes of commercializing VIMOVO in the United States. In addition, AstraZeneca granted the Company a non-exclusive right of reference and use under certain regulatory documentation controlled by AstraZeneca and its affiliates to develop, manufacture and commercialize VIMOVO in the United States and to manufacture, import, export and perform research and development activities with respect to VIMOVO outside the United States but solely for purposes of commercializing VIMOVO in the United States. | |||||||||||||||||||||||||
Under the AstraZeneca license agreement, the Company granted AstraZeneca a non-exclusive sublicense under such licensed intellectual property and a non-exclusive right of reference under certain regulatory documentation controlled by the Company to manufacture, import, export and perform research and development activities with respect to VIMOVO in the United States but solely for purposes of commercializing VIMOVO outside the United States. | |||||||||||||||||||||||||
Under the AstraZeneca license agreement, the Company and its affiliates are subject to certain limitations and restrictions on its ability to develop, commercialize and seek regulatory approval with respect to VIMOVO or other products that contain gastroprotective agents in a single fixed combination oral solid dosage form with NSAIDs (excluding DUEXIS). These limitations and restrictions include, among other things, restrictions on indications for which the Company may commercialize VIMOVO or any such other products, restrictions on the Company’s ability to develop or seek regulatory approval with respect to such other products that contain esomeprazole, restrictions on the Company’s ability to develop or seek regulatory approval for VIMOVO for any indications other than the indications for which NSAIDs are indicated, and restrictions on the Company’s marketing activities with respect to VIMOVO and any such other products. | |||||||||||||||||||||||||
Under the Pozen license agreement, Pozen granted to the Company an exclusive, royalty-bearing license under certain of Pozen’s intellectual property in the United States to manufacture, develop and commercialize VIMOVO and other products controlled by the Company that contain gastroprotective agents in a single fixed combination oral solid dosage form with NSAIDs (excluding DUEXIS) in the United States. | |||||||||||||||||||||||||
Under the Pozen license agreement, the Company is required to pay Pozen a flat 10% royalty on net sales of VIMOVO and such other products sold by the Company, its affiliates or sublicensees during the royalty term, subject to minimum annual royalty obligations of $5.0 million in 2014 and $7.5 million each year thereafter, which minimum royalty obligations will continue for each year during which one of Pozen’s patents covers such products in the United States and there are no competing products in the United States. The royalty rate may be reduced to a mid-single digit royalty rate as a result of loss of market share to competing products. The Company’s obligation to pay royalties to Pozen will expire upon the later of (a) expiration of the last-to-expire of certain patents covering such products in the United States, and (b) ten years after the first commercial sale of such products in the United States. In addition, the Company is obligated to reimburse Pozen for costs, including attorneys’ fees, incurred by Pozen in connection with VIMOVO patent litigation moving forward, subject to agreed caps. | |||||||||||||||||||||||||
Under the Pozen license agreement, the Company is responsible for and is required to use diligent and reasonable efforts to commercialize VIMOVO or another qualified product in the United States. The Company also owns and maintains all regulatory filings and marketing approvals in the United States for any such products, including all INDs and NDAs for VIMOVO. Pozen has covenanted that it will not at any time prior to the expiration of the royalty term, and will ensure that its affiliates do not, directly or indirectly, develop or commercialize or license any third party to develop or commercialize certain competing products in the United States. | |||||||||||||||||||||||||
The Pozen license agreement, unless earlier terminated, will expire upon expiration of the royalty term for all such products in the United States. Either party has the right to terminate the agreement upon any uncured material breach by the other party or upon the bankruptcy or similar proceeding of the other party. The Company also has the right to terminate the Pozen license agreement for cause upon certain defined product failures. | |||||||||||||||||||||||||
In November 2013, in connection with the asset purchase agreement, the Company, AstraZeneca and Pozen entered into a letter agreement in which Pozen consented to AstraZeneca’s assignment of the Pozen license agreement to the Company and that addresses the rights and responsibilities of the parties in relation to the Pozen license agreement and the amended and restated collaboration and license agreement between Pozen and AstraZeneca for territories outside the United States (the “Pozen-AstraZeneca license agreement”). Under the letter agreement, the Company and AstraZeneca agreed to pay Pozen milestone payments upon the achievement by the Company and AstraZeneca, collectively, of certain annual aggregate global sales thresholds ranging from $550.0 million to $1.25 billion with respect to products licensed by Pozen to the Company under the Pozen license agreement and to AstraZeneca under the Pozen-AstraZeneca license agreement. The aggregate milestone payment amount that may be owed by AstraZeneca and the Company, collectively, under the letter agreement is $260.0 million, with the amount payable by each of the Company and AstraZeneca with respect to each milestone to be based upon the proportional sales achieved by each of the Company and AstraZeneca, respectively, in the applicable year. | |||||||||||||||||||||||||
The letter agreement will terminate with respect to Pozen and the Company upon the termination of the Pozen license agreement and will terminate with respect to Pozen and AstraZeneca upon the termination of the Pozen-AstraZeneca license agreement. | |||||||||||||||||||||||||
In November 2013, in connection with the asset purchase agreement, the Company entered into a supply agreement with AstraZeneca pursuant to which AstraZeneca agreed to supply VIMOVO to the Company for commercialization in the United States through December 31, 2014. Under the supply agreement, AstraZeneca supplied the quantity of VIMOVO that the Company ordered, both for the Company’s own use and for use by the Company’s sublicensees, on a transitional basis through December 31, 2014. The Company agreed to pay a set price agreed to by the Company and AstraZeneca for quantities of VIMOVO supplied by AstraZeneca under the supply agreement. | |||||||||||||||||||||||||
The company accounted for the acquisition of the U.S. rights to VIMOVO under the acquisition method of accounting, in which the Company recognized and accounted for the acquisition of the U.S. rights to VIMOVO as a business combination. Net tangible and intangible assets acquired and royalty liabilities assumed were recorded based upon their respective estimated fair values as of the acquisition date. The following table shows the fair values assigned to the assets acquired and liabilities assumed by the Company as part of the asset purchase agreement (in thousands): | |||||||||||||||||||||||||
Allocation | |||||||||||||||||||||||||
Samples inventory | $ | 287 | |||||||||||||||||||||||
VIMOVO intellectual property | 67,705 | ||||||||||||||||||||||||
Royalty liabilities | (32,992 | ) | |||||||||||||||||||||||
Total cash consideration paid | $ | 35,000 | |||||||||||||||||||||||
The valuation of the intellectual property acquired, an identifiable intangible asset, was based on management’s estimates, forecasted financial information and reasonable and supportable assumptions. The allocation was generally based on the Company’s estimated fair value of the rights to payments with respect to U.S. revenue associated with VIMOVO which were acquired in the transaction. This estimated fair value was determined using the income approach under the discounted cash flow method. Significant assumptions used in valuing the intellectual property intangible asset included revenue projections through 2030 based on assumptions relating to pricing and reimbursement rates and market size and market penetration rates, cost of goods sold based on current manufacturing experience, general and administrative expenses, sales and marketing expenses, and research and development expenses for clinical and regulatory support. The calculated value of the VIMOVO intellectual property intangible asset is amortized using the straight-line method over an estimated useful life of 61.5 months. | |||||||||||||||||||||||||
Additionally, the Company assigned a fair value to its liability for royalties. The royalty liability was based on anticipated revenue streams utilizing the income approach under the discounted cash flow method. As a result, the Company recorded $33.0 million of fair value royalty payments due to Pozen, of which $24.5 million was guaranteed during the years 2014 through 2018 and $8.5 million was contingent on meeting certain revenue targets. The estimated liability for royalties is increased over time to reflect the change in its present value and accretion expense is recorded as part of cost of goods sold. During the second quarter of 2014, based on higher sales of VIMOVO during the six months June 30, 2014 versus the Company’s original expectations and the Company’s adjusted expectations for future VIMOVO sales, the Company recorded a charge of $13.0 million to cost of goods sold to increase the carrying value of the contingent royalties to reflect the updated estimates. During the fourth quarter of 2014, after the Company’s most recent five year plan was approved, the Company performed its annual assessment of the carrying value of the contingent royalty liability. The Company recorded a $3.6 million credit to cost of goods sold to decrease the amount of the contingent royalty liability to reflect the updated estimates. The effect of the reassessments during the second quarter and the fourth quarter of 2014 of the fair value of the contingent royalty liability represented a net charge of $9.4 million during the year ended December 31, 2014 to cost of goods sold to increase the amount of the contingent royalty liability. | |||||||||||||||||||||||||
Pro Forma Information | |||||||||||||||||||||||||
The following table represents the consolidated financial information for the Company on a pro forma basis, assuming that both the Merger and the acquisition of the U.S. rights to VIMOVO occurred as of January 1, 2013. The historical financial information has been adjusted to give effect to pro forma items that are directly attributable to the Merger and are expected to have a continuing impact on the consolidated results. These items include, among others, adjustments to record the amortization of definite-lived intangible assets, interest expense, debt discount and deferred financing costs associated with the debt in connection with the acquisitions. Additionally, the following table sets forth unaudited financial information and has been compiled from historical financial statements and other information, but is not necessarily indicative of the results that actually would have been achieved had the transactions occurred on the dates indicated or that may be achieved in the future (in thousands, except per share data): | |||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
As reported | Pro-forma | Pro-forma | As reported | Pro-forma | Pro-forma | ||||||||||||||||||||
adjustments | (Unaudited) | adjustments | (Unaudited) | ||||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||||
Net sales | $ | 296,955 | $ | 50,565 | $ | 347,520 | $ | 74,016 | $ | 79,230 | $ | 153,246 | |||||||||||||
Net loss | (263,603 | ) | (5,104 | ) | (268,707 | ) | (149,005 | ) | (23,647 | ) | (172,652 | ) | |||||||||||||
Loss per ordinary share: Basic and diluted | $ | (3.15 | ) | $ | (0.06 | ) | $ | (3.21 | ) | $ | (2.34 | ) | $ | (0.37 | ) | $ | (2.71 | ) | |||||||
The pro forma information excludes the PENNSAID 2% acquisition as it was impracticable to include because it would require significant estimates of third-party sale amounts and would be impossible to distinguish objectively the information in those estimates. In addition, prior to the Company’s acquisition, PENNSAID 2% did not have a significant amount of sales because it was not on the market until 2014. |
Inventories
Inventories | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | NOTE 5 – INVENTORIES | ||||||||
Inventories are stated at the lower of cost or market value. Inventories consist of raw materials, work-in-process and finished goods. The Company has entered into manufacturing and supply agreements for the manufacture or purchase of raw materials and production supplies. The Company’s inventories include the direct purchase cost of materials and supplies and manufacturing overhead costs. | |||||||||
In connection with the Merger, the ACTIMMUNE inventory was stepped up in value to $14.2 million as of the Merger date. As of December 31, 2014, the remaining balance of ACTIMMUNE inventory step-up was $3.2 million. | |||||||||
The components of inventories as of December 31, 2014 and 2013 consisted of the following (in thousands): | |||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 1,184 | $ | 91 | |||||
Work-in-process | 389 | 522 | |||||||
Finished goods | 15,292 | 8,088 | |||||||
Inventories, net | $ | 16,865 | $ | 8,701 | |||||
Prepaid_Expenses_and_Other_Cur
Prepaid Expenses and Other Current Assets | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||
Prepaid Expenses and Other Current Assets | NOTE 6 – PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||||||
Prepaid expenses and other current assets as of December 31, 2014 and 2013 consisted of the following (in thousands): | |||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Prepaid co-pay expenses | $ | 6,718 | $ | 621 | |||||
Product samples inventory | 4,014 | 1,323 | |||||||
Prepaid software license fees | 1,128 | 855 | |||||||
Prepaid FDA product and manufacturing fees | 1,055 | 312 | |||||||
Prepaid insurance | 345 | 379 | |||||||
Prepaid marketing expenses | 59 | 381 | |||||||
Prepaid clinical trial studies | 56 | 688 | |||||||
Other prepaid expenses | 995 | 329 | |||||||
Prepaid expenses and other current assets | $ | 14,370 | $ | 4,888 | |||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment | NOTE 7 – PROPERTY AND EQUIPMENT | ||||||||
Property and equipment as of December 31, 2014 and 2013 consisted of the following (in thousands): | |||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Machinery and equipment | $ | 3,288 | $ | 2,367 | |||||
Furniture and fixtures | 576 | 113 | |||||||
Computer equipment | 2,040 | 2,160 | |||||||
Software | 1,481 | 775 | |||||||
Trade show equipment | 392 | 228 | |||||||
Leasehold improvements | 3,412 | 783 | |||||||
11,189 | 6,426 | ||||||||
Less-accumulated depreciation | (3,948 | ) | (2,646 | ) | |||||
Property and equipment, net | $ | 7,241 | $ | 3,780 | |||||
Depreciation expense for the years ended December 31, 2014, 2013 and 2012 was $1.7 million, $1.2 million and $0.8 million, respectively. |
Intangible_Assets
Intangible Assets | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Intangible Assets | NOTE 8 – INTANGIBLE ASSETS | ||||||||||||||||||||||||||||||||
The Company’s intangible assets consist of developed technology related to the Company’s approved products, ACTIMMUNE, PENNSAID 2% and RAYOS in the United States, LODOTRA in Europe and VIMOVO intellectual property rights in the United States. | |||||||||||||||||||||||||||||||||
On November 18, 2013, in connection with the Company’s acquisition of the U.S. rights to VIMOVO, the Company capitalized $67.7 million for the U.S. intellectual property rights of VIMOVO. | |||||||||||||||||||||||||||||||||
On September 19, 2014, in connection with the Merger, the Company capitalized $560.0 million of developed technology, $66.0 million of IPR&D and $8.1 million of customer relationships related to ACTIMMUNE. | |||||||||||||||||||||||||||||||||
On October 17, 2014, in connection with the Company’s acquisition of the U.S. rights to PENNSAID 2%, the Company capitalized $45.0 million for the U.S. developed technology rights of PENNSAID 2%. | |||||||||||||||||||||||||||||||||
The Company tests its intangible assets for impairment when events or circumstances may indicate that the carrying value of these assets exceeds their fair value. The Company does not believe there have been any circumstances or events that would indicate that the carrying value of any of its intangible assets has been impaired at December 31, 2014 or 2013. | |||||||||||||||||||||||||||||||||
As of December 31, 2014 and 2013, amortizable intangible assets consisted of the following (in thousands): | |||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||
Cost | Accumulated | Currency | Net Book | Cost | Accumulated | Currency | Net Book | ||||||||||||||||||||||||||
Basis | Amortization | Translation | Value | Basis | Amortization | Translation | Value | ||||||||||||||||||||||||||
Developed technology | $ | 757,484 | $ | (51,331 | ) | $ | (9,190 | ) | $ | 696,963 | $ | 152,484 | $ | (19,254 | ) | $ | (2,136 | ) | $ | 131,094 | |||||||||||||
Customer relationships | 8,100 | (230 | ) | — | 7,870 | — | — | — | — | ||||||||||||||||||||||||
Total amortizable intangible assets | $ | 765,584 | $ | (51,561 | ) | $ | (9,190 | ) | $ | 704,833 | $ | 152,484 | $ | (19,254 | ) | $ | (2,136 | ) | $ | 131,094 | |||||||||||||
Amortization expense for the years ended December 31, 2014, 2013 and 2012 was $32.3 million, $8.1 million and $4.7 million, respectively. IPR&D is not amortized until successful completion of the project. As of December 31, 2014, estimated future amortization expense was as follows (in thousands): | |||||||||||||||||||||||||||||||||
2015 | $ | 71,298 | |||||||||||||||||||||||||||||||
2016 | 71,298 | ||||||||||||||||||||||||||||||||
2017 | 71,298 | ||||||||||||||||||||||||||||||||
2018 | 71,298 | ||||||||||||||||||||||||||||||||
2019 and thereafter | 419,641 | ||||||||||||||||||||||||||||||||
Total | $ | 704,833 | |||||||||||||||||||||||||||||||
Other_Assets
Other Assets | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||
Other Assets | NOTE 9 – OTHER ASSETS | ||||||||
Other assets as of December 31, 2014 and 2013, consisted of the following (in thousands): | |||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Deferred financing costs | $ | 11,491 | $ | 6,268 | |||||
Other | 73 | 689 | |||||||
Other assets | $ | 11,564 | $ | 6,957 | |||||
Accrued_Trade_Discounts_and_Re
Accrued Trade Discounts and Rebates | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Equity [Abstract] | |||||||||
Accrued Trade Discounts and Rebates | NOTE 10 – ACCRUED TRADE DISCOUNTS AND REBATES | ||||||||
Accrued trade discounts and rebates as of December 31, 2014 and 2013, consisted of the following (in thousands): | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Contractual allowances | $ | 55,678 | $ | 6,716 | |||||
Government rebates and chargebacks | 20,437 | 1,407 | |||||||
Accrued trade discounts and rebates | $ | 76,115 | $ | 8,123 | |||||
Accrued_Expenses
Accrued Expenses | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Accrued Expenses | NOTE 11 – ACCRUED EXPENSES | ||||||||
Accrued expenses as of December 31, 2014 and 2013, consisted of the following (in thousands): | |||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Payroll related expenses | $ | 20,933 | $ | 9,491 | |||||
Accrued excise tax | 11,243 | — | |||||||
Professional services | 3,825 | 350 | |||||||
Sales and marketing expenses | 2,343 | 1,761 | |||||||
Accrued income taxes | 1,400 | — | |||||||
Accrued interest | 1,260 | 810 | |||||||
Deferred rent | 1,026 | 755 | |||||||
Contract manufacturing expenses | 758 | 301 | |||||||
Clinical and regulatory expenses | 632 | 488 | |||||||
Consulting services | 596 | 283 | |||||||
Accrued other | 2,609 | 1,687 | |||||||
Accrued expenses | $ | 46,625 | $ | 15,926 | |||||
In connection with the Merger, any individual who is or was an executive officer or director of HPI or New Horizon and subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 at any time during the period commencing six months before and ending six months after the closing of the Merger (“Covered Individual”) is subject to an excise tax (15% in 2014) under Section 4985 of the Internal Revenue Code of 1986 on the value of certain stock compensation held at any time during the same period by the covered individual. The excise tax applies to all payments (or rights to payment) granted to the Covered Individuals by HPI or New Horizon in connection with the performance of services if the value of such payment is based on (or determined by reference to) the value of stock in HPI or New Horizon (excluding certain statutory incentive stock options and holdings in tax qualified plans). This includes any outstanding (a) unexercised nonqualified stock options, whether vested or unvested, (b) restricted stock awards that remain subject to forfeiture, (c) unvested restricted stock unit awards and (d) vested but deferred shares, in each case which are held by the Covered Individuals during this twelve month period. | |||||||||
After careful consideration, the New Horizon board of directors concluded that the Company would provide the Covered Individuals with a payment with respect to the excise tax, so that, on a net after-tax basis, they would be in the same position as if no such excise tax had applied to them. As a result, as of December 31, 2014, the Company has estimated a liability of $11.2 million for the payments due to those who were Covered Individuals. This amount was recorded by the Company as general and administrative expense on the consolidated statements of comprehensive loss and is included in accrued expenses on the consolidated balance sheet as of December 31, 2014. These payments are expected to be made to the Covered Individuals when the excise tax becomes due and payable in 2015. Should the Company grant stock compensation in connection with the hire of any new executive officers or addition of any new board members who become Covered Individuals at any time during the six month period following the closing of the Merger, an additional excise tax reimbursement payable for such new Covered Individuals will be incurred by the Company and a corresponding liability will be recorded. |
Accrued_Royalties
Accrued Royalties | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Text Block [Abstract] | |||||
Accrued Royalties | NOTE 12 – ACCRUED ROYALTIES | ||||
Changes in the liability for royalties during the year ended December 31, 2014 consisted of the following (in thousands): | |||||
Balance as of December 31, 2013 | $ | 32,992 | |||
Assumed ACTIMMUNE accrued royalty | 3,429 | ||||
Assumed ACTIMMUNE contingent royalty liabilities | 33,600 | ||||
Remeasurement of royalty liabilities | 10,660 | ||||
Royalty payments | (15,489 | ) | |||
Accretion expense | 9,020 | ||||
Balance as of December 31, 2014 | 74,212 | ||||
Less: Current portion | 25,325 | ||||
Accrued royalties, net of current | $ | 48,887 | |||
During the second quarter of 2014, based on higher sales of VIMOVO during the six months ended June 30, 2014 versus the Company’s original expectations and the Company’s adjusted expectations for future VIMOVO sales, the Company recorded a charge of $13.0 million to cost of goods sold to increase the amount of the contingent royalty liability to reflect the updated estimates. During the fourth quarter of 2014, after the Company’s most recent five year plan was approved, the Company performed its annual assessment of the carrying value of the contingent royalty liability. The Company recorded a $3.6 million credit to cost of goods sold to decrease the amount of the contingent royalty liability to reflect the updated estimates. The effect of the reassessments during the second quarter and the fourth quarter of the fair value of the contingent royalty liability represented a net charge of $9.4 million for the year ended December 31, 2014 to cost of goods sold to increase the amount of the contingent royalty liability. | |||||
During the fourth quarter of 2014, as the result of a price increase for ACTIMMUNE approved to take effect on January 1, 2015, the Company reassessed the value of the estimated royalty liability and recorded a charge of $1.3 million to cost of goods sold to increase the carrying value of the contingent royalties to reflect the updated estimates. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value Measurements | NOTE 13 – FAIR VALUE MEASUREMENTS | ||||||||||||||||
The following tables set forth the Company’s financial instruments that are measured at fair value on a recurring basis within the fair value hierarchy. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The following describes three levels of inputs that may be used to measure fair value: | |||||||||||||||||
Level 1 - Observable inputs such as quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||
Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||||||||||
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |||||||||||||||||
The Company utilizes the market approach to measure fair value for its money market funds. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. | |||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis | |||||||||||||||||
The following table sets forth the Company’s financial assets and liabilities at fair value on a recurring basis as of December 31, 2014 and 2013 (in thousands): | |||||||||||||||||
2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets: | |||||||||||||||||
Money market funds | $ | 111,581 | $ | — | $ | — | $ | 111,581 | |||||||||
Total assets at fair value | $ | 111,581 | $ | — | $ | — | $ | 111,581 | |||||||||
2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets: | |||||||||||||||||
Money market funds | $ | 66,817 | $ | — | $ | — | $ | 66,817 | |||||||||
Total assets at fair value | $ | 66,817 | $ | — | $ | — | $ | 66,817 | |||||||||
Liabilities: | |||||||||||||||||
Derivative liability | $ | — | $ | — | $ | 109,410 | $ | 109,410 | |||||||||
Total liabilities at fair value | $ | — | $ | — | $ | 109,410 | $ | 109,410 | |||||||||
In accordance with the pronouncement guidance in ASC 815 “Derivatives and Hedging”, the conversion option included within the Convertible Senior Notes was deemed to include an embedded derivative, which required the Company to bifurcate and separately account for the embedded derivative as a separate liability on its consolidated balance sheets. The estimated fair value was derived utilizing the binomial lattice approach for the valuation of convertible instruments. Assumptions used in the calculation included, among others, determining the appropriate credit spread using benchmarking analysis and solving for the implied credit spread, calculating the fair value of the stock component using a discounted risk free rate and borrowing cost and calculating the fair value of the note component using a discounted credit adjusted discount rate. Based on the assumptions used to determine the fair value of the derivative liability associated with the Convertible Senior Notes, the Company concluded that these inputs were Level 3 inputs. | |||||||||||||||||
The following table presents the assumptions used by the Company to determine the fair value of the conversion option embedded in the Convertible Senior Notes as of June 27, 2014, the date the Company’s shareholders approved the issuance of shares of HPI’s common stock in excess of 13,164,951 shares upon conversion of the Convertible Senior Notes, and December 31, 2013: | |||||||||||||||||
June 27, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Stock price | $ | 15.96 | $ | 7.62 | |||||||||||||
Risk free rate | 1.43 | % | 1.69 | % | |||||||||||||
Borrowing cost | 3.80% | 5.0% and 3.5% | |||||||||||||||
Weights | Equal weight | Equal weight | |||||||||||||||
Credit spread (in basis points) | 900 | 930 and 1,170 | |||||||||||||||
Volatilty | 40 | % | 40 | % | |||||||||||||
Initial conversion price | $ | 5.36 | $ | 5.36 | |||||||||||||
Remaining time to maturity (in years) | 4.4 | 4.9 | |||||||||||||||
On June 27, 2014, the Company’s shareholders approved the issuance of the Company’s ordinary shares in excess of 13,164,951 shares upon conversion of the Convertible Senior Notes. As such, on the date of approval, the derivative liability was re-measured to a final fair value and the entire fair value of the derivative liability of $324.4 million was reclassified to additional paid-in capital. Total losses of $215.0 million from re-measurement of the derivative liability were recorded in its results of operations for the year ended December 31, 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||
Commitments and Contingencies | NOTE 14 – COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||||||||||
Lease Obligations | |||||||||||||||||||||||||||||
The Company occupies approximately 10,300 square feet of office space in its headquarters in Dublin, Ireland under a lease that expires on November 4, 2029. The Company also occupies approximately 50,500 square feet of office space in Deerfield, Illinois under lease agreements that expire on June 30, 2018, approximately 5,000 square feet of office space in Mannheim, Germany under a lease that expires on December 31, 2016, approximately 3,200 square feet of office space in Reinach, Switzerland under a lease that expires on May 31, 2015 and approximately 6,200 square feet of office space in Roswell, Georgia under a lease that expires on October 31, 2018. | |||||||||||||||||||||||||||||
The Company recognizes rent expense on a monthly basis over the lease term based on a straight-line method. Rent expense was $0.6 million, $0.5 million and $0.5 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||||||
As of December 31, 2014, minimum future cash payments due under lease obligations were as follows (in thousands): | |||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 & | Total | |||||||||||||||||||||||
Thereafter | |||||||||||||||||||||||||||||
Operating Lease obligations | $ | 1,581 | $ | 1,624 | $ | 1,538 | $ | 1,104 | $ | 558 | $ | 5,484 | $ | 11,889 | |||||||||||||||
Annual Purchase Commitments | |||||||||||||||||||||||||||||
In August 2007, the Company entered into a manufacturing and supply agreement with Jagotec AG (“Jagotec”). Under the agreement, Jagotec or its affiliates are required to manufacture and supply RAYOS/LODOTRA exclusively to the Company in bulk. The Company committed to a minimum purchase of RAYOS/LODOTRA tablets from Jagotec for five years from the date of first launch of RAYOS/LODOTRA in a major country, as defined in the agreement, which was in April 2009. Thereafter, the agreement automatically renews on a yearly basis until either party provides two years advance written notice of termination. In April 2014, the agreement automatically renewed, and, therefore, the earliest the agreement can expire according to this advance notice procedure is April 15, 2017 and the minimum purchase commitment is in force until April 2017. At December 31, 2014, the minimum purchase commitment based on tablet pricing in effect under the agreement was $3.3 million through April 2017. | |||||||||||||||||||||||||||||
In May 2011, the Company entered into a manufacturing and supply agreement with sanofi-aventis U.S., and amended the agreement effective as of September 25, 2013. Pursuant to the agreement, as amended, sanofi-aventis U.S. is obligated to manufacture and supply DUEXIS to the Company in final, packaged form, and the Company is obligated to purchase DUEXIS exclusively from sanofi-aventis U.S. for the commercial requirements of DUEXIS in North America, South America and certain countries and territories in Europe, including the European Union member states and Scandinavia. At December 31, 2014, the Company had a binding purchase commitment to sanofi-aventis U.S. for DUEXIS of $2.6 million, which is to be delivered through March 2015. | |||||||||||||||||||||||||||||
In July 2013, Vidara and Boehringer Ingelheim entered into an exclusive supply agreement, which the Company assumed as of result of the Merger. Under the agreement, Boehringer Ingelheim is required to manufacture and supply interferon gamma 1-b (ACTIMMUNE) to the Company. The Company is required to purchase minimum quantities of finished drug product per annum through July 2020. As of December 31, 2014, the minimum binding purchase commitment to Boehringer Ingelheim was $21.2 million (converted using a Dollar-to-Euro rate of 1.22). | |||||||||||||||||||||||||||||
In November 2013, the Company entered into a long-term master manufacturing services and product agreement with Patheon pursuant to which Patheon will manufacture VIMOVO for the Company through December 31, 2019. The Company agreed to purchase a specified percentage of VIMOVO requirements for the United States from Patheon. The Company must pay an agreed price for final, packaged VIMOVO supplied by Patheon as set forth in the Patheon manufacturing agreement, subject to adjustments, including certain unilateral adjustments by Patheon, such as annual adjustments for inflation and adjustments to account for certain increases in the cost of components of VIMOVO other than active materials. The Company will issue 12-month forecasts of the volume of VIMOVO that the Company expects to order. The first three months of the forecast will be considered binding firm orders. At December 31, 2014, the Company had a binding purchase commitment with Patheon for VIMOVO of $3.6 million. | |||||||||||||||||||||||||||||
In October 2014, in connection with the acquisition of the U.S. rights to PENNSAID 2% from Nuvo, the Company and Nuvo, entered into an exclusive supply agreement. Under the supply agreement, Nuvo will manufacture and supply PENNSAID 2% to the Company. The initial term of our supply agreement is through December 31, 2022, but the agreement may be terminated earlier by either party for any uncured material breach by the other party of its obligations under the supply agreement or upon the bankruptcy or similar proceeding of the other party. At least 90 days prior to the first day of each calendar month during the term of the supply agreement, the Company will submit a binding written purchase order to Nuvo for PENNSAID 2% in minimum batch quantities. The Company has committed to binding purchase orders to Nuvo for delivery of PENNSAID 2% on or before April 1, 2015 of $2.7 million. | |||||||||||||||||||||||||||||
Royalty Agreements | |||||||||||||||||||||||||||||
In connection with the August 2004 development and license agreement with SkyePharma AG (“SkyePharma”) and Jagotec, a wholly-owned subsidiary of SkyePharma, regarding certain proprietary technology and know-how owned by SkyePharma, Jagotec is entitled to receive a single digit percentage royalty on net sales of RAYOS/LODOTRA and on any sub-licensing income, which includes any payments not calculated based on the net sales of RAYOS/LODOTRA, such as license fees, lump sum and milestone payments. Royalty expense recognized in cost of goods sold for the years ended December 31, 2014, 2013 and 2012 was $1.7 million, $0.9 million and $0.5 million, respectively. | |||||||||||||||||||||||||||||
Under the Pozen license agreement, the Company is required to pay Pozen a flat 10% royalty on net sales of VIMOVO and such other products sold by the Company, its affiliates or sublicensees during the royalty term, subject to minimum annual royalty obligations of $5.0 million in 2014 and $7.5 million each year thereafter, which minimum royalty obligations will continue for each year during which one of Pozen’s patents covers such products in the United States and there are no competing products in the United States. The royalty rate may be reduced to a mid-single digit royalty rate as a result of loss of market share to competing products. The Company’s obligation to pay royalties to Pozen will expire upon the later of (a) expiration of the last-to-expire of certain patents covering such products in the United States, and (b) ten years after the first commercial sale of such products in the United States. | |||||||||||||||||||||||||||||
Under the license agreement with Genentech Inc. (“Genentech”), which was the original developer of ACTIMMUNE, the Company is or was obligated to pay royalties to Genentech on its net sales of ACTIMMUNE as follows: | |||||||||||||||||||||||||||||
• | Through November 25, 2014, a royalty of 45% of the first $3.7 million in net sales achieved in a calendar year, and 10% on all additional net sales in that year; | ||||||||||||||||||||||||||||
• | For the period from November 26, 2014 through May 5, 2018, the royalty payments will be reduced to a 20%-30% range for the first tier in net sales and in the 1%-9% range for the second tier; and | ||||||||||||||||||||||||||||
• | From May 6, 2018 and for so long as the Company continues to commercially sell ACTIMMUNE, an annual royalty in the low single digits as a percentage of annual net sales. | ||||||||||||||||||||||||||||
Under the terms of the agreement with Connetics Corporation (which was the predecessor parent company to InterMune and is now part of GlaxoSmithKline) (“Connectics”), the Company is obligated to pay royalties to Connetics on the Company’s net sales of ACTIMMUNE as follows: | |||||||||||||||||||||||||||||
• | 0.25% of net sales of ACTIMMUNE, rising to 0.5% once cumulative net sales of ACTIMMUNE in the United States surpass $1.0 billion; and in the event the Company develops and receive regulatory approval for ACTIMMUNE in the indication of scleroderma, the Company will be obligated to pay a royalty of 4% on all net sales of ACTIMMUNE recorded for use in that indication. | ||||||||||||||||||||||||||||
The royalty obligations for VIMOVO and ACTIMMUNE are included in accrued royalties on the Company’s consolidated balance sheets. | |||||||||||||||||||||||||||||
Excise Tax Gross Up | |||||||||||||||||||||||||||||
In connection with the Merger, the New Horizon board of directors concluded that the Company would provide the Covered Individuals with a payment with respect to the excise tax on the value of certain stock compensation, so that, on a net after-tax basis, they would be in the same position as if no such excise tax had applied to them. As of December 31, 2014, the Company has estimated a liability of $11.2 million for the payments due to those who were Covered Individuals. This amount was recorded by the Company as general and administrative expense on the consolidated statements of comprehensive loss and is included in accrued expenses on the consolidated balance sheet as of December 31, 2014. These payments are expected to be made to the Covered Individuals when the excise tax becomes due and payable in 2015. Should the Company grant stock compensation in connection with the hire of any new executive officers or addition of any new board members who become Covered Individuals at any time during the six month period following the closing of the Merger, an additional excise tax reimbursement payable for such new Covered Individuals will be incurred by the Company and a corresponding liability will be recorded. | |||||||||||||||||||||||||||||
Contingencies | |||||||||||||||||||||||||||||
The Company is subject to claims and assessments from time to time in the ordinary course of business. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. In addition, the Company from time to time has billing disputes with vendors in which amounts invoiced are not in accordance with the terms of their contracts. | |||||||||||||||||||||||||||||
The Company previously entered into a rebate agreement with a pharmacy benefit manager (“PBM”), pursuant to which the Company was required to pay certain rebates on certain of its products that were reimbursed by health plans contracting with the PBM with respect to their formularies. In 2014, the Company sent a notice alerting the PBM of certain material breaches by the PBM under the agreement and indicating that the agreement would automatically terminate if the material breaches were not cured within 30 days. Among other things, the breaches by the PBM involved repeated invoices that included claims for rebates which were not eligible for payment under the agreement. Following the 30-day period, during which the PBM did not take action to cure the breaches or formally respond to the notice, the Company sent another notice informing the PBM that the agreement was terminated as of the end of the 30-day period in accordance with its terms and the Company ceased paying further rebates under the agreement. On November 6, 2014, the Company received a letter from the PBM asserting that the breaches the Company alleged in its termination notice were not material breaches and therefore the agreement was not terminated and remains in effect. In addition, the PBM claimed that the Company owes $38.5 million in past price protection and utilization rebates related to VIMOVO and DUEXIS, in addition to further rebates on sales of VIMOVO and DUEXIS continuing after the date the Company believes the agreement was terminated. The substantial majority of these rebate claims relate to price protection rebates on VIMOVO which the Company believes are precluded under the agreement, particularly because VIMOVO was not covered under the agreement until after the Company had established an initial price for VIMOVO under a Horizon-owned National Drug Code. Based upon the terms of the agreement and the PBM’s actions, the Company believes that the PBM’s claims in its November 6, 2014 letter are without merit and the Company intends to vigorously defend against them. The Company currently estimates the range of potential disputes to be in the $0 to $4.7 million range and has not recorded a liability associated with any portion of the disputed amounts as the Company does not believe payment of any such amounts is probable at this time. | |||||||||||||||||||||||||||||
Indemnification | |||||||||||||||||||||||||||||
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. | |||||||||||||||||||||||||||||
In accordance with its memorandum and articles of association, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. Additionally, the Company has entered, and intends to continue to enter, into separate indemnification agreements with its directors and executive officers. These agreements, among other things, require the Company to indemnify its directors and executive officers for certain expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of the Company’s directors or executive officers, or any of the Company’s subsidiaries or any other company or enterprise to which the person provides services at the Company’s request. There have been no claims to date and the Company has a director and officer insurance policy that enables it to recover a portion of any amounts paid for future potential claims. Certain of the Company’s officers and directors have also entered into separate indemnification agreements with HPI prior to the Merger. |
Legal_Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | NOTE 15 – LEGAL PROCEEDINGS |
On July 15, 2013, the Company received a Paragraph IV Patent Certification from Watson Laboratories, Inc.—Florida, known as Actavis Laboratories FL, Inc. (“Watson”), advising that Watson had filed an ANDA with the FDA for a generic version of RAYOS, containing up to 5 mg of prednisone. Watson has not advised the Company as to the timing or status of the FDA’s review of its filing. On August 26, 2013, the Company, together with Jagotec, filed suit in the United States District Court for the District of New Jersey against Watson, Actavis Pharma, Inc., Andrx Corp., and Actavis, Inc. (collectively “WLF”) seeking an injunction to prevent the approval of the ANDA. The lawsuit alleges that WLF has infringed U.S. Patent Nos. 6,488,960, 6,677,326, 8,168,218, 8,309,124 and 8,394,407 by filing an ANDA seeking approval from the FDA to market generic versions of RAYOS containing 1 mg, 2 mg and 5 mg of prednisone prior to the expiration of the patents. The subject patents are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. The commencement of the patent infringement lawsuit stays, or bars, FDA approval of WLF’s ANDA for 30 months or until an earlier district court decision that the subject patents are not infringed or are invalid. The Company and Jagotec have granted WLF a covenant not to sue with respect to US Patent Nos. 6,677,326 and 8,168,218, respectively, and accordingly these patents have been dismissed from the lawsuit. The court held a claim construction hearing on October 16, 2014, and issued its opinion and order on claim construction on November 10, 2014, adopting our proposed construction of both of the disputed claim terms. The court has scheduled expert discovery in the WLF action to be completed by June 2, 2015, and has set the pretrial conference for September 10, 2015. The trial date will be set following the pretrial conference. | |
On November 13, 2014, the Company received a Paragraph IV Patent Certification from Watson advising that Watson had filed an ANDA with the FDA for a generic version of PENNSAID 2%. Watson has not advised the Company as to the timing or status of the FDA’s review of its filing. On December 23, 2014, the Company filed suit in the United States District Court for the District of New Jersey against Watson seeking an injunction to prevent the approval of the ANDA. The lawsuit alleges that Watson has infringed U.S. Patent Nos. 8,217,078, 8,252,838, 8,546,450, 8,563,613, 8,618,164, and 8,871,809 by filing an ANDA seeking approval from the FDA to market generic versions of PENNSAID prior to the expiration of the patents. The subject patents are listed in the FDA’s Orange Book. The commencement of the patent infringement lawsuit stays, or bars, FDA approval of Watson’s ANDA for 30 months or until an earlier district court decision that the subject patents are not infringed or are invalid. The Court has not yet set a trial date for the Watson action. | |
On December 2, 2014, the Company received a Paragraph IV Patent Certification against Orange Book listed U.S. Patent Nos. 8,217,078, 8,252,838, 8,546,450, 8,563,613, 8,618,164, and 8,741,956 from Paddock Laboratories, LLC (“Paddock”) advising that Paddock had filed an ANDA with the FDA for a generic version of PENNSAID 2%. On January 9, 2015, the Company received from Paddock another Paragraph IV Patent Certification against newly Orange Book listed U.S. Patent No. 8,871,809. Paddock has not advised the Company as to the timing or status of the FDA’s review of its filings. On January 13, 2015 and January 14, 2015, the Company filed suits in the United States District Court for the District of New Jersey and the United States District Court for the District of Delaware, respectively, against Paddock seeking an injunction to prevent the approval of the ANDA. The lawsuits allege that Paddock has infringed U.S. Patent Nos. 8,217,078, 8,252,838, 8,546,450, 8,563,613, 8,618,164, and 8,871,809 by filing an ANDA seeking approval from the FDA to market generic versions of PENNSAID 2% prior to the expiration of the patents. The subject patents are listed in the FDA’s Orange Book. The commencement of the patent infringement lawsuit stays, or bars, FDA approval of Paddock’s ANDA for 30 months or until an earlier district court decision that the subject patents are not infringed or are invalid. The Courts have not yet set trial dates for the Paddock actions. | |
Currently, patent litigation is pending in the United States District Court for the District of New Jersey against four generic companies intending to market VIMOVO before the expiration of patents listed in the Orange Book. These cases are in the United States District Court for the District of New Jersey and have been consolidated for discovery purposes. They are collectively known as the VIMOVO cases, and involve the following sets of defendants: (i) Dr. Reddy’s Laboratories Inc. and Dr. Reddy’s Laboratories Ltd. (collectively, Dr. Reddy’s); (ii) Lupin Ltd. and Lupin Pharmaceuticals Inc. (collectively, Lupin); (iii) Mylan Pharmaceuticals Inc., Mylan Laboratories Limited, and Mylan Inc. (collectively, Mylan); and (iv) Watson Laboratories, Inc.—Florida, known as Actavis Laboratories FL, Inc. and Actavis Pharma, Inc. (collectively, Actavis). Patent litigation in the United States District Court for the District of New Jersey against a fifth generic company, Anchen Pharmaceuticals Inc. (“Anchen”), was dismissed on June 9, 2014 after Anchen recertified under Paragraph III. The Company understands that Dr. Reddy’s has entered into a settlement with AstraZeneca with respect to patent rights directed to Nexium for the commercialization of VIMOVO, and that according to the settlement agreement, Dr. Reddy’s is now able to commercialize VIMOVO under AstraZeneca’s Nexium patent rights. The settlement agreement, however, has no effect on the Pozen VIMOVO patents, which are still the subject of patent litigations. As part of the Company’s acquisition of the U.S. rights to VIMOVO, the Company has taken over and is responsible for the patent litigations that include the Pozen patents licensed to the Company under the Pozen license agreement. | |
The VIMOVO cases were filed on April 21, 2011, July 25, 2011, October 28, 2011, January 4, 2013, May 10, 2013, June 28, 2013 and October 23, 2013 and collectively include allegations of infringement of U.S. Patent Nos. 6,926,907 and 8,557,285. The Company understands the cases arise from Paragraph IV Notice Letters providing notice of the filing of an ANDA with the FDA seeking regulatory approval to market a generic version of VIMOVO before the expiration of the patents-in-suit. The Company understands the Dr. Reddy’s notice letters were dated March 11, 2011 and November 20, 2012; the Lupin notice letters were dated June 10, 2011 and March 12, 2014; the Mylan notice letter was dated May 16, 2013; the Actavis notice letters were dated March 29, 2013 and November 5, 2013; and the Anchen notice letter was dated September 16, 2011. The court has issued a claims construction order and has set a pretrial schedule but has not yet set a trial date. | |
On or about December 19, 2014, the Company filed a Notice of Opposition to a European patent, EP 2611457, to Roberto Testi, et al., covering compositions and methods for treating FA with interferon gamma, e.g., ACTIMMUNE. In the European Union, the grant of a patent may be opposed by one or more private parties. | |
On February 2, 2015, the Company received a Paragraph IV Patent Certification against Orange Book listed U.S. Patent Nos. 8,217,078, 8,252,838, 8,546,450, 8,563,613, 8,618,164, 8,741,956, and 8,871,809 from Taro Pharmaceuticals USA, Inc. and Taro Pharmaceutical Industries, Ltd. (collectively, “Taro”) advising that Taro had filed an ANDA with the FDA for a generic version of 2%. Taro has not advised the Company as to the timing or status of the FDA’s review of its filing. The Company is still in the process of evaluating the Paragraph IV Patent Certification, and it is anticipated the Company will file suit against Taro within the statutorily prescribed 45 day time limit. |
Debt_Agreements
Debt Agreements | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Debt Agreements | NOTE 16 – DEBT AGREEMENTS | ||||||||
The Company’s outstanding debt balances as of December 31, 2014 and 2013, consisted of the following (in thousands): | |||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Senior Secured Credit Facility | $ | 300,000 | $ | — | |||||
Convertible Senior Notes | 60,985 | 150,000 | |||||||
Debt discount | (15,482 | ) | (39,238 | ) | |||||
Total long-term debt | 345,503 | 110,762 | |||||||
Less: current maturities | 48,334 | — | |||||||
Long-term debt, net of current maturities | $ | 297,169 | $ | 110,762 | |||||
Convertible Senior Notes | |||||||||
On November 18, 2013, the Company entered into note purchase agreements with investors to issue $150.0 million aggregate principal amount of Convertible Senior Notes. The note purchase agreements contain customary representations, warranties, covenants and closing conditions. The Convertible Senior Notes were issued on November 22, 2013. The Company received net proceeds of $143.6 million from the sale of the Convertible Senior Notes, after deducting fees and expenses of $6.4 million. The Convertible Senior Notes are governed by an Indenture, dated as of November 22, 2013, between HPI and U.S. Bank National Association, as trustee (the “Indenture”). The Convertible Senior Notes bear interest at a rate of 5.00% per year, payable in arrears on May 15 and November 15 of each year, which began on May 15, 2014. The Convertible Senior Notes will mature on November 15, 2018, unless earlier repurchased or converted. | |||||||||
The Company used a portion of the proceeds from the Convertible Senior Notes to purchase $18.7 million related to certain capped call transactions with Deutsche Bank AG, London Branch, and Société Générale (the “counterparties”). The capped call transactions were comprised of a net settled purchased call option and a net settled sold call option. The Company purchased the call option with an initial strike price of $5.364, which was equal to the initial conversion price, and sold a call option with a strike price of $6.705, which is equal to the cap price. The number of options underlying the capped calls was 150,000 or the equivalent to the number of $1,000 Convertible Senior Notes initially issued by the Company. On September 23, 2014, the counterparties exercised their rights to terminate the capped call transactions. In connection with such termination, the Company received $14.0 million comprised of both $9.4 million in cash and 384,366 ordinary shares of the Company which were valued at $4.6 million, based on the closing share price of September 22, 2014 of $11.93 per share. The Company recorded the receipt of the ordinary shares as treasury shares. In addition, in connection with the termination of the capped call transactions, one counterparty and/or their affiliates unwound various hedging transactions with respect to the Company’s ordinary shares. | |||||||||
The Convertible Senior Notes were sold at a price equal to 100% of the principal amount thereof and are convertible, under certain conditions, at the option of the holders at any time prior to the close of business on the business day immediately preceding August 15, 2018. Prior to August 15, 2018, the Convertible Senior Notes are convertible, at the option of the holders thereof, only under the following circumstances: | |||||||||
1 | Conversion upon Satisfaction of Sale Price Condition: If the closing price of the Company’s ordinary shares for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day. | ||||||||
2 | Conversion upon Satisfaction of Trading Price Condition: The Convertible Senior Notes can be surrendered for conversion during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Convertible Senior Notes was less than 98% of the product of the last reported sale price of the Company’s ordinary shares and the applicable conversion rate on such date. | ||||||||
3 | Conversion upon Specified Distributions: If the Company elects to: | ||||||||
i. | issue to all or substantially all holders of the Company’s ordinary shares any rights, options or warrants (other than in connection with a shareholder rights plan) entitling them, for a period of not more than 45 calendar days after the declaration date for such issuance, to subscribe for or purchase the Company’s ordinary shares at a price per share that is less than the average of the last reported sale prices of the Company’s ordinary shares for the 10 consecutive trading day period ending on, and including, the trading day immediately preceding the declaration date for such issuance; or | ||||||||
ii. | distribute to all or substantially all holders of the Company’s ordinary shares its assets, securities or rights to purchase its securities, which distribution has a per share value, as reasonably determined by the Company’s board of directors or a committee thereof, exceeding 10% of the last reported sale price of the Company’s ordinary shares on the trading day preceding the date of announcement for such distribution. | ||||||||
4 | Conversion upon Specified Corporate Events: If (i) a transaction or event that constitutes a fundamental change or a make-whole fundamental change occurs or (ii) the Company is party to a consolidation, merger, binding share exchange, or transfer or lease of all or substantially all of its consolidated assets pursuant to which the Company’s ordinary shares would be converted into cash, securities or other assets. | ||||||||
On or after August 15, 2018 until the close of business on the second scheduled trading day immediately preceding the maturity date for the Convertible Senior Notes, holders will be able to convert their Convertible Senior Notes at their option at the conversion rate then in effect at any time, regardless of these conditions. | |||||||||
Subject to certain limitations, HPI may settle conversions of the Convertible Senior Notes by paying or delivering, as the case may be, cash, the Company’s ordinary shares or a combination of cash and the Company’s ordinary shares at HPI’s election. If the Company undergoes a fundamental change prior to the maturity date of the Convertible Senior Notes, the holders may require HPI to repurchase for cash all or any portion of their Convertible Senior Notes at a price equal to 100% of the principal amount of the Convertible Senior Notes to be repurchased, plus accrued and unpaid interest. | |||||||||
The conversion rate for the Convertible Senior Notes was initially 186.4280 ordinary shares per $1,000 principal amount of Convertible Senior Notes (equivalent to an initial conversion price of approximately $5.36 per ordinary share). The conversion rate of the Convertible Senior Notes, and the corresponding conversion price, is subject to adjustment for certain events, but will not be adjusted for accrued and unpaid interest. On June 27, 2014, the Company’s shareholders approved the issuance of ordinary shares in excess of 13,164,951 shares upon conversion of the Convertible Senior Notes. On June 30, 2014, the Company reclassified the Convertible Senior Notes from long term to short term as conditions for conversion were met. | |||||||||
Pursuant to a number of factors outlined in ASC Topic 815, Derivatives and Hedging, the conversion option in the Convertible Senior Notes was deemed to include an embedded derivative that required bifurcation and separate accounting. As such, the Company ascertained the value of the conversion option as if separate from the convertible issuance and appropriately recorded that value as a derivative liability. On November 22, 2013, a derivative liability and a corresponding debt discount in the amount of $40.1 million were recorded. The debt discount is being charged to interest expense ratably over the life of the convertible debt. The effective interest rate computed on the Convertible Senior Notes was 11.22%. | |||||||||
The derivative liability was subject to revaluation on a quarterly basis to reflect the market value change of the embedded conversion option. At December 31, 2013, the Company conducted a fair value assessment of the embedded derivative. As a result of the fair value assessment, the Company recorded a $69.3 million expense in its results of operations for the year ended December 31, 2013 to properly reflect the fair value of the embedded derivative of $109.4 million as of December 31, 2013. | |||||||||
On June 27, 2014, the Company’s shareholders approved the issuance of the Company’s ordinary shares in excess of 13,164,951 shares upon conversion of the Convertible Senior Notes. As such, on the date of approval, the derivative liability was re- measured to a final fair value and the entire fair value of the derivative liability of $324.4 million was reclassified to additional paid-in capital. Total losses of $215.0 million from re-measurement of the derivative liability were recorded in its results of operations for the year ended December 31, 2014. As of December 31, 2014, the fair value of the Convertible Senior Notes was approximately $57.0 million. | |||||||||
In connection with the Merger, HPI and New Horizon executed a supplemental indenture dated as of September 19, 2014 (the “First Supplemental Indenture”) with U.S Bank National Association (the “Trustee”) to the Indenture. Pursuant to the First Supplemental Indenture, HPI remained the obligor of the Convertible Senior Notes and the Company agreed to fully and unconditionally guaranty the obligations of HPI under the Indenture (the “Guaranty”). The First Supplemental Indenture also provides that the conversion value of the Convertible Senior Notes will be calculated by reference to the Company’s ordinary shares, rather than the common stock of HPI, and any shares issuable upon conversion of the Convertible Senior Notes will be settled in the Company’s ordinary shares, rather than shares of the common stock of HPI. In addition, the Company assumed the disclosure obligations required by the Indenture. | |||||||||
In the fourth quarter of 2014, the Company entered into separate, privately-negotiated conversion agreements with certain holders of the Convertible Senior Notes. Under the conversion agreements, the holders agreed to convert an aggregate principal amount of $89.0 million of Convertible Senior Notes held by them and the Company agreed to settle such conversions by issuing 16,594,793 ordinary shares. In addition, pursuant to the conversion agreements, the Company made an aggregate cash payment of $16.7 million to the holders for additional exchange consideration and $1.7 million of accrued and unpaid interest, and recognized a non-cash charge of $11.7 million related to the extinguishment of debt as a result of the note conversions. Immediately following the conversions of the Convertible Senior Notes contemplated by the conversion agreements, $61.0 in aggregate principal amount of the Convertible Senior Notes remained outstanding. | |||||||||
Senior Secured Credit Facility | |||||||||
On June 17, 2014, the Company entered into the Senior Secured Credit Facility with a group of lenders and Citibank, N.A., as administrative and collateral agent. The Senior Secured Credit Facility is governed by a Credit Agreement dated June 17, 2014. The Senior Secured Credit Facility provides for (i) a committed five-year $300.0 million term loan facility (the “Term Loan Facility”) with a portion of the proceeds used to effect the Merger and to pay fees and expenses in connection therewith, and with the balance being used for general corporate purposes; (ii) an uncommitted accordion facility subject to the satisfaction of certain financial and other conditions; and (iii) one or more uncommitted refinancing loan facilities with respect to loans thereunder. The initial borrower under the Term Loan Facility is U.S. HoldCo (renamed Horizon Pharma Holdings USA, Inc.). The Credit Agreement allows for the Company and other subsidiaries of the Company to become borrowers under the accordion facility. Loans under the Senior Secured Credit Facility bear interest, at each borrower’s option, at a rate equal to either the London Inter-Bank Offer Rate (“LIBOR”), plus an applicable margin of 8.0% per year (subject to a 1.0% LIBOR floor), or the prime lending rate, plus an applicable margin equal to 7.0% per year. The Company borrowed the full $300.0 million available on the Term Loan Facility on September 19, 2014 as a LIBOR-based borrowing. The Company paid a ticking fee to the applicable lenders of $3.2 million covering the period beginning on the date that was 31 days following the effective date of the Senior Secured Credit Facility and continuing through the closing of the Merger. | |||||||||
The borrowers’ obligations under the Credit Agreement and any swap obligations entered into with a lender thereunder are and will be guaranteed by the Company and each of the Company’s existing and subsequently acquired or organized direct and indirect subsidiaries (other than certain immaterial subsidiaries, subsidiaries whose guarantee would result in material adverse tax consequences and subsidiaries whose guarantee is prohibited by applicable law). The borrowers’ obligations under the Credit Agreement are secured, subject to customary permitted liens and other agreed upon exceptions, by a perfected security interest in (i) all tangible and intangible assets of the borrowers and the guarantors, except for certain customary excluded assets, and (ii) all of the capital stock owned by the borrowers and guarantors thereunder (limited, in the case of the stock of certain non-U.S. subsidiaries of U.S. HoldCo, to 65% of the capital stock of such subsidiaries). | |||||||||
U.S. HoldCo is permitted to make voluntary prepayments of loans under the Term Loan Facility, except that (i) a specified make-whole amount would apply to any repayment or repricing prior to the second anniversary of the Closing Date, (ii) a 4% premium would apply to any repayment or repricing on or prior to the third anniversary of the Closing Date, and (iii) a 2% premium would apply to any repayment or repricing on or prior to the fourth anniversary of the Closing Date. U.S. HoldCo is required to make mandatory prepayments of loans under the Term Loan Facility (without payment of a premium) with (a) net cash proceeds from certain non-ordinary course asset sales (subject to reinvestment rights and other exceptions), (b) casualty proceeds and condemnation awards (subject to reinvestment rights and other exceptions), and (c) net cash proceeds from issuances of debt (other than certain permitted debt). | |||||||||
The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions. Events of default under the Credit Agreement include: (i) the failure by the borrowers to timely make payments due under the Credit Agreement; (ii) material misrepresentations or misstatements in any representation or warranty by any party when made; (iii) failure by any borrower or guarantor thereunder to comply with the covenants under the Credit Agreement and other related agreements; (iv) certain defaults under a specified amount of other indebtedness of the Company or its subsidiaries; (v) insolvency or bankruptcy-related events with respect to the Company or any of its material subsidiaries; (vi) certain undischarged judgments against the Company or any of its restricted subsidiaries; (vii) certain ERISA-related events reasonably expected to have a material adverse effect on the Company and its subsidiaries taken as a whole; (viii) certain security interests or liens under the loan documents ceasing to be, or being asserted by the Company or its restricted subsidiaries not to be, in full force and effect; and (ix) any loan document or material provision thereof ceasing to be, or any proceeding being instituted asserting that such loan document or material provision is not, in full force and effect. | |||||||||
As of December 31, 2014, the carrying value of the Senior Secured Credit Facility approximates its fair value due to its recent issuance. | |||||||||
Commitment Letter | |||||||||
On March 18, 2014, the Company entered into the Commitment Letter with Deerfield and certain Deerfield Funds pursuant to which the Deerfield Funds had committed to provide up to $250.0 million of senior secured loans to finance the Merger. The Company paid Deerfield a commitment fee of $5.0 million upon execution of the Commitment Letter. The $5.0 million commitment fee paid to Deerfield was capitalized as a prepaid expense and was amortized to expense through June 30, 2014. The Company allowed the Commitment Letter to expire on June 30, 2014 as a result of the execution of the Senior Secured Credit Facility. |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Shareholders' Equity | NOTE 17 – SHAREHOLDERS’ EQUITY |
In connection with the Merger, each share of HPI’s common stock issued and outstanding was converted into one ordinary share of New Horizon and each warrant to acquire HPI’s common stock outstanding immediately prior to the Effective Time and not terminated as of the Effective Time was converted into a warrant to acquire, on substantially the same terms and conditions as were applicable under such warrant before the Effective Time, the number of ordinary shares of New Horizon equal to the number of shares of HPI’s common stock underlying such warrant immediately prior to the Effective Time. Vidara Holdings retained ownership of 31,350,000 ordinary shares of New Horizon at the Effective Time. Upon consummation of the Merger, the security holders of HPI (excluding the holders of HPI’s Convertible Senior Notes) owned approximately 74% of New Horizon and Vidara Holdings owned approximately 26% of New Horizon. | |
As discussed in Note 16—Debt Agreements, on September 23, 2014, the Company received 384,366 of its ordinary shares as part of the settlement of the termination of the capped call transaction associated with its Convertible Senior Notes and recorded the receipt of the ordinary shares as treasury shares. | |
During the year ended December 31, 2014, the Company issued an aggregate of 8,440,662 ordinary shares upon the cash exercise of warrants and the Company received proceeds of $38.5 million representing the aggregate exercise price for such warrants. In addition, warrants to purchase an aggregate of 987,201 ordinary shares of the Company were exercised in cashless exercises, resulting in the issuance of 549,458 ordinary shares. Included in these cashless exercises were 162,309 warrants that were exercised in cashless exercises in connection with the Merger, resulting in an aggregate issuance of 248 ordinary shares. As of December 31, 2014, there were outstanding warrants to purchase 6,683,811 ordinary shares of the Company. | |
During the year ended December 31, 2014, the Company issued an aggregate of 864,780 ordinary shares in connection with the exercise of stock options and vesting of restricted stock units and received $1.6 million in proceeds in connection with the exercise of stock options. The Company also received proceeds of $1.7 million upon the issuance of 536,543 ordinary shares of the Company through its employee stock purchase program during the year ended December 31, 2014. |
Equity_Incentive_Plans
Equity Incentive Plans | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||
Equity Incentive Plans | NOTE 18 – EQUITY INCENTIVE PLANS | ||||||||||||||||||||
Employee Stock Purchase Plan | |||||||||||||||||||||
In July 2010, HPI’s board of directors adopted the 2011 Employee Stock Purchase Plan (the “2011 ESPP”). In June 2011, HPI’s stockholders approved the 2011 ESPP, and it became effective upon the signing of the underwriting agreement related to HPI’s initial public offering in July 2011. HPI reserved a total of 463,352 common stock for issuance under the 2011 ESPP. The 2011 ESPP provided that an additional number of shares would automatically be added to the shares authorized for issuance under the 2011 ESPP each year on January 1, until 2021. The number of shares added each year was equal to the least of: (a) 4% of the total number of common stock outstanding on December 31 of the preceding calendar year; (b) 1,053,074 common stock; or (c) a number of common stock that could be determined each year by HPI’s board of directors that was less than (a) and (b). Subject to certain limitations, HPI’s employees could elect to have 1% to 15% of their compensation withheld through payroll deductions to purchase common stock under the 2011 ESPP at the end of a six-month offering period. Employees purchase common stock at a price per share equal to 85% of the lower of the fair market value at the start or end of the six-month offering period. | |||||||||||||||||||||
On December 5, 2013, pursuant to the terms of the 2011 ESPP, HPI’s board of directors approved an increase in the number of shares available for issuance under the 2011 ESPP of 1,053,074 shares, effective January 1, 2014. As of immediately prior to the closing of the Merger, 614,657 shares had been issued and an aggregate of 1,201,769 common stock were authorized and available for future grants under the 2011 ESPP. Upon consummation of the Merger, the Company assumed the 2011 ESPP. | |||||||||||||||||||||
On May 17, 2014, HPI’s board of directors adopted the Horizon Pharma Public Limited Company 2014 Employee Share Purchase Plan (the “2014 ESPP”). On September 18, 2014, at a special meeting of the stockholders of HPI (the “Special Meeting”), HPI’s stockholders approved the 2014 ESPP. Upon consummation of the Merger, the Company assumed the 2014 ESPP, which served as the successor to the 2011 ESPP. The 2014 ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of section 423 of the Internal Revenue Code of 1986, as amended. The 2014 ESPP provides a means by which employees of the Company (or any eligible subsidiary) may purchase the Company’s ordinary shares through payroll deductions. Generally, each regular employee (including officers) employed by the Company (or a subsidiary company if the Company’s board of directors designates such company as eligible to participate) will be eligible to participate in offerings under the 2014 ESPP. At the effective time of the 2014 ESPP, 10,201,769 ordinary shares were available for purchase under such plan, which number consisted of 9,000,000 ordinary shares of the Company, plus the 1,201,769 shares remaining available for issuance in the share reserve of the 2011 ESPP as of immediately prior to the effective time of the Merger. The Company’s board of directors may suspend or terminate the 2014 ESPP at any time. | |||||||||||||||||||||
As of December 31, 2014, an aggregate of 9,929,336 ordinary shares were authorized and available for future grants under the 2014 ESPP. | |||||||||||||||||||||
Stock-Based Compensation Plans | |||||||||||||||||||||
In October 2005, HPI adopted the 2005 Stock Plan (the “2005 Plan”). The 2005 Plan provided for the granting of stock options to employees and consultants of HPI. Options granted under the 2005 Plan were either incentive stock options or nonqualified stock options. Upon the signing of the underwriting agreement related to HPI’s initial public offering, on July 28, 2011, no further option grants were made under the 2005 Plan. As of July 28, 2011, the 460,842 common stock reserved for future issuance and the 1,304,713 common stock reserved for future issuance upon the exercise of options outstanding under the 2005 Plan were transferred to the 2011 Equity Incentive Plan (the “2011 EIP”), as described below. All stock options granted under the 2005 Plan prior to July 28, 2011 continue to be governed by the terms of the 2005 Plan. Upon consummation of the Merger, the Company assumed the 2005 Plan. | |||||||||||||||||||||
In July 2010, HPI’s board of directors adopted the 2011 EIP. In June 2011, HPI’s stockholders approved the 2011 EIP, and it became effective upon the signing of the underwriting agreement related to HPI’s initial public offering on July 28, 2011. The 2011 EIP had an initial reserve of 3,366,228 common stock, including 460,842 common stock previously reserved for future issuance under the 2005 Plan, 1,304,713 common stock reserved for future issuance upon the exercise of options outstanding under the 2005 Plan as of the 2011 EIP’s effective date and 1,600,673 new common stock reserved. The 2011 EIP provided that an additional number of shares would automatically be added to the shares authorized for issuance each year on January 1, until 2021. The number of shares added each year were equal to the least of: (a) 5% of the total number of common stock outstanding on December 31 of the preceding calendar year; (b) 1,474,304 common stock; or (c) a number of common stock that could be determined each year by HPI’s board of directors that was less than (a) and (b). On December 5, 2013, pursuant to the terms of HPI’s 2011 EIP, HPI’s board of directors approved an increase in the number of shares available for issuance under the 2011 EIP of 1,474,304 shares, effective January 1, 2014. On November 7, 2013, November 16, 2013 and March 3, 2014, HPI’s board of directors approved amendments to the 2011 EIP to reserve an additional 200,000 shares, 800,000 shares and 730,000 shares, respectively, of HPI’s common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of HPI (or following a bona fide period of non-employment with HPI), as an inducement material to the individual’s entry into employment with HPI within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules (“Rule 5635(c)(4)”). On January 10, 2014, HPI’s board of directors approved an amendment to the 2011 EIP to increase the number of shares available for issuance under the 2011 EIP by 703,400 shares (the “January 2014 amendment”), with such increase to the number of shares available for issuance under the 2011 EIP subject to stockholder approval of the January 2014 amendment. | |||||||||||||||||||||
On May 17, 2014, HPI’s board of directors approved an amendment to the 2011 EIP to among other things: increase the aggregate number of shares authorized for issuance under the 2011 EIP by an additional 10,000,000 shares; eliminate the annual “evergreen” provision and require stockholder approval for the issuance of additional shares; and provide that shares reserved as part of the “inducement pool” under Rule 5635(c)(4) may be used for grants to any eligible participant under the 2011 EIP. On June 27, 2014, HPI’s stockholders approved the amendment to the 2011 EIP. As of immediately prior to the closing of the Merger, there were 7,341,996 shares available for future grants under the 2011 EIP. Upon consummation of the Merger, the Company assumed the 2011 EIP. | |||||||||||||||||||||
On May 17, 2014, HPI’s board of directors adopted the Horizon Pharma Public Limited Company 2014 Equity Incentive Plan (the “2014 EIP”) and the Horizon Pharma Public Limited Company 2014 Non-Employee Equity Plan (the “2014 Non-Employee Equity Plan”). At the Special Meeting, HPI’s stockholders approved the 2014 EIP and 2014 Non-Employee Equity Plan. Upon consummation of the Merger, the Company assumed the 2014 EIP and 2014 Non-Employee Equity Plan, which serve as successors to the 2011 EIP. | |||||||||||||||||||||
The 2014 EIP provides for the grant of incentive and nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, other stock awards, and performance awards that may be settled in cash, shares or other property to the employees of the Company (or a subsidiary company). The number of ordinary shares of the Company that are authorized for issuance under the 2014 Plan will be no more than 22,052,130, which number consists of (i) 15,500,000 ordinary shares of the Company; plus (ii) the number of shares available for issuance pursuant to the grant of future awards under the 2011 EIP; plus (iii) any shares subject to outstanding stock awards granted under the 2011 EIP and the 2005 Plan that expire or terminate for any reason prior to exercise or settlement or are forfeited, redeemed or repurchased because of the failure to meet a contingency or condition required to vest such shares; less (iv) 10,000,000 shares, which is the additional number of shares which were previously approved as an increase to the share reserve of the 2011 EIP. The Company’s board of directors has authority to suspend or terminate the 2014 EIP at any time. | |||||||||||||||||||||
The 2014 Non-Employee Equity Plan provides for the grant of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and other forms of stock awards that may be settled in cash, shares or other property to the non-employee directors and consultants of the Company (or a subsidiary company). The total number of ordinary shares of the Company authorized for issuance under the 2014 Non-Employee Equity Plan is 2,500,000. The Company’s board of directors has authority to suspend or terminate the 2014 Non-Employee Equity Plan at any time. | |||||||||||||||||||||
As of December 31, 2014, an aggregate of 14,264,001 ordinary shares were authorized and available for future grants under the 2014 EIP. | |||||||||||||||||||||
Stock Options | |||||||||||||||||||||
The following table summarizes stock option activity during the year ended December 31, 2014: | |||||||||||||||||||||
Options | Weighted | Weighted Average | Aggregate | ||||||||||||||||||
Average | Remaining | Intrinsic Value | |||||||||||||||||||
Exercise Price | Contractual Term | (in thousands) | |||||||||||||||||||
Outstanding as of December 31, 2013 | 4,411,080 | $ | 6.47 | ||||||||||||||||||
Granted | 3,902,836 | $ | 10.71 | ||||||||||||||||||
Exercised | (497,082 | ) | $ | 5.27 | |||||||||||||||||
Forfeited | (789,151 | ) | $ | 6.16 | |||||||||||||||||
Outstanding as of December 31, 2014 | 7,027,683 | $ | 8.95 | 8.1 years | $ | 32,757 | |||||||||||||||
Exercisable as of December 31, 2014 | 2,938,278 | $ | 8.71 | 6.6 years | $ | 16,333 | |||||||||||||||
The following table summarizes the Company’s outstanding stock options at December 31, 2014: | |||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Exercise Price Ranges | Number of options | Weighted | Weighted | Number | Weighted | ||||||||||||||||
outstanding | Average | Average | Exercisable | Average | |||||||||||||||||
Exercise Price | Remaining | Exercise | |||||||||||||||||||
Contractual | Price | ||||||||||||||||||||
Term | |||||||||||||||||||||
$1.36 - $3.97 | 1,574,765 | $ | 2.63 | 8.0 years | 780,904 | $ | 2.62 | ||||||||||||||
$4.10 - $5.20 | 849,484 | $ | 4.99 | 6.4 years | 705,644 | $ | 5.01 | ||||||||||||||
$5.21 - $7.47 | 125,287 | $ | 6.85 | 8.8 years | 32,636 | $ | 6.85 | ||||||||||||||
$7.48 - $12.94 | 3,312,541 | $ | 10.11 | 8.8 years | 966,538 | $ | 10.25 | ||||||||||||||
$12.99 - $17.22 | 915,242 | $ | 14.4 | 8.8 years | 202,192 | $ | 14.1 | ||||||||||||||
$20.78 - $28.83 | 250,364 | $ | 28.05 | 3.7 years | 250,364 | $ | 28.05 | ||||||||||||||
7,027,683 | $ | 8.95 | 8.1 years | 2,938,278 | $ | 8.71 | |||||||||||||||
During the years ended December 31, 2014, 2013 and 2012, the Company granted stock options to purchase an aggregate of 3,902,836, 2,158,950 and 516,325 ordinary shares (or prior to the Merger, shares of HPI common stock), respectively, with a weighted average grant date fair value of $10.71, $2.23 and $3.44, respectively. | |||||||||||||||||||||
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. The determination of the fair value of each stock option is affected by the Company’s stock price on the date of grant, as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the expected life of the awards and actual and projected stock option exercise behavior. The weighted average fair value per share of stock option awards granted during the years ended December 31, 2014, 2013 and 2012, and assumptions used to value stock options, are as follows: | |||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Dividend yield | — | — | — | ||||||||||||||||||
Risk-free interest rate | 1.9 | % | 1.2 | % | 1 | % | |||||||||||||||
Weighted average volatility | 83.1 | % | 86.7 | % | 89 | % | |||||||||||||||
Expected life (in years) | 6.11 | 5.98 | 5.96 | ||||||||||||||||||
Weighted average grant date fair value per share of options granted | $ | 8.88 | $ | 2.82 | $ | 2.5 | |||||||||||||||
Dividend yields | |||||||||||||||||||||
The Company has never paid dividends and does not anticipate paying any dividends in the near future. Additionally, the Senior Secured Credit Facility contains covenants that restrict the Company from issuing dividends. | |||||||||||||||||||||
Risk-Free Interest Rate | |||||||||||||||||||||
The Company determined the risk-free interest rate by using a weighted average assumption equivalent to the expected term based on the U.S. Treasury constant maturity rate as of the date of grant. | |||||||||||||||||||||
Volatility | |||||||||||||||||||||
The Company used an average historical stock price volatility of comparable companies to be representative of future stock price volatility, as the Company did not have sufficient trading history for its common stock. | |||||||||||||||||||||
Expected Term | |||||||||||||||||||||
Given the Company’s limited historical exercise behavior, the expected term of options granted was determined using the “simplified” method since the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. Under this approach, the expected term is presumed to be the average of the vesting term and the contractual life of the option. | |||||||||||||||||||||
Forfeitures | |||||||||||||||||||||
As stock-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures based on actual forfeiture experience, analysis of employee turnover and other factors. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. | |||||||||||||||||||||
Restricted Stock Units | |||||||||||||||||||||
The following table summarizes restricted stock unit activity for the year ended December 31, 2014: | |||||||||||||||||||||
Number of | Weighted Average | ||||||||||||||||||||
Units | Grant-Date Fair | ||||||||||||||||||||
Value Per Units | |||||||||||||||||||||
Outstanding as of December 31, 2013 | 833,001 | $ | 2.86 | ||||||||||||||||||
Granted | 1,312,722 | $ | 10.55 | ||||||||||||||||||
Vested | (338,520 | ) | $ | 3.89 | |||||||||||||||||
Forfeited | (188,701 | ) | $ | 4.73 | |||||||||||||||||
Outstanding as of December 31, 2014 | 1,618,502 | $ | 8.66 | ||||||||||||||||||
During the years ended December 31, 2014, 2013 and 2012, the Company granted 1,312,722, 730,000 and 520,000 restricted stock units to acquire shares of the Company’s ordinary shares (or prior to the Merger, shares of HPI common stock) to its employees, respectively. The restricted stock units vest over a four-year period on each anniversary of the vesting commencement date. In December 2013, the Company also granted 101,004 fully vested deferred issuance restricted stock units to the Company’s named executive officers in connection with a one-time bonus payment associated with the completion of the Company’s acquisition of the U.S. rights to VIMOVO. | |||||||||||||||||||||
The following table summarizes share-based compensation expense included in the Company’s consolidated statements of operations for the years ended December 31, 2014, 2013 and 2012 (in thousands): | |||||||||||||||||||||
For the Years Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Share-based compensation expense: | |||||||||||||||||||||
Research and development | $ | 1,515 | $ | 1,054 | $ | 1,186 | |||||||||||||||
Sales and marketing | 4,174 | 1,465 | 1,090 | ||||||||||||||||||
General and administrative. | 7,509 | 2,495 | 2,385 | ||||||||||||||||||
Total share-based compensation expense | $ | 13,198 | $ | 5,014 | $ | 4,661 | |||||||||||||||
No income tax benefit has been recognized relating to stock-based compensation expense and no tax benefits have been realized from exercised stock options, due to the Company’s net loss position. As of December 31, 2014, the Company estimates that pre-tax unrecognized compensation expense of $39.1 million for all unvested share-based awards, including both stock options and restricted stock units, will be recognized through the first quarter of 2018. The Company expects to satisfy the exercise of stock options and future distribution of shares of restricted stock by issuing new ordinary shares which have been reserved under the 2014 EIP. | |||||||||||||||||||||
Cash Bonus Program | |||||||||||||||||||||
On November 5, 2014, the compensation committee of the Company’s board of directors approved a performance cash bonus program for the members of the Company’s executive committee and executive leadership team, including its executive officers (the “Cash Bonus Program”). Participants in the Cash Bonus Program will be eligible for a specified cash bonus, the amount of which bonus is determined by whether the Company’s total compounded annualized shareholder rate of return (“TSR”) for the period from November 5, 2014 to May 6, 2015 is greater than or equal to a specified threshold that ranges between 15% and 60%, and which bonus will be earned and payable only if the TSR for the period from November 5, 2014 to November 4, 2017 is greater than 15%. The TSR for these periods will be calculated using the 20-day volume weighted average trading price of the Company’s ordinary shares. The total bonus pool that may be payable under the Cash Bonus Program will be calculated as of May 6, 2015 and may range from $4.5 million to $17.0 million, depending upon the TSR for the period from November 5, 2014 to May 6, 2015. The portion of the total bonus pool payable to individual participants will be based on pre-determined allocations established by the Company’s compensation committee. Participants must remain employed by the Company through November 4, 2017 unless a participant’s earlier departure from employment is due to death, disability, termination without cause or a change in control transaction, to be further defined in a written plan. Bonus payments under the Cash Bonus Program, if any, will be made after November 4, 2017. | |||||||||||||||||||||
The Company accounts for the Cash Bonus Program under the liability method in accordance with ASC Topic 718, Compensation–Stock Compensation. Because the value of the Cash Bonus Program pool is dependent upon the attainment of a target level of TSR, it requires the impact of the market condition to be considered when estimating the fair value of the bonus pool. As a result, the Monte Carlo model is applied and $1.6 million was estimated to be the fair value of the award. As of December 31, 2014, the Company recorded $0.1 million of expense related to the Cash Bonus Program. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 19 – RELATED PARTY TRANSACTIONS |
On June 17, 2014, Mr. Robert De Vaere entered into an executive employment and transition agreement with the Company (the “Transition Agreement”), as part of his transition as the Company’s then current Executive Vice President and Chief Financial Officer, to a consulting position. Pursuant to the Transition Agreement Mr. De Vaere (a) continued to serve as the Company’s Executive Vice President and Chief Financial Officer through September 30, 2014, (b) will serve as a consultant to the Company for a fee of $50,000 per month from October 1, 2014 through March 31, 2015, and (c) will serve as a consultant to the Company in a reduced capacity for a fee of $20,000 per month from April 1, 2015 through September 30, 2015. | |
In connection with the Merger, the Company entered into an amendment to the employment agreement with Dr. Virinder Nohria, one of its directors. Pursuant to the amendment to the employment agreement, Dr. Nohria’s employment with Vidara was terminated, and Dr. Nohria received a $0.5 million lump sum payment that was contingent on his execution of a general release of claims. The Company also entered into a consulting agreement with Dr. Nohria. Pursuant to the consulting agreement, Dr. Nohria has been retained as a consultant by the Company for a term of one year, and is being paid $10,000 per month of service as a consultant. | |
In November 2014, certain of our shareholders, including Dr. Nohria and an affiliated trust, sold a number of Horizon Pharma plc ordinary shares in an underwritten public offering. As part of the offering, the Company agreed to reimburse Dr. Nohria and his affiliated trust, as well as another selling shareholder, for certain of the underwriting discounts otherwise payable by them in the offering. Based upon the sale by Dr. Nohria and his affiliated trust of an aggregate of 2,784,512 shares in the offering, the Company reimbursed Dr. Nohria and his affiliated trust a total of approximately $0.7 million. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | NOTE 20 – INCOME TAXES | ||||||||||||
The Company’s loss before benefit for income taxes by jurisdiction for the years ended December 31, 2014, 2013 and 2012 is as follows (in thousands): | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Ireland | $ | 22,164 | $ | — | $ | — | |||||||
United States | (275,080 | ) | (139,347 | ) | 56,038 | ||||||||
Other Foreign | (16,771 | ) | (10,779 | ) | (149,003 | ) | |||||||
Loss before benefit for income taxes | $ | (269,687 | ) | $ | (150,126 | ) | $ | (92,965 | ) | ||||
The components of the benefit for income taxes were as follows for the years ended December 31, 2014, 2013 and 2012 (in thousands): | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current provision | |||||||||||||
Ireland | $ | — | $ | — | $ | — | |||||||
US - Federal and State | 815 | 4 | 4 | ||||||||||
Other Foreign | 55 | 43 | 35 | ||||||||||
Total current provision | 870 | 47 | 39 | ||||||||||
Deferred benefit | |||||||||||||
Ireland | $ | — | $ | — | $ | — | |||||||
US - Federal and State | (3,860 | ) | — | — | |||||||||
Other Foreign | (3,094 | ) | (1,168 | ) | (5,210 | ) | |||||||
Total deferred benefit | (6,954 | ) | (1,168 | ) | (5,210 | ) | |||||||
Total benefit for income taxes | $ | (6,084 | ) | $ | (1,121 | ) | $ | (5,171 | ) | ||||
Total benefit for income taxes was $6.1 million, $1.1 million and $5.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. Current expense of $0.9 million for the year ended December 31, 2014 consisted primarily of alternative minimum tax. During the year ended December 31, 2014, the Company released a portion of its valuation allowance as a result of the Merger. In connection with the Merger, the Company recorded additional deferred tax liabilities related to certain acquired assets. Accordingly, the Company recorded a net benefit for income taxes of $3.0 million for the release of its valuation allowance during the third quarter of 2014. In addition, the Company eliminated its deferred tax liability of $3.0 million at its Swiss subsidiary related to the intercompany sale of intellectual property in the fourth quarter of 2014. As a result, the Company recorded an overall deferred tax benefit for income taxes of $7.0 million, including the net effect of other deferred tax items, during the year ended December 31, 2014. | |||||||||||||
During the year ended December 31, 2014, the Company recorded a $215.0 million loss on the derivative revaluation in connection with the increase in the fair value of the embedded derivative associated with the Convertible Senior Notes. The loss on derivative revaluation was a permanent tax difference and is not deductible for income tax reporting purposes. At the end of the third quarter of 2014, the capped call related to the $150.0 million convertible debt was removed resulting in revaluation of the debt for tax purposes. As a result of the debt revaluation (for tax purposes only), it was determined that an additional $22.8 million of interest expense could be claimed. During the fourth quarter of 2014, $89.1 million of the $150.0 million of convertible debt was converted resulting in a book loss on conversion of $29.4 million. The net result of the convertible debt settlements was that $14.7 million of the additional interest expense is deductible as a permanent item and $8.1 million as a temporary item for tax purposes. | |||||||||||||
The $6.1 million increase in the income tax benefit during the year ended December 31, 2014 related primarily to the recognition of the effect of the Merger acquisition liabilities recorded in the third quarter of 2014 for $3.0 million and the elimination of the deferred tax liability due to the intercompany sale of intellectual property in the fourth quarter of 2014 for $3.0 million. The $4.1 million decrease in the income tax benefit during the year ended December 31, 2013 was primarily attributable to the absence of one-time tax benefits in 2013 that were recorded during 2012. | |||||||||||||
As a result of the Merger in the third quarter of 2014, the Company changed its status from a U.S. company to an Irish company. Consequently, the controlling statutory income tax rate with respect to the effective income tax rate analysis is a 12.5% corporate tax rate for an Irish trading company versus the U.S. corporate rate of 35%. | |||||||||||||
A reconciliation between the Irish rate for 2014 and the U.S. federal statutory income tax rate for 2013 and 2012, respectively, and the Company’s effective tax is as follows (in thousands): | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Irish income tax statutory rate (12.5%) | $ | (33,711 | ) | $ | — | $ | — | ||||||
US federal income tax at statutory rate (35%) | — | (52,543 | ) | (32,538 | ) | ||||||||
Bargain purchase gain | (5,542 | ) | — | — | |||||||||
Transaction costs | 5,402 | — | — | ||||||||||
Excise tax | 3,911 | — | — | ||||||||||
Stock based compensation | 1,460 | 1,107 | 1,063 | ||||||||||
Foreign tax rate differential | (64,675 | ) | 2,019 | 4,376 | |||||||||
Deferred taxes not benefited | 7,360 | 23,921 | 21,715 | ||||||||||
Derivative liability | 75,248 | 24,255 | — | ||||||||||
Notional interest deduction | (2,149 | ) | — | — | |||||||||
Interest expense on convertible debt inducements | (4,789 | ) | — | — | |||||||||
Book loss on debt extinguishment | 10,286 | — | — | ||||||||||
Other | 1,115 | 120 | 213 | ||||||||||
Income tax benefit | $ | (6,084 | ) | $ | (1,121 | ) | $ | (5,171 | ) | ||||
Effective income tax rate | -2.26 | % | -10.39 | % | 34.7 | % | |||||||
No provision has been made for income taxes on undistributed earnings of foreign subsidiaries because it is the Company’s intention to indefinitely reinvest undistributed earnings of its foreign subsidiaries. There are no material undistributed foreign earnings. In the event of the distribution of those earnings in the form of dividends, a sale of the subsidiaries, or certain other transactions, the Company may be liable for income taxes. As of December 31, 2014, it was not practicable to determine the amount of the income tax liability related to those investments. | |||||||||||||
The Company accounts for income taxes based upon an asset and liability approach. Deferred tax assets and liabilities represent the future tax consequences of the differences between the financial statement carrying amounts of assets and liabilities versus the tax basis of assets and liabilities. Under this method, deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of tax rate changes on deferred tax assets and liabilities is recognized in the year that the change is enacted. | |||||||||||||
The tax effects of the temporary differences and net operating losses that give rise to significant portions of deferred tax assets and liabilities are as follows (in thousands): | |||||||||||||
As of December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Net operating and capital loss carry forwards | $ | 105,182 | $ | 121,001 | |||||||||
Alternative minimum tax credit | 820 | — | |||||||||||
Derivative liability | — | 14,799 | |||||||||||
Accrued compensation | 6,397 | — | |||||||||||
Accruals and reserves | 4,952 | 7,073 | |||||||||||
Original issuance discount related to capped call | — | 6,740 | |||||||||||
Contingent royalties | 14,495 | 3,122 | |||||||||||
Research and development credits | — | 2,571 | |||||||||||
Foreign intangible assets | — | 63 | |||||||||||
Total deferred tax assets | 131,846 | 155,369 | |||||||||||
Valuation allowance | (111,555 | ) | (128,422 | ) | |||||||||
Deferred tax assets, net of valuation allowance | 20,291 | 26,947 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Acquisition liabilities | $ | 3,068 | $ | — | |||||||||
Debt discount | 4,791 | 14,477 | |||||||||||
Interest expense on convertible debt inducements | 3,306 | — | |||||||||||
In-process research and development | — | — | |||||||||||
Developed technology | — | 13,009 | |||||||||||
Intangible assets | 7,137 | 2,823 | |||||||||||
Other | 1,989 | ||||||||||||
Total deferred tax liabilities | 20,291 | 30,309 | |||||||||||
Net deferred income tax liability | $ | — | $ | 3,362 | |||||||||
The decrease in the deferred tax valuation allowance was $16.9 million for the year ended December 31, 2014 and the increase in the valuation allowance was $32.5 million and $27.8 million for the years ended December 31, 2013 and 2012, respectively. The decrease in the deferred tax valuation allowance in 2014 was due primarily to the utilization of net operating losses in the United States and the release of allowances as a result of acquired Merger liabilities and the intercompany asset sale noted above. The increase in the deferred tax valuation allowance in 2013 was primarily the result of higher federal and state net operating losses, which were fully reserved for due to the uncertainty surrounding the realization of these assets. A reconciliation of the beginning and ending amounts of the valuation allowance for the years ended December 31, 2014 and 2013 are as follows (in thousands): | |||||||||||||
Valuation allowance at December 31, 2012 | $ | (95,970 | ) | ||||||||||
Increase for current year activity | (32,452 | ) | |||||||||||
Valuation allowance at December 31, 2013 | $ | (128,422 | ) | ||||||||||
Decrease for current year activity | $ | 9,507 | |||||||||||
Release in valuation allowance | 7,360 | ||||||||||||
Valuation allowance at December 31, 2014 | $ | (111,555 | ) | ||||||||||
As of December 31, 2014, the Company had net operating loss carryforwards of approximately $240.0 million, $55.0 million and $103.0 million available to reduce future taxable income, if any, for federal, state, and foreign income tax purposes, respectively. Net operating loss carryforwards for federal income tax purposes will begin to expire in 2027. State net operating losses expire approximately within the same time period as the federal losses. Foreign net operating losses expire beginning in 2015. Utilization of the net operating loss carryforwards may be subject to annual limitations as prescribed by federal and state statutory provisions. The annual limitation may result in the expiration of net operating loss carryforwards prior to their utilization. | |||||||||||||
As of December 31, 2014 and 2013, the Company had research and development credit carryforwards for federal and state income tax purposes of approximately $2.7 million and $0.4 million, respectively, available to reduce future taxable income. In 2014, the Company determined it is more likely than not that these credits will not be utilized. Accordingly, the deferred tax assets and the related ASC 740-10 reserve of $0.5 million was reversed. | |||||||||||||
The Company accounts for the uncertainty in income taxes by utilizing a comprehensive model for the recognition, measurement, presentation and disclosure in financial statements of any uncertain tax positions that have been taken or are expected to be taken on an income tax return. The changes in the Company’s uncertain income tax positions for the years ended December 31, 2014, 2013 and 2012 consisted of the following (in thousands): | |||||||||||||
For the Years | |||||||||||||
Ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Beginning balance | $ | 491 | $ | 442 | |||||||||
Tax positions related to current year: | |||||||||||||
Additions | 775 | 51 | |||||||||||
Reductions | — | — | |||||||||||
775 | 51 | ||||||||||||
Tax positions related to prior years: | |||||||||||||
Additions | — | — | |||||||||||
Reductions | (491 | ) | (2 | ) | |||||||||
Settlements | — | — | |||||||||||
Lapses in statutes of limitations | — | — | |||||||||||
Additions from current year acquisitions | — | — | |||||||||||
(491 | ) | (2 | ) | ||||||||||
Ending balance | $ | 775 | $ | 491 | |||||||||
As a result of the Merger, the Company acquired $0.8 million in ASC 740-10 liability with respect to net operating loss carryovers. Further, as noted above, the Company abandoned its claim for research and development tax credit carryovers and, accordingly, reversed the ASC 740-10 reserve of $0.5 million set up in prior years. | |||||||||||||
The Company has assessed that its liability for unrecognized income tax benefits will not significantly change within the next twelve months. If these unrecognized tax benefits are recognized, the impact on the Company’s effective tax rate would be immaterial. Additionally, there was no interest or penalties accrued at December 31, 2014 and 2013, respectively, due to the Company’s net operating loss position. | |||||||||||||
The Company files income tax returns in the U.S. federal and in various state and foreign jurisdictions. At December 31, 2014, all open tax years in the federal and some state jurisdictions date back to 2005 due to the taxing authorities’ ability to adjust operating loss carryforwards. No changes in settled tax years have occurred through December 31, 2014 and the Company does not anticipate there will be a material change in the total amount of unrecognized tax benefits within the next 12 months. | |||||||||||||
The Company realized no income tax benefit from stock option exercises in each of the periods presented in these financial statements due to recurring losses and valuation allowances. As of December 31, 2014, the Company had $0.3 million of total unrecognized compensation expense. | |||||||||||||
The Company classifies interest and penalties with respect to income tax liabilities as a component of income tax expense. |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | NOTE 21 – EMPLOYEE BENEFIT PLANS |
The Company sponsors a defined contribution 401(k) retirement savings plan covering all of its U.S. employees, whereby an eligible employee may elect to contribute a portion of his or her salary on a pre-tax basis, subject to applicable federal limitations. The Company is not required to make any discretionary matching of employee contributions. Beginning in 2014, the Company made a matching contribution generally equal to 50% of each employee’s elective contribution to the plan of up to six percent of the employee’s eligible pay with a 20% graded vesting over five years. For the years ended December 31, 2014, the Company recorded defined contribution expense of $0.8 million and for the years ended December 31, 2013 and 2012, the Company did not record any expense under the plan. | |
The Company’s wholly-owned subsidiary, Horizon Pharma AG, sponsors a defined benefit savings plan covering all of its employees in Switzerland and a defined contribution plan for its employees in Germany. For the years ended December 31, 2014, 2013 and 2012, the Company recognized expenses of $0.1 million each, under these plans. |
Selected_Quarterly_Financial_I
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Selected Quarterly Financial Information (Unaudited) | NOTE 22 – SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | ||||||||||||||||
The following table provides a summary of selected financial results of operations by quarter for the years ended December 31, 2014 and 2013 (in thousands, except per share data): | |||||||||||||||||
2014 | First | Second | Third | Fourth | |||||||||||||
Net sales | $ | 51,926 | $ | 66,062 | $ | 75,126 | $ | 103,841 | |||||||||
Gross profit | 44,307 | 41,252 | 61,482 | 71,161 | |||||||||||||
Gain (loss) from operations | 1,587 | (7,100 | ) | (11,961 | ) | 8,983 | |||||||||||
Net (loss) income | (206,250 | ) | (27,769 | ) | 2,063 | (31,647 | ) | ||||||||||
Net (loss) income per ordinary share-basic and diluted | $ | (3.07 | ) | $ | (0.38 | ) | $ | 0.03 | $ | (0.27 | ) | ||||||
2013 | First | Second | Third | Fourth | |||||||||||||
Net sales | $ | 8,693 | $ | 11,131 | $ | 24,112 | $ | 30,080 | |||||||||
Gross profit | 4,924 | 8,737 | 20,905 | 24,825 | |||||||||||||
Loss from operations | (18,544 | ) | (15,804 | ) | (2,744 | ) | (5,762 | ) | |||||||||
Net loss | (22,171 | ) | (18,441 | ) | (5,492 | ) | (102,901 | ) | |||||||||
Net loss per ordinary share-basic and diluted | $ | (0.36 | ) | $ | (0.29 | ) | $ | (0.08 | ) | $ | (1.56 | ) |
Schedule_II_Valuation_and_Qual
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||||
For Each of the Three Fiscal Years Ended December 31, 2014, 2013 and 2012: | |||||||||||||||||
Additions | |||||||||||||||||
Valuation and Qualifying Accounts | Balance at | Charged to | Deductions | Balance at | |||||||||||||
(in thousands) | beginning | costs and | from | end of | |||||||||||||
of period | expenses | reserves | period | ||||||||||||||
Year ended December 31, 2014: | |||||||||||||||||
Allowance for discounts and returns | $ | 431 | 18,254 | (14,202 | ) | $ | 4,483 | ||||||||||
Deferred tax asset valuation allowance | $ | 128,422 | — | (16,867 | ) | $ | 111,555 | ||||||||||
Year ended December 31, 2013: | |||||||||||||||||
Allowance for discounts and returns | $ | 77 | 3,270 | (2,916 | ) | $ | 431 | ||||||||||
Deferred tax asset valuation allowance | $ | 95,970 | 32,452 | — | $ | 128,422 | |||||||||||
Year ended December 31, 2012: | |||||||||||||||||
Allowance for discounts and returns | $ | 170 | 365 | (458 | ) | $ | 77 | ||||||||||
Deferred tax asset valuation allowance | $ | 68,194 | 32,034 | (4,258 | ) | $ | 95,970 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Accounting Policies [Abstract] | |||||
Basis of Presentation | Basis of Presentation | ||||
The accompanying consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the instructions for Form 10-K and Article 3 of Regulation S-X. The consolidated financial statements include the accounts of the Company and its wholly-owned consolidated subsidiaries. | |||||
Principles of Consolidation | Principles of Consolidation | ||||
The consolidated financial statements include the Company’s accounts and those of its wholly-owned subsidiaries in the United States, Ireland, Bermuda, Luxembourg, Switzerland, Germany and the United Kingdom. All intercompany accounts and transactions have been eliminated. Additionally, certain reclassifications have been made to prior period financial statements to conform to the current period presentation. | |||||
During the second quarter of 2014, the Company changed its income statement presentation to present net sales rather than presenting gross sales minus sales discounts and allowances. The revised presentation has no effect on net sales, gross margin dollars, net income, cash flows, working capital or shareholders’ equity amounts previously reported, and will not affect such amounts in future periods. | |||||
During the first quarter of 2014, the Company recorded an out of period correction of $1.6 million resulting in a reduction to its distribution service fees related to prior periods. This correction to distribution service fees was recorded as an increase in net sales within the Company’s condensed consolidated statements of comprehensive loss for the year ended December 31, 2014. The Company has evaluated the impact of the reduction in distribution service fees to prior reporting periods and has determined it was immaterial. | |||||
Segment Information | Segment Information | ||||
The Company operates as one segment. Management uses one measure of profitability and does not segment its business for internal reporting. | |||||
Use of Estimates | Use of Estimates | ||||
The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions | ||||
The reporting currency of the Company and its subsidiaries is the U.S. dollar. | |||||
The U.S. dollar is the functional currency for the Company’s U.S. based businesses and its subsidiaries in Ireland, Bermuda and Luxembourg. Other foreign subsidiaries have the following functional currencies: Switzerland (Euro), Germany (Euro) and U.K. (British Pound). Foreign currency-denominated assets and liabilities of these subsidiaries are translated into U.S. dollars based on exchange rates prevailing at the end of the period, revenues and expenses are translated at average exchange rates prevailing during the corresponding period, and shareholders’ equity (deficit) accounts are translated at historical exchange rates as of the date of any equity transaction. The effects of foreign exchange gains and losses arising from the translation of assets and liabilities of those entities where the functional currency is not the U.S. dollar are included as a component of accumulated other comprehensive income (loss). | |||||
Gains and losses resulting from foreign currency translations are reflected within the Company’s results of operations. During the year ended December 31, 2014, the Company recorded a loss from foreign currency translations of $3.9 million, compared to a gain from foreign currency translations during the year ended December 31, 2013 of $1.2 million. The Company does not currently utilize and has not in the past utilized any foreign currency hedging strategies to mitigate the effect of its foreign currency exposure. | |||||
Revenue Recognition | Revenue Recognition | ||||
Revenue is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price is fixed or determinable; and collectability is reasonably assured. Some of the Company’s agreements contain multiple elements and in accordance with these agreements, the Company may be eligible for upfront license fees, marketing or commercial milestones and payment for product deliveries. | |||||
Revenue from product deliveries | |||||
The Company recognizes revenue from the delivery of its products when delivery has occurred, title has transferred, the selling price is fixed or determinable, collectability is reasonably assured and the Company has no further performance obligations. In addition, revenue is only recognized when the right of return no longer exists (which is the earlier of the product being dispensed through patient prescriptions or the expiration of the right of return) or when product returns can be reasonably estimated. Due to the Company’s ability to reasonably estimate and determine allowances for product returns, rebates and discounts based on its own internal data for DUEXIS and RAYOS or data relating to prior sales of VIMOVO and ACTIMMUNE received in connection with the acquisition of those products, the Company recognizes revenue at the point of sale to wholesale pharmaceutical distributors and retail chains for all currently distributed products. | |||||
Revenue from upfront license fees | |||||
The Company recognizes revenues from the receipt of non-refundable, upfront license fees. In situations where the licensee is able to obtain stand-alone value from the license and no further performance obligations exist on the Company’s part, revenues are recognized on the earlier of when payments are received or collection is reasonably assured. Where continuing involvement by the Company is required in the form of technology transfer, product manufacturing or technical support, revenues are deferred and recognized over the term of the agreement. | |||||
Revenue from milestone receipts | |||||
Milestone payments are recognized as revenue based on achievement of the associated milestones, as defined in the relevant agreements. Revenue from a milestone achievement is recognized when earned, as evidenced by acknowledgment from the Company’s partner, provided that (1) the milestone event is substantive and its achievability was not reasonably assured at the inception of the agreement, (2) the milestone represents the culmination of an earnings process and (3) the milestone payment is non-refundable. If any of these criteria are not met, revenue from the milestone achievement is recognized over the remaining minimum period of the Company’s performance obligations under the agreement. | |||||
The Company anticipates revenues will continue to result from distribution, marketing, manufacturing and supply agreements with third parties in Europe and certain Asian, Latin American and other countries with respect to LODOTRA. | |||||
Under the manufacturing and supply agreements with Mundipharma Medical Company (“Mundipharma Medical”), Mundipharma Medical agreed to purchase LODOTRA exclusively from the Company at a price based on a specified percentage of the average net selling price (“ANSP”) for sales in a given country, subject to a minimum price. Mundipharma Medical has a nine-month period from purchase date to request an ANSP adjustment. If the ANSP is lower than the actual purchase price, then Mundipharma Medical would receive a price adjustment. Revenue for products sold to Mundipharma Medical is recognized upon delivery at the minimum price, as no contractual right of return exists. The difference between the actual selling price and the minimum price is recorded as deferred revenue until such time as adjustments for product returns, rebates and discounts can be reliably estimated or the nine-month ANSP adjustment period passes, at which time any previously deferred revenue would be recognized as revenue. As of December 31, 2014 and 2013, deferred revenues related to the sale of LODOTRA were $0.7 million and $0.6 million, respectively. Additionally, as of December 31, 2014 and 2013, deferred revenues related to milestone and upfront payments received under existing agreements were $7.1 million and $8.7 million, respectively. | |||||
Contractual Allowances | Contractual Allowances | ||||
Product Sales Discounts and Allowances | |||||
The Company records allowances for product returns, rebates and discounts at the time of sale to wholesale pharmaceutical distributors and national and regional retail chains. The Company is required to make significant judgments and estimates in determining some of these allowances. If actual results differ from its estimates, the Company will be required to make adjustments to these allowances in the future. | |||||
Product Launch Discounts | |||||
The Company has offered additional discounts to wholesale distributors for product purchased at the time of product launch. The Company has recorded these discounts as an allowance against accounts receivable and a reduction of revenue when orders were placed. | |||||
Customer Rebates | |||||
The Company participates in certain commercial rebate programs. Under these rebate programs, the Company pays a rebate to the commercial entity or third-party administrator of the program. The Company accrues estimated rebates based on contract prices, estimated percentages of product sold to qualified patients and estimated levels of inventory in the distribution channel and records the rebate as a reduction of revenue. | |||||
Distribution Service Fees | |||||
The Company includes distribution service fees paid to its wholesalers for distribution and inventory management services as a reduction to revenue. The Company accrues estimated fees based on contractually determined amounts, typically as a percentage of revenue, as a reduction of revenue. | |||||
Co-Pay Assistance | |||||
The Company offers discount card and other programs such as our PME program to patients under which the patient receives a discount on his or her prescription. In certain circumstances when a patient’s prescription is rejected by a managed care vendor, the Company will pay for the full cost of the prescription. The Company reimburses pharmacies for this discount through third-party vendors. The Company accrues estimated costs for co-pay assistance based on contract prices, estimated percentages of product sold to qualified patients and estimated levels of inventory in the distribution channel and records the rebate as a reduction of revenue. The Company records the total amount of estimated costs for co-pay assistance for sales recorded in the period as a reduction of revenue. | |||||
Sales Returns | |||||
Consistent with industry practice, the Company maintains a return policy that allows customers to return product within a specified period prior to and subsequent to the product expiration date. Generally, product may be returned for a period beginning six months prior to its expiration date and up to one year after its expiration date. The right of return expires on the earlier of one year after the product expiration date or the time that the product is dispensed to the patient. The majority of product returns result from product dating, which falls within the range set by the Company’s policy, and are settled through the issuance of a credit to the customer. The estimate of the provision for returns is based upon the Company’s historical experience with actual returns, which is applied to the level of sales for the period that corresponds to the period during which the customer may return product. This period is known to the Company based on the shelf life of products at the time of shipment. The Company records sales returns as an allowance against accounts receivable and a reduction of revenue. | |||||
Prompt Pay Discounts | |||||
As an incentive for prompt payment, the Company offers a 2% cash discount to customers. The Company expects that all customers will comply with the contractual terms to earn the discount. The Company records the discount as an allowance against accounts receivable and a reduction of revenue. | |||||
Government Rebates and Chargebacks | |||||
Government Rebates | |||||
The Company participates in certain federal government rebate programs, such as Medicare and Medicaid. The Company accrues estimated rebates based on percentages of product sold to qualified patients, estimated rebate percentages and estimated levels of inventory in the distribution channel that will be sold to qualified patients and records the rebates as a reduction of revenue. | |||||
Government Chargebacks | |||||
The Company provides discounts to federal government qualified entities with whom the Company has contracted. These federal entities purchase products from the wholesale pharmaceutical distributors at a discounted price, and the wholesale pharmaceutical distributors then charge back to the Company the difference between the current retail price and the contracted price that the federal entities paid for the products. The Company accrues estimated chargebacks based on contract prices and sell-through sales data obtained from third party information and records the chargeback as a reduction of revenue. | |||||
Bad Debt Expense | Bad Debt Expense | ||||
The Company’s products are sold to wholesale pharmaceutical distributors and retail chains. The Company monitors its accounts receivable balances to determine the impact, if any, of such factors as changes in customer concentration, credit risk and the realizability of its accounts receivable, and records a bad debt reserve when applicable. The Company had established an immaterial reserve for bad debt expense for the year ended December 31, 2014. For the years ended December 31, 2013 and 2012, the Company did not record a bad debt expense related to its accounts receivable balances. | |||||
Cost of Goods Sold | Cost of Goods Sold | ||||
The Company recognizes cost of goods sold in connection with its sale of ACTIMMUNE, DUEXIS, RAYOS/LODOTRA and VIMOVO. | |||||
Cost of goods sold for ACTIMMUNE includes all costs directly related to the acquisition of ACTIMMUNE from the Company’s third party manufacturer, including freight charges and other direct expenses such as insurance and amortization of intellectual property, royalty accretion expense and any changes in estimate associated with the contingent royalty liability as described in the accrued contingent royalty accounting policy below. | |||||
Cost of goods sold for DUEXIS includes all costs directly related to the purchase of product from the Company’s third party manufacturers, including freight charges and costs of distribution service fees. | |||||
Cost of goods sold for LODOTRA includes raw material costs, costs associated with third parties who manufacture LODOTRA for the Company, supply chain costs, manufacturing overhead costs, amortization of developed technology, royalty payments to third parties for the use of certain licensed patents and applicable taxes. | |||||
Cost of goods sold for RAYOS includes all costs directly related to the purchase of product from the Company’s third party manufacturers, including freight charges, amortization of developed technology and royalty payments to third parties for the use of certain licensed patents and applicable taxes. | |||||
Cost of goods sold for VIMOVO includes all costs directly related to the acquisition of product from AstraZeneca and/or a third-party manufacturer, amortization of intellectual property, royalty accretion expense and any changes in estimate associated with the contingent royalty liability as described in the accrued contingent royalty accounting policy below. | |||||
Until the Company began recognizing revenue at the point of sale of DUEXIS to the wholesalers in the fourth quarter of 2012, it also deferred the related DUEXIS cost of goods sold and recorded such amounts as other current assets until revenue was recognized | |||||
Inventories | Inventories | ||||
Inventories are stated at the lower of cost or market value, using the first-in, first-out convention. Inventories consist of raw materials, work-in-process and finished goods. The Company has entered into manufacturing and supply agreements for the manufacture or purchase of raw materials and production supplies. The Company’s inventories include the direct purchase cost of materials and supplies and manufacturing overhead costs. As of December 31, 2014 and 2013, the Company had inventories of $16.9 million and $8.7 million, respectively. | |||||
Inventories exclude product sample inventory, which is included in other current assets and is expensed as a component of sales and marketing expense when provided to physicians or healthcare providers. As of December 31, 2014 and 2013, the Company had product sample inventory of $4.0 million and $1.3 million, respectively. | |||||
Preclinical Studies and Clinical Trial Accruals | Preclinical Studies and Clinical Trial Accruals | ||||
The Company’s preclinical studies and clinical trials have historically been conducted by third-party contract research organizations and other vendors. Preclinical study and clinical trial expenses are based on the services received from these contract research organizations and vendors. Payments depend on factors such as the milestones accomplished, successful enrollment of certain numbers of patients and site initiation. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company adjusts the accrual accordingly. To date, the Company has had no significant adjustments to accrued clinical expenses. | |||||
Net Loss Per Share | Net Loss Per Share | ||||
Basic net loss per share is computed by dividing net loss by the weighted-average number of ordinary shares outstanding during the period. For the periods presented, the Company’s potential dilutive shares, which include shares issuable upon the exercise of outstanding stock options, unvested restricted stock units, warrants to purchase ordinary shares and ordinary shares associated with the potential conversion of the Company’s 5.00% Convertible Senior Notes due 2018 (“Convertible Senior Notes”) have not been included in the computation of diluted net loss per share for the periods presented in which there is a net loss as the result would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. | |||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||
Cash and cash equivalents primarily consist of cash balances and money market funds. Cash and cash equivalents were $218.8 million and $80.5 million as of December 31, 2014 and 2013, respectively. The Company’s policy is to invest excess cash in money market funds, which are generally of a short-term duration based upon operating requirements. | |||||
Restricted Cash | Restricted Cash | ||||
Restricted cash consists of balances included in interest-bearing money market accounts required by a vendor for the Company’s sponsored employee credit card program and by the lessor for the Company’s office in Deerfield, Illinois. As of each of December 31, 2014 and 2013, the Company had restricted cash of $0.7 million. | |||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||
The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses, approximate their fair values due to their short maturities. | |||||
At December 31, 2013 and at the final measurement date of June 27, 2014, the estimated fair value of the Company’s derivative liability related to the convertible portion of the Convertible Senior Notes was derived utilizing the binomial lattice approach for the valuation of convertible instruments. Assumptions used in the calculation included, among others, determining the appropriate credit spread using benchmarking analysis and solving for the implied credit spread, calculating the fair value of the stock component using a discounted risk free rate and borrowing cost and calculating the fair value of the note component using a discounted credit adjusted discount rate. Based on the assumptions used to determine the fair value of the derivative liability associated with the Convertible Senior Notes, the Company concluded that these inputs were Level 3 inputs. | |||||
Business Combinations | Business Combinations | ||||
The Company accounts for business combinations in accordance with the pronouncement guidance in ASC 805, Business Combinations, in which acquired assets and liabilities are measured at their respective estimated fair values as of the acquisition date. The Company may be required, as in the case of intangible assets, contingent royalties or derivatives, to determine the fair value associated with these amounts by estimating the fair value using an income approach under the discounted cash flow method, which may include revenue projections and other assumptions made by the Company to determine the fair value. | |||||
Property and Equipment, Net | Property and Equipment, Net | ||||
Property and equipment are stated at cost less accumulated depreciation. Depreciation is recognized using the straight-line method over the estimated useful lives of the related assets for financial reporting purposes and an accelerated method for income tax reporting purposes. Upon retirement or sale of an asset, the cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operations. Repair and maintenance costs are charged to expenses as incurred and improvements are capitalized. | |||||
Leasehold improvements are amortized on a straight-line basis over the term of the applicable lease, or the useful life of the assets, whichever is shorter. | |||||
Depreciation and amortization periods for the Company’s property and equipment are as follows: | |||||
Machinery and equipment | 5-7 years | ||||
Furniture and fixtures | 3-5 years | ||||
Computer equipment | 3 years | ||||
Software | 3 years | ||||
Trade show equipment | 3 years | ||||
Software includes internal-use software acquired and modified to meet the Company’s internal requirements. Amortization commences when the software is ready for its intended use. | |||||
Intangible Assets | Intangible Assets | ||||
Definite-lived intangible assets are amortized over their estimated useful lives. The Company reviews its intangible assets when events or circumstances may indicate that the carrying value of these assets exceeds their fair value. The Company measures fair value based on the estimated future discounted cash flows associated with these assets in addition to other assumptions and projections that the Company deems to be reasonable and supportable. The estimated useful lives for all identified intangible assets that are subject to amortization are as follows: | |||||
Intangible Asset | Estimated Useful Life | ||||
ACTIMMUNE developed technology | 13 years | ||||
LODOTRA and RAYOS developed technology | 12 years | ||||
PENNSAID 2% developed technology | 6 years | ||||
VIMOVO intellectual property | 5 years | ||||
Customer relationships | 10 years | ||||
Indefinite-lived intangible assets consist of capitalized in-process research and development (“IPR&D”). IPR&D assets represent capitalized incomplete research projects that the Company acquired through business combinations. Such assets are initially measured at their acquisition date fair values and are tested for impairment, until completion or abandonment of R&D efforts associated with the projects. An IPR&D asset is considered abandoned when R&D efforts associated with the asset have ceased, and there are no plans to sell or license the asset or derive value from the asset. At that point, the asset is considered to be disposed of and is written off. Upon successful completion of each project, the Company will make a determination about the then-remaining useful life of the intangible asset and begin amortization. The Company tests its indefinite-lived intangibles, including IPR&D assets, for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. | |||||
Research and Development Expenses | Research and Development Expenses | ||||
Research and development expenses include, but are not limited to, payroll and other personnel expenses, consultant expenses, expenses incurred under agreements with contract research organizations to conduct clinical trials and expenses incurred to manufacture clinical trial materials. | |||||
Sales and Marketing Expenses | Sales and Marketing Expenses | ||||
Sales and marketing expenses consist principally of payroll of sales representatives and marketing and support staff, travel and other personnel-related expenses, marketing materials and distributed sample inventories. In addition, sales and marketing expenses include the Company’s medical affairs expenses, which consist of expenses related to scientific publications, health outcomes, biostatistics, medical education and information, and medical communications. | |||||
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties | ||||
Financial instruments that may potentially subject the Company to significant concentrations of credit risk consist of cash and cash equivalents. The Company’s cash and cash equivalents are invested in deposits with various banks in the United States, Ireland, Bermuda, Switzerland and Germany that management believes are creditworthy. At times, deposits in these banks may exceed the amount of insurance provided on such deposits. To date, the Company has not experienced any losses on its deposits of cash and cash equivalents. | |||||
The purchase cost of ACTIMMUNE under a contract with Boehringer Ingelheim as well as sales contracts relating to LODOTRA are principally denominated in Euros and are subject to significant foreign currency risk. The Company also incurs certain operating expenses in currencies other than the U.S. dollar in relation to its Ireland operations and other foreign subsidiaries, including Horizon Pharma AG; therefore, the Company is subject to volatility in cash flows due to fluctuations in foreign currency exchange rates, particularly changes in the Euro. To date, the Company has not entered into any hedging contracts since exchange rate fluctuations have had minimal impact on its results of operations and cash flows. | |||||
To achieve profitable operations, the Company must successfully develop, obtain regulatory approval for, manufacture and market its products and product candidates, and/or acquire or in-license products from third parties. There can be no assurance that any additional products can be developed, will be approved for marketing by the regulatory authorities, or can be manufactured at an acceptable cost and with appropriate performance characteristics or that any new or existing products can be successfully marketed, acquired or in-licensed by the Company. These factors could have a material adverse effect on the Company’s operations. | |||||
The Company relies on third parties to manufacture its commercial supplies of ACTIMMUNE, DUEXIS, PENNSAID 2%, RAYOS/LODOTRA, and VIMOVO. The commercialization of any of its products or product candidates could be stopped, delayed or made less profitable if those third parties fail to provide the Company with sufficient quantities of product or fail to do so at acceptable quality levels or prices. | |||||
The Company is required to maintain compliance with applicable Swiss laws with respect to its Swiss subsidiary, Horizon Pharma AG, including laws requiring maintenance of equity in the subsidiary to avoid overindebtedness, which requires Horizon Pharma AG to maintain assets in excess of its liabilities. The Company reviews on a regular basis whether its Swiss subsidiary is overindebted. As of December 31, 2014, Horizon Pharma AG was not overindebted. However, Horizon Pharma AG has previously been overindebted, including at December 31, 2013, primarily as a result of operating losses at the subsidiary. The Company will continue to monitor and review Horizon Pharma AG’s financial position and, as necessary, will address any overindebtedness until such time as Horizon Pharma AG generates positive income at a statutory level, which could require the Company to have cash at Horizon Pharma AG in excess of its near-term operating needs and could affect the Company’s ability to have sufficient cash at its other operating subsidiaries to meet its near-term operating needs. As of December 31, 2014 and 2013, Horizon Pharma AG had cash and cash equivalents of $3.0 million and $3.5 million, respectively. Based upon the cash and cash equivalents held by Horizon Pharma AG as of December 31, 2014 and 2013, the Company does not expect that its financial position or results of operations will be materially affected by any need to address overindebtedness at Horizon Pharma AG. To date, the overindebtedness of Horizon Pharma AG has not resulted in the need to divert material cash resources from the Company’s other operating subsidiaries. | |||||
Historically, the Company’s accounts receivable balances have been highly concentrated with a select number of customers, consisting primarily of large wholesale pharmaceutical distributors who, in turn, sell the products to pharmacies, hospitals and other customers. For the year ended December 31, 2014, the Company’s top five customers, American Specialty Pharmacy, Inc., AmerisourceBergen, Cardinal Health, Inc., McKesson Corporation and Rochester Drug Company accounted for approximately 86% of total consolidated gross sales. For the year ended December 31, 2013, the Company’s top five customers, AmerisourceBergen, Cardinal Health, Inc., McKesson Corporation, Mundipharma and Rochester Drug Company, accounted for approximately 89% of total consolidated gross sales. | |||||
In addition, five customers, American Specialty Pharmacy, Inc., AmerisourceBergen, Cardinal Health, Inc., McKesson Corporation and Rochester Drug accounted for approximately 80% of the Company’s total outstanding accounts receivable balances at December 31, 2014. As of December 31, 2013, AmerisourceBergen, Cardinal Health, Inc., Halsted Pharmacy, McKesson Corporation and Rochester Drug Company, accounted for approximately 85% of the Company’s total outstanding accounts receivable balances. | |||||
Comprehensive Income (Loss) | Comprehensive Income (Loss) | ||||
Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss) (“OCI”). OCI includes certain changes in shareholders’ equity that are excluded from net income (loss), which consist of foreign currency translation adjustments. In February 2013, the Company adopted on a prospective basis Financial Accounting Standards Board (“FASB”) Accounting Standards Update 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated OCI on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. As of December 31, 2014 and 2013, accumulated other comprehensive loss was $4.4 million and $2.4 million, respectively. | |||||
Stock-Based Compensation | Stock-Based Compensation | ||||
The Company accounts for stock-based compensation using the fair value method. The fair value of awards granted is estimated at the date of grant and recognized as expense on a straight-line basis over the requisite service period with the offsetting credit to additional paid-in capital. For awards with service and/or performance conditions, the total amount of compensation expense to be recognized is based on the number of awards expected to vest and is adjusted to reflect those awards that do ultimately vest. For awards with performance conditions, the Company recognizes the compensation expense if and when the Company concludes that it is probable that the performance condition will be achieved. The Company reassesses the probability of achieving the performance condition at each reporting date. | |||||
The Company also accounts for stock options issued to non-employees based on the stock options’ estimated fair value. The fair value of equity awards granted to non-employees are re-measured at each reporting date, and the resulting change in the fair value associated with such awards, if any, is recognized as a corresponding increase or reduction to stock-based compensation during the period. | |||||
Accrued Contingent Royalties | Accrued Contingent Royalties | ||||
The Company’s accrued contingent royalties consist of the contingent royalty obligations assumed by the Company related to the Company’s acquisitions of the U.S. rights to VIMOVO and related to ACTIMMUNE. At the time of each acquisition, the Company assigned an estimated fair value to its contingent liability for royalties. The estimated royalty liability was based on anticipated revenue streams utilizing the income approach under the discounted cash flow method. The estimated liability for royalties is increased over time to reflect the change in its present value and accretion expense is recorded as part of cost of goods sold. The Company evaluates the adequacy of the estimated contingent royalty liability at least annually, or whenever events or changes in circumstances indicate that an evaluation of the estimate is necessary. As part of any evaluation, the Company adjusts the carrying value of the liability to the present value of the revised estimated cash flows using the original discount rate. Any decrease or increase to the liability is recorded as an increase or reduction in cost of goods sold. The royalty liability is included in current and long-term accrued royalties on the consolidated balance sheets. | |||||
New Accounting Pronouncements | New Accounting Pronouncements | ||||
From time to time, the Company adopts, as of the specified effective date, new accounting pronouncements issued by the FASB or other standard setting bodies. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption. | |||||
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU No. 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). ASU No. 2014-15 provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations in the financial statement footnotes. ASU No. 2014-15 is effective for annual reporting periods ending after December 15, 2016 and to annual and interim periods thereafter. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of ASU No. 2014-15 to its consolidated financial statements and related disclosures. | |||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606): Revenue from Contracts with Customers, which supersedes all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The new standard will be effective for the Company on January 1, 2017 and early adoption is not permitted. The new standard permits the use of either the retrospective or cumulative effect transition method on adoption. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures, including which transition method it will adopt. | |||||
In November 2014, the FASB issued ASU No. 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity. ASU No. 2014-16 clarifies how current guidance should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. In addition, ASU No. 2014-16 clarifies that in evaluating the nature of a host contract, an entity should assess the substance of the relevant terms and features (that is, the relative strength of the debt-like or equity-like terms and features given the facts and circumstances) when considering how to weight those terms and features. The effects of initially adopting ASU No. 2014-16 should be applied on a modified retrospective basis to existing hybrid financial instruments issued in a form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods. ASU No. 2014-16 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the impact of adoption of ASU No. 2014-16 on our consolidated financial statements and related disclosures. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Accounting Policies [Abstract] | |||||
Depreciation and Amortization Periods for Property and Equipment | Depreciation and amortization periods for the Company’s property and equipment are as follows: | ||||
Machinery and equipment | 5-7 years | ||||
Furniture and fixtures | 3-5 years | ||||
Computer equipment | 3 years | ||||
Software | 3 years | ||||
Trade show equipment | 3 years | ||||
Estimated Useful Life of Identified Intangible Assets | The estimated useful lives for all identified intangible assets that are subject to amortization are as follows: | ||||
Intangible Asset | Estimated Useful Life | ||||
ACTIMMUNE developed technology | 13 years | ||||
LODOTRA and RAYOS developed technology | 12 years | ||||
PENNSAID 2% developed technology | 6 years | ||||
VIMOVO intellectual property | 5 years | ||||
Customer relationships | 10 years |
Earnings_Loss_Per_Share_Tables
Earnings (Loss) Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Basic and Diluted Loss per Share | The following table presents basic and diluted loss per share for the years ended December 31, 2014, 2013 and 2012 as follows (in thousands, except share and per share data): | ||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Basic and diluted earnings per share calculation: | |||||||||||||
Net loss | $ | (263,603 | ) | $ | (149,005 | ) | $ | (87,794 | ) | ||||
Weighted average of common shares outstanding | 83,751,129 | 63,657,924 | 38,871,422 | ||||||||||
Basic and diluted net loss per share | $ | (3.15 | ) | $ | (2.34 | ) | $ | (2.26 | ) | ||||
Schedule of Outstanding Securities Excluded from Computation of Diluted Loss per Share | The following outstanding securities in the table below were excluded from the computation of diluted loss per share for the years ended December 31, 2014, 2013 and 2012 due to being potentially anti-dilutive: | ||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Stock options | 7,027,683 | 4,411,080 | 2,746,918 | ||||||||||
Restricted stock units | 1,618,502 | 934,005 | 457,158 | ||||||||||
Warrants | 6,683,811 | 16,114,746 | 17,480,243 | ||||||||||
Convertible Senior Notes | 11,369,398 | 13,164,951 | — |
Business_Acquisitions_Tables
Business Acquisitions (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Fair Values Assigned to Assets Acquired and Liabilities Assumed | The following table shows the fair values assigned to the assets acquired and liabilities assumed by the Company as part of the asset purchase agreement (in thousands): | ||||||||||||||||||||||||
Allocation | |||||||||||||||||||||||||
Samples inventory | $ | 287 | |||||||||||||||||||||||
VIMOVO intellectual property | 67,705 | ||||||||||||||||||||||||
Royalty liabilities | (32,992 | ) | |||||||||||||||||||||||
Total cash consideration paid | $ | 35,000 | |||||||||||||||||||||||
Consolidated Pro Forma Financial Information | Additionally, the following table sets forth unaudited financial information and has been compiled from historical financial statements and other information, but is not necessarily indicative of the results that actually would have been achieved had the transactions occurred on the dates indicated or that may be achieved in the future (in thousands, except per share data): | ||||||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
As reported | Pro-forma | Pro-forma | As reported | Pro-forma | Pro-forma | ||||||||||||||||||||
adjustments | (Unaudited) | adjustments | (Unaudited) | ||||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||||
Net sales | $ | 296,955 | $ | 50,565 | $ | 347,520 | $ | 74,016 | $ | 79,230 | $ | 153,246 | |||||||||||||
Net loss | (263,603 | ) | (5,104 | ) | (268,707 | ) | (149,005 | ) | (23,647 | ) | (172,652 | ) | |||||||||||||
Loss per ordinary share: Basic and diluted | $ | (3.15 | ) | $ | (0.06 | ) | $ | (3.21 | ) | $ | (2.34 | ) | $ | (0.37 | ) | $ | (2.71 | ) | |||||||
Vidara Therapeutics Holdings LLC [Member] | |||||||||||||||||||||||||
Fair Values Assigned to Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair values assigned to the assets acquired and the liabilities assumed by the Company pursuant to the Merger, along with the resulting bargain purchase gain (in thousands): | ||||||||||||||||||||||||
Allocation | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 34,401 | |||||||||||||||||||||||
Accounts receivable, net | 11,838 | ||||||||||||||||||||||||
Inventories | 15,422 | ||||||||||||||||||||||||
Other receivable—net working capital adjustment | 195 | ||||||||||||||||||||||||
Prepaid expenses | 138 | ||||||||||||||||||||||||
Property and equipment | 289 | ||||||||||||||||||||||||
Deferred tax assets | 2,907 | ||||||||||||||||||||||||
Customer relationships | 8,100 | ||||||||||||||||||||||||
In-process research and development | 66,000 | ||||||||||||||||||||||||
Developed technology | 560,000 | ||||||||||||||||||||||||
Accounts payable | (1,781 | ) | |||||||||||||||||||||||
Accrued expenses and other current liabilities | (32,372 | ) | |||||||||||||||||||||||
Contingent royalties | (33,600 | ) | |||||||||||||||||||||||
Other liabilities | (775 | ) | |||||||||||||||||||||||
Deferred tax liabilities | (7,170 | ) | |||||||||||||||||||||||
Bargain purchase gain | (22,171 | ) | |||||||||||||||||||||||
Fair value of consideration paid | $ | 601,421 | |||||||||||||||||||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Components of Inventories | The components of inventories as of December 31, 2014 and 2013 consisted of the following (in thousands): | ||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 1,184 | $ | 91 | |||||
Work-in-process | 389 | 522 | |||||||
Finished goods | 15,292 | 8,088 | |||||||
Inventories, net | $ | 16,865 | $ | 8,701 | |||||
Prepaid_Expenses_and_Other_Cur1
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets as of December 31, 2014 and 2013 consisted of the following (in thousands): | ||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Prepaid co-pay expenses | $ | 6,718 | $ | 621 | |||||
Product samples inventory | 4,014 | 1,323 | |||||||
Prepaid software license fees | 1,128 | 855 | |||||||
Prepaid FDA product and manufacturing fees | 1,055 | 312 | |||||||
Prepaid insurance | 345 | 379 | |||||||
Prepaid marketing expenses | 59 | 381 | |||||||
Prepaid clinical trial studies | 56 | 688 | |||||||
Other prepaid expenses | 995 | 329 | |||||||
Prepaid expenses and other current assets | $ | 14,370 | $ | 4,888 | |||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment | Property and equipment as of December 31, 2014 and 2013 consisted of the following (in thousands): | ||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Machinery and equipment | $ | 3,288 | $ | 2,367 | |||||
Furniture and fixtures | 576 | 113 | |||||||
Computer equipment | 2,040 | 2,160 | |||||||
Software | 1,481 | 775 | |||||||
Trade show equipment | 392 | 228 | |||||||
Leasehold improvements | 3,412 | 783 | |||||||
11,189 | 6,426 | ||||||||
Less-accumulated depreciation | (3,948 | ) | (2,646 | ) | |||||
Property and equipment, net | $ | 7,241 | $ | 3,780 | |||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Amortizable Intangible Assets | As of December 31, 2014 and 2013, amortizable intangible assets consisted of the following (in thousands): | ||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||||
Cost | Accumulated | Currency | Net Book | Cost | Accumulated | Currency | Net Book | ||||||||||||||||||||||||||
Basis | Amortization | Translation | Value | Basis | Amortization | Translation | Value | ||||||||||||||||||||||||||
Developed technology | $ | 757,484 | $ | (51,331 | ) | $ | (9,190 | ) | $ | 696,963 | $ | 152,484 | $ | (19,254 | ) | $ | (2,136 | ) | $ | 131,094 | |||||||||||||
Customer relationships | 8,100 | (230 | ) | — | 7,870 | — | — | — | — | ||||||||||||||||||||||||
Total amortizable intangible assets | $ | 765,584 | $ | (51,561 | ) | $ | (9,190 | ) | $ | 704,833 | $ | 152,484 | $ | (19,254 | ) | $ | (2,136 | ) | $ | 131,094 | |||||||||||||
Estimated Future Amortization Expense | As of December 31, 2014, estimated future amortization expense was as follows (in thousands): | ||||||||||||||||||||||||||||||||
2015 | $ | 71,298 | |||||||||||||||||||||||||||||||
2016 | 71,298 | ||||||||||||||||||||||||||||||||
2017 | 71,298 | ||||||||||||||||||||||||||||||||
2018 | 71,298 | ||||||||||||||||||||||||||||||||
2019 and thereafter | 419,641 | ||||||||||||||||||||||||||||||||
Total | $ | 704,833 | |||||||||||||||||||||||||||||||
Other_Assets_Tables
Other Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||
Schedule of Other Assets | Other assets as of December 31, 2014 and 2013, consisted of the following (in thousands): | ||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Deferred financing costs | $ | 11,491 | $ | 6,268 | |||||
Other | 73 | 689 | |||||||
Other assets | $ | 11,564 | $ | 6,957 | |||||
Accrued_Trade_Discounts_and_Re1
Accrued Trade Discounts and Rebates (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Equity [Abstract] | |||||||||
Schedule of Accrued Trade Discounts and Rebates | Accrued trade discounts and rebates as of December 31, 2014 and 2013, consisted of the following (in thousands): | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Contractual allowances | $ | 55,678 | $ | 6,716 | |||||
Government rebates and chargebacks | 20,437 | 1,407 | |||||||
Accrued trade discounts and rebates | $ | 76,115 | $ | 8,123 | |||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Schedule of Accrued Expenses | Accrued expenses as of December 31, 2014 and 2013, consisted of the following (in thousands): | ||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Payroll related expenses | $ | 20,933 | $ | 9,491 | |||||
Accrued excise tax | 11,243 | — | |||||||
Professional services | 3,825 | 350 | |||||||
Sales and marketing expenses | 2,343 | 1,761 | |||||||
Accrued income taxes | 1,400 | — | |||||||
Accrued interest | 1,260 | 810 | |||||||
Deferred rent | 1,026 | 755 | |||||||
Contract manufacturing expenses | 758 | 301 | |||||||
Clinical and regulatory expenses | 632 | 488 | |||||||
Consulting services | 596 | 283 | |||||||
Accrued other | 2,609 | 1,687 | |||||||
Accrued expenses | $ | 46,625 | $ | 15,926 | |||||
Accrued_Royalties_Tables
Accrued Royalties (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Text Block [Abstract] | |||||
Schedule of Changes in Liability for Royalties | Changes in the liability for royalties during the year ended December 31, 2014 consisted of the following (in thousands): | ||||
Balance as of December 31, 2013 | $ | 32,992 | |||
Assumed ACTIMMUNE accrued royalty | 3,429 | ||||
Assumed ACTIMMUNE contingent royalty liabilities | 33,600 | ||||
Remeasurement of royalty liabilities | 10,660 | ||||
Royalty payments | (15,489 | ) | |||
Accretion expense | 9,020 | ||||
Balance as of December 31, 2014 | 74,212 | ||||
Less: Current portion | 25,325 | ||||
Accrued royalties, net of current | $ | 48,887 | |||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Assets and Liabilities at Fair Value on Recurring Basis | The following table sets forth the Company’s financial assets and liabilities at fair value on a recurring basis as of December 31, 2014 and 2013 (in thousands): | ||||||||||||||||
2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets: | |||||||||||||||||
Money market funds | $ | 111,581 | $ | — | $ | — | $ | 111,581 | |||||||||
Total assets at fair value | $ | 111,581 | $ | — | $ | — | $ | 111,581 | |||||||||
2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets: | |||||||||||||||||
Money market funds | $ | 66,817 | $ | — | $ | — | $ | 66,817 | |||||||||
Total assets at fair value | $ | 66,817 | $ | — | $ | — | $ | 66,817 | |||||||||
Liabilities: | |||||||||||||||||
Derivative liability | $ | — | $ | — | $ | 109,410 | $ | 109,410 | |||||||||
Total liabilities at fair value | $ | — | $ | — | $ | 109,410 | $ | 109,410 | |||||||||
Assumptions Used to Determine Fair Value of Conversion Option Embedded in Convertible Senior Notes | The following table presents the assumptions used by the Company to determine the fair value of the conversion option embedded in the Convertible Senior Notes as of June 27, 2014, the date the Company’s shareholders approved the issuance of shares of HPI’s common stock in excess of 13,164,951 shares upon conversion of the Convertible Senior Notes, and December 31, 2013: | ||||||||||||||||
June 27, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Stock price | $ | 15.96 | $ | 7.62 | |||||||||||||
Risk free rate | 1.43 | % | 1.69 | % | |||||||||||||
Borrowing cost | 3.80% | 5.0% and 3.5% | |||||||||||||||
Weights | Equal weight | Equal weight | |||||||||||||||
Credit spread (in basis points) | 900 | 930 and 1,170 | |||||||||||||||
Volatilty | 40 | % | 40 | % | |||||||||||||
Initial conversion price | $ | 5.36 | $ | 5.36 | |||||||||||||
Remaining time to maturity (in years) | 4.4 | 4.9 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||
Schedule of Minimum Future Cash Payments Due under Lease Obligations | As of December 31, 2014, minimum future cash payments due under lease obligations were as follows (in thousands): | ||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 & | Total | |||||||||||||||||||||||
Thereafter | |||||||||||||||||||||||||||||
Operating Lease obligations | $ | 1,581 | $ | 1,624 | $ | 1,538 | $ | 1,104 | $ | 558 | $ | 5,484 | $ | 11,889 |
Debt_Agreements_Tables
Debt Agreements (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Outstanding Debt Balances | The Company’s outstanding debt balances as of December 31, 2014 and 2013, consisted of the following (in thousands): | ||||||||
As of December 31, | |||||||||
2014 | 2013 | ||||||||
Senior Secured Credit Facility | $ | 300,000 | $ | — | |||||
Convertible Senior Notes | 60,985 | 150,000 | |||||||
Debt discount | (15,482 | ) | (39,238 | ) | |||||
Total long-term debt | 345,503 | 110,762 | |||||||
Less: current maturities | 48,334 | — | |||||||
Long-term debt, net of current maturities | $ | 297,169 | $ | 110,762 | |||||
Equity_Incentive_Plans_Tables
Equity Incentive Plans (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||
Summary of Stock Option Activity | The following table summarizes stock option activity during the year ended December 31, 2014: | ||||||||||||||||||||
Options | Weighted | Weighted Average | Aggregate | ||||||||||||||||||
Average | Remaining | Intrinsic Value | |||||||||||||||||||
Exercise Price | Contractual Term | (in thousands) | |||||||||||||||||||
Outstanding as of December 31, 2013 | 4,411,080 | $ | 6.47 | ||||||||||||||||||
Granted | 3,902,836 | $ | 10.71 | ||||||||||||||||||
Exercised | (497,082 | ) | $ | 5.27 | |||||||||||||||||
Forfeited | (789,151 | ) | $ | 6.16 | |||||||||||||||||
Outstanding as of December 31, 2014 | 7,027,683 | $ | 8.95 | 8.1 years | $ | 32,757 | |||||||||||||||
Exercisable as of December 31, 2014 | 2,938,278 | $ | 8.71 | 6.6 years | $ | 16,333 | |||||||||||||||
Summary of Outstanding Stock Options | The following table summarizes the Company’s outstanding stock options at December 31, 2014: | ||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Exercise Price Ranges | Number of options | Weighted | Weighted | Number | Weighted | ||||||||||||||||
outstanding | Average | Average | Exercisable | Average | |||||||||||||||||
Exercise Price | Remaining | Exercise | |||||||||||||||||||
Contractual | Price | ||||||||||||||||||||
Term | |||||||||||||||||||||
$1.36 - $3.97 | 1,574,765 | $ | 2.63 | 8.0 years | 780,904 | $ | 2.62 | ||||||||||||||
$4.10 - $5.20 | 849,484 | $ | 4.99 | 6.4 years | 705,644 | $ | 5.01 | ||||||||||||||
$5.21 - $7.47 | 125,287 | $ | 6.85 | 8.8 years | 32,636 | $ | 6.85 | ||||||||||||||
$7.48 - $12.94 | 3,312,541 | $ | 10.11 | 8.8 years | 966,538 | $ | 10.25 | ||||||||||||||
$12.99 - $17.22 | 915,242 | $ | 14.4 | 8.8 years | 202,192 | $ | 14.1 | ||||||||||||||
$20.78 - $28.83 | 250,364 | $ | 28.05 | 3.7 years | 250,364 | $ | 28.05 | ||||||||||||||
7,027,683 | $ | 8.95 | 8.1 years | 2,938,278 | $ | 8.71 | |||||||||||||||
Weighted Average Fair Value per Share of Stock Option Awards Granted and Assumptions Used to Value Stock Options | The weighted average fair value per share of stock option awards granted during the years ended December 31, 2014, 2013 and 2012, and assumptions used to value stock options, are as follows: | ||||||||||||||||||||
For the Years Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Dividend yield | — | — | — | ||||||||||||||||||
Risk-free interest rate | 1.9 | % | 1.2 | % | 1 | % | |||||||||||||||
Weighted average volatility | 83.1 | % | 86.7 | % | 89 | % | |||||||||||||||
Expected life (in years) | 6.11 | 5.98 | 5.96 | ||||||||||||||||||
Weighted average grant date fair value per share of options granted | $ | 8.88 | $ | 2.82 | $ | 2.5 | |||||||||||||||
Summary of Restricted Stock Unit Activity | The following table summarizes restricted stock unit activity for the year ended December 31, 2014: | ||||||||||||||||||||
Number of | Weighted Average | ||||||||||||||||||||
Units | Grant-Date Fair | ||||||||||||||||||||
Value Per Units | |||||||||||||||||||||
Outstanding as of December 31, 2013 | 833,001 | $ | 2.86 | ||||||||||||||||||
Granted | 1,312,722 | $ | 10.55 | ||||||||||||||||||
Vested | (338,520 | ) | $ | 3.89 | |||||||||||||||||
Forfeited | (188,701 | ) | $ | 4.73 | |||||||||||||||||
Outstanding as of December 31, 2014 | 1,618,502 | $ | 8.66 | ||||||||||||||||||
Summary of Share-Based Compensation Expense | The following table summarizes share-based compensation expense included in the Company’s consolidated statements of operations for the years ended December 31, 2014, 2013 and 2012 (in thousands): | ||||||||||||||||||||
For the Years Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Share-based compensation expense: | |||||||||||||||||||||
Research and development | $ | 1,515 | $ | 1,054 | $ | 1,186 | |||||||||||||||
Sales and marketing | 4,174 | 1,465 | 1,090 | ||||||||||||||||||
General and administrative. | 7,509 | 2,495 | 2,385 | ||||||||||||||||||
Total share-based compensation expense | $ | 13,198 | $ | 5,014 | $ | 4,661 | |||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Company's of Loss Before Benefit for Income Taxes | The Company’s loss before benefit for income taxes by jurisdiction for the years ended December 31, 2014, 2013 and 2012 is as follows (in thousands): | ||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Ireland | $ | 22,164 | $ | — | $ | — | |||||||
United States | (275,080 | ) | (139,347 | ) | 56,038 | ||||||||
Other Foreign | (16,771 | ) | (10,779 | ) | (149,003 | ) | |||||||
Loss before benefit for income taxes | $ | (269,687 | ) | $ | (150,126 | ) | $ | (92,965 | ) | ||||
Components of Benefit for Income Taxes | The components of the benefit for income taxes were as follows for the years ended December 31, 2014, 2013 and 2012 (in thousands): | ||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current provision | |||||||||||||
Ireland | $ | — | $ | — | $ | — | |||||||
US - Federal and State | 815 | 4 | 4 | ||||||||||
Other Foreign | 55 | 43 | 35 | ||||||||||
Total current provision | 870 | 47 | 39 | ||||||||||
Deferred benefit | |||||||||||||
Ireland | $ | — | $ | — | $ | — | |||||||
US - Federal and State | (3,860 | ) | — | — | |||||||||
Other Foreign | (3,094 | ) | (1,168 | ) | (5,210 | ) | |||||||
Total deferred benefit | (6,954 | ) | (1,168 | ) | (5,210 | ) | |||||||
Total benefit for income taxes | $ | (6,084 | ) | $ | (1,121 | ) | $ | (5,171 | ) | ||||
Reconciliation Between Irish Rate and U.S Federal Statutory Income Tax Rate | A reconciliation between the Irish rate for 2014 and the U.S. federal statutory income tax rate for 2013 and 2012, respectively, and the Company’s effective tax is as follows (in thousands): | ||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Irish income tax statutory rate (12.5%) | $ | (33,711 | ) | $ | — | $ | — | ||||||
US federal income tax at statutory rate (35%) | — | (52,543 | ) | (32,538 | ) | ||||||||
Bargain purchase gain | (5,542 | ) | — | — | |||||||||
Transaction costs | 5,402 | — | — | ||||||||||
Excise tax | 3,911 | — | — | ||||||||||
Stock based compensation | 1,460 | 1,107 | 1,063 | ||||||||||
Foreign tax rate differential | (64,675 | ) | 2,019 | 4,376 | |||||||||
Deferred taxes not benefited | 7,360 | 23,921 | 21,715 | ||||||||||
Derivative liability | 75,248 | 24,255 | — | ||||||||||
Notional interest deduction | (2,149 | ) | — | — | |||||||||
Interest expense on convertible debt inducements | (4,789 | ) | — | — | |||||||||
Book loss on debt extinguishment | 10,286 | — | — | ||||||||||
Other | 1,115 | 120 | 213 | ||||||||||
Income tax benefit | $ | (6,084 | ) | $ | (1,121 | ) | $ | (5,171 | ) | ||||
Effective income tax rate | -2.26 | % | -10.39 | % | 34.7 | % | |||||||
Deferred Tax Assets and Liabilities | The tax effects of the temporary differences and net operating losses that give rise to significant portions of deferred tax assets and liabilities are as follows (in thousands): | ||||||||||||
As of December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Net operating and capital loss carry forwards | $ | 105,182 | $ | 121,001 | |||||||||
Alternative minimum tax credit | 820 | — | |||||||||||
Derivative liability | — | 14,799 | |||||||||||
Accrued compensation | 6,397 | — | |||||||||||
Accruals and reserves | 4,952 | 7,073 | |||||||||||
Original issuance discount related to capped call | — | 6,740 | |||||||||||
Contingent royalties | 14,495 | 3,122 | |||||||||||
Research and development credits | — | 2,571 | |||||||||||
Foreign intangible assets | — | 63 | |||||||||||
Total deferred tax assets | 131,846 | 155,369 | |||||||||||
Valuation allowance | (111,555 | ) | (128,422 | ) | |||||||||
Deferred tax assets, net of valuation allowance | 20,291 | 26,947 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Acquisition liabilities | $ | 3,068 | $ | — | |||||||||
Debt discount | 4,791 | 14,477 | |||||||||||
Interest expense on convertible debt inducements | 3,306 | — | |||||||||||
In-process research and development | — | — | |||||||||||
Developed technology | — | 13,009 | |||||||||||
Intangible assets | 7,137 | 2,823 | |||||||||||
Other | 1,989 | ||||||||||||
Total deferred tax liabilities | 20,291 | 30,309 | |||||||||||
Net deferred income tax liability | $ | — | $ | 3,362 | |||||||||
Reconciliation of Beginning and Ending Amounts of Valuation Allowance | A reconciliation of the beginning and ending amounts of the valuation allowance for the years ended December 31, 2014 and 2013 are as follows (in thousands): | ||||||||||||
Valuation allowance at December 31, 2012 | $ | (95,970 | ) | ||||||||||
Increase for current year activity | (32,452 | ) | |||||||||||
Valuation allowance at December 31, 2013 | $ | (128,422 | ) | ||||||||||
Decrease for current year activity | $ | 9,507 | |||||||||||
Release in valuation allowance | 7,360 | ||||||||||||
Valuation allowance at December 31, 2014 | $ | (111,555 | ) | ||||||||||
Changes in Uncertain Income Tax Positions | The changes in the Company’s uncertain income tax positions for the years ended December 31, 2014, 2013 and 2012 consisted of the following (in thousands): | ||||||||||||
For the Years | |||||||||||||
Ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Beginning balance | $ | 491 | $ | 442 | |||||||||
Tax positions related to current year: | |||||||||||||
Additions | 775 | 51 | |||||||||||
Reductions | — | — | |||||||||||
775 | 51 | ||||||||||||
Tax positions related to prior years: | |||||||||||||
Additions | — | — | |||||||||||
Reductions | (491 | ) | (2 | ) | |||||||||
Settlements | — | — | |||||||||||
Lapses in statutes of limitations | — | — | |||||||||||
Additions from current year acquisitions | — | — | |||||||||||
(491 | ) | (2 | ) | ||||||||||
Ending balance | $ | 775 | $ | 491 | |||||||||
Selected_Quarterly_Financial_I1
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Summary of Selected Financial Results of Operations | The following table provides a summary of selected financial results of operations by quarter for the years ended December 31, 2014 and 2013 (in thousands, except per share data): | ||||||||||||||||
2014 | First | Second | Third | Fourth | |||||||||||||
Net sales | $ | 51,926 | $ | 66,062 | $ | 75,126 | $ | 103,841 | |||||||||
Gross profit | 44,307 | 41,252 | 61,482 | 71,161 | |||||||||||||
Gain (loss) from operations | 1,587 | (7,100 | ) | (11,961 | ) | 8,983 | |||||||||||
Net (loss) income | (206,250 | ) | (27,769 | ) | 2,063 | (31,647 | ) | ||||||||||
Net (loss) income per ordinary share-basic and diluted | $ | (3.07 | ) | $ | (0.38 | ) | $ | 0.03 | $ | (0.27 | ) | ||||||
2013 | First | Second | Third | Fourth | |||||||||||||
Net sales | $ | 8,693 | $ | 11,131 | $ | 24,112 | $ | 30,080 | |||||||||
Gross profit | 4,924 | 8,737 | 20,905 | 24,825 | |||||||||||||
Loss from operations | (18,544 | ) | (15,804 | ) | (2,744 | ) | (5,762 | ) | |||||||||
Net loss | (22,171 | ) | (18,441 | ) | (5,492 | ) | (102,901 | ) | |||||||||
Net loss per ordinary share-basic and diluted | $ | (0.36 | ) | $ | (0.29 | ) | $ | (0.08 | ) | $ | (1.56 | ) |
Basis_of_Presentation_Addition
Basis of Presentation - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Oct. 17, 2014 | Mar. 18, 2014 | Jun. 17, 2014 | |
Employee | ||||
Basis Of Presentation [Line Items] | ||||
Number of sales representatives | 375 | |||
Non-controlling interest, ownership percentage in parent | 74.00% | 74.00% | ||
Merger agreement date | 18-Mar-14 | |||
Cash payment to acquire business | $35,000,000 | |||
Primary Care [Member] | ||||
Basis Of Presentation [Line Items] | ||||
Number of sales representatives | 325 | |||
Specialty and Orphan Diseases Business Areas [Member] | ||||
Basis Of Presentation [Line Items] | ||||
Number of sales representatives | 50 | |||
PENNSAID 2% [Member] | ||||
Basis Of Presentation [Line Items] | ||||
Merger agreement date | 17-Oct-14 | |||
Cash payment to acquire business | 45,000,000 | |||
Number of additional representatives | 75 | |||
Business acquisition description | On October 17, 2014, the Company acquired the U.S. rights to PENNSAID 2% from Nuvo for $45.0 million in cash. PENNSAID 2% is approved in the United States for the treatment of the pain of OA of the knee(s). As part of the acquisition, the Company entered into an eight-year exclusive supply agreement with Nuvo to manufacture and supply PENNSAID 2% to the Company. | |||
Nuvo Research Inc. [Member] | ||||
Basis Of Presentation [Line Items] | ||||
Acquisition agreement period | 8 years | |||
Vidara Therapeutics Holdings LLC [Member] | ||||
Basis Of Presentation [Line Items] | ||||
Non-controlling interest, ownership percentage in parent | 26.00% | 26.00% | ||
Cash paid to parent company by consolidated subsidiaries | 210,900,000 | |||
Citibank N.A [Member] | ||||
Basis Of Presentation [Line Items] | ||||
Cash payment under escrow agreement | 2,700,000 | |||
Senior Secured Credit Facility [Member] | ||||
Basis Of Presentation [Line Items] | ||||
Proceeds from credit facility | 300,000,000 | |||
Cash payment to transaction related expenses, and for general corporate purposes | $213,600,000 | |||
Senior secured credit facility term | 5 years |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2011 | Jun. 27, 2014 | Nov. 22, 2013 | |
Segment | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Number of operating segment | 1 | ||||||
Foreign exchange (loss) gain | ($3,905,000) | $1,206,000 | $489,000 | ||||
Cash discount to incentive for prompt payment | 2.00% | ||||||
Bad debt expense | 0 | 0 | 0 | ||||
Reserve for bad debt expense | 0 | 0 | 0 | ||||
Inventories, net | 16,865,000 | 8,701,000 | |||||
Product sample inventory | 4,014,000 | 1,323,000 | |||||
Cash and cash equivalents | 218,807,000 | 80,480,000 | 104,087,000 | 17,966,000 | |||
Restricted cash | 700,000 | 700,000 | |||||
Accumulated other comprehensive loss | -4,363,000 | -2,403,000 | |||||
Other Current Assets [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Product sample inventory | 4,000,000 | 1,300,000 | |||||
Up Front Fee and Milestone Payment Arrangement [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Deferred revenue | 7,100,000 | 8,700,000 | |||||
Lodotra [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Deferred revenue | 700,000 | 600,000 | |||||
Convertible Senior Notes [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Interest rate | 5.00% | 5.00% | 5.00% | 11.22% | |||
Maturity date of debt instrument | 15-Nov-18 | ||||||
Wholesaler Fees [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Out of period correction | 1,600,000 | ||||||
Customer Concentration Risk [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Cash and cash equivalents | $3,000,000 | $3,500,000 | |||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Consolidated receivable/sales percentage to major customers | 80.00% | 85.00% | |||||
Number of major customers for accounts receivable | 5 | 5 | |||||
Customer Concentration Risk [Member] | Sales Revenue [Member] | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Number of major customers for sales revenues | 5 | 5 | |||||
Consolidated receivable/sales percentage to major customers | 86.00% | 89.00% |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Depreciation and Amortization Periods for Property and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Machinery and Equipment [Member] | Minimum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Depreciation and amortization | 5 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Depreciation and amortization | 7 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Depreciation and amortization | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Depreciation and amortization | 5 years |
Computer Equipment [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Depreciation and amortization | 3 years |
Software [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Depreciation and amortization | 3 years |
Trade Show Equipment [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Depreciation and amortization | 3 years |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Estimated Useful Life of Identified Intangible Assets (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
ACTIMMUNE developed technology [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life of intangible assets | 13 years |
LODOTRA and RAYOS developed technology [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life of intangible assets | 12 years |
PENNSAID 2% developed technology [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life of intangible assets | 6 years |
VIMOVO intellectual property [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life of intangible assets | 5 years |
Customer relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life of intangible assets | 10 years |
Earnings_Loss_per_Share_Basic_
Earnings (Loss) per Share - Basic and Diluted Loss per Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Basic and diluted earnings per share calculation: | |||||||||||
Net loss | ($31,647) | $2,063 | ($27,769) | ($206,250) | ($102,901) | ($5,492) | ($18,441) | ($22,171) | ($263,603) | ($149,005) | ($87,794) |
Weighted average of common shares outstanding | 83,751,129 | 63,657,924 | 38,871,422 | ||||||||
Basic and diluted net loss per share | ($0.27) | $0.03 | ($0.38) | ($3.07) | ($1.56) | ($0.08) | ($0.29) | ($0.36) | ($3.15) | ($2.34) | ($2.26) |
Earnings_Loss_per_Share_Schedu
Earnings (Loss) per Share - Schedule of Outstanding Securities Excluded from Computation of Diluted Loss per Share (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Convertible Senior Notes [Member] | |||
Dilutive Securities Included And Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Reconciliation of basic and diluted earnings per share | 11,369,398 | 13,164,951 | |
Warrants [Member] | |||
Dilutive Securities Included And Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Reconciliation of basic and diluted earnings per share | 6,683,811 | 16,114,746 | 17,480,243 |
Stock Options [Member] | |||
Dilutive Securities Included And Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Reconciliation of basic and diluted earnings per share | 7,027,683 | 4,411,080 | 2,746,918 |
Restricted Stock Units [Member] | |||
Dilutive Securities Included And Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Reconciliation of basic and diluted earnings per share | 1,618,502 | 934,005 | 457,158 |
Business_Acquisitions_Addition
Business Acquisitions - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 6 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Mar. 18, 2014 | Oct. 17, 2014 | Nov. 30, 2013 | |
Business Acquisition [Line Items] | |||||||||||||||
Cash consideration | $35,000,000 | ||||||||||||||
Cost of goods sold recognized | 78,753,000 | 14,625,000 | 11,875,000 | ||||||||||||
Merger agreement date | 18-Mar-14 | ||||||||||||||
Number of ordinary shares to be issued from conversion of common stock | 1 | ||||||||||||||
Non-controlling interest, ownership by parent in share | 31,350,000 | 31,350,000 | 31,350,000 | ||||||||||||
Non-controlling interest, ownership percentage in parent | 74.00% | 74.00% | 74.00% | ||||||||||||
Inventory | 287,000 | 287,000 | |||||||||||||
Initial fair value of liability | 3,000,000 | ||||||||||||||
Income tax rate reconciliation, tax settlement, domestic percent | 39.00% | ||||||||||||||
Bargain purchase gain | 22,171,000 | ||||||||||||||
Net sales | 103,841,000 | 75,126,000 | 66,062,000 | 51,926,000 | 30,080,000 | 24,112,000 | 11,131,000 | 8,693,000 | 296,955,000 | 74,016,000 | 18,844,000 | ||||
One-time upfront cash payment | 35,000,000 | ||||||||||||||
Amount payable based upon proportional sales | 260,000,000 | ||||||||||||||
Amortization of intangible asset period | 61 months 15 days | ||||||||||||||
Fair value of royalty payments | 324,400,000 | 324,400,000 | |||||||||||||
2014 [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Minimum annual royalty obligations | 5,000,000 | 5,000,000 | |||||||||||||
Each Year [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Minimum annual royalty obligations | 7,500,000 | 7,500,000 | |||||||||||||
Pozen Inc.[Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Percentage of royalty on net sales | 10.00% | ||||||||||||||
Royalty [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Cost of goods sold | 9,400,000 | 13,000,000 | |||||||||||||
Fair value of royalty payments | 33,000,000 | 33,000,000 | |||||||||||||
Credit to cost of goods sold | 3,600,000 | ||||||||||||||
Guaranteed [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Fair value of royalty payments | 24,500,000 | 24,500,000 | |||||||||||||
Contingent Royalties [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Fair value of royalty payments | 8,500,000 | 8,500,000 | |||||||||||||
ACTIMMUNE Developed Technology [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Finite-lived intangible assets estimated useful life | 13 years | ||||||||||||||
Net sales | 25,300,000 | ||||||||||||||
ACTIMMUNE Developed Technology [Member] | Royalty [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Cost of goods sold | 1,300,000 | ||||||||||||||
Customer relationships [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Finite-lived intangible assets estimated useful life | 10 years | ||||||||||||||
Developed Technology [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Present value at discount rate | 15.00% | ||||||||||||||
In-Process Research and Development [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Present value at discount rate | 33.00% | ||||||||||||||
Citibank N.A [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Cash payment under escrow agreement | 2,700,000 | ||||||||||||||
PENNSAID 2% [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Acquisition date | 17-Oct-14 | ||||||||||||||
Cash consideration | 45,000,000 | ||||||||||||||
Sales Recognized | 0 | ||||||||||||||
Cost of goods sold recognized | 0 | ||||||||||||||
Business acquisition description | On October 17, 2014, the Company acquired the U.S. rights to PENNSAID 2% from Nuvo for $45.0 million in cash. PENNSAID 2% is approved in the United States for the treatment of the pain of OA of the knee(s). As part of the acquisition, the Company entered into an eight-year exclusive supply agreement with Nuvo to manufacture and supply PENNSAID 2% to the Company. | ||||||||||||||
Merger agreement date | 17-Oct-14 | ||||||||||||||
PENNSAID 2% [Member] | Developed Technology Intangible Asset [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Purchase price | 45,000,000 | ||||||||||||||
Finite-lived intangible assets estimated useful life | 6 years | ||||||||||||||
Nuvo Research Inc. [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Acquisition agreement period | 8 years | ||||||||||||||
Vidara Therapeutics Holdings LLC [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Cash consideration | 213,600,000 | ||||||||||||||
Purchase price | 601,421,000 | ||||||||||||||
Non-controlling interest, ownership percentage in parent | 26.00% | ||||||||||||||
Cash paid to parent company by consolidated subsidiaries | 210,900,000 | ||||||||||||||
Business combination, consideration transferred, equity interests issued and issuable | 387,800,000 | ||||||||||||||
Non-controlling interest, ownership by parent in share | 31,350,000 | ||||||||||||||
Business acquisition share price | $12.37 | $12.37 | |||||||||||||
Inventory | 15,422,000 | 15,422,000 | |||||||||||||
Initial fair value of liability | 33,600,000 | 33,600,000 | |||||||||||||
Bargain purchase gain | 22,171,000 | ||||||||||||||
Vidara Therapeutics Holdings LLC [Member] | ACTIMMUNE Developed Technology [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Inventory | 3,200,000 | 3,200,000 | |||||||||||||
Vidara Therapeutics Holdings LLC [Member] | Fair Value Adjustment to Inventory [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Inventory | 14,200,000 | 14,200,000 | |||||||||||||
AstraZeneca [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Merger agreement date | 18-Nov-13 | ||||||||||||||
Minimum [Member] | Pozen License Agreement [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Annual aggregate global sales under license agreement | 550,000,000 | ||||||||||||||
Maximum [Member] | Pozen License Agreement [Member] | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Annual aggregate global sales under license agreement | $1,250,000,000 |
Business_Acquisitions_Fair_Val
Business Acquisitions - Fair Values Assigned to Assets Acquired and Liabilities Assumed (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Loans At Acquisition Date [Line Items] | |
Inventories | $287 |
VIMOVO intellectual property | 67,705 |
Royalty liabilities | -32,992 |
Total cash consideration paid | 35,000 |
Bargain purchase gain | -22,171 |
Vidara Therapeutics Holdings LLC [Member] | |
Loans At Acquisition Date [Line Items] | |
Cash and cash equivalents | 34,401 |
Accounts receivable, net | 11,838 |
Inventories | 15,422 |
Other receivable-net working capital adjustment | 195 |
Prepaid expenses | 138 |
Property and equipment | 289 |
Deferred tax assets | 2,907 |
Accounts payable | -1,781 |
Accrued expenses and other current liabilities | -32,372 |
Royalty liabilities | -33,600 |
Other liabilities | -775 |
Total cash consideration paid | 213,600 |
Deferred tax liabilities | -7,170 |
Bargain purchase gain | -22,171 |
Consideration paid | 601,421 |
Vidara Therapeutics Holdings LLC [Member] | Customer relationships [Member] | |
Loans At Acquisition Date [Line Items] | |
Intangible assets | 8,100 |
Vidara Therapeutics Holdings LLC [Member] | In-Process Research and Development [Member] | |
Loans At Acquisition Date [Line Items] | |
Intangible assets | 66,000 |
Vidara Therapeutics Holdings LLC [Member] | Developed Technology [Member] | |
Loans At Acquisition Date [Line Items] | |
Intangible assets | $560,000 |
Business_Acquisitions_Consolid
Business Acquisitions - Consolidated Pro Forma Financial Information (Detail) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
As Reported [Member] | ||
Business Acquisition [Line Items] | ||
Net sales | $296,955 | $74,016 |
Net loss | -263,603 | -149,005 |
Loss per ordinary share: Basic and diluted | ($3.15) | ($2.34) |
Pro-forma Adjustments [Member] | ||
Business Acquisition [Line Items] | ||
Net sales | 50,565 | 79,230 |
Net loss | -5,104 | -23,647 |
Loss per ordinary share: Basic and diluted | ($0.06) | ($0.37) |
Pro-forma [Member] | ||
Business Acquisition [Line Items] | ||
Net sales | 347,520 | 153,246 |
Net loss | ($268,707) | ($172,652) |
Loss per ordinary share: Basic and diluted | ($3.21) | ($2.71) |
Inventories_Additional_Informa
Inventories - Additional Information (Detail) (USD $) | Dec. 31, 2014 | Mar. 18, 2014 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ||
Inventory | $287 | |
Vidara Therapeutics Holdings LLC [Member] | ACTIMMUNE Developed Technology [Member] | ||
Inventory [Line Items] | ||
Inventory | $3,200 | $14,200 |
Inventories_Components_of_Inve
Inventories - Components of Inventories (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw materials | $1,184 | $91 |
Work-in-process | 389 | 522 |
Finished goods | 15,292 | 8,088 |
Inventories, net | $16,865 | $8,701 |
Prepaid_Expenses_and_Other_Cur2
Prepaid Expenses and Other Current Assets - Prepaid Expenses and Other Current Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Prepaid Expenses And Other Current Assets [Line Items] | ||
Product samples inventory | $4,014 | $1,323 |
Prepaid insurance | 345 | 379 |
Other prepaid expenses | 995 | 329 |
Prepaid expenses and other current assets | 14,370 | 4,888 |
Co-Pay Expenses [Member] | ||
Prepaid Expenses And Other Current Assets [Line Items] | ||
Prepaid expense | 6,718 | 621 |
Software License Fees [Member] | ||
Prepaid Expenses And Other Current Assets [Line Items] | ||
Prepaid expense | 1,128 | 855 |
FDA Product and Manufacturing Fees [Member] | ||
Prepaid Expenses And Other Current Assets [Line Items] | ||
Prepaid expense | 1,055 | 312 |
Marketing Expenses [Member] | ||
Prepaid Expenses And Other Current Assets [Line Items] | ||
Prepaid expense | 59 | 381 |
Research and Development [Member] | ||
Prepaid Expenses And Other Current Assets [Line Items] | ||
Prepaid expense | $56 | $688 |
Property_and_Equipment_Propert
Property and Equipment - Property and Equipment (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $11,189 | $6,426 |
Less-accumulated depreciation | -3,948 | -2,646 |
Property and equipment, net | 7,241 | 3,780 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 3,288 | 2,367 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 576 | 113 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,040 | 2,160 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,481 | 775 |
Trade Show Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 392 | 228 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $3,412 | $783 |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $1.70 | $1.20 | $0.80 |
Intangible_Assets_Additional_I
Intangible Assets - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||
In Millions, unless otherwise specified | Nov. 18, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 17, 2014 | Sep. 19, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||||||
Capitalized intangible asset | $67.70 | |||||
Amortization expense of developed technology | 32.3 | 8.1 | 4.7 | |||
PENNSAID 2% [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Capitalized intangible asset | 45 | |||||
Developed Technology [Member] | ACTIMMUNE Developed Technology [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Capitalized intangible asset | 560 | |||||
In-Process Research and Development [Member] | ACTIMMUNE Developed Technology [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Capitalized intangible asset | 66 | |||||
Customer relationships [Member] | ACTIMMUNE Developed Technology [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Capitalized intangible asset | $8.10 |
Intangible_Assets_Amortizable_
Intangible Assets - Amortizable Intangible Assets (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost Basis | $765,584 | $152,484 |
Accumulated Amortization | -51,561 | -19,254 |
Currency Translation | -9,190 | -2,136 |
Net Book Value | 704,833 | 131,094 |
Developed Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost Basis | 757,484 | 152,484 |
Accumulated Amortization | -51,331 | -19,254 |
Currency Translation | -9,190 | -2,136 |
Net Book Value | 696,963 | 131,094 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost Basis | 8,100 | |
Accumulated Amortization | -230 | |
Net Book Value | $7,870 |
Intangible_Assets_Estimated_Fu
Intangible Assets - Estimated Future Amortization Expense (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2015 | $71,298 | |
2016 | 71,298 | |
2017 | 71,298 | |
2018 | 71,298 | |
2019 and thereafter | 419,641 | |
Net Book Value | $704,833 | $131,094 |
Other_Assets_Schedule_of_Other
Other Assets - Schedule of Other Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other Assets, Noncurrent [Abstract] | ||
Deferred financing costs | $11,491 | $6,268 |
Other | 73 | 689 |
Other assets | $11,564 | $6,957 |
Accrued_Trade_Discounts_and_Re2
Accrued Trade Discounts and Rebates - Schedule of Accrued Trade Discounts and Rebates (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ||
Contractual allowances | $55,678 | $6,716 |
Government rebates and chargebacks | 20,437 | 1,407 |
Accrued trade discounts and rebates | $76,115 | $8,123 |
Accrued_Expenses_Schedule_of_A
Accrued Expenses - Schedule of Accrued Expenses (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ||
Payroll related expenses | $20,933 | $9,491 |
Accrued excise tax | 11,243 | |
Professional services | 3,825 | 350 |
Sales and marketing expenses | 2,343 | 1,761 |
Accrued income taxes | 1,400 | |
Accrued interest | 1,260 | 810 |
Deferred rent | 1,026 | 755 |
Contract manufacturing expenses | 758 | 301 |
Clinical and regulatory expenses | 632 | 488 |
Consulting services | 596 | 283 |
Accrued other | 2,609 | 1,687 |
Accrued expenses | $46,625 | $15,926 |
Accrued_Expenses_Additional_In
Accrued Expenses - Additional Information (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Schedule Of Accrued Expenses [Line Items] | |
Excise tax rate | 15.00% |
Estimated liability related to excise tax | $11,243 |
Covered Individual [Member] | |
Schedule Of Accrued Expenses [Line Items] | |
Excise tax due period | 2015 |
Accrued_Royalties_Schedule_of_
Accrued Royalties - Schedule of Changes in Liability for Royalties (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Business Combinations [Abstract] | ||
Beginning balance | $32,992 | |
Assumed ACTIMMUNE accrued royalty | 3,429 | |
Assumed ACTIMMUNE contingent royalty liabilities | 33,600 | |
Remeasurement of royalty liabilities | 10,660 | |
Royalty payments | -15,489 | |
Accretion expense | 9,020 | |
Ending balance | 74,212 | |
Less: Current portion | 25,325 | 8,010 |
Accrued royalties, net of current | 48,887 | 24,982 |
Ending balance | $74,212 |
Accrued_Royalties_Additional_I
Accrued Royalties - Additional Information (Detail) (Royalty [Member], USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||
Cost of goods sold | $13 | $9.40 | |
Credit to cost of goods sold | 3.6 | ||
ACTIMMUNE Developed Technology [Member] | |||
Business Acquisition [Line Items] | |||
Cost of goods sold | $1.30 |
Fair_Value_Measurements_Assets
Fair Value Measurements - Assets and Liabilities at Fair Value on Recurring Basis (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities at fair value | $324,400 | |
Fair Value Measurements, Recurring Basis [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 111,581 | 66,817 |
Total liabilities at fair value | 109,410 | |
Fair Value Measurements, Recurring Basis [Member] | Derivative Liability [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities at fair value | 109,410 | |
Fair Value Measurements, Recurring Basis [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 111,581 | 66,817 |
Level 1 [Member] | Fair Value Measurements, Recurring Basis [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 111,581 | 66,817 |
Level 1 [Member] | Fair Value Measurements, Recurring Basis [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets at fair value | 111,581 | 66,817 |
Level 3 [Member] | Fair Value Measurements, Recurring Basis [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities at fair value | 109,410 | |
Level 3 [Member] | Fair Value Measurements, Recurring Basis [Member] | Derivative Liability [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities at fair value | $109,410 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | 12 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 27, 2014 | Nov. 22, 2013 | Nov. 18, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Common stock issued | 125,425,853 | 66,097,417 | |||
Loss on derivative fair value assessment operations | $214,995 | $69,300 | |||
Total liabilities at fair value | 324,400 | ||||
Convertible Senior Notes [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Common stock issued | 13,164,951 | ||||
Interest rate | 5.00% | 5.00% | 5.00% | 11.22% | |
Loss on derivative fair value assessment operations | 215,000 | 69,300 | |||
Total liabilities at fair value | $324,400 | $109,400 | |||
Convertible Senior Notes [Member] | Minimum [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Common stock issued | 13,164,951 |
Fair_Value_Measurements_Assump
Fair Value Measurements - Assumptions Used to Determine Fair Value of Conversion Option Embedded in Convertible Senior Notes (Detail) (USD $) | 0 Months Ended | |||
Jun. 27, 2014 | Dec. 31, 2013 | Jun. 27, 2014 | Dec. 31, 2013 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||
Stock price | $15.96 | $7.62 | $15.96 | $7.62 |
Risk free rate | 1.43% | 1.69% | ||
Borrowing cost | 3.80% | |||
Weights | Equal weight | Equal weight | ||
Credit spread | 9.00% | |||
Volatility | 40.00% | 40.00% | ||
Initial conversion price | $5.36 | $5.36 | $5.36 | $5.36 |
Remaining time to maturity | 4 years 4 months 24 days | 4 years 10 months 24 days | ||
Maximum [Member] | ||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||
Borrowing cost | 5.00% | |||
Credit spread | 11.70% | |||
Minimum [Member] | ||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||||
Borrowing cost | 3.50% | |||
Credit spread | 9.30% |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | ||
Nov. 06, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Loss Contingencies [Line Items] | ||||
Rent expense | $600,000 | $500,000 | $500,000 | |
Royalty expense recognized in cost of goods sold | 1,700,000 | 900,000 | 500,000 | |
Accrued excise tax liability | 11,243,000 | |||
Material breaches term under rebate agreement | 30 days | |||
DUEXIS [Member] | ||||
Loss Contingencies [Line Items] | ||||
Purchase commitment based on tablet and its pricing | 2,600,000 | |||
Minimum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Range of potential disputes | 0 | |||
Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Range of potential disputes | 4,700,000 | |||
2014 [Member] | ||||
Loss Contingencies [Line Items] | ||||
Minimum annual royalty obligations | 5,000,000 | |||
Each Year [Member] | ||||
Loss Contingencies [Line Items] | ||||
Minimum annual royalty obligations | 7,500,000 | |||
VIMOVO intellectual property [Member] | ||||
Loss Contingencies [Line Items] | ||||
Past price protection and utilization rebates | 38,500,000 | |||
Genentech Inc [Member] | ||||
Loss Contingencies [Line Items] | ||||
Net sales threshold | 3,700,000 | |||
Genentech Inc [Member] | November 25, 2014 [Member] | ||||
Loss Contingencies [Line Items] | ||||
Percentage of royalty on net sales | 45.00% | |||
Additional percentage of royalty on net sales | 10.00% | |||
Genentech Inc [Member] | November 26, 2014 through May 5, 2018 [Member] | Minimum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Percentage of royalty on net sales | 20.00% | |||
Additional percentage of royalty on net sales | 1.00% | |||
Genentech Inc [Member] | November 26, 2014 through May 5, 2018 [Member] | Maximum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Percentage of royalty on net sales | 30.00% | |||
Additional percentage of royalty on net sales | 9.00% | |||
Connetics Corporation [Member] | ||||
Loss Contingencies [Line Items] | ||||
Percentage of royalty on net sales | 0.25% | |||
Net sales threshold | 1,000,000,000 | |||
Additional percentage of royalty on net sales | 0.50% | |||
Percentage of royalty on net sales upon regulatory approval | 4.00% | |||
Pozen Inc.[Member] | ||||
Loss Contingencies [Line Items] | ||||
Percentage of royalty on net sales | 10.00% | |||
LODOTRA and RAYOS Developed Technology [Member] | ||||
Loss Contingencies [Line Items] | ||||
Purchase commitment based on tablet and its pricing | 3,300,000 | |||
Jagotec AG [Member] | ||||
Loss Contingencies [Line Items] | ||||
Term of commitment made by the company to purchase tablets | 5 years | |||
Sanofi-Aventis U.S [Member] | ||||
Loss Contingencies [Line Items] | ||||
Manufacturing and supply agreement initiation date | 2011-05 | |||
Boehringer Ingelheim [Member] | ||||
Loss Contingencies [Line Items] | ||||
Manufacturing and supply agreement initiation date | 2013-07 | |||
Binding purchase order issued | 21,200,000 | |||
Currency exchange rate | 1.22 | |||
Patheon [Member] | ||||
Loss Contingencies [Line Items] | ||||
Manufacturing and supply agreement initiation date | 2013-11 | |||
Binding purchase order issued | 3,600,000 | |||
PENNSAID 2% [Member] | ||||
Loss Contingencies [Line Items] | ||||
Manufacturing and supply agreement initiation date | 2014-10 | |||
Binding purchase order issued | $2,700,000 | |||
Supply agreement expiry date | 31-Dec-22 | |||
Dublin, Ireland Office [Member] | ||||
Loss Contingencies [Line Items] | ||||
Area of lease agreement | 10,300 | |||
Term of the lease expires | 4-Nov-29 | |||
Deerfield, Illinois Office [Member] | ||||
Loss Contingencies [Line Items] | ||||
Area of lease agreement | 50,500 | |||
Term of the lease expires | 30-Jun-18 | |||
Mannheim Office [Member] | ||||
Loss Contingencies [Line Items] | ||||
Area of lease agreement | 5,000 | |||
Term of the lease expires | 31-Dec-16 | |||
Reinach Office [Member] | ||||
Loss Contingencies [Line Items] | ||||
Area of lease agreement | 3,200 | |||
Term of the lease expires | 31-May-15 | |||
Roswell Office [Member] | ||||
Loss Contingencies [Line Items] | ||||
Area of lease agreement | 6,200 | |||
Term of the lease expires | 31-Oct-18 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Schedule of Minimum Future Cash Payments Due under Lease Obligations (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Lease obligations, 2015 | $1,581 |
Operating Lease obligations, 2016 | 1,624 |
Operating Lease obligations, 2017 | 1,538 |
Operating Lease obligations, 2018 | 1,104 |
Operating Lease obligations, 2019 | 558 |
Operating Lease obligations, 2020 & Thereafter | 5,484 |
Operating Lease obligations, Total | $11,889 |
Legal_Proceedings_Additional_I
Legal Proceedings - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
RAYOS [Member] | |
Legal Proceedings [Line Items] | |
Prevention period from approving the ANDA | 30 months |
PENNSAID 2% [Member] | |
Legal Proceedings [Line Items] | |
Prevention period from approving the ANDA | 30 months |
Taro [Member] | |
Legal Proceedings [Line Items] | |
Statutory time limit for lawsuit filing | 45 days |
Debt_Agreements_Outstanding_De
Debt Agreements - Outstanding Debt Balances (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ||
Senior Secured Credit Facility | $300,000 | |
Convertible Senior Notes | 60,985 | 150,000 |
Debt discount | -15,482 | -39,238 |
Total long-term debt | 345,503 | 110,762 |
Less: current maturities | 48,334 | |
Long-term debt, net of current maturities | 297,169 | 110,762 |
Total long-term debt | $345,503 | $110,762 |
Debt_Agreements_Additional_Inf
Debt Agreements - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | 3 Months Ended | |||||||
Jun. 17, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Jun. 27, 2014 | Mar. 18, 2014 | Sep. 19, 2014 | Sep. 22, 2014 | Nov. 22, 2013 | Nov. 18, 2013 | |
Debt Instrument [Line Items] | ||||||||||
Convertible Senior Notes | $60,985,000 | $150,000,000 | $60,985,000 | |||||||
Share price per share | $7.62 | $15.96 | ||||||||
Common stock issued | 125,425,853 | 66,097,417 | 125,425,853 | |||||||
Loss/expense on derivative fair value assessment operations | 214,995,000 | 69,300,000 | ||||||||
Total liabilities at fair value | 324,400,000 | 324,400,000 | ||||||||
Non-cash charge related to extinguishment of debt | -11,709,000 | -12,881,000 | ||||||||
Cut off percentage for defining limited liability subsidiaries, portion of capital stock held maximum | 65.00% | |||||||||
Secured bridge loan commitment | 32,992,000 | 32,992,000 | ||||||||
Commitment fee paid | 5,000,000 | |||||||||
Third Anniversary [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of prepayment premium of loan | 4.00% | |||||||||
Fourth Anniversary [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of prepayment premium of loan | 2.00% | |||||||||
Maximum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Secured bridge loan commitment | 250,000,000 | |||||||||
Senior Secured Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from credit facility | 300,000,000 | |||||||||
Interest rate description | Senior Secured Credit Facility bear interest, at each borrower's option, at a rate equal to either the London Inter-Bank Offer Rate ("LIBOR"), plus an applicable margin of 8.0% per year (subject to a 1.0% LIBOR floor), or the prime lending rate, plus an applicable margin equal to 7.0% per year. | |||||||||
LIBOR floor rate | 1.00% | |||||||||
Ticking fee accrual period | 31 days | |||||||||
Ticking fee | 3,200,000 | |||||||||
Senior Secured Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument variable rate | 8.00% | |||||||||
Line of credit facility borrowing capacity | 300,000,000 | |||||||||
Senior Secured Credit Facility [Member] | Prime Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument variable rate | 7.00% | |||||||||
Convertible Senior Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Senior Notes | 150,000,000 | |||||||||
Net proceeds received | 143,600,000 | |||||||||
Notes fees | 6,400,000 | |||||||||
Interest rate | 5.00% | 5.00% | 5.00% | 5.00% | 11.22% | |||||
Maturity date of debt instrument | 15-Nov-18 | |||||||||
Notes expenses | 18,700,000 | |||||||||
Number of options underlying capped call | 150,000 | |||||||||
Amount of debt instrument equivalent to options underlying capped call | 1,000,000 | 1,000,000 | ||||||||
Ordinary shares received | 384,366 | |||||||||
Value of ordinary shares received | 4,600,000 | 4,600,000 | ||||||||
Termination loan | 14,000,000 | 14,000,000 | ||||||||
Termination value | 9,400,000 | 9,400,000 | ||||||||
Share price per share | $11.93 | |||||||||
Convertible Senior Notes sold, percentage | 100.00% | |||||||||
Convertible senior notes, principal payment | 1,000,000 | 1,000,000 | ||||||||
Percentage of principal amount of debt instrument to be repurchased | 100.00% | |||||||||
Initial conversion, number of shares | 186.428 | |||||||||
Initial conversion price, per share | $5.36 | $5.36 | ||||||||
Common stock issued | 13,164,951 | |||||||||
Derivative liability | 40,100,000 | |||||||||
Loss/expense on derivative fair value assessment operations | 215,000,000 | 69,300,000 | ||||||||
Total liabilities at fair value | 324,400,000 | 109,400,000 | 324,400,000 | |||||||
Fair value of convertible senior notes | 57,000,000 | 57,000,000 | ||||||||
Convertible Senior Notes [Member] | Options Purchased [Member] | Call Option [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Strike price, per share | 5.364 | 5.364 | ||||||||
Convertible Senior Notes [Member] | Option Sold [Member] | Call Option [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Strike price, per share | 6.705 | 6.705 | ||||||||
Convertible Senior Notes [Member] | Conversion Condition One [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument number of trading days | 20 | |||||||||
Debt instrument consecutive trading days | 30 days | |||||||||
Debt instrument convertible minimum percentage | 130.00% | |||||||||
Convertible Senior Notes [Member] | Conversion Condition Two [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument number of trading days | 5 | |||||||||
Debt instrument consecutive trading days | 5 days | |||||||||
Convertible senior notes, principal payment | 1,000,000 | 1,000,000 | ||||||||
Debt instrument convertible maximum percentage | 98.00% | |||||||||
Convertible Senior Notes [Member] | Conversion Condition Three [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument number of trading days | 45 | |||||||||
Debt instrument consecutive trading days | 10 days | |||||||||
Debt instrument convertible minimum percentage | 10.00% | |||||||||
Convertible Senior Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Senior Notes | 89,000,000 | 89,000,000 | ||||||||
Initial conversion, number of shares | 16,594,793 | |||||||||
Cash payment to holders | 16,700,000 | |||||||||
Accrued and unpaid interest | 1,700,000 | |||||||||
Non-cash charge related to extinguishment of debt | -11,700,000 | |||||||||
Aggregate principal amount outstanding | $61,000,000 | $61,000,000 |
Shareholders_Equity_Additional
Shareholders' Equity - Additional Information (Detail) (USD $) | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Mar. 18, 2014 | Dec. 31, 2013 | Nov. 18, 2013 |
Subsidiary, Sale of Stock [Line Items] | ||||
Number of ordinary shares to be issued from conversion of common stock | 1 | |||
Non-controlling interest, ownership by parent in share | 31,350,000 | 31,350,000 | ||
Non-controlling interest, ownership percentage in parent | 74.00% | 74.00% | ||
Ordinary shares issued upon cash exercise of warrants | 8,440,662 | |||
Proceeds from aggregate exercise price | $38.50 | |||
Number of warrants exercised | 987,201 | |||
Ordinary shares issuance in cashless exercises | 549,458 | |||
Number of warrants outstanding | 6,683,811 | |||
Ordinary shares issued | 125,425,853 | 66,097,417 | ||
Stock Options [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Proceeds in connection with issuance of ordinary shares | 1.6 | |||
Stock Options and Restricted Stock Units [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Ordinary shares issued | 864,780 | |||
Employee Stock Purchase Program [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Proceeds in connection with issuance of ordinary shares | $1.70 | |||
Ordinary shares issued | 536,543 | |||
Warrants [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of warrants exercised | 162,309 | |||
Ordinary shares issuance in cashless exercises | 248 | |||
Vidara Therapeutics Holdings LLC [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Non-controlling interest, ownership percentage in parent | 26.00% | 26.00% | ||
Convertible Senior Notes [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Ordinary shares received | 384,366 | |||
Ordinary shares issued | 13,164,951 |
Equity_Incentive_Plans_Additio
Equity Incentive Plans - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | ||||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 28, 2011 | Jun. 27, 2014 | Dec. 05, 2013 | Jul. 31, 2011 | 17-May-14 | Mar. 03, 2014 | Jan. 10, 2014 | Nov. 16, 2013 | Nov. 07, 2013 | Jan. 02, 2012 | Sep. 18, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Acquisition date | 18-Mar-14 | |||||||||||||
Options, Granted | 3,902,836 | |||||||||||||
Common stock reserved for future issuance upon exercise of options outstanding | 7,027,683 | 4,411,080 | ||||||||||||
Options granted to purchase common stock | 3,902,836 | 2,158,950 | 516,325 | |||||||||||
Weighted average fair value of options granted to purchase common stock | $10.71 | $2.23 | $3.44 | |||||||||||
Restricted shares granted to employees to purchase common stock | 1,312,722 | 730,000 | 520,000 | |||||||||||
Restricted stock units, vesting period | 4 years | |||||||||||||
Tax benefit recognized from stock-based compensation expense | $0 | |||||||||||||
Tax benefits realized from stock options exercised | 0 | |||||||||||||
Pre-tax unrecognized compensation expense for all unvested share-based awards | 39,100,000 | |||||||||||||
Cash Bonus Program [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Cash Bonus Program, description | Participants in the Cash Bonus Program will be eligible for a specified cash bonus, the amount of which bonus is determined by whether our total compounded annualized shareholder rate of return ("TSR") for the period from November 5, 2014 to May 6, 2015 is greater than or equal to a specified threshold that ranges between 15% and 60%, and which bonus will be earned and payable only if the TSR for the period from November 5, 2014 to November 4, 2017 is greater than 15%. The TSR for these periods will be calculated using the 20-day volume weighted average trading price of the Company's ordinary shares. The total bonus pool that may be payable under the Cash Bonus Program will be calculated as of May 6, 2015 and may range from $4.5 million to $17.0 million, depending upon the TSR for the period from November 5, 2014 to May 6, 2015. The portion of the total bonus pool payable to individual participants will be based on pre-determined allocations established by our compensation committee. Participants must remain employed by us through November 4, 2017 unless a participant's earlier departure from employment by us is due to death, disability, termination without cause or a change in control transaction, to be further defined in a written plan. Bonus payments under the Cash Bonus Program, if any, will be made after November 4, 2017. | |||||||||||||
Estimated fair value of award | 1,600,000 | |||||||||||||
Expense related to Cash Bonus Program | 100,000 | |||||||||||||
Ordinary Shares [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Common stock, shares issued | 536,543 | 225,820 | ||||||||||||
Restricted Stock Units [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Granted, Number of Units | 1,312,722 | |||||||||||||
Restricted Stock Units [Member] | Executive Officers [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Granted, Number of Units | 101,004 | |||||||||||||
Maximum [Member] | Cash Bonus Program [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Cash Bonus Program, percentage | 60.00% | |||||||||||||
Total bonus pool payable | 17,000,000 | |||||||||||||
Minimum [Member] | Cash Bonus Program [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Cash Bonus Program, percentage | 15.00% | |||||||||||||
Total bonus pool payable | $4,500,000 | |||||||||||||
Cash bonus payment date | 4-Nov-17 | |||||||||||||
2011 ESPP [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Common stock shares reserved for future issuance | 1,201,769 | 463,352 | ||||||||||||
Percentage of common stock shares outstanding | 4.00% | |||||||||||||
Common stock, shares outstanding | 1,053,074 | |||||||||||||
Minimum payroll deduction to purchase shares of common stock under 2011 ESPP | 1.00% | |||||||||||||
Maximum payroll deduction to purchase shares of common stock under 2011 ESPP | 15.00% | |||||||||||||
Employees purchase shares of common stock at price per share equal | 85.00% | |||||||||||||
Lower of fair market offering period | 6 months | |||||||||||||
Additional reserve of common stock for issuance | 1,053,074 | |||||||||||||
Common stock, shares issued | 614,657 | |||||||||||||
Common stock shares authorized | 1,201,769 | |||||||||||||
2005 Plan [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Common stock shares reserved for future issuance | 460,842 | |||||||||||||
Options, Granted | 0 | |||||||||||||
2011 EIP [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Common stock shares reserved for future issuance | 3,366,228 | 1,474,304 | 730,000 | 800,000 | 200,000 | |||||||||
Common stock, shares outstanding | 1,474,304 | |||||||||||||
Additional reserve of common stock for issuance | 1,600,673 | 703,400 | ||||||||||||
Common stock shares authorized | 10,000,000 | |||||||||||||
Common stock reserved for future issuance upon exercise of options outstanding | 1,304,713 | |||||||||||||
Number of common stock share added each year in percentage | 5.00% | |||||||||||||
Additional shared authorized for issuance | 10,000,000 | |||||||||||||
Shares available for future grants | 7,341,996 | |||||||||||||
2014 EIP [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Common stock shares reserved for future issuance | 14,264,001 | |||||||||||||
Common stock shares authorized | 14,264,001 | 15,500,000 | ||||||||||||
2014 EIP [Member] | Maximum [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Common stock shares authorized | 22,052,130 | |||||||||||||
2014 Non-Employee Equity Plan [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Common stock shares authorized | 2,500,000 | |||||||||||||
2014 ESPP [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Common stock shares reserved for future issuance | 9,929,336 | |||||||||||||
Common stock shares authorized | 9,929,336 | 10,201,769 | ||||||||||||
Acquisition date | 17-May-14 | |||||||||||||
2014 ESPP [Member] | Ordinary Shares [Member] | ||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||||||
Common stock shares authorized | 9,000,000 |
Equity_Incentive_Plans_Summary
Equity Incentive Plans - Summary of Stock Option Activity (Detail) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options, Outstanding Beginning Balance | 4,411,080 | ||
Options, Granted | 3,902,836 | ||
Options, Exercised | -497,082 | ||
Options, Forfeited | -789,151 | ||
Options, Outstanding Ending Balance | 7,027,683 | 4,411,080 | |
Options, Exercisable as of December 31, 2014 | 2,938,278 | ||
Weighted Average Exercise Price, Outstanding Beginning Balance | $6.47 | ||
Weighted Average Exercise Price, Granted | $10.71 | $2.23 | $3.44 |
Weighted Average Exercise Price, Exercised | $5.27 | ||
Weighted Average Exercise Price, Forfeited | $6.16 | ||
Weighted Average Exercise Price, Outstanding Ending Balance | $8.95 | $6.47 | |
Weighted Average Exercise Price, Exercisable as of December 31, 2014 | $8.71 | ||
Weighted Average Remaining Contractual Term, Outstanding as of December 31, 2014 | 8 years 1 month 6 days | ||
Weighted Average Remaining Contractual Term, Exercisable as of December 31, 2014 | 6 years 7 months 6 days | ||
Aggregate Intrinsic Value, Outstanding as of December 31, 2014 | $32,757 | ||
Aggregate Intrinsic Value, Exercisable as of December 31, 2014 | $16,333 |
Equity_Incentive_Plans_Summary1
Equity Incentive Plans - Summary of Outstanding Stock Options (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Options Outstanding, Number of options outstanding | 7,027,683 | |
Options Outstanding, Weighted Average Exercise Price | $8.95 | $6.47 |
Options Outstanding, Weighted Average Remaining Contractual Term | 8 years 1 month 6 days | |
Options Exercisable, Number Exercisable | 2,938,278 | |
Options Exercisable, Weighted Average Exercise Price | $8.71 | |
Exercise Price Ranges, $1.36 - $3.97 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower Range | $1.36 | |
Range of Exercise Prices, Upper Range | $3.97 | |
Options Outstanding, Number of options outstanding | 1,574,765 | |
Options Outstanding, Weighted Average Exercise Price | $2.63 | |
Options Outstanding, Weighted Average Remaining Contractual Term | 8 years | |
Options Exercisable, Number Exercisable | 780,904 | |
Options Exercisable, Weighted Average Exercise Price | $2.62 | |
Exercise Price Ranges, $4.10 - $5.20 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower Range | $4.10 | |
Range of Exercise Prices, Upper Range | $5.20 | |
Options Outstanding, Number of options outstanding | 849,484 | |
Options Outstanding, Weighted Average Exercise Price | $4.99 | |
Options Outstanding, Weighted Average Remaining Contractual Term | 6 years 4 months 24 days | |
Options Exercisable, Number Exercisable | 705,644 | |
Options Exercisable, Weighted Average Exercise Price | $5.01 | |
Exercise Price Ranges, $5.21 - $7.47 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower Range | $5.21 | |
Range of Exercise Prices, Upper Range | $7.47 | |
Options Outstanding, Number of options outstanding | 125,287 | |
Options Outstanding, Weighted Average Exercise Price | $6.85 | |
Options Outstanding, Weighted Average Remaining Contractual Term | 8 years 9 months 18 days | |
Options Exercisable, Number Exercisable | 32,636 | |
Options Exercisable, Weighted Average Exercise Price | $6.85 | |
Exercise Price Ranges, $7.48 - $12.94 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower Range | $7.48 | |
Range of Exercise Prices, Upper Range | $12.94 | |
Options Outstanding, Number of options outstanding | 3,312,541 | |
Options Outstanding, Weighted Average Exercise Price | $10.11 | |
Options Outstanding, Weighted Average Remaining Contractual Term | 8 years 9 months 18 days | |
Options Exercisable, Number Exercisable | 966,538 | |
Options Exercisable, Weighted Average Exercise Price | $10.25 | |
Exercise Price Ranges, $12.99 - $17.22 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower Range | $12.99 | |
Range of Exercise Prices, Upper Range | $17.22 | |
Options Outstanding, Number of options outstanding | 915,242 | |
Options Outstanding, Weighted Average Exercise Price | $14.40 | |
Options Outstanding, Weighted Average Remaining Contractual Term | 8 years 9 months 18 days | |
Options Exercisable, Number Exercisable | 202,192 | |
Options Exercisable, Weighted Average Exercise Price | $14.10 | |
Exercise Price Ranges, $20.78 - $28.83 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Prices, Lower Range | $20.78 | |
Range of Exercise Prices, Upper Range | $28.83 | |
Options Outstanding, Number of options outstanding | 250,364 | |
Options Outstanding, Weighted Average Exercise Price | $28.05 | |
Options Outstanding, Weighted Average Remaining Contractual Term | 3 years 8 months 12 days | |
Options Exercisable, Number Exercisable | 250,364 | |
Options Exercisable, Weighted Average Exercise Price | $28.05 |
Equity_Incentive_Plans_Weighte
Equity Incentive Plans - Weighted Average Fair Value per Share of Stock Option Awards Granted and Assumptions Used to Value Stock Options (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 1.90% | 1.20% | 1.00% |
Weighted average volatility | 83.10% | 86.70% | 89.00% |
Expected life (in years) | 6 years 1 month 10 days | 5 years 11 months 23 days | 5 years 11 months 16 days |
Weighted average grant date fair value per share of options granted | $8.88 | $2.82 | $2.50 |
Equity_Incentive_Plans_Summary2
Equity Incentive Plans - Summary of Restricted Stock Unit Activity (Detail) (Restricted Stock Units [Member], USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Restricted Stock Units [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Units, Outstanding Beginning Balance | 833,001 |
Number of Units, Granted | 1,312,722 |
Number of Units, Vested | -338,520 |
Number of Units, Forfeited | -188,701 |
Number of Units, Outstanding Ending Balance | 1,618,502 |
Weighted Average Grant-Date Fair Value Per Units, Outstanding Beginning Balance | $2.86 |
Weighted Average Grant-Date Fair Value Per Units, Granted | $10.55 |
Weighted Average Grant-Date Fair Value Per Units, Vested | $3.89 |
Weighted Average Grant-Date Fair Value Per Units, Forfeited | $4.73 |
Weighted Average Grant-Date Fair Value Per Units, Outstanding Ending Balance | $8.66 |
Equity_Incentive_Plans_Summary3
Equity Incentive Plans - Summary of Stock-Based Compensation Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total share-based compensation expense | $13,198 | $5,014 | $4,661 |
Research and Development [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total share-based compensation expense | 1,515 | 1,054 | 1,186 |
Sales and Marketing [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total share-based compensation expense | 4,174 | 1,465 | 1,090 |
General and Administrative [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Total share-based compensation expense | $7,509 | $2,495 | $2,385 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | 0 Months Ended |
Nov. 30, 2014 | Dec. 31, 2014 | Jun. 17, 2014 | |
Related Party Transaction [Line Items] | |||
Related party transaction, description | On June 17, 2014, Mr. Robert De Vaere entered into an executive employment and transition agreement with the Company (the "Transition Agreement"), as part of his transition as the Company's then current Executive Vice President and Chief Financial Officer, to a consulting position. Pursuant to the Transition Agreement Mr. De Vaere (a) continued to serve as the Company's Executive Vice President and Chief Financial Officer through September 30, 2014, (b) will serve as a consultant to the Company for a fee of $50,000 per month from October 1, 2014 through March 31, 2015, and (c) will serve as a consultant to the Company in a reduced capacity for a fee of $20,000 per month from April 1, 2015 through September 30, 2015. | ||
Consultancy fees paid per month | $10,000 | ||
Payment for contingent on executing general claims | 500,000 | ||
Aggregate sale of shares in offering | 2,784,512 | ||
Reimbursed amount | 700,000 | ||
Scenario Forecast From October 1, 2014 Through March 31, 2015 [Member] | |||
Related Party Transaction [Line Items] | |||
Consultancy fees paid per month | 50,000 | ||
Scenario Forecast From April 1, 2015 Through September 30, 2015 [Member] | |||
Related Party Transaction [Line Items] | |||
Consultancy fees paid per month | $20,000 |
Income_Taxes_Companys_Loss_Bef
Income Taxes - Company's Loss Before Benefit for Income Taxes (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Contingency [Line Items] | |||
United States | ($275,080) | ($139,347) | $56,038 |
Loss before benefit for income taxes | -269,687 | -150,126 | -92,965 |
Other Foreign [Member] | |||
Income Tax Contingency [Line Items] | |||
Loss before benefit for income taxes, Foreign | -16,771 | -10,779 | -149,003 |
Ireland [Member] | |||
Income Tax Contingency [Line Items] | |||
Loss before benefit for income taxes, Foreign | $22,164 |
Income_Taxes_Components_of_Ben
Income Taxes - Components of Benefit for Income Taxes (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current provision | |||
Total current provision | $870 | $47 | $39 |
Deferred benefit | |||
Total deferred benefit | -6,954 | -1,168 | -5,210 |
Effective income taxes | -6,084 | -1,121 | -5,171 |
US - Federal and State [Member] | |||
Current provision | |||
Total current provision | 815 | 4 | 4 |
Deferred benefit | |||
Total deferred benefit | -3,860 | ||
Other Foreign [Member] | |||
Current provision | |||
Total current provision | 55 | 43 | 35 |
Deferred benefit | |||
Total deferred benefit | ($3,094) | ($1,168) | ($5,210) |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes [Line Items] | |||||
Income tax expense (benefit) | ($6,084,000) | ($1,121,000) | ($5,171,000) | ||
Net benefit for income taxes for release of valuation allowance in connection with merger | 3,000,000 | ||||
Current income tax expense | 870,000 | 47,000 | 39,000 | ||
Total deferred benefit | -6,954,000 | -1,168,000 | -5,210,000 | ||
Loss on the derivative revaluation | -214,995,000 | -69,300,000 | |||
Debt conversion amount | 89,015,000,000 | 89,015,000 | |||
Loss on debt conversion | -29,400,000 | ||||
Convertible debt | 150,000,000 | ||||
Increase (decrease) in the income tax benefit | 6,100,000 | -4,100,000 | |||
Merger acquisition liabilities | 3,000,000 | ||||
Income tax statutory rate, Percentage | 12.50% | ||||
Income tax at statutory rate, Percentage | 35.00% | ||||
Undistributed earnings of foreign subsidiaries | 0 | 0 | |||
Increase (decrease) in the deferred tax valuation allowance | -16,867,000 | 32,452,000 | 27,800,000 | ||
Net operating loss carryovers | 800,000 | 800,000 | |||
Accrued interest or penalties | 0 | 0 | 0 | ||
Unrecognized share based compensation expense | 300,000 | 300,000 | |||
Income tax benefit from stock option exercises | 0 | ||||
Swiss Subsidiary [Member] | |||||
Income Taxes [Line Items] | |||||
Deferred tax liability, eliminated | 3,000,000 | 3,000,000 | |||
Research Tax Credit Carryforward [Member] | |||||
Income Taxes [Line Items] | |||||
Deferred tax assets reserve | -500,000 | -500,000 | |||
Federal [Member] | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards | 240,000,000 | 240,000,000 | |||
Operating loss carryforward, expiration year | 2015 | ||||
Federal [Member] | Research Tax Credit Carryforward [Member] | |||||
Income Taxes [Line Items] | |||||
Income tax credit carryforwards | 2,700,000 | 2,700,000 | 2,700,000 | ||
State [Member] | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards | 55,000,000 | 55,000,000 | |||
Operating loss carryforward, expiration year | 2027 | ||||
State [Member] | Research Tax Credit Carryforward [Member] | |||||
Income Taxes [Line Items] | |||||
Income tax credit carryforwards | 400,000 | 400,000 | 400,000 | ||
Foreign [Member] | |||||
Income Taxes [Line Items] | |||||
Net operating loss carryforwards | 103,000,000 | 103,000,000 | |||
Convertible Senior Notes [Member] | |||||
Income Taxes [Line Items] | |||||
Income tax examination interest expense | 22,800,000 | ||||
Convertible Senior Notes [Member] | Permanent item [Member] | |||||
Income Taxes [Line Items] | |||||
Income tax examination interest expense | 14,700,000 | ||||
Convertible Senior Notes [Member] | Temporary item [Member] | |||||
Income Taxes [Line Items] | |||||
Income tax examination interest expense | $8,100,000 |
Income_Taxes_Reconciliation_Be
Income Taxes - Reconciliation Between Irish Rate and U.S Federal Statutory Income Tax Rate (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Irish income tax statutory rate (12.5%) | ($33,711) | ||
US federal income tax at statutory rate (35%) | -52,543 | -32,538 | |
Bargain purchase gain | -5,542 | ||
Transaction costs | 5,402 | ||
Excise tax | 3,911 | ||
Stock based compensation | 1,460 | 1,107 | 1,063 |
Foreign tax rate differential | -64,675 | 2,019 | 4,376 |
Deferred taxes not benefited | 7,360 | 23,921 | 21,715 |
Derivative liability | 75,248 | 24,255 | |
Notional interest deduction | -2,149 | ||
Interest expense on convertible debt inducements | -4,789 | ||
Book loss on debt extinguishment | 10,286 | ||
Other | 1,115 | 120 | 213 |
Income tax benefit | ($6,084) | ($1,121) | ($5,171) |
Effective income tax rate | -2.26% | -10.39% | 34.70% |
Income_Taxes_Reconciliation_Be1
Income Taxes - Reconciliation Between Irish Rate and U.S Federal Statutory Income Tax Rate (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Irish income tax statutory rate, Percentage | 12.50% |
US federal income tax at statutory rate, Percentage | 35.00% |
Income_Taxes_Deferred_Tax_Asse
Income Taxes - Deferred Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Deferred tax assets: | |||
Net operating and capital loss carry forwards | $105,182 | $121,001 | |
Alternative minimum tax credit | 820 | ||
Derivative liability | 14,799 | ||
Accrued compensation | 6,397 | ||
Accruals and reserves | 4,952 | 7,073 | |
Original issuance discount related to capped call | 6,740 | ||
Contingent royalties | 14,495 | 3,122 | |
Research and development credits | 2,571 | ||
Foreign intangible assets | 63 | ||
Total deferred tax assets | 131,846 | 155,369 | |
Valuation allowance | -111,555 | -128,422 | -95,970 |
Deferred tax assets, net of valuation allowance | 20,291 | 26,947 | |
Deferred tax liabilities: | |||
Acquisition liabilities | 3,068 | ||
Debt discount | 4,791 | 14,477 | |
Interest expense on convertible debt inducements | 3,306 | ||
In-process research and development | 0 | 0 | |
Developed technology | 13,009 | ||
Intangible assets | 7,137 | 2,823 | |
Other | 1,989 | ||
Total deferred tax liabilities | 20,291 | 30,309 | |
Net deferred income tax liability | $19,570 | $3,362 |
Income_Taxes_Reconciliation_of
Income Taxes - Reconciliation of Beginning and Ending Amounts of Valuation Allowance (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||
Beginning Balance | ($128,422,000) | ($95,970,000) | |
Increase (decrease) for current year activity | 9,507,000 | ||
Increase (decrease) for current year activity | 16,867,000 | -32,452,000 | -27,800,000 |
Release in valuation allowance | 7,360,000 | ||
Ending Balance | ($111,555,000) | ($128,422,000) | ($95,970,000) |
Income_Taxes_Changes_in_Uncert
Income Taxes - Changes in Uncertain Income Tax Positions (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Income Tax Disclosure [Abstract] | ||
Beginning balance | $491 | $442 |
Additions | 775 | 51 |
Reductions | 0 | 0 |
Unrecognized Tax Benefits, Current Year Tax Positions | 775 | 51 |
Additions | 0 | 0 |
Reductions | -491 | -2 |
Settlements | 0 | 0 |
Lapses in statutes of limitations | 0 | 0 |
Additions from current year acquisitions | 0 | 0 |
Unrecognized Tax Benefits Income Tax Prior Period Tax Positions | -491 | -2 |
Ending balance | $775 | $491 |
Employee_Benefit_Plans_Additio
Employee Benefit Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan expenses | $800,000 | $0 | $0 |
Percent of matching contribution by company | 50.00% | ||
Maximum percent of employee's elective contribution to plan | 6.00% | ||
Percent of employee's eligible pay | 20.00% | ||
Graded vesting period | 5 years | ||
Defined Benefit Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan expenses | $100,000 | $100,000 | $100,000 |
Selected_Quarterly_Financial_I2
Selected Quarterly Financial Information (Unaudited) - Summary of Selected Financial Results of Operations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||||||||||
Net sales | $103,841 | $75,126 | $66,062 | $51,926 | $30,080 | $24,112 | $11,131 | $8,693 | $296,955 | $74,016 | $18,844 |
Gross profit | 71,161 | 61,482 | 41,252 | 44,307 | 24,825 | 20,905 | 8,737 | 4,924 | 218,202 | 59,391 | 6,969 |
Gain (loss) from operations | 8,983 | -11,961 | -7,100 | 1,587 | -5,762 | -2,744 | -15,804 | -18,544 | -8,491 | -42,854 | -78,873 |
Net (loss) income | ($31,647) | $2,063 | ($27,769) | ($206,250) | ($102,901) | ($5,492) | ($18,441) | ($22,171) | ($263,603) | ($149,005) | ($87,794) |
Net (loss) income per ordinary share-basic and diluted | ($0.27) | $0.03 | ($0.38) | ($3.07) | ($1.56) | ($0.08) | ($0.29) | ($0.36) | ($3.15) | ($2.34) | ($2.26) |
Schedule_II_Valuation_and_Qual1
Schedule II - Valuation and Qualifying Accounts (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for discounts and returns [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of period | $431 | $77 | $170 |
Additions, Charged to costs and expenses | 18,254 | 3,270 | 365 |
Deductions from reserves | -14,202 | -2,916 | -458 |
Balance at end of period | 4,483 | 431 | 77 |
Deferred tax asset valuation allowance [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at beginning of period | 128,422 | 95,970 | 68,194 |
Additions, Charged to costs and expenses | 32,452 | 32,034 | |
Deductions from reserves | -16,867 | -4,258 | |
Balance at end of period | $111,555 | $128,422 | $95,970 |