Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 09, 2020 | Jun. 28, 2019 | |
Document and Entity Information | |||
Entity Registrant Name | Cerecor Inc. | ||
Entity Central Index Key | 0001534120 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Emerging Growth Company | true | ||
Entity Small Business | true | ||
Entity Transition Period | true | ||
Entity Shell Company | false | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 57,609,033 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Public Float | $ 81,295,262 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,609,438 | $ 10,646,301 |
Accounts receivable, net | 1,001,645 | 822,327 |
Other receivables | 4,240,572 | 5,262,213 |
Inventory, net | 21,334 | 317,923 |
Prepaid expenses and other current assets | 706,968 | 731,954 |
Restricted cash, current portion | 17,535 | 18,730 |
Investment in Aytu | 7,628,947 | 0 |
Current assets of discontinued operations | 497,577 | 4,132,445 |
Total current assets | 17,724,016 | 21,931,893 |
Property and equipment, net | 1,447,663 | |
Property and equipment, net | 586,512 | |
Intangibles assets, net | 2,426,258 | 3,765,254 |
Goodwill | 14,409,088 | 14,409,088 |
Restricted cash, net of current portion | 101,945 | 81,725 |
Long-term assets of discontinued operations | 0 | 29,476,249 |
Total assets | 36,108,970 | 70,250,721 |
Current liabilities: | ||
Accounts payable | 2,077,524 | 1,446,141 |
Accrued expenses and other current liabilities | 5,640,252 | 14,328,879 |
Income taxes payable | 551,671 | 2,032,258 |
Contingent consideration, current portion | 0 | 859,670 |
Current liabilities of discontinued operations | 3,891,012 | 7,549,631 |
Total current liabilities | 12,160,459 | 26,216,579 |
Contingent consideration, net of current portion | 0 | 396,540 |
Deferred tax liability, net | 85,981 | 69,238 |
License obligations | 0 | 1,250,000 |
Other long-term liabilities | 1,111,965 | 385,517 |
Long-term liabilities of discontinued operations | 1,755,000 | 21,025,099 |
Total liabilities | 15,113,405 | 49,342,973 |
Stockholders’ equity: | ||
Common Stock—$0.001 par value; 200,000,000 shares authorized at December 31, 2019 and 2018; 44,384,222 and 40,804,189 shares issued and outstanding at December 31, 2019 and 2018, respectively | 44,384 | 40,804 |
Preferred Stock—$0.001 par value; 5,000,000 shares authorized at December 31, 2019 and 2018; 2,857,143 shares issued and outstanding at December 31, 2019 and 2018, respectively | 2,857 | 2,857 |
Additional paid-in capital | 135,238,941 | 119,082,157 |
Accumulated deficit | (114,290,617) | (98,218,070) |
Total stockholders’ equity | 20,995,565 | 20,907,748 |
Total liabilities and stockholders’ equity | $ 36,108,970 | $ 70,250,721 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 44,384,222 | 40,804,189 |
Common stock, shares outstanding (in shares) | 44,384,222 | 40,804,189 |
Preferred stock, par value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 2,857,143 | 2,857,143 |
Preferred stock, shares outstanding (in shares) | 2,857,143 | 2,857,143 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | ||
Revenues | $ 6,750,351 | $ 7,028,378 |
Operating expenses: | ||
Cost of product sales | (566,523) | 3,260,668 |
Research and development | 11,764,133 | 5,786,635 |
Acquired in-process research and development | 0 | 18,723,952 |
General and administrative | 10,123,320 | 10,511,207 |
Sales and marketing | 1,484,044 | 545,218 |
Amortization expense | 1,338,996 | 1,828,552 |
Impairment of intangible assets | 0 | 1,861,562 |
Change in fair value of contingent consideration | (1,256,211) | (110,923) |
Total operating expenses | 22,887,759 | 42,406,871 |
Loss from continuing operations | (16,137,408) | (35,378,493) |
Other (expense) income: | ||
Change in fair value of Investment in Aytu | 53,932 | 0 |
Change in fair value of warrant liability and unit purchase option liability | (3,888) | 25,010 |
Other (expense) income, net | (24,399) | 13,657 |
Interest income, net | 121,326 | 16,261 |
Total other income, net from continuing operations | 146,971 | 54,928 |
Loss from continuing operations before taxes | (15,990,437) | (35,323,565) |
Income tax expense (benefit) | 280,316 | (49,466) |
Loss from continuing operations | (16,270,753) | (35,274,099) |
Income (loss) from discontinued operations, net of tax (inclusive of gain on sale) | 198,206 | (4,778,711) |
Net loss | (16,072,547) | $ (40,052,810) |
Net (loss) income per share of common stock, basic and diluted: | ||
Continuing operations (in dollars per share) | $ (1.06) | |
Discontinued operations (in dollars per share) | (0.14) | |
Net loss per share, basic and diluted (in dollars per share) | $ (1.20) | |
Product revenue, net | ||
Revenues | ||
Revenues | 6,650,351 | $ 6,572,322 |
Sales force revenue | ||
Revenues | ||
Revenues | 0 | 456,056 |
License and other revenue | ||
Revenues | ||
Revenues | $ 100,000 | $ 0 |
Common stock | ||
Net (loss) income per share of common stock, basic and diluted: | ||
Continuing operations (in dollars per share) | $ (0.28) | $ (1.06) |
Discontinued operations (in dollars per share) | 0 | (0.14) |
Net loss per share, basic and diluted (in dollars per share) | (0.28) | $ (1.20) |
Preferred Stock | ||
Net (loss) income per share of common stock, basic and diluted: | ||
Continuing operations (in dollars per share) | (1.42) | |
Discontinued operations (in dollars per share) | 0.01 | |
Net loss per share, basic and diluted (in dollars per share) | $ (1.41) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows | 12 Months Ended | |
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Operating activities | ||
Net loss | $ (16,072,547) | $ (40,052,810) |
Adjustments to reconcile net loss used in operating activities: | ||
Depreciation and amortization | 3,883,567 | 4,554,963 |
Impairment of intangible assets | 1,449,121 | 1,861,562 |
Stock-based compensation, excluding amount included within gain on sale of Pediatric Portfolio | 2,532,257 | 2,431,063 |
Acquired in-process research and development | 0 | 18,723,952 |
Deferred taxes | 16,743 | (16,745) |
Amortization of inventory fair value adjustment associated with acquisition of TRx and Avadel pediatric products | 107,271 | 300,573 |
Non-cash interest expense | 0 | 302,882 |
Gain on Aytu Divestiture | (7,964,924) | 0 |
Change in fair value of Investment in Aytu | (53,932) | 0 |
Change in fair value of contingent consideration liability | (1,009,169) | 58,366 |
Change in fair value of warrant liability and unit purchase option liability | 3,888 | (25,010) |
Changes in assets and liabilities, net of Aytu Divestiture: | ||
Accounts receivable, net | 1,658,333 | (222,530) |
Other receivables (excluding Aevi Loan) | 5,120,247 | (2,277,255) |
Inventory, net | 532,947 | (311,199) |
Prepaid expenses and other assets | (917,016) | (241,641) |
Escrowed cash receivable | 0 | 3,752,390 |
Accounts payable | 1,019,358 | 82,451 |
Income taxes payable | (1,480,587) | (226,890) |
Accrued expenses and other liabilities | (6,835,395) | 7,792,259 |
License obligations | (1,250,000) | 0 |
Lease liability, net | 125,506 | |
Other long term liabilities | 0 | 385,517 |
Net cash used in operating activities | (19,134,332) | (3,128,102) |
Investing activities | ||
Net cash received from Aytu Divestiture | 3,958,412 | 0 |
Loan to Aevi | (4,139,401) | |
Avadel pediatric products acquisition | 0 | (1) |
Net cash acquired from acquisition of Ichorion Therapeutics, Inc. | 0 | 1,429,877 |
Purchase of property and equipment | (262,013) | (564,415) |
Net cash (used in) provided by investing activities | (443,002) | 865,461 |
Financing activities | ||
Proceeds from exercise of stock options and warrants | 836,188 | 1,083,953 |
Proceeds from shares purchased through employee stock purchase plan | 210,777 | 72,236 |
Restricted Stock Units withheld for taxes | (33,959) | |
Proceeds from sale of shares pursuant to common stock private placement, net | 3,708,602 | 3,857,106 |
Proceeds from sale of shares of common stock in underwritten public offering, net of offering costs | 8,975,960 | |
Proceeds from issuance of Series B convertible preferred stock upon warrant exercise, net | 0 | 5,685,038 |
Payment of contingent consideration | (881,932) | (294,435) |
Payment of long-term debt | (256,140) | 0 |
Net cash provided by financing activities | 12,559,496 | 10,403,898 |
(Decrease) increase in cash and cash equivalents | (7,017,838) | 8,141,257 |
Cash, cash equivalents, and restricted cash at beginning of period | 10,746,756 | 2,605,499 |
Cash, cash equivalents, and restricted cash at end of period | 3,728,918 | 10,746,756 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 1,050,000 | 525,000 |
Cash paid for taxes | 1,803,665 | 354,000 |
Supplemental disclosures of non-cash investing and financing activities | ||
Leased asset obtained in exchange for new operating lease liability | 743,025 | |
Debt assumed in Avadel Pediatric Products acquisition | 0 | (15,075,000) |
Cash and cash equivalents | 3,609,438 | 10,646,301 |
Restricted cash, current portion | 17,535 | 18,730 |
Restricted cash, net of current portion | $ 101,945 | $ 81,725 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholder's Equity - USD ($) | Total | Common stock | Additional paid in capital | Contingently Issuable Common Stock | Accumulated deficit | Common stock | Redeemable Convertible Preferred StockPreferred Stock |
Balance at the beginning (in shares) at Dec. 31, 2017 | 31,266,989 | 0 | |||||
Balance at the beginning at Dec. 31, 2017 | $ 27,859,608 | $ 31,268 | $ 83,338,136 | $ 2,655,464 | $ (58,165,260) | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of contingently issuable shares in acquisition of TRX (in shares) | 2,349,968 | ||||||
Issuance of contingently issuable shares in acquisition of TRx | 0 | $ 2,350 | 2,653,114 | (2,655,464) | |||
Issuance of shares pursuant to common stock private placement, net of offering costs (in shares) | 1,000,000 | ||||||
Issuance of shares pursuant to common stock private placement, net of offering costs | 3,857,106 | $ 1,000 | 3,856,106 | ||||
Issuance of shares in acquisition of Ichorion assets (in shares) | 5,774,464 | ||||||
Issuance of shares in acquisition of Ichorion assets | 19,971,554 | $ 5,774 | 19,965,780 | ||||
Issuance of Series B convertible preferred stock upon warrant exercise, net of offering costs (in shares) | 2,857,143 | ||||||
Issuance of Series B convertible preferred stock upon warrant exercise, net of offering costs | 5,685,038 | 5,682,181 | $ 2,857 | ||||
Exercise of stock options and warrants (in shares) | 370,361 | ||||||
Exercise of stock options and warrants | 1,083,953 | $ 370 | 1,083,583 | ||||
Shares purchased through employee stock purchase plan (in shares) | 42,407 | ||||||
Shares purchased through employee stock purchase plan | 72,236 | $ 42 | 72,194 | ||||
Stock-based compensation | 2,431,063 | 2,431,063 | |||||
Net loss | (40,052,810) | (40,052,810) | |||||
Balance at the end (in shares) at Dec. 31, 2018 | 40,804,189 | 2,857,143 | |||||
Balance at the end at Dec. 31, 2018 | 20,907,748 | $ 40,804 | 119,082,157 | 0 | (98,218,070) | $ 2,857 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of shares pursuant to common stock private placement, net of offering costs (in shares) | 1,200,000 | ||||||
Issuance of shares pursuant to common stock private placement, net of offering costs | 3,708,602 | 3,707,402 | $ 1,200 | ||||
Exercise of stock options and warrants (in shares) | 323,177 | ||||||
Exercise of stock options and warrants | 836,188 | $ 323 | 835,865 | ||||
Shares purchased through employee stock purchase plan (in shares) | 73,143 | ||||||
Shares purchased through employee stock purchase plan | 210,777 | 210,704 | $ 73 | ||||
Stock-based compensation | 2,462,796 | 2,462,796 | |||||
Net loss | (16,072,547) | (16,072,547) | |||||
Issuance of shares of common stock in underwritten public offering, net of offering costs (in shares) | 1,818,182 | ||||||
Issuance of shares of common stock in underwritten public offering, net of offering costs | 8,975,960 | $ 1,818 | 8,974,142 | ||||
Restricted Stock Units vested during the period (in shares) | 172,500 | ||||||
Restricted Stock Units vested during the period | 0 | 173 | (173) | ||||
Restricted Stock Units withheld for taxes (in shares) | (6,969) | ||||||
Restricted Stock Units withheld for taxes | (33,959) | $ (7) | (33,952) | ||||
Balance at the end (in shares) at Dec. 31, 2019 | 44,384,222 | 2,857,143 | |||||
Balance at the end at Dec. 31, 2019 | $ 20,995,565 | $ 44,384 | $ 135,238,941 | $ 0 | $ (114,290,617) | $ 2,857 |
Business
Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Cerecor Inc. (the "Company" or "Cerecor") is a biopharmaceutical company focused on becoming a leader in development and commercialization of treatments for rare pediatric and orphan diseases. The Company is advancing an emerging clinical-stage pipeline of innovative therapies that address unmet patient needs within rare pediatric and orphan diseases. The Company's pediatric rare disease pipeline is led by CERC-801, CERC-802 and CERC-803 ("CERC-800 compounds"), which are therapies for inherited metabolic disorders known as Congenital Disorders of Glycosylation ("CDGs"). The U.S. Food and Drug Administration ("FDA") granted Rare Pediatric Disease designation ("RPDD") and Orphan Drug Designation ("ODD") to all three CERC-800 compounds, thus potentially qualifying the Company to receive a Priority Review Voucher ("PRV") upon approval of each New Drug Application ("NDA"). Each PRV may be sold or transferred an unlimited number of times. The Company plans to leverage the 505(b)(2) NDA pathway for all three compounds to accelerate development and approval. Additionally, CERC-801 and CERC-802 were granted Fast Track Designation ("FTD") from the FDA, which can help facilitate and potentially expedite development of each compound. The Company is also developing CERC-002, CERC-006 and CERC-007. CERC-007 is an anti-IL-18 monoclonal antibody being developed for the treatment of autoimmune inflammatory diseases such as Adult Onset Stills Disease ("AOSD") and Multiple Myeloma. CERC-006 is a dual mTOR inhibitor being developed for the treatment of complex Lymphatic Malformations. CERC-002 is an anti-LIGHT ( L ymphotoxin-like, exhibits I nducible expression, and competes with HSV G lycoprotein D for H VEM, a receptor expressed by T lymphocytes) monoclonal antibody being developed for the treatment of Pediatric-onset Crohn's Disease. The Company continues to explore strategic alternatives for its non-core assets, including CERC-301, as well as its sole commercialized product, Millipred ® , an oral prednisolone indicated across a wide variety of inflammatory conditions. On February 3, 2020, the Company consummated its two-step merger (the "Merger") with Aevi Genomic Medicine, Inc. ("Aevi") in accordance with the terms of the Agreement and Plan of Merger and Reorganization (the "Merger Agreement") dated December 5, 2019. The Merger consideration included stock valued at approximately $15.6 million , resulting in the issuance of approximately 3.9 million shares of Cerecor common stock to Aevi stockholders, forgiveness of a $4.1 million loan that Cerecor loaned Aevi in December 2019 (the "Aevi Loan"), and contingent value rights ("CVRs") for up to an additional $6.5 million in subsequent payments based on clinical and/or regulatory milestones. As part of the Merger, Cerecor acquired CERC-002, CERC-006 and CERC-007, expanding Cerecor's pipeline to six clinical stage assets being developed for rare pediatric and orphan diseases. Effective upon the consummation of the Merger, Cerecor entered into an employment agreement with Mike Cola for him to serve as Cerecor's Chief Executive Officer, an employment agreement with Dr. Garry Neil for him to serve as Cerecor's Chief Medical Officer and appointed Mike Cola and Sol J. Barer, Ph.D. to the Company's Board of Directors. See Note 17 for more information. During the fourth quarter of 2019, the Company entered into, and closed on, an asset purchase agreement (the "Aytu Purchase Agreement") with Aytu BioScience, Inc. (“Aytu”) to sell the Company’s rights, title and interest in, assets relating to its pediatric portfolio, namely Aciphex ® Sprinkle™, Cefaclor for Oral Suspension, Karbinal™ ER, Flexichamber™, Poly-Vi-Flor ® and Tri-Vi-Flor™ (the "Pediatric Portfolio"), as well as the corresponding commercial infrastructure consisting of the right to offer employment to Cerecor’s sales force and the assignment of supporting commercial contracts (the "Aytu Divestiture"). Aytu paid consideration of $4.5 million in cash and approximately 9.8 million shares of Aytu convertible preferred stock (the "Investment"), and assumed certain of the Company’s liabilities, including the Company’s payment obligations payable to Deerfield CSF, LLC of $ 15.1 million and other liabilities of $11.0 million . The Company recognized a gain of $8.0 million upon the closing of the Aytu Divestiture. As a result of the sale of the Pediatric Portfolio, the Pediatric Portfolio met all conditions required in order to be classified as discontinued operations. Therefore, operating results from the Pediatric Portfolio are reported within income (loss) from discontinued operations, net of tax (inclusive of gain on sale) for all periods presented and the gain recognized as a result of the sale is reported within income from discontinued operations, net of tax (inclusive of gain on sale) for the year ended December 31, 2019. In addition, assets and liabilities related to the Pediatric Portfolio are reported as assets and liabilities of discontinued operations in the accompanying consolidated balance sheets as of December 31, 2019 and 2018. See Note 3 for more information regarding the Aytu Divestiture and its accounting treatment. Cerecor was incorporated in 2011, commenced operations in the second quarter of 2011 and completed an initial public offering in October 2015. Liquidity During the first quarter of 2019, the Company closed on an underwritten public offering of common stock for 1,818,182 shares of common stock of the Company, at a price to the public of $5.50 per share ("public price"). Armistice Capital Master Fund Ltd. ("Armistice"), the Company's largest stockholder, participated in the offering by purchasing 363,637 shares of common stock of the Company at the public price. Cerecor director, Steven J. Boyd, is Armistice's Chief Investment Officer. The net proceeds of the offering were approximately $9.0 million . During the third quarter of 2019, the Company entered into a securities purchase agreement with Armistice, pursuant to which, the Company sold 1,200,000 shares of its common stock for a purchase price of $3.132 per share. Net proceeds of the private placement were approximately $3.7 million . During the fourth quarter of 2019, the Company entered into, and subsequently closed on, the Aytu Purchase Agreement to sell the Company's rights, title and interest in, assets relating to its Pediatric Portfolio and related commercial infrastructure for a combination of cash and preferred stock ( $4.5 million in cash, and approximately 9.8 million shares of Aytu convertible preferred stock) and the assumption of certain of the Company's liabilities including the Company’s payment obligations payable to Deerfield of $15.1 million and certain other liabilities of approximately $11.0 million . During the first quarter of 2020, the Company closed on a registered direct offering with institutional investors of 1,306,282 shares of the Company's common stock at a purchase price of $3.98 per share. Armistice participated in the offering by purchasing 1,256,282 shares of common stock from the Company. The net proceeds of the offering were approximately $5.0 million . In order to meet its cash flow needs, the Company applies a disciplined decision-making methodology as it evaluates the optimal allocation of the Company's resources between investing in the Company's existing pipeline assets and acquisitions or in-licensing of new assets. For the year ended December 31, 2019, Cerecor generated a net loss of $16.1 million and negative cash flow from operations of $19.1 million . As of December 31, 2019, Cerecor had an accumulated deficit of $114.3 million and $3.6 million in cash and cash equivalents. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern; however, the Company expects to incur additional losses in the future in connection with research and development activities and will require additional financing to fund its operations and to continue to execute its strategy. The Company plans to use its current cash on hand and the anticipated cash flows from the Company's profits from Millipred product sales and/or the potential proceeds from the out-license or sale of Millipred to a third party to offset costs related to its orphan disease pipeline assets, business development, and costs associated with its organizational infrastructure; however, Cerecor expects to continue to incur significant expenses and operating losses for the immediate future as it continues to invest in the Company's pipeline assets. The Company’s ability to continue as a going concern through 2020 is dependent upon the Company’s ability to raise additional equity and/or debt capital; however, there can be no assurance that such capital will be available in sufficient amounts or on terms acceptable to the Company. Over the long term, the Company's ultimate ability to achieve and maintain profitability is dependent on, among other things, the development, regulatory approval, and commercialization of its pipeline assets, and the potential sale of any PRVs it receives, all being adequate to support its cost structure and pipeline asset development. These conditions raise substantial doubt about its ability to continue as a going concern within one year after the date that the financial statements are issued. To alleviate these conditions, the Company is evaluating the potential out-licensing or sale of Millipred to a third party and some combination of rights to future PRV sales, equity or debt financings, collaborations, out-licensing arrangements, strategic alliances, federal and private grants, marketing, distribution or licensing arrangements, the sale of current or future assets or possible monetization of the Company's holdings of Aytu equity. If the Company raises additional funds through collaborations, strategic alliances or licensing arrangements with third parties, the Company might have to relinquish valuable rights to its technologies, future revenue streams, research programs or product candidates. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible or suspend or curtail planned programs. Due to the uncertainty regarding future financings and/or other potential options to raise additional funds, management has concluded that substantial doubt exists with respect to the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”). The consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should the Company be unable to continue as a going concern (see Note 1). Principles of Consolidation The consolidated financial statements include the accounts of Cerecor Inc. and its wholly-owned subsidiaries after elimination of all intercompany balances and transactions. Variable Interest Entities The primary beneficiary of a variable interest entity ("VIE") must consolidate the related assets and liabilities. Certain disclosures are required by sponsors, significant interest holders in VIEs and potential VIEs. The Company regularly assesses its relationships with contractual third-party and other entities for potential VIEs, including its relationship with Aytu and Aevi. In making this assessment, the Company considers the potential that its contracts or other arrangements provide subordinated financial support, absorb losses or rights to residual returns of the entity and the ability to directly or indirectly make decisions about the entities’ activities. Based on the Company’s assessments, management concluded that there were no relationships that constitute a VIE for which the Company was determined to be the primary beneficiary at December 31, 2019. If the Company’s management makes the determination that it is the primary beneficiary of a VIE, the Company will consolidate the statements of operations and financial condition of the VIE into its consolidated financial statements. Discontinued Operations As a result of the sale of the Pediatric Portfolio, as of December 31, 2019, the Pediatric Portfolio met all conditions required in order to be classified as discontinued operations. Accordingly, the operating results of the Pediatric Portfolio are reported as income (loss) from discontinued operations, net of tax (inclusive of gain on sale) in the accompanying consolidated financial statements for the years ended December 31, 2019 and 2018. Additionally, the gain recognized as a result of the sale of the Pediatric Portfolio is reported within income from discontinued operations, net of tax (inclusive of gain on sale) for the year ended December 31, 2019. The assets and liabilities related to the Pediatric Portfolio are reported as assets and liabilities of discontinued operations in the accompanying consolidated balance sheets as of December 31, 2019 and 2018. For additional information, see Note 3. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to but not limited to, revenue recognition, cost of product sales, stock-based compensation, fair value measurements (including those relating to contingent consideration, equity Investment in Aytu, and guaranteed liabilities), cash flows used in management's going concern assessment, income taxes, goodwill and other intangible assets, and clinical trial accruals. The Company bases its estimates on historical experience and other market‑specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Certain estimates related specifically to the Pediatric Portfolio, such as revenue, cost of product sales, fair value measurement (including those relating to contingent consideration), goodwill, and other intangible assets have been reclassified under discontinued operations and included in assets and liabilities of discontinued operations. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value. Restricted Cash Restricted cash consists of the 2016 Employee Stock Purchase Plan (the "Plan") deposits, security deposit for our corporate headquarters lease and credit card deposits. The Company adopted ASU No. 2016-18, Restricted Cash ("ASU 2016-18") effective January 1, 2018 and now includes restricted cash balances within the cash, cash equivalents and restricted cash balance on the statement of cash flows. Accounts Receivable, net Accounts receivable, net is comprised of amounts due from customers in the ordinary course of business. Management considers all accounts receivable to be fully collectible at December 31, 2019, and accordingly, no allowance for doubtful accounts has been recorded. Bad debt expense is charged to operations as amounts are determined to be uncollectible. Accounts receivable are written off when deemed uncollectible and recoveries of receivables previously written off are recorded when received. Accounts receivable are considered to be past due if any portion of the receivable balance is outstanding for more than the payment terms negotiated with the customer. The Company generally negotiates payment terms of 30 days . The Company offers wholesale distributors a prompt payment discount, which is typically 2% as an incentive to remit payment within this timeframe. Accounts receivable are stated net of the estimated prompt pay discount. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of a money market account with a financial institution that management believes to be creditworthy. The Company has no financial instruments with off‑balance sheet risk of loss. Inventory Inventory consists primarily of finished goods stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. The Company reviews the composition of inventory at each reporting period in order to identify obsolete, slow-moving, quantities in excess of expected demand, or otherwise non-saleable items. If non-saleable items are observed and there are no alternate uses for the inventory, the Company will record a write-down to net realizable value in the period that the decline in value is first recognized. These valuation adjustments are recorded based upon various factors for the Company’s products, including the level of product manufactured by the Company, the level of product in the distribution channel, current and projected product demand, the expected shelf life of the product and firm inventory purchase commitments. Leases The Company determines if an arrangement is a lease at inception. If an arrangement contains a lease, the Company performs a lease classification test to determine if the lease is an operating lease or a finance lease. The Company has identified one operating lease, which is for its corporate headquarters. Right-of-use ("ROU") assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term and are included in other long-term liabilities and other current liabilities on the Company's condensed consolidated balance sheet. ROU assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. Operating ROU assets are recorded in property and equipment, net on the condensed consolidated balance sheet and are amortized over the lease term. To determine the present value of lease payments on lease commencement, the Company uses the implicit rate when readily determinable, however, as most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Furthermore, the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component for the leased property asset class. Lease expense is recognized on a straight-line basis over the life of the lease and is included within general and administrative expenses. Property and Equipment Property and equipment consists of computers, office equipment, furniture, ROU assets (discussed above), and leasehold improvements and is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Property and equipment are depreciated on a straight‑line basis over their estimated useful lives. The Company uses a life of four years for computers and software, and five years for equipment and furniture. For leasehold improvements, deprecation of the asset will begin at the date it is placed in service and the depreciable life of the leasehold improvement is the shorter of the lease term or the improvement's useful life. The Company uses the lesser of the lease term or ten years for leasehold improvements. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized. Acquisitions For acquisitions that meet the definition of a business under ASC 805, the Company records the acquisition using the acquisition method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration, when applicable, are recorded at fair value at the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The application of the acquisition method of accounting requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration. For acquisitions that do not meet the definition of a business under ASC 805, the Company accounts for the transaction as an asset acquisition. Segment Information Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision‑making group, in making decisions on how to allocate resources and assess performance. As of December 31, 2019, the Company’s chief operating decision makers were the Chief Financial Officer and the Executive Chairman of the Board. The CFO and the Executive Chairman of the Board view the Company’s operations and manages the business as one operating segment. All long‑lived assets of the Company reside in the United States. Goodwill Goodwill relates to the amount that arose in connection with the Company's historical acquisitions which were accounted for as business combinations. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired when accounted for using the acquisition method of accounting for business combinations. Goodwill is not amortized but is evaluated for impairment on an annual basis or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of the Company's reporting unit below its carrying amount. The Company consists of one reporting unit. Upon disposal of a portion of a reporting unit that constitutes a business, we assign goodwill based on the relative fair values of the portion of the reporting unit being disposed and the portion of the reporting unit remaining. This approach requires a determination of the fair value of both the business to be disposed of and the business (or businesses) within the reporting unit that will be retained. As a result of the Aytu Divestiture, goodwill was assigned to the Pediatric Portfolio using the relative fair value approach discussed above and is reclassified within discontinued operations. Intangible Assets Intangible assets with definite useful lives are amortized over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset might not be recoverable. Impairment losses are measured and recognized to the extent the carrying value of such assets exceeds their fair value. Product Revenues, net As a result of the Aytu Divestiture, all product revenues related to the Pediatric Portfolio (which represented approximately 60% of total product revenues for the year ended December 31, 2019) are included within net income (loss) from discontinued operations, net of tax (inclusive of gain on sale). The Company generates substantially all of its revenue from sales of prescription pharmaceutical products to its customers and has identified a single product delivery performance obligation, which is the provision of prescription pharmaceutical products to its customers based upon master service agreements in place with wholesaler distributors, purchase orders from retail pharmacies or other direct customers and a contractual arrangement with a specialty pharmacy. The performance obligation is satisfied at a point in time, when control of the product has been transferred to the customer, either at the time the product has been received by the customer or to a lesser extent when the product is shipped. The Company determines the transaction price based on fixed consideration in its contractual agreements and the transaction price is allocated entirely to the performance obligation to provide pharmaceutical products. In determining the transaction price, a significant financing component does not exist because the timing from when the Company delivers product to when the customers pay for the product is less than one year and the customers do not pay for product in advance of the transfer of the product. Revenues from sales of products are recorded net of any variable consideration for estimated allowances for returns, chargebacks, distributor fees, prompt payment discounts, government rebates, and other common gross-to-net revenue adjustments. The identified variable consideration is recorded as a reduction of revenue at the time revenues from product sales are recognized. The Company recognizes revenue only to the extent that it is probable that a significant revenue reversal will not occur in a future period. Provisions for returns and government rebates are included within current liabilities in the consolidated balance sheet. Provisions for prompt payment discounts and distributor fees are included as a reduction to accounts receivable. Calculating these items involves estimates and judgments based on sales or invoice data, contractual terms, historical utilization rates, new information regarding changes in these programs’ regulations and guidelines that would impact the amount of the actual rebates, our expectations regarding future utilization rates for these programs, and channel inventory data. These estimates may differ from actual consideration amount received and the Company will re-assess these estimates and judgments each reporting period to adjust accordingly. The following table presents net revenues disaggregated by type: Year Ended December 31, 2019 2018 Prescription drugs $ 6,650,351 $ 6,572,322 Sales force revenue — 456,056 License and other revenue 100,000 — Total revenues, net from continuing operations $ 6,750,351 $7,028,378 Concentration with Customer As is typical in the pharmaceutical industry, the Company sells its prescription pharmaceutical products (which include prescription drugs) in the United States primarily through wholesale distributors and a specialty contracted pharmacy. Wholesale distributors account for substantially all of the Company’s net product revenues and trade receivables. In addition, the Company earns revenue from sales of its prescription pharmaceutical products directly to retail pharmacies. For the year ended December 31, 2019, the Company's three largest customers accounted for approximately 41% , 30% and 28% , respectively, of the Company's total net product revenues of prescription drugs from continuing operations. For the year ended December 31, 2018, the Company's three largest customers accounting for approximately 31% , 29% and 28% , respectively, of the Company's total net product revenues of prescription drugs from continuing operations. Returns and Allowances Consistent with industry practice, the Company maintains a return policy that allows customers to return product within a specified period both prior to and, in certain cases, subsequent to the product's expiration date. The Company’s return policy generally allows customers to receive credit for expired products within six months prior to expiration and within one year after expiration. The provision for returns and allowances consists of estimates for future product returns and pricing adjustments. The primary factors considered in estimating potential product returns include: • the shelf life or expiration date of each product; • historical levels of expired product returns; • external data with respect to inventory levels in the wholesale distribution channel; • external data with respect to prescription demand for each of the Company’s products; and • the estimated returns liability to be processed by year of sale based on analysis of lot information related to actual historical returns. The Company’s estimate for returns and allowances may be impacted by a number of factors, but the principal factor relates to the level of inventory in the distribution channel. Rebates The Company is subject to rebates on sales made under governmental pricing programs. For example, Medicaid rebates are amounts owed based upon contractual agreements or legal requirements with public sector (Medicaid) benefit providers after the final dispensing of the product by a pharmacy to a benefit plan participant. Medicaid reserves are based on expected payments, which are driven by patient usage, contract performance and field inventory that will be subject to a Medicaid rebate. Medicaid rebates are typically billed up to 180 days after the product is shipped, however this can be as much as 270 days after the quarter in which the product is dispensed to the Medicaid participant. In addition to the estimates mentioned above, the Company’s calculation also requires other estimates, such as estimates of sales mix, to determine which sales are subject to rebates and the amount of such rebates. Periodically, the Company adjusts the Medicaid rebate provision based on actual claims paid. Due to the delay in billing, adjustments to actual claims paid may incorporate revisions of this provision for several periods. Because Medicaid pricing programs involve particularly difficult interpretations of complex statutes and regulatory guidance, the Company's estimates could differ from actual experience. In determining estimates for these rebates, the Company considers the terms of the contracts, relevant statutes, historical relationships of rebates to revenues, past payment experience, estimated inventory levels and estimated future trends. Sales Force Revenue Pursuant to a marketing agreement with Pharmaceutical Associates, Inc . ( “PAI”), the Company received a monthly marketing fee to promote, market and sell certain products on behalf of PAI. The Company was also entitled to a share of PAI's profits under the agreement. Marketing fees and profit-sharing was recognized as sales force revenue when all the performance obligations have been satisfied and to the extent that it was probable that a significant revenue reversal would not occur in a future period. The marketing agreement with PAI was terminated in April 2018. License and Other Revenue The Company recognizes revenues from collaboration, license or other research or sale arrangements when or as performance obligations are satisfied. For milestone payments, the Company assesses, at contract inception, whether the milestones are considered probable of being achieved. If it is probable that a significant revenue reversal will occur, the Company will not record revenue until the uncertainty has been resolved. Milestone payments that are contingent upon regulatory approval are not considered probable until the approvals are obtained as it is outside of the control of the Company. If it is probable that significant revenue reversal will not occur, the Company will estimate the milestone payments using the most likely amount method. The Company will re-assess the milestones each reporting period to determine the probability of achievement. Accounting Policy Elections Related to Adoption of New Revenue Recognition Standard The Company elected the following practical expedients in applying ASU 2014-09, Revenue from Contracts with Customers ("Topic 606") to its identified revenue streams: • Portfolio approach - contracts within each revenue stream have similar characteristics and the Company believes this approach would not differ materially than if applying Topic 606 to each individual contract. • Modified retrospective approach - the Company applied Topic 606 only to contracts with customers that were not completed at the date of initial application, January 1, 2018. • Significant financing component - the Company does not adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. • Shipping and handling activities - the Company considers any shipping and handling costs that are incurred after the customer has obtained control of the product as a cost to fulfill a promise and will account for them as an expense. • Contract costs - the Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less. The Company does not incur costs to obtain a contract or costs to fulfill a contract that would result in the capitalization of contract costs. Specifically, internal sales commissions are costs to fulfill a contract and are expensed in the same period that revenue is recognized, which is typically within the same quarterly reporting period. Contract costs are expensed or amortized in “Operating expenses” on the accompanying Consolidated Statements of Operations. The Company has not made significant changes to the judgments made in applying Topic 606 for the year ended December 31, 2019. Cost of Product Sales Cost of product sales is comprised of (i) costs to acquire products sold to customers, (ii) royalty, license payments and other agreements granting the Company rights to sell related products, (iii) distribution costs incurred in the sale of products; (iv) the value of any write-offs of obsolete or damaged inventory that cannot be sold, (v) minimum sale obligations and (vi) minimum purchase obligations. The Company acquired the rights to sell certain of its commercial products through license and assignment agreements with the original developers or other parties with interests in these products. These agreements obligate the Company to make payments under varying payment structures based on its net revenue from related products. Research and Development Costs Research and development costs are expensed as incurred. These costs include, but are not limited to, employee‑related expenses, including salaries, benefits and stock‑based compensation of research and development personnel; expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical trials and preclinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; other supplies; facilities, depreciation and other expenses, such as direct and allocated expenses for rent, utilities and insurance; and costs associated with preclinical activities and regulatory operations, pharmacovigilance, quality and travel. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors, such as clinical research organizations, with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. Clinical Trial Expense Accruals As part of the process of preparing its financial statements, the Company is required to estimate its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate trial expenses in its financial statements by matching those expenses with the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by subject progression and the timing of various aspects of the trial. The Company determines accrual estimates by taking into account discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third‑party vendors. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed might vary and might result in it reporting amounts that are too high or too low for any particular period. Acquired In-Process Research and Development Expenses Acquired in-process research and development ("IPR&D") expense includes the initial costs of IPR&D projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use. Amortization Expense Amortization expense includes the amortization of the Company's acquired intangible assets. There is no amortization expense included in cost of product sales or sales and marketing expense as all amortization expense is included within its own standalone line in operating expenses in the Company's consolidated statements of operations. Estimated Fair Value and Change in Fair Value of Contingent Consideration The Company's business acquisitions of Avadel Pharmaceuticals PLC's ("Avadel") pediatric products and TRx Pharmaceuticals, LLC ("TRx") involved the potential for future payment of consideration that is contingent upon the achievement of operation and commercial milestones and royalty payments on future product sales. The fair value of contingent consideration was determined at the acquisition date utilizing unobservable inputs such as the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period, the contingent consideration liability was remeasured at the current fair value with changes recorded in the consolidated statements of operations. As part of the Aytu Divestiture, Aytu assumed the Company's contingent consideration liability related to future royalties on Avadel's pediatric products. Additionally, as part of a settlement the Company entered into in the second quarter of 2019, the Company was released from its contingent consideration liability related to TRx. Therefore, the Company's contingent consideration liability was $0 as of December 31, 2019. Refer to Note 6 for more information. There is no change in fair value of contingent consideration included in cost of product sales or research and development costs. For the year ended December 31, 2019 and 2018, the change in fair value of contingent consideration related to royalties on Avadel's pediatric products was included within net income (loss) from discontinued operations, net of tax (inclusive of gain on sale). The change in fair value of contingent consideration related to TRx was included within its own standalone line in operating expenses from continuing operations in the Company's consolidated statements of operations because the contingent consideration was related to a product that was not sold as part of the Aytu Divestiture. Estimated Fair Value of Investment in Aytu and Change in Fair Value of Investment in Aytu As consideration for the sale of the Pediatric Portfolio to Aytu, the Company received approximately 9.8 million shares of Aytu Series G Convertible Preferred Stock. Pursuant to ASC 323, the Company accounts for this Investment as a financial instrument because Cerecor's Investment does not result in a controlling financial interest, as the preferred stock received is in-substance common stock and Cerecor does not have the ability to exercise significant influence or joint control of Aytu. Therefore, the fair value of the Investment in Aytu was determined at the divestiture date utilizing quoted prices for Aytu's common stock price with a discount for lack of marketability due to our shares being restricted as of December 31, 2019 and subject to a lockup period ending on July 1, 2020. Subsequent to the divestiture date, at each reporting period, the Investment in Aytu will be remeasured at current fair value with the change in fair value recorded to other income, net in the accompanying statements of operations. The Investment in Aytu is recorded in the consolidated balance sheet as a current asset because it is available for sale within one year of December 31, 2019. Estimated Fair Value of Guarantee and Change in Fair Value of Guarantee As of the closing date of the Aytu Divestiture on November 1, 2019, Aytu assumed the Company's debt obligation to Deerfield CSF and the contingent consideration liability related to future royalties on Avadel's pediatric products. In conjunction with the closing of the Aytu Divestiture in the fourth quarter of 2019, the Company entered into a Guarantee, which guarantees the payment of the assumed debt obligation and contingent consideration. The fair value of the Guarantees were determined at the time of the divestiture as the diff |
Aytu Divestiture
Aytu Divestiture | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Aytu Divestiture | Aytu Divestiture Overview of Sale of Pediatric Portfolio and Related Commercial Infrastructure to Aytu BioScience On October 10, 2019, the Company entered into the Aytu Purchase Agreement to sell the Company’s rights, title and interest in, assets relating to its Pediatric Portfolio, namely Aciphex ® Sprinkle™ , Cefaclor for Oral Suspension, Karbinal™ ER, Flexichamber™ , Poly-Vi-Flor ® and Tri-Vi-Flor™ as well as the corresponding commercial infrastructure consisting of the right to offer employment to Cerecor’s sales force and the assignment of supporting commercial contracts. The Aytu Divestiture closed on November 1, 2019. Aytu paid consideration of $4.5 million in cash and approximately 9.8 million shares of Aytu convertible preferred stock, and assumed certain of the Company’s liabilities, including the Company’s payment obligations payable to Deerfield CSF, LLC of $15.1 million and certain other liabilities of $11 million primarily related to contingent consideration, Medicaid rebates and sales returns. In addition, Aytu assumed future contractual obligations under existing license agreements associated with the Pediatric Portfolio. Armistice, a significant stockholder of the Company, is also a significant stockholder of Aytu. Upon closing the Aytu Divestiture, Cerecor terminated all of its sales force personnel, which included both those offered employment by Aytu, as well as any remaining sales force personnel. Additionally, Cerecor retained all rights to Millipred ® . Pursuant to a transition services agreement entered into between Aytu and Cerecor, Aytu will manage Millipred ® commercial operations for a monthly fee of $12,000 for up to 18 months or until the Company establishes an independent commercial infrastructure for the product. Deerfield Guarantee On November 1, 2019, in conjunction with the closing of the Aytu Divestiture, the Company entered into a Guarantee in favor of Deerfield CSF ("Deerfield"), which guarantees the payment by Aytu of the assumed liabilities to Deerfield, which includes the debt obligation ("Fixed Payment Guarantee") and the contingent consideration related to future potential royalties on Avadel's pediatric products ("Deferred Payment Guarantee"). Additionally, on November 1, 2019, the Company entered into a Contribution Agreement with Armistice and Avadel that governs contribution rights and obligations of the Company, Armistice and Avadel with respect to amounts that are paid by Armistice and Avadel to Deerfield under certain guarantees made by Armistice and Avadel to Deerfield. The debt obligation assumed by Aytu consists of fixed monthly payments to Deerfield of $0.1 million until January 2021 and an additional balloon payment of $15.0 million to Deerfield on January 31, 2021. Therefore, Cerecor's Fixed Payment Guarantee will end on January 31, 2021, upon the $15.0 million balloon payment being made to Deerfield. The contingent consideration assumed by Aytu consists of quarterly deferred payments equal to 15% of net sales of certain Pediatric Portfolio paid in arrears each quarter until the earlier of (i) February 5, 2026, or (ii) upon $12.5 million in aggregate deferred payments has been paid to Deerfield. $3.2 million of the contingent consideration was paid to Deerfield prior to the Aytu Divestiture and therefore as of November 1, 2019, Aytu was responsible for the remaining $9.3 million . Aytu is required to pay an amount equal to at least $0.1 million per month except the monthly Deferred Payment due on January 31, 2020 will be at least $0.2 million . Cerecor's Deferred Payment Guarantee will end upon the earlier of (i) February 5, 2026, or (ii) upon $12.5 million in aggregate deferred payments has been paid to Deerfield. Cerecor is required to perform under the Guarantee upon demand by Deerfield, which Deerfield can demand at any time if all or any part of the fixed payments and/or deferred payments are not paid by Aytu when due or upon breach of a covenant. As of December 31, 2019, the maximum potential amount of future payments under the Guarantee was $25.2 million , consisting of $16.1 million for the Fixed Payment Guarantee and $9.1 million for the Deferred Payment Guarantee. As of December 31, 2019, the fair value of the Guarantee was $1.8 million , consisting of $0.9 million for the Fixed Payment Guarantee and $0.9 million for the Deferred Payment Guarantee. The Guarantee is recorded within long-term liabilities of discontinued operations in the accompanying consolidated balance sheet as of December 31, 2019. The estimated fair value of Cerecor's Fixed Payment Guarantee as of December 31, 2019 was estimated as the difference between (i) the estimated value of the fixed payments using Cerecor's estimated cost of debt, and (ii) the estimated value of fixed payments using Aytu's estimated cost of debt. Specifically, the significant assumptions used in the estimated fair value of the Fixed Payment Guarantee as of December 31, 2019 include (i) future fixed monthly payments of $0.1 million from January 2020 through January 2021 and the additional balloon payment of $15.0 million due to Deerfield on January 31, 2021, (ii) Cerecor's estimated cost of debt, and (iii) Aytu's estimated cost of debt. Cerecor and Aytu's estimated cost of debt was estimated using a synthetic credit rating model, based on each company's financial performance as of December 31, 2019. The estimated fair value of Cerecor's Deferred Payment Guarantee as of December 31, 2019 was estimated as the difference between (i) the value of the estimated contingent payments using Cerecor's estimated cost of debt, and (ii) the value of the estimated contingent payments using Aytu's cost of debt. Specifically, the significant assumptions used in estimating the fair value of the Deferred Payment Guarantee as of December 31, 2019 include (i) simulated net sales of the Pediatric Products subject to the deferred payments, (ii) the estimated contingent payments according to the contractual terms based on the simulated net sales, (iii) Cerecor's cost of debt, and (iv) Aytu's cost of debt. Cerecor and Aytu's estimated cost of debt was estimated using a synthetic credit rating model, based on each company's financial performance as of December 31, 2019. Discontinued Operations As a result of the sale of the Pediatric Portfolio, as of December 31, 2019, the operating results from the Pediatric Portfolio are reported as income (loss) from discontinued operations, net of tax (inclusive of gain on sale) in the accompanying consolidated statements of operations. Accordingly, the accompanying consolidated financial statements for the years ended December 31, 2019 and 2018 reflect the operations and related assets and liabilities of the Pediatric Portfolio as a discontinued operation. During the quarter and year ended December 31, 2019, the Company recognized a gain of $8.0 million upon the close of the transaction, which is included in income (loss) from discontinued operations, net of tax (inclusive of gain on sale) in the accompanying consolidated statement of operation for the year ended December 31, 2019. The gain is comprised of $4.5 million of cash consideration received, $7.6 million of Aytu preferred stock consideration received (which represents its fair value on November 1, 2019 (see Note 6 for more information), $18.8 million of net assets transferred as of November 1, 2019 (excluding debt assumed), $15.1 million of debt assumed as of November 1, 2019, and $0.6 million of transaction expenses incurred. The following tables summarizes the assets and liabilities of the discontinued operations as of December 31, 2019 and 2018: December 31, 2019 2018 Assets Current assets: Accounts receivable, net $ 497,577 $ 2,335,228 Other receivables — 206,798 Inventory, net — 792,857 Prepaid expenses and other current assets — 797,562 Total current assets of discontinued operations 497,577 4,132,445 Intangibles assets, net — 27,474,214 Goodwill — 2,002,035 Total long-term assets of discontinued operations — 29,476,249 Liabilities Current liabilities: Accounts payable 387,975 — Accrued expenses and other current liabilities 3,503,037 5,402,494 Long-term debt, current portion — 1,050,000 Contingent consideration, current portion — 1,097,137 Total current liabilities of discontinued operations 3,891,012 7,549,631 Long term debt, net of current portion — 14,327,882 Contingent consideration, net of current portion — 6,697,217 Other long-term liabilities 1,755,000 — Total long-term liabilities of discontinued operations 1,755,000 21,025,099 Subsequent to the closing of the Aytu Divestiture on November 1, 2019, Cerecor retains continuing involvement with the divested Pediatric Portfolio mainly surrounding collection of accounts receivable associated with sales of Pediatric Portfolio prior to November 1, 2019, future sales returns made after November 1, 2019 relating to sales of the Pediatric Portfolio prior to the close date of the Aytu Divestiture and the Deerfield Guarantee of $1.8 million (discussed in detail above). As of December 31, 2019, Cerecor is entitled to the $0.5 million of accounts receivable associated with sales of the Pediatric Portfolio prior to November 1, 2019. The Company expects it will collect the accounts receivable in 2020. Additionally, pursuant to the Aytu Purchase Agreement, Aytu assumed sales returns of the Pediatric Portfolio made after the closing date of November 1, 2019 and primarily relating to sales prior to November 1, 2019 only to the extent such post-Closing sales returns exceed $2.0 million and are less than $2.8 million (in other words, Aytu will only assume $0.8 million of such returns). Therefore, Cerecor is liable for future sales returns of the Pediatric Portfolio sold prior to November 1, 2019 in excess of the $0.8 million assumed by Aytu. As of December 31, 2019, the Company estimated its sales return reserve from discontinued operations to be $2.3 million , which is included above in accrued expenses and other current liabilities from discontinued operations. In future periods, as additional information becomes available to the Company, the Company expects to recognize expense (or a benefit) related to actual sales returns of the Pediatric Portfolio in excess (or less than) the returns reserve recorded as of November 1, 2019, which will be recognized in loss from discontinued operations. The Company expects this involvement to continue until sales returns are no longer accepted on sales of the Pediatric Portfolio made prior to November 1, 2019, which, in line with the products' return policies, returns on these products may be accepted through 2023. The following table summarizes the results of discontinued operations for the year ended December 31, 2019 and 2018: Year Ended December 31, 2019 2018 Product revenue, net $ 10,166,611 $ 11,298,423 Operating expenses: Cost of product sales 4,288,234 4,217,594 General and administrative 137,911 165,674 Sales and marketing 8,521,190 7,977,243 Amortization expense 2,425,083 2,703,896 Impairment of intangible assets 1,449,121 — Change in fair value of contingent consideration 247,042 169,289 Total operating expenses 17,068,581 15,233,696 Interest expense, net (793,860 ) (827,882 ) Gain on sale of Pediatric Portfolio 7,964,924 — Income (loss) from discontinued operations before tax 269,094 (4,763,155 ) Income tax expense 70,888 15,556 Income (loss) from discontinued operations, net of tax (inclusive of gain on sale) $ 198,206 $ (4,778,711 ) The significant non-cash operating items from the discontinued operations for the years ended December 31, 2019 and 2018 are contained below. There were no non-cash investing items from the discontinued operations for the years ended December 31, 2019 and 2018. Year Ended December 31, 2019 2018 Operating activities Amortization $ 2,425,083 $ 2,703,896 Impairment of intangible assets 1,449,121 — Stock-based compensation, excluding amount included within gain on sale of Pediatric Portfolio 327,180 137,082 Amortization of inventory fair value adjustment associated with acquisition of TRx and Avadel Pediatric Product 107,271 170,629 Non-cash interest expense — 302,882 Gain on Aytu Divestiture (7,964,924 ) — Change in fair value of contingent consideration liability 247,042 169,289 |
Net (Loss) Income Per Share Of
Net (Loss) Income Per Share Of Common Stock, Basic And Diluted | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net (Loss) Income Per Share of Common Stock, Basic and Diluted | Net (Loss) Income Per Share of Common Stock, Basic and Diluted The Company computes earnings per share ("EPS") using the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared and participation rights in undistributed earnings. The Company has two classes of stock outstanding, common stock and preferred stock. The preferred stock was issued in December 2018, upon Armistice exercising warrants to acquire an aggregate of 2,857,143 shares of the Series B Convertible Preferred Stock ("convertible preferred stock"). The convertible preferred stock has the same rights and preferences as the Company’s common stock, other than being non-voting, and is convertible into shares of common stock on a 1-for- 5 ratio. The convertible preferred stock is considered a separate class of stock for EPS purposes, however basic and diluted EPS was not provided for the convertible preferred stock for the year ended December 31, 2018 because the shares were only outstanding for five days in 2018, and therefore, EPS for the preferred stock is immaterial for the year ended December 31, 2018. EPS for both common stock and preferred stock is disclosed for the year ended December 31, 2019. EPS for common stock and EPS for preferred stock is computed by dividing the sum of distributed earnings and undistributed earnings for each class of stock by the weighted average number of shares outstanding for each class of stock for the period. In applying the two-class method, undistributed earnings are allocated to common stock and preferred stock based on the weighted average shares outstanding during the period, which assumes the convertible preferred stock has been converted to common stock. Diluted net (loss) income per share includes the potential dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect is dilutive. Common stock equivalents include: (i) outstanding stock options and restricted stock units, which are included under the "treasury stock method" when dilutive; (ii) common stock to be issued upon the assumed conversion of the Company's unit purchase option (the "UPO") shares, which are included under the "if-converted method" when dilutive; and (iii) common stock to be issued upon the exercise of outstanding warrants, which are included under the "treasury stock method" when dilutive. Because the impact of these items is generally anti-dilutive during periods of net loss, there is no difference between basic and diluted loss per common share for periods with net losses. In periods of net loss, losses are allocated to the participating security only if the security has not only the right to participate in earnings, but also a contractual obligation to share in the Company's losses. The following table sets forth the computation of basic and diluted net loss per share of common stock for continuing and discontinued operations for the years ended December 31, 2019 and 2018 , which includes both classes of participating securities: Year Ended December 31, 2019 Common stock Preferred Stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net (loss) income $ (12,204,552 ) $ 148,673 $ (4,066,201 ) $ 49,533 Denominator: Weighted average shares 42,878,040 42,878,040 2,857,143 2,857,143 Basic and diluted net loss per share $ (0.28 ) $ 0.00 $ (1.42 ) $ 0.01 Year Ended December 31, 2018 Common stock Continuing Operations Discontinued Operations Total Numerator: Net loss $ (35,274,099 ) $ (4,778,711 ) $ (40,052,810 ) Deemed distribution to stockholder 1,657,383 — 1,657,383 Allocation of undistributed net loss to common stockholders $ (36,931,482 ) $ (4,778,711 ) $ (41,710,193 ) Denominator: Weighted average shares 34,773,613 34,773,613 34,773,613 Basic and diluted net loss per share $ (1.06 ) $ (0.14 ) $ (1.20 ) As part of a private placement with Armistice entered into during the fourth quarter of 2018, the Company also entered into a securities purchase agreement with Armistice pursuant to which the Company issued warrants to purchase up to 4,000,000 shares of the Company's common stock with a term of 5.5 years and an exercise price of $12.50 per share (the "incentive warrants"). For accounting purposes, the Company calculated the fair value of the incentive warrants of $1.7 million , which was considered a deemed distribution to Armistice for the year ended December 31, 2018. Therefore, the net loss of $40.1 million for the year ended December 31, 2018 was increased by the deemed distribution of $1.7 million to arrive at the net loss attributable to common stockholders of $41.7 million . While the incentive warrants do have the rights to participate in undistributed earnings, the incentive warrants issued do not share in net losses of the Company. As such, the incentive warrants are excluded from the weighted average shares and warrants outstanding during periods of net loss. The following outstanding securities at December 31, 2019 and 2018 have been excluded from the computation of diluted weighted shares outstanding, as they could have been anti-dilutive: December 31, 2019 2018 Stock options 4,480,606 4,246,597 Warrants on common stock 4,024,708 4,024,708 Restricted Stock Units 267,500 445,000 Underwriters' unit purchase option 40,000 40,000 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations and Asset Acquisitions [Abstract] [Abstract] | |
Acquisitions | Acquisitions Ichorion Asset Acquisition On September 24, 2018, the Company entered into, and subsequently consummated the transactions contemplated by, an agreement and plan of merger (the "Ichorion Merger Agreement") by and among the Company and Ichorion Therapeutics, Inc., a Delaware corporation (the “Ichorion Asset Acquisition”), with Ichorion surviving as a wholly owned subsidiary of the Company. The consideration for the Ichorion Asset Acquisition consisted of approximately 5.8 million shares of the Company’s common stock, as adjusted for Estimated Working Capital as defined in the Ichorion Merger Agreement. The shares of common stock issued as part of the acquisition may not be resold until January 2020. Consideration for the Ichorion Asset Acquisition includes certain development milestones worth up to an additional $15.0 million, payable either in shares of the Company's common stock or in cash, at the election of the Company. The fair value of the common stock shares transferred at closing was approximately $20.0 million using the Company's closing stock price on September 24, 2018 and offset by an estimated discount for lack of marketability calculated using guideline public company volatility for comparable companies. The assets acquired consisted primarily of $18.7 million of IPR&D, $1.6 million of cash and $0.2 million assembled workforce. The Company recorded this transaction as an asset purchase as opposed to a business combination as management concluded that substantially all of the value received was related to one group of similar identifiable assets which was the IPR&D for the three preclinical therapies for inherited metabolic disorders known as CDGs (CERC-801, CERC-802 and CERC-803). The Company considered these assets similar due to similarities in the risks for development, compound type, stage of development, regulatory pathway, patient population and economics of commercialization. The fair value of the IPR&D was immediately recognized as Acquired In-Process Research and Development expense as the IPR&D asset has no other alternate use due to the stage of development. The acquired IPR&D expense was not tax deductible for the year ended December 31, 2018. The $0.2 million of transaction costs incurred were recorded to acquire IPR&D expense. The assembled workforce asset recorded to intangible assets will be amortized over an estimated useful life of two years . The contingent consideration of up to an additional $15.0 million relates to three future development milestones. The first milestone is the first product to be approved for marketing by the FDA on or prior to December 31, 2021. If this milestone is met, the Company is required to make a milestone payment of $6.0 million . The second milestone is the second product being approved for marketing by the FDA on or prior to December 31, 2021. If this milestone is met, the Company is required to make a milestone payment of $5.0 million . The third milestone is a protide molecule being approved by the FDA on or prior to December 31, 2023. If this milestone is met, the Company is required to make a milestone payment of $4.0 million . All milestones are payable in either shares of the Company's common stock or cash, at the election of the Company. The contingent consideration related to the development milestones will be recognized if and when such milestones are probable and can be reasonably estimated. As of December 31, 2019, no contingent consideration related to the development milestone has been recognized. The Company will continue to monitor the development milestones at each reporting period. Acquisitions of Businesses Avadel Pediatric Products Acquisition As part of the Company's Aytu Divestiture, Cerecor sold its rights, title and interest in each of the marketed pediatric products it initially acquired from Avadel in 2018, which included Aciphex ® Sprinkle™, Cefaclor for Oral Suspension, Karbinal™ ER, Flexichamber™. On February 16, 2018, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Avadel US Holdings, Inc., Avadel Pharmaceuticals (USA), Inc., Avadel Pediatrics, Inc., Avadel Therapeutics, LLC and Avadel Pharmaceuticals PLC (collectively, the “Sellers”) to purchase and acquire all rights to the Sellers’ pediatric products. Total consideration transferred to the Sellers consisted of a cash payment of one dollar. In addition, the Company assumed existing seller debt due in January 2021 with a fair value of $15.1 million and contingent consideration relating to royalty obligations through February 2026 with a fair value at acquisition date of approximately $7.9 million . As a result of the Avadel pediatric products acquisition, the Company recorded goodwill of $3.8 million , which is deductible over 15 years for income tax purposes. The transaction was accounted for as a business combination under the acquisition method of accounting. Accordingly, the tangible and identifiable intangible assets acquired and liabilities assumed were recorded at fair value as of the date of acquisition, with the remaining purchase price recorded as goodwill. The goodwill recognized is attributable primarily to strategic opportunities related to an expanded commercial footprint and diversified pediatric product portfolio that is expected to provide revenue and cost synergies. During the second quarter of 2018, the Company identified and recorded measurement period adjustments to the preliminary purchase price allocation. These adjustments are reflected in the tables below. The measurement period adjustments were the result of additional analysis performed and information identified during the second quarter of 2018 based on facts and circumstances that existed as of the purchase date. There were no additional measurement adjustments recorded in 2018. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition and as adjusted for measurement period adjustments identified during the second quarter of 2018: At February 16, 2018 (preliminary) Measurement Period Adjustments At February 16, 2018 (as adjusted) Inventory $ 2,549,000 $ (1,831,000 ) $ 718,000 Prepaid assets — 570,000 570,000 Intangible assets 16,453,000 1,838,000 18,291,000 Accrued expenses — (362,000 ) (362,000 ) Fair value of debt assumed (15,272,303 ) 197,303 (15,075,000 ) Fair value of contingent consideration (7,875,165 ) (44,835 ) (7,920,000 ) Total net liabilities assumed (4,145,468 ) 367,468 (3,778,000 ) Consideration exchanged 241,000 (240,999 ) 1 Goodwill $ 4,386,468 $ (608,467 ) $ 3,778,001 The purchase price allocation related to the acquisition of Avadel's pediatric products was finalized in 2018. The fair values of intangible assets, including marketing rights, licenses and developed technology, were determined using variations of the income approach. Varying discount rates were also applied to the projected net cash flows. The Company believes the assumptions are representative of those a market participant would use in estimating fair value. The fair value of intangible assets both as of the date of acquisition and as adjusted by measurement period adjustments identified during the second quarter of 2018 includes the following: At February 16, 2018 (preliminary) Measurement Period Adjustments At February 16, 2018 (as adjusted) Acquired Product Marketing Rights - Karbinal $ 6,221,000 $ (21,000 ) $ 6,200,000 Acquired Product Marketing Rights - AcipHex 2,520,000 283,000 2,803,000 Acquired Product Marketing Rights - Cefaclor 6,291,000 1,320,000 7,611,000 Acquired Developed Technology - Flexichamber 1,131,000 546,000 1,677,000 Acquired IPR&D - LiquiTime formulations 290,000 (290,000 ) — Total $ 16,453,000 $ 1,838,000 $ 18,291,000 During the second quarter of 2019, the Company made a strategic decision to eliminate sales force efforts related to selling Flexichamber (other than the limited inventory currently on hand). As a result of this decision, paired with significant deviations from forecasted sales, management identified an impairment indicator for Flexichamber. Accordingly, during the second quarter of 2019, the Company performed a test for recoverability and concluded that the sum of its estimated future undiscounted cash flows was less than its carrying value of $1.4 million . Management then measured the impairment loss by calculating the excess of Flexichamber's carrying amount over its fair value. Management determined that due to the absence of future material cash flows the fair value of Flexichamber as of June 30, 2019, which is considered a Level 3 nonrecurring fair value measurement, was $0 . Accordingly, a full impairment in the amount of $1.4 million was recognized within income (loss) from discontinued operations, net of tax (inclusive of gain on sale) for the year ended December 31, 2019 because Flexichamber was part of the Aytu Divestiture. In addition, because the Company expected the sale of remaining inventory on hand will not generate material cash flows, the Company wrote down the existing inventory on hand as of June 30, 2019 to $0 , which resulted in $0.2 million charge to cost of product sales of discontinued operations during the year ended December 31, 2019. TRx Acquisition As part of the Company's Aytu Divestiture, Cerecor sold its rights, title and interest in Metafolin (also referred to as Poly-Vi-Flor/Tri-Vi-Flor) which it initially acquired as part of the TRx acquisition. On November 17, 2017, the Company entered into, and consummated the transactions contemplated by, an equity interest purchase agreement (the “TRx Purchase Agreement”) by and among the Company, TRx, Fremantle Corporation and LRS International LLC, the selling members of TRx (collectively, the “TRx Sellers”), which provided for the purchase of all of the equity and ownership interests of TRx by the Company (the "TRx Acquisition"). The consideration for the TRx Acquisition consisted of $18.9 million in cash, as adjusted for estimated working capital, estimated cash on hand, estimated indebtedness and estimated transaction expenses, as well as 7,534,884 shares of the Company’s common stock having an aggregate value on the closing date of $8.5 million (the "Equity Consideration") and certain potential contingent payments. Upon closing, the Company issued 5,184,920 shares of its common stock to the TRx Sellers. Pursuant to the TRx Purchase Agreement, the issuance of the remaining 2,349,968 shares were subject to the Company's stockholder approval. In May 2018, stockholder approval was obtained and the remaining shares were issued to the TRx Sellers. The contingent shares were initially recorded to contingently issuable shares, which is recorded within stockholder's equity and were reclassed to common stock and additional paid in capital upon issuance, on the consolidating balance sheet date. As a result of the TRx Acquisition, the Company recorded goodwill of $12.6 million , of which $8.7 million was deductible for income taxes. During the third quarter of 2018, the Company identified and recorded measurement period adjustments to its preliminary purchase price allocation that was disclosed in prior periods. These adjustments are reflected in the tables below. If the measurement period adjustments were reflected in the consolidated statement of operations for the year ended December 31, 2017 its impact would have been immaterial. The measurement period adjustments were the result of an arbitration ruling discussed in further detail in Note 16, the facts and circumstances of which existed as of the acquisition date. The following table summarizes the preliminary acquisition-date fair value of the consideration transferred at the date of acquisition both as disclosed in prior periods prior to the third quarter of 2018 and as adjusted for measurement period adjustments identified during the third quarter of 2018: At November 17, 2017 (preliminary) Measurement Period Adjustments At November 17, 2017 (as adjusted) Cash $ 18,900,000 $ — $ 18,900,000 Common stock (including contingently issuable shares) 8,514,419 — 8,514,419 Contingent payments 2,576,633 (1,210,000 ) 1,366,633 Total consideration transferred $ 29,991,052 (1,210,000 ) 28,781,052 The TRx Acquisition was accounted for as a business combination under the acquisition method of accounting. Accordingly, the tangible and identifiable intangible assets acquired, and liabilities assumed, were recorded at fair value as of the date of acquisition, with the remaining purchase price recorded as goodwill. The goodwill recognized is attributable primarily to strategic opportunities related to leveraging TRx’s research and development, intellectual property, and processes. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition both as disclosed in prior periods prior to the third quarter of 2018 and as adjusted for measurement period adjustments identified during the third quarter of 2018: At November 17, 2017 (preliminary) Measurement Period Adjustments At November 17, 2017 (as adjusted) Fair value of assets acquired: Cash and cash equivalents $ 11,068 $ — $ 11,068 Accounts receivable, net 2,872,545 — 2,872,545 Inventory 495,777 — 495,777 Prepaid expenses and other current assets 134,281 — 134,281 Other receivables — 2,764,515 2,764,515 Identifiable Intangible Assets: — Acquired product marketing rights - Metafolin (Poly-Vi-Flor/Tri-Vi-Flor) 10,465,000 1,522,000 11,987,000 PAI sales and marketing agreement 2,334,000 219,000 2,553,000 Acquired product marketing rights - Millipred 4,714,000 342,000 5,056,000 Acquired product marketing rights - Ulesfia 555,000 (555,000 ) — Total assets acquired 21,581,671 4,292,515 25,874,186 Fair value of liabilities assumed: Accounts payable 192,706 — 192,706 Accrued expenses and other current liabilities 4,850,422 3,764,515 8,614,937 Deferred tax liability 839,773 78,840 918,613 Total liabilities assumed 5,882,901 3,843,355 9,726,256 Total identifiable net assets 15,698,770 449,160 16,147,930 Fair value of consideration transferred 29,991,052 (1,210,000 ) 28,781,052 Goodwill $ 14,292,282 $ (1,659,160 ) $ 12,633,122 The purchase price allocation related to the TRx Acquisition was finalized in 2018. The fair values of intangible assets, including marketing rights, licenses and developed technology, were determined using variations of the income approach, specifically the multi-period excess earnings method. Varying discount rates were also applied to the projected net cash flows. The Company believes the assumptions are representative of those a market participant would use in estimating fair value. The final fair value of intangible assets both as disclosed in prior periods and as adjusted by measurement period adjustments identified during the third quarter of 2018 includes the following: At November 17, Measurement Period Adjustments At November 17, 2017 (as adjusted) Acquired product marketing rights - Metafolin (Poly-Vi-Flor/Tri-Vi-Flor) $ 10,465,000 $ 1,522,000 $ 11,987,000 PAI sales and marketing agreement 2,334,000 219,000 2,553,000 Acquired product marketing rights - Millipred 4,714,000 342,000 5,056,000 Acquired product marketing rights - Ulesfia 555,000 (555,000 ) — Total $ 18,068,000 $ 1,528,000 $ 19,596,000 The Company received written notice to terminate the PAI sales and marketing agreement in the second quarter of 2018. As a result, the Company reassessed the fair value of the PAI sales and marketing agreement on that date (a level III non-recurring fair value measurement) and concluded due to the absence of future cash flows beyond the date of termination that the fair value was $0 . An impairment charge was recognized in the year ended December 31, 2018 in the amount of $1.9 million , representing the remaining net book value of the PAI sales and marketing agreement intangible asset. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC No. 820, Fair Value Measurements and Disclosures (“ASC 820”) defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value standard also establishes a three‑level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: • Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. • Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model‑derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability. • Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability. The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities from continuing operations that are measured at fair value on a recurring basis: December 31, 2019 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 2,240,230 $ — $ — Investment in Aytu $ — $ 7,628,947 $ — Liabilities Warrant liability** $ — $ — $ 3,460 Unit purchase option liability** $ — $ — $ 10,594 December 31, 2018 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 7,324,932 $ — $ — Liabilities Contingent consideration $ — $ — $ 1,256,210 Warrant liability** $ — $ — $ 2,950 Unit purchase option liability** $ — $ — $ 7,216 *Investments in money market funds are reflected in cash and cash equivalents on the accompanying consolidated balance sheets. **Warrant liability and unit purchase option liability are reflected in accrued expenses and other current liabilities on the accompanying consolidated balance sheets. As of December 31, 2019 and 2018 , the Company’s financial instruments included cash and cash equivalents, restricted cash, accounts receivable, other receivables, accounts payable, accrued expenses and other current liabilities, warrant liability, the underwriters' unit purchase option liability and contingent consideration. The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, other receivables, accounts payable, accrued expenses and other current liabilities approximate their respective fair values because of the short-term nature of these accounts. Level 2 Valuation The table presented below is a summary of changes in fair value of the Company's Level 2 valuation for the Investment in Aytu for the year ended December 31, 2019: Investment in Aytu Balance at December 31, 2018 $ — Initial valuation of Investment in Aytu upon issuance of Aytu Preferred Stock 7,575,015 Change in fair value of Investment in Aytu 53,932 Balance at December 31, 2019 $ 7,628,947 As part of the consideration for the Aytu Divestiture, Aytu issued to Cerecor 9,805,845 shares of Aytu Series G Convertible Preferred Stock (the "Aytu Series G Preferred Stock" or "Aytu Preferred Stock") at a price of $1.2747 per share, which, pursuant to the Aytu Purchase Agreement, represents a formula averaging the volume weighted average price of Aytu's common stock for the 30-day period ending immediately prior to August 30, 2019 and the 30-day period ending on October 28, 2019. The Aytu Series G Preferred Stock is not transferable until July 1, 2020. Further, the Aytu Series G Preferred Stock becomes convertible at the option of Cerecor and solely in connection with either (i) the distribution of the underlying shares of common stock issuable upon conversion to Cerecor’s stockholders; or (ii) the sale of the underlying shares of common stock issuable upon conversion in open market broker transactions or private sales to unaffiliated third parties. The Aytu Series G Preferred Stock is similar to Aytu's common stock other than it has no voting rights, is subject to a lock-up period and is only convertible to common stock in certain circumstances. Additionally, the Aytu Series G Preferred Stock was restricted as of December 31, 2019. Upon closing of the Aytu Divestiture on November 1, 2019, the Company recognized $7.6 million as the estimated fair value of the Aytu Series G Preferred Stock on that date. The fair value as of November 1, 2019 was calculated using Aytu's stock price close on November 1, 2019 of $1.03 per share and offset by an estimated discount for lack of marketability of 25% calculated using guideline public company volatility for comparable companies. Subsequent to the initial measurement, at each reporting period, the Investment in Aytu will be remeasured at the current fair value with the change in fair value recorded to other income, net in the accompanying statements of operations. As of December 31, 2019, the Investment of Aytu was $7.6 million , representing an immaterial change from the initial measurement on November 1, 2019. The fair value as of December 31, 2019 was calculated using Aytu's closing stock price on December 31, 2019 of $0.9725 per share and offset by an estimated discount for lack of marketability of 20% calculated using guideline public company volatility for comparable companies. The Investment in Aytu is recorded in the consolidated balance sheet as a current asset because the Aytu Series G Preferred Stock is available for sale within one year of December 31, 2019. Subsequent to December 31, 2019, Aytu's common stock price has been volatile and therefore Cerecor may recognize a significant gain or loss on the change in fair value of the Investment in Aytu for the three months ending March 31, 2020 and any future reporting period based on actual movements in the underlying stock price. Level 3 Valuation The tables presented below are a summary of changes in the fair value of the Company’s Level 3 valuations for the warrant liability, unit purchase option liability and contingent consideration from continuing operations for the years ended December 31, 2019 and 2018 : Warrant Unit purchase Contingent liability option liability consideration Total Balance at December 31, 2018 $ 2,950 $ 7,216 $ 1,256,211 $ 1,266,377 Change in fair value due to Lachlan Settlement — — (1,277,150 ) (1,277,150 ) Change in fair value 510 3,378 20,939 24,827 Balance at December 31, 2019 $ 3,460 $ 10,594 $ — $ 14,054 Warrant Unit purchase Contingent liability option liability consideration Total Balance at December 31, 2017 $ 8,185 $ 26,991 $ 2,577,134 $ 2,612,310 Purchase price allocation measurement period adjustment of contingent consideration — — (1,210,000 ) (1,210,000 ) Change in fair value (5,235 ) (19,775 ) (110,923 ) (135,933 ) Balance at December 31, 2018 $ 2,950 $ 7,216 $ 1,256,211 $ 1,266,377 In 2014, the Company issued warrants to purchase 625,208 shares of convertible preferred stock. Upon the closing of the Company's initial public offering ("IPO") in October 2015, these warrants became warrants to purchase 22,328 shares of common stock, in accordance with their terms. The warrants expire in October 2020. The warrants represent a freestanding financial instrument that is indexed to an obligation, which the Company refers to as the warrant liability. The warrant liability is marked-to-market each reporting period with the change in fair value recorded to other income, net in the accompanying statements of operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified to stockholders’ equity. The fair value of the warrant liability is estimated using a Black-Scholes option-pricing model. The significant assumptions used in preparing the option pricing model for valuing the warrant liability as of December 31, 2019 , include (i) volatility of 42% , (ii) risk-free interest rate of 1.59% , (iii) strike price of $8.40 , (iv) fair value of common stock of $5.39 , and (v) expected life of 0.8 years. The underwriters’ unit purchase option (the “UPO”) was issued to the underwriters of the Company's IPO in 2015 and provides the underwriters the option to purchase up to a total of 40,000 units. The units underlying the UPO will be, immediately upon exercise, separated into shares of common stock, underwriters’ Class A warrants and underwriters’ Class B warrants (such warrants together referred to as the Underwriters’ Warrants). The Underwriters’ Warrants are warrants to purchase shares of common stock. The Class B warrants expired in April 2017 and the Class A warrants expired in October 2018, while the UPO expires in October 2020. The Company classifies the UPO as a liability as it is a freestanding marked-to-market derivative instrument that is precluded from being classified in stockholders’ equity. The UPO liability is marked-to-market each reporting period with the change in fair value recorded to other income, net in the accompanying statements of operations until the UPO is exercised, expires or other facts and circumstances lead the UPO to be reclassified to stockholders’ equity. The fair value of the UPO liability is estimated using a Black-Scholes option-pricing model. The significant assumptions used in preparing the simulation model for valuing the UPO as of December 31, 2019 , include (i) volatility of 42% , (ii) risk-free interest rate of 1.59% , (iii) unit strike price of $7.47 , (iv) fair value of underlying equity of $5.39 , and (v) expected life of 0.8 years. The Company's business acquisitions of Avadel's pediatric products and TRx (see Note 5) involved the potential for future payment of consideration that is contingent upon the achievement of operational and commercial milestones and royalty payments on future product sales. The fair value of contingent consideration was determined at the acquisition date utilizing unobservable inputs such as the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period, the contingent consideration liabilities are remeasured at the current fair value with changes recorded in the consolidated statement of operations. Prior to the close of the Aytu Divestiture on November 1, 2019, the Company was required to pay a 15% annual royalty on net sales of the acquired Avadel pediatric products through February 2026 up to an aggregate amount of $12.5 million . The fair value of the future royalty was the expected future value of the contingent payments discounted to a present value. As detailed in Note 3, in connection with the close of the Aytu Divestiture on November 1, 2019, the contingent consideration related to Avadel's pediatric products was assumed by Aytu. Therefore, as of December 31, 2019, no value was assigned to the contingent consideration as of December 31, 2019. On November 1, 2019, in conjunction with the closing of the Aytu Divestiture, the Company entered into a Guarantee which guarantees the payment by Aytu of the contingent consideration related to future potential royalties on Avadel's pediatric products. For additional information regarding the Guarantee, which is recorded within discontinued operations, see Note 3. The consideration for the TRx Acquisition included certain potential contingent payments. First, pursuant to the TRx Purchase Agreement, the Company was required to pay $3.0 million to the TRx Sellers upon the gross profit related to TRx products achieving or exceeding a gross profit of $12.6 million in 2018. The Company did not achieve this contingent event in 2018 and therefore no value was assigned to the contingent payout for the year ended December 31, 2018. Additionally, the Company was required to pay the following: (1) $2.0 million upon the transfer of the Ulesfia NDA to the Company ("NDA Transfer Milestone"), and (2) $2.0 million upon FDA approval of a new dosage of Ulesfia ("FDA Approval Milestone"). However, as part of the settlement the Company entered into during the second quarter of 2019 with Lachlan Pharmaceuticals, an Irish company controlled by the previous owners of TRx, among additional terms discussed in Note 16, the Company gave up its right to sell Ulesfia, except for a limited amount of inventory on hand until that inventory is sold or expired. As a result, the settlement released the Company from the potential contingent payments related to the NDA Transfer Milestone and FDA Approval Milestone and therefore, no value was assigned to the two milestones as of December 31, 2019 resulting in the Company recognizing a gain on the change of fair value of contingent consideration of $1.3 million for the year ended December 31, 2019. Additionally, as a result of the Aytu Divestiture, the Company performed a non-recurring Level 3 valuation to assign goodwill to the disposed Pediatric Portfolio using the relative fair value approach (see Note 3 and Note 10 for more detail). The Company also recognized impairment of $1.4 million for the year ended December 31,2019 due to the impairment of the Flexichamber asset, which is considered a non-recurring Level 3 valuation. As Flexichamber was a part of the Aytu Divestiture, the impairment expense was included in income (loss) from discontinued operations, net of tax (inclusive of gain on sale) for the year ended December 31, 2019 (see Note 3 and Note 5 for more detail). No other changes in valuation techniques or inputs occurred during the years ended December 31, 2019 and 2018 . No transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy occurred during the years ended December 31, 2019 and 2018 . |
Aevi Loan
Aevi Loan | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Aevi Loan | Aevi Loan As discussed in detail in Note 17, on December 5, 2019, the Company entered into a Merger Agreement with Aevi that was subsequently consummated during the first quarter of 2020. In connection with the Merger Agreement, Cerecor agreed to fund certain expenses of Aevi related to the exercise of an exclusive license from MedImmune Limited to develop and commercialize a Phase 2‑ready fully human monoclonal antibody that targets interleukin 18, or IL‑18, AEVI‑007 (the "AZ Option"), as well as fund the operating expenses of Aevi from December 5, 2019 through the earlier of the termination of the Merger Agreement or the closing of the Merger. Cerecor received from Aevi two promissory notes in consideration for the loans for such expenses. In December 2019, Aevi requested and Cerecor funded a $4.1 million advance under the note specific to the AZ Option. Aevi did not request any advances under the note specific to general operating expenses. Pursuant to the Aevi Loan, the maximum loan amount was $5.0 million , together with interest on the outstanding principal amount of all such advances at an annual rate of 5% . The use of proceeds was limited to fund obligations related to the AZ Option. All unpaid principal and unpaid accrued interest on the Aevi Loan was due and payable in full on December 5, 2020 (unless the Merger Agreement was terminated or upon consummation of the Merger). Upon termination of the Merger Agreement for any reason, Aevi would be required to repay the amount borrowed under the Aevi Loan in full. Upon consummation of the Merger, the Aevi Loan was to be forgiven. As of December 31, 2019, it was unknown if the Merger would be consummated. Accordingly, as of December 31, 2019, the Company recognized the $4.1 million loaned to Aevi as an other receivable within its accompanying consolidated balance sheet. As discussed in detail in Note 17, on February 3, 2020, the Merger was consummated in accordance with the terms of the Merger Agreement and the $4.1 million loan that Cerecor advanced to Aevi in December 2019 was forgiven. The Company is in the process of determining the financial effect of the Merger, including whether the Merger will be recorded as an asset purchase or a business combination and will perform preliminary purchase accounting during the first quarter of 2020, however the Company preliminarily plans to treat the Aevi Loan as purchase price consideration. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory consists of finished goods stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis. The Company reviews the composition of inventory at each reporting period in order to identify obsolete, slow-moving, quantities in excess of expected demand, or otherwise non-saleable items. Inventory consisted of the following as of December 31, 2019 and 2018: December 31, 2019 2018 Raw materials $ — $ 11,392 Finished goods 46,705 497,949 Inventory reserve (25,371 ) (191,418 ) Inventory, net of continuing operations $ 21,334 $ 317,923 During the years ended December 31, 2019 and 2018, the Company recorded a related charge to cost of goods sold for obsolete inventory of continuing operations of $36,577 and $174,944 , respectively. |
Property And Equipment
Property And Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment as of December 31, 2019 and 2018 consisted of the following: December 31, 2019 2018 Furniture and equipment $ 143,168 $ 133,229 Computers and software 6,708 122,065 Right-of-use asset (Corporate Headquarters' Lease) 718,628 — Leasehold improvements 657,328 463,381 Total property and equipment 1,525,832 718,675 Less accumulated depreciation (78,169 ) (132,163 ) Property and equipment, net $ 1,447,663 $ 586,512 Depreciation expense was $119,488 and $22,515 for the years ended December 31, 2019 and December 31, 2018 , respectively. Corporate Headquarters' Lease The Company identified one operating lease, which is for its corporate headquarters located in Rockville, Maryland. The annual base rent for the office space is $161,671 , subject to annual 2.5% increases over the term of the lease. The lease provides for a rent abatement for a period of 12 months following the Company's date of occupancy. The lease has an initial term of 10 years from the date the Company makes its first annual fixed rent payment, which occurred in January 2020. The Company has the option to extend the lease two times, each for a period of five years , and may terminate the lease as of the sixth anniversary of the first annual fixed rent payment, upon the payment of a termination fee. As of the lease commencement date, it was not reasonably certain that the Company will exercise the renewal periods or early terminate the lease and therefore, the end date of the lease for accounting purposes is January 31, 2030. The remaining term of the lease at December 31, 2019 was 10.1 years . Supplemental balance sheet information related to the lease are as follows: December 31, 2019 Property and equipment, net $ 718,626 Other current liabilities $ 155,815 Other long-term liabilities $ 1,111,965 The operating lease ROU asset is included in property and equipment and the lease liability is included in accrued expenses and other current liabilities and other long-term liabilities in our condensed consolidated balance sheets. In order to determine the present value of lease payments, the Company utilized a discount rate of 7.7% . This rate was determined based on available information of the rate of interest the Company would pay to borrow on a collateralized basis at an amount equal to the lease payments in a similar economic environment over a similar term on the transition date. The components of lease expense for the year ended December 31, 2019: Year Ended December 31, 2019 2018 Operating lease cost* $ 160,767 $ 239,259 *Includes short-term leases, which are immaterial. Because the corporate headquarters lease provides for a 12 -month lease abatement, the cash paid for amounts included in the measurement of lease liabilities was $0 as of December 31, 2019. The following table shows a maturity analysis of the operating lease liability as of December 31, 2019: Undiscounted Cash Flows 2020 $ 155,815 2021 169,510 2022 173,748 2023 178,092 2024 182,544 Thereafter 1,000,746 Total lease payments $ 1,860,455 Less implied interest (592,675 ) Total $ 1,267,780 Upon consummation of the Aevi Merger on February 3, 2020, the Company also occupies an office in Wayne, Pennsylvania, which is an operating lease. The lease expires April 2020 and goes month-to-month thereafter, however both the Company and the landlord have the right to terminate the lease 60 days after written notice is provided. The monthly rent payment for this lease is $12,050 . |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The changes in the carrying amount of goodwill for the years ended December 31, 2019 and 2018 were as follows: Balance as of December 31, 2017 $ 12,290,247 Goodwill from acquisition of Avadel's pediatric products 3,778,001 Goodwill purchase price allocation measurement period adjustment from acquisition of TRx Pharmaceuticals (1,659,160 ) Balance as of December 31, 2018 and as of December 31, 2019 $ 14,409,088 The Company consists of one reporting unit. A portion of the Company's reporting unit was disposed of as part of the Aytu Divestiture, which closed on November 1, 2019. To determine the amount of goodwill allocated to the discontinued operation, the Company assigned goodwill based on the relative fair values of the portion of the reporting unit disposed and the portion of the reporting unit remaining (relative to the total estimated enterprise fair value of Cerecor on the closing date of the Aytu Divestiture on November 1, 2019). The estimated fair value of the reporting unit disposed was determined based on the estimated purchase consideration received as part of the Aytu Divestiture. The estimated fair value of the reporting unit remaining was determined based on the estimated enterprise fair value of Cerecor on the closing date of the Aytu Divestiture, which was based on the Company's market capitalization on November 1, 2019 and increased by an estimated enterprise value control premium of 20% calculated using historical market data of similar transactions at comparable companies. Based on the relative fair value approach, the Company assigned 12.2% or $2.0 million of its total goodwill balance to the Pediatric Portfolio and therefore the goodwill balance from continuing operations was $14.4 million as of December 31, 2018 and December 31, 2019. There were no accumulated impairment losses to goodwill at December 31, 2019 or December 31, 2018. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The changes in intangible assets for the years ended December 31, 2019 and 2018 were as follows: Balance as of December 31, 2017 $ 7,286,688 Additions 150,000 Purchase price allocation measurement period adjustments 6,000 Amortization (1,815,872 ) Impairment (1,861,562 ) Balance as of December 31, 2018 $ 3,765,254 Amortization (1,338,996 ) Balance as of December 31, 2019 $ 2,426,258 The Company received written notice to terminate the PAI sales and marketing agreement in the second quarter of 2018. As a result the Company reassessed the fair value of the PAI sales and marketing agreement on that date (a level III non‑recurring fair value measurement) and concluded due to the absence of future cash flows beyond the date of termination that the fair value was $0 . An impairment charge was recognized in the year ended December 31, 2018 in the amount of $1.9 million , representing the remaining net book value of the PAI sales and marketing agreement intangible asset on the date of assessment. No impairment for intangible assets from continuing operations was recognized as of December 31, 2019. The following is a summary of intangible assets held by the Company at December 31, 2019 and December 31, 2018, respectively: December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Life (in years) Acquired Product Marketing Rights $ 5,056,000 $ (2,685,992 ) $ 2,370,008 1.92 Acquired Assembled Workforce 150,000 (93,750 ) 56,250 0.75 Total Intangible Assets $ 5,206,000 $ (2,779,742 ) $ 2,426,258 1.89 December 31, 2018 Gross Carrying Amount Accumulated Amortization Impairment Loss Net Carrying Amount Weighted-Average Remaining Life (in years) Acquired Product Marketing Rights $ 5,056,000 $ (1,421,996 ) $ — $ 3,634,004 2.92 Sales and Marketing Agreement 2,553,000 (691,438 ) (1,861,562 ) — — Acquired Assembled Workforce 150,000 (18,750 ) — 131,250 1.75 Total Intangible Assets $ 7,759,000 $ (2,132,184 ) $ (1,861,562 ) $ 3,765,254 2.88 Amortization of intangibles for the next five years and thereafter is expected to be as follows: Estimated Amortization For the Years Ending December 31, Expense 2020 $ 1,320,246 2021 1,106,012 2022 — 2023 — 2024 — Thereafter — Total future amortization expense $ 2,426,258 |
Accrued Expenses And Other Curr
Accrued Expenses And Other Current Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of December 31, 2019 and 2018 consisted of the following: December 31, 2019 2018 Sales returns and allowances $ 2,284,175 $ 1,465,419 Medicaid rebates 118,271 50,246 Minimum sales commitments, royalties payable, and purchase obligations 75,000 8,954,521 Compensation and benefits 1,591,964 1,953,065 Research and development expenses 920,901 278,132 General and administrative 360,016 1,112,378 Sales and marketing 120,056 235,721 Other 169,869 279,397 Accrued expenses and other current liabilities $ 5,640,252 $ 14,328,879 |
Capital Structure
Capital Structure | 12 Months Ended |
Dec. 31, 2019 | |
CAPITAL STRUCTURE | |
Capital Structure | Capital Structure Pursuant to the Company's amended and restated certificate of incorporation, the Company is authorized to issue two classes of stock; common stock and preferred stock. At December 31, 2019 , the total number of shares of capital stock the Company was authorized to issue was 205,000,000 of which 200,000,000 was common stock and 5,000,000 was preferred stock. All shares of common and preferred stock have a par value of $0.001 per share. On December 26, 2018, the Company filed a Certificate of Designation of Preferences of Series B Non-Voting Convertible Preferred Stock ("Series B Convertible Preferred Stock" or "convertible preferred stock") of Cerecor Inc. (the “Certificate of Designation of the Series B Preferred Stock”) classifying and designating the rights, preferences and privileges of the Series B Convertible Preferred Stock. The Certificate of Designation of the Series B Convertible Preferred Stock authorized the issuance of 2,857,143 shares of convertible preferred stock to Armistice with a par value of $0.001 per share. The Series B Convertible Preferred Stock is convertible into shares of common stock on a 1-for- 5 ratio and holds no voting rights. Convertible Preferred Stock December 2018 Armistice Private Placement On December 27, 2018, the Company entered into a series of transactions as part of a private placement with Armistice in order to generate cash to continue to develop its pipeline assets and for general corporate purposes. The transactions are considered one transaction for accounting purposes. As part of the transaction, the Company exchanged common stock warrants issued on April 27, 2017 to Armistice for the purchase up to 14,285,714 shares of the Company’s common stock at an exercise price of $0.40 per share (the "original warrants") for like-kind warrants to purchase up to 2,857,143 shares of the Company's newly designated Series B Convertible Preferred Stock with an exercise price of $2.00 per share (the "exchanged warrants"). Armistice immediately exercised the exchanged warrants and acquired an aggregate of 2,857,143 shares of the convertible preferred stock. Net proceeds of the transaction were approximately $5.7 million . In order to provide Armistice an incentive to exercise the exchanged warrants, the Company also entered into a securities purchase agreement with Armistice pursuant to which the Company issued warrants for 4,000,000 shares of common stock of the Company with a term of 5.5 years and an exercise price of $12.50 per share (the "incentive warrants"). For accounting purposes, the Company calculated the fair value of the incentive warrants at $1.7 million , which was considered a deemed distribution to Armistice for the year ended December 31, 2018. During the first quarter of 2020, Armistice converted 1.6 million of Series B Convertible Preferred Stock (of its approximate 2.9 million shares of convertible preferred stock) into 8.0 million shares of Cerecor's common stock. Voting Holders of the Company's convertible preferred stock are not entitled to vote. Dividends The holders of convertible preferred stock are entitled to receive dividends, if any, as may be declared from time to time by the board of directors out of legally available funds. Liquidation In the event of the Company’s liquidation, dissolution or winding up, holders of the Company’s convertible preferred stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all debts and other liabilities. Rights and Preferences Each share of convertible preferred stock is convertible to shares of common stock on a 1-for- 5 ratio. There are no other preemptive or subscription rights and there are no redemption or sinking fund provisions applicable to the Company’s common stock. Common Stock February 2020 Financing On February 6, 2020, the Company closed on a registered direct offering with certain institutional investors for the sale by the Company of 1,306,282 shares of the Company's common stock at a purchase price of $3.98 per share, which represents the closing stock price the day prior to entering into the agreement. Armistice participated in the offering by purchasing 1,256,282 shares of common stock from the Company. The net proceeds of the offering were approximately $5 million . Aevi Merger On February 3, 2020, under the terms of the Aevi Merger noted below in Note 17, the Company issued 3.9 million shares of common stock. September 2019 Armistice Private Placement On September 4, 2019, the Company entered into a securities purchase agreement with Armistice, pursuant to which the Company sold 1,200,000 shares of the Company’s common stock for a purchase price of $3.132 per share, which represents the average closing price of the Common Stock on Nasdaq for the five trading days immediately preceding September 4, 2019. Net proceeds of the private placement were approximately $3.7 million . March 2019 Common Stock Offering On March 8, 2019, the Company closed on an underwritten public offering of common stock for 1,818,182 shares of common stock of the Company, at a price to the public of $5.50 per share. Armistice participated in the offering by purchasing 363,637 shares of common stock of the Company from the underwriter at the public price. The net proceeds to the Company from the offering were approximately $9.0 million . December 2018 Armistice Private Placement As discussed in detail above (see "December 2018 Armistice Private Placement"), on December 27, 2018, the Company exchanged with Armistice previously outstanding warrants for like-kind warrants to purchase up to 2,857,143 shares of the Company's convertible preferred stock with an exercise price of $2.00 per share which Armistice immediately exercised thus acquiring 2,857,143 shares of convertible preferred stock for net proceeds of $5.7 million . The convertible preferred stock is convertible into shares of common stock on a 1-for- 5 ratio (or to 14,285,714 shares of common stock in total, subject to adjustment). Additionally, on December 27, 2018, in order to provide Armistice an incentive to exercise the exchanged warrants, the Company entered into a securities purchase agreement with Armistice pursuant to which the Company issued warrants for 4,000,000 shares of common stock of the Company with a term of 5.5 years and an exercise price of $12.50 per share. August 2018 Armistice Private Placement On August 17, 2018, the Company entered into a securities purchase agreement with Armistice, pursuant to which the Company sold 1,000,000 shares of the Company’s common stock, $0.001 par value per share for a purchase price of $3.91 per share, which was the closing price of shares of the common stock on August 16, 2018. Net proceeds of this securities purchase agreement were approximately $3.9 million . Ichorion Asset Acquisition On September 25, 2018, under the terms of the Ichorion Asset Acquisition noted above in Note 5, the Company issued 5.8 million common stock shares upon closing. Contingently Issuable Shares Under the terms of the TRx Acquisition noted above in Note 5, the Company was required to issue common stock having an aggregate value as calculated in the TRx Purchase Agreement on the closing date of $8.1 million (the “Equity Consideration”). Upon closing, the Company issued 5,184,920 shares of its common stock. Pursuant to the TRx Purchase Agreement, the issuance of the remaining 2,349,968 shares as a part of the equity consideration was subject to stockholder approval at the Company's 2018 Annual Stockholder's Meeting. This approval was obtained in May 2018 and the remaining shares were issued to the TRx Sellers. Voting Common stock is entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, including the election of directors, and does not have cumulative voting rights. Accordingly, the holders of a majority of the shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election. Dividends The holders of common stock are entitled to receive dividends, if any, as may be declared from time to time by the board of directors out of legally available funds. Liquidation In the event of the Company’s liquidation, dissolution or winding up, holders of the Company’s common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders, including any preferred stock outstanding, after the payment of all debts and other liabilities. Rights and Preferences Holders of the Company’s common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to the Company’s common stock. Common Stock Warrants At December 31, 2019 , the following common stock warrants were outstanding: Number of shares Exercise price Expiration underlying warrants per share date 22,328* $ 8.40 October 2020 2,380* $ 8.68 May 2022 4,000,000 $ 12.50 June 2024 4,024,708 *Accounted for as a liability instrument (see Note 6) |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2016 Equity Incentive Plan On April 5, 2016, the Company’s Board of Directors adopted the 2016 Equity Incentive Plan (the “2016 Plan”) as the successor to the 2015 Omnibus Plan (the “2015 Plan”). The 2016 Plan was approved by the Company’s stockholders and became effective on May 18, 2016 (the “2016 Plan Effective Date”). Upon the 2016 Plan Effective Date, the 2016 Plan reserved and authorized up to 600,000 additional shares of common stock for issuance, as well as 464,476 unallocated shares remaining available for grant of new awards under the 2015 Plan. An Amended and Restated 2016 Equity Incentive Plan (the "2016 Amended Plan") was approved by the Company's stockholders in May 2018, which increased the share reserve by an additional 1.4 million shares. A Second Amended and Restated 2016 Equity Incentive Plan (the "2016 Second Amended Plan") was approved by the Company's stockholders in August 2019, which increased the share reserve by an additional 850,000 shares. During the term of the 2016 Second Amended Plan, the share reserve will automatically increase on the first trading day in January of each calendar year, by an amount equal to 4% of the total number of outstanding shares of common stock of the Company on the last trading day in December of the prior calendar year. As of December 31, 2019, there were 2,532,162 shares available for future issuance under the 2016 Second Amended Plan. On January 1, 2020, pursuant to the terms of the 2016 Second Amended Plan an additional 1,775,368 shares were made available for issuance for a total of 4,307,530 shares available for issuance. Option grants expire after ten years. Employee options typically vest over three or four years. Options granted to directors typically vest over one or three years. Directors may elect to receive stock options in lieu of board compensation, which vest immediately. For stock options granted to employees and non-employee directors, the estimated grant date fair market value of the Company’s stock-based awards is amortized ratably over the individuals’ service periods, which is the period in which the awards vest. Stock-based compensation expense includes expense related to stock options, restricted stock units and employee stock purchase plan shares. The amount of stock-based compensation expense recognized for the years ending December 31, 2019 and 2018 was as follows: Year Ended December 31, 2019 2018 Research and development $ 464,382 $ 101,000 General and administrative 1,549,844 2,135,710 Sales and marketing 190,851 57,271 Total stock-based compensation, continuing operations 2,205,077 2,293,981 Total stock-based compensation, discontinued operations 257,719 137,082 Total stock-based compensation $ 2,462,796 $ 2,431,063 In April 2019, the Company's former CEO resigned, however he remained on the Company's board of directors as of December 31, 2019. Subsequent to his resignation, during the second quarter of 2019, the former CEO agreed to forfeit the unvested portion of his equity awards granted to him during his service as CEO. As a result, he forfeited a total of 1,489,583 equity awards, which included 689,583 unvested service-based vesting options, 500,000 unvested market-based options and 300,000 unvested restricted stock units. The Company accounts for forfeitures as they occur. Because the requisite service period of 2.8 years was not rendered for the market-based options, the forfeiture of the market-based options resulted in the reversal in the second quarter of 2019 of the full expense recognized to date of $0.5 million , which was recorded as a reduction to general and administrative expense. Stock-based compensation during the year ended December 31, 2018 includes $0.3 million of expense related to modifications of awards related to a separated executive. Stock options with service-based vesting conditions The Company has granted stock options that contain service-based vesting conditions. The compensation cost for these options is recognized on a straight-line basis over the vesting periods. A summary of option activity with service-based vesting conditions for the year ended December 31, 2019 is as follows: Options Outstanding Number of shares Weighted average exercise price Grant date fair value of options Weighted average remaining contractual term (in years) Balance at December 31, 2018 3,746,597 $ 4.16 7.8 Granted 2,631,927 $ 5.70 $ 8,106,310 Exercised (323,403 ) $ 2.59 Forfeited (1,445,554 ) $ 5.22 $ 4,218,136 Expired (428,961 ) $ 4.99 $ 1,062,853 Balance at December 31, 2019 4,180,606 $ 4.80 7.9 Exercisable at December 31, 2019 2,228,748 $ 4.58 6.8 The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. As of December 31, 2019 , the aggregate intrinsic value of options outstanding and options currently exercisable was $4.9 million and $3.5 million , respectively. The total intrinsic value of options exercised during the year ended December 31, 2019 was $1.0 million . The total grant date fair value of shares which vested during the years ended December 31, 2019 and 2018 was $2.2 million and $1.2 million , respectively. The per‑share weighted‑average grant date fair value of the options granted during 2019 and 2018 was estimated at $3.08 and $2.28 , respectively. There were 983,644 options that vested during the year ended December 31, 2019 with a weighted average grant date fair value of $2.21 per share. The Company recognized stock-based compensation expense of $2.0 million related to stock options with service-based vesting conditions for the year ended December 31, 2019. At December 31, 2019, there was $4.5 million of total unrecognized compensation cost related to unvested service-based vesting conditions awards. This unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.7 years. Stock options with market-based vesting conditions The Company has granted awards that contain market-based vesting conditions. A summary of option activity with market-based vesting conditions for the year ended December 31, 2019 is as follows: Options Outstanding Number of shares Weighted average exercise price per share Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) Balance at December 31, 2018 500,000 $ 4.24 9.2 Granted 300,000 $ 4.98 Exercised — Forfeited (500,000 ) $ 4.24 Balance at December 31, 2019 300,000 $ 4.98 9.4 $ 123,000 Exercisable at December 31, 2019 — (1) The aggregate intrinsic value in the above table represents the total pre-tax amount that a participant would receive if the option had been exercised on the last day of the respective fiscal period. Options with a market value less than its exercise value are not included in the intrinsic value amount. During the second quarter of 2019, the Company granted the Executive Chairman of the Board an option to purchase 300,000 shares of Company common stock with market-based vesting conditions at an exercise price of $4.98 per share. One-third of the shares vest upon the Company's common stock closing at or above $8.00 per share for three consecutive days, one-third of the shares vest upon the Company's stock closing at or above $10.50 per share for three consecutive days, and one-third of the shares vest upon the Company's stock closing at or above $13.00 per share for three consecutive days. Each vesting tranche represents a unique requisite service period and therefore, the compensation cost for each vesting tranche is recognized on a straight-line basis over its respective vesting period. The Company recognized $(0.1) million related to stock options with market-based vesting conditions for the year ended December 31, 2019, which includes the reversal of expense for the former CEO's forfeited options and the expense related to the market-based options granted to the Executive Chairman of the Board. The weighted-average grant-date fair value of stock options with market-based vesting conditions granted during 2019 was $3.42 per share or $1.0 million . The weighted-average grant-date fair value of stock options with market-based vesting conditions forfeited during 2019 was $2.52 per share or $1.3 million . At December 31, 2019, there was $0.8 million of total unrecognized compensation cost related to unvested market-based vesting conditions awards. This compensation cost is expected to be recognized over a weighted-average period of 2.0 years. Stock-based compensation assumptions The following table shows the assumptions used to compute stock-based compensation expense for stock options granted to employees and members of the board of directors under the Black-Scholes valuation model, and the assumptions used to compute stock-based compensation expense for market-based stock option grants under a Monte Carlo simulation: Year Ended December 31, Service-based options 2019 2018 Risk-free interest rate 1.47% — 2.59% 2.51% — 3.01% Expected term of options (in years) 5.0 — 6.25 5.0 — 6.25 Expected stock price volatility 55% 55% — 65% Expected annual dividend yield 0% 0% Market-based options Risk-free interest rate 2.32% 2.84% Expected term of options (in years) 10 10 Expected stock price volatility 60% 60% Expected annual dividend yield 0% 0% The valuation assumptions were determined as follows: • Risk‑free interest rate: The Company bases the risk‑free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term. • Expected term of options: Due to lack of sufficient historical data, the Company estimates the expected life of its stock options with service-based vesting granted to employees and members of the board of directors as the arithmetic average of the vesting term and the original contractual term of the option for service-based options. The expected life of stock options with market-based vesting is derived from a Monte Carlo simulation which is the valuation technique used to value such awards. • Expected stock price volatility: The Company estimated the expected volatility based on actual historical volatility of the stock price of other publicly‑traded biotechnology companies engaged in lines of business that are the same or similar to the Company’s. The Company calculated the historical volatility of the selected companies by using daily closing prices over a period of the expected term of the associated award. The companies were selected based on their enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected term of the associated award. A decrease in the selected volatility would decrease the fair value of the underlying instrument. • Expected annual dividend yield: The Company estimated the expected dividend yield based on consideration of its historical dividend experience and future dividend expectations. The Company has not historically declared or paid dividends to stockholders. Moreover, it does not intend to pay dividends in the future, but instead expects to retain any earnings to invest in the continued growth of the business. Accordingly, the Company assumed an expected dividend yield of 0% . Restricted Stock Units The Company has granted restricted stock units ("RSU") to certain employees. The Company measures the fair value of the restricted awards using the stock price on the date of the grant. The restricted shares typically vest annually over a four -year period beginning on the first anniversary of the award. The following table summarizes the Company's RSU activity for the year ended December 31, 2019 : RSUs Outstanding Number of shares Weighted average grant date fair value Unvested RSUs at December 31, 2018 445,000 $ 4.27 Granted 295,000 $ 4.98 Vested (172,500 ) $ 4.52 Forfeited (300,000 ) $ 4.24 Unvested RSUs at December 31, 2019 267,500 During the second quarter of 2019, the Company granted its newly appointed Executive Chairman of the Board 250,000 RSUs, of which 50,000 shares vested immediately on the grant date and the remainder are to vest in three equal annual increments based on continued service. The Company recognized stock-based compensation expense of $0.5 million related to RSUs for the year ended December 31, 2019. At December 31, 2019, there was $1.3 million of total unrecognized compensation cost related to the RSU grants. This compensation cost is expected to be recognized over a weighted-average period of 2.3 years. Employee Stock Purchase Plan On April 5, 2016, the Company’s board of directors approved the 2016 Employee Stock Purchase Plan (the “ESPP”). The ESPP was approved by the Company’s stockholders and became effective on May 18, 2016 (the “ESPP Effective Date”). Under the ESPP, eligible employees can purchase common stock through accumulated payroll deductions at such times as are established by the administrator. The ESPP is administered by the compensation committee of the Company’s board of directors. Under the ESPP, eligible employees may purchase stock at 85% of the lower of the fair market value of a share of the Company’s common stock (i) on the first day of an offering period or (ii) on the purchase date. Eligible employees may contribute up to 15% of their earnings during the offering period. The Company’s board of directors may establish a maximum number of shares of the Company’s common stock that may be purchased by any participant, or all participants in the aggregate, during each offering or offering period. Under the ESPP, a participant may not accrue rights to purchase more than $0.03 million of the fair market value of the Company’s common stock for each calendar year in which such right is outstanding. Upon the ESPP Effective Date, the Company reserved and authorized up to 500,000 shares of common stock for issuance under the ESPP. On January 1 of each calendar year, the aggregate number of shares that may be issued under the ESPP automatically increases by a number equal to the lesser of (i) 1% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year, and (ii) 500,000 shares of the Company’s common stock, or (iii) a number of shares of the Company’s common stock as determined by the Company’s board of directors or compensation committee. As of December 31, 2019, 1,118,882 shares remained available for issuance. On January 1, 2020, the number of shares available for issuance under the ESPP increased by 443,842 for a total of 1,562,724 shares available for issuance. In accordance with the guidance in ASC 718-50, the ability to purchase shares of the Company’s common stock at the lower of the offering date price or the purchase date price represents an option and, therefore, the ESPP is a compensatory plan under this guidance. Accordingly, stock-based compensation expense is determined based on the option’s grant-date fair value and is recognized over the requisite service period of the option. The Company used the Black-Scholes valuation model and recognized stock-based compensation expense of $0.2 million and $0.05 million for the years ended December 31, 2019 and December 31, 2018, respectively, which are included in the table above with stock-based compensation from stock options. Subsequent Equity Grants In February 2020, the Company granted options to purchase 2.4 million shares of common stock as inducement option grants, pursuant to NASDAQ Listing Rule 5635(c)(4), to certain employees who joined the Company in connection with the Aevi Merger. Each inducement option grant will vest over four years , with the first 25% of such option vesting on the first anniversary of the date of grant, and the remainder vesting in equal monthly installments, subject to the continued service of the employees, respectively, through the applicable vesting date. Additionally, on February 3, 2020, the Company granted 500,000 options with service-based vesting conditions at an exercise price of $3.98 per share to Sol J. Barer, Ph.D., who was appointed to Cerecor's Board of Directors upon the consummation of the Aevi Merger. The options were granted under the 2016 Second Amended Plan and will vest over three years , with one-third of such option vesting on each of the first, second and third anniversaries of the date of grant. Finally, on February 3, 2020, the Company granted 514,400 options with service-based vesting conditions at an exercise price of $3.98 per share to other employees who joined the Company in connection with the Aevi Merger. The options were granted under the 2016 Second Amended Plan and will vest over four years , with one-quarter of such options vesting on the first anniversary of the grant date and the remaining three-quarters of the options vesting in equal monthly installments over the following 36 months . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740 (Topic 740, Income Taxes). ASC 740 is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected tax consequences or events that have been recognized in our financial statement or tax returns. ASC Topic 740 also clarifies the accounting for uncertainty in income taxes recognized in the financial statement. The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. There were no significant matters determined to be unrecognized tax benefits taken or expected to be taken in a tax return that have been recorded in our financial statement for the year ended December 31, 2019. Tax years beginning in 2016 are generally subject to examination by taxing authorities, although net operating losses from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. ASC Topic 740 provides guidance on the recognition of interest and penalties related to income taxes. It is the Company's policy to treat interest and penalties, to the extent they arise, as a component of income taxes. The Company accrued interest and penalties as components of income expense for tax liability generated for the year ended December 31, 2017. There was no interest or penalties related to income taxes arising in the years ended December 31, 2019 and 2018. The income tax provision from continuing operations consisted of the following for the years ending December 31, 2019 and 2018: December 31, 2019 2018 Current: Federal $ 209,001 $ (53,281 ) State 54,572 20,560 Total Current 263,573 (32,721 ) Deferred: Federal 24,458 (52,235 ) State (7,715 ) 35,490 Total Deferred 16,743 (16,745 ) Net income tax expense (benefit) $ 280,316 $ (49,466 ) The net deferred tax liabilities consisted of the following for the years ending December 31, 2019 and 2018: December 31, 2019 2018 Deferred tax assets (liabilities): Net operating losses $ 7,596,955 $ 4,421,423 Accrued compensation 321,748 465,430 Investment in Aytu 577,490 — Tax credits 1,070,738 252,095 Stock-based compensation 1,872,442 1,922,736 Installment sale 441,305 508,291 Other reserves 399,885 277,633 Prepaid expenses (120,863 ) (160,474 ) Right-of-use asset (167,943 ) — Lease liability 296,259 — Basis difference in tangible and intangible assets, net 1,968,008 2,968,764 Total deferred tax assets, net 14,256,024 10,655,898 Less valuation allowance (14,342,005 ) (10,725,136 ) Net deferred taxes $ (85,981 ) $ (69,238 ) As of December 31, 2019, the Company has roughly $32.5 million of gross NOLs for federal and state tax purposes that will begin to expire in 2031, including $27 million of gross NOLs for federal and state tax purposes that carry forward indefinitely. As of December 31, 2019, the Company has research and experimental tax credits of $1.1 million that will begin to expire in 2038. The income tax benefit for the years ended December 31, 2019 and 2018 differed from the amounts computed by applying the U.S. federal income tax rate of 21% as follows: December 31, 2019 2018 Federal statutory rate 21.00 % 21.00 % Stock compensation (0.47 )% (0.10 )% State taxes (0.13 )% 4.98 % Research and development credit 5.13 % 0.70 % Acquired in-process research and development — % (11.17 )% Fair value adjustment to contingent consideration 1.65 % — % Other (1.86 )% (0.74 )% Valuation allowance (27.07 )% (14.53 )% Effective income tax rate (1.75 )% 0.14 % The valuation allowance recorded by the Company as of December 31, 2019 and December 31, 2018 resulted from the uncertainties of the future utilization of deferred tax assets mainly resulting from net operating loss carry forwards for federal and state income tax purposes as well as the federal research and experimental and orphan drug tax credits. In assessing the realization of deferred tax assets, management considers the reversal of deferred tax liabilities, as well as whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon generation of future taxable income during the periods in which temporary differences are expected to reverse. The Company has established deferred tax liabilities for indefinite lived intangible assets consisting of goodwill that are not amortized for financial reporting purposes but are tax deductible and therefore amortized over 15 years for tax purposes. The Company has concluded that the resulting deferred tax liability will also have an indefinite life unless there is an impairment of the related assets (for financial reporting purposes), or the disposal of the business to which the assets relate. Losses generated in years after 2018 will also have an indefinite life and will be available to offset 80 percent of any Federal tax liability and will be available to offset many of the State deferred tax liabilities subject to utilization limits. A portion of existing deferred tax assets will reverse in the future, potentially generating net operating losses that will also be available to offset a portion of the indefinite lived deferred tax liability. Based on the consideration of these facts, the Company concluded it is more likely than not that a significant portion of its remaining gross deferred tax assets less the reversal of deferred tax liabilities will not be realized in the future, accordingly, a full valuation allowance continues to be recorded against the Company’s deferred tax asset as of December 31, 2019 and December 31, 2018. The Company will continue to assess and evaluate strategies that will enable the deferred tax asset, or portion thereof, to be utilized, and will reduce the valuation allowance appropriately as such time when it is determined that the “more likely than not” criteria is satisfied. Sections 382 and 383 of the Internal Revenue Code of 1986 subject the future utilization of net operating losses and certain other tax attributes, such as research and experimental tax credits, to an annual limitation in the event of certain ownership changes, as defined. The Company has undergone an ownership change study and has determined that a "change in ownership" as defined by IRC Section 382 of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder, did occur in February 2012, July 2014, and April 2017. Accordingly, approximately $52.2 million of the Company's NOL carryforwards are limited. Based on the Company having undergone multiple ownership changes throughout their history these NOLs will free up at varying rates each year. On December 22, 2017, H.R. 1 (also, known as the Tax Cuts and Jobs Act (the “Act”)) was signed into law. Among its numerous changes to the Internal Revenue Code, the Act reduces U.S. federal corporate tax rate from 35% to 21%. As a result, the Company concluded that the most significant impact on its 2017 consolidated financial statements is the reduction of approximately $2,200,000 in deferred tax assets and liabilities related to net operating losses and other assets. Such reduction is largely offset by changes to the Company’s valuation allowance. The Company is reported the impacts of the Act provisionally in the 2017 financial statements based upon reasonable estimates. The analysis of the tax effects of the Act has now been complete and there were not adjustments in 2018. In addition, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Act ("SAB 118") which allowed the Company to record provisional amounts during a measurement period not to extend beyond one year from the enactment date. Since the Tax Act was passed late in the fourth quarter of 2017, ongoing guidance and accounting interpretation was expected over the past year, and significant data and analysis was required to finalize amounts recorded pursuant to the Tax Act, the Company considered the accounting for the deferred tax remeasurements and other items to be incomplete at December 31, 2017 due to the forthcoming guidance and its ongoing analysis of final year-end data and tax positions. The Company completed its analysis within the measurement period in accordance with SAB 118 and there were no additional adjustments necessary. |
Commitments And Contingencies
Commitments And Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation Litigation - General The Company may become party to various contractual disputes, litigation, and potential claims arising in the ordinary course of business. The Company currently does not believe that the resolution of such matters will have a material adverse effect on its financial position or results of operations except as otherwise disclosed in this document. TRx 2018 Target Gross Profit Dispute As part of the TRx Acquisition, pursuant to the TRx Purchase Agreement, the Company was required to pay $3.0 million to the TRx Sellers (or "former TRx owners") if the gross profit, as defined in the TRx Purchase Agreement, related to TRx products equaled or exceeded $12.6 million in 2018. The Company believes it did not achieve this contingent event in 2018 and therefore, no amount is due to the former TRx owners. However, during the second quarter of 2019, the former TRx owners disputed the Company's calculation of gross profit under the TRx Purchase Agreement, arguing the Company met the $12.6 million target in 2018. Pursuant to the TRx Purchase Agreement, the dispute was submitted to an independent accounting firm for resolution during the third quarter of 2019. The dispute was resolved on October 8, 2019, with the independent accounting firm ruling in favor of the Company. However, on December 19, 2019, Cerecor received a letter from an attorney on behalf of the former TRx owners dated December 18, 2019 that enclosed a draft complaint seeking relief against Cerecor and one of the members of its board of directors. The letter further threatened that if an immediate discussion regarding a settlement did not occur, that the lawsuit would be filed on December 24, 2019. However, as of the date of this filing, no lawsuit has been filed, and the parties have agreed to a pre-lawsuit mediation tentatively set for April 30, 2020. The proposed complaint indicates that the former TRx owners would seek the following relief: (a) $3.0 million on the grounds that commercially reasonable efforts to sell the acquired former TRx owners would have resulted in the gross profit earn-out target being reached; (b) that the $3.0 million amount be trebled as a result of Cerecor's alleged improper conduct; (c) $9.2 million as a result of alleged losses resulting from the alleged improper treatment of the former TRx owners as affiliates; and (d) the removal of any restrictions on the former TRx owners shares of common stock in Cerecor. Cerecor disputes that the former TRx owners are entitled to the relief sought and intends to vigorously defend against any lawsuit filed on behalf of the former TRx owners. A loss in this matter is possible in a range of $0 to $18.2 million . As a loss in this matter is not considered probable, there has been no accrual recorded as of December 31, 2019. Lachlan Pharmaceuticals Settlement As discussed in Note 5, in November 2017, the Company acquired TRx and its wholly-owned subsidiaries, including Zylera. The former TRx owners beneficially own more than 10% of our outstanding common stock. Zylera, which is now our wholly owned subsidiary, entered into an agreement with Lachlan Pharmaceuticals, an Irish company controlled by the previous owners of TRx (“Lachlan”), effective December 18, 2015 (the "Lachlan Agreement"). Pursuant to the Lachlan Agreement, Lachlan named Zylera as its exclusive distributor of Ulesfia in the United States and agreed to supply Ulesfia to Zylera exclusively for marketing and sale in the United States. On May 22, 2019, the Company, Lachlan, the owners of Lachlan and Concordia Pharmaceuticals Inc., Sarl (“Concordia”), which is the unrelated third party from which Lachlan obtained rights to distribute Ulesfia, entered into a Settlement Agreement and related side letter and terminated the Lachlan Agreement, as discussed in more detail below (the Settlement Agreement and related side letter collectively the “Settlement”). The Lachlan Agreement required Zylera to purchase a minimum of 20,000 units per year, or approximately $1.2 million worth of product, from Lachlan, unless and until there was a “Market Change” involving a new successful competitive product. Zylera was required to pay Lachlan $58.84 per unit and handling fees equal to $4.03 per unit of fully packaged Ulesfia in 2019, escalating 10% annually. The Lachlan Agreement also required that Zylera make certain cumulative net sales milestone payments and royalty payments to Lachlan with a $3.0 million annual minimum payment unless and until there was a Market Change. Lachlan was obligated to pay identical amounts to the unrelated third party from which it obtained rights to Ulesfia, with the payments ultimately flowing through Shionogi, Inc. to Summers Laboratories, Inc. ("Summers Labs"). Because of the dispute described below, the Company had not made any payments to Lachlan under the Lachlan Agreement subsequent to the acquisition date. On December 10, 2016, Zylera informed Lachlan that a Market Change had occurred due to the introduction of Arbor Pharmaceuticals' lice product, Sklice®. On June 5, 2017, Lachlan and Zylera entered into joint legal representation along with other unrelated third parties in negotiation and arbitration of a dispute with Summers Labs regarding the existence of a Market Change and the concomitant obligations of the parties. The arbitration panel issued an interim ruling on October 23, 2018 that no Market Change had occurred up to and including the date of the hearing. The arbitration panel issued a second interim ruling on December 26, 2018, rejecting Summers Labs' request to accelerate future minimum royalties, but ruling in favor of Summers Labs that it is owed reimbursement for all reasonable costs and expenses, including legal fees, by Shionogi, as well as interest, as stipulated in the contract. The arbitration panel issued a final award on March 1, 2019 that dictated the final amount of reimbursable costs and interest. The rulings and final award had no direct bearing on the Company because the Company was not a named defendant to the original claim by Summers Labs and a federal court denied Zylera's ability to be a counterclaimant in the matter. Furthermore, the Company was not subject to the guarantee or interest provisions identified in the second ruling as these elements of the contractual relationship were not passed down to or through Lachlan. However, the Company interpreted the rulings’ impact on the Lachlan Agreement to mean that the minimum purchase obligation and minimum royalty provisions of the contract were active and due for any prior periods as well as future periods. Prior to the Settlement, the Company had recognized an $8.7 million liability for these minimum obligations and $0.4 million for the royalty payable in accrued liabilities as of March 31, 2019. Additionally, prior to settlement, under the terms of the TRx Purchase Agreement, the former TRx owners were required to indemnify the Company for 100% of all “Pre-Acquisition Ulesfia Losses,” as defined in the TRx Purchase Agreement, related to this arbitration, including legal costs, in excess of $1.0 million . Furthermore, the former TRx owners were required to indemnify the Company for 50% of “Post-Acquisition Ulesfia Losses,” as defined in the TRx Purchase Agreement, which would include losses resulting from having to fund these minimum obligations post-acquisition. The Company had recorded an indemnity receivable of $5.2 million in other receivables as of March 31, 2019, which the Company believed was fully collectible. Pursuant to the Settlement, during the second quarter of 2019, the Company made a $2.3 million cash payment to Concordia for a full release of all current and future liabilities related to the Lachlan Agreement as of June 30, 2019. As a result, the Company reversed the $8.7 million liability for the minimum obligations and $0.4 million royalty payable in accrued liabilities during the second quarter of 2019. The Settlement also released the former TRx owners of their requirement to indemnify the Company for the losses discussed above. As a result, the Company reversed the $5.2 million indemnity receivable in other receivables during the second quarter of 2019. The Settlement resulted in a net reversal of $1.6 million in previously recognized expense to cost of product sales, which lead to the overall negative cost of product sales for the year ended December 31, 2019. Additionally, with the termination of the Lachlan Agreement, the Company gave up its right to sell Ulesfia, except for a limited amount of inventory on hand until that inventory is all sold or expired. Finally, as discussed in detail in Note 6, the Settlement released the Company from having to make any acquisition milestone payout for the NDA transfer of Ulesfia and the FDA approval of an alternate dosing. Therefore, no value is assigned to the two milestones as of December 31, 2019, which resulted in the recognition of a gain on the change in fair value of contingent consideration of $1.3 million for the year ended December 31, 2019. Karbinal Royalty Make-Whole Provision As discussed in Note 5, on February 16, 2018, in connection with the acquisition of Avadel's pediatric products, the Company entered into a supply and distribution agreement with TRIS Pharma (the "Karbinal Agreement"). As part of this agreement, the Company had an annual minimum sales commitment, which is based on a commercial year that spans from August 1 through July 31, of 70,000 units through 2033. The Company was required to pay TRIS a royalty make whole payment (“Make-Whole Payments”) of $30 for each unit under the 70,000 units annual minimum sales commitment through 2033. As a part of the Aytu Divestiture, which closed on November 1, 2019, the Company assigned all payment obligations, including the Make-Whole Payments, under the Karbinal Agreement (collectively, the “TRIS Obligations”) to Aytu. However, under the original license agreement, the Company could ultimately be liable for TRIS Obligations to the extent Aytu fails to make the required payments. The future Make-Whole Payments to be made by Aytu are unknown as the amount owed to TRIS is dependent on the number of units sold. Millipred License and Supply Agreement The Company has a License and Supply Agreement for Millipred with Watson Laboratories, Inc., which is now part of Teva Pharmaceutical Industries Ltd. ("Teva"). Pursuant to the License and Supply Agreement, the Company is required to make license payments of $75,000 in February and August of each year through April 2021 and purchases inventory on an ad-hoc basis. The License and Supply Agreement expires on April 1, 2021, however if neither party terminates the agreement prior to April 1, 2021, then the agreement will automatically renew for successive one -year periods. As detailed in Note 17, on December 5, 2019, the Company entered into a Merger Agreement with Aevi that was subsequently consummated during the first quarter of 2020. Effective upon the consummation of the Merger, Cerecor appointed Sol J. Barer, Ph.D. to the Company's Board of Directors. Mr. Barer serves as Teva's Chairman of the Board. Possible future milestone proceeds for out-licensed compounds CERC-611 License Assignment On August 8, 2019, the Company entered into an assignment of license agreement (the “Assignment Agreement”) with ES Therapeutics, LLC (“ES Therapeutics”), a wholly-owned subsidiary of Armistice, a significant stockholder of the Company. Pursuant to the Assignment Agreement, the Company assigned and transferred its rights, title, interest, and obligations with respect to CERC-611 to ES Therapeutics. The Company initially licensed the compound from Eli Lilly Company ("Lilly") in September 2016. Under the Assignment Agreement, Armistice paid the Company an upfront payment of $0.1 million . The Company recognized the payment as license and other revenue for the year ended December 31, 2019. The Assignment Agreement also provides for: (a) a $7.5 million milestone payment to the Company upon cumulative net sales of licensed products reaching $750.0 million ; and (b) a $12.5 million milestone payment to the Company upon cumulative net sales of licensed products reaching $1.3 billion . The Assignment Agreement also releases the Company of obligations related to CERC-611, including the $1.3 million contingent payment to Lilly upon the first subject dosage of CERC-611 in a multiple ascending dose study, which was recorded as a license obligation on the balance sheet as of June 30, 2019. The decrease of this license obligation to $0 resulted in an offset of research and development expense of $1.3 million for the year ended December 31, 2019. The Assignment Agreement also releases the Company from additional potential future payments due to Lilly upon achievement of certain development and commercialization milestones, including the first commercial sale, and milestone payments and royalty on net sales upon commercialization of the compound. CERC-501 Sale to Janssen In August 2017, the Company sold its worldwide rights to CERC-501 to Janssen Pharmaceuticals, Inc. (“Janssen”) in exchange for initial gross proceeds of $25.0 million . There is a potential future $20.0 million regulatory milestone payment to the Company upon acceptance of an NDA for any indication. The terms of the agreement provide that Janssen will assume ongoing clinical trials and be responsible for any new development and commercialization of CERC-501. Possible future milestone payments Ichorion Acquisition possible future milestone payments As detailed in Note 5, on September 24, 2018, the Company acquired Ichorion Therapeutics, Inc., acquiring three compounds for inherited metabolic disorders known as CDGs (CERC-801, CERC-802 and CERC-803) and one other preclinical orphan disease compound, CERC-913, for the treatment of mitochondrial DNA Depletion Syndrome. Consideration for the transaction included approximately 5.8 million shares of the Company’s common stock (adjusted for estimated working capital) and certain contingent development milestones worth up to an additional $15.0 million . The contingent consideration of up to an additional $15.0 million relates to three future development milestones for the acquired compounds. The first milestone is the first product being approved for marketing by the FDA on or prior to December 31, 2021. If this milestone is met, the Company is required to make a milestone payment of $6.0 million . The second milestone is the second product being approved for marketing by the FDA on or prior to December 31, 2021. If this milestone is met, the Company is required to make a milestone payment of $5.0 million . The third milestone is a protide molecule being approved by the FDA on or prior to December 31, 2023. If this milestone is met, the Company is required to make a milestone payment of $4.0 million . All milestones are payable in either shares of the Company's common stock or cash, at the election of the Company. The contingent consideration related to the development milestones will be recognized if and when such milestones are probable and can be reasonably estimated. As of December 31, 2019, no contingent consideration related to the development milestone has been recognized. The Company will continue to monitor the development milestones at each reporting period. OSI Products Royalty Agreement As discussed in detail in Note 17, on December 5, 2019, the Company entered into a Merger Agreement with Aevi that was subsequently consummated during the first quarter of 2020. Effective upon the consummation of the Merger, Cerecor entered into an employment agreement with Mike Cola for him to serve as Cerecor's Chief Executive Officer and with Dr. Garry Neil for him to serve as Cerecor's Chief Medical Officer. Prior to Cerecor entering into the Merger Agreement, in July 2019, Aevi entered into a royalty agreement with Mike Cola, our current Chief Executive Officer, Joseph J. Grano, Jr., Kathleen Jane Grano, Joseph C. Grano, The Grano Children's Trust, Joseph C. Grano, trustee and LeoGroup Private Investment Access, LLC on behalf of Garry A. Neil, our current Chief Medical Officer, in exchange for a one-time aggregate payment of $2 million (the “Royalty Agreement”). Collectively, the investors will be entitled to an aggregate amount equal to a low-single digit percentage of the aggregate net sales of Astellas' second generation mTORC1/2 inhibitor, CERC-006 (the “OSI Products”). At any time beginning three years after the date of the first public launch of an OSI Product, Cerecor may exercise, at its sole discretion, a buyout option that terminates any further obligations under the Royalty Agreement in exchange for a payment to Investors of an aggregate of 75% of the net present value of the royalty payments. A majority of the independent members of the board of directors and the audit committee of Aevi approved the Royalty Agreement. Cerecor assumed this Royalty Agreement upon closing of the Merger with Aevi. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 3, 2020, the Company consummated its two-step merger with Aevi, in accordance with the terms of the Merger Agreement dated December 5, 2019, by and between Cerecor, Genie Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Cerecor (“Merger Sub”), Second Genie Merger Sub, LLC (“Second Merger Sub”), a Delaware limited liability company and wholly owned subsidiary of Cerecor, and Aevi. On February 3, 2020, Merger Sub merged with and into Aevi, with Aevi as the surviving corporation, and as part of the same overall transaction, Aevi then merged with and into Second Merger Sub, with Second Merger Sub as the surviving entity. The surviving entity from the second merger was renamed Aevi Genomic Medicine, LLC and is disregarded as an entity separate from Cerecor for U.S. federal income tax purposes. Cerecor retained its public reporting and current NASDAQ listing status. The Merger was consummated in accordance with the terms of the Merger Agreement and each outstanding shares of common stock of Aevi, par value of $0.0001 per share, was converted into the right to receive (i) the fraction of a share of Cerecor common stock, par value of $0.001 per share, at a ratio equal to 0.0334 , which in the aggregate totaled approximately 3.9 million shares of Cerecor common stock issued to Aevi stockholders (valued at approximately $15.6 million ); (ii) forgiveness of a $4.1 million loan that Cerecor loaned Aevi in December 2019 (see Note 7 for more details for its treatment as of December 31, 2019), (iii) one contingent value right, which represents the right to receive the pro rata portion of contingent payments of up to $6.5 million , to be paid in cash or Cerecor common stock in the sole discretion of Cerecor, upon the achievement of certain milestones in accordance with the CVR Agreement; and (iv) cash in lieu of fractional shares of Cerecor common stock, which in the aggregate totaled approximately $1,000 . Additionally, each outstanding Aevi stock option was canceled and each outstanding Aevi warrant was exercised on a cashless basis prior to the Effective Time. Effective upon the consummation of the Merger, Cerecor entered into an employment agreement with Mike Cola for him to serve as Cerecor's Chief Executive Officer, an employment agreement with Dr. Garry Neil for him to serve as Cerecor's Chief Medical Officer and appointed Mike Cola and Sol J. Barer, Ph.D. to the Company's Board of Directors. Cerecor is in-process of determining the financial effect of the Merger, including whether the Merger will be recorded as an asset purchase or a business combination and will perform preliminary purchase accounting during the first quarter of 2020. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Cerecor Inc. and its wholly-owned subsidiaries after elimination of all intercompany balances and transactions. |
Variable Interest Entities | Variable Interest Entities The primary beneficiary of a variable interest entity ("VIE") must consolidate the related assets and liabilities. Certain disclosures are required by sponsors, significant interest holders in VIEs and potential VIEs. The Company regularly assesses its relationships with contractual third-party and other entities for potential VIEs, including its relationship with Aytu and Aevi. In making this assessment, the Company considers the potential that its contracts or other arrangements provide subordinated financial support, absorb losses or rights to residual returns of the entity and the ability to directly or indirectly make decisions about the entities’ activities. Based on the Company’s assessments, management concluded that there were no relationships that constitute a VIE for which the Company was determined to be the primary beneficiary at December 31, 2019. If the Company’s management makes the determination that it is the primary beneficiary of a VIE, the Company will consolidate the statements of operations and financial condition of the VIE into its consolidated financial statements. |
Discontinued Operations | Discontinued Operations As a result of the sale of the Pediatric Portfolio, as of December 31, 2019, the Pediatric Portfolio met all conditions required in order to be classified as discontinued operations. Accordingly, the operating results of the Pediatric Portfolio are reported as income (loss) from discontinued operations, net of tax (inclusive of gain on sale) in the accompanying consolidated financial statements for the years ended December 31, 2019 and 2018. Additionally, the gain recognized as a result of the sale of the Pediatric Portfolio is reported within income from discontinued operations, net of tax (inclusive of gain on sale) for the year ended December 31, 2019. The assets and liabilities related to the Pediatric Portfolio are reported as assets and liabilities of discontinued operations in the accompanying consolidated balance sheets as of December 31, 2019 and 2018. For additional information, see Note 3. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to but not limited to, revenue recognition, cost of product sales, stock-based compensation, fair value measurements (including those relating to contingent consideration, equity Investment in Aytu, and guaranteed liabilities), cash flows used in management's going concern assessment, income taxes, goodwill and other intangible assets, and clinical trial accruals. The Company bases its estimates on historical experience and other market‑specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Certain estimates related specifically to the Pediatric Portfolio, such as revenue, cost of product sales, fair value measurement (including those relating to contingent consideration), goodwill, and other intangible assets have been reclassified under discontinued operations and included in assets and liabilities of discontinued operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value. |
Restricted Cash | Restricted Cash Restricted cash consists of the 2016 Employee Stock Purchase Plan (the "Plan") deposits, security deposit for our corporate headquarters lease and credit card deposits. The Company adopted ASU No. 2016-18, Restricted Cash ("ASU 2016-18") effective January 1, 2018 and now includes restricted cash balances within the cash, cash equivalents and restricted cash balance on the statement of cash flows. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable, net is comprised of amounts due from customers in the ordinary course of business. Management considers all accounts receivable to be fully collectible at December 31, 2019, and accordingly, no allowance for doubtful accounts has been recorded. Bad debt expense is charged to operations as amounts are determined to be uncollectible. Accounts receivable are written off when deemed uncollectible and recoveries of receivables previously written off are recorded when received. Accounts receivable are considered to be past due if any portion of the receivable balance is outstanding for more than the payment terms negotiated with the customer. The Company generally negotiates payment terms of 30 days . The Company offers wholesale distributors a prompt payment discount, which is typically 2% as an incentive to remit payment within this timeframe. Accounts receivable are stated net of the estimated prompt pay discount. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of a money market account with a financial institution that management believes to be creditworthy. The Company has no financial instruments with off‑balance sheet risk of loss. |
Inventory | Inventory Inventory consists primarily of finished goods stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. The Company reviews the composition of inventory at each reporting period in order to identify obsolete, slow-moving, quantities in excess of expected demand, or otherwise non-saleable items. If non-saleable items are observed and there are no alternate uses for the inventory, the Company will record a write-down to net realizable value in the period that the decline in value is first recognized. These valuation adjustments are recorded based upon various factors for the Company’s products, including the level of product manufactured by the Company, the level of product in the distribution channel, current and projected product demand, the expected shelf life of the product and firm inventory purchase commitments. |
Leases | Leases The Company determines if an arrangement is a lease at inception. If an arrangement contains a lease, the Company performs a lease classification test to determine if the lease is an operating lease or a finance lease. The Company has identified one operating lease, which is for its corporate headquarters. Right-of-use ("ROU") assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term and are included in other long-term liabilities and other current liabilities on the Company's condensed consolidated balance sheet. ROU assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. Operating ROU assets are recorded in property and equipment, net on the condensed consolidated balance sheet and are amortized over the lease term. To determine the present value of lease payments on lease commencement, the Company uses the implicit rate when readily determinable, however, as most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Furthermore, the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component for the leased property asset class. Lease expense is recognized on a straight-line basis over the life of the lease and is included within general and administrative expenses. |
Property and Equipment | Property and Equipment Property and equipment consists of computers, office equipment, furniture, ROU assets (discussed above), and leasehold improvements and is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Property and equipment are depreciated on a straight‑line basis over their estimated useful lives. The Company uses a life of four years for computers and software, and five years for equipment and furniture. For leasehold improvements, deprecation of the asset will begin at the date it is placed in service and the depreciable life of the leasehold improvement is the shorter of the lease term or the improvement's useful life. The Company uses the lesser of the lease term or ten years for leasehold improvements. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized. |
Acquisitions | Acquisitions For acquisitions that meet the definition of a business under ASC 805, the Company records the acquisition using the acquisition method of accounting. All of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration, when applicable, are recorded at fair value at the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The application of the acquisition method of accounting requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration. For acquisitions that do not meet the definition of a business under ASC 805, the Company accounts for the transaction as an asset acquisition. |
Segment Information | Segment Information Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision‑making group, in making decisions on how to allocate resources and assess performance. As of December 31, 2019, the Company’s chief operating decision makers were the Chief Financial Officer and the Executive Chairman of the Board. The CFO and the Executive Chairman of the Board view the Company’s operations and manages the business as one operating segment. All long‑lived assets of the Company reside in the United States. |
Goodwill | Goodwill Goodwill relates to the amount that arose in connection with the Company's historical acquisitions which were accounted for as business combinations. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired when accounted for using the acquisition method of accounting for business combinations. Goodwill is not amortized but is evaluated for impairment on an annual basis or more frequently if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of the Company's reporting unit below its carrying amount. The Company consists of one reporting unit. Upon disposal of a portion of a reporting unit that constitutes a business, we assign goodwill based on the relative fair values of the portion of the reporting unit being disposed and the portion of the reporting unit remaining. This approach requires a determination of the fair value of both the business to be disposed of and the business (or businesses) within the reporting unit that will be retained. As a result of the Aytu Divestiture, goodwill was assigned to the Pediatric Portfolio using the relative fair value approach discussed above and is reclassified within discontinued operations. |
Intangible Assets | Intangible Assets Intangible assets with definite useful lives are amortized over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset might not be recoverable. Impairment losses are measured and recognized to the extent the carrying value of such assets exceeds their fair value. Amortization Expense Amortization expense includes the amortization of the Company's acquired intangible assets. There is no amortization expense included in cost of product sales or sales and marketing expense as all amortization expense is included within its own standalone line in operating expenses in the Company's consolidated statements of operations. |
Revenue Recognition | Product Revenues, net As a result of the Aytu Divestiture, all product revenues related to the Pediatric Portfolio (which represented approximately 60% of total product revenues for the year ended December 31, 2019) are included within net income (loss) from discontinued operations, net of tax (inclusive of gain on sale). The Company generates substantially all of its revenue from sales of prescription pharmaceutical products to its customers and has identified a single product delivery performance obligation, which is the provision of prescription pharmaceutical products to its customers based upon master service agreements in place with wholesaler distributors, purchase orders from retail pharmacies or other direct customers and a contractual arrangement with a specialty pharmacy. The performance obligation is satisfied at a point in time, when control of the product has been transferred to the customer, either at the time the product has been received by the customer or to a lesser extent when the product is shipped. The Company determines the transaction price based on fixed consideration in its contractual agreements and the transaction price is allocated entirely to the performance obligation to provide pharmaceutical products. In determining the transaction price, a significant financing component does not exist because the timing from when the Company delivers product to when the customers pay for the product is less than one year and the customers do not pay for product in advance of the transfer of the product. Revenues from sales of products are recorded net of any variable consideration for estimated allowances for returns, chargebacks, distributor fees, prompt payment discounts, government rebates, and other common gross-to-net revenue adjustments. The identified variable consideration is recorded as a reduction of revenue at the time revenues from product sales are recognized. The Company recognizes revenue only to the extent that it is probable that a significant revenue reversal will not occur in a future period. Provisions for returns and government rebates are included within current liabilities in the consolidated balance sheet. Provisions for prompt payment discounts and distributor fees are included as a reduction to accounts receivable. Calculating these items involves estimates and judgments based on sales or invoice data, contractual terms, historical utilization rates, new information regarding changes in these programs’ regulations and guidelines that would impact the amount of the actual rebates, our expectations regarding future utilization rates for these programs, and channel inventory data. These estimates may differ from actual consideration amount received and the Company will re-assess these estimates and judgments each reporting period to adjust accordingly. The following table presents net revenues disaggregated by type: Year Ended December 31, 2019 2018 Prescription drugs $ 6,650,351 $ 6,572,322 Sales force revenue — 456,056 License and other revenue 100,000 — Total revenues, net from continuing operations $ 6,750,351 $7,028,378 Concentration with Customer As is typical in the pharmaceutical industry, the Company sells its prescription pharmaceutical products (which include prescription drugs) in the United States primarily through wholesale distributors and a specialty contracted pharmacy. Wholesale distributors account for substantially all of the Company’s net product revenues and trade receivables. In addition, the Company earns revenue from sales of its prescription pharmaceutical products directly to retail pharmacies. For the year ended December 31, 2019, the Company's three largest customers accounted for approximately 41% , 30% and 28% , respectively, of the Company's total net product revenues of prescription drugs from continuing operations. For the year ended December 31, 2018, the Company's three largest customers accounting for approximately 31% , 29% and 28% , respectively, of the Company's total net product revenues of prescription drugs from continuing operations. Returns and Allowances Consistent with industry practice, the Company maintains a return policy that allows customers to return product within a specified period both prior to and, in certain cases, subsequent to the product's expiration date. The Company’s return policy generally allows customers to receive credit for expired products within six months prior to expiration and within one year after expiration. The provision for returns and allowances consists of estimates for future product returns and pricing adjustments. The primary factors considered in estimating potential product returns include: • the shelf life or expiration date of each product; • historical levels of expired product returns; • external data with respect to inventory levels in the wholesale distribution channel; • external data with respect to prescription demand for each of the Company’s products; and • the estimated returns liability to be processed by year of sale based on analysis of lot information related to actual historical returns. The Company’s estimate for returns and allowances may be impacted by a number of factors, but the principal factor relates to the level of inventory in the distribution channel. Rebates The Company is subject to rebates on sales made under governmental pricing programs. For example, Medicaid rebates are amounts owed based upon contractual agreements or legal requirements with public sector (Medicaid) benefit providers after the final dispensing of the product by a pharmacy to a benefit plan participant. Medicaid reserves are based on expected payments, which are driven by patient usage, contract performance and field inventory that will be subject to a Medicaid rebate. Medicaid rebates are typically billed up to 180 days after the product is shipped, however this can be as much as 270 days after the quarter in which the product is dispensed to the Medicaid participant. In addition to the estimates mentioned above, the Company’s calculation also requires other estimates, such as estimates of sales mix, to determine which sales are subject to rebates and the amount of such rebates. Periodically, the Company adjusts the Medicaid rebate provision based on actual claims paid. Due to the delay in billing, adjustments to actual claims paid may incorporate revisions of this provision for several periods. Because Medicaid pricing programs involve particularly difficult interpretations of complex statutes and regulatory guidance, the Company's estimates could differ from actual experience. In determining estimates for these rebates, the Company considers the terms of the contracts, relevant statutes, historical relationships of rebates to revenues, past payment experience, estimated inventory levels and estimated future trends. Sales Force Revenue Pursuant to a marketing agreement with Pharmaceutical Associates, Inc . ( “PAI”), the Company received a monthly marketing fee to promote, market and sell certain products on behalf of PAI. The Company was also entitled to a share of PAI's profits under the agreement. Marketing fees and profit-sharing was recognized as sales force revenue when all the performance obligations have been satisfied and to the extent that it was probable that a significant revenue reversal would not occur in a future period. The marketing agreement with PAI was terminated in April 2018. License and Other Revenue The Company recognizes revenues from collaboration, license or other research or sale arrangements when or as performance obligations are satisfied. For milestone payments, the Company assesses, at contract inception, whether the milestones are considered probable of being achieved. If it is probable that a significant revenue reversal will occur, the Company will not record revenue until the uncertainty has been resolved. Milestone payments that are contingent upon regulatory approval are not considered probable until the approvals are obtained as it is outside of the control of the Company. If it is probable that significant revenue reversal will not occur, the Company will estimate the milestone payments using the most likely amount method. The Company will re-assess the milestones each reporting period to determine the probability of achievement. Accounting Policy Elections Related to Adoption of New Revenue Recognition Standard The Company elected the following practical expedients in applying ASU 2014-09, Revenue from Contracts with Customers ("Topic 606") to its identified revenue streams: • Portfolio approach - contracts within each revenue stream have similar characteristics and the Company believes this approach would not differ materially than if applying Topic 606 to each individual contract. • Modified retrospective approach - the Company applied Topic 606 only to contracts with customers that were not completed at the date of initial application, January 1, 2018. • Significant financing component - the Company does not adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. • Shipping and handling activities - the Company considers any shipping and handling costs that are incurred after the customer has obtained control of the product as a cost to fulfill a promise and will account for them as an expense. • Contract costs - the Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less. The Company does not incur costs to obtain a contract or costs to fulfill a contract that would result in the capitalization of contract costs. Specifically, internal sales commissions are costs to fulfill a contract and are expensed in the same period that revenue is recognized, which is typically within the same quarterly reporting period. Contract costs are expensed or amortized in “Operating expenses” on the accompanying Consolidated Statements of Operations. The Company has not made significant changes to the judgments made in applying Topic 606 for the year ended December 31, 2019. Cost of Product Sales Cost of product sales is comprised of (i) costs to acquire products sold to customers, (ii) royalty, license payments and other agreements granting the Company rights to sell related products, (iii) distribution costs incurred in the sale of products; (iv) the value of any write-offs of obsolete or damaged inventory that cannot be sold, (v) minimum sale obligations and (vi) minimum purchase obligations. The Company acquired the rights to sell certain of its commercial products through license and assignment agreements with the original developers or other parties with interests in these products. These agreements obligate the Company to make payments under varying payment structures based on its net revenue from related products. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. These costs include, but are not limited to, employee‑related expenses, including salaries, benefits and stock‑based compensation of research and development personnel; expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical trials and preclinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; other supplies; facilities, depreciation and other expenses, such as direct and allocated expenses for rent, utilities and insurance; and costs associated with preclinical activities and regulatory operations, pharmacovigilance, quality and travel. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors, such as clinical research organizations, with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. |
Clinical Trial Expense Accruals | Clinical Trial Expense Accruals As part of the process of preparing its financial statements, the Company is required to estimate its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate trial expenses in its financial statements by matching those expenses with the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by subject progression and the timing of various aspects of the trial. The Company determines accrual estimates by taking into account discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third‑party vendors. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed might vary and might result in it reporting amounts that are too high or too low for any particular period. |
Acquired In-Process Research and Development Expenses | Acquired In-Process Research and Development Expenses Acquired in-process research and development ("IPR&D") expense includes the initial costs of IPR&D projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use. |
Estimated Fair Value and Change in Fair Value of Contingent Consideration | Estimated Fair Value and Change in Fair Value of Contingent Consideration The Company's business acquisitions of Avadel Pharmaceuticals PLC's ("Avadel") pediatric products and TRx Pharmaceuticals, LLC ("TRx") involved the potential for future payment of consideration that is contingent upon the achievement of operation and commercial milestones and royalty payments on future product sales. The fair value of contingent consideration was determined at the acquisition date utilizing unobservable inputs such as the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period, the contingent consideration liability was remeasured at the current fair value with changes recorded in the consolidated statements of operations. As part of the Aytu Divestiture, Aytu assumed the Company's contingent consideration liability related to future royalties on Avadel's pediatric products. Additionally, as part of a settlement the Company entered into in the second quarter of 2019, the Company was released from its contingent consideration liability related to TRx. Therefore, the Company's contingent consideration liability was $0 as of December 31, 2019. Refer to Note 6 for more information. There is no change in fair value of contingent consideration included in cost of product sales or research and development costs. For the year ended December 31, 2019 and 2018, the change in fair value of contingent consideration related to royalties on Avadel's pediatric products was included within net income (loss) from discontinued operations, net of tax (inclusive of gain on sale). The change in fair value of contingent consideration related to TRx was included within its own standalone line in operating expenses from continuing operations in the Company's consolidated statements of operations because the contingent consideration was related to a product that was not sold as part of the Aytu Divestiture. Estimated Fair Value of Investment in Aytu and Change in Fair Value of Investment in Aytu As consideration for the sale of the Pediatric Portfolio to Aytu, the Company received approximately 9.8 million shares of Aytu Series G Convertible Preferred Stock. Pursuant to ASC 323, the Company accounts for this Investment as a financial instrument because Cerecor's Investment does not result in a controlling financial interest, as the preferred stock received is in-substance common stock and Cerecor does not have the ability to exercise significant influence or joint control of Aytu. Therefore, the fair value of the Investment in Aytu was determined at the divestiture date utilizing quoted prices for Aytu's common stock price with a discount for lack of marketability due to our shares being restricted as of December 31, 2019 and subject to a lockup period ending on July 1, 2020. Subsequent to the divestiture date, at each reporting period, the Investment in Aytu will be remeasured at current fair value with the change in fair value recorded to other income, net in the accompanying statements of operations. The Investment in Aytu is recorded in the consolidated balance sheet as a current asset because it is available for sale within one year of December 31, 2019. Estimated Fair Value of Guarantee and Change in Fair Value of Guarantee As of the closing date of the Aytu Divestiture on November 1, 2019, Aytu assumed the Company's debt obligation to Deerfield CSF and the contingent consideration liability related to future royalties on Avadel's pediatric products. In conjunction with the closing of the Aytu Divestiture in the fourth quarter of 2019, the Company entered into a Guarantee, which guarantees the payment of the assumed debt obligation and contingent consideration. The fair value of the Guarantees were determined at the time of the divestiture as the difference between (i) the estimated fair value of the debt and contingent payments, respectively, using Cerecor's estimated cost of debt and (ii) the estimated fair value of the debt and contingent payments, respectively, using Aytu's estimated cost of debt. Subsequent to the close of the Aytu Divestiture, at each reporting period, the Guarantee will be remeasured at its current fair value with changes recorded in income (loss) from discontinued operations, net of tax within the consolidated statements of operations. Refer to Note 3 for more information. |
Stock-Based Compensation | Stock‑Based Compensation The Company applies the provisions of ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock‑based awards made to employees, including employee stock options, in the statements of operations. For stock options issued to employees and members of the board of directors for their services, the Company estimates the grant date fair value of each option using the Black‑Scholes option pricing model. The use of the Black‑Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk‑free interest rates and expected dividend yields of the common stock. For awards subject to service‑based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock‑based compensation expense equal to the grant date fair value of stock options on a straight‑line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. For stock option grants with market-based conditions, compensation expense is recognized ratably over the attribution period. The Company estimates the fair value of the market-based stock option grants using a Monte-Carlo simulation. The Company generally estimates fair value using assumptions, including the risk-free interest rate, the expected volatility of a peer group of similar companies, the expected term of the awards and the expected dividend yield. The expected term for market-based stock option awards is based on the expected term calculated using a Monte-Carlo simulation. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Deferred tax assets primarily include net operating loss ("NOL") and tax credit carryforwards, accrued expenses not currently deductible and the cumulative temporary differences related to certain research and patent costs. Certain tax attributes, including NOLs and research and development credit carryforwards, may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code (the "IRC"). See Note 15 for further information. The portion of any deferred tax asset for which it is more likely than not that a tax benefit will not be realized must then be offset by recording a valuation allowance. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of December 31, 2019, the Company did not believe any material uncertain tax positions were present. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Adoption of ASC 842 In February 2016, FASB issued ASU 2016-02, which revises existing practice related to accounting for leases under ASC No. 840, Leases (“ASC 840”) for both lessees and lessors. The new guidance in ASU 2016-02 requires lessees to recognize a ROU asset and a lease liability for nearly all leases (other than leases that meet the definition of a short-term lease). The lease liability will be equal to the present value of lease payments and the ROU asset will be based on the lease liability, subject to adjustment such as for initial direct costs. For income statement purposes, the new standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating leases or finance leases. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840) while finance leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). The Company adopted the standard using the modified retrospective transition method on its effective date of January 1, 2019 and therefore did not adjust prior comparative periods as permitted by the codification improvements issued by FASB in July 2018. Additionally, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carryforward the historical lease classification. Additionally, the Company made an accounting policy election to keep leases with an initial term of 12 months or less off the balance sheet. As a result of the standard, the Company recorded a lease liability of $1.2 million and a ROU asset of $0.7 million , which is equal to the initial measurement of the lease liability reduced by the unamortized balance of lease incentive received and deferred rent. There was no material impact to our condensed consolidated income statement. For additional information see Note 9. Other Adopted Accounting Pronouncements SEC Simplification In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532 Disclosure Update and Simplification, to eliminate or modify certain disclosure rules that are redundant, outdated, or duplicative of GAAP or other regulatory requirements. Among other changes, the amendments provide that disclosure requirements related to the analysis of stockholders' equity are expanded for interim financial statements. An analysis of the changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The Company began providing this disclosure in the first quarter of 2019 within a separate statement. New Accounting Pronouncements- Pending Adoption Financial Instruments - Credit Losses In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” ("ASU 2016-13"). This guidance applies to all entities and impacts how entities account for credit losses for most financial assets and other instruments. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than a reduction to the carrying value of the asset. For trade receivables, loans and held-to-maturity debt securities, entities will be required to estimate lifetime expected credit losses. This guidance is effective for fiscal years beginning after December 15, 2019 and interim periods therein. The Company is assessing any potential impacts on its internal controls, business processes, and accounting policies related to both the implementation of, and ongoing compliance with, the new guidance. Upon adoption of the new standard on January 1, 2020, the Company will begin recognizing an allowance using a forward-looking approach to estimate the expected credit loss related to financial assets. The Company is currently evaluating the potential impact of the adoption of this standard, however, does not expect that the adoption of this new standard will have a material impact on the Company's results of operations, financial position, cash flows or disclosures. Fair Value Measurements In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." This new standard modifies certain disclosure requirements on fair value measurements. This new standard will be effective for the Company on January 1, 2020. The Company is currently evaluating the potential impact of the adoption of this standard on its financial statements. Income Tax Simplification In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740)(ASU 2019-12) final guidance that simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation that is applicable to the Company, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences among other changes. For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted, including adoption in any interim period for public business entities for periods for which financial statements have not yet been issued. An entity that elects early adoption must adopt all the amendments in the same period. The Company is currently evaluating the potential impact of the adoption of this standard on its financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies - (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | The following table presents net revenues disaggregated by type: Year Ended December 31, 2019 2018 Prescription drugs $ 6,650,351 $ 6,572,322 Sales force revenue — 456,056 License and other revenue 100,000 — Total revenues, net from continuing operations $ 6,750,351 $7,028,378 |
Aytu Divestiture (Tables)
Aytu Divestiture (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Discontinued Operations | The following tables summarizes the assets and liabilities of the discontinued operations as of December 31, 2019 and 2018: December 31, 2019 2018 Assets Current assets: Accounts receivable, net $ 497,577 $ 2,335,228 Other receivables — 206,798 Inventory, net — 792,857 Prepaid expenses and other current assets — 797,562 Total current assets of discontinued operations 497,577 4,132,445 Intangibles assets, net — 27,474,214 Goodwill — 2,002,035 Total long-term assets of discontinued operations — 29,476,249 Liabilities Current liabilities: Accounts payable 387,975 — Accrued expenses and other current liabilities 3,503,037 5,402,494 Long-term debt, current portion — 1,050,000 Contingent consideration, current portion — 1,097,137 Total current liabilities of discontinued operations 3,891,012 7,549,631 Long term debt, net of current portion — 14,327,882 Contingent consideration, net of current portion — 6,697,217 Other long-term liabilities 1,755,000 — Total long-term liabilities of discontinued operations 1,755,000 21,025,099 The following table summarizes the results of discontinued operations for the year ended December 31, 2019 and 2018: Year Ended December 31, 2019 2018 Product revenue, net $ 10,166,611 $ 11,298,423 Operating expenses: Cost of product sales 4,288,234 4,217,594 General and administrative 137,911 165,674 Sales and marketing 8,521,190 7,977,243 Amortization expense 2,425,083 2,703,896 Impairment of intangible assets 1,449,121 — Change in fair value of contingent consideration 247,042 169,289 Total operating expenses 17,068,581 15,233,696 Interest expense, net (793,860 ) (827,882 ) Gain on sale of Pediatric Portfolio 7,964,924 — Income (loss) from discontinued operations before tax 269,094 (4,763,155 ) Income tax expense 70,888 15,556 Income (loss) from discontinued operations, net of tax (inclusive of gain on sale) $ 198,206 $ (4,778,711 ) The significant non-cash operating items from the discontinued operations for the years ended December 31, 2019 and 2018 are contained below. There were no non-cash investing items from the discontinued operations for the years ended December 31, 2019 and 2018. Year Ended December 31, 2019 2018 Operating activities Amortization $ 2,425,083 $ 2,703,896 Impairment of intangible assets 1,449,121 — Stock-based compensation, excluding amount included within gain on sale of Pediatric Portfolio 327,180 137,082 Amortization of inventory fair value adjustment associated with acquisition of TRx and Avadel Pediatric Product 107,271 170,629 Non-cash interest expense — 302,882 Gain on Aytu Divestiture (7,964,924 ) — Change in fair value of contingent consideration liability 247,042 169,289 |
Net Loss Per Share Of Common St
Net Loss Per Share Of Common Stock, Basic And Diluted (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of the computation of basic and diluted net loss per share of Common Stock | The following table sets forth the computation of basic and diluted net loss per share of common stock for continuing and discontinued operations for the years ended December 31, 2019 and 2018 , which includes both classes of participating securities: Year Ended December 31, 2019 Common stock Preferred Stock Continuing Operations Discontinued Operations Continuing Operations Discontinued Operations Numerator: Allocation of undistributed net (loss) income $ (12,204,552 ) $ 148,673 $ (4,066,201 ) $ 49,533 Denominator: Weighted average shares 42,878,040 42,878,040 2,857,143 2,857,143 Basic and diluted net loss per share $ (0.28 ) $ 0.00 $ (1.42 ) $ 0.01 Year Ended December 31, 2018 Common stock Continuing Operations Discontinued Operations Total Numerator: Net loss $ (35,274,099 ) $ (4,778,711 ) $ (40,052,810 ) Deemed distribution to stockholder 1,657,383 — 1,657,383 Allocation of undistributed net loss to common stockholders $ (36,931,482 ) $ (4,778,711 ) $ (41,710,193 ) Denominator: Weighted average shares 34,773,613 34,773,613 34,773,613 Basic and diluted net loss per share $ (1.06 ) $ (0.14 ) $ (1.20 ) |
Schedule of anti-dilutive securities excluded from computation of diluted weighted shares outstanding | The following outstanding securities at December 31, 2019 and 2018 have been excluded from the computation of diluted weighted shares outstanding, as they could have been anti-dilutive: December 31, 2019 2018 Stock options 4,480,606 4,246,597 Warrants on common stock 4,024,708 4,024,708 Restricted Stock Units 267,500 445,000 Underwriters' unit purchase option 40,000 40,000 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations and Asset Acquisitions [Abstract] [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition both as disclosed in prior periods prior to the third quarter of 2018 and as adjusted for measurement period adjustments identified during the third quarter of 2018: At November 17, 2017 (preliminary) Measurement Period Adjustments At November 17, 2017 (as adjusted) Fair value of assets acquired: Cash and cash equivalents $ 11,068 $ — $ 11,068 Accounts receivable, net 2,872,545 — 2,872,545 Inventory 495,777 — 495,777 Prepaid expenses and other current assets 134,281 — 134,281 Other receivables — 2,764,515 2,764,515 Identifiable Intangible Assets: — Acquired product marketing rights - Metafolin (Poly-Vi-Flor/Tri-Vi-Flor) 10,465,000 1,522,000 11,987,000 PAI sales and marketing agreement 2,334,000 219,000 2,553,000 Acquired product marketing rights - Millipred 4,714,000 342,000 5,056,000 Acquired product marketing rights - Ulesfia 555,000 (555,000 ) — Total assets acquired 21,581,671 4,292,515 25,874,186 Fair value of liabilities assumed: Accounts payable 192,706 — 192,706 Accrued expenses and other current liabilities 4,850,422 3,764,515 8,614,937 Deferred tax liability 839,773 78,840 918,613 Total liabilities assumed 5,882,901 3,843,355 9,726,256 Total identifiable net assets 15,698,770 449,160 16,147,930 Fair value of consideration transferred 29,991,052 (1,210,000 ) 28,781,052 Goodwill $ 14,292,282 $ (1,659,160 ) $ 12,633,122 The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition and as adjusted for measurement period adjustments identified during the second quarter of 2018: At February 16, 2018 (preliminary) Measurement Period Adjustments At February 16, 2018 (as adjusted) Inventory $ 2,549,000 $ (1,831,000 ) $ 718,000 Prepaid assets — 570,000 570,000 Intangible assets 16,453,000 1,838,000 18,291,000 Accrued expenses — (362,000 ) (362,000 ) Fair value of debt assumed (15,272,303 ) 197,303 (15,075,000 ) Fair value of contingent consideration (7,875,165 ) (44,835 ) (7,920,000 ) Total net liabilities assumed (4,145,468 ) 367,468 (3,778,000 ) Consideration exchanged 241,000 (240,999 ) 1 Goodwill $ 4,386,468 $ (608,467 ) $ 3,778,001 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The final fair value of intangible assets both as disclosed in prior periods and as adjusted by measurement period adjustments identified during the third quarter of 2018 includes the following: At November 17, Measurement Period Adjustments At November 17, 2017 (as adjusted) Acquired product marketing rights - Metafolin (Poly-Vi-Flor/Tri-Vi-Flor) $ 10,465,000 $ 1,522,000 $ 11,987,000 PAI sales and marketing agreement 2,334,000 219,000 2,553,000 Acquired product marketing rights - Millipred 4,714,000 342,000 5,056,000 Acquired product marketing rights - Ulesfia 555,000 (555,000 ) — Total $ 18,068,000 $ 1,528,000 $ 19,596,000 The fair value of intangible assets both as of the date of acquisition and as adjusted by measurement period adjustments identified during the second quarter of 2018 includes the following: At February 16, 2018 (preliminary) Measurement Period Adjustments At February 16, 2018 (as adjusted) Acquired Product Marketing Rights - Karbinal $ 6,221,000 $ (21,000 ) $ 6,200,000 Acquired Product Marketing Rights - AcipHex 2,520,000 283,000 2,803,000 Acquired Product Marketing Rights - Cefaclor 6,291,000 1,320,000 7,611,000 Acquired Developed Technology - Flexichamber 1,131,000 546,000 1,677,000 Acquired IPR&D - LiquiTime formulations 290,000 (290,000 ) — Total $ 16,453,000 $ 1,838,000 $ 18,291,000 |
Schedule of Fair Value of Consideration Transferred | The following table summarizes the preliminary acquisition-date fair value of the consideration transferred at the date of acquisition both as disclosed in prior periods prior to the third quarter of 2018 and as adjusted for measurement period adjustments identified during the third quarter of 2018: At November 17, 2017 (preliminary) Measurement Period Adjustments At November 17, 2017 (as adjusted) Cash $ 18,900,000 $ — $ 18,900,000 Common stock (including contingently issuable shares) 8,514,419 — 8,514,419 Contingent payments 2,576,633 (1,210,000 ) 1,366,633 Total consideration transferred $ 29,991,052 (1,210,000 ) 28,781,052 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities that are measured at fair value on a recurring basis | The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities from continuing operations that are measured at fair value on a recurring basis: December 31, 2019 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 2,240,230 $ — $ — Investment in Aytu $ — $ 7,628,947 $ — Liabilities Warrant liability** $ — $ — $ 3,460 Unit purchase option liability** $ — $ — $ 10,594 December 31, 2018 Fair Value Measurements Using Quoted prices in Significant other Significant active markets for observable unobservable identical assets inputs inputs (Level 1) (Level 2) (Level 3) Assets Investments in money market funds* $ 7,324,932 $ — $ — Liabilities Contingent consideration $ — $ — $ 1,256,210 Warrant liability** $ — $ — $ 2,950 Unit purchase option liability** $ — $ — $ 7,216 *Investments in money market funds are reflected in cash and cash equivalents on the accompanying consolidated balance sheets. **Warrant liability and unit purchase option liability are reflected in accrued expenses and other current liabilities on the accompanying consolidated balance sheets. |
Summary of changes in the fair value of the Level 2 investment | The table presented below is a summary of changes in fair value of the Company's Level 2 valuation for the Investment in Aytu for the year ended December 31, 2019: Investment in Aytu Balance at December 31, 2018 $ — Initial valuation of Investment in Aytu upon issuance of Aytu Preferred Stock 7,575,015 Change in fair value of Investment in Aytu 53,932 Balance at December 31, 2019 $ 7,628,947 |
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation | The tables presented below are a summary of changes in the fair value of the Company’s Level 3 valuations for the warrant liability, unit purchase option liability and contingent consideration from continuing operations for the years ended December 31, 2019 and 2018 : Warrant Unit purchase Contingent liability option liability consideration Total Balance at December 31, 2018 $ 2,950 $ 7,216 $ 1,256,211 $ 1,266,377 Change in fair value due to Lachlan Settlement — — (1,277,150 ) (1,277,150 ) Change in fair value 510 3,378 20,939 24,827 Balance at December 31, 2019 $ 3,460 $ 10,594 $ — $ 14,054 Warrant Unit purchase Contingent liability option liability consideration Total Balance at December 31, 2017 $ 8,185 $ 26,991 $ 2,577,134 $ 2,612,310 Purchase price allocation measurement period adjustment of contingent consideration — — (1,210,000 ) (1,210,000 ) Change in fair value (5,235 ) (19,775 ) (110,923 ) (135,933 ) Balance at December 31, 2018 $ 2,950 $ 7,216 $ 1,256,211 $ 1,266,377 |
Inventory - (Tables)
Inventory - (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following as of December 31, 2019 and 2018: December 31, 2019 2018 Raw materials $ — $ 11,392 Finished goods 46,705 497,949 Inventory reserve (25,371 ) (191,418 ) Inventory, net of continuing operations $ 21,334 $ 317,923 |
Property And Equipment (Tables)
Property And Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of property and equipment | Property and equipment as of December 31, 2019 and 2018 consisted of the following: December 31, 2019 2018 Furniture and equipment $ 143,168 $ 133,229 Computers and software 6,708 122,065 Right-of-use asset (Corporate Headquarters' Lease) 718,628 — Leasehold improvements 657,328 463,381 Total property and equipment 1,525,832 718,675 Less accumulated depreciation (78,169 ) (132,163 ) Property and equipment, net $ 1,447,663 $ 586,512 |
Supplemental balance sheet information | Supplemental balance sheet information related to the lease are as follows: December 31, 2019 Property and equipment, net $ 718,626 Other current liabilities $ 155,815 Other long-term liabilities $ 1,111,965 |
Components of lease expense | The components of lease expense for the year ended December 31, 2019: Year Ended December 31, 2019 2018 Operating lease cost* $ 160,767 $ 239,259 *Includes short-term leases, which are immaterial. |
Operating lease maturities | The following table shows a maturity analysis of the operating lease liability as of December 31, 2019: Undiscounted Cash Flows 2020 $ 155,815 2021 169,510 2022 173,748 2023 178,092 2024 182,544 Thereafter 1,000,746 Total lease payments $ 1,860,455 Less implied interest (592,675 ) Total $ 1,267,780 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2019 and 2018 were as follows: Balance as of December 31, 2017 $ 12,290,247 Goodwill from acquisition of Avadel's pediatric products 3,778,001 Goodwill purchase price allocation measurement period adjustment from acquisition of TRx Pharmaceuticals (1,659,160 ) Balance as of December 31, 2018 and as of December 31, 2019 $ 14,409,088 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | The changes in intangible assets for the years ended December 31, 2019 and 2018 were as follows: Balance as of December 31, 2017 $ 7,286,688 Additions 150,000 Purchase price allocation measurement period adjustments 6,000 Amortization (1,815,872 ) Impairment (1,861,562 ) Balance as of December 31, 2018 $ 3,765,254 Amortization (1,338,996 ) Balance as of December 31, 2019 $ 2,426,258 |
Schedule of Finite-Lived Intangible Assets | The following is a summary of intangible assets held by the Company at December 31, 2019 and December 31, 2018, respectively: December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Life (in years) Acquired Product Marketing Rights $ 5,056,000 $ (2,685,992 ) $ 2,370,008 1.92 Acquired Assembled Workforce 150,000 (93,750 ) 56,250 0.75 Total Intangible Assets $ 5,206,000 $ (2,779,742 ) $ 2,426,258 1.89 December 31, 2018 Gross Carrying Amount Accumulated Amortization Impairment Loss Net Carrying Amount Weighted-Average Remaining Life (in years) Acquired Product Marketing Rights $ 5,056,000 $ (1,421,996 ) $ — $ 3,634,004 2.92 Sales and Marketing Agreement 2,553,000 (691,438 ) (1,861,562 ) — — Acquired Assembled Workforce 150,000 (18,750 ) — 131,250 1.75 Total Intangible Assets $ 7,759,000 $ (2,132,184 ) $ (1,861,562 ) $ 3,765,254 2.88 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Amortization of intangibles for the next five years and thereafter is expected to be as follows: Estimated Amortization For the Years Ending December 31, Expense 2020 $ 1,320,246 2021 1,106,012 2022 — 2023 — 2024 — Thereafter — Total future amortization expense $ 2,426,258 |
Accrued Expenses And Other Cu_2
Accrued Expenses And Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities as of December 31, 2019 and 2018 consisted of the following: December 31, 2019 2018 Sales returns and allowances $ 2,284,175 $ 1,465,419 Medicaid rebates 118,271 50,246 Minimum sales commitments, royalties payable, and purchase obligations 75,000 8,954,521 Compensation and benefits 1,591,964 1,953,065 Research and development expenses 920,901 278,132 General and administrative 360,016 1,112,378 Sales and marketing 120,056 235,721 Other 169,869 279,397 Accrued expenses and other current liabilities $ 5,640,252 $ 14,328,879 |
Capital Structure (Tables)
Capital Structure (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CAPITAL STRUCTURE | |
Schedule of outstanding common stock warrants | At December 31, 2019 , the following common stock warrants were outstanding: Number of shares Exercise price Expiration underlying warrants per share date 22,328* $ 8.40 October 2020 2,380* $ 8.68 May 2022 4,000,000 $ 12.50 June 2024 4,024,708 *Accounted for as a liability instrument (see Note 6) |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Schedule of stock-based compensation expense | The amount of stock-based compensation expense recognized for the years ending December 31, 2019 and 2018 was as follows: Year Ended December 31, 2019 2018 Research and development $ 464,382 $ 101,000 General and administrative 1,549,844 2,135,710 Sales and marketing 190,851 57,271 Total stock-based compensation, continuing operations 2,205,077 2,293,981 Total stock-based compensation, discontinued operations 257,719 137,082 Total stock-based compensation $ 2,462,796 $ 2,431,063 |
Summary of option activity | A summary of option activity with service-based vesting conditions for the year ended December 31, 2019 is as follows: Options Outstanding Number of shares Weighted average exercise price Grant date fair value of options Weighted average remaining contractual term (in years) Balance at December 31, 2018 3,746,597 $ 4.16 7.8 Granted 2,631,927 $ 5.70 $ 8,106,310 Exercised (323,403 ) $ 2.59 Forfeited (1,445,554 ) $ 5.22 $ 4,218,136 Expired (428,961 ) $ 4.99 $ 1,062,853 Balance at December 31, 2019 4,180,606 $ 4.80 7.9 Exercisable at December 31, 2019 2,228,748 $ 4.58 6.8 A summary of option activity with market-based vesting conditions for the year ended December 31, 2019 is as follows: Options Outstanding Number of shares Weighted average exercise price per share Weighted average remaining contractual term (in years) Aggregate intrinsic value (1) Balance at December 31, 2018 500,000 $ 4.24 9.2 Granted 300,000 $ 4.98 Exercised — Forfeited (500,000 ) $ 4.24 Balance at December 31, 2019 300,000 $ 4.98 9.4 $ 123,000 Exercisable at December 31, 2019 — (1) The aggregate intrinsic value in the above table represents the total pre-tax amount that a participant would receive if the option had been exercised on the last day of the respective fiscal period. Options with a market value less than its exercise value are not included in the intrinsic value amount. |
Schedule of fair value assumptions for options | The following table shows the assumptions used to compute stock-based compensation expense for stock options granted to employees and members of the board of directors under the Black-Scholes valuation model, and the assumptions used to compute stock-based compensation expense for market-based stock option grants under a Monte Carlo simulation: Year Ended December 31, Service-based options 2019 2018 Risk-free interest rate 1.47% — 2.59% 2.51% — 3.01% Expected term of options (in years) 5.0 — 6.25 5.0 — 6.25 Expected stock price volatility 55% 55% — 65% Expected annual dividend yield 0% 0% Market-based options Risk-free interest rate 2.32% 2.84% Expected term of options (in years) 10 10 Expected stock price volatility 60% 60% Expected annual dividend yield 0% 0% |
Nonvested Restricted Stock Shares Activity | The following table summarizes the Company's RSU activity for the year ended December 31, 2019 : RSUs Outstanding Number of shares Weighted average grant date fair value Unvested RSUs at December 31, 2018 445,000 $ 4.27 Granted 295,000 $ 4.98 Vested (172,500 ) $ 4.52 Forfeited (300,000 ) $ 4.24 Unvested RSUs at December 31, 2019 267,500 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The income tax provision from continuing operations consisted of the following for the years ending December 31, 2019 and 2018: December 31, 2019 2018 Current: Federal $ 209,001 $ (53,281 ) State 54,572 20,560 Total Current 263,573 (32,721 ) Deferred: Federal 24,458 (52,235 ) State (7,715 ) 35,490 Total Deferred 16,743 (16,745 ) Net income tax expense (benefit) $ 280,316 $ (49,466 ) |
Schedule of components of deferred tax assets | The net deferred tax liabilities consisted of the following for the years ending December 31, 2019 and 2018: December 31, 2019 2018 Deferred tax assets (liabilities): Net operating losses $ 7,596,955 $ 4,421,423 Accrued compensation 321,748 465,430 Investment in Aytu 577,490 — Tax credits 1,070,738 252,095 Stock-based compensation 1,872,442 1,922,736 Installment sale 441,305 508,291 Other reserves 399,885 277,633 Prepaid expenses (120,863 ) (160,474 ) Right-of-use asset (167,943 ) — Lease liability 296,259 — Basis difference in tangible and intangible assets, net 1,968,008 2,968,764 Total deferred tax assets, net 14,256,024 10,655,898 Less valuation allowance (14,342,005 ) (10,725,136 ) Net deferred taxes $ (85,981 ) $ (69,238 ) |
Reconciliation of income tax expenses between federal statutory rate and effective income tax rate | The income tax benefit for the years ended December 31, 2019 and 2018 differed from the amounts computed by applying the U.S. federal income tax rate of 21% as follows: December 31, 2019 2018 Federal statutory rate 21.00 % 21.00 % Stock compensation (0.47 )% (0.10 )% State taxes (0.13 )% 4.98 % Research and development credit 5.13 % 0.70 % Acquired in-process research and development — % (11.17 )% Fair value adjustment to contingent consideration 1.65 % — % Other (1.86 )% (0.74 )% Valuation allowance (27.07 )% (14.53 )% Effective income tax rate (1.75 )% 0.14 % |
Business (Details)
Business (Details) | Feb. 06, 2020USD ($)$ / sharesshares | Feb. 03, 2020USD ($)productshares | Sep. 04, 2019USD ($)$ / sharesshares | Mar. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)shares | Sep. 30, 2019USD ($)$ / sharesshares | Mar. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019USD ($)productshares | Dec. 31, 2018USD ($) | Nov. 01, 2019shares |
Subsequent Event [Line Items] | ||||||||||
Contingent consideration | $ 0 | $ 0 | ||||||||
Non-cash gain on sale of Pediatric Portfolio to Aytu | 7,964,924 | $ 0 | ||||||||
Net (loss) income | (16,072,547) | (40,052,810) | ||||||||
Net cash used in operating activities | (19,134,332) | (3,128,102) | ||||||||
Accumulated deficit | (114,290,617) | (114,290,617) | (98,218,070) | |||||||
Cash and cash equivalents | 3,609,438 | $ 3,609,438 | $ 10,646,301 | |||||||
Neurological Clinical And Preclinical Stage Compounds | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of products in development | product | 3 | |||||||||
Underwritten Public Offering | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued (in shares) | shares | 1,818,182 | |||||||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 5.50 | |||||||||
Armistice Purchase Agreement | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued (in shares) | shares | 1,200,000 | 1,200,000 | ||||||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 3.132 | $ 3.132 | ||||||||
Consideration received | $ 3,700,000 | $ 3,700,000 | ||||||||
Subsequent Event | Clinical Stage | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of products in development | product | 6 | |||||||||
Subsequent Event | Registered Direct Offering | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued (in shares) | shares | 1,306,282 | |||||||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 3.98 | |||||||||
Aevi | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Loan forgiven | $ 4,100,000 | |||||||||
Aevi | Subsequent Event | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Shares issued for purchase of business (in shares) | $ 15,600,000 | |||||||||
Consideration issued (in shares) | shares | 3,900,000 | |||||||||
Contingent consideration | $ 6,500,000 | |||||||||
Pediatric Portfolio | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Proceeds from sale of assets | 4,500,000 | |||||||||
Assumption of debt on sale of assets | 15,100,000 | $ 15,100,000 | ||||||||
Non-cash gain on sale of Pediatric Portfolio to Aytu | 8,000,000 | |||||||||
Pediatric Portfolio | AYTU | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Liabilities assumed by buyer | $ 11,000,000 | $ 11,000,000 | ||||||||
Convertible Preferred Stock | AYTU | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Investment, shares (in shares) | shares | 9,800,000 | 9,800,000 | 9,800,000 | |||||||
Common stock | Underwritten Public Offering | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Consideration received | $ 9,000,000 | |||||||||
Common stock | Armistice | Underwritten Public Offering | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued (in shares) | shares | 363,637 | |||||||||
Common stock | Armistice | Subsequent Event | Registered Direct Offering | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued (in shares) | shares | 1,256,282 | |||||||||
Consideration received | $ 5,000,000 | |||||||||
Scenario, Forecast | Subsequent Event | Registered Direct Offering | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued (in shares) | shares | 1,306,282 | |||||||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 3.98 | |||||||||
Scenario, Forecast | Common stock | Armistice | Subsequent Event | Registered Direct Offering | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of shares issued (in shares) | shares | 1,256,282 | |||||||||
Consideration received | $ 5,000,000 |
Significant Accounting Polici_4
Significant Accounting Policies - Narrative (Details) shares in Millions | 12 Months Ended | |||
Dec. 31, 2019USD ($)contractsegmentreporting_unitshares | Dec. 31, 2018 | Nov. 01, 2019shares | Jan. 01, 2019USD ($) | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||||
Allowance for doubtful accounts receivable | $ 0 | |||
Payment terms | 30 days | |||
Prompt payment discount | 2.00% | |||
Lessee, Operating Lease, Description [Abstract] | ||||
Number of operating leases | contract | 1 | |||
Segment Reporting Information, Additional Information [Abstract] | ||||
Number of operating segments | segment | 1 | |||
Goodwill | ||||
Number of reporting units | reporting_unit | 1 | |||
Fair Value Disclosures [Abstract] | ||||
Contingent consideration | $ 0 | |||
New Accounting Pronouncements and Changes in Accounting Principles | ||||
Property and equipment, net | 718,626 | |||
Total | $ 1,267,780 | |||
Computers and software | ||||
Property, Plant and Equipment [Abstract] | ||||
Computer, software, equipment and furniture, useful life | 4 years | |||
Furniture and equipment | ||||
Property, Plant and Equipment [Abstract] | ||||
Computer, software, equipment and furniture, useful life | 5 years | |||
Leasehold improvements | ||||
Property, Plant and Equipment [Abstract] | ||||
Computer, software, equipment and furniture, useful life | 10 years | |||
Minimum | ||||
Rebates | ||||
Medicaid billing period | 180 days | |||
Maximum | ||||
Rebates | ||||
Medicaid billing period | 270 days | |||
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements and Changes in Accounting Principles | ||||
Property and equipment, net | $ 700,000 | |||
Total | $ 1,200,000 | |||
Discontinued Operations, Disposed of by Sale | Pediatric Portfolio | Sales Revenue | Product Concentration Risk | ||||
Concentration Risk | ||||
Concentration risk percentage | 60.00% | |||
AYTU | Convertible Preferred Stock | ||||
Fair Value Disclosures [Abstract] | ||||
Investment, shares (in shares) | shares | 9.8 | 9.8 | ||
Major Customer Number One | Sales Revenue | Customer Concentration Risk | ||||
Concentration Risk | ||||
Concentration risk percentage | 41.00% | 31.00% | ||
Major Customer Number Two | Sales Revenue | Customer Concentration Risk | ||||
Concentration Risk | ||||
Concentration risk percentage | 30.00% | 29.00% | ||
Major Customer Number Three | Sales Revenue | Customer Concentration Risk | ||||
Concentration Risk | ||||
Concentration risk percentage | 28.00% | 28.00% |
Significant Accounting Polici_5
Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 6,750,351 | $ 7,028,378 | |
Prescription drugs | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 6,650,351 | 6,572,322 | |
Sales force revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 0 | 456,056 | |
License and other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 25,000,000 | $ 100,000 | $ 0 |
Aytu Divestiture - Narrative (D
Aytu Divestiture - Narrative (Details) - USD ($) shares in Millions | Nov. 01, 2019 | Jan. 31, 2020 | Dec. 31, 2019 | Oct. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 31, 2021 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Maximum future payments | $ 25,200,000 | $ 25,200,000 | |||||
Guarantee, fair value | 1,800,000 | 1,800,000 | |||||
Gain on sale of pediatric portfolio | 7,964,924 | $ 0 | |||||
Pediatric Portfolio | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from sale of assets | 4,500,000 | ||||||
Assumption of debt on sale of assets | 15,100,000 | 15,100,000 | |||||
Gain on sale of pediatric portfolio | 8,000,000 | ||||||
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from sale of assets | $ 4,500,000 | 4,500,000 | |||||
Assumption of debt on sale of assets | 15,100,000 | ||||||
Gain on sale of pediatric portfolio | 8,000,000 | 7,964,924 | 0 | ||||
Net assets transferred | 18,800,000 | ||||||
Transaction expenses | 600,000 | ||||||
Accounts receivable, net | $ 497,577 | $ 497,577 | $ 2,335,228 | ||||
Sales returns disposed of | 800,000 | ||||||
Sales return reserve | $ 2,300,000 | ||||||
Convertible Preferred Stock | AYTU | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Investment, shares (in shares) | 9.8 | 9.8 | 9.8 | ||||
AYTU | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Monthly commercial operation payments | $ 12,000 | ||||||
AYTU | Pediatric Portfolio | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Liabilities assumed by buyer | $ 11,000,000 | $ 11,000,000 | |||||
AYTU | Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Convertible preferred stock received | 7,600,000 | ||||||
Liabilities assumed by buyer | 11,000,000 | ||||||
Minimum | Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Sales returns disposed of | 2,000,000 | ||||||
Maximum | Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Sales returns disposed of | $ 2,800,000 | ||||||
Maximum | AYTU | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Duration of monthly commercial operation payments | 18 months | ||||||
Deerfield Obligation | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Contingent consideration paid | $ 3,200,000 | ||||||
Deerfield Obligation | Scenario, Forecast | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Periodic payment | $ 100,000 | ||||||
Fixed Payment Guarantee | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Maximum future payments | 16,100,000 | 16,100,000 | |||||
Guarantee, fair value | 900,000 | 900,000 | |||||
Deferred Payment Guarantee | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Maximum future payments | 9,100,000 | 9,100,000 | |||||
Guarantee, fair value | $ 900,000 | $ 900,000 | |||||
AYTU | Deerfield Obligation | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Remaining contingent consideration | $ 9,300,000 | ||||||
AYTU | Deerfield Obligation | Pediatric Portfolio | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Quarterly deferred payments, percentage of net sales of pediatric products | 15.00% | ||||||
Future aggregate deferred payments | $ 12,500,000 | ||||||
AYTU | Deerfield Obligation | Scenario, Forecast | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Periodic payment | 100,000 | ||||||
Balloon payment to be paid | $ 15,000,000 | ||||||
Subsequent Event | AYTU | Deerfield Obligation | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Periodic payment | $ 200,000 |
Aytu Divestiture - Summary of A
Aytu Divestiture - Summary of Assets and Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Total current assets of discontinued operations | $ 497,577 | $ 4,132,445 |
Total long-term assets of discontinued operations | 0 | 29,476,249 |
Current liabilities: | ||
Total current liabilities of discontinued operations | 3,891,012 | 7,549,631 |
Total long-term liabilities of discontinued operations | 1,755,000 | 21,025,099 |
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | ||
Current assets: | ||
Accounts receivable, net | 497,577 | 2,335,228 |
Other receivables | 0 | 206,798 |
Inventory, net | 0 | 792,857 |
Prepaid expenses and other current assets | 0 | 797,562 |
Total current assets of discontinued operations | 497,577 | 4,132,445 |
Intangibles assets, net | 0 | 27,474,214 |
Goodwill | 0 | 2,002,035 |
Total long-term assets of discontinued operations | 0 | 29,476,249 |
Current liabilities: | ||
Accounts payable | 387,975 | 0 |
Accrued expenses and other current liabilities | 3,503,037 | 5,402,494 |
Long-term debt, current portion | 0 | 1,050,000 |
Contingent consideration, current portion | 0 | 1,097,137 |
Total current liabilities of discontinued operations | 3,891,012 | 7,549,631 |
Long term debt, net of current portion | 0 | 14,327,882 |
Contingent consideration, net of current portion | 0 | 6,697,217 |
Other long-term liabilities | 1,755,000 | 0 |
Total long-term liabilities of discontinued operations | $ 1,755,000 | $ 21,025,099 |
Aytu Divestiture - Summary of I
Aytu Divestiture - Summary of Income Statement (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating expenses: | ||
Income (loss) from discontinued operations, net of tax (inclusive of gain on sale) | $ (4,778,711) | |
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Product revenue, net | $ 10,166,611 | 11,298,423 |
Operating expenses: | ||
Cost of product sales | 4,288,234 | 4,217,594 |
General and administrative | 137,911 | 165,674 |
Sales and marketing | 8,521,190 | 7,977,243 |
Amortization expense | 2,425,083 | 2,703,896 |
Impairment of intangible assets | 1,449,121 | 0 |
Change in fair value of contingent consideration | 247,042 | 169,289 |
Total operating expenses | 17,068,581 | 15,233,696 |
Interest expense, net | (793,860) | (827,882) |
Gain on sale of Pediatric Portfolio | 7,964,924 | 0 |
Income (loss) from discontinued operations before tax | 269,094 | (4,763,155) |
Income tax expense | 70,888 | 15,556 |
Income (loss) from discontinued operations, net of tax (inclusive of gain on sale) | $ 198,206 | $ (4,778,711) |
Aytu Divestiture - Summary of C
Aytu Divestiture - Summary of Cash Flows (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | |||
Gain on Aytu Divestiture | $ (7,964,924) | $ 0 | |
Pediatric Portfolio | |||
Operating activities | |||
Gain on Aytu Divestiture | $ (8,000,000) | ||
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | |||
Operating activities | |||
Amortization | 2,425,083 | 2,703,896 | |
Impairment of intangible assets | 1,449,121 | 0 | |
Stock-based compensation, excluding amount included within gain on sale of Pediatric Portfolio | 327,180 | 137,082 | |
Amortization of inventory fair value adjustment associated with acquisition of TRx and Avadel Pediatric Product | 107,271 | 170,629 | |
Non-cash interest expense | 0 | 302,882 | |
Gain on Aytu Divestiture | $ (8,000,000) | (7,964,924) | 0 |
Change in fair value of contingent consideration | $ 247,042 | $ 169,289 |
Net Loss Per Share Of Common _2
Net Loss Per Share Of Common Stock, Basic And Diluted (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator [Abstract] | ||
Net loss, continuing operations | $ (35,274,099) | |
Net loss, discontinued operations | (4,778,711) | |
Net loss | $ (16,072,547) | (40,052,810) |
Deemed distribution to stockholder, continuing operations | 1,657,383 | |
Deemed distribution to stockholder, discontinued operations | 0 | |
Deemed distribution to shareholder | 1,657,383 | |
Allocation of undistributed net (loss) income, continuing operations | (36,931,482) | |
Allocation of undistributed net (loss) income, discontinued operations | (4,778,711) | |
Allocation of undistributed net loss to common stockholders | $ (41,710,193) | |
Denominator [Abstract] | ||
Weighted average shares (in shares) | 34,773,613 | |
Basic and diluted net loss per share, continuing operations (in dollars per share) | $ (1.06) | |
Basic and diluted net loss per share, discontinued operations (in dollars per share) | (0.14) | |
Net loss per share, basic and diluted (in dollars per share) | (1.20) | |
Common stock | ||
Numerator [Abstract] | ||
Allocation of undistributed net (loss) income, continuing operations | (12,204,552) | |
Allocation of undistributed net (loss) income, discontinued operations | $ 148,673 | |
Denominator [Abstract] | ||
Weighted average shares (in shares) | 42,878,040 | |
Basic and diluted net loss per share, continuing operations (in dollars per share) | $ (0.28) | (1.06) |
Basic and diluted net loss per share, discontinued operations (in dollars per share) | 0 | (0.14) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.28) | $ (1.20) |
Preferred Stock | ||
Numerator [Abstract] | ||
Allocation of undistributed net (loss) income, continuing operations | $ (4,066,201) | |
Allocation of undistributed net (loss) income, discontinued operations | $ 49,533 | |
Denominator [Abstract] | ||
Weighted average shares (in shares) | 2,857,143 | |
Basic and diluted net loss per share, continuing operations (in dollars per share) | $ (1.42) | |
Basic and diluted net loss per share, discontinued operations (in dollars per share) | 0.01 | |
Net loss per share, basic and diluted (in dollars per share) | $ (1.41) |
Net (Loss) Income Per Share O_2
Net (Loss) Income Per Share Of Common Stock, Basic And Diluted - Narrative (Details) | Dec. 27, 2018$ / sharesshares | Dec. 26, 2018shares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2014shares |
Anti-dilutive securities | ||||||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | 5,000,000 | |||
Deemed distribution to shareholder | $ | $ 1,657,383 | |||||
Net loss | $ | $ (16,072,547) | (40,052,810) | ||||
Net (loss) income attributable to common shareholders | $ | $ 41,700,000 | |||||
Private Placement | ||||||
Anti-dilutive securities | ||||||
Number of shares available under warrant (in shares) | 14,285,714 | |||||
Exercise price per share (in dollars per share) | $ / shares | $ 0.40 | |||||
Series B convertible preferred stock | Preferred Stock | ||||||
Anti-dilutive securities | ||||||
Preferred stock conversion ratio | 0.20 | 0.20 | 0.20 | 0.20 | ||
Preferred stock, days outstanding | 5 days | |||||
Number of shares available under warrant (in shares) | 625,208 | |||||
Series B convertible preferred stock | Preferred Stock | Private Placement | ||||||
Anti-dilutive securities | ||||||
Preferred stock, shares authorized (in shares) | 2,857,143 | 2,857,143 | 2,857,143 | |||
Incentive Warrants | ||||||
Anti-dilutive securities | ||||||
Number of shares available under warrant (in shares) | 4,000,000 | 4,000,000 | ||||
Expected life | 5 years 6 months | 5 years 6 months | 5 years 6 months | |||
Exercise price per share (in dollars per share) | $ / shares | $ 12.50 | $ 12.50 | $ 12.50 | |||
Deemed distribution to shareholder | $ | $ 1,700,000 |
Net Loss Per Share Of Common _3
Net Loss Per Share Of Common Stock, Basic And Diluted - Anti-dilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stock options | ||
Anti-dilutive securities | ||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding | 4,480,606 | 4,246,597 |
Warrants on common stock | ||
Anti-dilutive securities | ||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding | 4,024,708 | 4,024,708 |
Restricted Stock Units | ||
Anti-dilutive securities | ||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding | 267,500 | 445,000 |
Underwriters' unit purchase option | ||
Anti-dilutive securities | ||
Anti- dilutive securities excluded from the computation of diluted weighted shares outstanding | 40,000 | 40,000 |
Acquisitions - Narrative (Deta
Acquisitions - Narrative (Details) | Dec. 31, 2019USD ($) | Sep. 25, 2018shares | Sep. 24, 2018USD ($)therapymilestoneshares | Feb. 16, 2018USD ($) | Nov. 17, 2017USD ($)shares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2023USD ($) | Jun. 30, 2019USD ($) | Jun. 29, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||||||||||||
Leased asset obtained in exchange for new operating lease liability | $ 19,971,554 | |||||||||||||
Useful life (in years) | 1 year 10 months 21 days | 2 years 10 months 17 days | ||||||||||||
Debt assumed in Avadel Pediatric Products acquisition | $ 0 | $ 0 | $ 15,075,000 | $ 0 | ||||||||||
Contingent consideration | 0 | 0 | 0 | |||||||||||
Goodwill | 14,409,088 | 14,409,088 | 14,409,088 | 14,409,088 | $ 12,290,247 | |||||||||
Impairment of intangible assets | 1,449,121 | 1,861,562 | ||||||||||||
Inventory, net | 21,334 | 21,334 | 317,923 | 21,334 | ||||||||||
Change in inventory reserve | 36,577 | $ 174,944 | ||||||||||||
Avadel | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Cash | $ 1 | |||||||||||||
Debt assumed in Avadel Pediatric Products acquisition | 15,075,000 | |||||||||||||
Contingent consideration | 0 | 7,900,000 | 0 | 0 | ||||||||||
Goodwill | $ 3,778,001 | |||||||||||||
Goodwill tax deductible period | 15 years | |||||||||||||
Fair value assigned to intangible asset at purchase | $ 18,291,000 | |||||||||||||
TRx | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Cash | $ 18,900,000 | |||||||||||||
Contingent consideration | 0 | 1,366,633 | $ 0 | 0 | ||||||||||
Goodwill | 12,633,122 | |||||||||||||
Fair value assigned to intangible asset at purchase | $ 19,596,000 | |||||||||||||
Unregistered shares of common stock issued or issuable as part of acquisition (in shares) | shares | 7,534,884 | |||||||||||||
Shares issued for purchase of business (in shares) | $ 8,514,419 | |||||||||||||
Shares issued upon closing (in shares) | shares | 5,184,920 | |||||||||||||
Contingent shares issuable as part of acquisition (in shares) | shares | 2,349,968 | |||||||||||||
Goodwill, expected tax deductible amount | $ 8,700,000 | |||||||||||||
Acquired Assembled Workforce | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Useful life (in years) | 9 months | 1 year 9 months | ||||||||||||
PAI Sales & Marketing Agreement | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Fair value of sales and marketing agreement | $ 0 | |||||||||||||
PAI Sales & Marketing Agreement | TRx | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Fair value assigned to intangible asset at purchase | 2,553,000 | |||||||||||||
Flexichamber | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Inventory, net | $ 0 | |||||||||||||
Change in inventory reserve | $ 200,000 | |||||||||||||
Flexichamber | Acquired Developed Technology | Avadel | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Fair value assigned to intangible asset at purchase | $ 1,677,000 | $ 0 | $ 1,400,000 | |||||||||||
Impairment of intangible assets | 1,400,000 | |||||||||||||
Nonrecurring | Level 3 | PAI Sales & Marketing Agreement | TRx | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Fair value of sales and marketing agreement | 0 | $ 0 | 0 | |||||||||||
Ichorion | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Consideration issued (in shares) | shares | 5,800,000 | 5,800,000 | ||||||||||||
Contingent consideration | $ 15,000,000 | |||||||||||||
Leased asset obtained in exchange for new operating lease liability | 20,000,000 | |||||||||||||
Intangible assets | 18,700,000 | |||||||||||||
Cash acquired | $ 1,600,000 | |||||||||||||
Number of preclinical therapies | therapy | 3 | |||||||||||||
Transaction costs | $ 200,000 | |||||||||||||
Number of contingent consideration milestones | milestone | 3 | |||||||||||||
Payment for contingent consideration | $ 0 | $ 0 | ||||||||||||
Ichorion | Acquired Assembled Workforce | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Intangible assets | $ 200,000 | |||||||||||||
Useful life (in years) | 2 years | |||||||||||||
Milestone One | TRx | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Contingent consideration | 3,000,000 | $ 0 | ||||||||||||
Milestone Two | TRx | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Contingent consideration | 2,000,000 | |||||||||||||
Milestone Three | TRx | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Contingent consideration | $ 2,000,000 | |||||||||||||
Scenario, Forecast | Milestone One | Ichorion | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Payment for contingent consideration | $ 6,000,000 | |||||||||||||
Scenario, Forecast | Milestone Two | Ichorion | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Payment for contingent consideration | 5,000,000 | |||||||||||||
Scenario, Forecast | Milestone Three | Ichorion | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Payment for contingent consideration | $ 4,000,000 | $ 4,000,000 |
Acquisitions - Schedule of Allo
Acquisitions - Schedule of Allocation of Purchase Price (Details) - USD ($) | Feb. 16, 2018 | Nov. 17, 2017 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2017 |
Fair value of liabilities assumed: | |||||||
Debt assumed in Avadel Pediatric Products acquisition | $ (15,075,000) | $ 0 | |||||
Goodwill | 14,409,088 | $ 14,409,088 | $ 12,290,247 | ||||
Measurement Period Adjustments | |||||||
Intangible assets | 6,000 | ||||||
Goodwill | $ (1,659,160) | ||||||
Avadel | |||||||
Fair value of assets acquired: | |||||||
Inventory | $ 718,000 | ||||||
Prepaid expenses and other current assets | 570,000 | ||||||
Identifiable Intangible Assets: | |||||||
Intangible assets | 18,291,000 | ||||||
Fair value of liabilities assumed: | |||||||
Accrued expenses and other current liabilities | (362,000) | ||||||
Debt assumed in Avadel Pediatric Products acquisition | (15,075,000) | ||||||
Fair value of contingent consideration | (7,920,000) | ||||||
Total identifiable net assets | (3,778,000) | ||||||
Fair value of consideration transferred | 1 | ||||||
Goodwill | 3,778,001 | ||||||
Measurement Period Adjustments | |||||||
Inventory | $ (1,831,000) | ||||||
Prepaid assets | 570,000 | ||||||
Intangible assets | 1,838,000 | ||||||
Accrued expenses | (362,000) | ||||||
Fair value of debt assumed | 197,303 | ||||||
Fair value of contingent consideration | (44,835) | ||||||
Total net liabilities assumed | 367,468 | ||||||
Consideration exchanged | (240,999) | ||||||
Goodwill | $ (608,467) | ||||||
TRx | |||||||
Fair value of assets acquired: | |||||||
Cash and cash equivalents | $ 11,068 | ||||||
Accounts receivable, net | 2,872,545 | ||||||
Inventory | 495,777 | ||||||
Prepaid expenses and other current assets | 134,281 | ||||||
Other receivables | 2,764,515 | ||||||
Identifiable Intangible Assets: | |||||||
Intangible assets | 19,596,000 | ||||||
Total assets acquired | 25,874,186 | ||||||
Fair value of liabilities assumed: | |||||||
Accounts payable | 192,706 | ||||||
Accrued expenses and other current liabilities | (8,614,937) | ||||||
Deferred tax liability | 918,613 | ||||||
Total liabilities assumed | 9,726,256 | ||||||
Total identifiable net assets | 16,147,930 | ||||||
Fair value of consideration transferred | 28,781,052 | ||||||
Goodwill | 12,633,122 | ||||||
Measurement Period Adjustments | |||||||
Accounts receivable, net | $ 0 | ||||||
Inventory | 0 | ||||||
Prepaid assets | 0 | ||||||
Other receivables | 2,764,515 | ||||||
Intangible assets | 1,528,000 | ||||||
Total assets acquired | 4,292,515 | ||||||
Accounts payable | 0 | ||||||
Accrued expenses | (3,764,515) | ||||||
Deferred tax liability | 78,840 | ||||||
Fair value of contingent consideration | 1,210,000 | ||||||
Total liabilities assumed | 3,843,355 | ||||||
Total net liabilities assumed | 449,160 | ||||||
Consideration exchanged | (1,210,000) | ||||||
Goodwill | (1,659,160) | ||||||
PAI Sales & Marketing Agreement | TRx | |||||||
Identifiable Intangible Assets: | |||||||
Intangible assets | 2,553,000 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | 219,000 | ||||||
Metafolin | Acquired Product Marketing Rights | TRx | |||||||
Identifiable Intangible Assets: | |||||||
Intangible assets | 11,987,000 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | 1,522,000 | ||||||
Millipred | Acquired Product Marketing Rights | TRx | |||||||
Identifiable Intangible Assets: | |||||||
Intangible assets | 5,056,000 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | 342,000 | ||||||
Ulesfia | Acquired Product Marketing Rights | TRx | |||||||
Identifiable Intangible Assets: | |||||||
Intangible assets | 0 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | $ (555,000) | ||||||
Previously Reported | Avadel | |||||||
Fair value of assets acquired: | |||||||
Inventory | 2,549,000 | ||||||
Prepaid expenses and other current assets | 0 | ||||||
Identifiable Intangible Assets: | |||||||
Intangible assets | 16,453,000 | ||||||
Fair value of liabilities assumed: | |||||||
Accrued expenses and other current liabilities | 0 | ||||||
Debt assumed in Avadel Pediatric Products acquisition | (15,272,303) | ||||||
Fair value of contingent consideration | (7,875,165) | ||||||
Total identifiable net assets | (4,145,468) | ||||||
Fair value of consideration transferred | 241,000 | ||||||
Goodwill | $ 4,386,468 | ||||||
Previously Reported | TRx | |||||||
Fair value of assets acquired: | |||||||
Cash and cash equivalents | 11,068 | ||||||
Accounts receivable, net | 2,872,545 | ||||||
Inventory | 495,777 | ||||||
Prepaid expenses and other current assets | 134,281 | ||||||
Other receivables | 0 | ||||||
Identifiable Intangible Assets: | |||||||
Intangible assets | 18,068,000 | ||||||
Total assets acquired | 21,581,671 | ||||||
Fair value of liabilities assumed: | |||||||
Accounts payable | 192,706 | ||||||
Accrued expenses and other current liabilities | (4,850,422) | ||||||
Deferred tax liability | 839,773 | ||||||
Total liabilities assumed | 5,882,901 | ||||||
Total identifiable net assets | 15,698,770 | ||||||
Fair value of consideration transferred | 29,991,052 | ||||||
Goodwill | 14,292,282 | ||||||
Previously Reported | PAI Sales & Marketing Agreement | TRx | |||||||
Identifiable Intangible Assets: | |||||||
Intangible assets | 2,334,000 | ||||||
Previously Reported | Metafolin | Acquired Product Marketing Rights | TRx | |||||||
Identifiable Intangible Assets: | |||||||
Intangible assets | 10,465,000 | ||||||
Previously Reported | Millipred | Acquired Product Marketing Rights | TRx | |||||||
Identifiable Intangible Assets: | |||||||
Intangible assets | 4,714,000 | ||||||
Previously Reported | Ulesfia | Acquired Product Marketing Rights | TRx | |||||||
Identifiable Intangible Assets: | |||||||
Intangible assets | $ 555,000 |
Acquisitions - Schedule of Int
Acquisitions - Schedule of Intangible Assets Acquired (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Jun. 30, 2019 | Jun. 29, 2019 | Feb. 16, 2018 | Nov. 17, 2017 | |
Measurement Period Adjustments | |||||||
Intangible assets | $ 6,000 | ||||||
Avadel | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 18,291,000 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | $ 1,838,000 | ||||||
TRx | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 19,596,000 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | $ 1,528,000 | ||||||
PAI Sales & Marketing Agreement | TRx | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 2,553,000 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | 219,000 | ||||||
Karbinal | Acquired Product Marketing Rights | Avadel | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 6,200,000 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | (21,000) | ||||||
AcipHex | Acquired Product Marketing Rights | Avadel | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 2,803,000 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | 283,000 | ||||||
Cefaclor | Acquired Product Marketing Rights | Avadel | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 7,611,000 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | 1,320,000 | ||||||
Flexichamber | Acquired Developed Technology | Avadel | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 0 | $ 1,400,000 | 1,677,000 | ||||
Measurement Period Adjustments | |||||||
Intangible assets | 546,000 | ||||||
LiquiTime Process | In Process Research and Development | Avadel | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 0 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | $ (290,000) | ||||||
Metafolin | Acquired Product Marketing Rights | TRx | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 11,987,000 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | 1,522,000 | ||||||
Millipred | Acquired Product Marketing Rights | TRx | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 5,056,000 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | 342,000 | ||||||
Ulesfia | Acquired Product Marketing Rights | TRx | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 0 | ||||||
Measurement Period Adjustments | |||||||
Intangible assets | $ (555,000) | ||||||
Previously Reported | Avadel | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 16,453,000 | ||||||
Previously Reported | TRx | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 18,068,000 | ||||||
Previously Reported | PAI Sales & Marketing Agreement | TRx | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 2,334,000 | ||||||
Previously Reported | Karbinal | Acquired Product Marketing Rights | Avadel | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 6,221,000 | ||||||
Previously Reported | AcipHex | Acquired Product Marketing Rights | Avadel | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 2,520,000 | ||||||
Previously Reported | Cefaclor | Acquired Product Marketing Rights | Avadel | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 6,291,000 | ||||||
Previously Reported | Flexichamber | Acquired Developed Technology | Avadel | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 1,131,000 | ||||||
Previously Reported | LiquiTime Process | In Process Research and Development | Avadel | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 290,000 | ||||||
Previously Reported | Metafolin | Acquired Product Marketing Rights | TRx | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 10,465,000 | ||||||
Previously Reported | Millipred | Acquired Product Marketing Rights | TRx | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | 4,714,000 | ||||||
Previously Reported | Ulesfia | Acquired Product Marketing Rights | TRx | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 555,000 |
Acquisitions - Schedule of Cons
Acquisitions - Schedule of Consideration Transferred (Details) - USD ($) | Nov. 17, 2017 | Sep. 30, 2018 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Contingent payments | $ 0 | ||
TRx | |||
Business Acquisition [Line Items] | |||
Cash | $ 18,900,000 | ||
Common stock (including contingently issuable shares) | 8,514,419 | ||
Contingent payments | 1,366,633 | $ 0 | |
Total consideration transferred | 28,781,052 | ||
Measurement Period Adjustments | |||
Contingent payments | $ (1,210,000) | ||
Consideration exchanged | $ (1,210,000) | ||
Previously Reported | TRx | |||
Business Acquisition [Line Items] | |||
Cash | 18,900,000 | ||
Common stock (including contingently issuable shares) | 8,514,419 | ||
Contingent payments | 2,576,633 | ||
Total consideration transferred | $ 29,991,052 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in Aytu | $ 7,628,947 | $ 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in Aytu | 7,628,947 | 0 |
Recurring basis | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,240,230 | 7,324,932 |
Recurring basis | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment in Aytu | 7,628,947 | |
Recurring basis | Level 3 | Contingent consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 1,256,210 | |
Recurring basis | Level 3 | Warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 3,460 | 2,950 |
Recurring basis | Level 3 | Unit purchase option liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | $ 10,594 | $ 7,216 |
Fair Value Measurements - Level
Fair Value Measurements - Level 2 Investment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Assets Measured On Recurring Basis [Roll Forward] | ||
Balance at December 31, 2018 | $ 0 | |
Change in fair value of Investment in Aytu | 53,932 | $ 0 |
Balance at December 31, 2019 | 7,628,947 | 0 |
Level 2 | ||
Fair Value, Assets Measured On Recurring Basis [Roll Forward] | ||
Balance at December 31, 2018 | 0 | |
Initial valuation of Investment in Aytu upon issuance of Aytu Preferred Stock | 7,575,015 | |
Change in fair value of Investment in Aytu | 53,932 | |
Balance at December 31, 2019 | $ 7,628,947 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | Nov. 01, 2019USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesclass_of_stockmilestone | Dec. 31, 2018USD ($)class_of_stock | Dec. 31, 2017USD ($) | Feb. 16, 2018USD ($) | Nov. 17, 2017USD ($) | Dec. 31, 2015shares | Oct. 31, 2015shares | Dec. 31, 2014shares |
Level 3 Valuation | |||||||||
Investment in Aytu | $ 7,628,947 | $ 0 | |||||||
Contingent consideration | 0 | ||||||||
Change in fair value of contingent consideration | $ 1,256,211 | $ 110,923 | |||||||
Number of changes in valuation techniques | class_of_stock | 0 | 0 | |||||||
Amount of transfers of assets from level 2 to level 1 | $ 0 | $ 0 | |||||||
Amount of transfers of assets from level 1 to level 2 | 0 | 0 | |||||||
Common stock | |||||||||
Level 3 Valuation | |||||||||
Number of shares available under warrant (in shares) | shares | 22,328 | ||||||||
Avadel | |||||||||
Level 3 Valuation | |||||||||
Product royalty | 15.00% | ||||||||
Royalty obligation | $ 12,500,000 | ||||||||
Contingent consideration | 0 | $ 7,900,000 | |||||||
TRx | |||||||||
Level 3 Valuation | |||||||||
Contingent consideration | $ 0 | $ 1,366,633 | |||||||
Number of contingent consideration milestones | milestone | 2 | ||||||||
Milestone One | TRx | |||||||||
Level 3 Valuation | |||||||||
Contingent consideration | 0 | 3,000,000 | |||||||
Gross profit | 12,600,000 | ||||||||
Milestone Two | TRx | |||||||||
Level 3 Valuation | |||||||||
Contingent consideration | 2,000,000 | ||||||||
Milestone Three | TRx | |||||||||
Level 3 Valuation | |||||||||
Contingent consideration | $ 2,000,000 | ||||||||
Level 2 | |||||||||
Level 3 Valuation | |||||||||
Investment in Aytu | $ 7,628,947 | $ 0 | |||||||
Level 3 | |||||||||
Level 3 Valuation | |||||||||
Change in fair value of contingent consideration | $ (24,827) | $ 135,933 | |||||||
Warrant liability | Level 3 | |||||||||
Level 3 Valuation | |||||||||
Expected life | 9 months 18 days | ||||||||
Warrant liability | Level 3 | Measurement input share price (in dollars per share) | |||||||||
Level 3 Valuation | |||||||||
Warrants and rights outstanding measurement input | $ / shares | 5.39 | ||||||||
Warrant liability | Level 3 | Measurement input price volatility | |||||||||
Level 3 Valuation | |||||||||
Warrants and rights outstanding measurement input | 0.42 | ||||||||
Warrant liability | Level 3 | Measurement input risk free interest rate | |||||||||
Level 3 Valuation | |||||||||
Warrants and rights outstanding measurement input | 0.0159 | ||||||||
Warrant liability | Level 3 | Measurement input strike price (in dollars per share) | |||||||||
Level 3 Valuation | |||||||||
Warrants and rights outstanding measurement input | $ / shares | 8.40 | ||||||||
Unit purchase option liability | Level 3 | |||||||||
Level 3 Valuation | |||||||||
Expected life | 9 months 18 days | ||||||||
Change in fair value of contingent consideration | $ (3,378) | $ 19,775 | |||||||
Unit purchase option liability | Level 3 | Measurement input share price (in dollars per share) | |||||||||
Level 3 Valuation | |||||||||
Warrants and rights outstanding measurement input | $ / shares | 5.39 | ||||||||
Unit purchase option liability | Level 3 | Measurement input price volatility | |||||||||
Level 3 Valuation | |||||||||
Warrants and rights outstanding measurement input | 0.42 | ||||||||
Unit purchase option liability | Level 3 | Measurement input risk free interest rate | |||||||||
Level 3 Valuation | |||||||||
Warrants and rights outstanding measurement input | 0.0159 | ||||||||
Unit purchase option liability | Level 3 | Measurement input strike price (in dollars per share) | |||||||||
Level 3 Valuation | |||||||||
Warrants and rights outstanding measurement input | $ / shares | 7.47 | ||||||||
Common Stock Warrants | |||||||||
Level 3 Valuation | |||||||||
Number of shares available under warrant (in shares) | shares | 40,000 | ||||||||
Series B convertible preferred stock | Preferred Stock | |||||||||
Level 3 Valuation | |||||||||
Number of shares available under warrant (in shares) | shares | 625,208 | ||||||||
Pediatric Portfolio | Convertible Preferred Stock | |||||||||
Level 3 Valuation | |||||||||
Shares received as consideration (in shares) | shares | 9,805,845 | ||||||||
Shares received as consideration, price per share (in dollars per share) | $ / shares | $ 1.2747 | ||||||||
AYTU | Convertible Preferred Stock | Level 2 | |||||||||
Level 3 Valuation | |||||||||
Investment in Aytu | $ 7,600,000 | $ 7,600,000 | |||||||
AYTU | Convertible Preferred Stock | Level 2 | Measurement input share price (in dollars per share) | |||||||||
Level 3 Valuation | |||||||||
Equity securities, measurement input | $ / shares | 1.03 | 0.9725 | |||||||
AYTU | Convertible Preferred Stock | Level 2 | Measurement input, discount for lack of marketability | |||||||||
Level 3 Valuation | |||||||||
Equity securities, measurement input | 0.25 | 0.20 | |||||||
Ulesfia Supply Agreement | |||||||||
Level 3 Valuation | |||||||||
Change in fair value of contingent consideration | $ (1,300,000) | ||||||||
Ulesfia Supply Agreement | Level 3 | |||||||||
Level 3 Valuation | |||||||||
Change in fair value of contingent consideration | 1,300,000 | ||||||||
Flexichamber | Level 3 | |||||||||
Level 3 Valuation | |||||||||
Impairment of intangible assets | $ 1,400,000 |
Fair Value Measurements - Rollf
Fair Value Measurements - Rollforward (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | |||
Change in fair value | $ (1,256,211) | $ (110,923) | |
Level 3 | |||
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | |||
Beginning balance | 1,266,377 | 2,612,310 | |
Change in fair value due to Lachlan Settlement | (1,277,150) | ||
Change in fair value | 24,827 | $ (135,933) | |
Purchase price allocation measurement period adjustment of contingent consideration | (1,210,000) | ||
Ending balance | 14,054 | 1,266,377 | 2,612,310 |
Warrant liability | Recurring basis | Level 3 | |||
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | |||
Beginning balance | 2,950 | 8,185 | |
Change in fair value | 510 | (5,235) | |
Ending balance | 3,460 | 2,950 | 8,185 |
Unit purchase option liability | Level 3 | |||
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | |||
Beginning balance | 7,216 | 26,991 | |
Change in fair value | 3,378 | (19,775) | |
Ending balance | 10,594 | 7,216 | 26,991 |
Contingent consideration | Level 3 | |||
Fair Value, Assets Measured on Recurring Basis [Roll Forward] | |||
Beginning balance | 1,256,211 | 2,577,134 | |
Change in fair value due to Lachlan Settlement | (1,277,150) | ||
Change in fair value | 20,939 | (110,923) | |
Purchase price allocation measurement period adjustment of contingent consideration | (1,210,000) | ||
Ending balance | $ 0 | $ 1,256,211 | $ 2,577,134 |
Aevi Loan (Details)
Aevi Loan (Details) $ in Millions | Feb. 03, 2020USD ($) | Dec. 05, 2019USD ($)note | Dec. 31, 2019USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of promissory notes | note | 2 | ||
Loans receivable, net | $ 4.1 | ||
Loan receivable | $ 5 | ||
Loan receivable, annual interest rate | 5.00% | ||
Subsequent Event | Aevi | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan forgiven | $ 4.1 |
Inventory - (Details)
Inventory - (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 0 | $ 11,392 |
Finished goods | 46,705 | 497,949 |
Inventory reserve | (25,371) | (191,418) |
Inventory, net of continuing operations | 21,334 | 317,923 |
Write down of obsolete inventory | $ 36,577 | $ 174,944 |
Property And Equipment - Summar
Property And Equipment - Summary of Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 718,675 | |
Right-of-use asset (Corporate Headquarters' Lease) | $ 718,628 | |
Total property and equipment | 1,525,832 | |
Less accumulated depreciation | (78,169) | |
Less accumulated depreciation | (132,163) | |
Property and equipment, net | 1,447,663 | |
Property and equipment, net | 586,512 | |
Depreciation | 119,488 | 22,515 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 143,168 | 133,229 |
Computers and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 6,708 | 122,065 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 657,328 | $ 463,381 |
Property And Equipment - Narrat
Property And Equipment - Narrative (Details) | Feb. 03, 2020USD ($) | Dec. 31, 2019USD ($)contractrenewal_option |
Property, Plant and Equipment [Line Items] | ||
Number of operating leases | contract | 1 | |
Annual base rent | $ 161,671 | |
Annual rent increase (as a percent) | 2.50% | |
Rent abatement period | 12 months | |
Lease term | 10 years | |
Number of renewal options | renewal_option | 2 | |
Lease renewal term | 5 years | |
Remaining lease term | 10 years 1 month | |
Discount rate | 7.70% | |
Operating lease payments | $ 0 | |
Subsequent Event | Aevi | Office | ||
Property, Plant and Equipment [Line Items] | ||
Termination period | 60 days | |
Monthly rent payment | $ 12,050 |
Property And Equipment - Supple
Property And Equipment - Supplemental Balance Sheet Information (Details) | Dec. 31, 2019USD ($) |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | $ 718,626 |
Other current liabilities | 155,815 |
Other long-term liabilities | $ 1,111,965 |
Property And Equipment - Lease
Property And Equipment - Lease Cost (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Operating lease cost | $ 160,767 | |
Operating lease cost | $ 239,259 |
Property And Equipment - Leas_2
Property And Equipment - Lease Maturity (Details) | Dec. 31, 2019USD ($) |
Property, Plant and Equipment [Abstract] | |
2020 | $ 155,815 |
2021 | 169,510 |
2022 | 173,748 |
2023 | 178,092 |
2024 | 182,544 |
Thereafter | 1,000,746 |
Total lease payments | 1,860,455 |
Less implied interest | (592,675) |
Total | $ 1,267,780 |
Goodwill (Details)
Goodwill (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)reporting_unit | Dec. 31, 2018USD ($) | |
Goodwill [Roll Forward] | ||
Beginning Balance | $ 14,409,088 | $ 12,290,247 |
Goodwill from acquisitions | 3,778,001 | |
Goodwill purchase price allocation measurement period adjustment from acquisition of TRx Pharmaceuticals | (1,659,160) | |
Ending Balance | $ 14,409,088 | 14,409,088 |
Number of reporting units | reporting_unit | 1 | |
Accumulated impairment of goodwill | $ 0 | 0 |
Pediatric Portfolio | Discontinued Operations, Disposed of by Sale | ||
Goodwill [Roll Forward] | ||
Percentage of goodwill allocated to Pediatric Portfolio | 12.20% | |
Allocation of goodwill to divested Pediatric Portfolio | $ 2,000,000 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets Rollforward (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Indefinite-lived Intangible Assets [Roll Forward] | ||
Intangible assets, beginning balance | $ 3,765,254 | $ 7,286,688 |
Additions | 150,000 | |
Purchase price allocation measurement period adjustments | 6,000 | |
Amortization | (1,338,996) | (1,815,872) |
Impairment | (1,449,121) | (1,861,562) |
Intangible assets, ending balance | $ 2,426,258 | $ 3,765,254 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Impairment charge | $ 0 | ||
Sales and Marketing Agreement | |||
Finite-Lived Intangible Assets [Line Items] | |||
Fair value of intangible asset | $ 0 | ||
Impairment charge | $ 1,900,000 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Finite Lived Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,206,000 | $ 7,759,000 |
Accumulated Amortization | (2,779,742) | (2,132,184) |
Impairment Loss | (1,861,562) | |
Net Carrying Amount | $ 2,426,258 | $ 3,765,254 |
Weighted-Average Remaining Life | 1 year 10 months 21 days | 2 years 10 months 17 days |
Acquired Product Marketing Rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,056,000 | $ 5,056,000 |
Accumulated Amortization | (2,685,992) | (1,421,996) |
Impairment Loss | 0 | |
Net Carrying Amount | $ 2,370,008 | $ 3,634,004 |
Weighted-Average Remaining Life | 1 year 11 months 1 day | 2 years 11 months 1 day |
Sales and Marketing Agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 2,553,000 | |
Accumulated Amortization | (691,438) | |
Impairment Loss | (1,861,562) | |
Net Carrying Amount | 0 | |
Acquired Assembled Workforce | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 150,000 | 150,000 |
Accumulated Amortization | (93,750) | (18,750) |
Impairment Loss | 0 | |
Net Carrying Amount | $ 56,250 | $ 131,250 |
Weighted-Average Remaining Life | 9 months | 1 year 9 months |
Intangible Assets - Schedule _3
Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 1,320,246 | |
2021 | 1,106,012 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | 0 | |
Net Carrying Amount | $ 2,426,258 | $ 3,765,254 |
Accrued Expenses And Other Cu_3
Accrued Expenses And Other Current Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Sales returns and allowances | $ 2,284,175 | $ 1,465,419 |
Medicaid rebates | 118,271 | 50,246 |
Minimum sales commitments, royalties payable, and purchase obligations | 75,000 | 8,954,521 |
Compensation and benefits | 1,591,964 | 1,953,065 |
Research and development expenses | 920,901 | 278,132 |
General and administrative | 360,016 | 1,112,378 |
Sales and marketing | 120,056 | 235,721 |
Other | 169,869 | 279,397 |
Accrued expenses and other current liabilities | $ 5,640,252 | $ 14,328,879 |
Capital Structure - Narrative (
Capital Structure - Narrative (Details) | Feb. 06, 2020USD ($)$ / sharesshares | Feb. 03, 2020$ / sharesshares | Sep. 04, 2019USD ($)day$ / sharesshares | Mar. 08, 2019USD ($)$ / sharesshares | Dec. 27, 2018$ / sharesshares | Dec. 26, 2018shares | Sep. 25, 2018shares | Sep. 24, 2018shares | Aug. 17, 2018USD ($)$ / sharesshares | Nov. 17, 2017USD ($)shares | Mar. 10, 2020shares | Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2019USD ($)class_of_stockVote$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Oct. 31, 2015shares | Oct. 20, 2015class_of_stock | Dec. 31, 2014shares |
Capital Structure | ||||||||||||||||||
Number of classes of stock authorized to issue | class_of_stock | 2 | |||||||||||||||||
Number of shares of capital stock authorized to issue (in shares) | 205,000,000 | |||||||||||||||||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | 200,000,000 | |||||||||||||||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||
Preferred stock, shares outstanding (in shares) | 2,857,143 | 2,857,143 | 2,857,143 | |||||||||||||||
Proceeds from issuance of Series B convertible preferred stock upon warrant exercise, net | $ | $ 0 | $ 5,685,038 | ||||||||||||||||
Deemed distribution to shareholder | $ | $ 1,657,383 | |||||||||||||||||
Common stock | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Number of shares available under warrant (in shares) | 22,328 | |||||||||||||||||
Consideration issued (in shares) | 5,774,464 | |||||||||||||||||
Issuance of stock (in shares) | 1,818,182 | |||||||||||||||||
Series B convertible preferred stock | Preferred Stock | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Preferred stock conversion ratio | 0.20 | 0.20 | 0.20 | 0.20 | ||||||||||||||
Number of shares available under warrant (in shares) | 625,208 | |||||||||||||||||
Preferred stock, shares outstanding (in shares) | 2,857,143 | |||||||||||||||||
Common Stock | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Number of shares available under warrant (in shares) | 4,024,708 | |||||||||||||||||
Number of redemption or sinking fund provisions | class_of_stock | 0 | |||||||||||||||||
Number of votes per share | Vote | 1 | |||||||||||||||||
Number of preemptive, conversion or subscription rights | class_of_stock | 0 | |||||||||||||||||
Private Placement | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Number of shares available under warrant (in shares) | 14,285,714 | |||||||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 0.40 | |||||||||||||||||
Proceeds from issuance of Series B convertible preferred stock upon warrant exercise, net | $ | $ 5,700,000 | |||||||||||||||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 3.91 | |||||||||||||||||
Proceeds from issuance or sale of equity | $ | $ 3,900,000 | |||||||||||||||||
Private Placement | Common stock | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Issuance of stock (in shares) | 1,000,000 | |||||||||||||||||
Private Placement | Series B convertible preferred stock | Preferred Stock | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Preferred stock, shares authorized (in shares) | 2,857,143 | 2,857,143 | 2,857,143 | |||||||||||||||
Preferred stock, par value per share (in dollars per share) | $ / shares | 2 | |||||||||||||||||
Armistice Purchase Agreement | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Number of shares issued (in shares) | 1,200,000 | 1,200,000 | ||||||||||||||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 3.132 | $ 3.132 | ||||||||||||||||
Consideration received | $ | $ 3,700,000 | $ 3,700,000 | ||||||||||||||||
Trading days | day | 5 | |||||||||||||||||
Bought Deal | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Number of shares issued (in shares) | 1,818,182 | |||||||||||||||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 5.50 | |||||||||||||||||
Consideration received | $ | $ 9,000,000 | |||||||||||||||||
TRx | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Unregistered shares of common stock issued or issuable as part of acquisition | $ | $ 8,100,000 | |||||||||||||||||
Shares issued upon closing (in shares) | 5,184,920 | |||||||||||||||||
Contingent shares issuable as part of acquisition (in shares) | 2,349,968 | |||||||||||||||||
Ichorion | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Consideration issued (in shares) | 5,800,000 | 5,800,000 | ||||||||||||||||
Subsequent Event | Series B convertible preferred stock | Preferred Stock | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Shares converted (in shares) | 1,600,000 | |||||||||||||||||
Subsequent Event | Common Stock | Common stock | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Shares issued upon conversion (in shares) | 8,000,000 | |||||||||||||||||
Subsequent Event | Registered Direct Offering | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Number of shares issued (in shares) | 1,306,282 | |||||||||||||||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 3.98 | |||||||||||||||||
Subsequent Event | Aevi | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||||||||||||
Consideration issued (in shares) | 3,900,000 | |||||||||||||||||
Incentive Warrants | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Number of shares available under warrant (in shares) | 4,000,000 | 4,000,000 | ||||||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 12.50 | $ 12.50 | $ 12.50 | |||||||||||||||
Expected life | 5 years 6 months | 5 years 6 months | 5 years 6 months | |||||||||||||||
Deemed distribution to shareholder | $ | $ 1,700,000 | |||||||||||||||||
Armistice | Bought Deal | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Number of shares issued (in shares) | 363,637 | |||||||||||||||||
Armistice | Subsequent Event | Registered Direct Offering | Common stock | ||||||||||||||||||
Capital Structure | ||||||||||||||||||
Number of shares issued (in shares) | 1,256,282 | |||||||||||||||||
Consideration received | $ | $ 5,000,000 |
Capital Structure - Warrants (D
Capital Structure - Warrants (Details) - Common Stock | Dec. 31, 2019$ / sharesshares |
Common Stock Warrants | |
Number of shares available under warrant (in shares) | 4,024,708 |
Common stock warrants, expiration date of October 2020 | |
Common Stock Warrants | |
Number of shares available under warrant (in shares) | 22,328 |
Exercise price per share (in dollars per share) | $ / shares | $ 8.40 |
Common stock warrants, expiration date of May 2022 | |
Common Stock Warrants | |
Number of shares available under warrant (in shares) | 2,380 |
Exercise price per share (in dollars per share) | $ / shares | $ 8.68 |
Common stock warrants expiration date of June 2024 | |
Common Stock Warrants | |
Number of shares available under warrant (in shares) | 4,000,000 |
Exercise price per share (in dollars per share) | $ / shares | $ 12.50 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) | Feb. 03, 2020$ / sharesshares | Jan. 01, 2020$ / sharesshares | May 18, 2016USD ($)shares | Feb. 29, 2020shares | Aug. 31, 2019shares | Apr. 30, 2019shares | May 31, 2018shares | Jun. 30, 2019USD ($)day$ / sharesshares | Sep. 30, 2019$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares |
Annual share reserve increase (as a percent) | 4.00% | ||||||||||
Total stock-based compensation | $ | $ 2,462,796 | $ 2,431,063 | |||||||||
Fair value assumptions | |||||||||||
Expected annual dividend yield | 0.00% | ||||||||||
Research and development | |||||||||||
Total stock-based compensation | $ | $ 464,382 | 101,000 | |||||||||
General and administrative | |||||||||||
Total stock-based compensation | $ | 1,549,844 | 2,135,710 | |||||||||
Sales and marketing | |||||||||||
Total stock-based compensation | $ | 190,851 | 57,271 | |||||||||
Total stock-based compensation, continuing operations | |||||||||||
Total stock-based compensation | $ | 2,205,077 | 2,293,981 | |||||||||
Total stock-based compensation, discontinued operations | |||||||||||
Total stock-based compensation | $ | 257,719 | $ 137,082 | |||||||||
Service Based Options | |||||||||||
Total stock-based compensation | $ | $ 2,000,000 | ||||||||||
Option Activity, Number of shares | |||||||||||
Balance, beginning of period (in shares) | 4,180,606 | 3,746,597 | 3,746,597 | ||||||||
Granted (in shares) | 2,631,927 | ||||||||||
Options exercises in period (in shares) | (323,403) | ||||||||||
Forfeitures (in shares) | (1,445,554) | ||||||||||
Expired (in shares) | (428,961) | ||||||||||
Balance, end of period (in shares) | 4,180,606 | 3,746,597 | |||||||||
Exercisable (in shares) | 2,228,748 | ||||||||||
Option Activity, Weighted-average exercise price | |||||||||||
Beginning of period (in dollars per share) | $ / shares | $ 4.80 | $ 4.16 | $ 4.16 | ||||||||
Granted (in dollars per share) | $ / shares | 5.70 | ||||||||||
Exercised (in dollars per share) | $ / shares | 2.59 | ||||||||||
Forfeitures (in dollars per share) | $ / shares | 5.22 | ||||||||||
Expired (in dollars per share) | $ / shares | 4.99 | ||||||||||
End of period (in dollars per share) | $ / shares | 4.80 | $ 4.16 | |||||||||
Exercisable (in dollars per share) | $ / shares | $ 4.58 | ||||||||||
Option Activity, Fair value of options granted | |||||||||||
Grant date fair value of options granted | $ | $ 8,106,310 | ||||||||||
Grant date fair value forfeitures | $ | 4,218,136 | ||||||||||
Grant date fair value of options expired | $ | $ 1,062,853 | ||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Balance | 7 years 10 months 10 days | 7 years 9 months 14 days | |||||||||
Exercisable | 6 years 9 months 25 days | ||||||||||
Aggregate intrinsic value | $ | $ 4,900,000 | ||||||||||
Aggregate intrinsic value of options exercisable | $ | 3,500,000 | ||||||||||
Intrinsic value of options exercised | $ | 1,000,000 | ||||||||||
Fair value of options vested in period | $ | $ 2,200,000 | $ 1,200,000 | |||||||||
Per share weighted average fair value of options granted (in dollars per share) | $ / shares | $ 3.08 | $ 2.28 | |||||||||
Options vested (in shares) | 983,644 | ||||||||||
Vested (in dollars per share) | $ / shares | $ 2.21 | ||||||||||
Unrecognized compensation expense | $ | $ 4,500,000 | ||||||||||
Unrecognized compensation cost period for recognition | 2 years 8 months 5 days | ||||||||||
Fair value assumptions | |||||||||||
Expected stock price volatility | 55.00% | ||||||||||
Expected annual dividend yield | 0.00% | 0.00% | |||||||||
Market Based Options | |||||||||||
Total stock-based compensation | $ | $ (100,000) | ||||||||||
Option Activity, Number of shares | |||||||||||
Balance, beginning of period (in shares) | 300,000 | 500,000 | 500,000 | ||||||||
Granted (in shares) | 300,000 | ||||||||||
Options exercises in period (in shares) | 0 | ||||||||||
Forfeitures (in shares) | (500,000) | ||||||||||
Balance, end of period (in shares) | 300,000 | 500,000 | |||||||||
Exercisable (in shares) | 0 | ||||||||||
Option Activity, Weighted-average exercise price | |||||||||||
Beginning of period (in dollars per share) | $ / shares | $ 4.98 | $ 4.24 | $ 4.24 | ||||||||
Granted (in dollars per share) | $ / shares | 4.98 | ||||||||||
Forfeitures (in dollars per share) | $ / shares | 4.24 | ||||||||||
End of period (in dollars per share) | $ / shares | $ 4.98 | $ 4.24 | |||||||||
Option Activity, Fair value of options granted | |||||||||||
Grant date fair value of options granted | $ | $ 1,000,000 | ||||||||||
Grant date fair value forfeitures | $ | $ 1,300,000 | ||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Balance | 9 years 4 months 24 days | 9 years 2 months 27 days | |||||||||
Aggregate intrinsic value | $ | $ 123,000 | ||||||||||
Per share weighted average fair value of options granted (in dollars per share) | $ / shares | $ 3.42 | ||||||||||
Per share weighted average fair value of options forfeited (in dollars per share) | $ / shares | $ 2.52 | ||||||||||
Unrecognized compensation expense | $ | $ 800,000 | ||||||||||
Unrecognized compensation cost period for recognition | 2 years | ||||||||||
Fair value assumptions | |||||||||||
Risk-free interest rate | 2.32% | 2.84% | |||||||||
Expected term of options (in years) | 10 years | 10 years | |||||||||
Expected stock price volatility | 60.00% | 60.00% | |||||||||
Expected annual dividend yield | 0.00% | 0.00% | |||||||||
Restricted Stock | |||||||||||
Award vesting period | 4 years | ||||||||||
Total stock-based compensation | $ | $ 500,000 | ||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Unrecognized compensation cost period for recognition | 2 years 3 months 18 days | ||||||||||
Restricted Stock Award, Number of Shares | |||||||||||
Nonvested restricted, beginning balance (in shares) | 267,500 | 445,000 | 445,000 | ||||||||
Granted (in shares) | 295,000 | ||||||||||
Vested (in shares) | (172,500) | ||||||||||
Forfeited (in shares) | (300,000) | ||||||||||
Nonvested restricted, ending balance (in shares) | 267,500 | 445,000 | |||||||||
Restricted Stock Award Weighted Average Grant Date Fair Value [Abstract] | |||||||||||
Beginning of period (in dollars per share) | $ / shares | $ 4.27 | $ 4.27 | |||||||||
Granted (in dollars per share) | $ / shares | 4.98 | ||||||||||
Vested (in dollars per share) | $ / shares | 4.52 | ||||||||||
Forfeited (in dollars per share) | $ / shares | $ 4.24 | ||||||||||
End of period (in dollars per share) | $ / shares | $ 4.27 | ||||||||||
Restricted stock award unrecognized compensation expense | $ | $ 1,300,000 | ||||||||||
Minimum | Service Based Options | |||||||||||
Fair value assumptions | |||||||||||
Risk-free interest rate | 1.47% | 2.51% | |||||||||
Expected term of options (in years) | 5 years | 5 years | |||||||||
Expected stock price volatility | 55.00% | ||||||||||
Maximum | Service Based Options | |||||||||||
Fair value assumptions | |||||||||||
Risk-free interest rate | 2.59% | 3.01% | |||||||||
Expected term of options (in years) | 6 years 3 months | 6 years 3 months | |||||||||
Expected stock price volatility | 65.00% | ||||||||||
2016 Plan | |||||||||||
Increase in number of shares reserved for issuance (in shares) | 600,000 | 1,400,000 | |||||||||
Common stock remaining for future issuance (in shares) | 2,532,162 | ||||||||||
2016 Plan | Stock options | |||||||||||
Award expiration period | 10 years | ||||||||||
2015 Plan | |||||||||||
Common stock remaining for future issuance (in shares) | 464,476 | ||||||||||
2016 Second Amended Plan | |||||||||||
Increase in number of shares reserved for issuance (in shares) | 850,000 | ||||||||||
Employee Stock Purchase Plan (ESPP) | |||||||||||
Common stock remaining for future issuance (in shares) | 1,118,882 | ||||||||||
Total stock-based compensation | $ | $ 200,000 | $ 50,000 | |||||||||
Restricted Stock Award Weighted Average Grant Date Fair Value [Abstract] | |||||||||||
Percentage of fair market value on the lower of first day or last day of the offering period at which employees may purchase stock under the ESPP | 85.00% | ||||||||||
Maximum portion of earning an employee may contribute to the ESPP Plan | 15.00% | ||||||||||
Maximum annual amount of fair market value of the Company's common stock that a participant may accrue the rights to purchase | $ | $ 25,000 | ||||||||||
Shares of common stock for future issuance (in shares) | 500,000 | ||||||||||
Automatic increase to shares authorized as percentage of outstanding stock at end of preceding year | 1.00% | ||||||||||
Employee | 2016 Plan | Minimum | Stock options | |||||||||||
Award vesting period | 3 years | ||||||||||
Employee | 2016 Plan | Maximum | Stock options | |||||||||||
Award vesting period | 4 years | ||||||||||
Director | 2016 Plan | Minimum | Stock options | |||||||||||
Award vesting period | 1 year | ||||||||||
Director | 2016 Plan | Maximum | Stock options | |||||||||||
Award vesting period | 3 years | ||||||||||
Terminated Executive | |||||||||||
Total stock-based compensation | $ | $ 300,000 | ||||||||||
Terminated Executive | Option And Non Option Awards | |||||||||||
Equity awards forfeited (in shares) | 1,489,583 | ||||||||||
Terminated Executive | Service Based Options | |||||||||||
Option Activity, Number of shares | |||||||||||
Forfeitures (in shares) | (689,583) | ||||||||||
Terminated Executive | Market Based Options | |||||||||||
Option Activity, Number of shares | |||||||||||
Forfeitures (in shares) | (500,000) | ||||||||||
Terminated Executive | Restricted Stock | |||||||||||
Total stock-based compensation | $ | $ (500,000) | ||||||||||
Requisite service period | 2 years 9 months 18 days | ||||||||||
Restricted Stock Award, Number of Shares | |||||||||||
Forfeited (in shares) | (300,000) | ||||||||||
Board of Directors Chairman | Market Based Options | |||||||||||
Option Activity, Number of shares | |||||||||||
Granted (in shares) | 300,000 | ||||||||||
Option Activity, Weighted-average exercise price | |||||||||||
Granted (in dollars per share) | $ / shares | $ 4.98 | ||||||||||
Board of Directors Chairman | Restricted Stock | |||||||||||
Restricted Stock Award, Number of Shares | |||||||||||
Granted (in shares) | 250,000 | ||||||||||
Vested (in shares) | (50,000) | ||||||||||
Subsequent Event | Inducement Option | |||||||||||
Award vesting period | 4 years | ||||||||||
Option Activity, Number of shares | |||||||||||
Granted (in shares) | 2,400,000 | ||||||||||
Subsequent Event | 2016 Plan | |||||||||||
Increase in number of shares reserved for issuance (in shares) | 1,775,368 | ||||||||||
Shares available for issuance (in shares) | 4,307,530 | ||||||||||
Subsequent Event | Employee Stock Purchase Plan (ESPP) | |||||||||||
Increase in number of shares reserved for issuance (in shares) | 443,842 | ||||||||||
Common stock remaining for future issuance (in shares) | 1,562,724 | ||||||||||
Subsequent Event | Board of Directors Chairman | Service Based Options | |||||||||||
Award vesting period | 3 years | ||||||||||
Option Activity, Number of shares | |||||||||||
Granted (in shares) | 500,000 | ||||||||||
Option Activity, Weighted-average exercise price | |||||||||||
Granted (in dollars per share) | $ / shares | $ 3.98 | ||||||||||
Tranche One | Board of Directors Chairman | Market Based Options | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Award vesting rights percentage | 33.33% | ||||||||||
Number of days above threshold to trigger vesting | day | 3 | ||||||||||
Tranche One | Board of Directors Chairman | Restricted Stock | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Award vesting rights percentage | 33.33% | ||||||||||
Tranche One | Board of Directors Chairman | Minimum | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Share price (in dollars per share) | $ / shares | $ 8 | ||||||||||
Tranche One | Subsequent Event | Inducement Option | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Award vesting rights percentage | 25.00% | ||||||||||
Tranche One | Subsequent Event | Board of Directors Chairman | Service Based Options | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Award vesting rights percentage | 33.33% | ||||||||||
Tranche Two | Board of Directors Chairman | Market Based Options | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Award vesting rights percentage | 33.33% | ||||||||||
Number of days above threshold to trigger vesting | day | 3 | ||||||||||
Tranche Two | Board of Directors Chairman | Restricted Stock | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Award vesting rights percentage | 33.33% | ||||||||||
Tranche Two | Board of Directors Chairman | Minimum | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Share price (in dollars per share) | $ / shares | $ 10.50 | ||||||||||
Tranche Two | Subsequent Event | Board of Directors Chairman | Service Based Options | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Award vesting rights percentage | 33.33% | ||||||||||
Tranche Three | Board of Directors Chairman | Market Based Options | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Award vesting rights percentage | 33.33% | ||||||||||
Number of days above threshold to trigger vesting | day | 3 | ||||||||||
Tranche Three | Board of Directors Chairman | Restricted Stock | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Award vesting rights percentage | 33.33% | ||||||||||
Tranche Three | Board of Directors Chairman | Minimum | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Share price (in dollars per share) | $ / shares | $ 13 | ||||||||||
Tranche Three | Subsequent Event | Board of Directors Chairman | Service Based Options | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Award vesting rights percentage | 33.33% | ||||||||||
Employee | Subsequent Event | Service Based Options | |||||||||||
Award vesting period | 4 years | ||||||||||
Option Activity, Number of shares | |||||||||||
Granted (in shares) | 514,400 | ||||||||||
Option Activity, Weighted-average exercise price | |||||||||||
Granted (in dollars per share) | $ / shares | $ 3.98 | ||||||||||
Employee | Tranche One | Subsequent Event | Service Based Options | |||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Award vesting rights percentage | 25.00% | ||||||||||
Employee | Tranche Two | Subsequent Event | Service Based Options | |||||||||||
Award vesting period | 36 months | ||||||||||
Option Activity, Weighted-average remaining contractual term (in years) | |||||||||||
Award vesting rights percentage | 75.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
Accrued penalties and interest accrued | $ 0 | |
Net operating loss carryforwards | 52,200,000 | |
Reduction of deferred taxes due to change in tax rate | $ 2,200,000 | |
Federal and State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 32,500,000 | |
Net operating loss carryforwards, not subject to expiration | 27,000,000 | |
Research and experimental tax credits | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit | $ 1,100,000 |
Income Taxes - Schedule of Inc
Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | ||
Federal | $ 209,001 | $ (53,281) |
State | 54,572 | 20,560 |
Total Current | 263,573 | (32,721) |
Deferred: | ||
Federal | 24,458 | (52,235) |
State | (7,715) | 35,490 |
Total Deferred | 16,743 | (16,745) |
Net income tax expense (benefit) | $ 280,316 | $ (49,466) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Taxes (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Tax Assets, Net [Abstract] | ||
Net operating losses | $ 7,596,955 | $ 4,421,423 |
Accrued compensation | 321,748 | 465,430 |
Investment in Aytu | 577,490 | 0 |
Tax credits | 1,070,738 | 252,095 |
Stock-based compensation | 1,872,442 | 1,922,736 |
Installment sale | 441,305 | 508,291 |
Other reserves | 399,885 | 277,633 |
Prepaid expenses | (120,863) | (160,474) |
Right-of-use asset | (167,943) | |
Lease liability | 296,259 | |
Basis difference in tangible and intangible assets, net | 1,968,008 | 2,968,764 |
Total deferred tax assets, net | 14,256,024 | 10,655,898 |
Less valuation allowance | (14,342,005) | (10,725,136) |
Net deferred taxes | $ (85,981) | $ (69,238) |
Income Taxes - Expense (Details
Income Taxes - Expense (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of income tax expense | ||
Federal statutory rate | 21.00% | 21.00% |
Stock compensation | (0.47%) | (0.10%) |
State taxes | (0.13%) | 4.98% |
Research and development credit | 5.13% | 0.70% |
Acquired in-process research and development | 0.00% | (11.17%) |
Fair value adjustment to contingent consideration | 1.65% | 0.00% |
Other | (1.86%) | (0.74%) |
Valuation allowance | (27.07%) | (14.53%) |
Effective income tax rate | (1.75%) | 0.14% |
Commitments And Contingencies (
Commitments And Contingencies (Details) $ / shares in Units, shares in Millions | Apr. 01, 2021 | Dec. 31, 2019USD ($) | Dec. 18, 2019USD ($) | Aug. 08, 2019USD ($) | Sep. 25, 2018shares | Sep. 24, 2018USD ($)therapymilestoneshares | Feb. 16, 2018unit$ / shares | Nov. 17, 2017USD ($) | Dec. 18, 2015USD ($)unit | Jul. 31, 2019USD ($) | Nov. 30, 2017USD ($)$ / shares | Aug. 31, 2017USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($)milestone | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Apr. 30, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2023USD ($) | Mar. 31, 2019USD ($) | Oct. 31, 2017 |
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Noncontrolling interest ownership percentage by Noncontrolling Owners | 10.00% | ||||||||||||||||||||
Contingent consideration | $ 0 | $ 0 | $ 0 | ||||||||||||||||||
Change in fair value | (1,256,211) | $ (110,923) | |||||||||||||||||||
License obligations | 0 | 0 | 1,250,000 | 0 | |||||||||||||||||
Revenues | 6,750,351 | 7,028,378 | |||||||||||||||||||
Potential future regulatory milestone | $ 20,000,000 | ||||||||||||||||||||
Royalty agreement, payment received | $ 2,000,000 | ||||||||||||||||||||
Period after public launch to terminate agreement | 3 years | ||||||||||||||||||||
Buyout option, percentage of net present value of royalty payments | 75.00% | ||||||||||||||||||||
Ulesfia Supply Agreement | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Indemnity receivable | $ (5,200,000) | $ 5,200,000 | |||||||||||||||||||
Karbinal Agreement | TRIS Pharma | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Minimum quantity required | unit | 70,000 | ||||||||||||||||||||
Make whole payment (in dollars per unit) | $ / shares | $ 30 | ||||||||||||||||||||
Zylera | Ulesfia Supply Agreement | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Price (in dollars per unit) | $ / shares | $ 58.84 | ||||||||||||||||||||
Management and handling fee (in dollars per unit) | $ / shares | $ 4.03 | ||||||||||||||||||||
Management and handling fee annual price increase | 10.00% | ||||||||||||||||||||
Zylera | Ulesfia Supply Agreement | Lachlan Pharmaceuticals | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Minimum quantity required | unit | 20,000 | ||||||||||||||||||||
Long-term purchase commitment | $ 1,200,000 | ||||||||||||||||||||
Minimum royalty | $ 3,000,000 | ||||||||||||||||||||
Lachlan Pharmaceuticals | Ulesfia Supply Agreement | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
License obligation current | (8,700,000) | 8,700,000 | |||||||||||||||||||
Accrued royalties | $ 400,000 | ||||||||||||||||||||
Indemnification of pre-acquisition losses | 100.00% | ||||||||||||||||||||
Threshold indemnification of legal costs and possible minimum payments | $ 1,000,000 | ||||||||||||||||||||
Indemnification of post-acquisition losses, (as a percent) | 50.00% | ||||||||||||||||||||
Payments for legal settlements | 2,300,000 | ||||||||||||||||||||
Decrease in royalty payable | 400,000 | ||||||||||||||||||||
Ulesfia Supply Agreement | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Change in fair value | 1,300,000 | ||||||||||||||||||||
CERC-611 | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Potential milestone payment | $ 7,500,000 | ||||||||||||||||||||
Potential milestone revenue threshold | 750,000,000 | ||||||||||||||||||||
Potential milestone payment two | 12,500,000 | ||||||||||||||||||||
Potential milestone revenue threshold two | 1,300,000,000 | ||||||||||||||||||||
License obligations | 0 | $ 1,300,000 | 0 | 0 | |||||||||||||||||
Research and development | 1,300,000 | ||||||||||||||||||||
License and other revenue | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Revenues | $ 25,000,000 | 100,000 | 0 | ||||||||||||||||||
Ichorion | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Number of preclinical therapies | therapy | 3 | ||||||||||||||||||||
Consideration issued (in shares) | shares | 5.8 | 5.8 | |||||||||||||||||||
Contingent consideration | $ 15,000,000 | ||||||||||||||||||||
Number of contingent consideration milestones | milestone | 3 | ||||||||||||||||||||
Payment for contingent consideration | 0 | 0 | |||||||||||||||||||
Ichorion | CERC-801, CERC-802, And CERC-803 | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Number of preclinical therapies | therapy | 3 | ||||||||||||||||||||
Ichorion | CERC-913 | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Number of preclinical therapies | therapy | 1 | ||||||||||||||||||||
Milestone One | Scenario, Forecast | Ichorion | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Payment for contingent consideration | $ 6,000,000 | ||||||||||||||||||||
Milestone Two | Scenario, Forecast | Ichorion | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Payment for contingent consideration | 5,000,000 | ||||||||||||||||||||
Milestone Three | Scenario, Forecast | Ichorion | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Payment for contingent consideration | $ 4,000,000 | $ 4,000,000 | |||||||||||||||||||
Teva Pharmaceutical Industries Ltd. | Scenario, Forecast | Millipred | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Semi-annual payment | $ 75,000 | ||||||||||||||||||||
Automatic renewal period | 1 year | ||||||||||||||||||||
Armistice | CERC-611 | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Installment payments | $ 100,000 | ||||||||||||||||||||
Revenue from related parties | 100,000 | ||||||||||||||||||||
TRx | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Potential milestone payment | $ 3,000,000 | ||||||||||||||||||||
Contingent consideration | $ 0 | 1,366,633 | $ 0 | $ 0 | |||||||||||||||||
Number of contingent consideration milestones | milestone | 2 | ||||||||||||||||||||
TRx | Milestone One | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Gross profit | 12,600,000 | ||||||||||||||||||||
Contingent consideration | 3,000,000 | $ 0 | |||||||||||||||||||
TRx | Milestone Two | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Contingent consideration | 2,000,000 | ||||||||||||||||||||
TRx | Milestone Three | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Contingent consideration | $ 2,000,000 | ||||||||||||||||||||
Cost of Sales | Lachlan Pharmaceuticals | Ulesfia Supply Agreement | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Gain related to litigation settlement | $ 1,600,000 | ||||||||||||||||||||
Former TRx Owners | Minimum | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Estimate of possible loss | $ 0 | ||||||||||||||||||||
Former TRx Owners | Maximum | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Estimate of possible loss | 18,200,000 | ||||||||||||||||||||
Contingent consideration | Former TRx Owners | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Damages sought | 3,000,000 | ||||||||||||||||||||
Loss From Improper Treatment | Former TRx Owners | |||||||||||||||||||||
Operating Leased Assets [Line Items] | |||||||||||||||||||||
Damages sought | $ 9,200,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Feb. 03, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 17, 2018 |
Subsequent Event [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Aevi | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Shares issued per acquiree share (in shares) | 0.0334 | |||
Consideration issued (in shares) | 3,900,000 | |||
Shares issued for purchase of business (in shares) | $ 15,600,000 | |||
Contingent consideration | 6,500,000 | |||
Cash | $ 1,000 | |||
Aevi | Aevi | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | |||
Aevi | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Loan forgiven | $ 4,100,000 |