Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 09, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Egalet Corp | |
Entity Central Index Key | 1,586,105 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 56,772,101 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 37,829 | $ 31,090 |
Marketable securities, available for sale | 32,178 | 59,953 |
Accounts receivable | 9,083 | 4,120 |
Inventory | 3,183 | 3,225 |
Prepaid expenses and other current assets | 1,539 | 2,672 |
Other receivables | 889 | 893 |
Total current assets | 84,701 | 101,953 |
Intangible assets, net | 5,466 | 6,583 |
Restricted cash | 400 | 400 |
Property and equipment, net | 8,565 | 9,911 |
Deposits and other assets | 848 | 1,011 |
Total assets | 99,980 | 119,858 |
Current liabilities: | ||
Accounts payable | 8,758 | 10,160 |
Accrued expenses | 27,949 | 16,104 |
Deferred revenue | 0 | 7,456 |
Debt - current, net | 22,386 | 1,081 |
Warrant liability | 2,833 | 8,166 |
Total current liabilities | 61,926 | 42,967 |
Debt - non-current portion, net | 78,620 | 98,890 |
Deferred income tax liability | 1,005 | 26 |
Derivative liability | 1,153 | 16,623 |
Other liabilities | 634 | 727 |
Total liabilities | 143,338 | 159,233 |
Commitments and contingencies (Note 12) | ||
Stockholders? deficit: | ||
Common stock--$0.001 par value; 75,000,000 and 275,000,000 shares authorized at December 31, 2017 and June 30, 2018, respectively; 45,939,663 and 56,298,373 shares issued and outstanding at December 31, 2017 and June 30, 2018, respectively | 52 | 46 |
Additional paid-in capital | 273,379 | 254,871 |
Accumulated other comprehensive income | 926 | 1,008 |
Accumulated deficit | (317,715) | (295,300) |
Total stockholders' deficit | (43,358) | (39,375) |
Total liabilities and stockholders? deficit | $ 99,980 | $ 119,858 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 275,000,000 | 75,000,000 |
Common stock, issued | 56,298,373 | 45,939,663 |
Common stock, outstanding | 56,298,373 | 45,939,663 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | ||||
Revenues | $ 7,443 | $ 6,255 | $ 13,704 | $ 11,682 |
Cost and Expenses | ||||
Amortization of product rights | 531 | 522 | 1,068 | 1,025 |
General and administrative | 6,694 | 12,471 | 13,767 | 20,962 |
Sales and marketing | 9,019 | 9,340 | 18,074 | 18,598 |
Research and development | 999 | 4,594 | 2,302 | 11,114 |
Total costs and expenses | 18,808 | 27,999 | 38,991 | 54,096 |
Loss from operations | (11,365) | (21,744) | (25,287) | (42,414) |
Other (income) expense: | ||||
Change in fair value of warrant and derivative liability | (3,181) | (8,306) | (12) | |
Interest expense, net | 3,804 | 4,749 | 7,360 | 9,283 |
Other (gain) loss | (25) | (14) | (25) | 167 |
Total other (income) expense | 598 | 4,735 | (971) | 9,438 |
Loss before provision (benefit) for income taxes | (11,963) | (26,479) | (24,316) | (51,852) |
Provision (benefit) for income taxes | 0 | 0 | 0 | 0 |
Net loss | $ (11,963) | $ (26,479) | $ (24,316) | $ (51,852) |
Per share information: | ||||
Net loss per share of common stock, basic and diluted (in dollars per share) | $ (0.22) | $ (1.04) | $ (0.48) | $ (2.06) |
Weighted-average shares outstanding, basic and diluted (in shares) | 53,302,399 | 25,542,733 | 50,302,419 | 25,145,440 |
Product | ||||
Revenues | ||||
Revenues | $ 7,443 | $ 6,255 | $ 13,704 | $ 11,682 |
Cost and Expenses | ||||
Cost of sales (excluding amortization of product rights) | $ 1,565 | $ 1,072 | $ 3,780 | $ 2,397 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Consolidated Statements of Comprehensive Loss | ||||
Net loss | $ (11,963) | $ (26,479) | $ (24,316) | $ (51,852) |
Other comprehensive income (loss): | ||||
Unrealized loss on available for sale securities | 59 | (2) | 29 | (37) |
Foreign currency translation adjustments | (235) | 491 | (111) | 620 |
Comprehensive loss | $ (12,139) | $ (25,990) | $ (24,398) | $ (51,269) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 6 Months Ended | |
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | |
Operating activities: | ||
Net loss | $ (24,316) | $ (51,852) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,407 | 2,568 |
Change in fair value of warrant and derivative liability | (8,306) | (12) |
Stock-based compensation expense | 1,954 | 3,362 |
Non-cash interest and amortization of debt discount | 1,242 | 3,055 |
Amortization of premium (discount) on marketable securities | (144) | 56 |
Changes in assets and liabilities: | ||
Accounts receivable | (5,334) | (3,999) |
Inventory | (115) | (249) |
Prepaid expenses and other current assets | 1,133 | 1,171 |
Other receivables | (23) | (121) |
Deposits and other assets | 164 | (1,044) |
Accounts payable | (1,403) | 790 |
Accrued expenses | 6,825 | 3,084 |
Deferred revenue | 2,209 | |
Other current liabilities | (1) | 3 |
Other liabilities | (91) | (90) |
Net cash used in operating activities | (26,008) | (41,069) |
Investing activities: | ||
Payments for purchase of property and equipment | (9) | (117) |
Purchases of investments | (23,451) | (55,945) |
Sales of investments | 3,400 | |
Maturity of investments | 51,400 | 37,297 |
Net cash (used in) provided by investing activities | 27,940 | (15,365) |
Financing activities: | ||
Net proceeds from issuance of common stock | 5,048 | 3,809 |
Net proceeds from debt and royalty rights | 38,304 | |
Royalty payments in connection with the 13% Notes | (201) | (146) |
Net cash provided by financing activities | 4,847 | 41,967 |
Effect of foreign currency translation on cash and cash equivalents | (40) | 380 |
Net (decrease) increase in cash and restricted cash | 6,739 | (14,087) |
Cash and restricted cash at beginning of period | 31,490 | 44,355 |
Cash and restricted cash at end of period | 38,229 | 30,268 |
Supplemental disclosures of cash flow information: | ||
Cash interest payments | 5,878 | $ 5,462 |
Non-cash financing activities: | ||
Reclassification to additional paid-in capital of derivative liability | $ 12,497 | |
13% Notes | ||
Financing activities: | ||
Interest rate (as a percent) | 13.00% |
Organization and Description of
Organization and Description of the Business | 6 Months Ended |
Jun. 30, 2018 | |
Organization and Description of the Business | |
Organization and Description of the Business | 1. Organization and Description of the Business Organization and Business Overview Egalet Corporation (the “Company”) is a fully integrated specialty pharmaceutical company developing, manufacturing and commercializing innovative treatments for pain and other conditions. Given the need for acute and chronic pain products and the issue of prescription abuse, the Company is focused on bringing non-narcotic and abuse-deterrent (“AD”) formulations of opioids to patients and healthcare providers. The Company is currently marketing SPRIX ® (ketorolac tromethamine) Nasal Spray (“SPRIX Nasal Spray”), OXAYDO ® (oxycodone HCI, USP) tablets for oral use only—CII (“OXAYDO”) and ARYMO ® ER (morphine sulfate) extended-release (“ER”) tablets, for oral use CII (“ARYMO ER”). SPRIX Nasal Spray is a nonsteroidal anti-inflammatory drug indicated in adult patients for the short‑term (up to five days) management of moderate to moderately severe pain that requires analgesia at the opioid level. OXAYDO is an immediate release (“IR”) oxycodone product designed to discourage abuse via snorting, indicated for the management of acute and chronic pain severe enough to require an opioid analgesic and for which alternative treatments are inadequate. ARYMO ER is an ER morphine product formulated with AD properties and approved for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. ARYMO ER is the Company’s first product developed using its proprietary Guardian™ Technology. The Company also has a pipeline of products developed using Guardian Technology which it may look to partner. The Company plans to continue to grow revenues of its three commercial products, explore business development opportunities and leverage its proprietary Guardian Technology. Liquidity and Substantial Doubt in Going Concern As of June 30, 2018, the Company was not in compliance with certain Nasdaq Global Market listing requirements. The Company’s outstanding 5.50% convertible notes (the “5.50% Notes”) in the principal amount of $24.7 million contain redemption features in the event the Company was not able to maintain its Nasdaq Global Market listing. On July 9, 2018, the Company received notice from Nasdaq that the Nasdaq Hearings Panel has approved the transfer of the listing of the Company’s Common Stock from the Nasdaq Global Market to the Nasdaq Capital Market effective at the open of business on July 11, 2018 (the “Transfer”). The Transfer represents a fundamental change under the 5.50% Notes, whereby the 5.50% Note holders are entitled to require the Company to repurchase for cash all or any portion of the 5.50% Notes at a repurchase price equal to 100% of the principal amount thereof. The continued listing on the Nasdaq Capital Market is subject to (i) the fulfillment of certain conditions and milestones and (ii) the Company’s evidencing a market value of the Company’s common stock of over $35 million for at least 10 consecutive trading days not later than November 20, 2018. Due to this short-term redemption feature of the 5.50% Notes, the Company reclassified the principal amount of the 5.50% Notes and the related debt discount from non-current liabilities to current liabilities in the Company’s consolidated balance sheet at June 30, 2018. Refer to Note 15 – Subsequent Events for further information. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred recurring operating losses since inception. As of June 30, 2018, the Company had an accumulated deficit of $317.7 million and will need to improve cash generated from product sales and may require additional capital to fund its commercialization strategies for SPRIX Nasal Spray, OXAYDO and ARYMO ER. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to its commercial infrastructure. The Company’s outstanding 6.50% Notes (as defined below) in the principal amount of $23.9 million contain redemption features in the event the Company is not able to maintain any Nasdaq listing. Refer to Note 7 – Long Term Debt for further information. These factors, in combination with others described above, raise substantial doubt about the ability of the Company to continue as a going concern within one year after the date that these financial statements are issued. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company continues to seek other sources of capital and alternatives, such as contemplating a reverse stock split, to maintain its listing on the Nasdaq. However, if the Company is unable to raise sufficient capital or maintain its Nasdaq listing to prevent the redemption of its convertible notes, both the 6.50% Notes referred to herein and the 5.50% Notes described above, the Company will not have sufficient liquidity to fund its business operations for at least the next year following the date that the financial statements are issued. Accordingly, 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Basis of Accounting | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies and Basis of Accounting | |
Summary of Significant Accounting Policies and Basis of Accounting | 2. Summary of Significant Accounting Policies and Basis of Accounting Basis of Presentation The unaudited consolidated financial statements are prepared in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information. Certain information and footnotes normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q. The Company’s consolidation policy requires the consolidation of entities where a controlling financial interest is held. All intercompany balances and transactions have been eliminated in consolidation. The accompanying consolidated financial information at June 30, 2018 and the three and six months ended June 30, 2017 and 2018 is unaudited. The interim unaudited financial statements have been prepared on the same basis as the annual audited financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s consolidated financial position as of June 30, 2018, the consolidated results of its operations and comprehensive loss for the three and six months ended June 30, 2017 and 2018, and consolidated cash flows for the six months ended June 30, 2017 and 2018. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2017 and 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018, any other interim periods or any future year or period. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2017 filed on March 16, 2018 with the SEC. The Company’s significant accounting policies are described in Note 2 of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies, except as described in Note 3 – Revenue from contracts with customers. Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows: Restricted Cash. The new standard requires changes in restricted cash during the period to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Company’s statement of cash flows. If cash, cash equivalents and restricted cash are presented in more than one line on the Company’s consolidated balance sheets, the new guidance requires a reconciliation of the total in the statement of cash flows to the related captions in the Company’s consolidated balance sheet. ASU 2016-18 was effective for annual and interim periods beginning after December 15, 2017 with early adoption permitted. The amendments in this ASU increased the beginning and ending cash balances in the Company’s statement of cash flows. . The Company has adopted the standard in the first quarter of 2018. The adoption had no material impact on the Company’s consolidated statements of cash flows and had no impact on the Company’s consolidated balances sheet or statement of operations. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company has defined a process to meet the accounting and reporting requirements of the guidance and is assessing lease arrangements in order to determine the impact ASU 842 adoption will have on the financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities , which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 was effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The Company has adopted the standard in the first quarter of 2018 and determined there to be no material impact of the adoption in the three and six months ended June 30, 2018. In May 2014, the FASB issued new guidance related to revenue recognition, ASU 2014-09, Revenue from Contracts with Customers , which outlines a comprehensive revenue recognition model and supersedes most current revenue recognition guidance. The new guidance requires an entity to recognize revenue upon transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. ASU 2014-09 defines a five-step approach for recognizing revenue, which may require an entity to use more judgment and make more estimates than under the current guidance. The new guidance became effective in calendar year 2018. Two methods of adoption are permitted: (a) full retrospective adoption, meaning the standard is applied to all periods presented; or (b) modified retrospective adoption, meaning the cumulative effect of applying the new guidance is recognized at the date of initial application as an adjustment to the opening retained earnings balance. In March 2016, April 2016 and December 2016, the FASB issued ASU No. 2016-08, Revenue From Contracts with Customers : Principal Versus Agent Considerations , ASU No. 2016-10, Revenue From Contracts with Customers : Identifying Performance Obligations and Licensing , and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue From Contracts with Customers , respectively, which further clarify the implementation guidance on principal versus agent considerations contained in ASU No. 2014-09. In May 2016, the FASB issued ASU 2016-12 Revenue from Contracts with Customers , narrow-scope improvements and practical expedients which provides clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for non-cash consideration and completed contracts at transition (collectively “ASC 606”). These standards are effective for the Company beginning in the first quarter of 2018. The Company formed a task force that analyzed the Company’s customer contracts and the impacts the standard had on previously reported revenues and future revenues. Under ASC 606, the Company recognizes net product sales at the time it ships its products to its customers (primarily wholesalers and specialty pharmacies), rather than its historic policy of recognizing net product sales when prescriptions are dispensed to patients. As a result, the Company now recognizes net product sales under such contracts earlier under ASC 606 than it would have recognized under the historic guidance. The Company adopted the new standard effective January 1, 2018 using the modified retrospective approach. Refer to Note 3 — Revenue From Contracts with Customers for further details. |
Revenue from Contract with Cust
Revenue from Contract with Customers | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customers | |
Revenue from Contract with Customers | 3. Revenue From Contracts with Customers Adoption of ASC Topic 606, Revenue from Contracts with Customers The Company adopted ASC 606 on January 1, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption, referred to herein as the “new guidance”. The reported results as of, and for the three and six months ended June 30 , 2018 reflect the application of ASC 606 guidance while the reported results as of, and for the three and six months ended June 30 , 2017 were prepared under the guidance of ASC 605, Revenue Recognition (“ASC 605”), which is also referred to herein as "legacy GAAP" or the "previous guidance". The adoption of ASC 606 had a material impact on the Company’s consolidated financial position, results of operations and stockholders’ deficit as of the adoption date and for the three and six months ended June 30 , 2018. The adoption of ASC 606 represents a change in accounting principle that will more closely align revenue recognition with the delivery of the Company's products to its customers and will provide financial statement readers with enhanced disclosures. Financial Statement Impact of Adopting ASC 606 The cumulative effect of applying the new guidance to all contracts with customers for which all performance obligations were satisfied as of January 1, 2018, was recorded as an adjustment to accumulated deficit as of the adoption date. For contracts which were modified before the adoption date, the Company has not restated the contract for those modifications. Rather, the Company has reflected the aggregate effect of all modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price, if necessary. As a result of applying the modified retrospective method in adopting the new revenue guidance, the following adjustments were made to accounts on the Company’s consolidated balance sheets as of January 1, 2018: December 31, 2017 Adjustments due to ASU 2014-09 January 1, 2018 Accounts receivable 4,120 (371) 3,749 Inventory 3,225 (157) 3,068 Accrued expenses 16,104 5,028 21,132 Deferred revenue 7,456 (7,456) - Accumulated deficit (295,300) 1,900 (293,400) Under ASC 606, the Company recognizes net product sales at the time it ships its products to its customers (primarily wholesalers and specialty pharmacies), rather than the legacy GAAP policy of recognizing net product sales when prescriptions are dispensed to patients. As a result, the adjustments reflect the recognition of all deferred revenue related to product shipped to the Company’s customers, but not yet dispensed to patients and the related decrease in inventory. In addition, the Company recorded accrued expenses for patient discount programs, commercial and government rebates and a reduction in accounts receivable for estimated returns. An adjustment to accumulated deficit was recorded for the net impact of the preceding adjustments as of January 1, 2018. Revenue Recognition Under ASC 606, revenue is recognized when, or as, performance obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. To recognize revenue pursuant to the provisions of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect substantially all the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses whether the goods or services promised within each contract are distinct to determine those that are performance obligations. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer (“transaction price”). The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price to which the Company expects to be entitled after giving effect to returns, rebates, sales allowances and other variable elements with contracts between the Company and its customers. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance under the contract and all information (historical, current and forecasted) that is reasonably available. Sales taxes and other taxes collected on behalf of third parties are excluded from revenue. When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the significant financing practical expedient, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component as of June 30 , 2018. The Company’s existing contracts with customers contain only a single performance obligation and, as such, the entire transaction price is allocated to the single performance obligation. Should future contracts contain multiple performance obligations, those would require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on observable prices or a cost-plus margin approach when one is not available. The Company’s performance obligations are to provide pharmaceutical products to several wholesalers or a single specialty pharmaceutical distributor. All of the Company's performance obligations, and associated revenue, are generally transferred to customers at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring control of a promised good to a customer, which is typically upon delivery. Payments for invoices are generally due within 30 days of invoice date. Disaggregation of Revenue The following table summarizes revenue by revenue source for the three and six months ended June 30, 2018: (in thousands) Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Product lines SPRIX Nasal Spray $ 5,404 $ 10,218 OXAYDO 1,688 2,948 ARYMO ER 351 538 Total $ 7,443 $ 13,704 Reserves for Variable Consideration Revenues from product sales are recorded at the transaction price, which includes estimates of variable consideration for which reserves are established and which result from returns, rebates and sales allowances that are offered within or impacted by contracts between the Company and its customers. Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as the Company’s historical experience, current contractual requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract as of the date of determination. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known. Product Returns Consistent with industry practice, the Company generally offers customers a limited right of return for its products. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company estimates product return liabilities using the expected value method based on its historical sales information and other factors that it believes could significantly impact its expected returns, including product recalls and expirations, of which it becomes aware. These factors include its estimate of actual and historical return rates for non-conforming product and open return requests. Specialty Pharmacy Fees The Company pays certain specialty pharmaceutical distributor fees based on a contractually determined rate. The Company records the fees on shipment to the distributor and recognizes the fees as a reduction of revenue in the same period the related revenue is recognized. Wholesaler Fees The Company pays certain pharmaceutical wholesalers fees based on a contractually determined rate. The Company accrues the fees on shipment to the respective wholesalers and recognizes the fees as a reduction of revenue in the same period the related revenue is recognized. Prompt Pay Discount The Company offers cash discounts to its customers, generally 2% of the sales price, as an incentive for prompt payment. The Company estimates for cash discounts using the mostly likely amount method by reducing accounts receivable by the prompt pay discount amount. The discount is recognized as a reduction of revenue in the same period as the related revenue. Patient Discount Programs The Company offers co-pay discount programs for SPRIX Nasal Spray, OXAYDO and ARYMO ER to patients, in which patients receive a co-pay discount on their prescriptions. The Company estimates the total amount that will be redeemed using the expected value method based on the quantity of product shipped. The Company recognizes the discount as a reduction of revenue in the same period as the related revenue. Commercial and Government Rebates The Company contracts with various private and government payor organizations, primarily insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. The Company estimates these rebates using the expected value method and records such estimates in the same period the related revenue is recognized, resulting in a reduction of net product sales and the establishment of an accrued expense. The following table summarizes activity in each of the net product sales allowance and reserve categories for the six months ended June 30 , 2018: (in thousands) Fees and distribution costs Co-pay assistance Rebates Returns Total Balances at December 31, 2017 $ 595 $ 3,644 $ 579 $ — $ 4,818 Adjustment for ASU 2014-09 — 4,221 656 — 4,877 Allowances for current period sales 4,052 36,335 3,908 510 44,805 Adjustment related to prior period sales — — 180 — 180 Credits or payments made for prior period sales (555) (7,840) (1,214) — (9,609) Credits or payments made for current period sales (3,463) (22,965) (1,633) (394) (28,455) Balance at June 30, 2018 $ 629 $ 13,395 $ 2,476 $ 116 $ 16,616 Total gross product sales $ 58,690 Total provision for product sales allowances and accruals as a percentage of total gross sales Impact of New Revenue Guidance on Financial Statement Line Items The following table compares the Company’s reported consolidated balance sheet as of June 30 , 2018 to the pro-forma amounts had the previous guidance been in effect: Adjustments Due to Pro Forma if the previous As reported ASU 2014-09 accounting was in effect Accounts receivable 9,083 371 9,454 Inventory 3,183 423 3,606 Accrued expenses 27,949 (9,850) 18,099 Deferred revenue - 14,022 14,022 Accumulated deficit (317,715) (3,372) (321,087) Under ASC 606, the Company recognizes net product sales at the time it ships its products to its customers (primarily wholesalers and specialty pharmacies), rather than the legacy GAAP policy of recognizing net product sales when prescriptions are dispensed to patients. As a result, the adjustments reflect the accrual of deferred revenue related to product shipped to the Company’s customers, but not yet dispensed to patients and the related increase in inventory for deferred cost of goods sold. In addition, the Company would not have accrued expenses for patient discount programs, commercial and government rebates or a reduction in accounts receivable for estimated returns until the product was dispensed to patients. The adjustment to accumulated deficit represents the net impact of these items. The following table compares the Company’s reported consolidated statement of operations for the three and six months ended June 30 , 2018 to the pro-forma amounts had the previous guidance been in effect: Adjustments Due to Three Months Ended As reported ASU 2014-09 June 30, 2018 Revenues Net product sales $ 7,443 $ (391) $ 7,052 Cost of sales (excluding amortization of product rights) 1,565 (144) 1,421 Net loss $ (11,963) $ (247) $ (12,210) Per share information: Net loss per share of common stock, basic and diluted $ (0.22) $ (0.01) $ (0.23) Weighted-average shares outstanding, basic and diluted 53,302,399 53,302,399 53,302,399 Adjustments Due to Six Months Ended As reported ASU 2014-09 June 30, 2018 Revenues Net product sales $ 13,704 $ (1,867) $ 11,837 Cost of sales (excluding amortization of product rights) 3,780 (395) 3,385 Net loss $ (24,316) $ (1,472) $ (25,788) Per share information: Net loss per share of common stock, basic and diluted $ (0.48) $ (0.03) $ (0.51) Weighted-average shares outstanding, basic and diluted 50,302,419 50,302,419 50,302,419 Amounts reported on certain line items within net cash used in operating activities on the consolidated statement of cash flows changed as a result of the adoption of ASU 2014-09, but there was no change in the reported amounts of total operating, investing and financing cash flow. Transaction Price Allocated to Future Performance Obligations ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of June 30 , 2018. The guidance provides certain practical expedients that limit this requirement including performance obligations that are part of a contract that has an original expected duration of one year or less. All of the Company’s contracts are eligible for the practical expedient provided by ASC 606, therefore the Company elected not to disclose any remaining performance obligations. Contract Balances from Contracts with Customers When the Company receives consideration from a customer, or such consideration is unconditionally due from a customer prior to the transfer of goods or services to the customer under the terms of a contract, the Company records a contract liability. Contract liabilities are recognized as revenue after control of the products is transferred to the customer and all revenue recognition criteria have been met. The Company classifies contract liabilities as deferred revenue. The Company had no deferred revenue as of January 1, 2018 or June 30, 2018. Contract assets primarily relate to rights to consideration for goods or services transferred to the customer when the right is conditional on something other than the passage of time. Contract assets are transferred to accounts receivable when the rights become unconditional. The Company had no contract assets as of January 1, 2018 or June 30, 2018. Costs to Obtain and Fulfill a Contract The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. When shipping and handling costs are incurred after a customer obtains control of the products, the Company has elected to account for these as costs to fulfill the promise and not as a separate performance obligation. Shipping and handling costs associated with the distribution of finished products to customers are expensed as incurred and are recorded in costs of goods sold in the accompanying consolidated statements of operations. The Company expenses incremental costs of obtaining a contract with a customer (for example, commissions) when incurred as the period of benefit is less than one year. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2018 | |
Investments | |
Investments | 4. Investments Marketable Securities Marketable securities consisted of the following at December 31, 2017: (in thousands) Cost Basis Unrealized Gains Unrealized Losses Fair Value Corporate notes and bonds $ 60,000 $ — $ (47) $ 59,953 Total $ 60,000 $ — $ (47) $ 59,953 Marketable securities consisted of the following as of June 30, 2018: (in thousands) Cost Basis Unrealized Gains Unrealized Losses Fair Value Corporate notes and bonds $ 32,195 $ — $ (17) $ 32,178 Total $ 32,195 $ — $ (17) $ 32,178 The fair value of marketable securities as of June 30, 2018 with a maturity of less than one year is $32.2 million. There were no marketable securities with a maturity of greater than one year as of June 30, 2018. At June 30, 2018, the Company held sixteen marketable securities that were in a continuous loss position for less than one year and one marketable security that was in a continuous loss position for one to two years. The unrealized losses are immaterial in amount and are the result of current economic and market conditions and the Company has determined that no other than temporary impairment exists at June 30, 2018. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2018 | |
Inventory | |
Inventory | 5. Inventory Inventory is stated at the lower of cost or market using actual cost net of reserve for excess and obsolete inventory. The following represents the components of inventory at December 31, 2017 and June 30, 2018: December 31, June 30, (in thousands) 2017 2018 Raw materials $ 850 $ 841 Work in process 772 863 Finished goods 1,446 1,479 Deferred cost of sales 157 — Total $ 3,225 $ 3,183 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Intangible Assets | |
Intangible Assets | 6. Intangible Assets The following represents the balance of the intangible assets at December 31, 2017: Gross Net Remaining Useful Intangible Accumulated Intangible Life (in thousands) Assets Amortization Assets (in years) OXAYDO product rights $ 7,695 $ (3,273) $ 4,422 4.00 SPRIX Nasal Spray product rights 4,978 (2,964) 2,014 2.00 IP R&D 183 (36) 147 4.00 Total $ 12,856 $ (6,273) $ 6,583 The following represents the balance of the intangible assets at June 30, 2018: Gross Net Remaining Useful Intangible Accumulated Intangible Life (in thousands) Assets Amortization Assets (in years) OXAYDO product rights $ 7,653 $ (3,801) $ 3,852 3.60 SPRIX Nasal Spray product rights 4,891 (3,401) 1,490 1.60 IP R&D 177 (53) 124 3.50 Total $ 12,721 $ (7,255) $ 5,466 There was no impairment to intangible assets in the three and six months ended June 30, 2017 or in the three and six months ended June 30, 2018. Collaboration and License Agreement with Acura Pharmaceuticals, Inc. (“Acura”) In January 2015, the Company entered into a Collaboration and License Agreement with Acura to commercialize OXAYDO™ (oxycodone hydrochloride) tablets containing Acura’s Aversion® Technology (the “OXAYDO License Agreement”). The Company paid Acura an upfront payment of $5.0 million in January 2015 and a $2.5 million milestone payment in October 2015 as a result of the first commercial sale of OXAYDO. The Company also incurred transaction costs of $172,000 associated with the OXAYDO License Agreement. Refer to Note 13 — Acquisitions and License and Collaboration Agreements for additional details. During the three and six months ended June 30, 2017, the Company recognized amortization expense of $270,000 and $539,000, respectively, related to the OXAYDO product rights intangible asset. During the three and six months ended June 30, 2018, the Company recognized amortization expense of $274,000 and $550,000, respectively, related to the OXAYDO product rights intangible asset. Purchase Agreement with Luitpold Pharmaceuticals, Inc. (“Luitpold”) In January 2015, the Company entered into and consummated the transactions contemplated by the Purchase Agreement with Luitpold to purchase SPRIX Nasal Spray (the “SPRIX Purchase Agreement”). Pursuant to the SPRIX Purchase Agreement, the Company acquired specified assets and liabilities associated with SPRIX (ketorolac tromethamine) Nasal Spray for a purchase price of $7.0 million. The Company recorded an intangible asset of $4.6 million related to this transaction. Refer to Note 13 — Acquisitions and License and Collaboration Agreements for additional details. During the three and six months ended June 30, 2017, the Company recognized amortization expense of $235,000 and $469,000, respectively, related to the SPRIX Nasal Spray product rights intangible asset. During the three and six months ended June 30, 2018, the Company recognized amortization expense of $248,000 and $500,000, respectively, related to the SPRIX Nasal Spray product rights intangible asset. In-Process Research and Development (“IP R&D”) In connection with the acquisition of Egalet A/S, the Company recognized an IP R&D asset related to the drug delivery platform specifically designed to help deter physical abuse of pain medications, the Guardian Technology. Through December 31, 2017, the IP R&D was considered an indefinite-lived intangible asset and was assessed for impairment annually or more frequently if impairment indicators existed. Following the approval of ARYMO ER in January 2017, the Company began to amortize the intangible asset over a useful life of five years. During the three and six months ended June 30, 2017, the Company recognized amortization expense of $17,000 related to the IP R&D intangible asset. During the three and six months ended June 30, 2018, the Company recognized amortization expense of $9,000 and $18,000, respectively, related to the IP R&D intangible assets. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt | |
Debt | 7. Debt 5.50% Convertible Notes Due 2020 (the “5.50% Notes”) In April and May 2015, the Company issued through a private placement $61.0 million in aggregate principal amount of the 5.50% Notes. Interest on the 5.50% Notes is payable semi-annually in arrears on April 1 and October 1 of each year and commenced on October 1, 2015. As of June 30, 2018, a total of $24.7 million in principal amount of the 5.50% Notes remain outstanding. The 5.50% Notes are general, unsecured and unsubordinated obligations and rank senior in right of payment to all of the Company’s indebtedness that is expressly subordinated in right of payment to the 5.50% Notes. The 5.50% Notes rank equal in right of payment to the Company’s existing and future indebtedness and other liabilities that are not so subordinated. The 5.50% Notes are effectively subordinated to any of the Company’s future secured indebtedness to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all indebtedness and other liabilities incurred by the Company’s subsidiaries, including trade payables. The 5.50% Notes rank equal in right of the payment to the 13% Notes (as defined below). The Company may not redeem the 5.50% Notes prior to maturity. The 5.50% Notes are convertible prior to maturity, subject to certain conditions described below, into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) at an initial conversion rate of 67.2518 shares per $1,000 principal amount of the 5.50% Notes (equivalent to an initial conversion price of approximately $14.87 per share of Common Stock). This conversion rate is subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for accrued and unpaid interest. The Company is obligated to satisfy the conversion obligation by paying or delivering, as the case may be, cash, shares of the Company’s Common Stock or a combination thereof, at the Company’s election. Holders may convert all or any portion of their 5.50% Notes, in multiples of $1,000 principal amount, at their option at any time prior to the close of business on the business day immediately preceding January 1, 2020 only under the following circumstances: · on or after the date that is six months after the last date of original issuance of the 5.50% Notes, if the last reported sale price of the Company’s Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending within the five trading days immediately preceding a conversion date is greater than or equal to the conversion price for the 5.50% Notes on each applicable trading day; · during the five business day period after any five consecutive trading day period, (the “measurement period”), in which the trading price per $1,000 principal amount of 5.50% Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Common Stock and the conversion rate on each such trading day; or · upon the occurrence of specified corporate events, including Fundamental Changes, as defined in the indenture governing the 5.50% Notes (“the 5.50% Notes Indenture”). On or after January 1, 2020 until the close of business on the second scheduled trading day immediately preceding the maturity date (April 1, 2020), holders may convert all or any portion of their 5.50% Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. Upon conversion, the Company is obligated to pay or deliver cash, shares of the Company’s Common Stock or a combination of cash and shares of the Company’s Common Stock, at the Company’s election, and an interest make-whole payment in shares of the common stock, if applicable. If the Company satisfies the conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of the Company’s Common Stock, the amount of cash and shares of Common Stock, if any, due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 50 trading day observation period. In addition, following certain corporate events that occur prior to the maturity date, the Company is obligated to increase the conversion rate for a holder who elects to convert its 5.50% Notes in connection with such a corporate event in certain circumstances. Holders will not receive any additional cash payment or additional shares representing accrued and unpaid interest, if any, upon conversion of a note, except in limited circumstances. Instead, interest will be deemed to be paid in full, rather than cancelled, extinguished or forfeited from the consideration paid to the holders upon conversion of a 5.50% Note. On or after the date that is six months after the last date of original issuance of the 5.50% Notes, if the last reported sale price of the Company’s Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending within the five trading days immediately preceding a conversion date is greater than or equal to the conversion price for the 5.50% Notes on each applicable trading day, the Company is obligated to, in addition to the other consideration payable or deliverable in connection with such conversion, make an interest make-whole payment to the converting holder equal to the sum of the present value of the remaining scheduled payments of interest that would have been made on the 5.50% Notes to be converted had such notes remained outstanding from the conversion date through April 1, 2018, computed using a discount rate equal to 2%. The Company is obligated to pay any interest make-whole payment by delivering shares of the Company’s Common Stock valued at 95% of the simple average of the daily volume weighted average price for the 10 trading days ending on and including the trading day immediately preceding the conversion date. Notwithstanding the foregoing, the number of shares the Company may deliver in connection with a conversion of the 5.50% Notes, including those delivered in connection with an interest make-whole payment, will not exceed 77.3395 shares of Common Stock per $1,000 principal amount of 5.50% Notes, subject to adjustment. The Company will not be required to make any cash payments in lieu of any fractional shares or have any further obligation to deliver any shares of Common Stock or pay any cash in excess of the threshold described above. In addition, if in connection with any conversion the conversion rate is adjusted, then such holder will not receive the interest make-whole payment with respect to such 5.50% Note. Certain provisions in the 5.50% Notes could require accelerated payment of principal and interest. The 5.50% Notes provide that the delisting of the Company’s Common Stock from the Nasdaq Global Market would constitute a “fundamental change” under the 5.50% Notes, which would entitle the holder, at the holder’s option, to require the Company to repurchase for cash all or any portion of such holder’s 5.50% Notes at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon. On July 9, 2018, the Company received notice from Nasdaq that the Nasdaq Hearings Panel has approved the Transfer. Under the 5.50% Notes Indenture, the Company’s Common Stock ceasing to be listed on The Nasdaq Global Market as a result of the Transfer constituted a “Fundamental Change.” In accordance with the 5.50% Notes Indenture, on July 31, 2018, the Company delivered to the holders of the 5.50% Notes a Fundamental Change Company Notice, Make-Whole Fundamental Change notice and Offer to Repurchase (the “Fundamental Change Company Notice”) pursuant to which, as a result of the Transfer and pursuant to the terms of the 5.50% Notes Indenture and 5.50% Notes, the Company offered to repurchase, at the option of each holder, all 5.50% Notes that are validly tendered for repurchase, and not properly withdrawn, at any time prior to 5:00 p.m., New York City time, on September 18, 2018 (the “Expiration Time”), which is the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date. Pursuant to Section 15.02(a) of the 5.50% Notes Indenture, the Fundamental Change Repurchase Date must be a date not less than 20 nor more than 35 business days after the date of the Fundamental Change Company Notice. Accordingly, the Fundamental Change Repurchase Date is scheduled for September 19, 2018. Pursuant to the terms of the 5.50% Notes Indenture and the 5.50% Notes, the Company is obligated, on the Fundamental Change Repurchase Date, to pay the Fundamental Change Repurchase Price, payable in cash, equal to 100% of the principal amount of the Notes being repurchased. As the Fundamental Change Repurchase Date falls after the next Regular Record Date (as defined in the 5.50% Notes Indenture) of September 15, 2018 but prior to the next Interest Payment Date (as defined in the 5.50% Notes Indenture) to which such Regular Record Date relates of October 1, 2018, the Company is obligated to pay the full amount of accrued and unpaid interest to holders of record as of such Regular Record Date on such Interest Payment Date in accordance with the 5.50% Notes Indenture. Refer to Note 1– Organization and Description of the Business and Note 15 – Subsequent Events for further details. The Company accounts for convertible debt instruments by recording the liability and equity components of the convertible debt separately. The liability is computed based on the fair value of a similar debt instrument that does not include the conversion option. The liability component includes both the value of the embedded interest make-whole derivative and the carrying value of the 5.50% Notes. The equity component is computed based on the total debt proceeds less the fair value of the liability component. The equity component is also recorded as debt discount and amortized as interest expense over the expected term of the 5.50% Notes, using the effective interest method. The liability component of the 5.50% Notes on the date of issuance was computed as $41.6 million, including the value of the embedded interest make-whole derivative of $0.9 million and the carrying value of the 5.50% Notes of $40.6 million. Accordingly, the equity component on the date of issuance was $19.4 million. The discount on the 5.50% Notes is being amortized to interest expense over the term of the 5.50% Notes, using the effective interest method. The conversion criteria for the 5.50% Notes have not been met at June 30, 2018. As a result of the Transfer and the corresponding Fundamental Change under the 5.50% Notes Indenture, the conversion criteria for the 5.50% Notes was met as of July 11, 2018. If an event of default (as defined in the 5.50% Indenture) occurs and is continuing (other than specified events of bankruptcy or insolvency with respect to the Company), the trustee or the holders of at least 25% in aggregate principal amount of the outstanding 5.50% Notes may declare all the outstanding 5.50% Notes to be due and payable immediately. If an event of default relating to specified events of bankruptcy or insolvency with respect to the Company occurs, all the outstanding 5.50% Notes will immediately become due and payable without any declaration or other act on the part of the trustee or any holders of the 5.50% Notes. Notwithstanding the foregoing, the 5.50% Notes Indenture provides that, to the extent the Company elects, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the 5.50% Notes Indenture will, for the first 180 days after such event of default, consist exclusively of the right to receive additional interest on the 5.50% Notes. Events of default under the 5.50% Notes Indenture include, among other things, a default in payment of principal on the 5.50% Notes (including upon any required repurchase), a default in payment of any other indebtedness for money borrowed in excess of $5,000,000 if such default is not cured or waived within 30 days and certain events of bankruptcy or insolvency, both voluntary and involuntary. Transaction costs of $4.1 million related to the issuance of the 5.50% Notes were allocated to the liability and equity components in proportion to the allocation of the proceeds and accounted for as debt discount and equity issuance costs, respectively. Approximately $1.3 million of this amount was allocated to equity and the remaining $2.8 million was recorded as debt discount at issuance. In September 2016, in connection with the issuance of the 13% Notes (as defined below), the Company and its subsidiaries entered into supplemental indentures with the trustee for the 5.50% Notes pursuant to which the Company’s subsidiaries became guarantors under the 5.50% Notes Indenture. In December 2017, the Company exchanged, with certain existing 5.50% Noteholders, $36.4 million in principal amount of the 5.50% Notes for (i) approximately $23.9 million of the Company’s new 6.50% Notes, (ii) a warrant exercisable for 3.5 million shares of the Company’s Common Stock and (iii) payments, in cash, of all accrued but unpaid interest as of the closing of the 5.50% Notes exchanged in the transaction. This exchange was accounted for as a debt extinguishment and the gain on debt extinguishment of $13.2 million, inclusive of the make-whole payments and write-off of deferred financing fees, is reflected in the Company’s consolidated statements of operations during the year ended December 31, 2017. The following table summarizes how the issuance of the 5.50% Notes is reflected in the Company’s consolidated balance sheets at December 31, 2017 and June 30, 2018: December 31, 2017 June 30, 2018 (in thousands) Principal $ 24,650 $ 24,650 Unamortized debt discount (4,222) (3,404) Carrying value $ 20,428 $ 21,246 The carrying value of the 5.50% Notes was classified as a non-current liability on the Company’s consolidated balance sheets at December 31, 2017. The carrying value of the 5.50% Notes was classified as a current liability on the Company’s consolidated balance sheets at June 30, 2018 due to the fundamental change provisions of the 5.50% Notes Indenture. Refer to Note 1- Organization and Description of the Business for further details. 6.50% Convertible Notes Due 2024 (the “6.50% Notes”) In December 2017, the Company entered into exchange agreements (the “Exchange Agreements”) with certain holders (the “Holders”) of the Company’s 5.50% Notes pursuant to which the Holders agreed to exchange, in the aggregate, approximately $36.4 million of outstanding principal amount of the 5.50% Notes for, in the aggregate, (i) approximately $23.9 million of the Company’s new 6.50% Notes, (ii) a warrant exercisable for 3.5 million shares of the Company’s Common Stock at an exercise price of $0.01 per share and (iii) payments, in cash, of all accrued but unpaid interest as of the closing on the 5.50% Notes exchanged in the transaction (the “Exchange”). At the closing of the Exchange, 2.5 million warrants were exercised. The remaining 1.0 million warrants were exercised in January 2018. The Company consummated the Exchange in reliance upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”) and pursuant to an indenture (the “Indenture”), dated December 27, 2017, by and among the Company, the subsidiary guarantors party thereto as of the date thereof, and The Bank of New York Mellon, as trustee (the “Trustee”). The Company is obligated to pay interest on the 6.50% Notes semiannually in arrears on January 1 and July 1 of each year commencing July 1, 2018 at a rate of 6.50% per year, which rate is subject to adjustment in accordance with the terms of the Indenture (the 6.50% Notes Indenture”) and as described below. The 6.50% Notes are general unsecured obligations of the Company and rank equally in right of payment with all of its other existing and future senior unsecured indebtedness and senior in right of payment to all of its existing and future subordinated indebtedness. The 6.50% Notes will mature on December 31, 2024, unless earlier repurchased, redeemed or converted in accordance with the terms of the 6.50% Notes Indenture prior to such date. Subject to certain conditions, on or after January 1, 2021, the Company may redeem for cash all or a part of the 6.50% Notes. The 6.50% Notes will be convertible at any time until the close of business on the business day immediately preceding the maturity date. Upon conversion and subject to certain conditions, holders of the 6.50% Notes are entitled to receive shares of the Company’s Common Stock at an initial conversion rate of 749.6252 shares of Common Stock per $1,000 principal amount of 6.50% Notes, which is equivalent to an initial conversion price of approximately $1.33 per share and is subject to adjustment under the terms of the 6.50% Notes Indenture. Similar to the 5.50% Notes, the 6.50% Notes provide for an interest make-whole payment in connection with conversions that occur prior to January 1, 2021. For any Conversion Date that occurs prior to the close of business on the business day immediately preceding January 1, 2021, the Company is obligated to, in addition to the other consideration payable or deliverable in connection with any conversion of Notes, make an interest make-whole payment in cash or in shares of Common Stock, at the Company’s election, to such converting Holder equal to the sum of the present value of the remaining scheduled payments of interest that would have been made on the Notes to be converted had such Notes remained outstanding from the Conversion Date through January 1, 2021. The present values will be computed using a discount rate equal to 2% by a U.S. nationally recognized independent investment banking firm. If an event of default (as defined in the 6.50% Notes Indenture) occurs and is continuing (other than specified events of bankruptcy or insolvency with respect to the Company), the Trustee or the holders of at least 25% in aggregate principal amount of the outstanding 6.50% Notes may declare all the outstanding 6.50% Notes to be due and payable immediately. If an event of default relating to specified events of bankruptcy or insolvency with respect to the Company occurs, all the outstanding 6.50% Notes will immediately become due and payable without any declaration or other act on the part of the trustee or any holders of the 6.50% Notes. Notwithstanding the foregoing, the 6.50% Notes Indenture provides that, to the extent the Company elects, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the 6.50% Notes Indenture will, for the first 180 days after such event of default, consist exclusively of the right to receive additional interest on the 6.50% Notes. Events of default under the 6.50% Notes Indenture include, among other things, a default in payment of principal on the 6.50% Notes (including upon any required repurchase), a default in payment of any other indebtedness for money borrowed in excess of $5,000,000 if such default is not cured or waived within 30 days and certain events of bankruptcy or insolvency, both voluntary and involuntary. In addition, the 6.50% Notes Indenture required the Company to use its reasonable best efforts to (i) seek stockholder approval of an amendment to the Company’s Third Amended & Restated Certificate of Incorporation, as amended, to increase the amount of authorized shares available for issuance thereunder, and (ii) upon such approval, to reserve from such amount the number of shares that may be issued in respect of the 6.50% Notes and any other securities issued in connection with the Exchange. In February 2018, the Company held a special meeting of stockholders (the “Special Meeting”) and received stockholder approval of an amendment to the Company’s Third Amended and Restated Certificate of Incorporation (the “Charter Amendment”) to increase authorized shares by 200,000,000 shares. Refer to Footnote 8- Stockholders’ Equity for further details. The Exchange Agreements also provide that, for a period of nine months, the Company will not enter into additional exchange transactions with the other holders of the 5.50% Notes the economic terms of which, taken is a whole, are more favorable to the 5.50% Note holders than the December 2017 Exchange. Certain provisions in the 6.50% Notes could require accelerated payment of principal and interest. The 6.50% Notes provide that the delisting of the Company’s Common Stock from the Nasdaq exchange would constitute a “fundamental change” under the 6.50% Notes, which would entitle the holder, at the holder’s option, to require the Company to repurchase for cash all or any portion of such holder’s 6.50% Notes at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon. Transfer does not constitute a fundamental change under the 6.50% Notes, but if the Company were to be delisted from the Nasdaq Capital Market, such delisting would constitute such a fundamental change under the 6.50% Notes Indenture. Refer to Note 1- Organization and Description of the Business and Note 15 – Subsequent Events for further details. At the date of Exchange, December 27, 2017, the Company did not have sufficient unissued authorized shares to cover the conversion of the outstanding 6.50% Notes and as a result was required to account for the bifurcated conversion feature as a derivative liability which results in a debt discount on the 6.50% Notes. The fair value of the derivative liability for the conversion feature at the date of Exchange was determined to be approximately $15.0 million and was classified as a liability in the Company’s consolidated balance sheet as of December 31, 2017, with subsequent changes to fair value recorded through earnings at each reporting period on the Company’s consolidated statements of operations and comprehensive loss as change in fair value of derivative liabilities. As a result of the Charter Amendment, as of June 30 , 2018, the Company had reserved sufficient shares of its Common Stock to satisfy the conversion provisions of the 6.50% Notes and accordingly, the conversion feature is considered indexed to the Company’s Common Stock and the fair value of the conversion feature at the date of approval, $12.5 million, was reclassified from a liability into stockholders' equity during the first quarter of 2018. The conversion criteria for the 6.50% Notes have not been met at June 30, 2018. Should the 6.50% Notes become convertible, management will determine whether the intent is to settle in cash which would result in the liability component of the 6.50% Notes being classified as a current liability and the equity component being presented as redeemable equity if the liability is considered current. Transaction costs of $1.7 million related to the issuance of the 6.50% Notes were accounted for as debt discount. The following table summarizes how the issuance of the 6.50% Notes is reflected in the Company’s consolidated balance sheets at December 31, 2017 and June 30, 2018: December 31, 2017 June 30, 2018 (in thousands) Principal $ 23,888 $ 23,888 Unamortized debt discount (20,919) (20,834) Carrying value $ 2,969 $ 3,054 The carrying value of the 6.50% Notes was classified as a non-current liability on the Company’s consolidated balance sheets at December 31, 2017 and June 30, 2018. 13% Senior Secured Notes (the “13% Notes”) In August 2016, the Company completed the initial closing (the “Initial Closing”) of its offering (the “Offering”) of up to $80.0 million aggregate principal amount of its 13% Notes and entered into an indenture (the “Indenture”) governing the 13% Notes with the guarantors party thereto (the “Guarantors”) and U.S. Bank National Association, a national banking association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”). The Company issued $40.0 million aggregate principal amount of the 13% Notes at the Initial Closing and issued an additional $40.0 million aggregate principal amount upon the FDA’s approval of ARYMO™ ER in January 2017 (the “Second Closing”). Net proceeds from the Initial Closing and Second Closing were $37.2 million and $38.3 million, respectively, after deducting the estimated Offering expenses payable by the Company in connection with the Initial Closing and Second Closing. The 13% Notes were sold only to qualified institutional buyers within the meaning of Rule 144A under the Securities Act of 1933, as amended. The Company has used and will use the net proceeds from the 13% Notes and the Royalty Rights (as defined below) to repay all outstanding obligations to Hercules under the Loan Agreement with Hercules, to support the commercialization of ARYMO ER and for general corporate purposes. Prior to the Second Closing, interest on the 13% Notes accrued at a rate of 13% per annum and was payable semi-annually in arrears on March 20 and September 20 of each year (each, a “Payment Date”) commencing on March 20, 2017. On each Payment Date commencing on March 20, 2018, the Company was required to also pay an installment of principal of the 13% Notes pursuant to a straight-line fixed amortization schedule. Following the Second Closing in January 2017, in lieu of the straight-line fixed amortization schedule, on each Payment Date commencing on March 20, 2018, the Company is obligated to pay an installment of principal on the 13% Notes in an amount equal to 15% (or 17% if certain sales targets are not met) of the aggregate net sales of SPRIX Nasal Spray, OXAYDO, ARYMO ER and, if approved, Egalet-002 for the two consecutive fiscal quarterly period most recently ended, less the amount of interest payable on the 13% Notes on such Payment Date. The 13% Notes are senior secured obligations of the Company and equal in right of payment to all existing and future pari passu indebtedness of the Company (including the Company’s outstanding 5.50% Notes due 2020), will be senior in right of payment to all existing and future subordinated indebtedness of the Company, have the benefit of a security interest in the 13% Notes collateral and are junior in lien priority in respect of any collateral that secures any first priority lien obligations incurred, which includes intellectual property (“IP”), from time to time in accordance with the indenture governing the 13% Notes (the “13% Notes Indenture”). Following the Second Closing, the stated maturity date of the 13% Notes became September 30, 2033. Upon the occurrence of a Change of Control, subject to certain conditions, or certain Asset Sales events (each, as defined in the 13% Notes Indenture), holders of the 13% Notes may require the Company to repurchase for cash all or part of their 13% Notes at a repurchase price equal to 101.00% of the principal amount of the 13% Notes to be repurchased, plus accrued and unpaid interest to the date of repurchase. The Company may redeem the 13% Notes at its option, in whole or in part from time to time, prior to August 31, 2018, at a redemption price equal to 100.00% of the principal amount of the 13% Notes being redeemed, plus accrued and unpaid interest, if any, through the redemption date, plus a make-whole premium computed using a discount rate equal to the treasury rate in respect of such redemption date plus 100 basis points. The Company may redeem the 13% Notes at its option, in whole or in part from time to time, on or after August 31, 2018 at a redemption price equal to: (i) from and including August 31, 2018 to and including August 30, 2019, 109.00% of the principal amount of the 13% Notes to be redeemed, (ii) from and including August 31, 2019 to and including August 30, 2020, 104.50% of the principal amount of the 13% Notes to be redeemed, and (iii) from and including August 31, 2020 and thereafter, 100.00% of the principal amount of the 13% Notes to be redeemed, in each case, plus accrued and unpaid interest to the redemption date. In addition, prior to August 31, 2018, the Company may redeem, at its option, up to 35% of the aggregate principal amount of the 13% Notes with the proceeds of one or more public or private equity offerings at a redemption price equal to 113.50% of the aggregate principal amount of the 13% Notes to be redeemed, plus accrued and unpaid interest to the date of redemption in accordance with the 13% Notes Indenture; provided that at least 65% of the aggregate principal amount of 13% Notes issued under the 13% Notes Indenture remains outstanding immediately after each such redemption and provided further that each such redemption occurs within 90 days of the date of closing of each such equity offering. No sinking fund is provided for the 13% Notes, which means that the Company is not required to periodically redeem or retire the 13% Notes. The obligations of the Company under the 13% Notes Indenture and the 13% Notes are unconditionally guaranteed on a secured basis by the Guarantors. Under the terms of the 13% Notes Indenture, the Company may designate entities within its corporate structure as unrestricted subsidiaries, which entities will therefore not be guarantors provided that certain conditions set forth in the Indenture are met. Pursuant to the 13% Notes Indenture, the Company and its restricted subsidiaries must also comply with certain affirmative covenants, such as furnishing financial statements to the holders of the 13% Notes, and negative covenants, including limitations on the following: the incurrence of debt; the issuance of preferred and/or disqualified stock; the payment of dividends, the repurchase of shares and under certain conditions making certain other restricted payments; the prepayment, redemption or repurchase of subordinated debt; the merger, amalgamation or consolidation involving the Company; engaging in certain transactions with affiliates; and the making of investments other than those permitted by the 13% Notes Indenture. The 13% Notes Indenture contains customary events of default with respect to the 13% Notes, and upon certain events of default occurring and continuing, the Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding 13% Notes by notice to the Company and the Trustee, may (subject to the provisions of the 13% Notes Indenture) declare 100% of the principal of and accrued and unpaid interest, if any, on all of the 13% Notes to be due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, as well as the then-applicable optional redemption premium under the 13% Notes Indenture, will be due and payable immediately. In the case of certain events of bankruptcy, insolvency or reorganization involving the Company or a Restricted Subsidiary (as defined in the 13% Notes Indenture), the 13% Notes will automatically become due and payable. Events of default under the 13% Notes Indenture include, among other things, a default in payment of principal on the 13% Notes (including upon any required repurchase or redemption), a default in payment of any other indebtedness for money borrowed in excess of $2,000,000 and certain events of bankruptcy or insolvency, both voluntary and involuntary. In connection with the Initial Offering in August 2016, the Company entered into royalty rights agreements with each of the 13% Notes Purchasers pursuant to which the Company sold to such Purchasers the right to receive, in the aggregate, a payment equal to 1.5% of the aggregate net sales of OXAYDO and SPRIX Nasal Spray from the Initial Closing through December 31, 2019, inclusive (the “Royalty Rights”). Following the approval of ARYMO ER in January 2017, the Royalty Rights will continue through December 31, 2020 and include royalties of ARYMO ER as described below. The Company also entered into separate royalty rights agreements with each of the Purchasers pursuant to which the Company sold to such Purchasers the right to receive 1.5% of the aggregate net sales of ARYMO ER payable from the date of first sale of ARYMO ER through December 31, 2020, inclusive. The royalty rights agreements also include other terms and conditions customary in agreements of this type. The Royalty Rights were determined to be a freestanding element with respect to the 13% Notes |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' equity | |
Stockholders' equity | 8. Stockholders’ Equity At the Market Offering In July 2015, the Company entered into a Controlled Equity Offering Sales Agreement (“2015 Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”), under which the Company could, at its discretion, from time to time, sell shares of its Common Stock, for an aggregate offering price of up to $30.0 million. The Company provided Cantor with customary indemnification rights, and Cantor is entitled to a commission at a fixed rate of 3% of the gross proceeds per share sold. Sales of the shares of Common Stock under the 2015 Sales Agreement have been and, if there are additional sales under the 2015 Sales Agreement, will be, made in transactions deemed to be “at the market offerings”, as defined in Rule 415 under the Securities Act of 1933, as amended. The Company has initiated sales of shares under the 2015 Sales Agreement at various times beginning in March 2017 and has sold an aggregate of 9,357,669 shares of Common Stock through June 30, 2018, resulting in gross proceeds of $9.4 million before deducting commissions of $281,000. July 2017 Equity Offering On July 6, 2017, the Company entered into an underwriting agreement with Cantor relating to an underwritten public offering (the “July 2017 Equity Offering”) of 16,666,667 shares of the Company’s Common Stock and accompanying warrants to purchase 16,666,667 shares of Common Stock, at a combined public offering price of $1.80 per share and accompanying warrant, for gross proceeds of $30.0 million. The net offering proceeds were $28.6 million after deducting underwriting discounts and commissions and offering-related costs of $1.4 million. Each warrant had an initial exercise price of $2.70, subject to adjustment in certain circumstances. As of June 30, 2018, the warrants had an exercise price of $1.92. The shares of Common Stock and warrants were issued separately. The warrants may be exercised at any time on or after the date of issuance and will expire five years from the date of issuance. The Company accounted for the warrants using ASC 480 – Distinguishing Liabilities from Equity and determined that the warrants were a freestanding financial instrument that are subject to liability classification. Pursuant to the terms of the agreement, the Company could be required to settle the warrants in cash in the event of an acquisition of the Company, and as a result the warrants are required to be measured at fair value and reported as a liability in the Company’s consolidated balance sheet. The warrant exercise price is subject to adjustment upon the issuance of certain equity securities at a price less than the exercise price of the warrants then in effect. The fair value of the warrants to purchase shares of the Company’s Common Stock in connection with the July 2017 Equity Offering was $9.7 million on the date of issuance, which was determined using a lattice model that takes into account various future financing scenarios and the impact of those scenarios on the fair value of the warrants. The fair value of the warrants of $9.7 million on the date of issuance was recorded as a liability which will be marked to its estimated fair value at each reporting period. Refer to Footnote 9- Fair Value Measurements for further details. Reclassification of the Derivative Liability In February 2018, the Company received shareholder approval to increase the number of its authorized shares of common stock by 200,000,000 additional shares. Prior to this approval, the embedded conversion options in the 6.50% Notes were required to be separately accounted for as a derivative liability. Upon the shareholder approval to increase the number of authorized shares, the Company had sufficient shares of its Common Stock to satisfy the conversion provisions of the 6.50% Notes. The fair value of the derivative liability of $12.5 million was reclassified from a liability into stockholders’ equity during the first quarter of 2018. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | 9. Fair Value Measurements The Company measures certain assets and liabilities at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The guidance in ASC 820 outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company maximizes the use of quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of inputs as follows: · Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. · Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities. · Level 3—Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis : (in thousands) Fair Value Measurements as of December 31, 2017 Level 1 Level 2 Level 3 Total Assets Cash equivalents (money market funds) $ 16,973 $ — $ — $ 16,973 Marketable securities, available-for-sale — 59,953 — 59,953 Total assets $ 16,973 $ 59,953 $ — $ 76,926 Liabilities Interest make-whole derivatives $ — $ — $ 2,589 $ 2,589 Conversion feature, 6.50% Notes — — 14,034 14,034 Warrant liability — — 8,166 8,166 Total liabilities $ — $ — $ 24,789 $ 24,789 (in thousands) Fair Value Measurements as of June 30, 2018 Level 1 Level 2 Level 3 Total Assets Cash equivalents (money market funds and commercial paper) $ 30,248 $ — $ — $ 30,248 Marketable securities, available-for-sale — 32,178 — 32,178 Total assets $ 30,248 $ 32,178 $ — $ 62,426 Liabilities Interest make-whole derivatives $ — $ — $ 1,153 $ 1,153 Warrant liability — — 2,833 2,833 Total liabilities $ — $ — $ 3,986 $ 3,986 The following tables set forth a summary of changes in the fair value as of June 30, 2018: (in thousands) Reclassification Fair Value December 31, to Additional Change in June 30, 2017 Additions Paid in Capital 2018 2018 Interest make-whole derivatives 2,589 $ — $ $ (1,436) $ 1,153 Conversion feature, 6.50% Notes 14,034 — (12,497) (1,537) — Warrant liability 8,166 — (5,333) 2,833 Total liabilities $ 24,789 $ — $ (12,497) $ (8,306) $ 3,986 The 6.50% Notes include an interest make-whole feature whereby if a noteholder converts any of the 6.50% Notes prior to July 1, 2021, the Company is obligated to, in addition to the other consideration payable or deliverable in connection with such conversion, make an interest make-whole payment to the converting holder equal to the sum of the present value of the remaining scheduled payments of interest that would have been made on the notes to be converted had such notes remained outstanding from the conversion date through July 1, 2021 (6.50% Notes), computed using a discount rate equal to 2%. The embedded conversion options in the 6.50% Notes were required to be separately accounted for as derivatives as at December 31, 2017 as the Company did not have enough available authorized shares to cover the conversion obligation as of the date of issuance as of December 31, 2017. In February 2018, the Company received stockholder approval for the Charter Amendment, which increased the Company’s authorized shares of Common Stock by 200,000,000. As the Company had reserved sufficient shares of its Common Stock to satisfy the conversion provisions of the 6.50% Notes, the conversion feature is considered indexed to their stock and the fair value of the conversion feature at the date of approval, $12.5 million, was reclassified from a liability into stockholders' equity during the first quarter of 2018. The Company has determined that the above features are embedded derivatives and has recognized the fair value of the derivatives as liabilities in the Company’s consolidated balance sheets, with subsequent changes to fair value recorded through earnings at each reporting period on the Company’s consolidated statements of operations and comprehensive loss as change in fair value of derivative liabilities. The fair value of the Company’s warrant liability was estimated utilizing a lattice tree model both for the initial valuation and as of June 30, 2018. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value measurement was based on several factors including: · Various future financing scenarios · Volatility of the Company’s Common Stock and risk free rate As of June 30, 2018, the fair value of the 6.50% Notes interest make whole features was calculated utilizing the binomial lattice tree model. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value measurement was based on several factors including: · Credit spread at the valuation date · Discount yield as of the valuation date The fair value and carrying value of the Company’s 5.50% Notes and 6.50% Notes at December 31, 2017 was as follows: (in thousands) Fair Value Carrying Value Face Value 5.50% Notes due 2020 $ 11,699 $ 20,428 $ 24,650 6.50% Notes due 2024 $ 4,643 $ 2,969 $ 23,888 The fair value and carrying value of the Company’s 5.50% Notes and 6.50% Notes at June 30, 2018 was as follows: (in thousands) Fair Value Carrying Value Face Value 5.50% Notes due 2020 $ 8,627 $ 21,246 $ 24,650 6.50% Notes due 2024 $ 2,182 $ 3,054 $ 23,888 The fair value of the Company’s 13% Notes approximates its carrying value of $73.0 million as the interest rate is reflective of the interest rates on debt the Company could currently obtain with similar terms and conditions and thus represents a Level 2 measurement within the fair value hierarchy. |
Net Loss Per Common Share
Net Loss Per Common Share | 6 Months Ended |
Jun. 30, 2018 | |
Net Loss Per Common Share | |
Net Loss Per Common Share | 10. Net Loss Per Common Share The following table sets forth the computation of basic and diluted net loss per share for the periods indicated: (in thousands, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Basic and diluted net loss per common share calculation: Net loss $ (26,479) $ (11,963) $ (51,852) $ (24,316) Weighted average common stock outstanding 25,542,733 53,302,399 25,145,440 50,302,419 Net loss per share of common stock—basic and diluted $ (1.04) $ (0.22) $ (2.06) $ (0.48) The following outstanding securities for the three and six months ended June 30, 2017 and 2018 have been excluded from the computation of diluted weighted shares outstanding, as they would have been anti-dilutive: Three and six months ended June 30, 2017 2018 Stock options outstanding 4,788,917 4,640,696 Unvested restricted stock awards 72,448 2,120,495 Common shares issuable upon conversion of the 5.50% Notes 4,102,360 1,657,757 Common shares issuable upon conversion of the 6.50% Notes — 17,907,047 Common shares issuable upon exercise of warrants — 17,666,667 Total 8,963,725 43,992,662 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Stock-Based Compensation | |
Stock-Based Compensation | 11. Stock-Based Compensation 2013 Stock-Based Incentive Compensation Plan In November 2013, the Company adopted its 2013 Stock-Based Incentive Compensation Plan (as subsequently amended from time to time, the “2013 Plan”). Pursuant to the 2013 Plan, the compensation committee of the Company’s board of directors is authorized to grant equity-based incentive awards to its directors, executive officers and other employees and service providers, including officers, employees and service providers of its subsidiaries and affiliates. The number of shares of the Company’s Common Stock initially reserved for issuance under the 2013 Plan was 1,680,000 in the form of Common Stock, deferred stock, restricted stock, restricted stock units, stock options and stock appreciation rights. Share increases of 2,000,000, 2,600,000 and 6,000,000, to the number of shares originally reserved for issuance under the 2013 Plan were authorized by the Company’s stockholders in June 2014, June 2016, and May 2018, respectively. The amount, terms of grants and exercisability provisions are determined by the compensation committee, and in certain circumstances pursuant to delegated authority, the Company’s chief executive officer and chief financial officer, acting jointly. The term of the options may be up to 10 years, and options are exercisable in cash or as otherwise determined by the compensation committee. All stock options vest over time as stipulated in the individual award agreements. In September 2015, the compensation committee voted to amend the 2013 Plan to, among other things, allow for monthly vesting of stock options granted thereunder after the first annual vesting. 2017 Inducement Plan In December 2016, the Company adopted its 2017 Inducement Plan (the “Inducement Plan”), which became effective in January 2017. Pursuant to the Inducement Plan, the Company’s compensation committee is authorized to grant equity-based incentive awards to its employees, including employees of its subsidiaries, who were not previously employees or non-employee directors of the Company or any of its subsidiaries (or who have had a bona fide period of non-employment with the Company and its subsidiaries) in compliance with Rule 5635(c)(4) of the NASDAQ Global Market. The number of shares of the Company’s Common Stock initially reserved for issuance under the Plan was 300,000, in the form of Common Stock, deferred stock, restricted stock, restricted stock units, stock options and stock appreciation rights. The amount, terms of grants and exercisability provisions are determined by the compensation committee of the Company’s board of directors. The term of stock options issued under the Inducement Plan may be up to 10 years, and stock options are exercisable in cash or as otherwise determined by the compensation committee of the Company’s board of directors. All stock options vest over time as stipulated in the individual award agreements. Employee Stock Purchase Plan In January 2016, the Company established an Employee Stock Purchase Plan (the “Purchase Plan”), which was approved by the Company’s stockholders in June 2016. A total of 750,000 shares of Common Stock were originally approved for future issuance under the Purchase Plan pursuant to purchase rights granted to the Company’s employees. Under the Company’s Purchase Plan, eligible employees can purchase the Company’s Common Stock through accumulated payroll deductions at such times as established by the administrator. The Purchase Plan is administered by the compensation committee. Under the Purchase Plan, eligible employees may purchase the Company’s Common Stock at 85% of the lower of the fair market value of a share of the Company’s Common Stock on the first day of an offering period or on the last day of the offering period. Eligible employees may contribute up to 10% of their eligible compensation. A participant may purchase a maximum of 1,500 shares of common stock per offering period. Under the Purchase Plan, a participant may not accrue rights to purchase more than $25,000 worth of the Company’s common stock for each calendar year in which such right is outstanding. At the end of each offering period, shares of the Company’s Common Stock may be purchased at 85% of the lower of the fair market value of the Company’s Common Stock on the first or last day of the respective offering period. In accordance with the guidance in ASC 718-50 – Compensation – Stock Compensation , the ability to purchase shares of the Company’s Common Stock at the lower of the price on the first day of the offering period or the last day of the offering period (i.e. the pricing date) represents a stock option and, therefore, the Purchase Plan 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 recognized stock-based compensation expense of $7,000 and $15,000, respectively, during the three and six months ended June 30, 2018 and stock-based compensation expense of $35,000 and $70,000 for the three and six months ended June 30, 2017 related to the Purchase Plan. Shares Available for Future Grant Under Equity Compensation Plans As of June 30, 2018, the Company has reserved the following shares to be granted under its equity compensation plans: Shares initially reserved under the 2013 Plan 1,680,000 Shares reserved under the Inducement Plan 300,000 Shares reserved under the Purchase Plan 750,000 Authorized increase to the 2013 Plan 10,600,000 Common stock options granted under the 2013 Plan (6,127,188) Common stock options granted under the Inducement Plan (212,500) Restricted stock awards granted under the 2013 Plan (3,043,660) Restricted stock units granted under the 2013 Plan (600,000) Common stock issued under the Purchase Plan (146,314) Stock options and restricted stock awards forfeited 1,724,615 Remaining shares available for future grant 4,924,953 The estimated grant-date fair value of the Company’s share-based awards is amortized ratably over the awards’ service periods. Stock-based compensation expense recognized was as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2017 2018 2017 2018 General and administrative $ 1,265 $ 912 $ 2,621 $ 1,734 Sales and marketing 144 37 303 103 Research and development 159 53 438 117 Total stock based compensation expense $ 1,568 $ 1,002 $ 3,362 $ 1,954 Stock Options Granted Under Equity Compensation Plans Stock Options Outstanding Weighted-average Remaining Number of Weighted-Average Contractual Shares Exercise Price Term (in years) Outstanding at December 31, 2017 4,110,612 $ Granted 936,250 Exercised — — Forfeited (229,585) Cancelled (176,581) Outstanding at June 30, 2018 4,640,696 $ 8.31 Vested or expected to vest at June 30, 2018 4,640,696 $ 8.31 Exercisable at June 30, 2018 1,988,964 $ 7.57 The intrinsic value of the 4,640,696 stock options outstanding as of June 30, 2018 was $0, based on a per share price of $0.42, the Company’s closing stock price on that date, and a weighted-average exercise price of $5.22 per share. The Company uses the Black-Scholes valuation model in determining the fair value of equity awards. For stock options granted to employees and directors with only service-based vesting conditions, the Company measures stock-based compensation expense at the grant date based on the estimated fair value of the award and recognizes it as expense over the requisite service period on a straight-line basis. The Company records the expense of equity compensation for non-employees based on the estimated fair value of the stock option as of the respective vesting date. Further, the Company expenses the fair value of non-employee stock options that contain only service-based vesting conditions over the requisite service period of the underlying stock options. Following the adoption of ASU 2016-09, the Company no longer estimates forfeitures in calculating its stock-based compensation expense and adjusts each period to reflect actual forfeitures. On June 8, 2017, the Company granted stock options for 630,000 shares of the Company’s Common Stock to nine senior executives (the “June 2017 Grant”). The contractual term of each of the grants made in the June 2017 Grant is 10 years and the exercise price is $2.38 per share. Provided that the grantee is still employed by the Company, the vesting terms of the June 2017 Grant include a combination of market and service-based conditions as follows: (a) 25% of the award will vest on the later of (i) the six-month anniversary of the grant and (ii) the date on which the average closing price of the Company's Common Stock on Nasdaq is at least $3.33 for 30 consecutive trading days. (b) 25% of the award will vest on the later of (i) the twelve-month anniversary of the grant and (ii) the date on which the average closing price of the Company's Common Stock on Nasdaq is at least $4.05 for 30 consecutive trading days. (c) 50% of the award will vest on the later of (i) the twenty-four-month anniversary of the grant and (ii) the date on which the average closing price of the Company's Common Stock on Nasdaq is at least $4.76 for 30 consecutive trading days. The Company used the binomial model to estimate the compensation cost for the June 2017 Grant. Key assumptions used in calculating the total estimated compensation cost of $1,334,000 included (i) an estimated term of 5.6 years, (ii) expected volatility of 95.54%, (iii) expected dividends of $0.00 and (iv) a risk-free return of 1.80%. Stock-based compensation expense related to the June 2017 Grant will be recognized ratably over the requisite service period of 5.6 years and amounted to $52,000 and $104,000 for the three and six months ended June 30, 2018. The per-share weighted-average grant date fair value of the options granted to employees during the six months ended June 30, 2018 was estimated at $0.50 per share on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: Six months ended June 30, 2018 Risk-free interest rate 2.79 % Expected term of options (in years) 5.83 Expected volatility 80.60 % Dividend yield — The weighted-average valuation assumptions were determined as follows: · Risk-free interest rate: The Company based 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: The Company estimated the expected life of its employee stock options using the “simplified” method, as prescribed in Staff Accounting Bulletin (“SAB”) No. 107, “ Share Based Payments ”, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to its lack of sufficient historical data. · Expected stock price volatility: The Company estimated the expected volatility based on its actual historical volatility of the Company’s stock price. The Company calculated the historical volatility by using daily closing prices over a period of the expected term of the associated award. A decrease in the expected volatility would have decreased 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 0.0%. As of June 30, 2018, there was $6.0 million of total unrecognized stock-based compensation expense, related to unvested options granted under the 2013 Plan and the Inducement Plan, which will be recognized over the weighted-average remaining period of 2.22 years. Restricted Stock A summary of the status of the Company’s restricted stock awards and restricted stock units at June 30, 2018 and of changes in restricted stock awards and restricted stock units outstanding under the 2013 Plan for the six months ended June 30, 2018 is as follows: Weighted-average Number of Grant Date Fair Shares Value per Share Unvested at December 31, 2017 25,047 $ 7.07 Granted 2,100,000 $ 0.55 Forfeited — $ — Vested restricted stock awards (4,552) $ 7.07 Unvested at June 30, 2018 2,120,495 $ 0.62 For restricted stock awards and restricted stock units that vest subject to the satisfaction of service requirements, stock-based compensation expense is measured based on the fair value of the award on the date of grant and is recognized as expense on a straight-line basis over the requisite service period. All of the restricted stock awards and restricted stock units reflected above vest based on performance conditions or over time as stipulated in the individual award agreements. In the event of a change in control, the unvested awards will be accelerated and fully vested immediately prior to the change in control. As of June 30, 2018, there was $1.1 million of total unrecognized stock-based compensation expense, related to restricted stock awards and restricted stock units under the 2013 Plan, which will be recognized over the weighted-average remaining period of 1.05 years. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies Legal Proceedings On January 27, 2017 and February 10, 2017, respectively, two putative securities class actions were filed in the U.S. District Court for the Eastern District of Pennsylvania that named as defendants Egalet Corporation and current officers Robert S. Radie and Stanley J. Musial, and former officer Jeffrey M. Dayno (the “Officer Defendants” and together with Egalet Corporation, the “Defendants”). These two complaints, captioned Mineff v. Egalet Corp. et al., No. 2:17-cv-00390-MMB and Klein v. Egalet Corp. et al., No. 2:17-cv-00617-MMB, assert securities fraud claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) on behalf of putative classes of persons who purchased or otherwise acquired Egalet Corporation securities between December 15, 2015 and January 9, 2017. On May 1, 2017, the Court entered an order consolidating the two cases (the “Securities Class Action Litigation”) before it, appointing the Egalet Investor Group (consisting of Joseph Spizzirri, Abdul Rahiman and Kyle Kobold) as lead plaintiff and approving their selection of lead and liaison counsel. On July 3, 2017, the plaintiffs filed their consolidated amended complaint, which named the same Defendants and also asserts claims for purported violations of Sections 10(b) and 20(a) of the Exchange Act. Plaintiffs brought their claims individually and on behalf of a putative class of all persons who purchased or otherwise acquired shares of the Company between November 4, 2015 and January 9, 2017 inclusive. The consolidated amended complaint based its claims on allegedly false and/or misleading statements and/or failures to disclose information about the likelihood that ARYMO ER would be approved for intranasal abuse-deterrent labeling. The Defendants moved to dismiss the consolidated amended complaint on September 1, 2017 (the “Motion to Dismiss”), the plaintiffs filed their opposition on October 31, 2017, and the Defendants filed their reply on December 8, 2017. The Court heard oral arguments on the Motion to Dismiss on February 20, 2018, and entered an order pursuant to which the plaintiffs filed a motion for leave to file a second amended complaint on March 6, 2018. The Defendants responded on March 20, 2018 and the plaintiffs filed their reply on March 27, 2018. The Court heard oral arguments on the plaintiffs’ motion for leave to file a second amended complaint on July 12, 2018. On August 2, 2018, the Court granted the Defendants’ Motion to Dismiss and dismissed the Securities Class Action Litigation with prejudice. Plaintiffs have 30 days to appeal the decision or 28 days to move under Rule 59 for reconsideration. On March 15, 2018, a lawsuit was filed by the State of Arkansas and multiple local governments in Arkansas in the Circuit Court of Crittenden County, Arkansas, against the Company and other pharmaceutical manufacturers, distributors and retailers, and physicians. The action alleges a variety of claims related to opioid marketing and distribution practices, including false advertising, deceptive trade practices, public nuisance, unjust enrichment, violations of state narcotics statutes and civil conspiracy. The suit seeks monetary penalties. The Company was served with the lawsuit on April 30, 2018 and filed its answer on May 30, 2018. The Company disputes the allegations in the lawsuit and intends to defend this action vigorously. The Company cannot determine the likelihood of, nor can it reasonably estimate the range of, any potential loss, if any, from this lawsuit. On April 4, 2018, Egalet US, Inc. and Egalet Ltd., subsidiaries of the Company, filed a patent infringement lawsuit in the U.S. District Court for the District of Delaware against Teva Pharmaceuticals USA, Inc. (“Teva”). The lawsuit was filed under the Hatch-Waxman Act for Teva’s infringement of one of the Company’s patents for ARYMO ER listed in the Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book— U.S. Patent No. 9,044,402. The lawsuit was filed in response to a paragraph IV certification that the Company received from Teva on February 23, 2018, stating that Teva had submitted an Abbreviated New Drug Application (“ANDA”) to the U.S. Food and Drug Administration (“FDA”) for a generic version of ARYMO ER. Teva’s paragraph IV certification alleges that this U.S. patent is invalid and/or will not be infringed by Teva’s proposed product. This patent for ARYMO ER was granted following review by the U.S. Patent and Trademark Office, is presumed to be valid under governing law, and can only be invalidated in federal court with clear and convincing evidence. Under the Hatch-Waxman Act, the Company was permitted to file suit within 45 days from its receipt of the paragraph IV certification and thereby automatically stay or bar the FDA from approving Teva’s ANDA for 30 months or until a district court decision that is adverse to the asserted patent, whichever is earlier. On May 29, 2018, Teva filed its answer to the Company’s complaint and alleged certain counterclaims. The Company intends to vigorously enforce its intellectual property rights relating to ARYMO ER. Halo Manufacturing Agreement In February 2017, the Company entered into a Drug Product Manufacturing Services Agreement (the “Manufacturing Agreement”) with Halo Pharmaceutical, Inc. (“Halo”) pursuant to which the Company engaged Halo to provide certain services related to the manufacture and supply of ARYMO ER tablets for commercial use in the United States. The Company is obligated to purchase all its requirements for ARYMO ER from Halo through 2019, and seventy-five percent of its requirements thereafter, subject to certain limited exceptions. The Company is obligated to purchase ARYMO ER pursuant to binding purchase orders at a fixed price based on dosage strength, with specified percentage rebates for annual volumes of product ordered over a specified amount. In addition, the Company has agreed to purchase certain minimum amounts of manufacturing and additional services per calendar quarter from Halo over the term of the Agreement (the “Quarterly Minimum”). If the Company fails to meet the Quarterly Minimum, it will be required to pay to Halo the resulting shortfall. Total commitments to Halo are $3.6 million and $3.6 million in 2018 and 2019, respectively and $7.2 million thereafter. |
Acquisitions and License and Co
Acquisitions and License and Collaboration Agreements | 6 Months Ended |
Jun. 30, 2018 | |
Acquisitions and License and Collaboration Agreements | |
Acquisitions and License and Collaboration Agreements | 13. Acquisitions and License and Collaboration Agreements Collaboration and License Agreement with Acura In January 2015, the Company entered into the OXAYDO License Agreement with Acura to commercialize OXAYDO tablets containing Acura’s Aversion Technology. OXAYDO (formerly known as Oxecta®) is currently approved by the FDA for marketing in the U.S. in 5 mg and 7.5 mg strengths, but was not actively marketed at the time of the OXAYDO License Agreement. Under the terms of the OXAYDO License Agreement, Acura transferred the approved New Drug Application (“NDA”) for OXAYDO to the Company and the Company was granted an exclusive license under Acura’s intellectual property rights for development and commercialization of OXAYDO worldwide in all strengths. The Company paid Acura an upfront payment of $5.0 million in January 2015 and a $2.5 million milestone payment in October 2015 as a result of the first commercial sale of OXAYDO. In addition, Acura will be entitled to a one-time $12.5 million milestone payment when OXAYDO net sales reach a level of $150.0 million in a calendar year. The Company has recorded a product rights intangible asset of $7.7 million related to the arrangement, which includes $172,000 of transaction costs related to the License Agreement. The intangible asset is being amortized over a useful life of 7 years, which coincides with the patent protection of the product in the U.S. In addition, Acura receives from the Company, a tiered royalty percentage based on sales thresholds. Based on the Company’s current level of net sales, the royalty percentage payable to Acura is in the mid-single digits; however, the percentage may increase in future years in the event we achieve the higher sales thresholds set forth in the License Agreement. In addition, in any calendar year in which net sales exceed a specified threshold, Acura is entitled receive a double-digit royalty on all OXAYDO net sales in that year. The Company’s royalty payment obligations commence on the first commercial sale of OXAYDO and expire, on a country-by-country basis, upon the expiration of the last to expire valid patent claim covering OXAYDO in such country (or if there are no patent claims in such country, then upon the expiration of the last valid claim in the U.S.). Royalties will be reduced upon the entry of generic equivalents, as well for payments required to be made by the Company to acquire intellectual property rights to commercialize OXAYDO, with an aggregate minimum floor. The term of the Acura license agreement expires, in its entirety, upon the final expiration of any such patent claim in any country. OXAYDO is currently sold in the United States and is covered by six U.S. patents that expire between 2023 and 2025. Patents covering OXAYDO in foreign jurisdictions expire in 2024. Either the Company or Acura may terminate the license agreement for certain customary reasons, including cause, insolvency or patent challenge. The Company may terminate the license agreement upon 90 days prior written notice. Purchase Agreement with Luitpold In January 2015, the Company entered into and consummated the transactions contemplated by the SPRIX Nasal Spray Purchase Agreement with Luitpold (the “SPRIX Purchase Agreement”). Pursuant to the SPRIX Purchase Agreement, the Company acquired specified assets and liabilities associated with SPRIX Nasal Spray for a purchase price of $7.0 million. The Company concurrently purchased an additional $1.1 million of glassware, equipment and active pharmaceutical ingredient (“API”) from Luitpold and agreed to purchase an additional $340,000 of API after closing. Under the purchase agreement with Luitpold pursuant to which the Company acquired certain assets and liabilities associated with SPRIX Nasal Spray, the Company was assigned an exclusive license with Recordati Ireland Ltd. (“Recordati”) for intranasal formulations of ketorolac tromethamine (the “Licensed Product”), the active ingredient in SPRIX Nasal Spray. The Company was required to pay a fixed, single-digit royalty to Recordati on net sales of the Licensed Product. The exclusive term of the license agreement expires, on a country-by-country basis, on the later of the final expiration of any patent right in such country that contains a valid claim covering the Licensed Product, or ten years from the date of the first commercial sale of the Licensed Product in such country, and thereafter the Company will retain a non-exclusive, perpetual license in such country. In addition, during the exclusivity period with respect to the United States, Canada and Latin America, the royalty payable to Recordati is decreased if no patent containing a valid claim is in force in the country at the time of sale. SPRIX Nasal Spray is currently sold in the United States and is covered by a patent that expires in December 2018 and the first commercial sale of SPRIX Nasal Spray in the United States occurred in May 2011. The Company accounted for the arrangement as a business combination. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Taxes | |
Income Taxes | 14. Income Taxes In accordance with ASC Topic No. 270 “Interim Reporting” and ASC Topic No. 740 “Income Taxes” (Topic No. 740) at the end of each interim period, the Company is required to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the three and six months ended June 30 , 2017 and 2018, the Company had no tax provision since it had a full valuation allowance for federal, foreign and state purposes. The Company recorded a deferred tax liability of $61,000 and $981,000, with an offsetting decrease to additional paid in capital during the three and six months ended June 30 , 2018, respectively, due to the state tax impact of the embedded conversion liability derivative being reclassified as an equity instrument during the three and six months ended June 30 , 2018. Refer to Note 8 – Stockholders Equity for further details. The Company had no deferred tax liability for the three and six months ended June 30 , 2017. The Company maintains a full valuation against all net deferred tax assets for federal and foreign purposes as management has determined that it is not more likely than not that the Company will realize these future tax benefits. The Tax Cuts and Jobs Act (the "Tax Act"), enacted on December 22, 2017, became effective January 1, 2018. The Tax Act had significant changes to U.S. tax law, lowering U.S. corporate income tax rates, implementing a territorial tax system, imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries and modified the taxation of other income and expense items. Due to the valuation allowance on the Company’s deferred tax assets, these provisions do not have any material impact on the Company. The Tax Act contains additional international provisions which may impact the Company prospectively, including the tax on Global Intangible Low-Taxed Income. The Company does not believe the impact will be material given the historical losses in its international subsidiary and projected future losses. Upon further analyses of certain aspects of the Tax Act and refinement of the Company’s calculations during the three and six months ended June 30, 2018, the Company determined that an adjustment to the provisional amount is not necessary at this time. The Company will continue to monitor for future updates to guidance or interpretations issued from the Internal Revenue Service. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events. | |
Subsequent Events | 15. Subsequent Events On July 9, 2018, the Company received notice from Nasdaq that the Nasdaq Hearings Panel has approved the transfer of the listing of the Company’s Common Stock from The Nasdaq Global Market to The Nasdaq Capital Market effective at the open of business on July 11, 2018 (the “Transfer”). The continued listing on The Nasdaq Capital Market is subject to (i) the fulfillment of certain conditions and milestones and (ii) the Company’s evidencing a market value of the Company’s Common Stock of over $35.0 million for at least 10 consecutive trading days not later than November 20, 2018. The Company is working to meet such conditions and milestones and to demonstrate compliance with the requirements for continued listing on The Nasdaq Capital Market. Under the 5.50% Notes Indenture, the Company’s Common Stock ceasing to be listed on the Nasdaq Global Market as a result of the Transfer constituted a “Fundamental Change.” In accordance with the Indenture, on July 31, 2018, the Company delivered to the holders of the 5.50% Notes, with $24.7 million of principal currently outstanding, a Fundamental Change Company Notice, Make-Whole Fundamental Change notice and Offer to Repurchase “the “Fundamental Change Company Notice”) pursuant to which, as a result of the Transfer and pursuant to the terms of the 5.50% Notes Indenture, the Company offered to repurchase, at the option of each holder, all 5.50% Notes that are validly tendered for repurchase, and not properly withdrawn, at any time prior to 5:00pm New York City time, on September 18, 2018 (the “Expiration Time”), which is the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date. Pursuant to Section 15.02(a) of the 5.50% Notes Indenture, the Fundamental Change Repurchase Date must be a date not less than 20 nor more than 35 business days after the date of the Fundament Change Company Notice. Accordingly, the Fundamental Change Repurchase Date is scheduled for September 19, 2018. Pursuant to the terms of the 5.50% Notes Indenture, the Company is obligated, on the Fundamental Change Repurchase Date, to pay the Fundamental Change Repurchase Price, payable in cash, equal to 100% of the principal amount of the 5.50% Notes being repurchased. As the Fundamental Change Repurchase Date falls after the next Regular Record Date (as defined in the 5.50% Notes Indenture) of September 15, 2018 but prior to the next Interest Payment Date (as defined in the 5.50% Notes Indenture) to which such Regular Record Date relates of October 1, 2018, the Company is obligated to pay the full amount of accrued and unpaid interest to 5.50% Note holders of record as of such Regular Record Date on such Interest Payment Date in accordance with the 5.50% Notes Indenture. As of June 30, 2018, the Company had cash and cash equivalents, restricted cash and marketable securities of $70.4 million. On August 2, 2018, the Court in the Company’s Securities Class Action Litigation granted the Company’s and Officer Defendants’ Motion to Dismiss and dismissed the Securities Class Action Litigation with prejudice. Plaintiffs have 30 days to appeal the Court’s decision or 28 days to move under Rule 59 for reconsideration. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies and Basis of Accounting (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies and Basis of Accounting | |
Basis of Accounting | Basis of Presentation The unaudited consolidated financial statements are prepared in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information. Certain information and footnotes normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q. The Company’s consolidation policy requires the consolidation of entities where a controlling financial interest is held. All intercompany balances and transactions have been eliminated in consolidation. The accompanying consolidated financial information at June 30, 2018 and the three and six months ended June 30, 2017 and 2018 is unaudited. The interim unaudited financial statements have been prepared on the same basis as the annual audited financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s consolidated financial position as of June 30, 2018, the consolidated results of its operations and comprehensive loss for the three and six months ended June 30, 2017 and 2018, and consolidated cash flows for the six months ended June 30, 2017 and 2018. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2017 and 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018, any other interim periods or any future year or period. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2017 filed on March 16, 2018 with the SEC. The Company’s significant accounting policies are described in Note 2 of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies, except as described in Note 3 – Revenue from contracts with customers. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows: Restricted Cash. The new standard requires changes in restricted cash during the period to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Company’s statement of cash flows. If cash, cash equivalents and restricted cash are presented in more than one line on the Company’s consolidated balance sheets, the new guidance requires a reconciliation of the total in the statement of cash flows to the related captions in the Company’s consolidated balance sheet. ASU 2016-18 was effective for annual and interim periods beginning after December 15, 2017 with early adoption permitted. The amendments in this ASU increased the beginning and ending cash balances in the Company’s statement of cash flows. . The Company has adopted the standard in the first quarter of 2018. The adoption had no material impact on the Company’s consolidated statements of cash flows and had no impact on the Company’s consolidated balances sheet or statement of operations. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either financing or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company has defined a process to meet the accounting and reporting requirements of the guidance and is assessing lease arrangements in order to determine the impact ASU 842 adoption will have on the financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities , which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 was effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The Company has adopted the standard in the first quarter of 2018 and determined there to be no material impact of the adoption in the three and six months ended June 30, 2018. In May 2014, the FASB issued new guidance related to revenue recognition, ASU 2014-09, Revenue from Contracts with Customers , which outlines a comprehensive revenue recognition model and supersedes most current revenue recognition guidance. The new guidance requires an entity to recognize revenue upon transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. ASU 2014-09 defines a five-step approach for recognizing revenue, which may require an entity to use more judgment and make more estimates than under the current guidance. The new guidance became effective in calendar year 2018. Two methods of adoption are permitted: (a) full retrospective adoption, meaning the standard is applied to all periods presented; or (b) modified retrospective adoption, meaning the cumulative effect of applying the new guidance is recognized at the date of initial application as an adjustment to the opening retained earnings balance. In March 2016, April 2016 and December 2016, the FASB issued ASU No. 2016-08, Revenue From Contracts with Customers : Principal Versus Agent Considerations , ASU No. 2016-10, Revenue From Contracts with Customers : Identifying Performance Obligations and Licensing , and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue From Contracts with Customers , respectively, which further clarify the implementation guidance on principal versus agent considerations contained in ASU No. 2014-09. In May 2016, the FASB issued ASU 2016-12 Revenue from Contracts with Customers , narrow-scope improvements and practical expedients which provides clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for non-cash consideration and completed contracts at transition (collectively “ASC 606”). These standards are effective for the Company beginning in the first quarter of 2018. The Company formed a task force that analyzed the Company’s customer contracts and the impacts the standard had on previously reported revenues and future revenues. Under ASC 606, the Company recognizes net product sales at the time it ships its products to its customers (primarily wholesalers and specialty pharmacies), rather than its historic policy of recognizing net product sales when prescriptions are dispensed to patients. As a result, the Company now recognizes net product sales under such contracts earlier under ASC 606 than it would have recognized under the historic guidance. The Company adopted the new standard effective January 1, 2018 using the modified retrospective approach. Refer to Note 3 — Revenue From Contracts with Customers for further details. |
Revenue from Contract with Cu23
Revenue from Contract with Customers(Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customers | |
Schedule of financial statement impact of adopting ASU 606 | December 31, 2017 Adjustments due to ASU 2014-09 January 1, 2018 Accounts receivable 4,120 (371) 3,749 Inventory 3,225 (157) 3,068 Accrued expenses 16,104 5,028 21,132 Deferred revenue 7,456 (7,456) - Accumulated deficit (295,300) 1,900 (293,400) |
Schedule of disaggregation of revenue | (in thousands) Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 Product lines SPRIX Nasal Spray $ 5,404 $ 10,218 OXAYDO 1,688 2,948 ARYMO ER 351 538 Total $ 7,443 $ 13,704 |
Schedule of net product sales allowance and reserve | (in thousands) Fees and distribution costs Co-pay assistance Rebates Returns Total Balances at December 31, 2017 $ 595 $ 3,644 $ 579 $ — $ 4,818 Adjustment for ASU 2014-09 — 4,221 656 — 4,877 Allowances for current period sales 4,052 36,335 3,908 510 44,805 Adjustment related to prior period sales — — 180 — 180 Credits or payments made for prior period sales (555) (7,840) (1,214) — (9,609) Credits or payments made for current period sales (3,463) (22,965) (1,633) (394) (28,455) Balance at June 30, 2018 $ 629 $ 13,395 $ 2,476 $ 116 $ 16,616 Total gross product sales $ 58,690 Total provision for product sales allowances and accruals as a percentage of total gross sales |
Impact of new revenue guidance on financial statement line items | Adjustments Due to Pro Forma if the previous As reported ASU 2014-09 accounting was in effect Accounts receivable 9,083 371 9,454 Inventory 3,183 423 3,606 Accrued expenses 27,949 (9,850) 18,099 Deferred revenue - 14,022 14,022 Accumulated deficit (317,715) (3,372) (321,087) |
Schedule of disclosure of reported consolidated statement of operations for the period to the pro-forma amounts had the previous guidance been in effect | Adjustments Due to Three Months Ended As reported ASU 2014-09 June 30, 2018 Revenues Net product sales $ 7,443 $ (391) $ 7,052 Cost of sales (excluding amortization of product rights) 1,565 (144) 1,421 Net loss $ (11,963) $ (247) $ (12,210) Per share information: Net loss per share of common stock, basic and diluted $ (0.22) $ (0.01) $ (0.23) Weighted-average shares outstanding, basic and diluted 53,302,399 53,302,399 53,302,399 Adjustments Due to Six Months Ended As reported ASU 2014-09 June 30, 2018 Revenues Net product sales $ 13,704 $ (1,867) $ 11,837 Cost of sales (excluding amortization of product rights) 3,780 (395) 3,385 Net loss $ (24,316) $ (1,472) $ (25,788) Per share information: Net loss per share of common stock, basic and diluted $ (0.48) $ (0.03) $ (0.51) Weighted-average shares outstanding, basic and diluted 50,302,419 50,302,419 50,302,419 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments | |
Schedule of marketable securities | Marketable securities consisted of the following at December 31, 2017: (in thousands) Cost Basis Unrealized Gains Unrealized Losses Fair Value Corporate notes and bonds $ 60,000 $ — $ (47) $ 59,953 Total $ 60,000 $ — $ (47) $ 59,953 Marketable securities consisted of the following as of June 30, 2018: (in thousands) Cost Basis Unrealized Gains Unrealized Losses Fair Value Corporate notes and bonds $ 32,195 $ — $ (17) $ 32,178 Total $ 32,195 $ — $ (17) $ 32,178 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory | |
Schedule of components of inventory | December 31, June 30, (in thousands) 2017 2018 Raw materials $ 850 $ 841 Work in process 772 863 Finished goods 1,446 1,479 Deferred cost of sales 157 — Total $ 3,225 $ 3,183 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Intangible Assets | |
Schedule of indefinite-lived intangible assets | Gross Net Remaining Useful Intangible Accumulated Intangible Life (in thousands) Assets Amortization Assets (in years) OXAYDO product rights $ 7,695 $ (3,273) $ 4,422 4.00 SPRIX Nasal Spray product rights 4,978 (2,964) 2,014 2.00 IP R&D 183 (36) 147 4.00 Total $ 12,856 $ (6,273) $ 6,583 The following represents the balance of the intangible assets at June 30, 2018: Gross Net Remaining Useful Intangible Accumulated Intangible Life (in thousands) Assets Amortization Assets (in years) OXAYDO product rights $ 7,653 $ (3,801) $ 3,852 3.60 SPRIX Nasal Spray product rights 4,891 (3,401) 1,490 1.60 IP R&D 177 (53) 124 3.50 Total $ 12,721 $ (7,255) $ 5,466 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
5.50% Notes | |
Summary of debt reflected in the balance sheet | December 31, 2017 June 30, 2018 (in thousands) Principal $ 24,650 $ 24,650 Unamortized debt discount (4,222) (3,404) Carrying value $ 20,428 $ 21,246 |
6.50% Notes | |
Summary of debt reflected in the balance sheet | December 31, 2017 June 30, 2018 (in thousands) Principal $ 23,888 $ 23,888 Unamortized debt discount (20,919) (20,834) Carrying value $ 2,969 $ 3,054 |
13% Notes | |
Summary of debt reflected in the balance sheet | December 31, 2017 June 30, 2018 (in thousands) Gross proceeds $ 80,000 $ 80,000 Unamortized debt discount (7,572) (6,981) Carrying value $ 72,428 $ 73,019 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Measurements | |
Schedule of information about each major category of financial assets and liabilities measured at fair value on a recurring basis | (in thousands) Fair Value Measurements as of December 31, 2017 Level 1 Level 2 Level 3 Total Assets Cash equivalents (money market funds) $ 16,973 $ — $ — $ 16,973 Marketable securities, available-for-sale — 59,953 — 59,953 Total assets $ 16,973 $ 59,953 $ — $ 76,926 Liabilities Interest make-whole derivatives $ — $ — $ 2,589 $ 2,589 Conversion feature, 6.50% Notes — — 14,034 14,034 Warrant liability — — 8,166 8,166 Total liabilities $ — $ — $ 24,789 $ 24,789 (in thousands) Fair Value Measurements as of June 30, 2018 Level 1 Level 2 Level 3 Total Assets Cash equivalents (money market funds and commercial paper) $ 30,248 $ — $ — $ 30,248 Marketable securities, available-for-sale — 32,178 — 32,178 Total assets $ 30,248 $ 32,178 $ — $ 62,426 Liabilities Interest make-whole derivatives $ — $ — $ 1,153 $ 1,153 Warrant liability — — 2,833 2,833 Total liabilities $ — $ — $ 3,986 $ 3,986 |
Summary of changes in the fair value of Level 3 liabilities | (in thousands) Reclassification Fair Value December 31, to Additional Change in June 30, 2017 Additions Paid in Capital 2018 2018 Interest make-whole derivatives 2,589 $ — $ $ (1,436) $ 1,153 Conversion feature, 6.50% Notes 14,034 — (12,497) (1,537) — Warrant liability 8,166 — (5,333) 2,833 Total liabilities $ 24,789 $ — $ (12,497) $ (8,306) $ 3,986 |
Schedule of fair value and carrying value of convertible debt | The fair value and carrying value of the Company’s 5.50% Notes and 6.50% Notes at December 31, 2017 was as follows: (in thousands) Fair Value Carrying Value Face Value 5.50% Notes due 2020 $ 11,699 $ 20,428 $ 24,650 6.50% Notes due 2024 $ 4,643 $ 2,969 $ 23,888 The fair value and carrying value of the Company’s 5.50% Notes and 6.50% Notes at June 30, 2018 was as follows: (in thousands) Fair Value Carrying Value Face Value 5.50% Notes due 2020 $ 8,627 $ 21,246 $ 24,650 6.50% Notes due 2024 $ 2,182 $ 3,054 $ 23,888 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Net Loss Per Common Share | |
Schedule of computation of basic and diluted net loss per share | (in thousands, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Basic and diluted net loss per common share calculation: Net loss $ (26,479) $ (11,963) $ (51,852) $ (24,316) Weighted average common stock outstanding 25,542,733 53,302,399 25,145,440 50,302,419 Net loss per share of common stock—basic and diluted $ (1.04) $ (0.22) $ (2.06) $ (0.48) |
Schedule of outstanding securities excluded from the computation of diluted weighted shares outstanding | Three and six months ended June 30, 2017 2018 Stock options outstanding 4,788,917 4,640,696 Unvested restricted stock awards 72,448 2,120,495 Common shares issuable upon conversion of the 5.50% Notes 4,102,360 1,657,757 Common shares issuable upon conversion of the 6.50% Notes — 17,907,047 Common shares issuable upon exercise of warrants — 17,666,667 Total 8,963,725 43,992,662 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stock-Based Compensation | |
Schedule of shares available for future grant | Shares initially reserved under the 2013 Plan 1,680,000 Shares reserved under the Inducement Plan 300,000 Shares reserved under the Purchase Plan 750,000 Authorized increase to the 2013 Plan 10,600,000 Common stock options granted under the 2013 Plan (6,127,188) Common stock options granted under the Inducement Plan (212,500) Restricted stock awards granted under the 2013 Plan (3,043,660) Restricted stock units granted under the 2013 Plan (600,000) Common stock issued under the Purchase Plan (146,314) Stock options and restricted stock awards forfeited 1,724,615 Remaining shares available for future grant 4,924,953 |
Schedule of stock-based compensation expense recognized | Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2017 2018 2017 2018 General and administrative $ 1,265 $ 912 $ 2,621 $ 1,734 Sales and marketing 144 37 303 103 Research and development 159 53 438 117 Total stock based compensation expense $ 1,568 $ 1,002 $ 3,362 $ 1,954 |
Schedule of stock options outstanding under the 2013 stock-based incentive plan | Stock Options Outstanding Weighted-average Remaining Number of Weighted-Average Contractual Shares Exercise Price Term (in years) Outstanding at December 31, 2017 4,110,612 $ Granted 936,250 Exercised — — Forfeited (229,585) Cancelled (176,581) Outstanding at June 30, 2018 4,640,696 $ 8.31 Vested or expected to vest at June 30, 2018 4,640,696 $ 8.31 Exercisable at June 30, 2018 1,988,964 $ 7.57 |
Schedule of weighted-average assumptions | Six months ended June 30, 2018 Risk-free interest rate 2.79 % Expected term of options (in years) 5.83 Expected volatility 80.60 % Dividend yield — |
Summary of status and change in restricted stock awards | Weighted-average Number of Grant Date Fair Shares Value per Share Unvested at December 31, 2017 25,047 $ 7.07 Granted 2,100,000 $ 0.55 Forfeited — $ — Vested restricted stock awards (4,552) $ 7.07 Unvested at June 30, 2018 2,120,495 $ 0.62 |
Organization and Description 31
Organization and Description of the Business (Details) $ in Thousands | Jul. 09, 2018USD ($) | Jul. 31, 2018USD ($) | Jun. 30, 2018USD ($)product | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) |
Liquidity [Abstract] | |||||
Number of Products | product | 3 | ||||
Accumulated deficit | $ (317,715) | $ (293,400) | $ (295,300) | ||
Comon Stock to be continued listing on The Nasdaq Capital Market | Subsequent Events | Minimum | |||||
Liquidity [Abstract] | |||||
Standard market value as per listing rule | $ 35,000 | ||||
Minimum consecutive trading days before a certain date required in which the market value has to maintain at the standard | 10 days | ||||
5.50% Notes | |||||
Liquidity [Abstract] | |||||
Interest rate (as a percent) | 5.50% | ||||
Convertible debt outstanding | $ 24,700 | ||||
5.50% Notes | Subsequent Events | |||||
Liquidity [Abstract] | |||||
Convertible debt outstanding | $ 24,700 | ||||
5.50% Notes | Comon Stock to be continued listing on The Nasdaq Capital Market | |||||
Liquidity [Abstract] | |||||
Interest rate (as a percent) | 5.50% | ||||
Convertible debt outstanding | $ 24,700 | ||||
5.50% Notes | Comon Stock to be continued listing on The Nasdaq Capital Market | Subsequent Events | |||||
Liquidity [Abstract] | |||||
Interest rate (as a percent) | 5.50% | ||||
6.50% Notes | |||||
Liquidity [Abstract] | |||||
Interest rate (as a percent) | 6.50% | 6.50% | |||
6.50% Notes | Not in compliance with Nasdaq's Listing Rule 5450(b)(2)(A) | |||||
Liquidity [Abstract] | |||||
Interest rate (as a percent) | 6.50% | ||||
Convertible debt outstanding | $ 23,900 | ||||
13% Notes | |||||
Liquidity [Abstract] | |||||
Interest rate (as a percent) | 13.00% |
Revenue from Contract with Cu32
Revenue from Contract with Customers (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable | $ 9,083 | $ 3,749 | $ 4,120 |
Inventory | 3,183 | 3,068 | 3,225 |
Accrued expenses | 27,949 | 21,132 | 16,104 |
Deferred revenue | 0 | 0 | 7,456 |
Accumulated deficit | (317,715) | $ (293,400) | (295,300) |
ASU 2014-09 | Adjustments | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable | 371 | (371) | |
Inventory | 423 | (157) | |
Accrued expenses | (9,850) | 5,028 | |
Deferred revenue | 14,022 | (7,456) | |
Accumulated deficit | $ (3,372) | $ 1,900 |
Revenue from Contract with Cu33
Revenue from Contract with Customers - Disaggregation of Revenue (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | ||
Total | $ 7,443 | $ 13,704 |
Cash discounts | 2 | |
Period in which payments for invoices are due | 30 days | |
SPRIX Nasal Spray | ||
Disaggregation of Revenue [Line Items] | ||
Total | 5,404 | $ 10,218 |
OXAYDO tablets | ||
Disaggregation of Revenue [Line Items] | ||
Total | 1,688 | 2,948 |
ARYMO ER | ||
Disaggregation of Revenue [Line Items] | ||
Total | $ 351 | $ 538 |
Revenue from Contract with Cu34
Revenue from Contract with Customers - Reserves for Variable Consideration (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |
Balances at beginning of period | $ 4,818 |
Allowances for current period sales | 44,805 |
Adjustments | 180 |
Credits or payments made for current period sales | (28,455) |
Credits or payments mad for prior period sales | (9,609) |
Balances at end of period | 16,616 |
Total gross product sales | $ 58,690 |
Total provision for product sales allowances and accruals as a percentage of total gross sales | 76 |
Fees and distribution costs | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |
Balances at beginning of period | $ 595 |
Allowances for current period sales | 4,052 |
Credits or payments made for current period sales | (3,463) |
Credits or payments mad for prior period sales | (555) |
Balances at end of period | 629 |
Co-pay assistance | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |
Balances at beginning of period | 3,644 |
Allowances for current period sales | 36,335 |
Credits or payments made for current period sales | (22,965) |
Credits or payments mad for prior period sales | (7,840) |
Balances at end of period | 13,395 |
Rebates | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |
Balances at beginning of period | 579 |
Allowances for current period sales | 3,908 |
Adjustments | 180 |
Credits or payments made for current period sales | (1,633) |
Credits or payments mad for prior period sales | (1,214) |
Balances at end of period | 2,476 |
Returns | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |
Allowances for current period sales | 510 |
Credits or payments made for current period sales | (394) |
Balances at end of period | 116 |
ASU 2014-09 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |
Adjustments | 4,877 |
ASU 2014-09 | Co-pay assistance | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |
Adjustments | 4,221 |
ASU 2014-09 | Rebates | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |
Adjustments | $ 656 |
Revenue from Contract with Cu35
Revenue from Contract with Customers - Impact of New Revenue Guidance on Financial Statement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Accounts receivable | $ 9,083 | $ 9,083 | $ 3,749 | $ 4,120 | ||
Inventory | 3,183 | 3,183 | 3,068 | 3,225 | ||
Accrued expenses | 27,949 | 27,949 | 21,132 | 16,104 | ||
Deferred revenue | 0 | 0 | 0 | 7,456 | ||
Accumulated deficit | (317,715) | (317,715) | $ (293,400) | (295,300) | ||
Revenues [Abstract] | ||||||
Net product sales | 7,443 | 13,704 | ||||
Net loss | $ (11,963) | $ (26,479) | $ (24,316) | $ (51,852) | ||
Net loss per share of common stock, basic and diluted (in dollars per share) | $ (0.22) | $ (1.04) | $ (0.48) | $ (2.06) | ||
Weighted-average shares outstanding, basic and diluted (in shares) | 53,302,399 | 25,542,733 | 50,302,419 | 25,145,440 | ||
Pro Forma if the previous accounting was in effect | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Accounts receivable | $ 9,454 | $ 9,454 | ||||
Inventory | 3,606 | 3,606 | ||||
Accrued expenses | 18,099 | 18,099 | ||||
Deferred revenue | 14,022 | 14,022 | ||||
Accumulated deficit | (321,087) | (321,087) | ||||
Revenues [Abstract] | ||||||
Net loss | $ (12,210) | $ (25,788) | ||||
Net loss per share of common stock, basic and diluted (in dollars per share) | $ (0.23) | $ (0.51) | ||||
Weighted-average shares outstanding, basic and diluted (in shares) | 53,302,399 | 50,302,419 | ||||
Product | ||||||
Revenues [Abstract] | ||||||
Net product sales | $ 7,443 | $ 13,704 | ||||
Cost of sales (excluding amortization of product rights) | 1,565 | $ 1,072 | 3,780 | $ 2,397 | ||
Product | Pro Forma if the previous accounting was in effect | ||||||
Revenues [Abstract] | ||||||
Net product sales | 7,052 | 11,837 | ||||
Cost of sales (excluding amortization of product rights) | 1,421 | 3,385 | ||||
ASU 2014-09 | Adjustments | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Accounts receivable | 371 | 371 | (371) | |||
Inventory | 423 | 423 | (157) | |||
Accrued expenses | (9,850) | (9,850) | 5,028 | |||
Deferred revenue | 14,022 | 14,022 | (7,456) | |||
Accumulated deficit | (3,372) | (3,372) | $ 1,900 | |||
Revenues [Abstract] | ||||||
Net loss | $ (247) | $ (1,472) | ||||
Net loss per share of common stock, basic and diluted (in dollars per share) | $ (0.01) | $ (0.03) | ||||
Weighted-average shares outstanding, basic and diluted (in shares) | 53,302,399 | 50,302,419 | ||||
ASU 2014-09 | Product | Adjustments | ||||||
Revenues [Abstract] | ||||||
Net product sales | $ (391) | $ (1,867) | ||||
Cost of sales (excluding amortization of product rights) | $ (144) | $ (395) |
Revenue from Contract with Cu36
Revenue from Contract with Customers - Transaction Price Allocated to Future Performance Obligations (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Costs to Obtain and Fulfill a Contract | |||
Practical expedient performance obligation | true | ||
Deferred revenue | $ 0 | $ 0 | $ 7,456 |
Contract assets | $ 0 | $ 0 |
Revenue from Contract with Cu37
Revenue from Contract with Customers - Costs to Obtain and Fulfill a Contract (Details) | 6 Months Ended |
Jun. 30, 2018 | |
Costs to Obtain and Fulfill a Contract | |
Practical expedient, incremental costs of obtaining contracts as an expense when incurred as the period of benefit is less than one year | true |
Investments (Details)
Investments (Details) | 6 Months Ended | |
Jun. 30, 2018USD ($)security | Dec. 31, 2017USD ($) | |
Marketable Securities | ||
Cost Basis | $ 32,195,000 | $ 60,000,000 |
Unrealized Losses | (17,000) | (47,000) |
Fair Value | 32,178,000 | 59,953,000 |
Fair value of marketable securities with a maturity of less than one year | 32,200,000 | |
Fair value of marketable securities with a maturity greater than one year | $ 0 | |
Number of marketable securities which were in a continuous loss position for less than one year | security | 16 | |
Number of marketable securities which were in a continuous loss position for greater than one year | security | 1 | |
Other than temporary impairment | $ 0 | |
Corporate notes and bonds | ||
Marketable Securities | ||
Cost Basis | 32,195,000 | 60,000,000 |
Unrealized Losses | (17,000) | (47,000) |
Fair Value | $ 32,178,000 | $ 59,953,000 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Inventory | |||
Raw materials | $ 841 | $ 850 | |
Work in process | 863 | 772 | |
Finished goods | 1,479 | 1,446 | |
Deferred cost of sales | 157 | ||
Total | $ 3,183 | $ 3,068 | $ 3,225 |
Intangible Assets - Balance of
Intangible Assets - Balance of Intangible Assets and Impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Finite-lived intangible assets | |||||
Accumulated Amortization | $ (7,255) | $ (7,255) | $ (6,273) | ||
Gross Intangible Assets | 12,721 | 12,721 | 12,856 | ||
Net Intangible Assets | 5,466 | 5,466 | 6,583 | ||
Impairment of intangible assets | 0 | $ 0 | 0 | $ 0 | |
OXAYDO product rights | |||||
Finite-lived intangible assets | |||||
Gross Intangible Assets | 7,653 | 7,653 | 7,695 | ||
Accumulated Amortization | (3,801) | (3,801) | (3,273) | ||
Net Intangible Assets | 3,852 | $ 3,852 | $ 4,422 | ||
Remaining Useful Life | 3 years 7 months 6 days | 4 years | |||
SPRIX Nasal Spray product rights | |||||
Finite-lived intangible assets | |||||
Gross Intangible Assets | 4,891 | $ 4,891 | $ 4,978 | ||
Accumulated Amortization | (3,401) | (3,401) | (2,964) | ||
Net Intangible Assets | 1,490 | $ 1,490 | $ 2,014 | ||
Remaining Useful Life | 1 year 7 months 6 days | 2 years | |||
IP R&D | |||||
Finite-lived intangible assets | |||||
Accumulated Amortization | (53) | $ (53) | $ (36) | ||
Remaining Useful Life | 3 years 6 months | 4 years | |||
Gross Intangible Assets | 177 | $ 177 | $ 183 | ||
Net Intangible Assets | $ 124 | $ 124 | $ 147 |
Intangible Assets - Collaborati
Intangible Assets - Collaboration and License Agreement, Purchase Agreement and IP R&D (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jan. 31, 2017 | Jan. 31, 2015 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Oct. 31, 2015 | |
OXAYDO tablets | Acura | Collaboration and License Agreement | |||||||
Collaboration and License Agreement with Acura | |||||||
Upfront payment paid | $ 5,000,000 | ||||||
Milestone payment payable | $ 2,500,000 | ||||||
Transaction costs | $ 172,000 | ||||||
Amortization expense | |||||||
Amortization expense | $ 274,000 | $ 270,000 | $ 550,000 | $ 539,000 | |||
Useful life of intangible asset | 7 years | ||||||
IP R&D | |||||||
Amortization expense | |||||||
Amortization expense | 9,000 | 17,000 | 18,000 | 17,000 | |||
Useful life of intangible asset | 5 years | ||||||
Luitpold | |||||||
Acquisition | |||||||
Purchase price | $ 7,000,000 | ||||||
Intangible asset | $ 4,600,000 | ||||||
SPRIX Nasal Spray product rights | Luitpold | |||||||
Amortization expense | |||||||
Amortization expense | $ 248,000 | $ 235,000 | $ 500,000 | $ 469,000 |
Debt (Details)
Debt (Details) | Jul. 09, 2018D | Aug. 31, 2016USD ($)item | Feb. 28, 2018shares | Dec. 31, 2017USD ($)$ / sharesshares | Jan. 31, 2017USD ($) | May 31, 2015USD ($)item$ / shares | Jun. 30, 2018USD ($)$ / sharesshares | Mar. 31, 2018USD ($) | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Jul. 31, 2018USD ($) | Jan. 31, 2018shares | Dec. 27, 2017USD ($) |
Long-term Debt | |||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Aggregate principal amount of debt issued | $ 23,888,000 | $ 23,888,000 | $ 23,888,000 | ||||||||||
Unamortized debt discount | (20,919,000) | (20,834,000) | (20,834,000) | ||||||||||
Carrying value | $ 2,969,000 | $ 3,054,000 | $ 3,054,000 | ||||||||||
Repurchase price (as a percent) | 101.00% | ||||||||||||
common stock shares authorized | shares | 75,000,000 | 275,000,000 | 275,000,000 | ||||||||||
Change In Fair Value Of Derivative Liability | $ 3,181,000 | $ 8,306,000 | $ 12,000 | ||||||||||
Current and non-current debt | Royalty rights agreements | |||||||||||||
Long-term Debt | |||||||||||||
Royalty rights obligations | $ 4,100,000 | $ 3,700,000 | $ 3,700,000 | ||||||||||
5.50% Notes | |||||||||||||
Long-term Debt | |||||||||||||
Interest rate (as a percent) | 5.50% | 5.50% | |||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||||||||||||
Convertible debt outstanding | $ 24,700,000 | $ 24,700,000 | |||||||||||
Aggregate principal amount of debt issued | 24,650,000 | $ 24,650,000 | $ 24,650,000 | ||||||||||
Initial conversion rate | 0.0672518 | ||||||||||||
Conversion price (in dollar per share) | $ / shares | $ 14.87 | ||||||||||||
Period after the last date of original issuance of the notes to apply conversion terms | 6 months | ||||||||||||
Principal amount denomination for conversion | $ 1,000 | ||||||||||||
Number of threshold trading days within the 30 consecutive trading days during which the conversion terms will apply | item | 20 | ||||||||||||
Number of consecutive trading days not later than November 20, 2018 | item | 30 | ||||||||||||
Number of trading days immediately preceding a conversion date within which the threshold consecutive trading days apply | 5 days | ||||||||||||
Discount rate used to calculate the present value of the remaining scheduled payments of interest for an interest make-whole payment (as a percent) | 2.00% | ||||||||||||
Percentage of stock value of the simple average of the daily volume weighted average price for the specified period used to calculate the interest make-whole payment (as a percent) | 95.00% | ||||||||||||
Period ending on and including the trading day immediately preceding the conversion date within which the simple average of the daily volume weighted average price is used to calculate the interest make-whole payment | 10 days | ||||||||||||
Fair value | $ 41,600,000 | ||||||||||||
Percentage price of original principal amount of debt at which debt has to be repurchased by the issuer as the request from the holder | 100.00% | 100.00% | |||||||||||
Interest make-whole derivative | 900,000 | ||||||||||||
Carrying amount | 40,600,000 | ||||||||||||
Value of equity component | $ 19,400,000 | ||||||||||||
Percentage of debt instrument holders (as a percent) | 25.00% | ||||||||||||
Threshold period after event of default the company should comply with certain reporting covenants in the Indenture will | 180 days | ||||||||||||
Transaction costs | $ 4,100,000 | ||||||||||||
Transaction costs allocated to debt discount | 2,800,000 | ||||||||||||
Transaction costs allocated to equity | 1,300,000 | ||||||||||||
Principal amount of debt converted | 36,400,000 | ||||||||||||
Gain (loss) on extinguishment of debt | 13,200,000 | ||||||||||||
Unamortized debt discount | (4,222,000) | $ (3,404,000) | (3,404,000) | ||||||||||
Carrying value | $ 20,428,000 | $ 21,246,000 | 21,246,000 | ||||||||||
Warrant exercisable (in shares) | shares | 3,500,000 | ||||||||||||
Fair value of the derivative liability at issuance | $ 41,600,000 | ||||||||||||
Transaction costs | $ 4,100,000 | ||||||||||||
Threshold limit for default in payment of any other indebtedness of money borrowed | $ 5,000,000 | ||||||||||||
Period to waive default in payment of any other indebtness of money borrowed | 30 days | ||||||||||||
5.50% Notes | Long-term Debt | |||||||||||||
Long-term Debt | |||||||||||||
Interest rate (as a percent) | 5.50% | ||||||||||||
5.50% Notes | Short-term Debt | |||||||||||||
Long-term Debt | |||||||||||||
Interest rate (as a percent) | 5.50% | 5.50% | |||||||||||
5.50% Notes | Private placement | |||||||||||||
Long-term Debt | |||||||||||||
Interest rate (as a percent) | 5.50% | ||||||||||||
Aggregate principal amount of debt issued | $ 61,000,000 | ||||||||||||
Frequency of interest payment | semi-annually | ||||||||||||
5.50% Notes | Maximum | |||||||||||||
Long-term Debt | |||||||||||||
Initial conversion rate | 0.0773395 | ||||||||||||
5.50% Notes | Comon Stock to be continued listing on The Nasdaq Capital Market | |||||||||||||
Long-term Debt | |||||||||||||
Interest rate (as a percent) | 5.50% | 5.50% | |||||||||||
Convertible debt outstanding | $ 24,700,000 | $ 24,700,000 | |||||||||||
5.50% Notes | Conversion prior to January 1, 2020 | |||||||||||||
Long-term Debt | |||||||||||||
Period after the last date of original issuance of the notes to apply conversion terms | 6 months | ||||||||||||
Number of threshold trading days within the 30 consecutive trading days during which the conversion terms will apply | item | 20 | ||||||||||||
Number of consecutive trading days not later than November 20, 2018 | item | 30 | ||||||||||||
Number of trading days immediately preceding a conversion date within which the threshold consecutive trading days apply | 5 days | ||||||||||||
Period after any five consecutive trading days of the note measurement period | 5 days | ||||||||||||
Number of consecutive trading days during the five business day period the conversion terms were measured | 5 days | ||||||||||||
Maximum percentage of the trading price to the product of the sale price of the entity's common stock and the conversion rate (as a percent) | 98.00% | ||||||||||||
5.50% Notes | Conversion on or after January 1, 2020 | |||||||||||||
Long-term Debt | |||||||||||||
Principal amount denomination for conversion | $ 1,000 | ||||||||||||
Observation period to determine the amount due upon conversion based on a daily conversion value calculated on a proportionate basis for each trading day | 50 days | ||||||||||||
6.50% Notes | |||||||||||||
Long-term Debt | |||||||||||||
Interest rate (as a percent) | 6.50% | 6.50% | 6.50% | ||||||||||
Initial conversion rate | 0.7496252 | ||||||||||||
Conversion price (in dollar per share) | $ / shares | $ 1.33 | ||||||||||||
Principal amount denomination for conversion | $ 1,000 | ||||||||||||
Discount rate used to calculate the present value of the remaining scheduled payments of interest for an interest make-whole payment (as a percent) | 2.00% | 2.00% | |||||||||||
Percentage price of original principal amount of debt at which debt has to be repurchased by the issuer as the request from the holder | 100.00% | 100.00% | |||||||||||
Percentage of debt instrument holders (as a percent) | 25.00% | ||||||||||||
Threshold period after event of default the company should comply with certain reporting covenants in the Indenture will | 180 days | ||||||||||||
Transaction costs | $ 1,700,000 | ||||||||||||
Warrant exercisable (in shares) | shares | 3,500,000 | ||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.01 | ||||||||||||
Number of shares callable by warrants | shares | 2,500,000 | 1,000,000 | |||||||||||
Frequency of interest payment | semi-annually | ||||||||||||
Additional number of common stock shares authorized | shares | 200,000,000 | ||||||||||||
Transaction costs | $ 1,700,000 | ||||||||||||
Threshold limit for default in payment of any other indebtedness of money borrowed | $ 5,000,000 | ||||||||||||
Period to waive default in payment of any other indebtness of money borrowed | 30 days | ||||||||||||
Conversion feature, 6.50% Notes | $ 15,000,000 | ||||||||||||
Fair value of derivative liability was reclassified from a liability into a stockholders' equity | $ 12,500,000 | ||||||||||||
6.50% Notes | Long-term Debt | |||||||||||||
Long-term Debt | |||||||||||||
Interest rate (as a percent) | 6.50% | 6.50% | 6.50% | ||||||||||
6.50% Notes | Not in compliance with Nasdaq's Listing Rule 5450(b)(2)(A) | |||||||||||||
Long-term Debt | |||||||||||||
Interest rate (as a percent) | 6.50% | 6.50% | |||||||||||
Convertible debt outstanding | $ 23,900,000 | $ 23,900,000 | |||||||||||
13% Notes | |||||||||||||
Long-term Debt | |||||||||||||
Interest rate (as a percent) | 13.00% | 13.00% | |||||||||||
Aggregate principal amount of debt issued | $ 80,000,000 | $ 80,000,000 | $ 80,000,000 | ||||||||||
Unamortized debt discount | (7,572,000) | (6,981,000) | (6,981,000) | ||||||||||
Carrying value | $ 72,428,000 | 73,019,000 | 73,019,000 | ||||||||||
Threshold limit for default in payment of any other indebtedness of money borrowed | $ 2,000,000 | ||||||||||||
13% Notes | Royalty rights agreements | |||||||||||||
Long-term Debt | |||||||||||||
Royalty rights obligations | $ 5,000,000 | $ 5,000,000 | |||||||||||
13% Notes | Prior to August 31, 2018 | |||||||||||||
Long-term Debt | |||||||||||||
Spread on treasury rate | 1 | ||||||||||||
13% Notes | Long-term Debt | |||||||||||||
Long-term Debt | |||||||||||||
Interest rate (as a percent) | 13.00% | 13.00% | 13.00% | ||||||||||
Senior notes | 13% Notes | |||||||||||||
Long-term Debt | |||||||||||||
Transaction costs | $ 4,500,000 | ||||||||||||
Accrual interest rate (as a percent) | 13.00% | ||||||||||||
Frequency of interest payment | semi-annually | ||||||||||||
Percentage of payment of principal to aggregate net sales (as a percent) | 15.00% | ||||||||||||
Percentage of payment of principal to aggregate net sales, if sales targets not met (as a percent) | 17.00% | ||||||||||||
Number of consecutive quarters | item | 2 | ||||||||||||
Redemption price of debt (as a percent) | 113.50% | ||||||||||||
Number of days for the redemption of principal, after equity offering | 90 days | ||||||||||||
Sinking fund | $ 0 | ||||||||||||
Percentage of amount due and payable (as a percent) | 100.00% | ||||||||||||
Transaction costs | $ 4,500,000 | ||||||||||||
Effective interest rate (as a percent) | 15.20% | ||||||||||||
Senior notes | 13% Notes | Prior to August 31, 2018 | |||||||||||||
Long-term Debt | |||||||||||||
Redemption price of debt (as a percent) | 100.00% | ||||||||||||
Senior notes | 13% Notes | On or after August 31, 2018, till August 30, 2019 | |||||||||||||
Long-term Debt | |||||||||||||
Redemption price of debt (as a percent) | 109.00% | ||||||||||||
Senior notes | 13% Notes | From August 31, 2019, till August 30, 2020 | |||||||||||||
Long-term Debt | |||||||||||||
Redemption price of debt (as a percent) | 104.50% | ||||||||||||
Senior notes | 13% Notes | August 31, 2020 and thereafter | |||||||||||||
Long-term Debt | |||||||||||||
Redemption price of debt (as a percent) | 100.00% | ||||||||||||
Senior notes | 13% Notes | Current and non-current debt | Royalty rights agreements | |||||||||||||
Long-term Debt | |||||||||||||
Royalty rights obligations | $ 4,100,000 | $ 3,700,000 | $ 3,700,000 | ||||||||||
Senior notes | 13% Notes | Initial closing | |||||||||||||
Long-term Debt | |||||||||||||
Interest rate (as a percent) | 13.00% | ||||||||||||
Aggregate principal amount of debt issued | $ 40,000,000 | ||||||||||||
Conditional aggregate principal amount | 40,000,000 | ||||||||||||
Net proceeds from the issuance of secured notes | $ 37,200,000 | ||||||||||||
Senior notes | 13% Notes | Second closing | |||||||||||||
Long-term Debt | |||||||||||||
Net proceeds from the issuance of secured notes | $ 38,300,000 | ||||||||||||
Senior notes | 13% Notes | Maximum | |||||||||||||
Long-term Debt | |||||||||||||
Percentage of principal amount of debt redeemed or to be redeemed (as a percent) | 35.00% | ||||||||||||
Senior notes | 13% Notes | Maximum | Initial closing | |||||||||||||
Long-term Debt | |||||||||||||
Maximum borrowings | $ 80,000,000 | ||||||||||||
Senior notes | 13% Notes | Minimum | |||||||||||||
Long-term Debt | |||||||||||||
Percentage of debt instrument holders (as a percent) | 25.00% | ||||||||||||
Percentage of aggregate principal amount remains outstandings | 65.00% | ||||||||||||
OXAYDO and SPRIX Nasal Spray | Senior notes | 13% Notes | Royalty rights agreements | |||||||||||||
Long-term Debt | |||||||||||||
Percentage of royalty right payment to aggregate net sale | $ 1.5 | ||||||||||||
Subsequent Events | 5.50% Notes | |||||||||||||
Long-term Debt | |||||||||||||
Convertible debt outstanding | $ 24,700,000 | ||||||||||||
Subsequent Events | 5.50% Notes | Comon Stock to be continued listing on The Nasdaq Capital Market | |||||||||||||
Long-term Debt | |||||||||||||
Interest rate (as a percent) | 5.50% | ||||||||||||
Percentage price of original principal amount of debt at which debt has to be repurchased by the issuer as the request from the holder | 100.00% | ||||||||||||
Subsequent Events | 5.50% Notes | Comon Stock to be continued listing on The Nasdaq Capital Market | Maximum | |||||||||||||
Long-term Debt | |||||||||||||
Number of business days at which debt to be repurchased since the date of the Fundament Change Company Notice | D | 35 | ||||||||||||
Subsequent Events | 5.50% Notes | Comon Stock to be continued listing on The Nasdaq Capital Market | Minimum | |||||||||||||
Long-term Debt | |||||||||||||
Number of business days at which debt to be repurchased since the date of the Fundament Change Company Notice | D | 20 |
Stockholders Equity (Details)
Stockholders Equity (Details) - USD ($) | Jul. 06, 2017 | Feb. 28, 2018 | Mar. 31, 2017 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jan. 31, 2018 | Dec. 31, 2017 | Jul. 31, 2015 |
Sale of stocks | ||||||||||
Fair value of warrants | $ 2,833,000 | $ 2,833,000 | $ 8,166,000 | |||||||
6.50% Notes | ||||||||||
Sale of stocks | ||||||||||
Number of shares callable by warrants | 1,000,000 | 2,500,000 | ||||||||
Exercise price of warrants (in dollars per share) | $ 0.01 | |||||||||
Additional number of common stock shares authorized | 200,000,000 | |||||||||
Interest rate (as a percent) | 6.50% | 6.50% | 6.50% | |||||||
Fair value of derivative liability was reclassified from a liability into a stockholders' equity | $ 12,500,000 | |||||||||
Controlled Equity Offering Sales Agreement As 2015 Sales Agreement | Cantor Fitzgerald And Co. | ||||||||||
Sale of stocks | ||||||||||
Aggregate offering price | $ 30,000,000 | |||||||||
Fixed Commission rate on sale of common stock (as a percent) | 3.00% | |||||||||
Issuance of common stock, net of costs (in shares) | 9,357,669 | 428,953 | 9,357,669 | |||||||
Net proceeds from sale of common stock | $ 9,400,000 | $ 171,000 | $ 9,400,000 | |||||||
Commissions paid on sale of common stock | $ 5,000 | $ 281,000 | ||||||||
Public offering under the July 2017 Equity Offering | ||||||||||
Sale of stocks | ||||||||||
Issuance of common stock, net of costs (in shares) | 16,666,667 | |||||||||
Number of shares callable by warrants | 16,666,667 | |||||||||
Stock price (in dollars per share) | $ 1.80 | |||||||||
Exercise price of warrants (in dollars per share) | $ 2.70 | $ 1.92 | $ 1.92 | |||||||
Expiration term of warrants (in years) | 5 years | |||||||||
Proceeds from issuance of warrants | $ 30,000,000 | |||||||||
Net cash inflow from issuance of warrants after deduct the discounts and commissions | 28,600,000 | |||||||||
Fair value of warrants | 9,700,000 | |||||||||
Public offering under the July 2017 Equity Offering | Cantor Fitzgerald And Co. | ||||||||||
Sale of stocks | ||||||||||
Underwriting discounts and commissions | $ 1,400,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2018 | Dec. 31, 2017 | May 31, 2015 | Mar. 31, 2018 | Jun. 30, 2018 | Dec. 27, 2017 | |
Fair Value Measurements | ||||||
Marketable securities, available for sale | $ 59,953,000 | $ 32,178,000 | ||||
Warrant liability | 8,166,000 | 2,833,000 | ||||
Changes in the fair value of Level 3 liabilities | ||||||
Carrying Value | 2,969,000 | 3,054,000 | ||||
Face Value | 23,888,000 | $ 23,888,000 | ||||
5.50% Notes | ||||||
Fair Value Measurements | ||||||
Interest make-whole derivative | $ 900,000 | |||||
Interest rate (as a percent) | 5.50% | |||||
Discount rate used to calculate the present value of the remaining scheduled payments of interest for an interest make-whole payment (as a percent) | 2.00% | |||||
Changes in the fair value of Level 3 liabilities | ||||||
Fair value | $ 41,600,000 | |||||
Carrying Value | 20,428,000 | $ 21,246,000 | ||||
Face Value | $ 24,650,000 | $ 24,650,000 | ||||
6.50% Notes | ||||||
Fair Value Measurements | ||||||
Conversion feature, 6.50% Notes | $ 15,000,000 | |||||
Interest rate (as a percent) | 6.50% | 6.50% | ||||
Discount rate used to calculate the present value of the remaining scheduled payments of interest for an interest make-whole payment (as a percent) | 2.00% | 2.00% | ||||
Additional number of common stock shares authorized | 200,000,000 | |||||
Fair value of derivative liability was reclassified from a liability into a stockholders' equity | $ 12,500,000 | |||||
13% Notes | ||||||
Fair Value Measurements | ||||||
Interest rate (as a percent) | 13.00% | |||||
Changes in the fair value of Level 3 liabilities | ||||||
Carrying Value | $ 72,428,000 | $ 73,019,000 | ||||
Face Value | $ 80,000,000 | $ 80,000,000 | ||||
Level 2 | 13% Notes | ||||||
Fair Value Measurements | ||||||
Interest rate (as a percent) | 13.00% | |||||
Changes in the fair value of Level 3 liabilities | ||||||
Carrying Value | $ 73,000,000 | |||||
Level 3 | 5.50% Notes | ||||||
Fair Value Measurements | ||||||
Interest rate (as a percent) | 5.50% | 5.50% | ||||
Changes in the fair value of Level 3 liabilities | ||||||
Fair value | $ 11,699,000 | $ 8,627,000 | ||||
Carrying Value | 20,428,000 | 21,246,000 | ||||
Face Value | $ 24,650,000 | $ 24,650,000 | ||||
Level 3 | 6.50% Notes | ||||||
Fair Value Measurements | ||||||
Interest rate (as a percent) | 6.50% | 6.50% | ||||
Changes in the fair value of Level 3 liabilities | ||||||
Fair value | $ 4,643,000 | $ 2,182,000 | ||||
Carrying Value | 2,969,000 | 3,054,000 | ||||
Face Value | 23,888,000 | 23,888,000 | ||||
Recurring basis | ||||||
Fair Value Measurements | ||||||
Cash equivalents (money market funds and commercial paper) | 16,973,000 | 30,248,000 | ||||
Marketable securities, available for sale | 59,953,000 | 32,178,000 | ||||
Total assets | 76,926,000 | 62,426,000 | ||||
Interest make-whole derivative | 2,589,000 | 1,153,000 | ||||
Conversion feature, 6.50% Notes | 14,034,000 | |||||
Warrant liability | 8,166,000 | 2,833,000 | ||||
Total liabilities | 24,789,000 | 3,986,000 | ||||
Changes in the fair value of Level 3 liabilities | ||||||
Beginning balance | 24,789,000 | 24,789,000 | ||||
Reclassification to Additional Paid in Capital | (12,497,000) | |||||
Fair Value Change during the period | (8,306,000) | |||||
Ending balance | 24,789,000 | 3,986,000 | ||||
Recurring basis | Interest make-whole derivative | ||||||
Changes in the fair value of Level 3 liabilities | ||||||
Beginning balance | 2,589,000 | 2,589,000 | ||||
Fair Value Change during the period | (1,436,000) | |||||
Ending balance | 2,589,000 | 1,153,000 | ||||
Recurring basis | Conversion feature, 6.50% Notes | ||||||
Changes in the fair value of Level 3 liabilities | ||||||
Beginning balance | 14,034,000 | 14,034,000 | ||||
Reclassification to Additional Paid in Capital | (12,497,000) | |||||
Fair Value Change during the period | (1,537,000) | |||||
Ending balance | 14,034,000 | |||||
Recurring basis | Warrants | ||||||
Changes in the fair value of Level 3 liabilities | ||||||
Beginning balance | $ 8,166,000 | 8,166,000 | ||||
Fair Value Change during the period | (5,333,000) | |||||
Ending balance | 8,166,000 | 2,833,000 | ||||
Recurring basis | Level 1 | ||||||
Fair Value Measurements | ||||||
Cash equivalents (money market funds and commercial paper) | 16,973,000 | 30,248,000 | ||||
Total assets | 16,973,000 | 30,248,000 | ||||
Recurring basis | Level 2 | ||||||
Fair Value Measurements | ||||||
Marketable securities, available for sale | 59,953,000 | 32,178,000 | ||||
Total assets | 59,953,000 | 32,178,000 | ||||
Recurring basis | Level 3 | ||||||
Fair Value Measurements | ||||||
Interest make-whole derivative | 2,589,000 | 1,153,000 | ||||
Conversion feature, 6.50% Notes | 14,034,000 | |||||
Warrant liability | 8,166,000 | 2,833,000 | ||||
Total liabilities | $ 24,789,000 | $ 3,986,000 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Basic and diluted net loss per common share calculation: | |||||
Net loss | $ (11,963) | $ (26,479) | $ (24,316) | $ (51,852) | |
Weighted-average common stock outstanding | 53,302,399 | 25,542,733 | 50,302,419 | 25,145,440 | |
Net loss per share of common stock, basic and diluted | $ (0.22) | $ (1.04) | $ (0.48) | $ (2.06) | |
Shares excluded from the calculation of diluted weighted average shares outstanding, as they would be anti-dilutive | 43,992,662 | 8,963,725 | 43,992,662 | 8,963,725 | |
5.50% Notes | |||||
Basic and diluted net loss per common share calculation: | |||||
Interest rate (as a percent) | 5.50% | 5.50% | |||
6.50% Notes | |||||
Basic and diluted net loss per common share calculation: | |||||
Interest rate (as a percent) | 6.50% | 6.50% | 6.50% | ||
Stock options | |||||
Basic and diluted net loss per common share calculation: | |||||
Shares excluded from the calculation of diluted weighted average shares outstanding, as they would be anti-dilutive | 4,640,696 | 4,788,917 | 4,640,696 | 4,788,917 | |
Restricted stock awards | |||||
Basic and diluted net loss per common share calculation: | |||||
Shares excluded from the calculation of diluted weighted average shares outstanding, as they would be anti-dilutive | 2,120,495 | 72,448 | 2,120,495 | 72,448 | |
Common shares issuable upon conversion of the 5.50% notes | 5.50% Notes | |||||
Basic and diluted net loss per common share calculation: | |||||
Shares excluded from the calculation of diluted weighted average shares outstanding, as they would be anti-dilutive | 1,657,757 | 4,102,360 | 1,657,757 | 4,102,360 | |
Common shares issuable upon conversion of the 5.50% notes | 6.50% Notes | |||||
Basic and diluted net loss per common share calculation: | |||||
Shares excluded from the calculation of diluted weighted average shares outstanding, as they would be anti-dilutive | 17,907,047 | 17,907,047 | |||
Warrants | |||||
Basic and diluted net loss per common share calculation: | |||||
Shares excluded from the calculation of diluted weighted average shares outstanding, as they would be anti-dilutive | 17,666,667 | 17,666,667 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Plans (Details) | Jun. 08, 2017item$ / sharesshares | May 31, 2018shares | Dec. 31, 2016shares | Jun. 30, 2016shares | Jun. 30, 2014shares | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Dec. 31, 2017shares | Jan. 31, 2016shares | Nov. 30, 2013shares |
Shares of common stock reserved for issuance: | ||||||||||||
Common stock shares issued | (56,298,373) | (56,298,373) | (45,939,663) | |||||||||
Shares Available for Future Grant Under Equity Compensation Plans | 4,924,953 | 4,924,953 | ||||||||||
Total stock-based compensation expense | $ | $ 1,002,000 | $ 1,568,000 | $ 1,954,000 | $ 3,362,000 | ||||||||
Share-based Compensation | $ | 1,954,000 | 3,362,000 | ||||||||||
General and administrative | ||||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Total stock-based compensation expense | $ | 912,000 | 1,265,000 | 1,734,000 | 2,621,000 | ||||||||
Sales and marketing | ||||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Total stock-based compensation expense | $ | 37,000 | 144,000 | 103,000 | 303,000 | ||||||||
Research and development | ||||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Total stock-based compensation expense | $ | $ 53,000 | 159,000 | $ 117,000 | 438,000 | ||||||||
Stock options | ||||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Expected term of options | 5 years 9 months 29 days | |||||||||||
Options, additional disclosures | ||||||||||||
Weighted average grant date fair value of the options granted (in dollars per share) | $ / shares | $ 0.50 | |||||||||||
Weighted average assumptions: | ||||||||||||
Risk free interest rate (as a percent) | 2.79% | |||||||||||
Expected term of options | 5 years 9 months 29 days | |||||||||||
Expected volatility (as a percent) | 80.60% | |||||||||||
Dividend yield (as a percent) | 0.00% | |||||||||||
Restricted stock awards | ||||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Granted (in shares) | 2,100,000 | |||||||||||
Granted (in dollars per share) | $ / shares | $ 0.55 | |||||||||||
Stock options and restricted stock | ||||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Stock options and restricted stock awards forfeited | 1,724,615 | 1,724,615 | ||||||||||
Employee stock purchase plan | ||||||||||||
Stock-based Compensation | ||||||||||||
Common stock initially reserved for issuance (in shares) | 750,000 | 750,000 | ||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Shares initially reserved under the Plan | 750,000 | 750,000 | ||||||||||
Common stock shares issued | (146,314) | (146,314) | ||||||||||
Shares Available for Future Grant Under Equity Compensation Plans | 750,000 | |||||||||||
Total stock-based compensation expense | $ | $ 7,000 | $ 35,000 | $ 15,000 | $ 70,000 | ||||||||
2013 Stock-Based Incentive Plan | ||||||||||||
Stock-based Compensation | ||||||||||||
Common stock initially reserved for issuance (in shares) | 1,680,000 | 1,680,000 | 1,680,000 | |||||||||
Authorized increase to the Plan | 6,000,000 | 2,600,000 | 2,000,000 | 10,600,000 | ||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Shares initially reserved under the Plan | 1,680,000 | 1,680,000 | 1,680,000 | |||||||||
Authorized increase to the Plan | 6,000,000 | 2,600,000 | 2,000,000 | 10,600,000 | ||||||||
Common stock options granted | (6,127,188) | (6,127,188) | ||||||||||
2013 Stock-Based Incentive Plan | Stock options | ||||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Weighted average remaining period over which unrecognized compensation expense will be recognized | 2 years 2 months 19 days | |||||||||||
Options Outstanding, Number of Shares | ||||||||||||
Balance at beginning of the period (in shares) | 4,110,612 | |||||||||||
Granted (in shares) | 936,250 | |||||||||||
Forfeited (in shares) | (229,585) | |||||||||||
Cancelled (in shares) | (176,581) | |||||||||||
Balance at end of the period (in shares) | 4,640,696 | 4,640,696 | ||||||||||
Vested or expected to vest at the end of the period (in shares) | 4,640,696 | 4,640,696 | ||||||||||
Exercisable at the end of the period (in shares) | 1,988,964 | 1,988,964 | ||||||||||
Options Outstanding, Weighted-Average Exercise Price | ||||||||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 6.41 | |||||||||||
Granted (in dollars per share) | $ / shares | 0.72 | |||||||||||
Forfeited (in dollars per share) | $ / shares | 5.05 | |||||||||||
Cancelled ( in dollars per share) | $ / shares | 9.26 | |||||||||||
Outstanding at end of the period (in dollars per share) | $ / shares | $ 5.22 | 5.22 | ||||||||||
Vested or expected to vest at the end of the period (in dollars per share) | $ / shares | 5.22 | 5.22 | ||||||||||
Exercisable at the end of the period (in dollars per share) | $ / shares | $ 6.86 | $ 6.86 | ||||||||||
Options, additional disclosures | ||||||||||||
Balance at the end of the period, Weighted-average remaining contractual term | 8 years 3 months 22 days | |||||||||||
Vested or expected to vest at the end of the period, Weighted-average remaining contractual term | 8 years 3 months 22 days | |||||||||||
Exercisable at the end of the period, Weighted-average remaining contractual term | 7 years 6 months 26 days | |||||||||||
Unvested options (in shares) | 4,640,696 | 4,640,696 | ||||||||||
Intrinsic value of unvested options (in dollars) | $ | $ 0 | $ 0 | ||||||||||
Stock price (in dollars per share) | $ / shares | $ 0.42 | $ 0.42 | ||||||||||
Unvested options, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 5.22 | $ 5.22 | ||||||||||
Unrecognized compensation expense and recognition period disclosure | ||||||||||||
Unrecognized compensation expense | $ | $ 6,000,000 | $ 6,000,000 | ||||||||||
Weighted average remaining period over which unrecognized compensation expense will be recognized | 2 years 2 months 19 days | |||||||||||
2013 Stock-Based Incentive Plan | Stock options | Maximum | ||||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Expected term of options | 10 years | |||||||||||
Weighted average assumptions: | ||||||||||||
Expected term of options | 10 years | |||||||||||
2013 Stock-Based Incentive Plan | Restricted stock awards | ||||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Restricted stock awards granted | (3,043,660) | (3,043,660) | ||||||||||
Total stock-based compensation expense | $ | $ 1,100,000 | |||||||||||
Weighted average remaining period over which unrecognized compensation expense will be recognized | 1 year 18 days | |||||||||||
Unrecognized compensation expense and recognition period disclosure | ||||||||||||
Weighted average remaining period over which unrecognized compensation expense will be recognized | 1 year 18 days | |||||||||||
2013 Stock-Based Incentive Plan | Restricted stock units | ||||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Restricted stock awards granted | (600,000) | (600,000) | ||||||||||
2017 Inducement Plan | ||||||||||||
Stock-based Compensation | ||||||||||||
Common stock initially reserved for issuance (in shares) | 300,000 | 300,000 | ||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Shares initially reserved under the Plan | 300,000 | 300,000 | ||||||||||
Shares reserved under Plan for future issuance | 300,000 | |||||||||||
Common stock options granted | (212,500) | (212,500) | ||||||||||
Term of the awards | P10Y | |||||||||||
June 2017 Grant | Stock options | ||||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Expected term of options | 10 years | 5 years 7 months 6 days | ||||||||||
Total stock-based compensation expense | $ | $ 52,000 | $ 104,000 | ||||||||||
Granted (in shares) | 630,000 | |||||||||||
Number of senior executives | item | 9 | |||||||||||
Granted (in dollars per share) | $ / shares | $ 2.38 | |||||||||||
Share-based Compensation | $ | $ 1,334,000 | |||||||||||
Weighted average remaining period over which unrecognized compensation expense will be recognized | 5 years 7 months 6 days | 5 years 7 months 6 days | ||||||||||
Weighted average assumptions: | ||||||||||||
Risk free interest rate (as a percent) | 1.80% | |||||||||||
Expected term of options | 10 years | 5 years 7 months 6 days | ||||||||||
Expected volatility (as a percent) | 95.54% | |||||||||||
Dividend yield (as a percent) | 0.00% | |||||||||||
Unrecognized compensation expense and recognition period disclosure | ||||||||||||
Weighted average remaining period over which unrecognized compensation expense will be recognized | 5 years 7 months 6 days | 5 years 7 months 6 days | ||||||||||
June 2017 Grant | Stock options | Tranche one | ||||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Vesting percentage | 25.00% | |||||||||||
Average closing price | $ / shares | $ 3.33 | |||||||||||
Consecutive trading days for average closing price | 30 days | |||||||||||
June 2017 Grant | Stock options | Tranche one | Minimum | ||||||||||||
Stock-based Compensation | ||||||||||||
Number of months of anniversary of the grant for which the grant starts vesting | 6 months | |||||||||||
June 2017 Grant | Stock options | Tranche two | ||||||||||||
Stock-based Compensation | ||||||||||||
Number of months of anniversary of the grant for which the grant starts vesting | 12 months | |||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Vesting percentage | 25.00% | |||||||||||
Average closing price | $ / shares | $ 4.05 | |||||||||||
Consecutive trading days for average closing price | 30 days | |||||||||||
June 2017 Grant | Stock options | Tranche three | ||||||||||||
Stock-based Compensation | ||||||||||||
Number of months of anniversary of the grant for which the grant starts vesting | 24 months | |||||||||||
Shares of common stock reserved for issuance: | ||||||||||||
Vesting percentage | 50.00% | |||||||||||
Average closing price | $ / shares | $ 4.76 | |||||||||||
Consecutive trading days for average closing price | 30 days |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Stock (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Restricted stock awards | |
Shares | |
Unvested balance at the beginning of the period (in shares) | shares | 25,047 |
Granted (in shares) | shares | 2,100,000 |
Vested restricted stock awards (in shares) | shares | (4,552) |
Unvested balance at the end of the period (in shares) | shares | 2,120,495 |
Weighted-average Grant Date Fair Value per Share | |
Outstanding balance at the beginning of the period (in dollars per share) | $ / shares | $ 7.07 |
Granted (in dollars per share) | $ / shares | 0.55 |
Vested restricted stock awards (in dollars per share) | $ / shares | 7.07 |
Outstanding balance at the end of the period (in dollars per share) | $ / shares | $ 0.62 |
2013 Stock-Based Incentive Plan | Restricted stock awards | |
Weighted-average Grant Date Fair Value per Share | |
Weighted average remaining period over which unrecognized compensation expense will be recognized | 1 year 18 days |
2013 Stock-Based Incentive Plan | Stock options | |
Weighted-average Grant Date Fair Value per Share | |
Weighted average remaining period over which unrecognized compensation expense will be recognized | 2 years 2 months 19 days |
Stock-based Compensation - Empl
Stock-based Compensation - Employee Stock Purchase Plans (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock-based Compensation | ||||
The maximum value of shares an employee can accrue to purchase under the plan per calendar year | $ 25,000 | |||
Share-based compensation expense recognized | $ 1,002,000 | $ 1,568,000 | $ 1,954,000 | $ 3,362,000 |
Employee stock purchase plan | ||||
Stock-based Compensation | ||||
Purchase price of common stock expressed as a percentage of its fair value | 85.00% | |||
Maximum employee contribution rate | 10.00% | 10.00% | ||
Maximum number of shares to purchase per employee per period | 1,500 | |||
Share-based compensation expense recognized | $ 7,000 | $ 35,000 | $ 15,000 | $ 70,000 |
Commitments and Contingencies (
Commitments and Contingencies (Detail) $ in Millions | Aug. 02, 2018 | Feb. 10, 2017security | Jan. 27, 2017security | Feb. 28, 2017USD ($) |
Loss Contingencies [Line Items] | ||||
Number of putative securities | security | 2 | 2 | ||
Drug Product Manufacturing Agreement | Halo Pharmaceutical, Inc | ||||
Loss Contingencies [Line Items] | ||||
Percentage of requirements to be purchased after second financial year. | 75.00% | |||
2,018 | $ 3.6 | |||
2,019 | 3.6 | |||
Thereafter | $ 7.2 | |||
Subsequent Events | ||||
Loss Contingencies [Line Items] | ||||
Number of days to appeal the Court's decision | 30 days | |||
Number of days to move under Rule 59 for reconsideration | 28 days |
Acquisitions and License and 50
Acquisitions and License and Collaboration Agreements - Shionogi and Acura (Details) - OXAYDO tablets | 1 Months Ended | ||
Jan. 31, 2015USD ($) | Jun. 30, 2018item | Oct. 31, 2015USD ($) | |
License and collaboration agreement | |||
Number of U.S. patents that expire between 2023 and 2025 | item | 6 | ||
Collaboration and License Agreement | Acura | |||
License and collaboration agreement | |||
Upfront payment paid | $ 5,000,000 | ||
Milestone payment payable | $ 2,500,000 | ||
Milestone payment payable upon achievement of net product sales in calendar year threshold | 12,500,000 | ||
Net product sales threshold in calendar year to be met for one-time milestone payment | 150,000,000 | ||
Intangible assets | 7,700,000 | ||
Transaction costs | $ 172,000 | ||
Useful life | 7 years |
Acquisitions and License and 51
Acquisitions and License and Collaboration Agreements - Luitpold Agreement (Details) | 1 Months Ended |
Jan. 31, 2015USD ($) | |
SPRIX Nasal Spray product rights | |
Acquisition | |
Purchase agreement term from date of first commercial sale | 10 years |
Luitpold | |
Acquisition | |
Purchase price | $ 7,000,000 |
Additional glassware, equipment and active pharmaceutical ingredient purchased | 1,100,000 |
Additional pharmaceutical ingredient to be purchased after closing | $ 340,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income tax expense (benefit) | $ 0 | $ 0 | $ 0 | $ 0 |
State | ||||
Deferred tax liabilty | $ 61,000 | $ 0 | $ 981,000 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Aug. 02, 2018 | Jul. 09, 2018USD ($)D | Jul. 31, 2018USD ($) | Jun. 30, 2018USD ($) |
Subsequent Events | ||||
Cash and cash equivalents, restricted cash and marketable securities | $ 70.4 | |||
5.50% Notes | ||||
Subsequent Events | ||||
Convertible debt outstanding | $ 24.7 | |||
Interest rate (as a percent) | 5.50% | |||
Percentage price of original principal amount of debt at which debt has to be repurchased by the issuer as the request from the holder | 100.00% | |||
5.50% Notes | Comon Stock to be continued listing on The Nasdaq Capital Market | ||||
Subsequent Events | ||||
Convertible debt outstanding | $ 24.7 | |||
Interest rate (as a percent) | 5.50% | |||
Subsequent Events | ||||
Subsequent Events | ||||
Number of days to appeal the Court's decision | 30 days | |||
Number of days to move under Rule 59 for reconsideration | 28 days | |||
Subsequent Events | Minimum | Comon Stock to be continued listing on The Nasdaq Capital Market | ||||
Subsequent Events | ||||
Standard market value as per listing rule | $ 35 | |||
Minimum consecutive trading days before a certain date required in which the market value has to maintain at the standard | 10 days | |||
Subsequent Events | 5.50% Notes | ||||
Subsequent Events | ||||
Convertible debt outstanding | $ 24.7 | |||
Subsequent Events | 5.50% Notes | Comon Stock to be continued listing on The Nasdaq Capital Market | ||||
Subsequent Events | ||||
Interest rate (as a percent) | 5.50% | |||
Percentage price of original principal amount of debt at which debt has to be repurchased by the issuer as the request from the holder | 100.00% | |||
Subsequent Events | 5.50% Notes | Minimum | Comon Stock to be continued listing on The Nasdaq Capital Market | ||||
Subsequent Events | ||||
Number of business days at which debt to be repurchased since the date of the Fundament Change Company Notice | D | 20 | |||
Subsequent Events | 5.50% Notes | Maximum | Comon Stock to be continued listing on The Nasdaq Capital Market | ||||
Subsequent Events | ||||
Number of business days at which debt to be repurchased since the date of the Fundament Change Company Notice | D | 35 |