Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 27, 2019 | Oct. 22, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Osmotica Pharmaceuticals plc | ||
Entity Central Index Key | 0001739426 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Public Float | $ 75.1 | ||
Entity Common Stock, Shares Outstanding | 52,518,924 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 70,834,496 | $ 34,743,152 |
Trade accounts receivable, net | 56,423,866 | 37,637,957 |
Inventories, net | 24,383,021 | 16,946,870 |
Prepaid expenses and other current assets | 20,743,685 | 25,498,092 |
Total current assets | 172,385,068 | 114,826,071 |
Property, plant and equipment, net | 31,263,432 | 31,410,133 |
Intangibles, net | 490,389,723 | 585,388,710 |
Goodwill | 100,854,816 | 187,172,816 |
Other non‑current assets | 751,927 | 942,419 |
Total assets | 795,644,966 | 919,740,149 |
Current liabilities: | ||
Trade accounts payable | 24,869,593 | 36,069,936 |
Accrued liabilities | 87,236,940 | 81,926,390 |
Current portion of long‑term debt, net of deferred financing costs | 1,774,199 | 6,655,604 |
Current portion of obligation under capital leases | 119,344 | 24,245 |
Income taxes payable - current portion | 393,552 | |
Total current liabilities | 114,393,628 | 124,676,175 |
Long‑term debt, net of non‑current deferred financing costs | 266,802,911 | 313,949,581 |
Long‑term portion of obligation under capital leases | 137,949 | 57,059 |
Income taxes payable - long-term portion | 1,803,512 | 1,334,645 |
Deferred taxes | 26,237,841 | 42,891,444 |
Other long-term liabilities | 1,047,477 | |
Total liabilities | 409,375,841 | 483,956,381 |
Commitments and contingencies (See Note 11) | ||
Shareholders' Equity/Partners' Capital | ||
Ordinary shares ($0.01 nominal value 400,000,000 shares authorized, 52,518,924 share issued and outstanding) | 525,189 | |
Additional paid in capital | 489,949,791 | |
Accumulated deficit | (102,359,672) | |
Partners’ capital | 436,416,914 | |
Accumulated other comprehensive loss | (1,846,183) | (633,146) |
Total shareholders' equity | 386,269,125 | |
Total partners’ capital | 435,783,768 | |
Total liabilities and shareholders' equity/partners' capital | $ 795,644,966 | $ 919,740,149 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) | Dec. 31, 2018$ / sharesshares | Dec. 31, 2018€ / sharesshares |
CONSOLIDATED BALANCE SHEETS | ||
Ordinary shares, nominal value (in dollars per share) | $ / shares | $ 0.01 | |
Ordinary shares, number of shares authorized | 400,000,000 | 400,000,000 |
Ordinary shares, number of shares issued | 52,518,924 | 52,518,924 |
Ordinary shares, number of shares outstanding | 52,518,924 | 52,518,924 |
Preferred shares, nominal value (in dollars per share) | $ / shares | $ 0.01 | |
Preferred shares, number of shares authorized | 40,000,000 | 40,000,000 |
Preferred shares, number of shares issued | 0 | 0 |
Preferred shares, number of shares outstanding | 0 | 0 |
Euro deferred shares, nominal value (in euros per share) | € / shares | € 1 | |
Euro deferred shares, number of shares authorized | 25,000 | 25,000 |
Euro deferred shares, number of shares issued | 0 | 0 |
Euro deferred shares, number of shares outstanding | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | $ 263,701,349 | $ 245,749,032 |
Cost of goods sold (inclusive of amortization of intangibles) | 135,013,998 | 125,188,435 |
Gross profit | 128,687,351 | 120,560,597 |
Selling, general and administrative expenses | 74,242,509 | 56,954,513 |
Research and development expenses | 48,761,494 | 42,688,062 |
Impairment of intangibles and fixed assets | 17,903,208 | 72,986,303 |
Impairment of goodwill | 86,318,000 | 0 |
Total operating expenses | 227,225,211 | 172,628,878 |
Operating loss | (98,537,860) | (52,068,281) |
Interest expense and amortization of debt discount | 20,790,714 | 29,052,363 |
Other non-operating (income) loss, net | (664,391) | 4,521,898 |
Total other non‑operating expense, net | 20,126,323 | 33,574,261 |
Loss before income taxes | (118,664,183) | (85,642,542) |
Income tax benefit | 9,267,917 | 44,500,731 |
Net loss | (109,396,266) | (41,141,811) |
Other comprehensive loss, net | ||
Change in foreign currency translation adjustments | (1,213,036) | (907,927) |
Comprehensive loss | $ (110,609,302) | $ (42,049,738) |
Loss per share attributable to shareholders | ||
Basic | $ (2.42) | $ (0.96) |
Diluted | $ (2.42) | $ (0.96) |
Weighted average shares basic and diluted | ||
Basic and Diluted | 45,276,278 | 42,855,722 |
Product Revenue | ||
Revenues | $ 261,398,205 | $ 237,671,178 |
Royalty Revenue | ||
Revenues | 1,958,571 | 6,449,095 |
Licensing and Contract Revenue | ||
Revenues | $ 344,573 | $ 1,628,759 |
STATEMENTS OF CHANGES IN EQUITY
STATEMENTS OF CHANGES IN EQUITY - USD ($) | Ordinary shares | Additional Paid-in Capital [Member] | Accumulated deficit | Partners' capital [Member] | Accumulated other comprehensive loss | Total |
Partners' Capital, Beginning Balance at Dec. 31, 2016 | $ 477,430,725 | $ 274,781 | $ 477,705,506 | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||
Net loss | (41,141,811) | (41,141,811) | ||||
Change in foreign currency translation | (907,927) | (907,927) | ||||
Partners' contributions | 128,000 | 128,000 | ||||
Partners' Capital, Ending Balance at Dec. 31, 2017 | 436,416,914 | (633,146) | 435,783,768 | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||
Cumulative effect of change in accounting standard (See Note 2) | 1,047,477 | 1,047,477 | ||||
Net loss | (7,036,594) | (7,036,594) | ||||
Change in foreign currency translation | (1,169,244) | (1,169,244) | ||||
Share compensation | 1,248,023 | 1,248,023 | ||||
Partners’ distributions | (2,026) | (2,026) | ||||
Partners' Capital, Ending Balance at Oct. 17, 2018 | 431,673,794 | (1,802,390) | 429,871,404 | |||
Partners' Capital, Beginning Balance at Dec. 31, 2017 | 436,416,914 | (633,146) | 435,783,768 | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||
Net loss | (109,396,266) | |||||
Change in foreign currency translation | (1,213,036) | |||||
Stockholders' equity, ending balance at Dec. 31, 2018 | $ 525,189 | $ 489,949,791 | $ (102,359,672) | (1,846,183) | 386,269,125 | |
Partners' Capital, Beginning Balance at Oct. 17, 2018 | 431,673,794 | (1,802,390) | 429,871,404 | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||
Net loss | (102,359,672) | (102,359,672) | ||||
Change in foreign currency translation | (43,793) | (43,793) | ||||
Share compensation | 717,323 | 717,323 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Effect of reorganization, value | $ 428,571 | 431,245,223 | $ (431,673,794) | |||
Effect of reorganization, shares | 42,857,139 | |||||
Issuance of ordinary shares in initial public offering and private placement, net of offering costs | $ 96,618 | 57,987,245 | 58,083,863 | |||
Issuance of ordinary shares in initial public offering and private placement, shares | 9,661,785 | |||||
Stockholders' equity, ending balance at Dec. 31, 2018 | $ 525,189 | $ 489,949,791 | $ (102,359,672) | $ (1,846,183) | $ 386,269,125 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares, Outstanding | 52,518,924 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (109,396,266) | $ (41,141,811) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 81,572,591 | 46,450,146 |
Share compensation | 1,965,346 | |
Impairment of intangibles and fixed assets | 17,903,208 | 72,986,303 |
Impairment of goodwill | 86,318,000 | 0 |
Deferred income tax benefit | (16,653,604) | (48,506,649) |
Loss on sale of fixed assets | 93,652 | |
Bad debt provision | (1,771,487) | 832,388 |
Non-cash interest expense and amortization of deferred financing and loan origination fees | 1,651,536 | 7,506,359 |
Write off of deferred financing fees in connection with prepayment | 875,576 | 4,981,624 |
Expensed IPR&D | 16,372,476 | |
Change in fair value of contingent consideration | 182,396 | |
Payment for contingent consideration | (1,991,288) | |
Payment of in-kind interest | (9,321,500) | |
Change in operating assets and liabilities: | ||
Trade accounts receivable, net | (17,040,991) | 5,268,883 |
Inventories, net | (7,436,151) | 2,892,119 |
Prepaid expenses and other current assets | 4,686,449 | (14,569,647) |
Other non‑current assets | 1,512,082 | |
Trade accounts payable | (11,325,623) | 588,238 |
Accrued and other current liabilities | 6,116,094 | 13,794,939 |
Net cash provided by operating activities | 37,558,330 | 57,837,058 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of fixed assets | 10,000 | |
Payment for asset acquisition | (12,500,000) | |
Purchase of property, plant and equipment | (4,143,723) | (6,895,332) |
Net cash used in investing activities | (4,133,723) | (19,395,332) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments to affiliates | (2,026) | |
Contributions from Partners | 128,000 | |
Payments on capital lease obligations | (111,554) | (113,842) |
Proceeds from issuances of debt | 327,500,000 | |
Debt financing costs | (3,563,499) | |
Proceeds from insurance financing loan | 2,744,852 | |
Repayment of insurance financing loan | (970,653) | |
Proceeds from initial public offering and private placement, net of issuance costs | 58,083,863 | |
Debt repayment | (56,140,063) | (338,756,329) |
Payment for contingent consideration | (8,508,712) | |
Net cash provided by (used in) financing activities | 3,604,419 | (23,314,382) |
Net change in cash and cash equivalents | 37,029,026 | 15,127,344 |
Effect on cash of changes in exchange rate | (937,682) | 57,237 |
Cash and cash equivalents, beginning of period | 34,743,152 | 19,558,571 |
Cash and cash equivalents, end of period | 70,834,496 | 34,743,152 |
Supplemental disclosure of cash and non‑cash transactions: | ||
Cash paid for interest | 19,618,614 | 25,272,842 |
Income taxes paid | 2,637,560 | $ 17,592,965 |
Purchase of fixed assets by entering into capital lease | $ 287,542 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2018 | |
Organization and Nature of Operations | |
Organization and Nature of Operations | Note 1. Organization and Nature of Operations Osmotica Pharmaceuticals plc (formerly known as Lilydale Limited and Osmotica Pharmaceuticals Limited) is an Irish public limited company. Osmotica Holdings S.C.Sp. acquired Osmotica Pharmaceuticals plc on April 30, 2018 for the purpose of facilitating an offering of ordinary shares in an initial public offering. On October 22, 2018, Osmotica Pharmaceuticals plc completed its initial public offering (the “IPO”), in which it issued and allotted 7,647,500 ordinary shares at a public offering price of $7.00 per share. The number of shares issued in the IPO reflected the exercise in full of the underwriters’ option to purchase 997,500 additional ordinary shares. In addition, the Company issued and allotted 2,014,285 ordinary shares at the public offering price in a private placement to investment funds affiliated with Avista Capital Partners, Altchem Limited and an entity controlled by the Company’s Chief Financial Officer. The aggregate net proceeds from the IPO and the private placement were approximately $58.1 million after deducting underwriting discounts and commissions and estimated offering expenses. Immediately prior to the IPO and prior to the commencement of trading of Osmotica Pharmaceuticals plc’s ordinary shares on the Nasdaq Global Select Market, Osmotica Holdings S.C.Sp. undertook a series of restructuring transactions that resulted in Osmotica Pharmaceuticals plc becoming the direct parent of Osmotica Holdings S.C.Sp with each holder of common units of Osmotica Holdings S.C.Sp. receiving approximately 42.84 ordinary shares of Osmotica Pharmaceuticals plc in exchange for each such common unit. In addition, each holder of an option to purchase common units of Osmotica Holdings S.C.Sp. received an option to purchase the number of ordinary shares of Osmotica Pharmaceuticals plc determined by multiplying the number of units underlying such option by approximately 42.84 (rounded down to the nearest whole share) and dividing the exercise price per unit for such option by approximately 42.84 (rounded up to the nearest whole cent). These transactions are referred to as the “Reorganization”. Accordingly, all share and share amounts for all periods presented in the accompanying financial statements have been adjusted retroactively, where applicable, to reflect the stock split. Until the Reorganization on October 17, 2018, Osmotica Pharmaceuticals plc did not conduct any operations (other than activities incidental to its formation, the Reorganization and the pursuit of an initial public offering). Upon the completion of the Reorganization, the historical consolidated financial statements of Osmotica Holdings S.C.Sp. became the historical financial statements of Osmotica Pharmaceuticals plc. Accordingly, the accompanying consolidated financial statements included herein reflect the financial information of Osmotica Holdings S.C.Sp. Osmotica Holdings S.C.Sp.is a Luxembourg special limited partnership, formed on January 28, 2016. Osmotica Holdings US LLC, a subsidiary of Osmotica Holdings S.C.Sp. entered into a fifty-fifty partnership (the “Merger”), effective February 3, 2016, pursuant to a definitive agreement between Vertical/Trigen Holdings, LLC (“Vertical/Trigen”) and members, and Osmotica Holdings Corp Limited and Subsidiaries. Osmotica Holdings S.C.Sp. and several other holding companies and partnerships were formed as a result of the Merger. Pursuant to the Merger, Vertical/Trigen was deemed to be the accounting acquirer. Osmotica is a fully integrated biopharmaceutical company focused on the development and commercialization of specialty products that target markets with underserved patient populations. Unless otherwise indicated or required by the context, references throughout to “Osmotica,” or the “Company,” refer to (i) prior to the completion of the Reorganization, Osmotica Holdings S.C.Sp. and its consolidated subsidiaries, including, from and after April 30, 2018, Osmotica Pharmaceuticals plc, and (ii) following the completion of the Reorganization, Osmotica Pharmaceuticals plc and its consolidated subsidiaries, including Osmotica Holdings S.C.Sp. Immaterial Correction of Errors Subsequent to the issuance of the unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2018 and 2017 in the Company’s Quarterly Report on Form 10-Q, the Company determined that a revision was required to correct misstatements associated with the business combination between Osmotica Holdings Limited and subsidiaries and Vertical/Trigen Holdings LLC which occurred on February 3, 2016. For the year ended December 31, 2017, the correction resulted in an increase in Goodwill of $34,357,100; a decrease in Prepaid Expenses of $316,197; an increase in Deferred Tax Liability of $17,527,389; an increase in Partners’ Capital of $16,513,514; and an increase in Income Tax Benefit and corresponding decrease in Net Loss of $4,013,161. The Company has corrected these amounts in the periods presented in these consolidated financial statements with an adjustment to the Company’s consolidated financial statements for the year ended December 31, 2016 and the adjustments were determined to be immaterial to the Company’s financial position as previously reported. For the statement of changes in partners’ capital/shareholders equity, the correction resulted in an increase of $12,500,353 in the balance of Partners’ Capital at December 31, 2016. For the consolidated statement of cash flows for the year ended December 31, 2017, within the Cash Flows from Operating Activities section, Net loss decreased by $4,013,161, deferred income tax benefit increased by $4,013,161. The impacts of the corrections have been reflected throughout the consolidated financial statements, including the applicable notes, as appropriate. The following table presents the amounts originally reported, net correction adjustments, and corrected amounts for items affected by the corrections for the three months and nine months ended on September 30, 2018 and 2017, and year-to-date periods ended December 31, 2017: Year ended December 31, 2017 As originally Net As reported adjustments corrected Partners' capital as of 12/31/2016 $ 465,205,153 $ 12,500,353 $ 477,705,506 Goodwill 152,815,716 34,357,100 187,172,816 Prepaid expenses 25,814,289 (316,197) 25,498,092 Total assets 885,699,246 34,040,903 919,740,149 Deferred taxes 25,364,055 17,527,389 42,891,444 Total liabilities 466,428,992 17,527,389 483,956,381 Partners' capital as of 12/31/2017 419,270,254 16,513,514 435,783,768 Total liabilities and partners' capital 885,699,246 34,040,903 919,740,149 Income tax benefit 40,487,570 4,013,161 44,500,731 Net loss (45,154,972) 4,013,161 (41,141,811) Comprehensive loss (46,062,899) 4,013,161 (42,049,738) Loss per share (1.05) 0.09 (0.96) Nine months ended September 30, 2018 As originally Net As reported adjustments corrected Goodwill $ 152,815,716 $ 34,357,100 $ 187,172,816 Prepaid expense and other current assets 18,802,004 5,628,370 24,430,374 Total assets 855,472,388 39,985,470 895,457,858 Deferred taxes 13,124,607 22,048,491 35,173,098 Total liabilites 439,969,303 22,048,491 462,017,794 Partners' capital as of 9/30/2018 417,374,758 17,936,979 435,311,737 Total liabilities and partners' capital 855,472,388 39,985,470 895,457,858 Income tax benefit 1,999,323 1,423,465 3,422,788 Net loss (3,574,093) 1,423,465 (2,150,628) Comprehensive loss (4,812,620) 1,423,465 (3,389,155) Loss per share (0.08) 0.03 (0.05) Nine months ended September 30, 2017 As originally Net As reported adjustments corrected Income tax benefit $ 16,785,658 $ (644,853) $ 16,140,805 Net loss (42,332,512) (644,853) (42,977,365) Comprehensive loss (41,915,544) (644,853) (42,560,397) Loss per share (0.99) (0.02) (1.01) Three months ended September 30, 2017 As originally Net As reported adjustments corrected Income tax benefit $ 12,046,928 $ (1,704,498) $ 10,342,430 Net loss (12,272,821) (1,704,498) (13,977,319) Comprehensive loss (11,979,971) (1,704,498) (13,684,469) Loss per share (0.29) (0.04) (0.33) Three months ended September 30, 2018 As originally Net As reported adjustments corrected Income tax benefit $ 2,489,029 $ 1,557,842 $ 4,046,871 Net loss (4,988,310) 1,557,842 (3,430,468) Comprehensive loss (5,136,493) 1,557,842 (3,578,651) Loss per share (0.12) 0.04 (0.08) |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2. Basis of Presentation and Summary of Significant Accounting Policies Significant Accounting Policies Basis of Presentation —The accompanying consolidated financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Principles of Consolidation —The accompanying consolidated financial statements include the accounts of Osmotica Pharmaceuticals plc and its wholly-owned domestic and foreign subsidiaries. All inter‑company transactions and balances have been eliminated in consolidation. The Company is not involved with variable interest entities. Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Foreign Currency Translation —The financial position and results of operations of the Company’s non-U.S. subsidiaries are generally determined using U.S. Dollars as the functional currency, except our subsidiary in Argentina which uses the local currency as its functional currency. Assets and liabilities of this subsidiary are translated into U.S. dollars at the exchange rate in effect at each year end. Income statement accounts are translated into U.S. dollars at the average rate of exchange prevailing during the year. Adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive loss in shareholders’ equity. Foreign currency transaction gains and losses are included in foreign exchange (loss) gain in the Company’s statements of operations. Cash and Cash Equivalents —The Company considers all highly liquid investments with an original maturity date of three months or less to be cash equivalents. Fair Value of Financial Instruments —The Company applies Accounting Standards Committee or ASC 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable and short and long‑term debt. The fair values of these financial instruments approximate book value because of the short maturity of these instruments. The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below: Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. Inventories —Inventories are stated at the lower of cost or net realizable value at approximate costs determined on the first-in first-out basis. The Company maintains an allowance for excess and obsolete inventory as well as inventory where the cost is in excess of its net realizable value (“NRV”) based on management’s assessments. The Company capitalizes inventory costs associated with its products prior to regulatory approval when, based on management judgement, future commercialization is considered probable and future economic benefit is expected to be realized. As of December 31, 2018 and 2017, there were no capitalized inventory costs associated with products that had not yet achieved regulatory approval. The Company assesses the regulatory approval process and where the product stands in relation to that approval process including any known constraints or impediments to approval. The Company also considers the shelf life of the product in relation to the product timeline for approval. Sample inventory utilized for promoting the Company’s products are expensed and included in cost of goods sold when the sample units are purchased or manufactured. Property, Plant and Equipment —Property, plant and equipment is stated at cost, less accumulated depreciation. Maintenance and repairs are charged to expense when incurred. Additions and improvements that extend the economic useful life of the asset are capitalized and depreciated over the remaining useful lives of the assets. The cost and accumulated depreciation of assets sold or retired are removed from the respective accounts, and any resulting gain or loss is reflected in current earnings. Depreciation is provided using the straight‑line method in amounts considered to be sufficient to amortize the cost of the assets to operations over their estimated useful lives or lease terms, as follows: Asset category Depreciable life Buildings 20 - 30 years Leasehold improvements Lesser of the useful life of the improvement or the terms of the underlying lease Machinery 3 - 15 years Furniture, fixtures and equipment 3 - 10 years Computer hardware and software 3 - 12 years Long‑Lived Assets, Including Definite‑Lived Intangible Assets —Intangible assets are stated at cost less accumulated amortization. Amortization is generally recorded on a straight‑line basis or based on the expected pattern of cash flows over estimated useful lives ranging from 3 to 20 years. The Company periodically reviews the estimated useful lives of intangible assets and makes adjustments when events indicate that a shorter life is appropriate. Long‑lived assets, other than goodwill and other indefinite‑lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Factors that the Company considers in deciding when to perform an impairment review include significant changes in the Company’s forecasted projections for the asset or asset group for reasons including, but not limited to, significant under‑performance of a product in relation to expectations, significant changes, or planned changes in the Company’s use of the assets, significant negative industry or economic trends, and new or competing products that enter the marketplace. The impairment test is based on a comparison of the undiscounted cash flows expected to be generated from the use of the asset group. If impairment is indicated, the asset is written down by the amount by which the carrying value of the asset exceeds the related fair value of the asset with the related impairment charge recognized within the statements of operations. The Company recorded impairment charges of $10,303,208 and $15,894,843, in regard to definite‑lived intangible assets for the years ended December 31, 2018 and 2017, respectively (see Note 8). Goodwill and Indefinite Lived Intangible Assets —Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value‑based test. The Company is organized in one reporting unit and evaluates the goodwill for the Company as a whole. Goodwill is assessed for impairment on an annual basis as of October 1 st of each year or more frequently if events or changes in circumstances indicate that the asset might be impaired. Under the authoritative guidance issued by the Financial Accounting Standards Board (the “FASB”), the Company has the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the goodwill impairment test is performed. The goodwill impairment test requires the Company to estimate the fair value of the reporting unit and to compare the fair value of the reporting unit with its carrying amount. If the fair value exceeds the carrying value, then no impairment is recognized. If the carrying value recorded exceeds the fair value calculated, then an impairment charge is recognized for the difference. The judgments made in determining the projected cash flows used to estimate the fair value can materially impact the Company’s financial condition and results of operations. There was no impairment of goodwill for the year ended December 31, 2017. For the year ended December 31, 2018 it was determined that the carrying value of goodwill exceeded its fair value. Accordingly, the Company recognized a goodwill impairment charge of $86,318,000 for the year ended December 31, 2018 (see Note 8). In‑Process Research and Development (“IPR&D”) intangible assets represent the value assigned to acquired Research & Development (“R&D”) projects that principally represent rights to develop and sell a product that the Company has acquired which have not yet been completed or approved. These assets are subject to impairment testing until completion or abandonment of each project. Impairment testing requires the development of significant estimates and assumptions involving the determination of estimated net cash flows for each year for each project or product (including net revenues, cost of sales, R&D costs, selling and marketing costs and other costs which may be allocated), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, the potential regulatory and commercial success risks, and competitive trends impacting each asset and related cash flow stream as well as other factors. The major risks and uncertainties associated with the timely and successful completion of the IPR&D projects include legal risk, market risk and regulatory risk. If applicable, upon abandonment of the IPR&D product, the assets are reduced to zero. IPR&D is assessed for impairment on an annual basis as of October 1 st of each year or more frequently if events or changes in circumstances indicate that the asset might be impaired. If the fair value of the IPR&D is less than its carrying amount, an impairment is recognized for the difference. The Company recognized impairment charges to IPR&D of $7,600,000 and $56,625,436 for the years ended December 31, 2018 and 2017, respectively (see Note 8). Product Sales —Revenue is recognized at the point in time when the Company’s performance obligations with the applicable customers have been satisfied. At contract inception, the Company determines if the contract is within the scope of ASC Topic 606 and then evaluates the contract using the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue at the point in time when the entity satisfies a performance obligation. Revenue is recorded at the transaction price, which is the amount of consideration the Company expects to receive in exchange for transferring products to a customer. The Company considered the unit of account for each purchase order that contains more than one product. Because all products in a given purchase order are generally delivered at the same time and the method of revenue recognition is the same for each, there is no need to separate an individual order into separate performance obligations. The Company determines the transaction price based on fixed consideration in its contractual agreements, which includes estimates of variable consideration, and the transaction price is allocated entirely to the performance obligation to provide pharmaceutical products. In determining the transaction price, a significant financing component does not exist since the timing from when the Company delivers product to when the customers pay for the product is less than one year and the customers do not pay for product in advance of the transfer of the product. The Company records product sales net of any variable consideration, which includes estimated chargebacks, certain commercial rebates, and discounts and allowances. The Company utilizes the expected value method to estimate all elements of variable consideration included in the transaction price. The variable consideration is recorded as a reduction of revenue at the time revenues are recognized. The Company will only recognize revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. These estimates may differ from actual consideration amount received and the Company will re-assess these estimates each reporting period to reflect known changes in factors. Royalty Revenue —For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (a) when the related sales occur, or (b) when the performance obligation to which some or all the royalty has been allocated has been satisfied (or partially satisfied). Licensing and Contract Revenue —The Company has arrangements with commercial partners that allow for the purchase of product from the Company by the commercial partners for purposes of sub-distribution. The Company recognizes revenue from an arrangement when control of such product is transferred to the commercial partner, which is typically upon delivery. In these situations, the performance obligation is satisfied when product is delivered to the Company’s commercial partner. Licensing revenue is recognized in the period in which the product subject to the sublicensing arrangement is sold by the Company to its commercial partner. Sales deductions, such as returns on product sales, government program rebates, price adjustments, and prompt pay discounts in regard to licensing revenue is generally the responsibility of the Company’s commercial partners and not recorded by the Company. Freight —The Company records amounts billed to customers for shipping and handling as revenue, and records shipping and handling expenses related to product sales as cost of goods sold. 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 also has elected to account for these as costs to fulfill the promise and not as a separate performance obligation. Chargebacks —The Company enters into contractual agreements with certain third parties such as retailers, hospitals, and group-purchasing organizations (“GPOs”) to sell certain products at predetermined prices. Similarly, the Company maintains an allowance for rebates and discounts related to chargebacks, wholesaler fees for service contracts, GPO administrative fees, government programs, prompt payment and other adjustments with certain customers. Most of the parties have elected to have these contracts administered through wholesalers that buy the product from the Company and subsequently sell it to these third parties. As noted elsewhere, these wholesalers represent a significant percentage of the Company’s gross sales. When a wholesaler sells products to one of these third parties that are subject to a contractual price agreement, the difference between the price paid to the Company by the wholesaler and the price under the specific contract is charged back to the Company by the wholesaler. Utilizing this information, the Company estimates a chargeback percentage for each product and records an allowance as a reduction to gross sales when the Company records its sale of the products. The Company reduces the chargeback allowance when a chargeback request from a wholesaler is processed. The Company’s provision for chargebacks is fully reserved for at the time when sales revenues are recognized. The Company obtains product inventory reports from major wholesalers to aid in analyzing the reasonableness of the chargeback allowance and to monitor whether wholesaler inventory levels do not significantly exceed customer demand. The Company assesses the reasonableness of its chargeback allowance by applying a product chargeback percentage that is based on a combination of historical activity and current price and mix expectations to the quantities of inventory on hand at the wholesalers according to wholesaler inventory reports. In addition, the Company estimates the percentage of gross sales that were generated through direct and indirect sales channels and the percentage of contract vs. non-contract revenue in the period, as these each affect the estimated reserve calculation. In accordance with its accounting policy, the Company estimates the percentage amount of wholesaler inventory that will ultimately be sold to third parties that are subject to contractual price agreements based on a trend of such sales through wholesalers. The Company uses this percentage estimate until historical trends indicate that a revision should be made. On an ongoing basis, the Company evaluates its actual chargeback rate experience, and new trends are factored into its estimates each quarter as market conditions change. The Company ensures that chargebacks are reasonable through review of contractual obligations, historical trends and evaluation of recent activity. Furthermore, other events that could materially alter chargebacks include: changes in product pricing as a result of competitive market dynamics or negotiations with customers, changes in demand for specific products due to external factors such as competitor supply position or consumer preferences, customer shifts in buying patterns from direct to indirect through wholesalers, which could either individually or in aggregate increase or decrease the chargebacks depending on the direction and trend of the change(s). Commercial Rebates —The Company maintains an allowance for commercial rebates that it has in place with certain customers. Commercial rebates vary by product and by volume purchased by each eligible customer. The Company tracks sales by product number for each eligible customer and then applies the applicable commercial rebate percentage, using both historical trends and actual experience to estimate its commercial rebates. The Company reduces gross sales and increases the commercial rebates allowance by the estimated commercial rebates when the Company sells its products to eligible customers. The Company reduces the commercial rebate allowance when it processes a customer request for a rebate. At each month end, the Company analyzes the allowance for commercial rebates against actual rebates processed and makes necessary adjustments as appropriate. The Company’s provision for commercial rebates is fully reserved for at the time when sales revenues are recognized. The allowance for commercial rebates takes into consideration price adjustments which are credits issued to reflect increases or decreases in the invoice or contract prices of the Company’s products. In the case of a price decrease, a credit is given for products remaining in customer’s inventories at the time of the price reduction. Contractual price protection results in a similar credit when the invoice or contract prices of the Company’s products increase, effectively allowing customers to purchase products at previous prices for a specified period of time. Amounts recorded for estimated shelf-stock adjustments and price protections are based upon specified terms with direct customers, estimated changes in market prices, and estimates of inventory held by customers. The Company regularly monitors these and other factors and evaluates the reserve as additional information becomes available. The Company ensures that commercial rebates are reasonable through review of contractual obligations, review of historical trends and evaluation of recent activity. Furthermore, other events that could materially alter commercial rebates include: changes in product pricing as a result of competitive market dynamics or negotiations with customers, changes in demand for specific products due to external factors such as competitor supply position or consumer preferences, customer shifts in buying patterns from direct to indirect through wholesalers, which could either individually or in aggregate increase or decrease the commercial rebates depending on the direction and velocity of the change(s). Product Returns —Certain of the Company’s products are sold with the customer having the right to return the product within specified periods. Estimated return accruals are made at the time of sale based upon historical experience. Historical factors such as one-time recall events as well as pending new developments like comparable product approvals or significant pricing movement that may impact the expected level of returns are taken into account monthly to determine the appropriate accrued expense. As part of the evaluation of the liability required, the Company considers actual returns to date that are in process, the expected impact of any product recalls and the amount of wholesaler’s inventory to assess the magnitude of unconsumed product that may result in product returns to the Company in the future. The product returns level can be impacted by factors such as overall market demand and market competition and availability for substitute products which can increase or decrease the pull through for sales of the Company’s products and ultimately impact the level of product returns. Product returns are fully reserved for at the time when sales revenues are recognized. The Company ensures that product returns are reasonable through review of historical trends and evaluation of recent activity. Furthermore, other events that could materially alter product returns include: acquisitions and integration activities that consolidate dissimilar contract terms and could impact the return rate as typically the Company purchases smaller entities with less contracting power and integrates those product sales to Company contracts; and consumer demand shifts by products, which could either increase or decrease the product returns depending on the product or products specifically demanded and ultimately returned. Accrual for Promotions and Co‑Pay Discount Cards —From time to time the Company authorizes various retailers to run in‑store promotional sales of its products. The Company accrues an estimate of the dollar amount expected to be owed back to the retailer. Additionally, the Company provides consumer co‑pay discount cards, administered through outside agents to provide discounted products when redeemed. Upon release of the cards into the market, the Company records an estimate of the dollar value of co‑pay discounts expected to be utilized taking into consideration historical experience. Government Program Rebates —Federal law requires that a pharmaceutical distributor, as a condition of having federal funds being made available to the States for the manufacturer’s drugs under Medicaid and Medicare Part B, must enter into a rebate agreement to pay rebates to state Medicaid programs for the distributor’s covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid program under a fee‑for‑service arrangement. The Centers for Medicare and Medicaid Services (“CMS”) are responsible for administering the Medicaid rebate agreements between the federal government and pharmaceutical manufacturers. Rebates are also due on the utilization of Medicaid managed care organizations (“MMCOs”). The Company also pays rebates to managed care organizations (“MCOs”) for the reimbursement of a portion of the sales price of prescriptions filled that are covered by the respective plans. The liability for Medicaid, Medicare, and other government program rebates is settled in cash and is estimated at the time when sales revenues are recognized based on historical and current rebate redemption and utilization rates contractually submitted by each state’s program administrator and assumptions regarding future government program utilization for each product sold; and accordingly recorded as a reduction of product sales. Business Combinations —The Company accounts for its business combinations under the provisions of ASC Topic 805, Business Combinations (“ASC 805”), which requires that the purchase method of accounting be used for all business combinations. Assets acquired, and liabilities assumed, are recorded at the date of acquisition at their respective fair values. Amounts allocated to acquire IPR&D are capitalized at the date of an acquisition and are not amortized. As products in development are approved for sale, amounts are allocated to product rights and licenses and amortized over their estimated useful lives. Definite‑lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition‑related expenses are recognized separately from business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn‑outs, are recognized as follows: 1) if the contingent consideration is classified as equity, the contingent consideration is not re‑measured and its subsequent settlement is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. Purchases of developed products and licenses that are accounted for as an asset acquisition are capitalized as intangible assets and amortized over an estimated useful life. IPR&D assets acquired as part of an asset acquisition are expensed immediately if they have no alternative future uses. In‑Process Research and Development —In‑process research and development represent the fair value assigned to incomplete research projects that the Company acquires through business combinations or developed internally which, at that time, have not reached technological feasibility. Intangible assets associated with IPR&D projects are not amortized until regulatory approval is obtained and product is launched, subject to certain specified conditions and management judgment. The useful life of an amortizing asset generally is determined by identifying the period in which substantially all of the cash flows are expected to be generated. During the years ended December 31, 2018 and 2017, $0 and $264,100,000 of IPR&D was transferred to Product Rights as the products in development are approved for sale and placed into service (see Note 8). Such amounts will be amortized over their respectful estimated useful lives of 7 and 10 years. At that time an evaluation of fair value was performed immediately prior to such transfer. Research and Development Costs —Research and development costs are expensed as incurred. These expenses include the costs of proprietary efforts, as well as costs incurred in connection with certain licensing arrangements. Upfront payments are recorded when incurred, and milestone payments are recorded when the specific milestone has been achieved. Advertising —Advertising expense consists primarily of print media promotional materials. Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2018 and 2017 amounted to $6,193,610 and $2,650,540, respectively. Share‑based Compensation —The Company recognizes share‑based compensation expense for all options and other arrangements within the scope of ASC 718, Stock Compensation, that are expected to vest. Share‑based compensation expense is measured at the date of grant, based on the fair value of the award, and is recognized using the straight‑line method over the employee’s requisite service period. Compensation for share‑based awards with vesting conditions other than service are recognized at the time that those conditions will be achieved. Income Taxes —Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Where applicable, the Company records a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the future. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. Comprehensive income (loss) —Comprehensive income (loss) refers to revenues, expenses, gains and losses that under U.S. GAAP are included in comprehensive loss but are excluded from net loss as these amounts are recorded directly as an adjustment to accumulated other comprehensive income (loss). The Company’s other comprehensive loss is comprised of foreign currency translation adjustments. Basic and Diluted Loss per Share —Basic and diluted net loss per share is determined by dividing net loss by the weighted average ordinary shares outstanding during the period. For all periods presented with a net loss, the shares underlying the common share options have been excluded from the calculation because their effect would have been anti‑dilutive. Therefore, the weighted average shares outstanding used to calculate both basic and diluted loss per share are the same for periods with a net loss. Segment Reporting —The Company operates in one business segment which focuses on developing and commercializing pharmaceutical products that target markets with underserved patient populations. The Company’s business offerings have similar economic and other characteristics, |
Other Strategic Investments
Other Strategic Investments | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Other Strategic Investments | Note 3. Other Strategic Investments RevitaLid Asset Acquisition On October 24, 2017, the Company entered into a stock purchase agreement with Nephron Pharmaceuticals Corporation, Point Guard Partners, LLC, VOOM LLC, Tom Riedhammer, Avery Family Trust, and Vision Quest Holdings, LLC (collectively, the “Sellers”) to purchase the outstanding stock of RevitaLid, Inc. (“RevitaLid”). RevitaLid is the owner of RVL‑1201, an ophthalmic product that treats blepharoptosis, or droopy eyelid, which had been licensed from VOOM LLC. Osmotica obtained all rights to the VOOM LLC License Agreement and will be undertaking future development and commercialization of RVL‑1201, which includes conducting clinical trials and filing a new drug application with the Food and Drug Administration (“FDA”). The acquisition of RevitaLid included the license to intellectual property from VOOM LLC dated August 31, 2011 which contains future regulatory and sales milestone payments and royalties payable to VOOM LLC as well as a liability payable to Oculos Clinical Research and unpaid Seller transaction expenses. The minimum purchase price for the transaction was $12,500,000 which was payable less the liability payable to Oculos Clinical Research less all Sellers’ transaction expenses, plus an earn‑out based on specified percentages of net sales once regulatory approval has been given regarding commercialization, the Company determined that the earn‑out was not probable on October 24, 2017 or as of December 31, 2017. The Company evaluated the acquisition of the RevitaLid assets under ASC 805, Business Combinations and ASU 2017‑01 and concluded that as substantially all of the fair value of the gross assets acquired is concentrated in an identifiable group of similar assets, the transaction did not meet the requirements to be accounted for as a business combination and therefore was accounted for as an asset acquisition. Accordingly, the purchase price of the RevitaLid assets, along with transaction costs of $681,952 were allocated over the relative fair value of the identified group of assets as follows: In-process research and development $ 12,500,000 Net deferred tax assets and liabilities 3,872,476 Total assets acquired $ 16,372,476 The acquired IPR&D was deemed to have no alternative future uses, thus, pursuant to ASC 730, Research and Development , $16,372,476 was recorded as an expense after the acquisition date and included in Research and development expenses in the Consolidated Statements of Operations and Comprehensive Loss. The deferred tax liability of $5,566,642, a component of the net deferred tax assets and liabilities acquired, was subsequently removed and included as a component of the income tax benefit for the year ended December 31, 2017. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2018 | |
Revenues Abstract | |
Revenues | Note 4. Revenues The Company’s performance obligations are to provide its pharmaceutical products based upon purchase orders from distributors. The performance obligation is satisfied at a point in time, typically upon delivery, when the customer obtains control of the pharmaceutical product. The Company invoices its customers after the products have been delivered and invoice payments are generally due within 60 days of invoice date. The following table disaggregates revenue from contracts with customers by pharmaceutical products: Year Ended December 31, Pharmaceutical Product 2018 2017 Venlafaxine ER $ 66,039,604 $ 96,054,161 Methylphenidate ER 129,468,673 43,711,097 Lorzone 17,171,894 22,275,831 Divigel 23,313,679 18,541,774 OB Complete 10,509,824 10,446,364 Other 14,894,531 46,641,951 Net product sales 261,398,205 237,671,178 Royalty revenue 1,958,571 6,449,095 License and contract revenue 344,573 1,628,759 Total revenues $ 263,701,349 $ 245,749,032 When the Company receives consideration from a customer, or such consideration is unconditionally due from a customer prior to the transfer of products to the customer under the terms of a contract, the Company records a contract liability. The Company classifies contract liabilities as deferred revenue. The Company had no deferred revenue as of December 31, 2018 and 2017. Upon adoption of ASC Topic 606, the Company did not have any contract assets or liabilities. The Company has elected to apply the exemption under paragraph 606‑10‑50‑14(a) related to remaining performance obligations as all open purchase orders are expected to be satisfied with a period of one year from the date of the purchase order. 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 December 31, 2018. The Company has no costs to obtain or fulfill contracts meeting the capitalization criteria under ASC Topic 340, Other Assets and Deferred Costs. |
Accounts Receivable, Sales and
Accounts Receivable, Sales and Allowances | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Receivable, Sales and Allowances | |
Accounts Receivable, Sales and Allowances | Note 5. Accounts Receivable, Sales and Allowances The nature of the Company’s business inherently involves, in the ordinary course, significant amounts and substantial volumes of transactions and estimates relating to allowances for product returns, chargebacks, rebates, doubtful accounts and discounts given to customers. This is typical of the pharmaceutical industry and not necessarily specific to the Company. Depending on the product, the end‑user customer, the specific terms of national supply contracts and the particular arrangements with the Company’s wholesale customers, certain rebates, chargebacks and other credits are deducted from the Company’s accounts receivable. The process of claiming these deductions depends on wholesalers reporting to the Company the amount of deductions that were earned under the terms of the respective agreement with the end‑user customer (which in turn depends on the specific end‑user customer, each having its own pricing arrangement, which entitles it to a particular deduction). This process can lead to partial payments against outstanding invoices as the wholesalers take the claimed deductions at the time of payment. Accounts receivable result primarily from sales of pharmaceutical products, amounts due under revenue sharing, license and royalty arrangements, which inherently involves, in the ordinary course of business, estimates relating to allowances for product returns, chargebacks, rebates, doubtful accounts and discounts given to customers. Credit is extended based on the customer’s financial condition, and, generally, collateral is not required. The Company ages its accounts receivable using the corresponding sale date of the transaction and considers accounts past due based on terms agreed upon in the transaction, which is generally 30 to 60 days for branded and generic sales, depending on the customer and the products purchased. With the exception of the provision for doubtful accounts, which is reflected as part of selling, general and administrative expense, the provisions for the following customer reserves are reflected as a reduction of revenues in the accompanying Consolidated Statements of Operations and Comprehensive Loss. Trade accounts receivable, net consists of the following: December 31, December 31, 2018 2017 Gross trade accounts receivable Trade accounts receivable $ 146,419,682 $ 110,592,198 Royalty accounts receivable 238,960 25,712 Other receivable 1,562,287 4,161,368 Less reserves for: Chargebacks (38,861,232) (32,342,377) Commercial rebates (49,231,445) (39,233,419) Discounts and allowances (3,510,242) (3,484,587) Doubtful accounts (194,144) (2,080,938) Total trade accounts receivable, net $ 56,423,866 $ 37,637,957 Subsequent to the issuance of the 2017 consolidated financial statements, the Company determined that a reclassification was required to correct disclosure of the components of the royalty and other accounts receivable. These reclassifications had no effect on net earnings, cash flows or the Company’s financial position as previously reported. For the years ended December 31, 2018 and 2017, the Company recorded the following adjustments to gross product sales: Year Ended December 31, 2018 2017 Gross product sales $ 948,560,626 $ 646,701,628 Less provisions for: Chargebacks (365,042,883) (202,366,801) Government rebates (18,582,352) (26,007,632) Commercial rebates (257,916,721) (134,525,716) Product returns (20,492,281) (26,299,811) Discounts and allowances (20,245,486) (15,387,024) Advertising and promotions (4,882,698) (4,443,466) Net product sales $ 261,398,205 $ 237,671,178 For the years ended December 31, 2018 and 2017, the activity in the Company’s allowance for customer deductions against trade accounts receivable is as follows: Discounts Commercial and Doubtful Chargebacks Rebates Allowances Accounts Total Balance at January 1, 2017 $ 24,311,153 $ 30,552,734 $ 3,631,326 $ 4,910,478 $ 63,405,691 Provision 202,366,801 134,525,716 15,387,024 832,388 353,111,929 Charges processed (194,335,577) (125,845,031) (15,533,763) (3,661,928) (339,376,299) Balance at December 31, 2017 32,342,377 39,233,419 3,484,587 2,080,938 77,141,321 Provision 365,042,883 257,916,721 20,245,486 (1,771,487) 641,433,603 Charges processed (358,524,028) (247,918,695) (20,219,831) (115,307) (626,777,861) Balance at December 31, 2018 $ 38,861,232 $ 49,231,445 $ 3,510,242 $ 194,144 $ 91,797,063 The annual activity in the Company’s accrued liabilities for customer deductions by account for the years ended December 31, 2018 and 2017, is as follows: Product Government Returns Rebates Total Balance at January 1, 2017 $ 30,340,749 $ 6,485,749 $ 36,826,498 Provision 26,299,811 26,007,632 52,307,443 Charges processed (13,341,236) (18,341,667) (31,682,903) Balance at December 31, 2017 $ 43,299,324 $ 14,151,714 $ 57,451,038 Provision 20,492,281 18,582,352 39,074,633 Charges processed (15,328,096) (22,753,190) (38,081,286) Balance at December 31, 2018 $ 48,463,509 $ 9,980,876 $ 58,444,385 Provisions and utilizations of provisions activity in the current period which relate to the prior period revenues are not provided because to do so would be impracticable. The Company's current systems and processes do not capture the chargeback and rebate settlements by the period in which the original sales transaction was recorded. Chargeback, rebate claims and certain other gross to net items are not submitted by customers with sufficient details to link the accrual recorded at the point of sale with the settlement of the accrual. As a result, the Company is unable to reasonably determine the dollar amount of the change in estimate in its gross to net reporting reflected in its results of operations for each period presented, and, those changes could be significant. However, the Company uses a combination of factors and applications to estimate the dollar amount of reserves for chargebacks and rebates at each month end. The Company regularly monitors the reserves based on an analysis of the Company’s product sales and most recent claims, wholesaler inventory, current pricing, and anticipated future pricing changes. If amounts are different from the estimate due to changes from estimated rates, accrual rate adjustments are considered prospectively when determining provisions in accordance with authoritative U.S. GAAP. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventories | |
Inventories | Note 6. Inventories The components of inventories, net of allowances, are as follows: December 31, December 31, 2018 2017 Finished goods $ 15,577,104 $ 10,467,243 Work in process 1,138,906 789,413 Raw materials and supplies 7,667,011 5,690,214 $ 24,383,021 $ 16,946,870 The Company maintains an allowance for excess and obsolete inventory, as well as inventory where its cost is in excess of its net realizable value. The activity in the allowance for excess and obsolete inventory account for the years ended December 31, 2018 and 2017, was as follows: Year Ended December 31, December 31, 2018 2017 Balance at beginning of year $ 3,066,620 $ 7,754,596 Provision 2,926,472 9,183,372 Charges processed (4,432,010) (13,871,348) Balance at end of year $ 1,561,082 $ 3,066,620 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | Note 7. Property, Plant and Equipment, Net Property, plant and equipment consist of the following: Year Ended December 31, 2018 2017 Land $ 2,120,000 $ 2,120,000 Buildings 11,567,677 11,363,109 Leasehold improvements 2,109,106 2,095,784 Machinery 13,851,886 11,495,856 Furniture, fixtures and equipment 1,447,819 266,314 Computer hardware and software 6,984,055 5,838,823 38,080,543 33,179,886 Accumulated depreciation (10,235,900) (5,852,660) 27,844,643 27,327,226 Construction in progress 3,418,789 4,082,907 $ 31,263,432 $ 31,410,133 Depreciation expense was $4,476,813 and $3,069,223 for the years ended December 31, 2018 and 2017, respectively. There is approximately $1,502,000 of remaining construction in progress expenditures to substantially complete the projects. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | Note 8. Goodwill and Other Intangible Assets The Company tests goodwill and indefinite‑lived intangible assets for impairment annually as of October 1 st , or more frequently whenever events or changes in circumstances indicate that the asset might be impaired. As further described below, in December 2018, changes in events and circumstances made it more likely than not goodwill had been impaired. As a result we recognized a goodwill impairment charge of $86,318,000. The following table sets forth the carrying value of goodwill as of December 31, 2018 and 2017, respectively. Goodwill January 1, 2017 $ 187,172,816 Impairments — December 31, 2017 187,172,816 Impairments (86,318,000) December 31, 2018 $ 100,854,816 The following table sets forth the major categories of the Company’s intangible assets and the weighted‑average remaining amortization period as of December 31, 2018 and 2017, for those assets that are not already fully amortized: December 31, 2018 Weighted Average Remaining Gross Net Amortization Carrying Accumulated Carrying Period Amount Amortization Reclassifications Impairment Amount (Years) Distribution Rights $ 98,433,377 $ (17,229,374) $ — $ — $ 81,204,003 12.0 Product Rights 326,530,149 (109,056,754) — — 217,473,395 4.0 Tradenames 13,485,000 (2,329,284) — — 11,155,716 16.0 Developed Technology 138,133,333 (30,973,516) — (10,303,208) 96,856,609 12.6 IPR&D 91,300,000 — — (7,600,000) 83,700,000 Indefinite Lived $ 667,881,859 $ (159,588,928) $ — $ (17,903,208) $ 490,389,723 The gross carrying amount and accumulated amortization in the table above is inclusive of $6,156,564 of accumulated amortization for assets that have been fully impaired as of December 31, 2018. December 31, 2017 Weighted Average Gross Net Remaining Carrying Accumulated Carrying Amortization Amount Amortization Reclassifications Impairment Amount Period (Years) Distribution Rights $ 98,433,377 $ (9,890,282) $ — $ — $ 88,543,095 13.0 Product Rights 69,558,325 (49,902,094) 264,100,000 (7,128,176) 276,628,055 5.4 Tradenames 13,485,000 (1,623,368) — — 11,861,632 17.1 Developed Technology 146,900,000 (21,077,405) — (8,766,667) 117,055,928 13.1 IPR&D 412,025,436 — (264,100,000) (56,625,436) 91,300,000 Indefinite Lived $ 740,402,138 $ (82,493,149) $ — $ (72,520,279) $ 585,388,710 The gross carrying amount and accumulated amortization in the table above is inclusive of $3,786,772 of accumulated amortization for assets that have been fully impaired in 2017. Changes in intangible assets during the years ended December 31, 2018 and 2017, were as follows: Distribution Product Developed Rights Rights Tradenames Technology IPR&D Total January 1, 2017 $ 95,741,106 $ 44,091,974 $ 12,759,363 $ 136,672,033 $ 412,025,436 $ 701,289,912 Acquisitions — — — — 16,372,476 16,372,476 Amortization (7,198,011) (24,435,743) (897,731) (10,849,438) — (43,380,923) Impairments — (7,128,176) — (8,766,667) (56,625,436) (72,520,279) Reclassifications ( A) — 264,100,000 — — (264,100,000) — Expensed (B) — — — — (16,372,476) (16,372,476) December 31, 2017 $ 88,543,095 $ 276,628,055 $ 11,861,632 $ 117,055,928 $ 91,300,000 $ 585,388,710 Amortization (7,339,092) (59,154,660) (705,916) (9,896,111) — (77,095,779) Impairments — — — (10,303,208) (7,600,000) (17,903,208) December 31, 2018 $ 81,204,003 $ 217,473,395 $ 11,155,716 $ 96,856,609 $ 83,700,000 $ 490,389,723 (A) IPR&D related to the methylphenidate ER asset group was reclassified to Product Rights at the time the product was launched. The amount will be amortized over the estimated useful life of 7 years which was determined to be the period in which the Product Rights are expected to contribute to cash flow. The amount will be amortized on an accelerated method based on estimated pattern of cash flows. (B) The amount acquired for IPR&D in the RevitaLid Asset Acquisition was deemed to have no alternative future uses, thus the full amount was expensed (see Note 3). The Company tests goodwill and indefinite-lived intangible assets for impairment annually on October 1st, or more frequently whenever events or changes in circumstances indicate that the asset might be impaired. As part of the Company’s goodwill and intangible asset impairment assessments and when IPR&D assets are put into service, the Company estimates the fair values of the reporting unit and intangible assets using an income approach that utilizes a discounted cash flow model, or, where appropriate, a market approach. The discounted cash flow models are dependent upon our estimates of future cash flows and other factors. These estimates of future cash flows involve assumptions concerning (i) future operating performance, including future sales, long‑term growth rates, operating margins, variations in the amounts, allocation and timing of cash flows and the probability of achieving the estimated cash flows and (ii) future economic conditions. These assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. The discount rates applied to the estimated cash flows for the Company’s October 1, 2018 and 2017 annual goodwill and indefinite‑lived intangible assets impairment test ranged from 14.0% to 9.0%, respectively, depending on the overall risk associated with the particular assets and other market factors. The Company believes the discount rates and other inputs and assumptions are consistent with those that a market participant would use. Impairment charges resulting from annual or interim goodwill and intangible asset impairment assessments, if any, are recorded to Impairment of intangible assets in the Consolidated Statements of Operations and Comprehensive Loss. In December 2018, we determined that, subsequent to our annual impairment testing, circumstances and events related to pricing on certain of our generic assets together with our decision to discontinue commercialization of a developed technology asset, and discontinue development of an IPR&D asset, made it more likely than not that goodwill had become impaired. As a result, we performed an assessment of goodwill as of December 31, 2018. Based on the results of this assessment, it was determined that the carrying value of goodwill exceeded its fair value by approximately $86.3 million and an impairment charge was recognized for the year end December 31, 2018. During the fourth quarter of 2017, the Company performed an evaluation of the carrying value of the intangible assets acquired. After completing the valuations, the Company realized the net present value of the intangible assets had decreased below the net book value and thus impaired the intangible assets. Product Rights, Developed Technologies, and IPR&D had been impaired by $7,128,176, $8,766,667, and $56,625,436 respectively due to lower than expected cash flows and, in the case of IPR&D, delays in the anticipated timing of development. Amortization expense was $77,095,779 and $43,380,923 for the years ended December 31, 2018 and 2017, respectively. The amortization expense of acquired intangible assets for each of the following five years are expected to be as follows: Amortization Years ending December 31 Expense 2019 $ 68,899,197 2020 67,512,249 2021 65,348,168 2022 43,107,441 2023 38,906,920 Thereafter 122,915,748 Total $ 406,689,723 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities Abstract | |
Accrued Liabilities | Note 9. Accrued Liabilities Accrued liabilities consist of the following: December 31, December 31, 2018 2017 Accrued product returns $ 48,463,509 $ 43,299,324 Accrued royalties 3,597,957 12,325,232 Accrued compensation 8,672,913 6,342,731 Accrued government rebates 9,980,876 14,151,714 Accrued research and development 8,337,812 1,248,800 Accrued expenses and other liabilities 7,362,941 3,904,556 Customer coupons 719,578 425,911 Deferred revenue 101,354 228,122 Total $ 87,236,940 $ 81,926,390 In the ordinary course of business, the Company enters into contractual agreements with wholesalers pursuant to which the wholesalers distribute sales of Company products to customers and provide sales data to the Company. In return the wholesalers charge the Company a fee for services and other customary rebates and chargebacks based on distribution sales of Company products through the wholesalers and downstream customers. |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Dec. 31, 2018 | |
Financing Arrangements | |
Financing Arrangements | Note 10. Financing Arrangements The composition of the Company’s debt and financing obligations are as follows: December 31, December 31, 2018 2017 CIT Bank, N.A. Term Loan, net of deferred financing costs of $4,557,025 and $6,894,816 as of December 31, 2018 and December 31, 2017, respectively $ 266,802,911 $ 320,605,185 Note payable — insurance financing 1,774,199 — 268,577,110 320,605,185 Less: current portion (1,774,199) (6,655,604) Long-term debt $ 266,802,911 $ 313,949,581 Term Loan Concurrent with the closing of the Company's acquisition of Osmotica Holdings Corp Limited, the Company entered into a $160,000,000 Term Loan (the "Term Loan") pursuant to a Credit Agreement dated February 3, 2016 (the "Term Loan Agreement") between the Company as borrower, certain other lenders and CIT Bank, N.A. ("CIT Bank") acting as administrative agent. The Term Loan is secured by certain assets of the Company, excluding certain intangibles and foreign property. The Term Loan Agreement required quarterly principal repayments equal to 0.625% of the initial aggregate Term Loan amount beginning on the last day of the first full fiscal quarter following the closing of the Term Loan Agreement, with final payment of the remaining principal balance due at maturity six years from the date of closing of the Term Loan Agreement. At the Company's election, interest accrues on a Prime Rate/Federal Funds Effective Rate ("ABR Loan") or a LIBOR ("LIBOR Loan") rate, plus a margin of 4.00% for ABR Loan, and 5.00% for LIBOR Loan. As of December 31, 2016, this rate was 6.00%. For the year ended December 31, 2016, the Company incurred debt issuance costs associated with the Term Loan Agreement in the amount of $5,734,332, which were deferred and are amortized over the length of the Term Loan using the effective interest method. On November 10, 2016, the Company amended the Term Loan Agreement (the "Amended Term Loan Agreement") in conjunction with the reacquisition of venlafaxine distribution rights. Pursuant to the Amended Term Loan Agreement, CIT Bank and certain other lenders agreed to make available to the Company, an Incremental Term Loan in the aggregate principal amount of $117,500,000, which was added to the Term Loan; there were no other modifications to the Term Loan Agreement. The Company accounted for the Amended Term Loan Agreement as a modification of debt in accordance with ASC 470-50, Debt — Modifications and Extinguishments. In accordance with modification guidance detailed in ASC 470-50, lender fees incurred in the amount of $4,000,000 were deferred and are amortized over the length of the Term Loan using the effective interest rate method. In addition, the Company incurred third party fees associated with the Amended Term Loan Agreement in the amount of $398,558, which were expensed as professional fees in accordance with modification guidance and included in selling, general and administrative expense during the year ended December 31, 2016. On April 28, 2017, the Company amended the Amended Term Loan Agreement (the "Second Amended Term Loan Agreement"), in which the due date of the Company's annual financial statements was modified for the first fiscal year after the closing of the Second Amended Term Loan Agreement. Furthermore, on December 21, 2017, the Company amended the Second Amended Term Loan Agreement (the "Third Amended Term Loan Agreement"). Pursuant to the Third Amended Term Loan Agreement, CIT Bank and certain other lenders agreed to increase the principal amount of the Term Loan to an aggregate principal amount of $327,500,000. Of the aggregate principal amount, $277,500,000 will be designated as the Term A Loan and $50,000,000 will be designated as the Term B Loan. The Third Amended Term Loan Agreement requires quarterly principal repayments to 0.6925% of the original principal amount of the Term A Loan and in the case of the Term B Loan 0.25% of the original principal amount of the Term B Loan, with final payment of the remaining principal balance due at maturity five years from the date of closing of the Third Amended Term Loan Agreement. At the Company's election, for the Term A Loan, interest accrues on a Prime Rate/Federal Funds Effective Rate ("ABR Loan") or an LIBOR ("LIBOR Loan") rate in which the applicable rate per annum set forth below under the caption "ABR Spread" or "LIBOR Rate Spread," based upon the Total Leverage Ratio (as defined in the Third Amended Term Loan Agreement) as of last day of the most recently ended fiscal quarter is as follows: Total Leverage Ratio LIBOR Rate Margin ABR Margin Category 1 3.75 % 2.75 % Greater than 2.00 to 1.00 Category 2 3.25 % 2.25 % Equal to or less than 2.00 to 1.00 For Term B Loan, interest accrues with respect to any ABR Loan, 3.25% per annum, and with respect to any LIBOR Rate Loan, 4.25% per annum. As of December 31, 2018 and 2017, the interest rates were 6.09% and 5.25% for Term A Loan and 6.59% and 5.75% for Term B Loan, respectively. The Company accounted for the Third Amended Term Loan Agreement as a modification of debt in accordance with ASC 470-50, Debt — Modifications and Extinguishments. In accordance with modification guidance detailed in ASC 470-50, lender fees incurred in the amount of $3,126,000 were deferred and are amortized over the length of the Term Loan using the effective interest rate method. In addition, deferred financing fees and a prepayment premium in the total amount of $4,981,624 were charged to other non-operating (loss)/income, net during the year ended December 31, 2017, as certain previous lenders did not participate in the Third Amended Term Loan. In addition, the Company incurred third party fees associated with the Third Amended Term Loan Agreement in the amount of $389,234, which were expensed as professional fees in accordance with modification guidance and included in selling, general and administration expense during the year ended December 31, 2017. The Third Amended Term Loan Agreement contains covenants that require the Company to deliver quarterly and annual financial statements along with certain supplementary financial information and schedules and ratios. The Third Amended Term Loan Agreement also contains covenants that limit the ability of the Company to, among other things: incur additional indebtedness; incur liens; make investments; make payments on indebtedness; dispose of assets; enter into merger transactions; and make distributions. In addition, the Company shall not permit the total leverage ratio to be greater than 4.75:1.00 until March 31, 2020 at which time the total leverage ratio remains constant at a required 4.50:1.00. The total leverage ratio is the ratio, as of any date of determination, of (a) consolidated total debt, net of unrestricted cash and cash equivalents as of such date to (b) consolidated adjusted earnings before income taxes, depreciation and amortization ("Consolidated EBITDA") for the test period then most recently ended for which financial statements have been delivered. Also, the Company will not permit the fixed charge coverage ratio to fall below 1.25:1.00 beginning on March 31, 2018 through the final maturity date. The fixed charge coverage ratio, as of the date of determination, is the ratio of (x) Consolidated EBITDA net of capital expenditures and cash taxes paid to (y) interest payments, scheduled principal payments, restricted payments and management fees paid to related parties. The Company obtained a waiver from CIT Bank in regard to its non-compliance of its covenant to deliver annual financial statements by April 2, 2018. The Company did not incur a waiver fee as a condition to the waiver. The Company was in compliance with all covenants of the Third Amended Term Loan Agreement as of December 31, 2018. On October 31, 2018, the Company used a portion of the proceeds resulting from the IPO on October 22, 2018 to repay $50,000,000 in aggregate of the outstanding principal amount and $1,787,924 of accrued interest of indebtedness under the Company’s senior secured credit facilities. The prepayments made on October 31, 2018 were as follows: (1) $42,278,907 and $1,492,597 on Term Loan A outstanding principal and accrued interest, respectively, and (2) $7,721,093 and $295,327 on Term Loan B outstanding principal and accrued interest respectively. The prepayments were made on a pro rata basis which is consistent with the requirements of the Third Amendment. The prepayments were applied to the remaining scheduled installments of principal due in respect of the Term Loans of such class in direct order of maturity. As a result, there are no remaining scheduled installments of principal due in respect of the Term Loans until the final maturity date. The Company will continue to make interest payments accrued on the outstanding remaining balance through the date of maturity. In accordance with ASC 470, when debt is prepaid within its contractual terms and the terms of the remaining debt are not modified, the prepayment should be treated as a partial extinguishment rather than a modification. This conclusion is reached without regard to consideration of the 10% cash flow test since no change to terms of the original debt instrument was modified in connection with the prepayment. The Third Agreement allows for partial prepayments without creating changes to the terms of Term Loan A or Term Loan B. The Company incurred debt issuance costs associated with the Third Amendment. Pursuant to ASC 835-30-35-2, with respect to a note for which the imputation of interest is required, the difference between the present value and the face amount shall be treated as a discount or premium and amortized as interest expense or income over the life of the note in such a way as to result in a constant rate of interest when applied to the amount outstanding at the beginning of any given period. As such, in accordance with ASC 835-30-35-2, the Company deferred and amortized the debt issuance costs amortized over the length of the Term Loan using the effective interest method. The balance of the debt issuance costs as of the date of the partial prepayment made on October 31, 2018 was $5,627,508. As a result of the partial extinguishment, the Company has elected, as an accounting policy in accordance with ASC 470-50-40-2, to write off a proportionate amount of the unamortized fees at the time that the financing was partially settled in accordance with the terms of the Third Amendment. The unamortized debt issuance costs are allocated between the remaining original loan balance and the portion of the loan paid down on a pro-rata basis. At the time of repayment, the Company wrote off $875,576 in debt issuance costs and recorded the expense in the accompanying Consolidated Statement of Operations and Comprehensive Loss. Revolving Facility Concurrent with the closing of the Company's acquisition of Osmotica Holdings Corp Limited, the Company entered into a Revolving Facility in an aggregate amount of $30,000,000 (the "Revolving Facility") pursuant to a Credit Agreement dated February 3, 2016 between the Company as borrower, certain other lenders and CIT Bank, N.A. ("CIT Bank") acting as administrative agent, as discussed above. The Company incurred closing costs associated with the Revolving Facility in the amount of $1,075,187, which were deferred and amortized over the length of the Revolving Facility on a straight-line basis. On December 21, 2017, the Company amended the Revolving Facility (the "Amended Revolving Facility"). Pursuant to the Amended Revolving Facility, CIT Bank and certain other lenders agreed to increase the revolving credit commitments up to $50,000,000. The Company accounted for the Amended Revolving Facility as a modification of debt in accordance with ASC 470-50, Debt — Modifications and Extinguishments and ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line of Credit Arrangements. Lender fees incurred in the amount of $437,500 were deferred and are amortized over the length of the Amended Revolving Facility on a straight-line basis. The total amount available under the Revolving Facility includes a Swingline Loan and Letter of Credit subfacility, respectively, in an aggregate principal amount at any time outstanding not to exceed the lesser of (x) in the case of each of the Swingline Loan and Letter of Credit, $5,000,000 and (y) the total revolving commitment, based on certain terms and conditions of the Credit Agreement. The Company will be required to repay the Revolving Facility upon its expiration five years from issuance, subject to permitted extension, and will pay interest on the outstanding balance monthly based, at the Company's election, on an adjusted prime/federal funds rate ("ABR") or an adjusted LIBOR ("LIBOR"), in which the applicable rate per annum set forth below under the caption "ABR Spread" or "LIBOR Rate Spread," based upon the Total Leverage Ratio (as defined in the Credit Agreement) as of last day of the most recently ended fiscal quarter is as follows: Total Leverage Ratio LIBOR Rate Margin ABR Margin Category 1 3.75 % 2.75 % Greater than 2.00 to 1.00 Category 2 3.25 % 2.25 % Equal to or less than 2.00 to 1.00 At December 31, 2018 and 2017, there were no outstanding borrowings or outstanding letters of credit. Availability under the Revolving Facility as of December 31, 2018, was $50,000,000. Subordinated Note Concurrent with the closing of the Company's acquisition of Osmotica Holdings Corp Limited, the Company entered into a $40,000,000 Subordinated Note Purchase Agreement (the "Subordinated Note") between the Company as borrower and Newstone Capital Partners, LLC. Interest on the outstanding principal balance of the Subordinated Note accrues, at the Company's election, at a rate equal to ABR plus a margin of 9.00% or LIBOR plus a margin of 10.00%. As of December 31, 2016, the effective interest rate on the Subordinated note was 11.00%. The Subordinated Note was to mature on February 3, 2023. As part of the Third Amended Term Loan Agreement, the Subordinated Note was paid in full including associated accrued interest. $1,159,557 and $800,000 of deferred financing and prepayment costs, respectively, associated with the Subordinated Note was expensed in accordance with ASC 470-50, Debt — Modifications and Extinguishments and included in the total amount of $4,981,624 as a component of other non-operating (loss) income, net on the accompanying Consolidated Statement of Operations and Comprehensive Loss. Promissory Notes Concurrent with the closing of the Company's acquisition of Osmotica Holdings Corp Limited, the Company entered into four promissory note agreements (collectively the "PIK Notes") for total proceeds of $25,000,000. The PIK Notes are identical to each other with exception for the Lender (as identified below) and principal sum. Interest accrued on a daily basis at a rate equal to 18% per annum on the unpaid principal balance of the PIK Notes outstanding. The lenders and principal sum of the PIK Notes are below: Lender Principal Sum Altchem Limited (Cyprus) $ 12,500,000 ACP III AIV, L.P. 7,661,834 ACP Holdco (Offshore), L.P. 4,272,166 Newstone Capital Partners II, L.P. 566,000 $ 25,000,000 As part of the Third Amended Term Loan Agreement, the PIK Notes were paid in full including associated accrued in-kind interest that had been accrued and capitalized in a total amount of $9,321,500. Aggregated cumulative maturities of long-term obligations (including the incremental and existing Term Loan and the Revolving Facility), excluding deferred financing costs of $4,557,025, as of December 31, 2018 are: Maturities of Long-term Years ending December 31, Obligations 2019 $ 1,774,199 2020 — 2021 — 2022 271,359,936 Total $ 273,134,135 |
Concentrations and Credit Risk
Concentrations and Credit Risk | 12 Months Ended |
Dec. 31, 2018 | |
Concentrations and Credit Risk | |
Concentrations and Credit Risk | Note 11. Concentrations and Credit Risk For the years ended December 31, 2018 and 2017, a significant portion of the Company’s gross product sales reported were through three customers, and a significant portion of the Company’s accounts receivable as of December 31, 2018 and 2017 were due from these customers as well. The following table sets forth the percentage of the Company’s gross sales and accounts receivable attributable to these customers for the periods indicated: Gross Product Year Ended December 31, 2018 2017 Amerisource Bergen 7 % 23 % Cardinal Health 55 % 37 % McKesson 34 % 32 % Combined Total 96 % 92 % Gross Account Receivables December 31, December 31, 2018 2017 Amerisource Bergen 6 % 7 % Cardinal Health 61 % 57 % McKesson 29 % 29 % Combined Total 96 % 93 % Purchasing For the year ended December 31, 2018, four suppliers accounted for more than 96% of the Company’s purchases of raw materials for products that are manufactured by the Company. Three suppliers accounted for more than 91% of the Company’s purchases of raw materials manufactured by the Company for the year ended December 31, 2017. The Company purchases various API of finished products at contractual minimum levels through agreements with third parties. Individually, none of these agreements are material to the Company, therefore, the Company does not believe at this time that any of the purchase obligations represent levels above the normal course of business. Sales by Product For the years ended December 31, 2018 and 2017, one product accounted for 66% and 15%, respectively, of the Company's total gross product sales. Royalty Sales The following tables set forth the percentage of the revenues and accounts receivable recognized in connection with Company's royalty contracts for the years ended December 31, 2018 and 2017, respectively: Year ended December 31, 2018 Gross Gross Royalty Royalty Revenue Accounts Receivable Customer 4 36 % 43 % Customer 5 31 % 30 % Customer 6 — % — % Combined Total 67 % 73 % Year ended December 31, 2017 Gross Gross Royalty Royalty Revenue Accounts Receivable Customer 4 54 % NM % Customer 5 14 % NM % Customer 6 21 % NM % Combined Total 89 % — % |
Incentive Plans
Incentive Plans | 12 Months Ended |
Dec. 31, 2018 | |
Incentive Plans | |
Incentive Plans | Note 12. Incentive Plans Osmotica Pharmaceuticals plc 2018 Equity Incentive Plan Prior to the IPO, the Company adopted the 2018 Incentive Plan (the "2018 Plan") which became effective upon our IPO and allows for the issuance of up to 4,100,000 ordinary shares of the Company ("Shares") in satisfaction of awards under the 2018 Plan. The 2018 Plan provides for the grant of share options, SARs, restricted and unrestricted share and share units, performance awards, and other awards that are convertible into or otherwise based on the Company’s shares to employees and non-employee directors, consultants and advisors to the Company. The Company's compensation committee shall determine the time at which an award vests or becomes exercisable. In connection with the IPO, the Company granted share options under the 2018 Plan that will vest on the fourth anniversary of the grant date, subject to the employee’s continued employment through such vesting date. Osmotica Holdings S.C.Sp. 2016 Equity Incentive Plan Effective February 3, 2016, Osmotica Holdings S.C.Sp. adopted the 2016 Equity Incentive Plan (the "2016 Plan") which allows for the issuance of up to 75,000 Units in Osmotica Holdings S.C.Sp. Options to purchase common units granted under the 2016 Plan vest and become exercisable in whole or in part, in accordance with vesting conditions set by the Company's board of directors. Each option award had a maximum term of ten years from the date of grant. The option awards granted under the 2016 Plan were made up of two components: Time Awards and Performance Awards. The Time Awards vested 25% annually from original grant date, subject to continuous employment on each vesting date. The vesting of the Performance awards was subject to performance criteria, requiring the majority investors in the Company to receive (on a cumulative basis) aggregate net proceeds exceeding certain return on investment targets. The Time Awards and Performance Awards contained a sales restriction in the form of a liquidity event and subsequent disposal of common units by the Major Limited Partners (as defined in the 2016 Plan) before the employee was able to sell vested and exercised common units and were required to remain employed to avoid Company’s call option on such common units at a lower of cost or fair market value. Amended and Restated Osmotica Pharmaceuticals plc. 2016 Equity Incentive Plan On August 14, 2018, the board of directors amended and restated the 2016 Plan in connection with the Reorganization. The Amended and Restated 2016 Equity Incentive Plan (the “Amended 2016 Plan”) became effective upon our IPO which closed on October 22, 2018. In connection with the Reorganization, options to purchase common units of Osmotica Holdings S.C.Sp. were converted into options to purchase shares of the Company and existing sales restriction was removed. In connection with the IPO, the number of shares issuable pursuant to the Amended 2016 Plan and the corresponding exercise prices of options were adjusted to reflect a stock split initiated prior to the IPO. Additionally, effective upon the IPO, the Amended 2016 Plan modified the terms of Performance Awards previously issued under the 2016 Plan by converting these awards to time based awards vesting in equal annual installments on the first four anniversaries of the IPO, subject to continuous employment. There were 3,015,572 ordinary shares issuable upon exercise of options issued and outstanding as of December 31, 2018 under the Amended 2016 Plan. Prior to the modification date, there was no share based compensation recognized for the Performance Awards due to a performance condition based upon the majority investors in the Company receiving aggregate net proceeds exceeding certain return on investment targets. Share-based Compensation The estimated fair value of the options is expensed over the requisite service period, which is generally the vesting period on a graded vesting basis. The compensation cost that has been charged against income for those incentive plans was $1,965,346 for the year ended December 31, 2018, $1.2 million of which related to share based compensation incurred prior to the IPO related to the fiscal year 2018. The total income tax benefit recognized in the statement of operations and comprehensive loss for share-based compensation arrangements was $439,318 for the year ended December 31, 2018. The conversion of the Performance Awards issued under the 2016 Plan to Time Awards upon IPO under the Amended 2016 Plan was accounted for as a modification where the fair value of such awards determined on a modification date, or the IPO date is being recognized over their remaining vesting period. Share-Based Award Activity A summary of option activity granted under the 2016 Plan and the Amended 2016 Plan as of December 31, 2018, and changes during the year then ended is presented below: 2016 Equity Incentive Plan Weighted Weighted Average Average Number of Units Exercise Contractual Time Performance Total Price Term Outstanding at December 31, 2016 35,650 35,650 71,300 $ — Granted 3,150 3,150 6,300 646 Exercised — — — — Expired / Forfeited (2,700) (2,700) (5,400) 640 Outstanding at December 31, 2017 36,100 36,100 72,200 $ — 8.3 years Granted — — — — Exercised — — — — Expired / Forfeited (900) (900) (1,800) 640 Outstanding at date of conversion 35,200 35,200 70,400 641 Unit options converted to share options 1,507,786 1,507,786 3,015,572 14.96 Performance options modified to time options 1,507,786 (1,507,786) — 14.96 Granted — — — — Exercised — — — — Expired / Forfeited — — — — Outstanding at December 31, 2018 3,015,572 — 3,015,572 — 7.5 years Vested Options at December 31, 2018 720,131 — 720,131 $ 14.96 There were no options granted during 2018 under the 2016 Plan. The weighted-average grant-date fair value of options granted during 2018 under the 2016 Plan was $184.69. A summary of option activity granted under the 2018 Plan as of December 31, 2018, and changes during the year then ended is presented below: Weighted Weighted Average Average Number of Shares Exercise Contractual Time Performance Total Price Term Outstanding at December 31, 2017 — — — $ 7.00 Granted 179,700 — 179,700 — Exercised — — — — Expired / Forfeited (1,100) — (1,100) 7.00 Outstanding at December 31, 2018 178,600 — 178,600 $ — 9.8 years Vested Options at December 31, 2018 — — — $ 7.00 The weighted-average grant-date fair value of options granted during 2018 under the 2018 Plan was $3.82. As of December 31, 2018, there was $5,062,986 of total unrecognized compensation cost related to nonvested options granted under the Incentive Plans. That cost is expected to be recognized over a weighted-average period of 9.8 years. The fair value of option awards is estimated using the Black-Scholes option-pricing model. Exercise price of each award is generally not less than the per share fair value in effect as of that award date. The determination of fair value using the Black-Scholes model is affected by the Company’s share fair value as well as assumptions regarding a number of complex and subjective variables, including expected price volatility, risk-free interest rate and projected employee share option exercise behaviors. Options granted or modified under the 2016 Plan and 2018 Plan during the years ended December 2018 and 2017 were valued using the Black-Scholes option-pricing model with the following assumptions: Years ended December 31, 2018 2017 Expected volatility 50% - 63.1 % 50% - 55 % Risk-free interest rate 3.03% - 3.11 % 1.94% - 2.27 % Expected dividend yield — % — % Expected life of options in years 5.02 - 7.00 6.25 The Company estimates its expected volatility by using a combination of historical share price volatilities of similar companies within our industry. The risk-free interest rate assumption is based on observed interest rates for the appropriate term of the Company’s options on a grant date. The expected option term assumption is estimated using the simplified method and is based on the mid-point between vest date and the remaining contractual term of the option, since the Company does not have sufficient exercise history to estimate expected term of its historical option awards. For all periods prior to the IPO, our Board of Directors has determined the fair value of the common unit underlying our option with assistance from management and based upon information available at the time of grant. Prior to our IPO, given the absence of a public trading market for our common units, estimating the fair value of our common units based on the actual operational and financial performance, current business conditions and discounted cash flow projections. The estimated fair value of our common units, prior to our IPO was adjusted for lack of marketability and control existing at the grant date. |
Earnings (Loss) per Ordinary Sh
Earnings (Loss) per Ordinary Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Ordinary Share | Note 13. Earnings (Loss) per Ordinary Share Basic net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted-average number of shares of ordinary shares outstanding during the period. Diluted net income per ordinary shares is computed by dividing net income by the weighted average number of shares of ordinary shares and potentially dilutive outstanding shares of ordinary shares during the period to reflect the potential dilution that could occur from ordinary shares issuable through contingent share arrangements, share options and warrants. The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares and units outstanding as they would have been anti ‑ dilutive at December 31, 2018 and 2017: Year Ended December 31, 2018 2017 Unit options to purchase units — 74,200 Options to purchase ordinary shares 3,193,072 — |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 14. Commitments and Contingencies The Company leases its New Jersey office and warehouse facilities under non‑cancelable leases that expire in July 2022 and December 2023, respectively. On September 6, 2018, the Company entered into a sublease agreement to lease additional office space in its New Jersey location that expires November 2023. The Company also leases office and warehouse facilities in Tampa, Florida, under a non‑cancelable lease that expires in October 2023. The Company also leases its Argentina office and warehouse facilities which originally expired in December 31, 2014, but the contract was amended to extend to December 31, 2020. The Company also leases its Hungary office and warehouse facilities which expired on February 15, 2017 and automatically renewed for a two‑year term. The lease will continue to renew for successive two‑year periods unless either party elects not to renew. The Company also leases its North Carolina office and warehouse facilities that expires on July 31, 2019. In 2018, the Company began leasing vehicles under a cancelable fleet lease that has successive one-year renewal terms. The lease may be terminated by either party by providing written notice to the other. Total rent expense charged to selling, general and administrative expenses was $1,000,994 and $598,159 for the years ended December 31, 2018 and 2017, respectively. Total rent expense charged to research and development was $229,448 and $273,706 for the years ended December 31, 2018 and 2017, respectively. The rent expense charged to cost of goods sold was $343,793 and $372,429 the years ended December 31, 2018 and 2017, respectively. The table below shows the future minimum rental payments, exclusive of taxes, insurance and other costs, under the leases as of December 31, 2018: Years ending December 31 Operating Leases 2019 $ 1,997,564 2020 1,371,444 2021 1,084,566 2022 859,184 2023 490,514 Thereafter — Total $ 5,803,272 Capital Leases Amortization of assets held under the capital lease is included in depreciation expense as a component of selling, general and administrative expenses. The Company has future minimum lease payments for the year ended December 31, 2018 required under the capital leases together with its present value of the net minimum lease payments of $257,293. Contingent Milestone Payments The Company has entered into strategic business agreements for the development and marketing of finished dosage form pharmaceutical products with various pharmaceutical development companies. Each strategic business agreement includes a future payment schedule for contingent milestone payments and in certain strategic business agreements, minimum royalty payments. The Company will be responsible for contingent milestone payments and minimum royalty payments to these strategic business partners based upon the occurrence of future events. Each strategic business agreement defines the triggering event of its future payment schedule, such as meeting product development progress timelines, successful product testing and validation, successful clinical studies, and various U.S. Food and Drug Administration and other regulatory approvals. Royalty Obligations The Company has agreements with third parties that require the Company to make minimum royalty payments on a calendar year basis. The following table lists the Company’s enforceable and legally binding royalty obligations as of December 31, 2018: Royalty Obligations Less than 1 year $ 1,375,000 1 to 3 years 3,188,000 3 to 5 years 3,000,000 More than 5 years 1,083,000 Total $ 8,646,000 Supply Agreement Obligations The Company is engaged in various supply agreements with third parties which obligate the Company to purchase various API or finished products at contractual minimum levels. None of these agreements are individually in the aggregate material to the Company. Further, the Company does not believe at this time that any of the purchase obligations represent levels above that of normal business demands. The following table lists the Company’s enforceable and legally binding purchase obligations as of December 31, 2018: Purchase Obligations Less than 1 year $ 4,000,000 1 to 3 years — 3 to 5 years — Total $ 4,000,000 Defined Contribution Plan Vertical/Trigen and Legacy Osmotica both had a defined contribution plan under Section 401(k) of the Internal Revenue Code ("IRC") as of December 31, 2016 pursuant to the Merger (the "Contribution Plans"). The employees of the respective Companies are eligible to participate in the Contribution Plans. Participants may contribute amounts through payroll deductions not to exceed IRC limitations. For the year ended December 31, 2016, the Vertical/Trigen Plan provided for nonelective employer contributions equal to 3% of basic compensation. The separate Contribution Plans were merged into one plan effective January 1, 2017. Effective January 1, 2017, the plan provides for employer matching contributions equal to 100% of each employee's elective deferrals up to 3% of base salary, plus 50% of each employee's elective deferrals between 3% and 5% of base salary. For the years ended December 31, 2018 and 2017, the Company recognized expenses related to its contributions under the Plan of $1,076,677 and $896,632, respectively. Legal Proceedings The Company is a party in legal proceedings and potential claims arising from time to time in the ordinary course of its business. The amount, if any, of ultimate liability with respect to such matters cannot be determined. Despite the inherent uncertainties of litigation, management of the Company believes that the ultimate disposition of such proceedings and exposures will not have a material adverse impact on the financial condition, results of operations, or cash flows of the Company. Osmotica was a party to patent infringement litigation in the U.S. District Court for the Northern District of Georgia with Shire Development, LLC (“Shire”) over the Company’s proposed delayed‑release mesalamine abbreviated new drug application (“ANDA”) product which is a generic version of Shire’s LIALDA ® . ( Shire Development LLC et al. v. Osmotic Pharmaceutical Corp. , No. 1‑12‑cv‑00904 (N.D. Georgia, filed March 16, 2012)). The litigation over the mesalamine product was limited to one (1) patent, U.S. Patent No. 6,773,720 (the “720 Patent”), which is directed to a particular controlled‑release formulation. Absent invalidation by a generic challenger, the ‘720 Patent will expire on June 8, 2020. On March 29, 2017, Osmotica sent a notice to the FDA requesting that their ANDA be withdrawn, and on March 31, 2017, Osmotica received confirmation from FDA that the ANDA was withdrawn. On May 5, 2017, Osmotica was dismissed from the litigation, as such no loss or accrual was deemed necessary. On February 16, 2018, the Company received FDA approval for its amantadine extended release tablets under the trade name Osmolex ER. On that same date the Company filed in the Federal District Court for the District of Delaware a Complaint for Declaratory Judgment of Noninfringement of certain patents owned by Adamas Pharmaceuticals, Inc. (Osmotica Pharmaceutical US LLC and Vertical Pharmaceuticals, LLC vs. Adamas Pharmaceuticals, Inc. and Adamas Pharma, LLC). Adamas was served with the Complaint on February 21, 2018. Adamas filed an answer on April 13, 2018 denying the allegations in the Complaint. On September 20, 2018, Adamas filed an amended answer to the Company’s Complaint for Declaratory Judgment of Noninfringement, with counterclaims alleging infringement of certain patents included in the Company’s Complaint and requesting that the court grant Adamas damages, injunctive relief and attorneys’ fees. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | Note 15. Income Taxes Osmotica Pharmaceuticals plc (formerly known as Lilydale Limited and Osmotica Pharmaceuticals Limited) is an Irish public limited company. Osmotica Holdings S.C.Sp. acquired Osmotica Pharmaceuticals plc on April 30, 2018 for the purpose of facilitating an offering of ordinary shares in an initial public offering. On October 22, 2018, Osmotica Pharmaceuticals plc completed its initial public offering (the “IPO”). Immediately prior to the IPO and prior to the commencement of trading of Osmotica Pharmaceuticals plc’s ordinary shares on the Nasdaq Global Select Market, Osmotica Holdings S.C.Sp. undertook a series of restructuring transactions that resulted in Osmotica Pharmaceuticals plc being the direct parent of Osmotica Holdings S.C.Sp. Osmotica Holdings S.C.Sp. is a Luxembourg special limited partnership, formed on January 28, 2016. Osmotica Holdings US LLC, a subsidiary of Osmotica Holdings S.C.Sp. entered into a fifty ‑ fifty partnership (the “Merger”), effective February 3, 2016, pursuant to a definitive agreement between Vertical/Trigen Holdings, LLC (“Vertical/Trigen”) and members, and Osmotica Holdings Corp Limited and Subsidiaries. Osmotica Holdings S.C.Sp. and several other holding companies and partnerships were formed as a result of the Merger. Vertical/Trigen Holdings, LLC became a wholly-owned subsidiary of certain U.S. corporations that are directly or indirectly owned by Osmotica Holdings U.S. LLC. These subsidiaries are included in the consolidated financial statements and are designated as C Corp filers for U.S. tax purposes. As such, the activity of Vertical/Trigen Holdings, LLC is subject to federal income tax at the level of its U.S. corporate parents beginning in 2016. In addition, the Company’s foreign entities are subject to income tax in various foreign jurisdictions. The Company follows the Income Taxes topic of ASC 740, which prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, as well as guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The loss before income taxes and the related tax benefit are as follows: December 31, December 31, 2018 2017 Loss before income taxes U.S. operations $ (52,758,931) $ (41,276,187) Non-U.S. operations (65,905,252) (44,366,355) Total loss before income taxes (118,664,183) (85,642,542) Current provision Federal 4,039,243 2,198,256 State 1,537,683 212,416 Foreign 1,808,761 1,595,246 Total current tax expenses 7,385,687 4,005,918 Deferred (benefit) provision Federal (8,962,037) (41,477,737) State (4,005,413) (3,282,520) Foreign (3,686,154) (3,746,392) Total deferred tax benefit (16,653,604) (48,506,649) Total benefit for income taxes $ (9,267,917) $ (44,500,731) A reconciliation of the statutory federal income tax rate to the Company's effective tax rate for the years ended December 31, 2018 and 2017 respectively are as follows: December 31, December 31, 2018 2017 Federal tax at 34% statutory rate 21.00 % 34.00 % State and local income taxes, net of federal benefit 1.68 % 2.37 % Differences in tax effects on foreign income (10.08) % (14.79) % Federal tax credits 4.54 % 8.69 % Uncertain tax positions — interest & penalties (0.08) % (0.07) % Enacted change in statutory rates 0.00 % 22.24 % Change in valuation allowance 0.00 % 0.00 % Permanent adjustments (8.70) % 0.09 % Other (0.55) % (0.57) % Effective tax rate 7.81 % 51.96 % For the year ended December 31, 2018 differences between the Federal statutory income tax rate of 21% and the effective tax rate are primarily due to the foreign tax rate differential and Orphan Drug/Research & Development federal credits. For the year ended December 31, 2017, differences between the Federal statutory income tax rate of 34% and the effective tax rate are primarily due to the enactment of U.S. tax legislation known as the Tax Cuts and Jobs Act (“TCJA”), foreign tax rate differential and a change in estimate with regard to the prior year Orphan Drug credit. In December 2017, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts during a measurement period not to exceed beyond one year of the enactment date. In the fourth quarter of 2018, we completed our analysis to determine the effect of the 2017 Tax Act, which did not require any adjustments as of December 31, 2018. Deferred taxes reflect the tax effects of the differences between the amounts recorded as assets and liabilities for financial statement purposes and the comparable amounts recorded for income tax purposes. Significant components of the deferred tax assets (liabilities) at December 31, 2018 and 2017 respectively are as follows: December 31, December 31, 2018 2017 Deferred tax assets: Accounts receivable $ 44,241 $ 495,373 Accrued expenses 12,640,052 11,259,586 Inventory 490,574 341,539 Investment in partnership 9,536,754 7,730,044 Net operating losses 3,742,237 5,716,378 Tax credits 4,616,722 9,091,441 Share compensation 439,318 — Other 2,634,429 1,932,521 Less: valuation allowance (298,219) (137,061) Deferred tax liabilities: Prepaid expenses (828,216) (9,200,249) Property plant & equipment (3,002,215) (2,827,186) Intangible assets (56,253,518) (67,293,830) Total deferred income taxes $ (26,237,841) $ (42,891,444) On December 22, 2017, the U.S. enacted the TCJA, which resulted in the revaluation of the Company's U.S. related deferred tax assets and liabilities and had an impact on the Company's total 2017 tax benefit. Included in the deferred tax balances above is a net deferred tax liability of $30,289,469 and $44,655,585 respectively for 2018 and 2017 related to the assets and liabilities in Vertical/Trigen Holdings, LLC, which is a partnership for Federal income tax purposes. The Company owns in aggregate 100% of Vertical/Trigen Holdings, LLC and the assets and liabilities of this entity are included in the consolidated financial statements of the Company. As of December 31, 2018 and 2017, the Company had a federal net operating loss carryover of $3.3 million and $4.4 million, respectively and net operating loss carryovers in certain foreign tax jurisdictions of approximately $30.5 million and $90.2 million, respectively which will begin to expire in 2022. At December 31, 2018 and 2017, the Company had total tax credit carryovers of approximately $4.6 million and $9.1 million primarily consisting of Federal Orphan Drug Tax Credit carryovers. These credit carryovers begin to expire in 2036. The Company assesses the realizability of the deferred tax assets at each balance sheet date based on actual and forecasted operating results in order to determine the proper amount, if any, required for a valuation allowance. As of December 31, 2018 and 2017, the Company maintains valuation allowances on deferred tax assets applicable to entities in foreign jurisdictions for which separate income tax returns are filed, where realization of the related deferred tax assets from future profitable operations is not reasonably assured. In 2018, the valuation allowance increased by $1.8 million due to incremental net operating losses applicable to entities in foreign jurisdictions. The Company leverages its significant resources in research and development and proprietary drug delivery technology to address the growing need of the global patient population. The Company completed a tax evaluation project for its year ended December 31, 2017 to determine its appropriate research and development credits for the Orphan Drug and Research & Development credit. This project resulted in the engagement of professional technical experts and the investment in significant time to evaluate historical records to identify the maximum credits as permitted by the relevant tax law. This project was concluded in connection with the preparation of the current year financial statements. As a result of the significant effort required to attain, validate and conclude on the appropriate credits, the Company considers the results of the tax project to be new information and therefore the results of such project are recorded in the current year as a change in accounting estimate. In the year ended December 31, 2017, the adjustment recorded was an increase in tax credits of approximately $5.7 million net of a reduction in income tax expense of approximately $2.7 million for a net tax effect of $3.0 million. The Company files income tax returns in U.S. federal, state and certain international jurisdictions. For federal and certain state income tax purposes, the Company's 2014 through 2017 tax years remain open for examination by the tax authorities under the normal statute of limitations. For certain international income tax purposes, the Company's 2010 through 2017 tax years remain open for examination by the tax authorities under the normal statute of limitations. No provision is made for foreign withholding or income taxes associated with the cumulative undistributed earnings of the foreign subsidiaries. The cumulative undistributed earnings, if any, are expected to be reinvested in working capital and other business needs indefinitely. Any future foreign withholding or income taxes associated with the undistributed earnings are not anticipated to be material. A reconciliation was completed of the beginning and ending amounts of unrecognized tax benefits, excluding accrued interest, for December 31, 2018 and 2017. It is not anticipated that the amount of unrecognized tax benefits will materially change in the next 12 months. If recognized, the total amount of unrecognized benefits of $1 .5 million would have no impact on the effective tax rate. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
Related Parties | |
Related Parties | Note 16. Related Parties As of December 31, 2018 and 2017, respectively, the Company had a $83,818 and $125,000 accrued liability which comprised of quarterly advisory and monitoring fees payable to shareholders. Further, the Company leases its Argentina office and warehouse space facilities through a related party lease. The term of the operating lease is through December 31, 2020. For the years ended December 31, 2018 and 2017, the Company incurred rent expense of $246,092 and $325,838, respectively. On August 22, 2018, the Company entered into a Master Service Agreement with United Biosource, LLC or UBC, an Avista portfolio company, for prescription processing and patient access services. In November 2018, the Company and UBC entered into a Statement of Work for services valued at approximately $2.4 million. In 2016 the Company entered into a two‑year consulting agreement with two Vertical/Trigen shareholders. The term of the agreement requires a compensation rate of $20,833 per month and is a component of the selling, general and administrative expenses. This agreement terminated in January 2018. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation —The accompanying consolidated financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Principles of Consolidation | Principles of Consolidation —The accompanying consolidated financial statements include the accounts of Osmotica Pharmaceuticals plc and its wholly-owned domestic and foreign subsidiaries. All inter‑company transactions and balances have been eliminated in consolidation. The Company is not involved with variable interest entities. |
Use of Estimates | Use of Estimates —The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases it estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. |
Foreign Currency Translation | Foreign Currency Translation —The financial position and results of operations of the Company’s non-U.S. subsidiaries are generally determined using U.S. Dollars as the functional currency, except our subsidiary in Argentina which uses the local currency as its functional currency. Assets and liabilities of this subsidiary are translated into U.S. dollars at the exchange rate in effect at each year end. Income statement accounts are translated into U.S. dollars at the average rate of exchange prevailing during the year. Adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive loss in shareholders’ equity. Foreign currency transaction gains and losses are included in foreign exchange (loss) gain in the Company’s statements of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents —The Company considers all highly liquid investments with an original maturity date of three months or less to be cash equivalents. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments —The Company applies Accounting Standards Committee or ASC 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable and short and long‑term debt. The fair values of these financial instruments approximate book value because of the short maturity of these instruments. The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below: Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. |
Inventories | Inventories —Inventories are stated at the lower of cost or net realizable value at approximate costs determined on the first-in first-out basis. The Company maintains an allowance for excess and obsolete inventory as well as inventory where the cost is in excess of its net realizable value (“NRV”) based on management’s assessments. The Company capitalizes inventory costs associated with its products prior to regulatory approval when, based on management judgement, future commercialization is considered probable and future economic benefit is expected to be realized. As of December 31, 2018 and 2017, there were no capitalized inventory costs associated with products that had not yet achieved regulatory approval. The Company assesses the regulatory approval process and where the product stands in relation to that approval process including any known constraints or impediments to approval. The Company also considers the shelf life of the product in relation to the product timeline for approval. Sample inventory utilized for promoting the Company’s products are expensed and included in cost of goods sold when the sample units are purchased or manufactured. |
Property, Plant and Equipment | Property, Plant and Equipment —Property, plant and equipment is stated at cost, less accumulated depreciation. Maintenance and repairs are charged to expense when incurred. Additions and improvements that extend the economic useful life of the asset are capitalized and depreciated over the remaining useful lives of the assets. The cost and accumulated depreciation of assets sold or retired are removed from the respective accounts, and any resulting gain or loss is reflected in current earnings. Depreciation is provided using the straight‑line method in amounts considered to be sufficient to amortize the cost of the assets to operations over their estimated useful lives or lease terms, as follows: Asset category Depreciable life Buildings 20 - 30 years Leasehold improvements Lesser of the useful life of the improvement or the terms of the underlying lease Machinery 3 - 15 years Furniture, fixtures and equipment 3 - 10 years Computer hardware and software 3 - 12 years |
Long-lived Assets, Including Definite-Lived Intangible Assets | Long‑Lived Assets, Including Definite‑Lived Intangible Assets —Intangible assets are stated at cost less accumulated amortization. Amortization is generally recorded on a straight‑line basis or based on the expected pattern of cash flows over estimated useful lives ranging from 3 to 20 years. The Company periodically reviews the estimated useful lives of intangible assets and makes adjustments when events indicate that a shorter life is appropriate. Long‑lived assets, other than goodwill and other indefinite‑lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Factors that the Company considers in deciding when to perform an impairment review include significant changes in the Company’s forecasted projections for the asset or asset group for reasons including, but not limited to, significant under‑performance of a product in relation to expectations, significant changes, or planned changes in the Company’s use of the assets, significant negative industry or economic trends, and new or competing products that enter the marketplace. The impairment test is based on a comparison of the undiscounted cash flows expected to be generated from the use of the asset group. If impairment is indicated, the asset is written down by the amount by which the carrying value of the asset exceeds the related fair value of the asset with the related impairment charge recognized within the statements of operations. The Company recorded impairment charges of $10,303,208 and $15,894,843, in regard to definite‑lived intangible assets for the years ended December 31, 2018 and 2017, respectively (see Note 8). |
Goodwill and Indefinite Lived Intangible Assets | Goodwill and Indefinite Lived Intangible Assets —Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value‑based test. The Company is organized in one reporting unit and evaluates the goodwill for the Company as a whole. Goodwill is assessed for impairment on an annual basis as of October 1 st of each year or more frequently if events or changes in circumstances indicate that the asset might be impaired. Under the authoritative guidance issued by the Financial Accounting Standards Board (the “FASB”), the Company has the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the goodwill impairment test is performed. The goodwill impairment test requires the Company to estimate the fair value of the reporting unit and to compare the fair value of the reporting unit with its carrying amount. If the fair value exceeds the carrying value, then no impairment is recognized. If the carrying value recorded exceeds the fair value calculated, then an impairment charge is recognized for the difference. The judgments made in determining the projected cash flows used to estimate the fair value can materially impact the Company’s financial condition and results of operations. There was no impairment of goodwill for the year ended December 31, 2017. For the year ended December 31, 2018 it was determined that the carrying value of goodwill exceeded its fair value. Accordingly, the Company recognized a goodwill impairment charge of $86,318,000 for the year ended December 31, 2018 (see Note 8). In‑Process Research and Development (“IPR&D”) intangible assets represent the value assigned to acquired Research & Development (“R&D”) projects that principally represent rights to develop and sell a product that the Company has acquired which have not yet been completed or approved. These assets are subject to impairment testing until completion or abandonment of each project. Impairment testing requires the development of significant estimates and assumptions involving the determination of estimated net cash flows for each year for each project or product (including net revenues, cost of sales, R&D costs, selling and marketing costs and other costs which may be allocated), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, the potential regulatory and commercial success risks, and competitive trends impacting each asset and related cash flow stream as well as other factors. The major risks and uncertainties associated with the timely and successful completion of the IPR&D projects include legal risk, market risk and regulatory risk. If applicable, upon abandonment of the IPR&D product, the assets are reduced to zero. IPR&D is assessed for impairment on an annual basis as of October 1 st of each year or more frequently if events or changes in circumstances indicate that the asset might be impaired. If the fair value of the IPR&D is less than its carrying amount, an impairment is recognized for the difference. The Company recognized impairment charges to IPR&D of $7,600,000 and $56,625,436 for the years ended December 31, 2018 and 2017, respectively (see Note 8). |
Revenue Recognition | Product Sales —Revenue is recognized at the point in time when the Company’s performance obligations with the applicable customers have been satisfied. At contract inception, the Company determines if the contract is within the scope of ASC Topic 606 and then evaluates the contract using the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue at the point in time when the entity satisfies a performance obligation. Revenue is recorded at the transaction price, which is the amount of consideration the Company expects to receive in exchange for transferring products to a customer. The Company considered the unit of account for each purchase order that contains more than one product. Because all products in a given purchase order are generally delivered at the same time and the method of revenue recognition is the same for each, there is no need to separate an individual order into separate performance obligations. The Company determines the transaction price based on fixed consideration in its contractual agreements, which includes estimates of variable consideration, and the transaction price is allocated entirely to the performance obligation to provide pharmaceutical products. In determining the transaction price, a significant financing component does not exist since the timing from when the Company delivers product to when the customers pay for the product is less than one year and the customers do not pay for product in advance of the transfer of the product. The Company records product sales net of any variable consideration, which includes estimated chargebacks, certain commercial rebates, and discounts and allowances. The Company utilizes the expected value method to estimate all elements of variable consideration included in the transaction price. The variable consideration is recorded as a reduction of revenue at the time revenues are recognized. The Company will only recognize revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. These estimates may differ from actual consideration amount received and the Company will re-assess these estimates each reporting period to reflect known changes in factors. Royalty Revenue —For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (a) when the related sales occur, or (b) when the performance obligation to which some or all the royalty has been allocated has been satisfied (or partially satisfied). Licensing and Contract Revenue —The Company has arrangements with commercial partners that allow for the purchase of product from the Company by the commercial partners for purposes of sub-distribution. The Company recognizes revenue from an arrangement when control of such product is transferred to the commercial partner, which is typically upon delivery. In these situations, the performance obligation is satisfied when product is delivered to the Company’s commercial partner. Licensing revenue is recognized in the period in which the product subject to the sublicensing arrangement is sold by the Company to its commercial partner. Sales deductions, such as returns on product sales, government program rebates, price adjustments, and prompt pay discounts in regard to licensing revenue is generally the responsibility of the Company’s commercial partners and not recorded by the Company. Freight —The Company records amounts billed to customers for shipping and handling as revenue, and records shipping and handling expenses related to product sales as cost of goods sold. 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 also has elected to account for these as costs to fulfill the promise and not as a separate performance obligation. Chargebacks —The Company enters into contractual agreements with certain third parties such as retailers, hospitals, and group-purchasing organizations (“GPOs”) to sell certain products at predetermined prices. Similarly, the Company maintains an allowance for rebates and discounts related to chargebacks, wholesaler fees for service contracts, GPO administrative fees, government programs, prompt payment and other adjustments with certain customers. Most of the parties have elected to have these contracts administered through wholesalers that buy the product from the Company and subsequently sell it to these third parties. As noted elsewhere, these wholesalers represent a significant percentage of the Company’s gross sales. When a wholesaler sells products to one of these third parties that are subject to a contractual price agreement, the difference between the price paid to the Company by the wholesaler and the price under the specific contract is charged back to the Company by the wholesaler. Utilizing this information, the Company estimates a chargeback percentage for each product and records an allowance as a reduction to gross sales when the Company records its sale of the products. The Company reduces the chargeback allowance when a chargeback request from a wholesaler is processed. The Company’s provision for chargebacks is fully reserved for at the time when sales revenues are recognized. The Company obtains product inventory reports from major wholesalers to aid in analyzing the reasonableness of the chargeback allowance and to monitor whether wholesaler inventory levels do not significantly exceed customer demand. The Company assesses the reasonableness of its chargeback allowance by applying a product chargeback percentage that is based on a combination of historical activity and current price and mix expectations to the quantities of inventory on hand at the wholesalers according to wholesaler inventory reports. In addition, the Company estimates the percentage of gross sales that were generated through direct and indirect sales channels and the percentage of contract vs. non-contract revenue in the period, as these each affect the estimated reserve calculation. In accordance with its accounting policy, the Company estimates the percentage amount of wholesaler inventory that will ultimately be sold to third parties that are subject to contractual price agreements based on a trend of such sales through wholesalers. The Company uses this percentage estimate until historical trends indicate that a revision should be made. On an ongoing basis, the Company evaluates its actual chargeback rate experience, and new trends are factored into its estimates each quarter as market conditions change. The Company ensures that chargebacks are reasonable through review of contractual obligations, historical trends and evaluation of recent activity. Furthermore, other events that could materially alter chargebacks include: changes in product pricing as a result of competitive market dynamics or negotiations with customers, changes in demand for specific products due to external factors such as competitor supply position or consumer preferences, customer shifts in buying patterns from direct to indirect through wholesalers, which could either individually or in aggregate increase or decrease the chargebacks depending on the direction and trend of the change(s). Commercial Rebates —The Company maintains an allowance for commercial rebates that it has in place with certain customers. Commercial rebates vary by product and by volume purchased by each eligible customer. The Company tracks sales by product number for each eligible customer and then applies the applicable commercial rebate percentage, using both historical trends and actual experience to estimate its commercial rebates. The Company reduces gross sales and increases the commercial rebates allowance by the estimated commercial rebates when the Company sells its products to eligible customers. The Company reduces the commercial rebate allowance when it processes a customer request for a rebate. At each month end, the Company analyzes the allowance for commercial rebates against actual rebates processed and makes necessary adjustments as appropriate. The Company’s provision for commercial rebates is fully reserved for at the time when sales revenues are recognized. The allowance for commercial rebates takes into consideration price adjustments which are credits issued to reflect increases or decreases in the invoice or contract prices of the Company’s products. In the case of a price decrease, a credit is given for products remaining in customer’s inventories at the time of the price reduction. Contractual price protection results in a similar credit when the invoice or contract prices of the Company’s products increase, effectively allowing customers to purchase products at previous prices for a specified period of time. Amounts recorded for estimated shelf-stock adjustments and price protections are based upon specified terms with direct customers, estimated changes in market prices, and estimates of inventory held by customers. The Company regularly monitors these and other factors and evaluates the reserve as additional information becomes available. The Company ensures that commercial rebates are reasonable through review of contractual obligations, review of historical trends and evaluation of recent activity. Furthermore, other events that could materially alter commercial rebates include: changes in product pricing as a result of competitive market dynamics or negotiations with customers, changes in demand for specific products due to external factors such as competitor supply position or consumer preferences, customer shifts in buying patterns from direct to indirect through wholesalers, which could either individually or in aggregate increase or decrease the commercial rebates depending on the direction and velocity of the change(s). Product Returns —Certain of the Company’s products are sold with the customer having the right to return the product within specified periods. Estimated return accruals are made at the time of sale based upon historical experience. Historical factors such as one-time recall events as well as pending new developments like comparable product approvals or significant pricing movement that may impact the expected level of returns are taken into account monthly to determine the appropriate accrued expense. As part of the evaluation of the liability required, the Company considers actual returns to date that are in process, the expected impact of any product recalls and the amount of wholesaler’s inventory to assess the magnitude of unconsumed product that may result in product returns to the Company in the future. The product returns level can be impacted by factors such as overall market demand and market competition and availability for substitute products which can increase or decrease the pull through for sales of the Company’s products and ultimately impact the level of product returns. Product returns are fully reserved for at the time when sales revenues are recognized. The Company ensures that product returns are reasonable through review of historical trends and evaluation of recent activity. Furthermore, other events that could materially alter product returns include: acquisitions and integration activities that consolidate dissimilar contract terms and could impact the return rate as typically the Company purchases smaller entities with less contracting power and integrates those product sales to Company contracts; and consumer demand shifts by products, which could either increase or decrease the product returns depending on the product or products specifically demanded and ultimately returned. Accrual for Promotions and Co‑Pay Discount Cards —From time to time the Company authorizes various retailers to run in‑store promotional sales of its products. The Company accrues an estimate of the dollar amount expected to be owed back to the retailer. Additionally, the Company provides consumer co‑pay discount cards, administered through outside agents to provide discounted products when redeemed. Upon release of the cards into the market, the Company records an estimate of the dollar value of co‑pay discounts expected to be utilized taking into consideration historical experience. Government Program Rebates —Federal law requires that a pharmaceutical distributor, as a condition of having federal funds being made available to the States for the manufacturer’s drugs under Medicaid and Medicare Part B, must enter into a rebate agreement to pay rebates to state Medicaid programs for the distributor’s covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid program under a fee‑for‑service arrangement. The Centers for Medicare and Medicaid Services (“CMS”) are responsible for administering the Medicaid rebate agreements between the federal government and pharmaceutical manufacturers. Rebates are also due on the utilization of Medicaid managed care organizations (“MMCOs”). The Company also pays rebates to managed care organizations (“MCOs”) for the reimbursement of a portion of the sales price of prescriptions filled that are covered by the respective plans. The liability for Medicaid, Medicare, and other government program rebates is settled in cash and is estimated at the time when sales revenues are recognized based on historical and current rebate redemption and utilization rates contractually submitted by each state’s program administrator and assumptions regarding future government program utilization for each product sold; and accordingly recorded as a reduction of product sales. |
Business Combinations | Business Combinations —The Company accounts for its business combinations under the provisions of ASC Topic 805, Business Combinations (“ASC 805”), which requires that the purchase method of accounting be used for all business combinations. Assets acquired, and liabilities assumed, are recorded at the date of acquisition at their respective fair values. Amounts allocated to acquire IPR&D are capitalized at the date of an acquisition and are not amortized. As products in development are approved for sale, amounts are allocated to product rights and licenses and amortized over their estimated useful lives. Definite‑lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition‑related expenses are recognized separately from business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn‑outs, are recognized as follows: 1) if the contingent consideration is classified as equity, the contingent consideration is not re‑measured and its subsequent settlement is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. Purchases of developed products and licenses that are accounted for as an asset acquisition are capitalized as intangible assets and amortized over an estimated useful life. IPR&D assets acquired as part of an asset acquisition are expensed immediately if they have no alternative future uses. |
In Process Research and Development | In‑Process Research and Development —In‑process research and development represent the fair value assigned to incomplete research projects that the Company acquires through business combinations or developed internally which, at that time, have not reached technological feasibility. Intangible assets associated with IPR&D projects are not amortized until regulatory approval is obtained and product is launched, subject to certain specified conditions and management judgment. The useful life of an amortizing asset generally is determined by identifying the period in which substantially all of the cash flows are expected to be generated. During the years ended December 31, 2018 and 2017, $0 and $264,100,000 of IPR&D was transferred to Product Rights as the products in development are approved for sale and placed into service (see Note 8). Such amounts will be amortized over their respectful estimated useful lives of 7 and 10 years. At that time an evaluation of fair value was performed immediately prior to such transfer. |
Research and Development Costs | Research and Development Costs —Research and development costs are expensed as incurred. These expenses include the costs of proprietary efforts, as well as costs incurred in connection with certain licensing arrangements. Upfront payments are recorded when incurred, and milestone payments are recorded when the specific milestone has been achieved. |
Advertising | Advertising —Advertising expense consists primarily of print media promotional materials. Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2018 and 2017 amounted to $6,193,610 and $2,650,540, respectively. |
Share-based Compensation | Share‑based Compensation —The Company recognizes share‑based compensation expense for all options and other arrangements within the scope of ASC 718, Stock Compensation, that are expected to vest. Share‑based compensation expense is measured at the date of grant, based on the fair value of the award, and is recognized using the straight‑line method over the employee’s requisite service period. Compensation for share‑based awards with vesting conditions other than service are recognized at the time that those conditions will be achieved. |
Income Taxes | Income Taxes —Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Where applicable, the Company records a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the future. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. |
Comprehensive Income | Comprehensive income (loss) —Comprehensive income (loss) refers to revenues, expenses, gains and losses that under U.S. GAAP are included in comprehensive loss but are excluded from net loss as these amounts are recorded directly as an adjustment to accumulated other comprehensive income (loss). The Company’s other comprehensive loss is comprised of foreign currency translation adjustments. |
Basic and Diluted Loss per Share | Basic and Diluted Loss per Share —Basic and diluted net loss per share is determined by dividing net loss by the weighted average ordinary shares outstanding during the period. For all periods presented with a net loss, the shares underlying the common share options have been excluded from the calculation because their effect would have been anti‑dilutive. Therefore, the weighted average shares outstanding used to calculate both basic and diluted loss per share are the same for periods with a net loss. |
Segment Reporting | Segment Reporting —The Company operates in one business segment which focuses on developing and commercializing pharmaceutical products that target markets with underserved patient populations. The Company’s business offerings have similar economic and other characteristics, including the nature of products, manufacturing and acquiring processes, types of customers, distribution methods and regulatory environment. The chief operating decision maker (“CODM”) reviews profit and loss information on a consolidated basis to assess performance and make overall operating decisions. The consolidated financial statements reflect the financial results of the Company’s one reportable operating segment. The Company has no significant revenues or tangible assets outside of the United States. |
Recently Adopted and Recent Accounting Standards | Recently Adopted Accounting Standards In May 2014, the FASB issued ASC Topic 606, which, along with amendments issued in 2015, 2016 and 2017, supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition (ASC Topic 605), including most industry‑specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. ASC Topic 606 provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer in an amount that reflects the consideration it expects to receive in exchange for those goods or services. On January 1, 2018, the Company adopted the new revenue recognition standard for all contracts not completed as of the adoption date using the modified retrospective method. The implementation of the new revenue recognition standard did not have a material impact on the Company’s consolidated financial statements. The information presented for the periods prior to January 1, 2018 has not been restated and is reported under ASC Topic 605. In January 2016, the FASB issued ASU 2016‑01, Financial Instruments‑Overall (Subtopic 825‑10): Recognition and Measurement of Financial Assets and Financial Liabilities . The accounting standard primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, it includes a clarification related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available‑for‑sale debt securities. The accounting guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. The Company adopted ASU 2016‑01 as of January 1, 2018, and there was no material impact on the Company’s consolidated financial statements resulting from the adoption of this guidance. In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU 2016‑15 eliminates the diversity in practice related to the classification of certain cash receipts and payments for debt prepayment or extinguishment costs, the maturing of a zero‑coupon bond, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, distributions from certain equity method investees and beneficial interests obtained in a financial asset securitization. ASU 2016‑15 designates the appropriate cash flow classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities. The Company adopted this standard on January 1, 2018 and adoption did not have a material impact on the consolidated financial statements. In October of 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory , ASU 2016-16 requires recognition of the current and deferred income tax effects of an intra-entity asset transfer, other than inventory, when the transfer occurs, as opposed to current GAAP, which requires companies to defer the income tax effects of intra-entity asset transfers until the asset has been sold to an outside party. The income tax effects of intra-entity inventory transfers will continue to be deferred until the inventory is sold. The standard is required to be adopted on a modified retrospective basis with a cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. The Company adopted this standard on January 1, 2018. Subsequent to the issuance of the condensed consolidated financial statements as of and for the six months ended June 30, 2018, the Company determined that a revision was required to correct for the adoption of this accounting standard resulting in an increase to Partners’ capital and decrease to Other long-term liabilities in the amount of $1,047,477. These adjustments were not considered to be material to the Company’s condensed consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718). This standard requires that an entity must apply modification accounting to changes in the terms or conditions of a share-based payment award unless all of the following criteria are met: (1) the fair value of the modified award is the same as the fair value of the original award immediately before the modification provided that if the modification does not affect any of the inputs to the valuation technique used to value the award, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the modification; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the modification. The Company adopted this standard on January 1, 2018 and there was no impact to the Company’s consolidated financial statements. In March 2018, the FASB issued ASU 2018‑05, Income Taxes (Topic 740) — Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018‑05”). This standard amends Accounting Standards Codification 740, Income Taxes (“ASC 740”) to provide guidance on accounting for the tax effects of the Tax Cuts and Jobs Act (the Tax Act) pursuant to Staff Accounting Bulletin No. 118, which allows companies to complete the accounting under ASC 740 within a one‑year measurement period from the Tax Act enactment date. The amendments are effective upon addition to the FASB Accounting Standards Codification. This standard was effective upon issuance. The Company has evaluated the impact from the Tax Cut and Jobs Act pursuant to SAB 118, see Note 14 for further disclosures. Recent Accounting Standards In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842) (“ASU 2016‑02”), which is effective for annual reporting periods beginning after December 15, 2019 and early adoption is permitted. Under ASU 2016‑02, lessees will be required to recognize the following for all leases (with the exception of short‑term leases) at the commencement date: 1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and 2) a right‑of‑use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016‑02 must be adopted on a modified retrospective transition basis for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements. In July 2018, the FASB issued ASU 2018-11, Leases: Targeted Improvements . Among other things, this ASU provides entities with a transition option to recognize the cumulative-effect adjustment from the modified retrospective application to the opening balance of retained earnings in the period of adoption rather than the earliest period presented in the financial statements. We will adopt ASU 2016-02 on a modified retrospective basis at the adoption date of January 1, 2019. The adoption of ASU 2016-02 will result in the recognition of right-of-use assets and lease liabilities of approximately $4.5 million on the consolidated balance sheet as of January 1, 2019. The right-of-use assets and lease liabilities primarily relate to real estate lease. We will provide additional lease-related disclosures in the notes to the consolidated financial statements commencing with our consolidated financial statements for the quarter ending March 31, 2019. In February 2018, the FASB issued ASU 2018‑02, Income Statement — Reporting Comprehensive Income (Topic 220) — Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This standard allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act and requires certain disclosures about stranded tax effects. This standard will be effective for the Company for annual periods beginning after December 15, 2018 and should be applied either in the period of adoption or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of the new accounting standard. |
Organization and Nature of Op_2
Organization and Nature of Operations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization and Nature of Operations | |
Schedule of amounts originally reported, net correction adjustments and corrected amounts for items affected by the restatement | Year ended December 31, 2017 As originally Net As reported adjustments corrected Partners' capital as of 12/31/2016 $ 465,205,153 $ 12,500,353 $ 477,705,506 Goodwill 152,815,716 34,357,100 187,172,816 Prepaid expenses 25,814,289 (316,197) 25,498,092 Total assets 885,699,246 34,040,903 919,740,149 Deferred taxes 25,364,055 17,527,389 42,891,444 Total liabilities 466,428,992 17,527,389 483,956,381 Partners' capital as of 12/31/2017 419,270,254 16,513,514 435,783,768 Total liabilities and partners' capital 885,699,246 34,040,903 919,740,149 Income tax benefit 40,487,570 4,013,161 44,500,731 Net loss (45,154,972) 4,013,161 (41,141,811) Comprehensive loss (46,062,899) 4,013,161 (42,049,738) Loss per share (1.05) 0.09 (0.96) Nine months ended September 30, 2018 As originally Net As reported adjustments corrected Goodwill $ 152,815,716 $ 34,357,100 $ 187,172,816 Prepaid expense and other current assets 18,802,004 5,628,370 24,430,374 Total assets 855,472,388 39,985,470 895,457,858 Deferred taxes 13,124,607 22,048,491 35,173,098 Total liabilites 439,969,303 22,048,491 462,017,794 Partners' capital as of 9/30/2018 417,374,758 17,936,979 435,311,737 Total liabilities and partners' capital 855,472,388 39,985,470 895,457,858 Income tax benefit 1,999,323 1,423,465 3,422,788 Net loss (3,574,093) 1,423,465 (2,150,628) Comprehensive loss (4,812,620) 1,423,465 (3,389,155) Loss per share (0.08) 0.03 (0.05) Nine months ended September 30, 2017 As originally Net As reported adjustments corrected Income tax benefit $ 16,785,658 $ (644,853) $ 16,140,805 Net loss (42,332,512) (644,853) (42,977,365) Comprehensive loss (41,915,544) (644,853) (42,560,397) Loss per share (0.99) (0.02) (1.01) Three months ended September 30, 2017 As originally Net As reported adjustments corrected Income tax benefit $ 12,046,928 $ (1,704,498) $ 10,342,430 Net loss (12,272,821) (1,704,498) (13,977,319) Comprehensive loss (11,979,971) (1,704,498) (13,684,469) Loss per share (0.29) (0.04) (0.33) Three months ended September 30, 2018 As originally Net As reported adjustments corrected Income tax benefit $ 2,489,029 $ 1,557,842 $ 4,046,871 Net loss (4,988,310) 1,557,842 (3,430,468) Comprehensive loss (5,136,493) 1,557,842 (3,578,651) Loss per share (0.12) 0.04 (0.08) |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Schedule of Useful Lives Of Property, Plant and Equipment | Asset category Depreciable life Buildings 20 - 30 years Leasehold improvements Lesser of the useful life of the improvement or the terms of the underlying lease Machinery 3 - 15 years Furniture, fixtures and equipment 3 - 10 years Computer hardware and software 3 - 12 years |
Other Strategic Investments (Ta
Other Strategic Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired | In-process research and development $ 12,500,000 Net deferred tax assets and liabilities 3,872,476 Total assets acquired $ 16,372,476 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenues Abstract | |
Schedule of disaggregation of revenue from contracts with customers | Year Ended December 31, Pharmaceutical Product 2018 2017 Venlafaxine ER $ 66,039,604 $ 96,054,161 Methylphenidate ER 129,468,673 43,711,097 Lorzone 17,171,894 22,275,831 Divigel 23,313,679 18,541,774 OB Complete 10,509,824 10,446,364 Other 14,894,531 46,641,951 Net product sales 261,398,205 237,671,178 Royalty revenue 1,958,571 6,449,095 License and contract revenue 344,573 1,628,759 Total revenues $ 263,701,349 $ 245,749,032 |
Accounts Receivable, Sales an_2
Accounts Receivable, Sales and Allowances (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of components of accounts receivable | December 31, December 31, 2018 2017 Gross trade accounts receivable Trade accounts receivable $ 146,419,682 $ 110,592,198 Royalty accounts receivable 238,960 25,712 Other receivable 1,562,287 4,161,368 Less reserves for: Chargebacks (38,861,232) (32,342,377) Commercial rebates (49,231,445) (39,233,419) Discounts and allowances (3,510,242) (3,484,587) Doubtful accounts (194,144) (2,080,938) Total trade accounts receivable, net $ 56,423,866 $ 37,637,957 |
Schedule of adjustments to gross product sales | Year Ended December 31, 2018 2017 Gross product sales $ 948,560,626 $ 646,701,628 Less provisions for: Chargebacks (365,042,883) (202,366,801) Government rebates (18,582,352) (26,007,632) Commercial rebates (257,916,721) (134,525,716) Product returns (20,492,281) (26,299,811) Discounts and allowances (20,245,486) (15,387,024) Advertising and promotions (4,882,698) (4,443,466) Net product sales $ 261,398,205 $ 237,671,178 |
Trade accounts receivable | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of activity in allowance/liability for customer deductions | Discounts Commercial and Doubtful Chargebacks Rebates Allowances Accounts Total Balance at January 1, 2017 $ 24,311,153 $ 30,552,734 $ 3,631,326 $ 4,910,478 $ 63,405,691 Provision 202,366,801 134,525,716 15,387,024 832,388 353,111,929 Charges processed (194,335,577) (125,845,031) (15,533,763) (3,661,928) (339,376,299) Balance at December 31, 2017 32,342,377 39,233,419 3,484,587 2,080,938 77,141,321 Provision 365,042,883 257,916,721 20,245,486 (1,771,487) 641,433,603 Charges processed (358,524,028) (247,918,695) (20,219,831) (115,307) (626,777,861) Balance at December 31, 2018 $ 38,861,232 $ 49,231,445 $ 3,510,242 $ 194,144 $ 91,797,063 |
Accrued liabilities | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of activity in allowance/liability for customer deductions | Product Government Returns Rebates Total Balance at January 1, 2017 $ 30,340,749 $ 6,485,749 $ 36,826,498 Provision 26,299,811 26,007,632 52,307,443 Charges processed (13,341,236) (18,341,667) (31,682,903) Balance at December 31, 2017 $ 43,299,324 $ 14,151,714 $ 57,451,038 Provision 20,492,281 18,582,352 39,074,633 Charges processed (15,328,096) (22,753,190) (38,081,286) Balance at December 31, 2018 $ 48,463,509 $ 9,980,876 $ 58,444,385 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory [Line Items] | |
Summary of components of inventories, net of allowances | December 31, December 31, 2018 2017 Finished goods $ 15,577,104 $ 10,467,243 Work in process 1,138,906 789,413 Raw materials and supplies 7,667,011 5,690,214 $ 24,383,021 $ 16,946,870 |
Allowance for excess and obsolete inventory | |
Inventory [Line Items] | |
Schedule of activity in allowance for inventory valuation and obsolescence | Year Ended December 31, December 31, 2018 2017 Balance at beginning of year $ 3,066,620 $ 7,754,596 Provision 2,926,472 9,183,372 Charges processed (4,432,010) (13,871,348) Balance at end of year $ 1,561,082 $ 3,066,620 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Year Ended December 31, 2018 2017 Land $ 2,120,000 $ 2,120,000 Buildings 11,567,677 11,363,109 Leasehold improvements 2,109,106 2,095,784 Machinery 13,851,886 11,495,856 Furniture, fixtures and equipment 1,447,819 266,314 Computer hardware and software 6,984,055 5,838,823 38,080,543 33,179,886 Accumulated depreciation (10,235,900) (5,852,660) 27,844,643 27,327,226 Construction in progress 3,418,789 4,082,907 $ 31,263,432 $ 31,410,133 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Other Intangible Assets | |
Schedule of carrying value of goodwill | Goodwill January 1, 2017 $ 187,172,816 Impairments — December 31, 2017 187,172,816 Impairments (86,318,000) December 31, 2018 $ 100,854,816 |
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | December 31, 2018 Weighted Average Remaining Gross Net Amortization Carrying Accumulated Carrying Period Amount Amortization Reclassifications Impairment Amount (Years) Distribution Rights $ 98,433,377 $ (17,229,374) $ — $ — $ 81,204,003 12.0 Product Rights 326,530,149 (109,056,754) — — 217,473,395 4.0 Tradenames 13,485,000 (2,329,284) — — 11,155,716 16.0 Developed Technology 138,133,333 (30,973,516) — (10,303,208) 96,856,609 12.6 IPR&D 91,300,000 — — (7,600,000) 83,700,000 Indefinite Lived $ 667,881,859 $ (159,588,928) $ — $ (17,903,208) $ 490,389,723 The gross carrying amount and accumulated amortization in the table above is inclusive of $6,156,564 of accumulated amortization for assets that have been fully impaired as of December 31, 2018. December 31, 2017 Weighted Average Gross Net Remaining Carrying Accumulated Carrying Amortization Amount Amortization Reclassifications Impairment Amount Period (Years) Distribution Rights $ 98,433,377 $ (9,890,282) $ — $ — $ 88,543,095 13.0 Product Rights 69,558,325 (49,902,094) 264,100,000 (7,128,176) 276,628,055 5.4 Tradenames 13,485,000 (1,623,368) — — 11,861,632 17.1 Developed Technology 146,900,000 (21,077,405) — (8,766,667) 117,055,928 13.1 IPR&D 412,025,436 — (264,100,000) (56,625,436) 91,300,000 Indefinite Lived $ 740,402,138 $ (82,493,149) $ — $ (72,520,279) $ 585,388,710 |
Schedule of changes in the net carrying amount of intangible assets | Distribution Product Developed Rights Rights Tradenames Technology IPR&D Total January 1, 2017 $ 95,741,106 $ 44,091,974 $ 12,759,363 $ 136,672,033 $ 412,025,436 $ 701,289,912 Acquisitions — — — — 16,372,476 16,372,476 Amortization (7,198,011) (24,435,743) (897,731) (10,849,438) — (43,380,923) Impairments — (7,128,176) — (8,766,667) (56,625,436) (72,520,279) Reclassifications ( A) — 264,100,000 — — (264,100,000) — Expensed (B) — — — — (16,372,476) (16,372,476) December 31, 2017 $ 88,543,095 $ 276,628,055 $ 11,861,632 $ 117,055,928 $ 91,300,000 $ 585,388,710 Amortization (7,339,092) (59,154,660) (705,916) (9,896,111) — (77,095,779) Impairments — — — (10,303,208) (7,600,000) (17,903,208) December 31, 2018 $ 81,204,003 $ 217,473,395 $ 11,155,716 $ 96,856,609 $ 83,700,000 $ 490,389,723 (A) IPR&D related to the methylphenidate ER asset group was reclassified to Product Rights at the time the product was launched. The amount will be amortized over the estimated useful life of 7 years which was determined to be the period in which the Product Rights are expected to contribute to cash flow. The amount will be amortized on an accelerated method based on estimated pattern of cash flows. (B) The amount acquired for IPR&D in the RevitaLid Asset Acquisition was deemed to have no alternative future uses, thus the full amount was expensed (see Note 3). |
Schedule of expected amortization expense | Amortization Years ending December 31 Expense 2019 $ 68,899,197 2020 67,512,249 2021 65,348,168 2022 43,107,441 2023 38,906,920 Thereafter 122,915,748 Total $ 406,689,723 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities Abstract | |
Schedule of accrued liabilities | December 31, December 31, 2018 2017 Accrued product returns $ 48,463,509 $ 43,299,324 Accrued royalties 3,597,957 12,325,232 Accrued compensation 8,672,913 6,342,731 Accrued government rebates 9,980,876 14,151,714 Accrued research and development 8,337,812 1,248,800 Accrued expenses and other liabilities 7,362,941 3,904,556 Customer coupons 719,578 425,911 Deferred revenue 101,354 228,122 Total $ 87,236,940 $ 81,926,390 |
Financing Arrangement (Tables)
Financing Arrangement (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Instrument [Line Items] | |
Schedule of Composition of Company’s Debt and Financing Obligations | December 31, December 31, 2018 2017 CIT Bank, N.A. Term Loan, net of deferred financing costs of $4,557,025 and $6,894,816 as of December 31, 2018 and December 31, 2017, respectively $ 266,802,911 $ 320,605,185 Note payable — insurance financing 1,774,199 — 268,577,110 320,605,185 Less: current portion (1,774,199) (6,655,604) Long-term debt $ 266,802,911 $ 313,949,581 |
Schedule of Maturities of Long-Term Debt | Maturities of Long-term Years ending December 31, Obligations 2019 $ 1,774,199 2020 — 2021 — 2022 271,359,936 Total $ 273,134,135 |
Term A Loan | |
Debt Instrument [Line Items] | |
Schedule of Interest Rates | Total Leverage Ratio LIBOR Rate Margin ABR Margin Category 1 3.75 % 2.75 % Greater than 2.00 to 1.00 Category 2 3.25 % 2.25 % Equal to or less than 2.00 to 1.00 |
Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Schedule of Interest Rates | Total Leverage Ratio LIBOR Rate Margin ABR Margin Category 1 3.75 % 2.75 % Greater than 2.00 to 1.00 Category 2 3.25 % 2.25 % Equal to or less than 2.00 to 1.00 |
Promissory Notes | |
Debt Instrument [Line Items] | |
Schedule of Composition of Company’s Debt and Financing Obligations | Lender Principal Sum Altchem Limited (Cyprus) $ 12,500,000 ACP III AIV, L.P. 7,661,834 ACP Holdco (Offshore), L.P. 4,272,166 Newstone Capital Partners II, L.P. 566,000 $ 25,000,000 |
Concentrations and Credit Risk
Concentrations and Credit Risk (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Royalty Revenue | |
Concentrations and Credit Risk | |
Schedule of percentage of Company’s gross sales and accounts receivable attributable to customers | Year ended December 31, 2018 Gross Gross Royalty Royalty Revenue Accounts Receivable Customer 4 36 % 43 % Customer 5 31 % 30 % Customer 6 — % — % Combined Total 67 % 73 % Year ended December 31, 2017 Gross Gross Royalty Royalty Revenue Accounts Receivable Customer 4 54 % NM % Customer 5 14 % NM % Customer 6 21 % NM % Combined Total 89 % — % |
Gross Product Sales | Customer concentration risk | Product Revenue | |
Concentrations and Credit Risk | |
Schedule of percentage of Company’s gross sales and accounts receivable attributable to customers | Gross Product Year Ended December 31, 2018 2017 Amerisource Bergen 7 % 23 % Cardinal Health 55 % 37 % McKesson 34 % 32 % Combined Total 96 % 92 % |
Gross AccountS Receivable | Credit concentration risk | Product Revenue | |
Concentrations and Credit Risk | |
Schedule of percentage of Company’s gross sales and accounts receivable attributable to customers | Gross Account Receivables December 31, December 31, 2018 2017 Amerisource Bergen 6 % 7 % Cardinal Health 61 % 57 % McKesson 29 % 29 % Combined Total 96 % 93 % |
Incentive Plan (Tables)
Incentive Plan (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Valuation Assumptions | Years ended December 31, 2018 2017 Expected volatility 50% - 63.1 % 50% - 55 % Risk-free interest rate 3.03% - 3.11 % 1.94% - 2.27 % Expected dividend yield — % — % Expected life of options in years 5.02 - 7.00 6.25 |
2016 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Award activities | 2016 Equity Incentive Plan Weighted Weighted Average Average Number of Units Exercise Contractual Time Performance Total Price Term Outstanding at December 31, 2016 35,650 35,650 71,300 $ — Granted 3,150 3,150 6,300 646 Exercised — — — — Expired / Forfeited (2,700) (2,700) (5,400) 640 Outstanding at December 31, 2017 36,100 36,100 72,200 $ — 8.3 years Granted — — — — Exercised — — — — Expired / Forfeited (900) (900) (1,800) 640 Outstanding at date of conversion 35,200 35,200 70,400 641 Unit options converted to share options 1,507,786 1,507,786 3,015,572 14.96 Performance options modified to time options 1,507,786 (1,507,786) — 14.96 Granted — — — — Exercised — — — — Expired / Forfeited — — — — Outstanding at December 31, 2018 3,015,572 — 3,015,572 — 7.5 years Vested Options at December 31, 2018 720,131 — 720,131 $ 14.96 |
Equity Incentive Plan 2018 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Award activities | Weighted Weighted Average Average Number of Shares Exercise Contractual Time Performance Total Price Term Outstanding at December 31, 2017 — — — $ 7.00 Granted 179,700 — 179,700 — Exercised — — — — Expired / Forfeited (1,100) — (1,100) 7.00 Outstanding at December 31, 2018 178,600 — 178,600 $ — 9.8 years Vested Options at December 31, 2018 — — — $ 7.00 |
Earnings (Loss) per Ordinary _2
Earnings (Loss) per Ordinary Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of potentially dilutive securities excluded from computation of diluted weighted average shares | Year Ended December 31, 2018 2017 Unit options to purchase units — 74,200 Options to purchase ordinary shares 3,193,072 — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Summary of operating lease, future minimum rental payments | Years ending December 31 Operating Leases 2019 $ 1,997,564 2020 1,371,444 2021 1,084,566 2022 859,184 2023 490,514 Thereafter — Total $ 5,803,272 |
Summary of Company's enforceable and legally binding royalty obligations | Royalty Obligations Less than 1 year $ 1,375,000 1 to 3 years 3,188,000 3 to 5 years 3,000,000 More than 5 years 1,083,000 Total $ 8,646,000 |
Summary of Company’s enforceable and legally binding purchase obligations | Purchase Obligations Less than 1 year $ 4,000,000 1 to 3 years — 3 to 5 years — Total $ 4,000,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of Income Before Income Tax Domestic and Foreign and Components of Income Tax Expense Benefit | December 31, December 31, 2018 2017 Loss before income taxes U.S. operations $ (52,758,931) $ (41,276,187) Non-U.S. operations (65,905,252) (44,366,355) Total loss before income taxes (118,664,183) (85,642,542) Current provision Federal 4,039,243 2,198,256 State 1,537,683 212,416 Foreign 1,808,761 1,595,246 Total current tax expenses 7,385,687 4,005,918 Deferred (benefit) provision Federal (8,962,037) (41,477,737) State (4,005,413) (3,282,520) Foreign (3,686,154) (3,746,392) Total deferred tax benefit (16,653,604) (48,506,649) Total benefit for income taxes $ (9,267,917) $ (44,500,731) |
Schedule Reconciling Statutory Tax Rate to Effective Tax Rate | December 31, December 31, 2018 2017 Federal tax at 34% statutory rate 21.00 % 34.00 % State and local income taxes, net of federal benefit 1.68 % 2.37 % Differences in tax effects on foreign income (10.08) % (14.79) % Federal tax credits 4.54 % 8.69 % Uncertain tax positions — interest & penalties (0.08) % (0.07) % Enacted change in statutory rates 0.00 % 22.24 % Change in valuation allowance 0.00 % 0.00 % Permanent adjustments (8.70) % 0.09 % Other (0.55) % (0.57) % Effective tax rate 7.81 % 51.96 % |
Schedule of Deferred Tax Assets and Liabilities | December 31, December 31, 2018 2017 Deferred tax assets: Accounts receivable $ 44,241 $ 495,373 Accrued expenses 12,640,052 11,259,586 Inventory 490,574 341,539 Investment in partnership 9,536,754 7,730,044 Net operating losses 3,742,237 5,716,378 Tax credits 4,616,722 9,091,441 Share compensation 439,318 — Other 2,634,429 1,932,521 Less: valuation allowance (298,219) (137,061) Deferred tax liabilities: Prepaid expenses (828,216) (9,200,249) Property plant & equipment (3,002,215) (2,827,186) Intangible assets (56,253,518) (67,293,830) Total deferred income taxes $ (26,237,841) $ (42,891,444) |
Organization and Nature of Op_3
Organization and Nature of Operations (Details) - USD ($) | Oct. 22, 2018 | Oct. 17, 2018 | Feb. 03, 2016 |
Stock transactions | |||
Aggregate net proceeds | $ 58,100,000 | ||
Number of shares per unit | 42.84 | ||
Option shares multiple | 42.84 | ||
Option exercise price divisor | $ 42.84 | ||
IPO [Member] | |||
Stock transactions | |||
Number of ordinary shares issued | 7,647,500 | ||
Public offering price per share | $ 7 | ||
Over-Allotment Option [Member] | |||
Stock transactions | |||
Number of ordinary shares issued | 997,500 | ||
Private Placement [Member] | |||
Stock transactions | |||
Number of ordinary shares issued | 2,014,285 | ||
Osmotica Pharmaceuticals Plc [Member] | Osmotica Holdings SCSp [Member] | |||
Stock transactions | |||
Ownership interest (as a percent) | 50.00% | ||
Vertical/Trigen Holdings, LLC [Member] | Osmotica Holdings SCSp [Member] | |||
Stock transactions | |||
Ownership interest (as a percent) | 50.00% |
Organization and Nature of Op_4
Organization and Nature of Operations - Error correction (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 17, 2018 | Dec. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Partners' Capital | $ 435,311,737 | $ 435,311,737 | $ 435,783,768 | $ 429,871,404 | $ 477,705,506 | |||
Goodwill | 187,172,816 | 187,172,816 | $ 100,854,816 | 187,172,816 | 187,172,816 | |||
Prepaid expenses and other current assets | 24,430,374 | 24,430,374 | 20,743,685 | 25,498,092 | ||||
Assets | 895,457,858 | 895,457,858 | 795,644,966 | 919,740,149 | ||||
Deferred taxes | 35,173,098 | 35,173,098 | 26,237,841 | 42,891,444 | ||||
Liabilities | 462,017,794 | 462,017,794 | 409,375,841 | 483,956,381 | ||||
Liabilities and Equity | 895,457,858 | 895,457,858 | 795,644,966 | 919,740,149 | ||||
Income tax benefit | 4,046,871 | $ 10,342,430 | 3,422,788 | $ 16,140,805 | 9,267,917 | 44,500,731 | ||
Net income (loss) | (3,430,468) | (13,977,319) | (2,150,628) | (42,977,365) | (109,396,266) | (41,141,811) | ||
Comprehensive loss | $ (3,578,651) | $ (13,684,469) | $ (3,389,155) | $ (42,560,397) | $ (110,609,302) | $ (42,049,738) | ||
Loss per share | $ (0.08) | $ (0.33) | $ (0.05) | $ (1.01) | $ (2.42) | $ (0.96) | ||
Previously Reported [Member] | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Partners' Capital | $ 417,374,758 | $ 417,374,758 | $ 419,270,254 | 465,205,153 | ||||
Goodwill | 152,815,716 | 152,815,716 | 152,815,716 | |||||
Prepaid expenses and other current assets | 18,802,004 | 18,802,004 | 25,814,289 | |||||
Assets | 855,472,388 | 855,472,388 | 885,699,246 | |||||
Deferred taxes | 13,124,607 | 13,124,607 | 25,364,055 | |||||
Liabilities | 439,969,303 | 439,969,303 | 466,428,992 | |||||
Liabilities and Equity | 855,472,388 | 855,472,388 | 885,699,246 | |||||
Income tax benefit | 2,489,029 | $ 12,046,928 | 1,999,323 | $ 16,785,658 | 40,487,570 | |||
Net income (loss) | (4,988,310) | (12,272,821) | (3,574,093) | (42,332,512) | (45,154,972) | |||
Comprehensive loss | $ (5,136,493) | $ (11,979,971) | $ (4,812,620) | $ (41,915,544) | $ (46,062,899) | |||
Loss per share | $ (0.12) | $ (0.29) | $ (0.08) | $ (0.99) | $ (1.05) | |||
Restatement Adjustment [Member] | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Partners' Capital | $ 17,936,979 | $ 17,936,979 | $ 16,513,514 | $ 12,500,353 | ||||
Goodwill | 34,357,100 | 34,357,100 | 34,357,100 | |||||
Prepaid expenses and other current assets | 5,628,370 | 5,628,370 | (316,197) | |||||
Assets | 39,985,470 | 39,985,470 | 34,040,903 | |||||
Deferred taxes | 22,048,491 | 22,048,491 | 17,527,389 | |||||
Liabilities | 22,048,491 | 22,048,491 | 17,527,389 | |||||
Liabilities and Equity | 39,985,470 | 39,985,470 | 34,040,903 | |||||
Income tax benefit | 1,557,842 | $ (1,704,498) | 1,423,465 | $ (644,853) | 4,013,161 | |||
Net income (loss) | 1,557,842 | (1,704,498) | 1,423,465 | (644,853) | 4,013,161 | |||
Comprehensive loss | $ 1,557,842 | $ (1,704,498) | $ 1,423,465 | $ (644,853) | $ 4,013,161 | |||
Loss per share | $ 0.04 | $ (0.04) | $ 0.03 | $ (0.02) | $ 0.09 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Minimum | Building | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 20 years |
Minimum | Machinery | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Minimum | Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Minimum | Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Maximum | Building | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 30 years |
Maximum | Machinery | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 15 years |
Maximum | Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Maximum | Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 12 years |
Basis of Presentation - Intangi
Basis of Presentation - Intangibles, Revenue (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Intangible asset impairment, finite-lived | $ 10,303,208 | $ 15,894,843 |
Number of reporting units | item | 1 | |
Goodwill impairment | $ 86,318,000 | 0 |
Revenue, Practical Expedient [Abstract] | ||
Revenue, Practical Expedient, Financing Component [true false] | true | |
IPR&D | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Intangible asset impairment, indefinite-lived | $ 7,600,000 | $ 56,625,436 |
Minimum | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Estimated useful life | 3 years | |
Maximum | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Estimated useful life | 20 years |
Basis of Presentation - IPR&D,
Basis of Presentation - IPR&D, Advertising (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Marketing and Advertising Expense [Abstract] | ||
Advertising expense | $ 6,193,610 | $ 2,650,540 |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 20 years | |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 3 years | |
IPR&D | ||
Finite-Lived Intangible Assets [Line Items] | ||
Reclassifications | 264,100,000 | |
Product Rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Reclassifications | $ (264,100,000) | |
Estimated useful life | 7 years | |
Product Rights | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | |
Product Rights | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 7 years | |
Product Rights | IPR&D | ||
Finite-Lived Intangible Assets [Line Items] | ||
Reclassifications | $ 0 |
Basis of Presentation - Segment
Basis of Presentation - Segments (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Number of operating segments | 1 |
Number of reportable operating segments | 1 |
Basis of Presentation - Account
Basis of Presentation - Accounting Standards (Details) - USD ($) | Jan. 01, 2019 | Dec. 31, 2018 | Oct. 17, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Partners' Capital | $ 429,871,404 | $ 435,311,737 | $ 435,783,768 | $ 477,705,506 | ||
Other long-term liabilities | 1,047,477 | |||||
Restatement Adjustment [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Partners' Capital | $ 17,936,979 | $ 16,513,514 | $ 12,500,353 | |||
Restatement Adjustment [Member] | Accounting Standards Update 2016-16 [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Partners' Capital | $ 1,047,477 | |||||
Other long-term liabilities | $ (1,047,477) | |||||
Restatement Adjustment [Member] | Accounting Standards Update 2016-02 [Member] | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Lease liabilities | $ 4,500,000 | |||||
Right of use asset | $ 4,500,000 |
Other Strategic Investments (De
Other Strategic Investments (Details) - USD ($) | Oct. 24, 2017 | Dec. 31, 2017 |
Research and Development Assets Acquired Other than Through Business Combination [Line Items] | ||
Purchase price | $ 12,500,000 | |
Acquired IPR&D written off | 16,372,476 | |
RevitaLid, Inc. [Member] | ||
Research and Development Assets Acquired Other than Through Business Combination [Line Items] | ||
Purchase price | $ 12,500,000 | |
Transaction costs | 681,952 | |
Fair value of acquired IPR&D | 12,500,000 | |
Net deferred tax assets and liabilities | 3,872,476 | |
Acquired IPR&D written off | $ 16,372,476 | |
Reduction in deferred tax liability | 5,566,642 | |
RevitaLid, Inc. [Member] | Research and development | ||
Research and Development Assets Acquired Other than Through Business Combination [Line Items] | ||
Acquired IPR&D written off | $ 16,372,476 |
Revenues (Details)
Revenues (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 263,701,349 | $ 245,749,032 |
Contract with customer, asset and liability | ||
Deferred revenue | $ 0 | 0 |
Remaining performance obligations | true | |
Contract assets | $ 0 | |
Cost to obtain or fulfill contracts | 0 | |
Calculated under Revenue Guidance in Effect before Topic 606 | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 245,749,032 | |
Product Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 261,398,205 | 237,671,178 |
Product Revenue | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 237,671,178 | |
Venlafaxine ER | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 66,039,604 | |
Venlafaxine ER | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 96,054,161 | |
Methylphenidate ER | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 129,468,673 | |
Methylphenidate ER | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 43,711,097 | |
Lorzone | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 17,171,894 | |
Lorzone | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 22,275,831 | |
Divigel | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 23,313,679 | |
Divigel | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 18,541,774 | |
OB Complete | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 10,509,824 | |
OB Complete | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 10,446,364 | |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 14,894,531 | |
Other | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 46,641,951 | |
Royalty Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,958,571 | 6,449,095 |
Royalty Revenue | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 6,449,095 | |
License and contract revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 344,573 | |
License and contract revenue | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 1,628,759 | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Invoice payment due period | 60 days | |
Maximum | Product Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Invoice payment due period | 60 days |
Accounts Receivable, Sales an_3
Accounts Receivable, Sales and Allowances - Trade accounts receivable, net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Reserves | $ (91,797,063) | $ (63,405,691) | |
Total trade accounts receivable, net | $ 56,423,866 | $ 37,637,957 | |
Minimum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Invoice payment due period | 30 days | ||
Maximum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Invoice payment due period | 60 days | ||
Chargebacks | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Reserves | $ (38,861,232) | (32,342,377) | (24,311,153) |
Commercial rebates | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Reserves | (49,231,445) | (39,233,419) | (30,552,734) |
Discounts and allowances | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Reserves | (3,510,242) | (3,484,587) | (3,631,326) |
Doubtful accounts | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Reserves | (194,144) | (2,080,938) | $ (4,910,478) |
Trade accounts receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gross trade accounts receivable | 146,419,682 | 110,592,198 | |
Royalty accounts receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gross trade accounts receivable | 238,960 | 25,712 | |
Other receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gross trade accounts receivable | $ 1,562,287 | $ 4,161,368 |
Accounts Receivable, Sales an_4
Accounts Receivable, Sales and Allowances - Adjustment to gross product sales (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revenues | $ 263,701,349 | $ 245,749,032 |
Product Revenue | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross product sales | 948,560,626 | |
Revenues | 261,398,205 | 237,671,178 |
Product Revenue | Chargebacks | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (365,042,883) | |
Product Revenue | Government rebates | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (18,582,352) | |
Product Revenue | Commercial rebates | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (257,916,721) | |
Product Revenue | Product returns | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (20,492,281) | |
Product Revenue | Discounts and allowances | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (20,245,486) | |
Product Revenue | Advertising and promotions | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | $ (4,882,698) | |
Calculated under Revenue Guidance in Effect before Topic 606 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revenues | 245,749,032 | |
Calculated under Revenue Guidance in Effect before Topic 606 | Product Revenue | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross product sales | 646,701,628 | |
Revenues | 237,671,178 | |
Calculated under Revenue Guidance in Effect before Topic 606 | Product Revenue | Chargebacks | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (202,366,801) | |
Calculated under Revenue Guidance in Effect before Topic 606 | Product Revenue | Government rebates | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (26,007,632) | |
Calculated under Revenue Guidance in Effect before Topic 606 | Product Revenue | Commercial rebates | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (134,525,716) | |
Calculated under Revenue Guidance in Effect before Topic 606 | Product Revenue | Product returns | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (26,299,811) | |
Calculated under Revenue Guidance in Effect before Topic 606 | Product Revenue | Discounts and allowances | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (15,387,024) | |
Calculated under Revenue Guidance in Effect before Topic 606 | Product Revenue | Advertising and promotions | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | $ (4,443,466) |
Accounts Receivable, Sales an_5
Accounts Receivable, Sales and Allowances - Allowance for customer deduction (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | $ 63,405,691 | |
Provision | 353,111,929 | |
Charges processed | $ (626,777,861) | (339,376,299) |
Balance at end of period | 91,797,063 | |
Trade accounts receivable | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 77,141,321 | |
Provision | 641,433,603 | |
Balance at end of period | 77,141,321 | |
Chargebacks | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 32,342,377 | 24,311,153 |
Provision | 202,366,801 | |
Charges processed | (358,524,028) | (194,335,577) |
Balance at end of period | 38,861,232 | 32,342,377 |
Chargebacks | Trade accounts receivable | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 32,342,377 | |
Provision | 365,042,883 | |
Balance at end of period | 32,342,377 | |
Commercial rebates | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 39,233,419 | 30,552,734 |
Provision | 134,525,716 | |
Charges processed | (247,918,695) | (125,845,031) |
Balance at end of period | 49,231,445 | 39,233,419 |
Commercial rebates | Trade accounts receivable | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 39,233,419 | |
Provision | 257,916,721 | |
Balance at end of period | 39,233,419 | |
Discounts and allowances | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 3,484,587 | 3,631,326 |
Provision | 15,387,024 | |
Charges processed | (20,219,831) | (15,533,763) |
Balance at end of period | 3,510,242 | 3,484,587 |
Discounts and allowances | Trade accounts receivable | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 3,484,587 | |
Provision | 20,245,486 | |
Balance at end of period | 3,484,587 | |
Doubtful accounts | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 2,080,938 | 4,910,478 |
Provision | 832,388 | |
Charges processed | (115,307) | (3,661,928) |
Balance at end of period | 194,144 | 2,080,938 |
Doubtful accounts | Trade accounts receivable | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 2,080,938 | |
Provision | $ (1,771,487) | |
Balance at end of period | $ 2,080,938 |
Accounts Receivable, Sales an_6
Accounts Receivable, Sales and Allowances - Accrued liabilities for customer deductions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | $ 63,405,691 | |
Provision | 353,111,929 | |
Charges processed | $ (626,777,861) | (339,376,299) |
Balance at end of period | 91,797,063 | |
Accrued liabilities | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 57,451,038 | 36,826,498 |
Provision | 39,074,633 | 52,307,443 |
Charges processed | (38,081,286) | (31,682,903) |
Balance at end of period | 58,444,385 | 57,451,038 |
Product returns | Accrued liabilities | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 43,299,324 | 30,340,749 |
Provision | 20,492,281 | 26,299,811 |
Charges processed | (15,328,096) | (13,341,236) |
Balance at end of period | 48,463,509 | 43,299,324 |
Government rebates | Accrued liabilities | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 14,151,714 | 6,485,749 |
Provision | 18,582,352 | 26,007,632 |
Charges processed | (22,753,190) | (18,341,667) |
Balance at end of period | $ 9,980,876 | $ 14,151,714 |
Inventories - Components (Detai
Inventories - Components (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventories | ||
Finished goods | $ 15,577,104 | $ 10,467,243 |
Work in process | 1,138,906 | 789,413 |
Raw materials and supplies | 7,667,011 | 5,690,214 |
Total | $ 24,383,021 | $ 16,946,870 |
Inventories - Allowance for Exc
Inventories - Allowance for Excess and Obsolete Inventory (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of activity in the allowance for excess, obsolete, and net realizable value inventory account | ||
Balance at beginning of period | $ 63,405,691 | |
Provision | 353,111,929 | |
Charges processed | $ (626,777,861) | (339,376,299) |
Balance at end of period | 91,797,063 | |
Allowance for excess and obsolete inventory | ||
Summary of activity in the allowance for excess, obsolete, and net realizable value inventory account | ||
Balance at beginning of period | 3,066,620 | 7,754,596 |
Provision | 2,926,472 | 9,183,372 |
Charges processed | (4,432,010) | (13,871,348) |
Balance at end of period | $ 1,561,082 | $ 3,066,620 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 38,080,543 | $ 33,179,886 |
Accumulated depreciation | (10,235,900) | (5,852,660) |
Property, plant and equipment, net, excluding construction in progress | 27,844,643 | 27,327,226 |
Construction in progress | 3,418,789 | 4,082,907 |
Property, plant and equipment, net | 31,263,432 | 31,410,133 |
Depreciation expense | 4,476,813 | 3,069,223 |
Remaining construction in progress expenditures | 1,502,000 | |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,120,000 | 2,120,000 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 11,567,677 | 11,363,109 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 2,109,106 | 2,095,784 |
Machinery | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 13,851,886 | 11,495,856 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,447,819 | 266,314 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 6,984,055 | $ 5,838,823 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | $ 187,172,816 | $ 187,172,816 |
Impairments | (86,318,000) | 0 |
Goodwill, Ending Balance | $ 100,854,816 | $ 187,172,816 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Major Categories (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Accumulated amortization | $ (159,588,928) | $ (82,493,149) | |
Impairment | (17,903,208) | (72,520,279) | |
Net carrying amount, finite-lived | 406,689,723 | ||
Gross carrying amount | 667,881,859 | 740,402,138 | |
Net carrying amount | 490,389,723 | 585,388,710 | $ 701,289,912 |
Fully impaired intangible assets | 6,156,564 | 3,786,772 | |
IPR&D | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Reclassifications | (264,100,000) | ||
Impairment | (7,600,000) | (56,625,436) | |
Gross carrying amount, Indefinite-lived | 91,300,000 | 412,025,436 | |
Indefinite-lived intangible assets | 83,700,000 | 91,300,000 | |
Net carrying amount | 83,700,000 | 91,300,000 | 412,025,436 |
Distribution Rights | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Gross carrying amount, finite-lived | 98,433,377 | 98,433,377 | |
Accumulated amortization | (17,229,374) | (9,890,282) | |
Net carrying amount, finite-lived | 81,204,003 | 88,543,095 | |
Net carrying amount | $ 81,204,003 | $ 88,543,095 | 95,741,106 |
Weighted average remaining amortization period (Years) | 12 years | 13 years | |
Product Rights | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Gross carrying amount, finite-lived | $ 326,530,149 | $ 69,558,325 | |
Accumulated amortization | (109,056,754) | (49,902,094) | |
Reclassifications | 264,100,000 | ||
Impairment | (7,128,176) | ||
Net carrying amount, finite-lived | 217,473,395 | 276,628,055 | |
Net carrying amount | $ 217,473,395 | $ 276,628,055 | 44,091,974 |
Weighted average remaining amortization period (Years) | 4 years | 5 years 4 months 24 days | |
Product Rights | IPR&D | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Reclassifications | $ 0 | ||
Tradenames | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Gross carrying amount, finite-lived | 13,485,000 | $ 13,485,000 | |
Accumulated amortization | (2,329,284) | (1,623,368) | |
Net carrying amount, finite-lived | 11,155,716 | 11,861,632 | |
Net carrying amount | $ 11,155,716 | $ 11,861,632 | 12,759,363 |
Weighted average remaining amortization period (Years) | 16 years | 17 years 1 month 6 days | |
Developed Technology | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Gross carrying amount, finite-lived | $ 138,133,333 | $ 146,900,000 | |
Accumulated amortization | (30,973,516) | (21,077,405) | |
Impairment | (10,303,208) | (8,766,667) | |
Net carrying amount, finite-lived | 96,856,609 | 117,055,928 | |
Net carrying amount | $ 96,856,609 | $ 117,055,928 | $ 136,672,033 |
Weighted average remaining amortization period (Years) | 12 years 7 months 6 days | 13 years 1 month 6 days |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Changes in Net Carrying Amount of Intangible Assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Balance at the beginning of the period | $ 585,388,710 | $ 701,289,912 | |
Acquisitions | 16,372,476 | ||
Amortization | (77,095,779) | (43,380,923) | |
Impairments | (17,903,208) | (72,520,279) | |
Expensed | (16,372,476) | ||
Balance at the end of the period | $ 585,388,710 | 490,389,723 | 585,388,710 |
IPR&D | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Balance at the beginning of the period | 91,300,000 | 412,025,436 | |
Acquisitions | 16,372,476 | ||
Impairments | (56,625,436) | (7,600,000) | (56,625,436) |
Reclassifications | (264,100,000) | ||
Expensed | (16,372,476) | ||
Balance at the end of the period | 91,300,000 | 83,700,000 | 91,300,000 |
Distribution Rights | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Balance at the beginning of the period | 88,543,095 | 95,741,106 | |
Amortization | (7,339,092) | (7,198,011) | |
Balance at the end of the period | 88,543,095 | 81,204,003 | 88,543,095 |
Product Rights | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Balance at the beginning of the period | 276,628,055 | 44,091,974 | |
Amortization | (59,154,660) | (24,435,743) | |
Impairments | (7,128,176) | (7,128,176) | |
Reclassifications | 264,100,000 | ||
Balance at the end of the period | 276,628,055 | 217,473,395 | $ 276,628,055 |
Estimated useful life | 7 years | ||
Tradenames | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Balance at the beginning of the period | 11,861,632 | $ 12,759,363 | |
Amortization | (705,916) | (897,731) | |
Balance at the end of the period | 11,861,632 | 11,155,716 | 11,861,632 |
Developed Technology | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Balance at the beginning of the period | 117,055,928 | 136,672,033 | |
Amortization | (9,896,111) | (10,849,438) | |
Impairments | (8,766,667) | (10,303,208) | (8,766,667) |
Balance at the end of the period | $ 117,055,928 | $ 96,856,609 | $ 117,055,928 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Fair value (Details) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 01, 2018item | Oct. 01, 2017item | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Impairment of goodwill | $ 86,318,000 | $ 0 | |||
Impairment of intangible assets | 17,903,208 | 72,520,279 | |||
IPR&D | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Impairment of intangible assets | $ 56,625,436 | 7,600,000 | 56,625,436 | ||
Product Rights | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Impairment of intangible assets | 7,128,176 | 7,128,176 | |||
Developed Technology | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Impairment of intangible assets | $ 8,766,667 | $ 10,303,208 | $ 8,766,667 | ||
Minimum | Measurement Input, Discount Rate [Member] | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Discount rate for goodwill and intangible assets | item | 9 | 9 | |||
Maximum | Measurement Input, Discount Rate [Member] | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Discount rate for goodwill and intangible assets | item | 14 | 14 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill and Other Intangible Assets | ||
Amortization | $ 77,095,779 | $ 43,380,923 |
Amortization expense of acquired intangible assets | ||
2019 | 68,899,197 | |
2020 | 67,512,249 | |
2021 | 65,348,168 | |
2022 | 43,107,441 | |
2023 | 38,906,920 | |
Thereafter | 122,915,748 | |
Net carrying amount, finite-lived | $ 406,689,723 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities Abstract | ||
Accrued product returns | $ 48,463,509 | $ 43,299,324 |
Accrued royalties | 3,597,957 | 12,325,232 |
Accrued compensation | 8,672,913 | 6,342,731 |
Accrued government rebates | 9,980,876 | 14,151,714 |
Accrued research and development | 8,337,812 | 1,248,800 |
Accrued expenses and other liabilities | 7,362,941 | 3,904,556 |
Customer coupons | 719,578 | 425,911 |
Deferred revenue | 101,354 | 228,122 |
Accrued Liabilities | $ 87,236,940 | $ 81,926,390 |
Financing Arrangements (Details
Financing Arrangements (Details) - USD ($) | Dec. 31, 2018 | Oct. 31, 2018 | Dec. 31, 2017 |
Financing Arrangements | |||
Long-term debt | $ 268,577,110 | $ 320,605,185 | |
Less current portion | (1,774,199) | (6,655,604) | |
Long‑term debt, net of non‑current deferred financing costs | 266,802,911 | 313,949,581 | |
Deferred financing costs | 4,557,025 | ||
CIT Bank, N.A. Term Loan | |||
Financing Arrangements | |||
Long-term debt | 266,802,911 | 320,605,185 | |
Deferred financing costs | 4,557,025 | $ 5,627,508 | $ 6,894,816 |
Note payable — insurance financing | |||
Financing Arrangements | |||
Long-term debt | $ 1,774,199 |
Financing Arrangements - Term l
Financing Arrangements - Term loan (Details) | Oct. 31, 2018USD ($) | Dec. 21, 2017USD ($) | Nov. 10, 2016USD ($) | Feb. 03, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Financing Arrangements | |||||||
Face amount of debt | $ 25,000,000 | ||||||
Repayment of accrued interest | $ 9,321,500 | ||||||
Deferred financing costs | $ 4,557,025 | ||||||
Debt issuance costs written off | 875,576 | 4,981,624 | |||||
CIT Bank, N.A. Term Loan | |||||||
Financing Arrangements | |||||||
Proceeds from secured debt | $ 117,500,000 | $ 160,000,000 | |||||
Quarterly principal payment, as a percent | 0.625% | ||||||
Debt instrument term | 5 years | 6 years | |||||
Effective interest rate (as percent) | 6.00% | ||||||
Debt issuance costs | 4,000,000 | 3,126,000 | $ 5,734,332 | ||||
Face amount of debt | $ 327,500,000 | ||||||
Minimum leverage ratio, first period | 4.75 | ||||||
Minimum leverage ratio, second period | 4.5 | ||||||
Minimum fixed charge coverage ratio | 1.25 | ||||||
Deferred financing costs | $ 5,627,508 | $ 4,557,025 | 6,894,816 | ||||
Debt issuance costs written off | 875,576 | ||||||
CIT Bank, N.A. Term Loan | Selling, general and administrative expenses | |||||||
Financing Arrangements | |||||||
Debt modification costs expensed | $ 398,558 | 389,234 | |||||
CIT Bank, N.A. Term Loan | Other Nonoperating Income (Expense) [Member] | |||||||
Financing Arrangements | |||||||
Debt modification costs expensed | $ 4,981,624 | ||||||
CIT Bank, N.A. Term Loan | ABR | |||||||
Financing Arrangements | |||||||
Margin rate, as a percent | 4.00% | ||||||
CIT Bank, N.A. Term Loan | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Financing Arrangements | |||||||
Margin rate, as a percent | 5.00% | ||||||
Term A Loan | |||||||
Financing Arrangements | |||||||
Quarterly principal payment, as a percent | 0.6925% | ||||||
Effective interest rate (as percent) | 6.09% | 5.25% | |||||
Leverage ratio threshold | 2 | ||||||
Face amount of debt | $ 277,500,000 | ||||||
Repayment of principal | 42,278,907 | ||||||
Repayment of accrued interest | 1,492,597 | ||||||
Term A Loan | ABR | Entity Leverage Ratio In Category One Per Loan Agreement [Member] | |||||||
Financing Arrangements | |||||||
Margin rate, as a percent | 2.75% | ||||||
Term A Loan | ABR | Entity Leverage Ratio In Category Two Per Loan Agreement [Member] | |||||||
Financing Arrangements | |||||||
Margin rate, as a percent | 2.25% | ||||||
Term A Loan | London Interbank Offered Rate (LIBOR) [Member] | Entity Leverage Ratio In Category One Per Loan Agreement [Member] | |||||||
Financing Arrangements | |||||||
Margin rate, as a percent | 3.75% | ||||||
Term A Loan | London Interbank Offered Rate (LIBOR) [Member] | Entity Leverage Ratio In Category Two Per Loan Agreement [Member] | |||||||
Financing Arrangements | |||||||
Margin rate, as a percent | 3.25% | ||||||
Term B Loan | |||||||
Financing Arrangements | |||||||
Quarterly principal payment, as a percent | 0.25% | ||||||
Effective interest rate (as percent) | 6.59% | 5.75% | |||||
Face amount of debt | $ 50,000,000 | ||||||
Repayment of principal | 7,721,093 | ||||||
Repayment of accrued interest | 295,327 | ||||||
Term B Loan | ABR | |||||||
Financing Arrangements | |||||||
Margin rate, as a percent | 3.25% | ||||||
Term B Loan | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Financing Arrangements | |||||||
Margin rate, as a percent | 4.25% | ||||||
Revolving Credit Facility [Member] | |||||||
Financing Arrangements | |||||||
Debt instrument term | 5 years | ||||||
Leverage ratio threshold | 2 | ||||||
Debt issuance costs | $ 437,500 | $ 1,075,187 | |||||
Repayment of principal | 50,000,000 | ||||||
Repayment of accrued interest | $ 1,787,924 | ||||||
Revolving Credit Facility [Member] | ABR | Entity Leverage Ratio In Category One Per Loan Agreement [Member] | |||||||
Financing Arrangements | |||||||
Margin rate, as a percent | 2.75% | ||||||
Revolving Credit Facility [Member] | ABR | Entity Leverage Ratio In Category Two Per Loan Agreement [Member] | |||||||
Financing Arrangements | |||||||
Margin rate, as a percent | 2.25% | ||||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Entity Leverage Ratio In Category One Per Loan Agreement [Member] | |||||||
Financing Arrangements | |||||||
Margin rate, as a percent | 3.75% | ||||||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Entity Leverage Ratio In Category Two Per Loan Agreement [Member] | |||||||
Financing Arrangements | |||||||
Margin rate, as a percent | 3.25% |
Financing Arrangements - Revolv
Financing Arrangements - Revolving credit facility (Details) | Dec. 21, 2017USD ($) | Feb. 03, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Revolving Credit Facility [Member] | ||||
Financing Arrangements | ||||
Aggregate borrowing capacity | $ 30,000,000 | |||
Debt issuance costs | $ 437,500 | $ 1,075,187 | ||
Increase in borrowing capacity | $ 50,000,000 | |||
Leverage ratio threshold | 2 | |||
Debt instrument term | 5 years | |||
Amount outstanding | $ 0 | $ 0 | ||
Availability under the facility | 50,000,000 | |||
Revolving Credit Facility [Member] | ABR | Entity Leverage Ratio In Category One Per Loan Agreement [Member] | ||||
Financing Arrangements | ||||
Margin rate, as a percent | 2.75% | |||
Revolving Credit Facility [Member] | ABR | Entity Leverage Ratio In Category Two Per Loan Agreement [Member] | ||||
Financing Arrangements | ||||
Margin rate, as a percent | 2.25% | |||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Entity Leverage Ratio In Category One Per Loan Agreement [Member] | ||||
Financing Arrangements | ||||
Margin rate, as a percent | 3.75% | |||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Entity Leverage Ratio In Category Two Per Loan Agreement [Member] | ||||
Financing Arrangements | ||||
Margin rate, as a percent | 3.25% | |||
Swingline Loan [Member] | ||||
Financing Arrangements | ||||
Aggregate borrowing capacity | $ 5,000,000 | |||
Letter of Credit [Member] | ||||
Financing Arrangements | ||||
Aggregate borrowing capacity | $ 5,000,000 | |||
Amount outstanding | $ 0 | $ 0 |
Financing Arrangements - Subord
Financing Arrangements - Subordinated and promissory notes (Details) | Dec. 21, 2017USD ($) | Feb. 03, 2016USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016 |
Financing Arrangements | ||||
Face amount of debt | $ 25,000,000 | |||
Repayment of accrued interest | $ 9,321,500 | |||
Subordinated Debt [Member] | ||||
Financing Arrangements | ||||
Face amount of debt | $ 40,000,000 | |||
Effective interest rate (as percent) | 11.00% | |||
Subordinated Debt [Member] | Other Nonoperating Income (Expense) [Member] | ||||
Financing Arrangements | ||||
Debt issuance costs | $ 1,159,557 | |||
Debt modification costs expensed | 800,000 | |||
Deferred financing fees | 4,981,624 | |||
Subordinated Debt [Member] | ABR | ||||
Financing Arrangements | ||||
Margin rate, as a percent | 9.00% | |||
Subordinated Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Financing Arrangements | ||||
Margin rate, as a percent | 10.00% | |||
Promissory Notes | ||||
Financing Arrangements | ||||
Face amount of debt | $ 25,000,000 | |||
Number of debt instruments | item | 4 | |||
Fixed interest rate, as a percent | 18.00% | |||
Repayment of accrued interest | $ 9,321,500 | |||
Altchem Limited (Cyprus) | ||||
Financing Arrangements | ||||
Face amount of debt | $ 12,500,000 | |||
ACP III AIV, L.P. | ||||
Financing Arrangements | ||||
Face amount of debt | 7,661,834 | |||
ACP Holdco (Offshore), L.P. | ||||
Financing Arrangements | ||||
Face amount of debt | 4,272,166 | |||
Newstone Capital Partners II, L.P. | ||||
Financing Arrangements | ||||
Face amount of debt | $ 566,000 |
Financing Arrangements - Maturi
Financing Arrangements - Maturities (Details) | Dec. 31, 2018USD ($) |
Financing Arrangements | |
Deferred financing costs | $ 4,557,025 |
Maturities of Long-term Debt [Abstract] | |
2019 | 1,774,199 |
2022 | 271,359,936 |
Long-term debt, cumulative maturities | $ 273,134,135 |
Concentrations and Credit Risks
Concentrations and Credit Risks (Details) | 12 Months Ended | |
Dec. 31, 2018itemcustomer | Dec. 31, 2017itemcustomer | |
Product Concentration Risk [Member] | ||
Concentrations and Credit Risk | ||
Number of products | item | 1 | 1 |
Purchases | Supplier concentration risk | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 91.00% | |
Number of suppliers | item | 4 | 3 |
Purchases | Supplier concentration risk | Minimum | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 96.00% | |
Product Revenue | Gross Sales | Customer concentration risk | ||
Concentrations and Credit Risk | ||
Number of customers | customer | 3 | 3 |
Concentration risk (as a percent) | 96.00% | 92.00% |
Product Revenue | Gross Sales | Customer concentration risk | Amerisource Bergen | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 7.00% | 23.00% |
Product Revenue | Gross Sales | Customer concentration risk | Cardinal Health | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 55.00% | 37.00% |
Product Revenue | Gross Sales | Customer concentration risk | McKesson | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 34.00% | 32.00% |
Product Revenue | Gross Sales | Product Concentration Risk [Member] | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 66.00% | 15.00% |
Product Revenue | Gross AccountS Receivable | Credit concentration risk | ||
Concentrations and Credit Risk | ||
Number of customers | customer | 3 | 3 |
Concentration risk (as a percent) | 96.00% | 93.00% |
Product Revenue | Gross AccountS Receivable | Credit concentration risk | Amerisource Bergen | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 6.00% | 7.00% |
Product Revenue | Gross AccountS Receivable | Credit concentration risk | Cardinal Health | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 61.00% | 57.00% |
Product Revenue | Gross AccountS Receivable | Credit concentration risk | McKesson | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 29.00% | 29.00% |
Royalty Revenue | Gross Sales | Customer concentration risk | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 67.00% | 89.00% |
Royalty Revenue | Gross Sales | Customer concentration risk | Customer 4 [Member] | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 36.00% | 54.00% |
Royalty Revenue | Gross Sales | Customer concentration risk | Customer 5 [Member] | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 31.00% | 14.00% |
Royalty Revenue | Gross Sales | Customer concentration risk | Customer 6 [Member] | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 21.00% | |
Royalty Revenue | Gross AccountS Receivable | Credit concentration risk | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 73.00% | |
Royalty Revenue | Gross AccountS Receivable | Credit concentration risk | Customer 4 [Member] | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 43.00% | |
Royalty Revenue | Gross AccountS Receivable | Credit concentration risk | Customer 5 [Member] | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 30.00% |
Incentive Plans (Details)
Incentive Plans (Details) | Feb. 03, 2016itemshares | Oct. 21, 2018USD ($) | Dec. 31, 2018USD ($)shares | Dec. 31, 2017 |
Summary of Time and Performance Award activities | ||||
Share-based compensation expense | $ | $ 1,200,000 | $ 1,965,346 | ||
Share compensation, income tax benefit | $ | $ 439,318 | |||
Equity Incentive Plan 2018 [Member] | ||||
Summary of Time and Performance Award activities | ||||
Number of shares authorized for grant | shares | 4,100,000 | |||
Weighted Average Contractual Term | 9 years 9 months 18 days | |||
2016 Equity Incentive Plan | ||||
Summary of Time and Performance Award activities | ||||
Number of shares authorized for grant | shares | 75,000 | 3,015,572 | ||
Award term | 10 years | |||
Number of award components | item | 2 | |||
Weighted Average Contractual Term | 7 years 6 months | 8 years 3 months 18 days | ||
2016 Equity Incentive Plan | Time | ||||
Summary of Time and Performance Award activities | ||||
Vesting percentage | 25.00% |
Incentive Plans - Activity, Exp
Incentive Plans - Activity, Expense, Unrecognized Cost (Details) - USD ($) | 2 Months Ended | 10 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 21, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted Average Exercise Price | ||||
Unrecognized compensation cost related to nonvested options | $ 5,062,986 | $ 5,062,986 | ||
Unrecognized compensation cost, recognition period | 9 years 9 months 18 days | |||
Equity Incentive Plan 2018 [Member] | ||||
Number of Units | ||||
Granted | 179,700 | |||
Expired / Forfeited | (1,100) | |||
Outstanding at at the end of period | 178,600 | 178,600 | ||
Weighted Average Exercise Price | ||||
Outstanding at the beginning of period | $ 7 | $ 7 | ||
Expired / Forfeited | 7 | |||
Outstanding at at the end of period | $ 7 | |||
Vested Options at the end of period | $ 7 | $ 7 | ||
Weighted Average Contractual Term | 9 years 9 months 18 days | |||
Weighted average grant date fair value of options granted | $ 3.82 | |||
Equity Incentive Plan 2018 [Member] | Time | ||||
Number of Units | ||||
Granted | 179,700 | |||
Expired / Forfeited | (1,100) | |||
Outstanding at at the end of period | 178,600 | 178,600 | ||
2016 Equity Incentive Plan | ||||
Number of Units | ||||
Outstanding at the beginning of period | 70,400 | 72,200 | 72,200 | 71,300 |
Granted | 0 | 6,300 | ||
Expired / Forfeited | (1,800) | (5,400) | ||
Unit options converted to share options | 3,015,572 | |||
Outstanding at at the end of period | 3,015,572 | 70,400 | 3,015,572 | 72,200 |
Vested Options at the end of period | 720,131 | |||
Weighted Average Exercise Price | ||||
Outstanding at the beginning of period | $ 641 | |||
Granted | $ 646 | |||
Expired / Forfeited | $ 640 | $ 640 | ||
Unit options converted to share options | 14.96 | |||
Performance options modified to time options | 14.96 | |||
Outstanding at at the end of period | $ 641 | |||
Vested Options at the end of period | $ 14.96 | $ 14.96 | ||
Weighted Average Contractual Term | 7 years 6 months | 8 years 3 months 18 days | ||
Weighted average grant date fair value of options granted | $ 184.69 | |||
2016 Equity Incentive Plan | Time | ||||
Number of Units | ||||
Outstanding at the beginning of period | 35,200 | 36,100 | 36,100 | 35,650 |
Granted | 3,150 | |||
Expired / Forfeited | (900) | (2,700) | ||
Unit options converted to share options | 1,507,786 | |||
Performance options modified to time options | 1,507,786 | |||
Outstanding at at the end of period | 3,015,572 | 35,200 | 3,015,572 | 36,100 |
Vested Options at the end of period | 720,131 | |||
2016 Equity Incentive Plan | Performance | ||||
Number of Units | ||||
Outstanding at the beginning of period | 35,200 | 36,100 | 36,100 | 35,650 |
Granted | 3,150 | |||
Expired / Forfeited | (900) | (2,700) | ||
Unit options converted to share options | 1,507,786 | |||
Performance options modified to time options | (1,507,786) | |||
Outstanding at at the end of period | 35,200 | 36,100 |
Incentive Plans - Valuation Ass
Incentive Plans - Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected life of options in years | 6 years 3 months | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected volatility | 50.00% | 50.00% |
Risk-free interest rate | 3.03% | 1.94% |
Expected life of options in years | 5 years 7 days | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected volatility | 63.10% | 55.00% |
Risk-free interest rate | 3.11% | 2.27% |
Expected life of options in years | 7 years |
Earnings (Loss) per Ordinary _3
Earnings (Loss) per Ordinary Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Unit Options to Purchase Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 74,200 | |
Options to Purchase Ordinary Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 3,193,072 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Feb. 15, 2017 | |
Summary of future minimum rental payments, exclusive of taxes, insurance and other costs, under operating leases | |||
2019 | $ 1,997,564 | ||
2020 | 1,371,444 | ||
2021 | 1,084,566 | ||
2022 | 859,184 | ||
2023 | 490,514 | ||
Total | $ 5,803,272 | ||
Building | |||
Operating Leases | |||
Renewal term (in years) | 2 years | ||
Vehicles [Member] | |||
Operating Leases | |||
Renewal term (in years) | 1 year | ||
Selling, general and administrative expenses | |||
Operating Leases | |||
Rent expenses | $ 1,000,994 | $ 598,159 | |
Research and development | |||
Operating Leases | |||
Rent expenses | 229,448 | 273,706 | |
Cost of goods sold | |||
Operating Leases | |||
Rent expenses | $ 343,793 | $ 372,429 |
Commitments and Contingencies_2
Commitments and Contingencies - Capital Leases (Details) | Dec. 31, 2018USD ($) |
Capital leases | |
Present value of net minimum lease payments | $ 257,293 |
Commitments and Contingencies_3
Commitments and Contingencies - Royalty Obligations (Details) - Royalty obligations | Dec. 31, 2018USD ($) |
Summary of Company’s enforceable and legally binding royalty obligations | |
Less than 1 year | $ 1,375,000 |
1 to 3 years | 3,188,000 |
3 to 5 years | 3,000,000 |
More than 5 years | 1,083,000 |
Royalty obligations | $ 8,646,000 |
Commitments and Contingencies_4
Commitments and Contingencies - Purchase Obligations (Details) | Dec. 31, 2018USD ($) |
Summary of Company’s enforceable and legally binding purchase obligations | |
Less than 1 year | $ 4,000,000 |
Purchase obligations | $ 4,000,000 |
Commitments and Contingencies_5
Commitments and Contingencies - Defined contribution plan (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2016 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Nonelective employer contribution, as a percentage of basic compensation | 3.00% | ||
Number of plans | item | 1 | ||
Employee contribution threshold, as a percent of basic compensation | 3.00% | ||
Employer match percentage when employee contributes below threshold | 100.00% | ||
Employer match percentage when employee contributes above threshold | 50.00% | ||
Recognized expenses | $ | $ 1,076,677 | $ 896,632 | |
Maximum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum contribution that employer will match, as a percent | 5.00% |
Commitments and Contingencies_6
Commitments and Contingencies - Legal Proceedings (Details) | May 05, 2017USD ($)patent |
Commitments and Contingencies | |
Number of patent under litigation | patent | 1 |
Loss from litigation | $ | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Feb. 03, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||||||
U.S. operations | $ (52,758,931) | $ (41,276,187) | |||||
Non-U.S. operations | (65,905,252) | (44,366,355) | |||||
Loss before income taxes | (118,664,183) | (85,642,542) | |||||
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||||||
Current provision - federal | 4,039,243 | 2,198,256 | |||||
Current provision - state | 1,537,683 | 212,416 | |||||
Current provision - foreign | 1,808,761 | 1,595,246 | |||||
Current provision - total | 7,385,687 | 4,005,918 | |||||
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||||||
Deferred provision - current | (8,962,037) | (41,477,737) | |||||
Deferred provision - state | (4,005,413) | (3,282,520) | |||||
Deferred provision - foreign | (3,686,154) | (3,746,392) | |||||
Deferred provision - total | (16,653,604) | (48,506,649) | |||||
Income Tax Expense (Benefit), Total | $ (4,046,871) | $ (10,342,430) | $ (3,422,788) | $ (16,140,805) | $ (9,267,917) | $ (44,500,731) | |
Osmotica Pharmaceuticals Plc [Member] | Osmotica Holdings SCSp [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Ownership interest (as a percent) | 50.00% | ||||||
Vertical/Trigen Holdings, LLC [Member] | Osmotica Holdings SCSp [Member] | |||||||
Income Tax Disclosure [Line Items] | |||||||
Ownership interest (as a percent) | 50.00% |
Income Taxes - Rate reconciliat
Income Taxes - Rate reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Federal tax at 34% statutory rate, as a percent | 21.00% | 34.00% |
State and local income taxes, net of federal benefit, as a percent | 1.68% | 2.37% |
Differences in tax effects on foreign income, as a percent | (10.08%) | (14.79%) |
Federal tax credits, as a percent | 4.54% | 8.69% |
Uncertain tax positions, interest and penalties, as a percent | (0.08%) | (0.07%) |
Enacted change in statutory rates, as a percent | 0.00% | 22.24% |
Change in valuation allowance, as a percent | 0.00% | 0.00% |
Permanent adjustments, as a percent | (8.70%) | 0.09% |
Other, as a percent | (0.55%) | (0.57%) |
Effective Income Tax Rate Reconciliation, Percent, Total, as a percent | 7.81% | 51.96% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Components of Deferred Tax Assets [Abstract] | ||
Accounts receivable | $ 44,241 | $ 495,373 |
Accrued expenses | 12,640,052 | 11,259,586 |
Inventory | 490,574 | 341,539 |
Investment in partnership | 9,536,754 | 7,730,044 |
Net operating losses | 3,742,237 | 5,716,378 |
Tax credits | 4,616,722 | 9,091,441 |
Share compensation | 439,318 | |
Other | 2,634,429 | 1,932,521 |
Less: valuation allowance | (298,219) | (137,061) |
Components of Deferred Tax Liabilities [Abstract] | ||
Prepaid expenses | (828,216) | (9,200,249) |
Property plant & equipment | (3,002,215) | (2,827,186) |
Intangible assets | (56,253,518) | (67,293,830) |
Total deferred income taxes | $ (26,237,841) | $ (42,891,444) |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Line Items] | ||||||
Net deferred tax liability | $ 26,237,841 | $ 42,891,444 | ||||
Tax credit carryovers | 4,600,000 | 9,100,000 | ||||
Increase in valuation allowance | 1,800,000 | |||||
Net tax effect | $ 4,046,871 | $ 10,342,430 | $ 3,422,788 | $ 16,140,805 | 9,267,917 | 44,500,731 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense [Abstract] | ||||||
Unrecognized tax benefits | 1,500,000 | |||||
Unrecognized tax benefits that would affect tax rate | 0 | |||||
Orphan Drug And Research And Development Tax Credits [Member] | ||||||
Income Tax Disclosure [Line Items] | ||||||
Increase in tax credits | 5,700,000 | |||||
Reduction in taxes | 2,700,000 | |||||
Net tax effect | 3,000,000 | |||||
Domestic Tax Authority [Member] | ||||||
Income Tax Disclosure [Line Items] | ||||||
Net operating loss carryovers | 3,300,000 | 4,400,000 | ||||
Foreign Tax Authority [Member] | ||||||
Income Tax Disclosure [Line Items] | ||||||
Net operating loss carryovers | 30,500,000 | 90,200,000 | ||||
Vertical/Trigen | ||||||
Income Tax Disclosure [Line Items] | ||||||
Net deferred tax liability | $ 30,289,469 | $ 44,655,585 | ||||
Vertical/Trigen Holdings, LLC [Member] | ||||||
Income Tax Disclosure [Line Items] | ||||||
Ownership by parent (as a percent) | 100.00% |
Related Parties (Details)
Related Parties (Details) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)shareholder | |
Related Party Transaction [Line Items] | ||||
Rent expense under operating lease | $ 246,092 | $ 325,838 | ||
Shareholder | ||||
Related Party Transaction [Line Items] | ||||
Accrued liability | $ 83,818 | $ 125,000 | ||
Avista | ||||
Related Party Transaction [Line Items] | ||||
Amount per agreement | $ 2,400,000 | |||
Vertical/Trigen | ||||
Related Party Transaction [Line Items] | ||||
Term of consulting agreement | 2 years | |||
Number of Vertical/Trigen shareholders | shareholder | 2 | |||
Compensation rate per month | $ 20,833 |