Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 29, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity Registrant Name | Osmotica Pharmaceuticals plc | ||
ICFR Auditor Attestation Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 62,719,131 | ||
Entity Public Float | $ 78.9 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001739426 | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 114,053 | $ 95,865 |
Trade accounts receivable, net | 26,412 | 43,914 |
Inventories, net | 17,934 | 21,305 |
Prepaid expenses and other current assets | 14,755 | 11,546 |
Total current assets | 173,154 | 172,630 |
Property, plant and equipment, net | 28,054 | 30,238 |
Operating lease assets | 2,755 | 4,983 |
Intangibles, net | 65,758 | 153,986 |
Goodwill | 100,855 | 100,855 |
Other non‑current assets | 373 | 563 |
Total assets | 370,949 | 463,255 |
Current liabilities: | ||
Trade accounts payable | 6,768 | 8,495 |
Accrued liabilities | 47,517 | 65,253 |
Current portion of obligation under finance leases, ASC842 | 40 | 127 |
Current portion of lease liability | 1,457 | 2,062 |
Income taxes payable - current portion | 2 | |
Total current liabilities | 55,784 | 75,937 |
Long‑term debt, net of non‑current deferred financing costs | 219,525 | 267,950 |
Long-term portion of obligation under finance lease, ASC842 | 4 | 44 |
Long-term portion of lease liability | 1,436 | 3,116 |
Deferred taxes | 344 | 1,500 |
Total liabilities | 277,093 | 348,547 |
Commitments and contingencies (See Note 14) | ||
Shareholders' Equity | ||
Ordinary shares ($0.01 nominal value 400,000,000 shares authorized, 62,545,832 and 51,845,742 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | 625 | 518 |
Additional paid in capital | 548,070 | 489,440 |
Accumulated deficit | (452,610) | (373,021) |
Accumulated other comprehensive loss | (2,229) | (2,229) |
Total shareholders' equity | 93,856 | 114,708 |
Total liabilities and shareholders' equity | $ 370,949 | $ 463,255 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) | Dec. 31, 2020$ / sharesshares | Dec. 31, 2020€ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2019€ / sharesshares |
CONSOLIDATED BALANCE SHEETS | ||||
Ordinary shares, nominal value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||
Ordinary shares, number of shares authorized | 400,000,000 | 400,000,000 | 400,000,000 | 400,000,000 |
Ordinary shares, number of shares issued | 62,545,832 | 62,545,832 | 51,845,742 | 51,845,742 |
Ordinary shares, number of shares outstanding | 62,545,832 | 62,545,832 | 51,845,742 | 51,845,742 |
Preferred shares, nominal value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||
Preferred shares, number of shares authorized | 40,000,000 | 40,000,000 | 40,000,000 | 40,000,000 |
Preferred shares, number of shares issued | 0 | 0 | 0 | 0 |
Preferred shares, number of shares outstanding | 0 | 0 | 0 | 0 |
Euro deferred shares, nominal value (in euros per share) | € / shares | € 1 | € 1 | ||
Euro deferred shares, number of shares authorized | 25,000 | 25,000 | 25,000 | 25,000 |
Euro deferred shares, number of shares issued | 0 | 0 | ||
Euro deferred shares, number of shares outstanding | 0 | 0 | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | $ 177,884 | $ 240,031 |
Cost of goods sold (inclusive of amortization of intangibles) | 74,480 | 111,630 |
Gross profit | 103,404 | 128,401 |
Selling, general and administrative expenses | 81,961 | 93,030 |
Research and development expenses | 19,696 | 32,319 |
Impairment of intangibles | 72,183 | 283,747 |
Total operating expenses | 173,840 | 409,096 |
Operating loss | (70,436) | (280,695) |
Interest expense and amortization of debt discount | 14,396 | 18,211 |
Other non-operating gain | (546) | (884) |
Total other non-operating expense | (13,850) | (17,327) |
Loss before income taxes | (84,286) | (298,022) |
Income tax benefit | 4,697 | 27,121 |
Net loss | (79,589) | (270,901) |
Other comprehensive loss, net | ||
Change in foreign currency translation adjustments | (383) | |
Comprehensive loss | $ (79,589) | $ (271,284) |
Income (loss) per share attributable to shareholders | ||
Loss per share attributable to shareholders, basic and diluted | $ (1.31) | $ (5.17) |
Weighted average shares basic and diluted | ||
Weighted average shares, basic and diluted | 60,652,999 | 52,367,444 |
Product Revenue | ||
Revenues | $ 145,850 | $ 235,472 |
Royalty Revenue | ||
Revenues | 4,107 | 3,641 |
Licensing and Contract Revenue | ||
Revenues | $ 27,927 | $ 918 |
STATEMENTS OF CHANGES IN SHAREH
STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY - USD ($) $ in Thousands | Ordinary shares | Additional Paid-in Capital [Member] | Accumulated deficit | Accumulated other comprehensive loss | Total |
Stockholders' equity, beginning balance at Dec. 31, 2018 | $ 525 | $ 487,288 | $ (102,120) | $ (1,846) | $ 383,847 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2018 | 52,518,924 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (270,901) | (270,901) | |||
Change in foreign currency translation adjustments | (383) | (383) | |||
Share compensation | 4,932 | 4,932 | |||
Repurchase of ordinary shares, value | $ (7) | (2,780) | $ (2,787) | ||
Repurchase of ordinary shares, shares | (673,182) | (673,182) | |||
Stockholders' equity, ending balance at Dec. 31, 2019 | $ 518 | 489,440 | (373,021) | (2,229) | $ 114,708 |
Shares, Outstanding, Ending Balance at Dec. 31, 2019 | 51,845,742 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (79,589) | (79,589) | |||
Share compensation, value | $ 3 | 5,144 | 5,147 | ||
Share compensation, shares | 235,815 | ||||
Payments for taxes related to the net share settlement of equity awards | (749) | (749) | |||
Issuance of ordinary shares, net of offering costs | $ 119 | 62,321 | 62,440 | ||
Issuance of ordinary shares in initial public offering and private placement, shares | 11,900,000 | ||||
Repurchase of ordinary shares, value | $ (15) | (8,086) | $ (8,101) | ||
Repurchase of ordinary shares, shares | (1,435,725) | (1,435,725) | |||
Stockholders' equity, ending balance at Dec. 31, 2020 | $ 625 | $ 548,070 | $ (452,610) | $ (2,229) | $ 93,856 |
Shares, Outstanding, Ending Balance at Dec. 31, 2020 | 62,545,832 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (79,589) | $ (270,901) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 21,026 | 57,015 |
Share compensation | 4,925 | 4,932 |
Impairment of intangibles | 72,183 | 283,747 |
Deferred income tax benefit | (1,156) | (26,794) |
Loss on sale of fixed and leased assets | 287 | 173 |
Bad debt provision | 6 | (164) |
Amortization of deferred financing and loan origination fees | 1,269 | 1,337 |
Write off of deferred financing fees in connection with prepayment | 496 | |
Change in operating assets and liabilities: | ||
Trade accounts receivable, net | 17,496 | 12,674 |
Inventories, net | 3,371 | 3,078 |
Prepaid expenses and other current assets | (3,209) | 9,177 |
Trade accounts payable | (1,723) | (16,375) |
Accrued and other current liabilities | (17,792) | (24,332) |
Net cash provided by operating activities | 17,590 | 33,567 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of fixed and leased assets | 50 | 17 |
Payments on disposal of leased assets | (214) | (74) |
Purchase of property, plant and equipment | (2,920) | (3,963) |
Net cash used in investing activities | (3,084) | (4,020) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on finance lease obligations | (127) | (130) |
Proceeds from public offering, net of issuance costs | 62,440 | |
Proceeds from purchases of stock under ESPP | 219 | |
Debt repayment | (50,000) | |
Repurchases of ordinary shares | (8,101) | (2,787) |
Payments for taxes related to net share settlement of equity awards | (749) | |
Proceeds from insurance financing loan | 1,314 | |
Repayment of insurance financing loan | (3,088) | |
Net cash provided by (used in) financing activities | 3,682 | (4,691) |
Net change in cash and cash equivalents | 18,188 | 24,856 |
Effect on cash of changes in exchange rate | 175 | |
Cash and cash equivalents, beginning of period | 95,865 | 70,834 |
Cash and cash equivalents, end of period | 114,053 | 95,865 |
Supplemental disclosure of cash and non‑cash transactions: | ||
Cash paid for interest | 14,745 | 15,181 |
Cash paid for taxes | $ 2,044 | $ 1,290 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2020 | |
Organization and Nature of Operations | |
Organization and Nature of Operations | Note 1. Organization and Nature of Operations Osmotica Pharmaceuticals plc, together with its subsidiaries, is a fully integrated biopharmaceutical company focused on the development and commercialization of specialty products that target markets with underserved patient populations. The Company generates revenues across an existing portfolio of promoted specialty neurology and women’s health products, as well as non-promoted products, many of which are primarily complex formulations of generic drugs. 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 Reorganization. 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. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
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 Going Concern Evaluation The Company devotes significant financial resources to the manufacture, marketing and commercialization of its approved products, and support of its research and development efforts. The Company’s future operating performance depends on many assumptions, including assumptions with respect to product sales and expenses, commercialization costs, research and development expenses as well as other factors. These assumptions may prove to be wrong or other factors may adversely affect the Company’s operating results. As a result, the Company’s operating results may fluctuate significantly quarter to quarter or year to year. The Company expects its near term levels of profitability to be negatively affected by price competition on our generic products, and increased expenses associated with new product launches. As a result, it’s possible it would not be able to comply with financial covenants in its credit agreement or generate sufficient cash to service its debt obligations. The Company is currently undertaking a comprehensive review of strategic options to maximize shareholder value. The options under consideration include divestitures of non-stragetic assets, re-financings and commercialization or collaboration agreements. In the event the Company is unable to generate sufficient proceeds from these strategic options such that it can reduce, retire or refinance its existing debt, the Company believes it has sufficient plans to effectively manage its expenses and avail itself of cure provisions provided for in its credit agreement, in order to maintain compliance with its debt covenants therein. The use of the cure provisions will result in utilization cash to pay down the debt balance. A significant portion of the Company’s expense base is discretionary and the Company has the ability to reduce or defer spending to reduce expenses and improve profitability and cash flow to maintain compliance with its debt covenants. This could include, among other things, significant reductions in its general and administrative expenses, research and development expenses, including deferral of clinical trial programs, and deferrals of certain promotional and capital spending programs which could negatively impact the Company’s revenue growth and plans. The Company has previously demonstrated an ability to implement various cost reduction initiatives. During the third quarter of 2019 and continuing into 2020, the Company reduced its field force by an aggregate of 90 positions, generating annualized savings of approximately $10 million, and took measures to realign its operating infrastructure to prepare for the launch of Upneeq and implemented other cost-savings measures to reduce its expenses. Based on the current facts and circumstances, the use of the cure provisions provided for in the credit agreement, which will result in utilizing cash to prepay debt, and the Company’s ability to implement spending reductions and program deferrals, we believe it is probable that the Company can effectively manage its spending to improve profitability in order to maintain compliance with the debt covenants and other obligations in our credit agreement for at least the next 12 months, even if the strategic review does not generate sufficient proceeds to reduce, retire or refinance our existing debt. As a result, the Company has concluded that, after consideration of management’s plans it has sufficient liquidity to meet its obligations within one year after the issuance date of its Consolidated Financial Statements, and it does not have substantial doubt about its ability to continue as a going concern. 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. Our subsidiary in Argentina is currently operating in a highly inflationary environment, as a result, we account for translation in accordance with US GAAP. Foreign currency transaction gains and losses are included in selling, general and administrative expenses 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, 2020 and 2019, 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 5 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 $72.2 million and $283.7 million, in regard to definite‑lived and indefinite-lived intangible assets for the years ended December 31, 2020 and 2019, respectively (see Note 7). 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, 2020 and 2019, respectively. (see Note 7). 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 an impairment charge to IPR&D of $28.9 million for the year ended December 31, 2020 and we recognized no impairment charges of IPR&D for the year ended December 31, 2019 (see Note 7). 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. The transfer of the license is a performance obligation satisfied at a point in time. For arrangements that include non-sales based milestones, including milestone payments based on regulatory approvals or other activities, and the license is deemed to be the predominant item to which the milestones relate, the Company recognizes revenue at the later of a) when the milestone activity is achieved, or b) when the performance obligation to which some or all the milestone has been allocated has been satisfied (or partially satisfied). 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). 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 feas |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2020 | |
Revenues Abstract | |
Revenues | Note 3. 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 30 to 60 days of invoice date. The following table disaggregates revenue from contracts with customers by pharmaceutical products (in thousands): Year Ended December 31, Pharmaceutical Product 2020 2019 Venlafaxine ER (VERT) $ 25,576 $ 75,601 Methylphenidate ER 31,699 73,205 Divigel 31,629 26,794 Nitrofurantoin 10,443 5,726 Lorzone 4,058 15,004 OB Complete 6,948 9,851 Other 35,497 29,291 Net product sales 145,850 235,472 Royalty revenue 4,107 3,641 License and contract revenue 27,927 918 Total revenues $ 177,884 $ 240,031 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 material deferred revenue as of December 31, 2020 and 2019. 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, 2020 and 2019, respectively. 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, 2020 | |
Accounts Receivable, Sales and Allowances | |
Accounts Receivable, Sales and Allowances | Note 4. 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, credit losses 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. The Company is exposed to credit losses primarily through sales of its products. Prior to January 1, 2020, accounts receivable were recorded at cost less an allowance for doubtful accounts. Subsequent to January 1, 2020, accounts receivable are recorded at amortized cost less an allowance for expected credit losses that are not expected to be recovered. The Company’s expected loss methodology for accounts receivable is developed using historical collection experience, a review of the current status of customer’s trade receivables, and current and future market conditions. Due to the short-term nature of such receivables, the estimate of accounts receivable that may not be collected is based on the aging of accounts receivable balances and the financial condition of customers. The Company’s monitoring activities include timely account reconciliations, dispute resolution, payment confirmation, consideration of customers’ financial condition and macroeconomic conditions. Balances are written-off when determined to be uncollectible. The Company considered the current and expected future economic and market conditions surrounding a novel strain of the coronavirus, referred to as 2019-ncov, COVID-19 coronavirus epidemic, or COVID-19, and determined that the estimate of credit losses was not significantly impacted. With the exception of the allowance for credit losses, 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 (in thousands): December 31, December 31, 2020 2019 Gross trade accounts receivable Trade accounts receivable $ 38,546 $ 70,958 Royalty accounts receivable 1,267 702 Other receivable 4,639 2,186 Less reserves for: Chargebacks (9,921) (14,624) Commercial rebates (7,344) (13,579) Discounts and allowances (775) (1,591) Allowance for credit losses — (138) Total trade accounts receivable, net $ 26,412 $ 43,914 For the years ended December 31, 2020 and 2019, the Company recorded the following adjustments to gross product sales (in thousands): Year Ended December 31, 2020 2019 Gross product sales $ 321,493 $ 764,267 Less provisions for: Chargebacks (122,592) (345,366) Government and managed care rebates (18,211) (20,092) Commercial rebates (22,488) (147,173) Product returns (2,825) 3,932 Discounts and allowances (7,003) (15,719) Advertising and promotions (2,524) (4,377) Net product sales $ 145,850 $ 235,472 For the years ended December 31, 2020 and 2019, the activity in the Company’s allowance for customer deductions against trade accounts receivable is as follows (in thousands): Discounts Commercial and Credit Chargebacks Rebates Allowances Losses Total Balance at December 31, 2018 $ 38,861 $ 49,232 $ 3,510 $ 194 $ 91,797 Provision 345,366 147,173 15,719 (190) 508,068 Charges processed (369,603) (182,826) (17,638) 134 (569,933) Balance at December 31, 2019 $ 14,624 $ 13,579 $ 1,591 $ 138 $ 29,932 Provision 122,592 22,488 7,003 6 152,089 Charges processed (127,295) (28,723) (7,819) (144) (163,981) Balance at December 31, 2020 $ 9,921 $ 7,344 $ 775 $ — $ 18,040 The annual activity in the Company’s accrued liabilities for customer deductions by account for the years ended December 31, 2020 and 2019, is as follows (in thousands): Government and Product Managed Care Returns Rebates Total Balance at December 31, 2018 $ 48,464 $ 9,981 $ 58,445 Provision (3,932) 20,092 16,160 Charges processed (11,075) (25,206) (36,281) Balance at December 31, 2019 $ 33,457 $ 4,867 $ 38,324 Provision 2,825 18,211 21,036 Charges processed (14,256) (19,633) (33,889) Balance at December 31, 2020 $ 22,026 $ 3,445 $ 25,471 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. The Company uses a combination of factors and applications to estimate the dollar amount of reserves for chargebacks and rebates at each month end. Variable consideration is included in the transaction price only to the extent a significant reversal in the amount of cumulative revenue recognized is not probable of occurring when the uncertainty associated with the variable consideration is subsequently resolved. 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. During the year ended December 31, 2020 and 2019, adjustments due to changes in estimates were necessary based on actual product returns experience, resulting in a decrease of $7.1 million and $25.3 million, respectively, to the product returns reserve and a corresponding benefit to the net product sales recognized. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Inventories | |
Inventories | Note 5. Inventories The components of inventories, net of allowances, are as follows (in thousands): December 31, December 31, 2020 2019 Finished goods $ 13,352 $ 15,319 Work in process 618 778 Raw materials and supplies 3,964 5,208 $ 17,934 $ 21,305 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, 2020 and 2019, was as follows (in thousands): Year Ended December 31, December 31, 2020 2019 Balance at beginning of period $ 1,069 $ 1,561 Provision 1,001 2,322 Charges processed (1,144) (2,814) Balance at end of period $ 926 $ 1,069 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | Note 6. Property, Plant and Equipment, Net Property, plant and equipment consist of the following (in thousands): Year Ended December 31, December 31, 2020 2019 Land $ 2,120 $ 2,120 Buildings 11,671 11,643 Leasehold improvements 3,580 3,423 Machinery 17,399 16,034 Furniture, fixtures and equipment 1,368 1,388 Computer hardware and software 9,014 8,508 45,152 43,116 Accumulated depreciation (18,980) (14,292) 26,172 28,824 Construction in progress 1,882 1,414 $ 28,054 $ 30,238 Depreciation expense was $5.0 million and $4.4 million for the years ended December 31, 2020 and 2019, respectively. There is approximately $2.8 million 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, 2020 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | Note 7. 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. Goodwill is net of accumulated impairment charges of $86.3 million at December 31, 2020 and 2019. The following table sets forth the carrying value of goodwill as of December 31, 2019 and 2020, respectively (in thousands). Goodwill January 1, 2019 $ 100,855 Impairments — December 31, 2019 $ 100,855 Impairments — December 31, 2020 $ 100,855 The following tables sets forth the major categories of the Company’s intangible assets and the weighted‑average remaining amortization period as of December 31, 2020 and 2019, for those assets that are not already fully amortized (in thousands): December 31, 2020 Weighted Average Remaining Gross Net Amortization Carrying Accumulated Carrying Period Amount Amortization Impairment Amount (Years) Distribution Rights $ 33,714 $ (23,893) $ (9,461) $ 360 0.8 Product Rights 202,567 (164,336) (19,539) 18,692 2.1 Tradenames 13,485 (3,741) — 9,744 14.0 Developed Technology 52,466 (36,321) (14,273) 1,872 8.6 IPR&D 64,000 — (28,910) 35,090 Indefinite Lived $ 366,232 $ (228,291) $ (72,183) $ 65,758 The table above is inclusive of a gross carrying amount of $85.9 million and $62.1 million of accumulated amortization for assets that have been fully impaired. December 31, 2019 Weighted Average Gross Net Remaining Carrying Accumulated Carrying Amortization Amount Amortization Impairment Amount Period (Years) Distribution Rights $ 98,433 $ (22,291) $ (64,719) $ 11,423 10.1 Product Rights 348,600 (152,348) (146,033) 50,219 3.1 Tradenames 13,485 (3,035) — 10,450 15.0 Developed Technology 125,461 (34,572) (72,995) 17,894 10.9 IPR&D 64,000 — — 64,000 Indefinite Lived $ 649,979 $ (212,246) $ (283,747) $ 153,986 The table above is inclusive of a gross carrying amount of $28.3 million and $10.4 million of accumulated amortization for assets that have been fully impaired. Changes in intangible assets during the years ended December 31, 2019 and 2020, were as follows (in thousands): Distribution Product Developed Rights Rights Tradenames Technology IPR&D Total January 1, 2019 $ 81,204 $ 217,473 $ 11,156 $ 96,857 $ 83,700 $ 490,390 Amortization (5,062) (40,921) (706) (5,968) — (52,657) Impairments (64,719) (146,033) — (72,995) — (283,747) Reclassifications(A) — 19,700 — — (19,700) — December 31, 2019 $ 11,423 $ 50,219 $ 10,450 $ 17,894 $ 64,000 $ 153,986 Amortization (1,602) (11,988) (706) (1,749) — (16,045) Impairments (9,461) (19,539) — (14,273) (28,910) (72,183) December 31, 2020 $ 360 $ 18,692 $ 9,744 $ 1,872 $ 35,090 $ 65,758 (A) IPR&D in the amount of $19.7 million related to Osmolex ER was reclassified to Product Rights in the first quarter of 2019 when the product was launched. Osmolex ER was fully impaired during the second quarter of 2019. As part of the Company’s goodwill and intangible asset impairment assessments performed on the annual assessment date, when indicators of impairment are identified and when IPR&D assets are put into service, when a qualitative assessment is performed, the Company estimates the fair values of the 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. As of October 1, 2020, the Company performed a qualitative assessment for goodwill and for the IPR&D assets and concluded that the assets were not impaired. The discount rates applied to the estimated cash flows for the Company’s 2019 annual goodwill and indefinite‑lived intangible assets impairment test was 16.5%, based on the overall risk associated with the particular assets and other market factors. Indefinite-lived intangible assets classified as in-process research and development, or IPRD, are subject to adjustments reducing their anticipated revenues and costs by a probability of success, or POS, factor based upon empirical research of probabilities a new drug candidate would be approved based on the candidate’s stage of clinical development. The POS factor applied to the IPRD asset on a subsequent assessment as of December 31, 2020 was 69.6% and the discount rate was 9.5%. 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. Impairments of intangible assets and goodwill for the year-ended December 31, 2020 was $72.2 million primarily consisting of write-downs to fair value for methylphenidate ER, VERT and Oxybutynin of $19.5 million, $20.2 million and $3.6 million, respectively, including an indefinite-lived In-Process R&D asset, arbaclofen ER, which resulted in an impairment charge of $28.9 million due to a delay in the anticipated commercialization date of the product, if approved. These impairments reflect the competitive generic environment which has continued to erode net realized pricing and volumes of these products. In the fourth quarter of 2020 we recognized an impairment of finite-lived development technology and product rights for VERT of $10.7 million and $9.5 million, respectively due to the approval of a competing product and the anticipated deterioration of pricing and volumes. During 2019, we recognized impairments of finite-lived intangible assets of $283.7 million, consisting primarily of write-downs to fair value of methylphenidate ER, VERT, Osmolex ER, and Corvite of $128.1 million, $137.7 million, $17.7 million, and $0.2 million, respectively. Methylphenidate ER tablets and VERT were impaired due to lower revenues reflecting an increasingly competitive environment which deteriorated pricing and volumes; Osmolex ER was impaired due to underperforming revenue expectations subsequent to the launch of the product; and Corvite due to the discontinuation of the product. In the third and fourth quarter of 2019 we also recognized an impairment of finite-lived development technology and distribution rights for VERT of $73.0 million and $64.7 million, respectively, due to approvals of competing products which deteriorated pricing and volumes. Amortization expense was $16.0 million and $52.7 million for the years ended December 31, 2020 and 2019, respectively and is recorded to Cost of goods sold (inclusive of amortization of intangibles) in the Consolidated Statements of Operations and Comprehensive Loss. The amortization expense of acquired intangible assets for each of the following five years are expected to be as follows (in thousands): Amortization Years ending December 31 Expense 2021 $ 10,193 2022 5,625 2023 4,739 2024 2,790 Thereafter 7,321 Total $ 30,668 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Liabilities Abstract | |
Accrued Liabilities | Note 8. Accrued Liabilities Accrued liabilities consist of the following (in thousands): December 31, December 31, 2020 2019 Accrued product returns $ 22,026 $ 33,457 Accrued royalties 2,246 3,649 Accrued compensation 8,022 10,998 Accrued government and managed care rebates 3,445 4,867 Accrued research and development 1,000 3,028 Accrued expenses and other liabilities 10,550 8,477 Customer coupons 200 777 Deferred revenue 28 — Total $ 47,517 $ 65,253 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. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 9. Leases The Company leases office space in Bridgewater, New Jersey for its principal offices under two non‑cancelable leases that expire in July 2022 and November 2023, in addition to office and warehouse space in various domestic and international locations. The Company also leases certain vehicles under operating leases. As of December 31, 2020, the Company’s operating leases had remaining lease terms ranging from 0.99 years to 3.00 years. We assess whether an arrangement is a lease or contains a lease at inception. For arrangements considered leases or that contain a lease that is accounted for separately, we determine the classification and initial measurement of the right-of-use asset and lease liability at the lease commencement date, which is the date that the underlying asset becomes available for use. The Company has elected to account for non-lease components associated with our leases and lease components as a single lease component. The Company recognizes a right-of use asset, which represents the Company’s right to use the underlying asset for the lease term, and a lease liability, which represents the present value of the Company’s obligation to make payments arising over the lease term. The present value of the lease payments are calculated using either the implicit interest rate in the lease or an incremental borrowing rate. Our lease assets and liabilities were classified as follows on our Condensed Consolidated Balance Sheet at December 31, 2020 (in thousands): Leases Classification Balance at Balance at Assets Operating Operating Lease Assets $ 2,755 $ 4,983 Finance Property, plant and equipment, net 58 188 Total leased assets $ 2,813 $ 5,171 Liabilities Current Operating Current portion of lease liability $ 1,457 $ 2,062 Finance Current portion of obligations under finance leases 40 127 Non-current Operating Long-term portion of lease liability 1,436 3,116 Finance Long-term portion of obligations under finance leases 4 44 Total lease liabilities $ 2,937 $ 5,349 The Company recognizes lease expense on a straight-line basis over the lease term. The components of lease cost are as follows (in thousands): Lease Cost Classification Year Ended Year Ended Operating lease cost SG&A expenses $ 1,525 $ 1,926 R&D expenses 104 139 Cost of goods sold 392 366 Finance lease cost Amortization of leased assets Depreciation and amortization 130 130 Interest on lease liabilities Interest expense 2 4 Total lease cost $ 2,153 $ 2,565 The table below shows the future minimum rental payments, exclusive of taxes, insurance and other costs, under the leases as follows (in thousands): Years ending December 31 Operating Leases 2021 $ 1,589 2022 955 2023 554 Total lease payments 3,098 Less: interest 207 Present value of lease payments $ 2,891 The Company has future minimum lease payments required under the finance leases of less than $0.1 million less interest expense of less than $0.1 million for total present value lease payments of less than $0.1 million for the years ended December 31, 2021 through December 31, 2022. The weighted-average remaining lease term and the weighted-average discount rate of our leases were as follows (in thousands): Lease Term and Discount Rate December 31, 2020 December 31, 2019 Weighted average remaining lease term (years) Operating leases Finance leases Weighted average discount rate Operating leases % % Finance leases % % Other Information December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ (1,927) $ (2,431) Operating cash flows for finance leases (2) (4) Financing cash flows for finance leases (127) (130) For the years ended December 31, 2020 and 2019, the Company recorded $0.2 million and $1.4 million, respectively, of leased assets obtained in exchange for new operating lease liabilities and $0.0 million and less than $0.1 million, respectively, of leased assets obtained in exchange for new finance lease liabilities. During the years ended December 31, 2020 and 2019, the Company disposed of $0.6 million and $0.4 million, respectively, of leased assets. |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Dec. 31, 2020 | |
Financing Arrangements | |
Financing Arrangements | Note 10. Financing Arrangements The composition of the Company’s debt and financing obligations are as follows (in thousands): December 31, December 31, 2020 2019 CIT Bank, N.A. Term Loan due December 21, 2022, net of deferred financing costs of $1.8 million and $3.4 million as of December 31, 2020 and December 31, 2019, respectively $ 219,525 $ 267,950 Total debt 219,525 267,950 Less: current portion — — Long-term debt $ 219,525 $ 267,950 Term Loan Concurrent with the closing of the Company's acquisition of Osmotica Holdings Corp Limited, the Company entered into a $160.0 million Term Loan (the "Term Loan") pursuant to a Credit Agreement dated February 3, 2016 (as amended, supplemented or otherwise modified, 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. On November 10, 2016, the Company amended the Term Loan Agreement (the "First Amendment to the Term Loan Agreement") in conjunction with the reacquisition of venlafaxine distribution rights. Pursuant to the First Amendment to the 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. On April 28, 2017, the Company amended the Term Loan Agreement (the "Second Amendment to the 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 Amendment to Term Loan Agreement. On December 21, 2017, the Company amended the Term Loan Agreement (the "Third Amendment to the Term Loan Agreement"). Pursuant to the Third Amendment to the 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 was designated as the Term A Loan and $50,000,000 was designated as the Term B Loan. On December 11, 2020, the Company amended the Term Loan Agreement (the "Fourth Amendment to the Term Loan Agreement"). Pursuant to the Fourth Amendment to the Term Loan Agreement, the Term Loan Agreement was amended to, among other things, remove a limit on the exercise of the Company’s right to cure a breach of the financial covenant under the Term Loan Agreement and providing that any proceeds received by the company as a result of the exercise of such cure right will be applied to repay term loans under the Term Loan Agreement. The 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 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 a 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 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, 2020 and 2019, the interest rates were 4.75% and 5.79% for Term A Loan and 5.25% and 6.29% for Term B Loan, respectively. The 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 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 1.25:1.0 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 Term Loan Agreement as of December 31, 2020 and 2019. As a result, of payments made in 2018, as of both December 31, 2020 and 2019, there are no remaining scheduled installments of principal due in respect of the Term Loans until the final maturity date. During the year ended December 31, 2020, the Company prepaid $50.0 million in aggregate of the outstanding principal amount. The prepayments consisted of $42.3 million of Term A Loan outstanding principal and $7.7 million of Term B Loan outstanding principal. As required by the Third Amendment, the prepayments were made on a pro rata basis between the Term A Loan and the Term B Loan. The Company intends to 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. 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. The Company wrote off $0.5 million in debt issuance costs relating to the prepayment which occurred during the year ended December 31, 2020, 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 $30.0 million (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 $1.1 million, 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 $50.0 million. 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 $0.4 million 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, $5.0 million 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. Additionally, the Company will pay a Commitment Fee based on the average daily unused revolving credit commitment. The LIBOR Rate Margin, the ABR Margin and Commitment Fee are as follows: Total Leverage Ratio LIBOR Rate Margin ABR Margin Commitment Fee Category 1 3.75 % 2.75 % 0.50 % Greater than 2.00 to 1.00 Category 2 3.25 % 2.25 % 0.38 % Equal to or less than 2.00 to 1.00 At December 31, 2020 and 2019, there were no outstanding borrowings or outstanding letters of credit. Availability under the Revolving Facility as of December 31, 2020, was $50.0 million. Aggregated cumulative maturities of long-term obligations (including the incremental and existing Term Loan and the Revolving Facility), excluding deferred financing costs of $1.8 million, as of December 31, 2020 were (in thousands): Maturities of Long-term Years ending December 31, Obligations 2021 $ — 2022 219,525 Total $ 219,525 |
Concentrations and Credit Risk
Concentrations and Credit Risk | 12 Months Ended |
Dec. 31, 2020 | |
Concentrations and Credit Risk | |
Concentrations and Credit Risk | Note 11. Concentrations and Credit Risk For the years ended December 31, 2020 and 2019, 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, 2020 and 2019 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 Sales Year Ended December 31, 2020 2019 Amerisource Bergen 31 % 12 % Cardinal Health 20 % 47 % McKesson 43 % 38 % Combined Total 94 % 97 % Gross Account Receivables December 31, December 31, 2020 2019 Amerisource Bergen 21 % 21 % Cardinal Health 20 % 22 % McKesson 52 % 51 % Combined Total 93 % 94 % Purchasing For the year ended December 31, 2020, two suppliers accounted for more than 86% of the Company’s purchases of raw materials for products that are manufactured by the Company. Three suppliers accounted for more than 92% of the Company’s purchases of raw materials manufactured by the Company for the year ended December 31, 2019. 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, 2020 and 2019, one product accounted for 33% and 57%, 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, 2020 and 2019, respectively: Year Ended December 31, 2020 Gross Gross Royalty Royalty Revenue Accounts Receivable Customer 4 53 % 54 % Customer 5 24 % 12 % Combined Total 77 % 66 % Year ended December 31, 2019 Gross Gross Royalty Royalty Revenue Accounts Receivable Customer 4 54 % 93 % Customer 5 12 % NM % Combined Total 66 % 93 % NM – Not Meaningful |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Note 12. Shareholders’ Equity 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. Ordinary Share Repurchase Program In September 2019, the Company’s board of directors authorized the repurchase of up to 5,251,892 ordinary shares pursuant to a share repurchase program. Purchases under the ordinary share repurchase program can be made on the open market or in privately negotiated transactions, with the size and timing of these purchases based on a number of factors, including the price of our ordinary shares, our business and market conditions. The Company has retired ordinary shares acquired under the repurchase program. For the years ended December 31, 2020 and 2019, the Company repurchased 1,435,725 ordinary shares for an aggregate of $8.1 million and 673,182 ordinary shares for an aggregate of $2.8 million, respectively. 2019 Employee Share Purchase Plan In September 2019, the Company’s board of directors adopted and approved, the Employee Share Purchase Plan (the “ESPP”). The ESPP allows each eligible employee who is participating in the plan to purchase shares by authorizing payroll deductions of up to $2,000 per payroll period. Unless the participating employee has previously withdrawn from the offering, accumulated payroll deductions will be used to purchase shares on the last business day of the offering period at a price equal to 85 percent of the fair market value of the shares on the first business day or the last business day of the offering period, whichever is lower. Under applicable tax rules, an employee may purchase no more than $25,000 worth of ordinary shares, valued at the start of the purchase period, under the ESPP in any calendar year. There is no minimum holding period associated with shares purchased pursuant to this plan. An employee’s purchase rights terminate immediately upon termination of employment. The Company accounts for employee stock purchases made under its ESPP using the estimate grant date fair value of accounting in accordance with ASC 718, Stock Compensation. The purchase price discount and the look-back feature cause the ESPP to be compensatory and the Company to recognize compensation expense. The compensation cost is recognized on a straight-line basis over the requisite service period. The Company recognized $113,860 and $31,619 of compensation expense for the years ended December 31, 2020 and 2019, respectively. The Company values ESPP shares using the Black-Scholes model. As of December 31, 2020 and 2019, there were no unrecognized ordinary share compensation expense related to the ESPP. There were 51,905 ordinary shares issued under the ESPP during the year ended December 31, 2020. There were no ordinary shares issued under the ESPP during the year ended December 31, 2019. On January 4, 2021, the Company issued 39,321 ordinary shares to the employees who participated in the ESPP during the offering period ended December 31, 2020. Share-based Compensation The compensation cost that has been charged against income for all incentive plans was $4.8 million for the year ended December 31, 2020 and $4.9 million for the year ended December 31, 2019. 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, 2020, and changes during the year then ended is presented below: 2016 Equity Incentive Plan Weighted Weighted Average Average Number of Shares Exercise Contractual Time Price Term Outstanding at January 1, 2019 3,015,572 $ 14.96 7.5 years Granted — — Exercised — — Expired / Forfeited (55,686) $ 14.95 Outstanding at December 31, 2019 2,959,886 $ 14.96 6.4 years Vested Options at December 31, 2019 1,459,005 $ 14.96 6.4 years Granted — — Exercised — — Expired / Forfeited (132,786) $ 15.21 Outstanding at December 31, 2020 2,827,100 $ 14.95 5.4 years Vested Options at December 31, 2020 2,099,950 $ 14.95 5.4 years There were no options granted during 2020 and 2019, respectively, under the 2016 Plan. The intrinsic value of options under the 2016 Plan outstanding at December 31, 2020 and 2019, respectively, was $0. The fair value of options vested under the 2016 Plan during the years ended December 31, 2020 and 2019 were $8,832 and $6,431, respectively. A summary of option activity granted under the 2018 Plan as of December 31, 2020, and changes during the year then ended is presented below: 2018 Equity Incentive Plan Weighted Weighted Average Average Number of Shares Exercise Contractual Time Price Term Outstanding at January 1, 2019 178,600 $ 7.00 9.8 years Granted — — Exercised — — Expired / Forfeited (44,400) $ 7.00 Outstanding at December 31, 2019 134,200 $ 7.00 8.7 years Vested Options at December 31, 2019 — Granted Exercised Expired / Forfeited (37,800) $ 7.00 Outstanding at December 31, 2020 96,400 $ 7.00 Vested Options at December 31, 2020 — — 7.7 years There were no options granted during 2020 and 2019, respectively. 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. As of December 31, 2020 and 2019, there was $0.8 million and $2.2 million 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 1.3 years and 1.5 years, respectively. 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. There were no options granted during 2020 and 2019, respectively. 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 was 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. Restricted and Performance Stock Units On May 18, 2020 and May 20, 2020, the Company granted performance stock units (“PSUs”) under its existing 2018 Incentive Plan (the “2018 Plan”) to certain key employees of the Company that gives holders the potential to receive a certain number of earned PSUs at the end of a pre-determined term. Unless earlier terminated, forfeited, relinquished or expired, the earned PSUs will vest in full on the vesting date, subject to the grantee remaining in continuous employment from the date of grant through the vesting date. The vesting date is the third anniversary from the grant date for the PSUs granted on May 18, 2020 and the fifth anniversary from the grant date for the PSUs granted on May 20, 2020. The number of PSUs that become earned PSUs as of the end of the performance period shall be equal to the number of PSUs multiplied by the applicable percentage based on Stock Price Hurdle attainment, as set forth in the PSU Award Agreement and 2018 Plan. The fair value of these market-based awards is estimated on the date of grant using a Monte Carlo simulation model with the following assumptions: Years Ended December 31, 2020 Expected volatility 90 % Risk-free interest rate .21% - .24 % Expected dividend yield — % Performance period in years 3.00 The Company estimates its expected volatility by using a combination of historical share price volatilites 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. As of December 31, 2020 total compensation cost not yet recognized related to unvested PSUs $3.2 million which is expected to be recognized over a weighted average period of 3.0 years. The following table summarizes the information as of December 31, 2020 and activity during 2020 related to our PSUs: Weighted- Weighted- Average Remaining Number of Average Grant Contractual Term PSUs Date Fair Value (Years) Outstanding at January 1, 2020 — $ — — PSUs granted 825,997 4.99 — PSUs vested — — — PSUs forfeited (36,198) 4.90 — Outstanding at December 31, 2020 789,799 $ 4.99 During 2020 and 2019 we granted restricted stock units, or RSUs, covering an equal number of our ordinary shares to employees and certain directors with a weighted average grant date fair value of $4.46 and $7.19, respectively. The fair value of RSUs are determined on the date of grant based on the market price of our ordinary shares as of that date. The fair value of the RSUs is recognized ratably over the vesting period of four years for employees and one to three years for directors. As of December 31, 2020 and 2019 total compensation cost not yet recognized related to unvested RSUs was $8.5 million and $8.0 million which is expected to be recognized over a weighted average period of 2.8 years and 3.2 years, respectively. The following table summarizes the information as of December 31, 2020 and activity during 2020 related to our RSUs: Weighted- Weighted- Average Remaining Number of Average Grant Contractual Term RSUs Date Fair Value (Years) Outstanding at January 1, 2019 — $ — — RSUs granted 1,486,020 7.19 — RSUs vested — — — RSUs forfeited (51,787) 7.18 — Outstanding at December 31, 2019 1,434,233 $ 7.19 RSUs granted 976,429 4.46 — RSUs vested (300,788) 6.73 — RSUs forfeited (118,317) 6.07 — Outstanding at December 31, 2020 1,991,557 $ 5.99 2020 Equity Offering On January 13, 2020 we completed a follow-on equity offering and allotted 6,900,000 ordinary share at a public offering price of $5.00 per share. The number of shares issued in this offering reflected the exercise in full of the underwriters’ option to purchase 900,000 ordinary shares. The aggregate net proceeds from the follow-on offering were approximately $31.8 million after deducting underwriting discounts and commissions and offering expenses. Proceeds from the offering were used for working capital and general corporate purposes. On July 16, 2020 we completed a follow-on equity offering and allotted 5.0 million ordinary shares. The aggregate proceeds from the follow-on offering were approximately $30.6 million after deducting offering expenses. Proceeds from the offering will be used for working capital and general corporate purposes. |
Earnings (Loss) per Ordinary Sh
Earnings (Loss) per Ordinary Share | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 and 2019: Year Ended December 31, 2020 2019 Performance and restricted stock units 2,781,356 1,434,233 Options to purchase ordinary shares 2,923,500 3,093,786 Shares to be purchased through employee stock purchase plan 39,321 29,550 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 14. Commitments and Contingencies 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 aggregate amount of future potential milestone payments payable in connection with such agreement are currently not material to the Company’s financial statements. 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. The aggregate amount of future potential milestone payments are currently not material to our financial statements. 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, 2020 (in thousands): Royalty Obligations Less than 1 year $ 1,000 1 to 3 years 3,000 3 to 5 years 2,000 More than 5 years 83 Total $ 6,083 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 Company has no enforceable and legally binding purchase obligations as of December 31, 2020. 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, 2020 and 2019, the Company recognized expenses related to its contributions under the Plan of $0.5 million and $1.3 million, 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. 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 and reserving the ability to raise counterclaims as the litigation progresses. 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. On December 2, 2020, we entered into an agreement to settle the litigation with Adamas. Under the terms of the agreement, both parties agreed to drop their respective claims relating to the patent litigation, and Adamas agreed to acquire the global rights to Osmolex ER from the Company for $7.5 million. The sale of the global rights to Osmolex ER closed in January 2021 at which time the related gain was recorded. Additionally, in connection with the settlement and the sale of the global rights to Osmolex ER, the parties entered into a supply agreement pursuant to which the Company agreed to supply Adamas with amantadine extended release tablets for a six-year term, subject to possible two-year extensions and customary closing conditions. On April 30, 2019, the Company was served with a complaint in an action entitled Leo Shumacher, et al., v. Osmotica Pharmaceuticals plc, et al., Superior Court of New Jersey, Somerset County No. SOM-L-000540-19 . On May 10, 2019, a Complaint entitled Jeffrey Tello, et al., v. Osmotica Pharmaceuticals plc, et al., Superior Court of New Jersey, Somerset County No. SOM-L-000617-19 was filed in the same court as the Shumacher action. The complaints named the Company, certain of the Company’s directors and officers and the underwriters of the Company’s initial public offering as defendants in putative class actions alleging violations of Sections 11 and 15 of the Securities Act of 1933 related to the disclosures contained in the registration statement and prospectus used for the Company’s initial public offering of ordinary shares. On July 22, 2019, the plaintiffs filed an amended complaint consolidating the two actions, reiterating the previously pled allegations and adding an additional individual defendant. The parties participated in a mediation and reached an agreement in principle to settle the litigation on December 15, 2020. The agreement in principle calls for a payment by the Company of $5.25 million (a portion of which we expect would be covered by applicable insurance) and would fully resolve all claims asserted in the litigation against all defendants named in the litigation, including the Company. No party would admit any wrongdoing as part of the proposed settlement, which was reached to avoid the further cost and distraction of litigation. The agreement in principle contemplates the negotiation and execution of a final settlement agreement. The settlement is also subject to preliminary approval by the Superior Court of New Jersey, notice to the putative class, and subsequent final approval by the Superior Court of New Jersey. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
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 (in thousands): December 31, December 31, 2020 2019 Loss before income taxes U.S. operations $ 66,836 $ 140,664 Non-U.S. operations 17,450 157,358 Total loss before income taxes 84,286 298,022 Current tax benefit (provision) Federal 4,541 (1,387) State (232) 292 Foreign (985) (791) Total current tax benefit (expenses) 3,324 (1,886) Deferred tax benefit (provision) Federal (82) 15,396 State — 712 Foreign 1,455 12,899 Total deferred tax benefit 1,373 29,007 Total benefit for income taxes $ 4,697 $ 27,121 A reconciliation of the statutory federal income tax rate to the Company's effective tax rate for the years ended December 31, 2020 and 2019 respectively are as follows: December 31, December 31, 2020 2019 Federal tax at 21% statutory rate 21.00 % 21.00 % State and local income taxes, net of federal benefit 1.11 % 0.91 % Differences in tax effects on foreign income (3.38) % (6.43) % Federal tax credits 1.35 % 0.59 % Uncertain tax positions 1.40 % 0.04 % NOL carryback rate differential 3.87 % 0.00 % Tax audit adjustment (3.65) % 0.00 % Change in valuation allowance (15.52) % (7.02) % Permanent adjustments (0.79) % 0.00 % Other 0.18 % 0.01 % Effective tax rate 5.57 % 9.10 % 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, 2020 and 2019 respectively are as follows (in thousands): December 31, December 31, 2020 2019 Deferred tax assets: Accounts receivable $ — $ 31 Accrued expenses 5,921 9,535 Inventory 295 243 Investment in partnership 2,393 8,696 Net operating losses 1,285 2,627 Operating lease liabilities 657 1,121 Tax credits 6,486 3,249 Share compensation 1,816 1,399 Intangible assets 19,082 — Other 3,328 1,685 Less: valuation allowance (27,811) (21,216) Deferred tax liabilities: Prepaid expenses (658) (689) Property plant & equipment (3,261) (3,252) Operating lease assets (623) (1,115) Intangible assets (9,254) (3,814) Total deferred income taxes $ (344) $ (1,500) Included in the deferred tax balances above is a net deferred tax asset of $14.9 million and deferred tax liability of $4.6 million, respectively for 2020 and 2019 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, 2020 and 2019, the Company had a federal and state net operating loss carryover of $29.1 million and $2.2 million, respectively and net operating loss carryovers in certain foreign tax jurisdictions of $3.8 million and $9.9 million, respectively which will begin to expire in 2022. At December 31, 2020 and 2019, the Company had total tax credit carryovers of approximately $6.7 million and $4.6 million primarily consisting of Federal Orphan Drug Tax Credit carryovers. These credit carryovers begin to expire in 2035. 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, 2020 and 2019, the Company maintains valuation allowances on deferred tax assets applicable to entities in the United States and 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 2020, the valuation allowance increased by $6.6 million. The Coronavirus Aid Relief, and Economic Security Act (CARES Act) was enacted on March 27, 2020 in the United States. The CARES Act and related notices include several significant provisions, including delaying certain payroll tax payments, mandatory transition tax payments under the Tax Cuts and Jobs Act, and estimated income tax payments that we expect to defer to future periods. The Cares Act provides a five year carryback for losses generated in 2018-2020, The Company incurred losses in the current period that will be carried back to the earliest year, 2015. The loss generated in 2020 will be carried back to a tax year with a higher tax rate providing a benefit of $3.2 million. The impact to the Company’s effective tax rate is 3.8%. The Cares Act made the business interest limitation less restrictive in that it increased the deduction limit for business interest to 50% of adjusted taxable income as well as allowing taxpayers to elect to utilize 2019 adjusted taxable income when computing the limitation in 2020. The Company utilized this clause in the CARES ACT when computing the current period income tax benefit. 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 2015 through 2018 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 2015 through 2019 tax years remain open for examination by the tax authorities under the normal statute of limitations. Two of the Company’s subsidiaries, Osmotica Pharmaceutical Corp. and Valkyrie Group Holding Inc., finalized audits by the Internal Revenue Service for tax years 2016 and 2017. The Company agreed to an IRS adjustments and correspondingly recorded tax expense of $1.9 million which includes $1.4 million of income tax $0.5 million of interest and penalty expense. No provision is made for foreign withholding or income taxes associated with the cumulative undistributed earnings of the foreign subsidiaries. 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, 2020 and 2019. 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 $0 .2 million would an immaterial impact on the effective tax rate. December 31, December 31, 2020 2019 Unrecognized tax benefits beginning balance $ 2,677 $ 2,218 Additions related to current period tax positions 171 459 Releases related to prior period tax positions (2,677) — Unrecognized tax benefits ending balance $ 171 $ 2,677 The Company classifies interest expense related to unrecognized tax benefits as componenets of the tax provision for income taxes. Interest and penalties recognized in the consolidated income statement as of December 31, 2020 resulted in an immaterial amount of interest and penalties as of December 31, 2020 and in a decrease of $0.1 million as of December 31, 2019. As of December 31, 2020 and 2019 the Company has recorded accrued interest of an immaterial amount and $0.2 million, respectively. The current year release of unrecognized tax benefits is due to an accounting method change which eliminated the need for an uncertain tax position. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
Related Parties | |
Related Parties | Note 16. Related Parties 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 through the end of 2019 valued at approximately $2.4 million. During 2019, we amended the initial Statement of Work to add approximately $275,000 of additional services for 2019. On January 1, 2020, we entered into an additional Statement of Work for services during 2020 valued at approximately $1.7 million. The Company had accrued $0.2 million of liabilities related to this agreement as of December 31, 2020 and had recognized $1.0 million of related expense for the year ended December 31, 2020. The Company had accrued less than $0.1 million of liabilities related to this agreement as of December 31, 2019 and had recognized $1.9 million of related expense for the year ended December 31, 2019. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation | The Company devotes significant financial resources to the manufacture, marketing and commercialization of its approved products, and support of its research and development efforts. The Company’s future operating performance depends on many assumptions, including assumptions with respect to product sales and expenses, commercialization costs, research and development expenses as well as other factors. These assumptions may prove to be wrong or other factors may adversely affect the Company’s operating results. As a result, the Company’s operating results may fluctuate significantly quarter to quarter or year to year. The Company expects its near term levels of profitability to be negatively affected by price competition on our generic products, and increased expenses associated with new product launches. As a result, it’s possible it would not be able to comply with financial covenants in its credit agreement or generate sufficient cash to service its debt obligations. The Company is currently undertaking a comprehensive review of strategic options to maximize shareholder value. The options under consideration include divestitures of non-stragetic assets, re-financings and commercialization or collaboration agreements. In the event the Company is unable to generate sufficient proceeds from these strategic options such that it can reduce, retire or refinance its existing debt, the Company believes it has sufficient plans to effectively manage its expenses and avail itself of cure provisions provided for in its credit agreement, in order to maintain compliance with its debt covenants therein. The use of the cure provisions will result in utilization cash to pay down the debt balance. A significant portion of the Company’s expense base is discretionary and the Company has the ability to reduce or defer spending to reduce expenses and improve profitability and cash flow to maintain compliance with its debt covenants. This could include, among other things, significant reductions in its general and administrative expenses, research and development expenses, including deferral of clinical trial programs, and deferrals of certain promotional and capital spending programs which could negatively impact the Company’s revenue growth and plans. The Company has previously demonstrated an ability to implement various cost reduction initiatives. During the third quarter of 2019 and continuing into 2020, the Company reduced its field force by an aggregate of 90 positions, generating annualized savings of approximately $10 million, and took measures to realign its operating infrastructure to prepare for the launch of Upneeq and implemented other cost-savings measures to reduce its expenses. Based on the current facts and circumstances, the use of the cure provisions provided for in the credit agreement, which will result in utilizing cash to prepay debt, and the Company’s ability to implement spending reductions and program deferrals, we believe it is probable that the Company can effectively manage its spending to improve profitability in order to maintain compliance with the debt covenants and other obligations in our credit agreement for at least the next 12 months, even if the strategic review does not generate sufficient proceeds to reduce, retire or refinance our existing debt. As a result, the Company has concluded that, after consideration of management’s plans it has sufficient liquidity to meet its obligations within one year after the issuance date of its Consolidated Financial Statements, and it does not have substantial doubt about its ability to continue as a going concern. 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. Our subsidiary in Argentina is currently operating in a highly inflationary environment, as a result, we account for translation in accordance with US GAAP. Foreign currency transaction gains and losses are included in selling, general and administrative expenses 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. |
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. |
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, 2020 and 2019, 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 5 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 $72.2 million and $283.7 million, in regard to definite‑lived and indefinite-lived intangible assets for the years ended December 31, 2020 and 2019, respectively (see Note 7). |
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, 2020 and 2019, respectively. (see Note 7). 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 an impairment charge to IPR&D of $28.9 million for the year ended December 31, 2020 and we recognized no impairment charges of IPR&D for the year ended December 31, 2019 (see Note 7). |
Licensing and Contract Revenue | 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. The transfer of the license is a performance obligation satisfied at a point in time. For arrangements that include non-sales based milestones, including milestone payments based on regulatory approvals or other activities, and the license is deemed to be the predominant item to which the milestones relate, the Company recognizes revenue at the later of a) when the milestone activity is achieved, or b) when the performance obligation to which some or all the milestone has been allocated has been satisfied (or partially satisfied). 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). 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, 2020 and 2019, $0 million and $19.7 million, respectively, of IPR&D was transferred to Product Rights as the products in development are approved for sale and placed into service (see Note 7). Such amounts will be amortized over their respectful estimated useful lives. At that time an evaluation of fair value was performed immediately prior to such transfer and no impairments were recognized at that time. Assets are subsequently evaluated for indicators of impairment. |
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, 2020 and 2019 amounted to $9.3 million and $8.5 million, 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 . Share‑based compensation expense is measured at the date of grant, based on the fair value of the award. Compensation for share‑based awards with vesting conditions other than service are recognized at the time that those conditions will be achieved. Forfeitures are recognized as they are incurred. |
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. |
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 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 Accounting Standards | Recently Adopted Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which introduces a new methodology for accounting for credit losses on financial instruments, including available-for-sale debt securities. The guidance establishes a new “expected loss model” that requires entities to estimate current expected credit losses on financial instruments by using all practical and relevant information. The estimate of credit losses must be based on all relevant information including historical information, current conditions, and reasonable and supportable forecasts that affect the collectability of the amounts. The Company adopted this standard on January 1, 2020, and there was no material impact to the Company’s consolidated financial statements. The Company has provided additional disclosures as required by the standard upon adoption. Refer to Note 4 for additional details. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenues Abstract | |
Schedule of disaggregation of revenue from contracts with customers | Year Ended December 31, Pharmaceutical Product 2020 2019 Venlafaxine ER (VERT) $ 25,576 $ 75,601 Methylphenidate ER 31,699 73,205 Divigel 31,629 26,794 Nitrofurantoin 10,443 5,726 Lorzone 4,058 15,004 OB Complete 6,948 9,851 Other 35,497 29,291 Net product sales 145,850 235,472 Royalty revenue 4,107 3,641 License and contract revenue 27,927 918 Total revenues $ 177,884 $ 240,031 |
Accounts Receivable, Sales an_2
Accounts Receivable, Sales and Allowances (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of components of accounts receivable | December 31, December 31, 2020 2019 Gross trade accounts receivable Trade accounts receivable $ 38,546 $ 70,958 Royalty accounts receivable 1,267 702 Other receivable 4,639 2,186 Less reserves for: Chargebacks (9,921) (14,624) Commercial rebates (7,344) (13,579) Discounts and allowances (775) (1,591) Allowance for credit losses — (138) Total trade accounts receivable, net $ 26,412 $ 43,914 |
Schedule of adjustments to gross product sales | Year Ended December 31, 2020 2019 Gross product sales $ 321,493 $ 764,267 Less provisions for: Chargebacks (122,592) (345,366) Government and managed care rebates (18,211) (20,092) Commercial rebates (22,488) (147,173) Product returns (2,825) 3,932 Discounts and allowances (7,003) (15,719) Advertising and promotions (2,524) (4,377) Net product sales $ 145,850 $ 235,472 |
Trade accounts receivable | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of activity in allowance/liability for customer deductions | Discounts Commercial and Credit Chargebacks Rebates Allowances Losses Total Balance at December 31, 2018 $ 38,861 $ 49,232 $ 3,510 $ 194 $ 91,797 Provision 345,366 147,173 15,719 (190) 508,068 Charges processed (369,603) (182,826) (17,638) 134 (569,933) Balance at December 31, 2019 $ 14,624 $ 13,579 $ 1,591 $ 138 $ 29,932 Provision 122,592 22,488 7,003 6 152,089 Charges processed (127,295) (28,723) (7,819) (144) (163,981) Balance at December 31, 2020 $ 9,921 $ 7,344 $ 775 $ — $ 18,040 |
Accrued liabilities | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Schedule of activity in allowance/liability for customer deductions | Government and Product Managed Care Returns Rebates Total Balance at December 31, 2018 $ 48,464 $ 9,981 $ 58,445 Provision (3,932) 20,092 16,160 Charges processed (11,075) (25,206) (36,281) Balance at December 31, 2019 $ 33,457 $ 4,867 $ 38,324 Provision 2,825 18,211 21,036 Charges processed (14,256) (19,633) (33,889) Balance at December 31, 2020 $ 22,026 $ 3,445 $ 25,471 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory [Line Items] | |
Summary of components of inventories, net of allowances | December 31, December 31, 2020 2019 Finished goods $ 13,352 $ 15,319 Work in process 618 778 Raw materials and supplies 3,964 5,208 $ 17,934 $ 21,305 |
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, 2020 2019 Balance at beginning of period $ 1,069 $ 1,561 Provision 1,001 2,322 Charges processed (1,144) (2,814) Balance at end of period $ 926 $ 1,069 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Year Ended December 31, December 31, 2020 2019 Land $ 2,120 $ 2,120 Buildings 11,671 11,643 Leasehold improvements 3,580 3,423 Machinery 17,399 16,034 Furniture, fixtures and equipment 1,368 1,388 Computer hardware and software 9,014 8,508 45,152 43,116 Accumulated depreciation (18,980) (14,292) 26,172 28,824 Construction in progress 1,882 1,414 $ 28,054 $ 30,238 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | |
Schedule of carrying value of goodwill | Goodwill January 1, 2019 $ 100,855 Impairments — December 31, 2019 $ 100,855 Impairments — December 31, 2020 $ 100,855 |
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | December 31, 2020 Weighted Average Remaining Gross Net Amortization Carrying Accumulated Carrying Period Amount Amortization Impairment Amount (Years) Distribution Rights $ 33,714 $ (23,893) $ (9,461) $ 360 0.8 Product Rights 202,567 (164,336) (19,539) 18,692 2.1 Tradenames 13,485 (3,741) — 9,744 14.0 Developed Technology 52,466 (36,321) (14,273) 1,872 8.6 IPR&D 64,000 — (28,910) 35,090 Indefinite Lived $ 366,232 $ (228,291) $ (72,183) $ 65,758 December 31, 2019 Weighted Average Gross Net Remaining Carrying Accumulated Carrying Amortization Amount Amortization Impairment Amount Period (Years) Distribution Rights $ 98,433 $ (22,291) $ (64,719) $ 11,423 10.1 Product Rights 348,600 (152,348) (146,033) 50,219 3.1 Tradenames 13,485 (3,035) — 10,450 15.0 Developed Technology 125,461 (34,572) (72,995) 17,894 10.9 IPR&D 64,000 — — 64,000 Indefinite Lived $ 649,979 $ (212,246) $ (283,747) $ 153,986 |
Schedule of changes in the net carrying amount of intangible assets | Distribution Product Developed Rights Rights Tradenames Technology IPR&D Total January 1, 2019 $ 81,204 $ 217,473 $ 11,156 $ 96,857 $ 83,700 $ 490,390 Amortization (5,062) (40,921) (706) (5,968) — (52,657) Impairments (64,719) (146,033) — (72,995) — (283,747) Reclassifications(A) — 19,700 — — (19,700) — December 31, 2019 $ 11,423 $ 50,219 $ 10,450 $ 17,894 $ 64,000 $ 153,986 Amortization (1,602) (11,988) (706) (1,749) — (16,045) Impairments (9,461) (19,539) — (14,273) (28,910) (72,183) December 31, 2020 $ 360 $ 18,692 $ 9,744 $ 1,872 $ 35,090 $ 65,758 (A) IPR&D in the amount of $19.7 million related to Osmolex ER was reclassified to Product Rights in the first quarter of 2019 when the product was launched. Osmolex ER was fully impaired during the second quarter of 2019. |
Schedule of expected amortization expense | Amortization Years ending December 31 Expense 2021 $ 10,193 2022 5,625 2023 4,739 2024 2,790 Thereafter 7,321 Total $ 30,668 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Liabilities Abstract | |
Schedule of accrued liabilities | December 31, December 31, 2020 2019 Accrued product returns $ 22,026 $ 33,457 Accrued royalties 2,246 3,649 Accrued compensation 8,022 10,998 Accrued government and managed care rebates 3,445 4,867 Accrued research and development 1,000 3,028 Accrued expenses and other liabilities 10,550 8,477 Customer coupons 200 777 Deferred revenue 28 — Total $ 47,517 $ 65,253 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of lease assets and liabilities on the Balance Sheet | Leases Classification Balance at Balance at Assets Operating Operating Lease Assets $ 2,755 $ 4,983 Finance Property, plant and equipment, net 58 188 Total leased assets $ 2,813 $ 5,171 Liabilities Current Operating Current portion of lease liability $ 1,457 $ 2,062 Finance Current portion of obligations under finance leases 40 127 Non-current Operating Long-term portion of lease liability 1,436 3,116 Finance Long-term portion of obligations under finance leases 4 44 Total lease liabilities $ 2,937 $ 5,349 |
Schedule of lease costs | Lease Cost Classification Year Ended Year Ended Operating lease cost SG&A expenses $ 1,525 $ 1,926 R&D expenses 104 139 Cost of goods sold 392 366 Finance lease cost Amortization of leased assets Depreciation and amortization 130 130 Interest on lease liabilities Interest expense 2 4 Total lease cost $ 2,153 $ 2,565 |
Schedule of future minimum rental payments ASC842 | Years ending December 31 Operating Leases 2021 $ 1,589 2022 955 2023 554 Total lease payments 3,098 Less: interest 207 Present value of lease payments $ 2,891 |
Schedule of additional lease information | Lease Term and Discount Rate December 31, 2020 December 31, 2019 Weighted average remaining lease term (years) Operating leases Finance leases Weighted average discount rate Operating leases % % Finance leases % % Other Information December 31, 2020 December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ (1,927) $ (2,431) Operating cash flows for finance leases (2) (4) Financing cash flows for finance leases (127) (130) |
Financing Arrangement (Tables)
Financing Arrangement (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Instrument [Line Items] | |
Schedule of Composition of Company’s Debt and Financing Obligations | December 31, December 31, 2020 2019 CIT Bank, N.A. Term Loan due December 21, 2022, net of deferred financing costs of $1.8 million and $3.4 million as of December 31, 2020 and December 31, 2019, respectively $ 219,525 $ 267,950 Total debt 219,525 267,950 Less: current portion — — Long-term debt $ 219,525 $ 267,950 |
Schedule of Maturities of Long-Term Debt | Maturities of Long-term Years ending December 31, Obligations 2021 $ — 2022 219,525 Total $ 219,525 |
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 Commitment Fee Category 1 3.75 % 2.75 % 0.50 % Greater than 2.00 to 1.00 Category 2 3.25 % 2.25 % 0.38 % Equal to or less than 2.00 to 1.00 |
Concentrations and Credit Risk
Concentrations and Credit Risk (Tables) - Customer concentration risk | 12 Months Ended |
Dec. 31, 2020 | |
Gross Product Sales | Product Revenue | |
Concentrations and Credit Risk | |
Schedule of percentage of Company’s gross sales and accounts receivable attributable to customers | Gross Product Sales Year Ended December 31, 2020 2019 Amerisource Bergen 31 % 12 % Cardinal Health 20 % 47 % McKesson 43 % 38 % Combined Total 94 % 97 % |
Gross Product Sales | Royalty Revenue | |
Concentrations and Credit Risk | |
Schedule of percentage of Company’s gross sales and accounts receivable attributable to customers | Year Ended December 31, 2020 Gross Gross Royalty Royalty Revenue Accounts Receivable Customer 4 53 % 54 % Customer 5 24 % 12 % Combined Total 77 % 66 % Year ended December 31, 2019 Gross Gross Royalty Royalty Revenue Accounts Receivable Customer 4 54 % 93 % Customer 5 12 % NM % Combined Total 66 % 93 % |
Gross Accounts Receivable | 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, 2020 2019 Amerisource Bergen 21 % 21 % Cardinal Health 20 % 22 % McKesson 52 % 51 % Combined Total 93 % 94 % |
Gross Accounts Receivable | Royalty Revenue | |
Concentrations and Credit Risk | |
Schedule of percentage of Company’s gross sales and accounts receivable attributable to customers | Year Ended December 31, 2020 Gross Gross Royalty Royalty Revenue Accounts Receivable Customer 4 53 % 54 % Customer 5 24 % 12 % Combined Total 77 % 66 % Year ended December 31, 2019 Gross Gross Royalty Royalty Revenue Accounts Receivable Customer 4 54 % 93 % Customer 5 12 % NM % Combined Total 66 % 93 % |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of valuation assumptions | Years Ended December 31, 2020 Expected volatility 90 % Risk-free interest rate .21% - .24 % Expected dividend yield — % Performance period in years 3.00 |
Summary of performance share unit activity | Weighted- Weighted- Average Remaining Number of Average Grant Contractual Term PSUs Date Fair Value (Years) Outstanding at January 1, 2020 — $ — — PSUs granted 825,997 4.99 — PSUs vested — — — PSUs forfeited (36,198) 4.90 — Outstanding at December 31, 2020 789,799 $ 4.99 |
Summary of restricted stock unit activity | Weighted- Weighted- Average Remaining Number of Average Grant Contractual Term RSUs Date Fair Value (Years) Outstanding at January 1, 2019 — $ — — RSUs granted 1,486,020 7.19 — RSUs vested — — — RSUs forfeited (51,787) 7.18 — Outstanding at December 31, 2019 1,434,233 $ 7.19 RSUs granted 976,429 4.46 — RSUs vested (300,788) 6.73 — RSUs forfeited (118,317) 6.07 — Outstanding at December 31, 2020 1,991,557 $ 5.99 |
2016 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of option activity | 2016 Equity Incentive Plan Weighted Weighted Average Average Number of Shares Exercise Contractual Time Price Term Outstanding at January 1, 2019 3,015,572 $ 14.96 7.5 years Granted — — Exercised — — Expired / Forfeited (55,686) $ 14.95 Outstanding at December 31, 2019 2,959,886 $ 14.96 6.4 years Vested Options at December 31, 2019 1,459,005 $ 14.96 6.4 years Granted — — Exercised — — Expired / Forfeited (132,786) $ 15.21 Outstanding at December 31, 2020 2,827,100 $ 14.95 5.4 years Vested Options at December 31, 2020 2,099,950 $ 14.95 5.4 years |
Equity Incentive Plan 2018 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of option activity | 2018 Equity Incentive Plan Weighted Weighted Average Average Number of Shares Exercise Contractual Time Price Term Outstanding at January 1, 2019 178,600 $ 7.00 9.8 years Granted — — Exercised — — Expired / Forfeited (44,400) $ 7.00 Outstanding at December 31, 2019 134,200 $ 7.00 8.7 years Vested Options at December 31, 2019 — Granted Exercised Expired / Forfeited (37,800) $ 7.00 Outstanding at December 31, 2020 96,400 $ 7.00 Vested Options at December 31, 2020 — — 7.7 years |
Earnings (Loss) per Ordinary _2
Earnings (Loss) per Ordinary Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of potentially dilutive securities excluded from computation of diluted weighted average shares | Year Ended December 31, 2020 2019 Performance and restricted stock units 2,781,356 1,434,233 Options to purchase ordinary shares 2,923,500 3,093,786 Shares to be purchased through employee stock purchase plan 39,321 29,550 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Summary of Company's enforceable and legally binding royalty obligations | Royalty Obligations Less than 1 year $ 1,000 1 to 3 years 3,000 3 to 5 years 2,000 More than 5 years 83 Total $ 6,083 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | December 31, December 31, 2020 2019 Loss before income taxes U.S. operations $ 66,836 $ 140,664 Non-U.S. operations 17,450 157,358 Total loss before income taxes 84,286 298,022 Current tax benefit (provision) Federal 4,541 (1,387) State (232) 292 Foreign (985) (791) Total current tax benefit (expenses) 3,324 (1,886) Deferred tax benefit (provision) Federal (82) 15,396 State — 712 Foreign 1,455 12,899 Total deferred tax benefit 1,373 29,007 Total benefit for income taxes $ 4,697 $ 27,121 |
Schedule Reconciling Statutory Tax Rate to Effective Tax Rate | December 31, December 31, 2020 2019 Federal tax at 21% statutory rate 21.00 % 21.00 % State and local income taxes, net of federal benefit 1.11 % 0.91 % Differences in tax effects on foreign income (3.38) % (6.43) % Federal tax credits 1.35 % 0.59 % Uncertain tax positions 1.40 % 0.04 % NOL carryback rate differential 3.87 % 0.00 % Tax audit adjustment (3.65) % 0.00 % Change in valuation allowance (15.52) % (7.02) % Permanent adjustments (0.79) % 0.00 % Other 0.18 % 0.01 % Effective tax rate 5.57 % 9.10 % |
Schedule of Deferred Tax Assets and Liabilities | December 31, December 31, 2020 2019 Deferred tax assets: Accounts receivable $ — $ 31 Accrued expenses 5,921 9,535 Inventory 295 243 Investment in partnership 2,393 8,696 Net operating losses 1,285 2,627 Operating lease liabilities 657 1,121 Tax credits 6,486 3,249 Share compensation 1,816 1,399 Intangible assets 19,082 — Other 3,328 1,685 Less: valuation allowance (27,811) (21,216) Deferred tax liabilities: Prepaid expenses (658) (689) Property plant & equipment (3,261) (3,252) Operating lease assets (623) (1,115) Intangible assets (9,254) (3,814) Total deferred income taxes $ (344) $ (1,500) |
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] | December 31, December 31, 2020 2019 Unrecognized tax benefits beginning balance $ 2,677 $ 2,218 Additions related to current period tax positions 171 459 Releases related to prior period tax positions (2,677) — Unrecognized tax benefits ending balance $ 171 $ 2,677 |
Organization and Nature of Op_2
Organization and Nature of Operations (Details) | Jul. 16, 2020shares | Jan. 13, 2020shares | Oct. 22, 2018USD ($)$ / sharesshares | Oct. 17, 2018USD ($)shares | Feb. 03, 2016 |
Stock transactions | |||||
Number of ordinary shares issued | 5,000,000 | 6,900,000 | |||
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 | $ / shares | $ 7 | ||||
Over-Allotment Option [Member] | |||||
Stock transactions | |||||
Number of ordinary shares issued | 900,000 | 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% |
Basis of Presentation - Propert
Basis of Presentation - Property, plant and equipment (Details) $ in Millions | 12 Months Ended | 18 Months Ended |
Dec. 31, 2020USD ($) | Dec. 31, 2020item | |
Property, Plant and Equipment [Line Items] | ||
Reduction in field force | item | 90 | |
Annual savings | $ | $ 10 | |
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 - Long-li
Basis of Presentation - Long-lived assets (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Impairment of intangibles | $ 72,183,000 | $ 283,747,000 |
Number of reporting units | item | 1 | |
Goodwill impairment | $ 0 | 0 |
IPR&D | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Impairment of intangibles | 28,910,000 | |
Intangible asset impairment, finite-lived | $ 28,900,000 | |
Intangible asset impairment, indefinite-lived | $ 0 | |
Minimum | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Estimated useful life | 5 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 ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Marketing and Advertising Expense [Abstract] | ||
Advertising expense | $ 9.3 | $ 8.5 |
IPR&D | ||
Finite-Lived Intangible Assets [Line Items] | ||
Reclassifications | 0 | $ 19.7 |
Intangible asset impairment, finite-lived | $ 28.9 |
Basis of Presentation - Segment
Basis of Presentation - Segments (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
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 ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Basis of Presentation and Summary of Significant Accounting Policies | ||
Operating Lease, Right-of-Use Asset | $ 2,755 | $ 4,983 |
Lease liabilities | 2,891 | |
Operating Lease, Liability, Current | 1,457 | 2,062 |
Operating Lease, Liability, Noncurrent | $ 1,436 | $ 3,116 |
Revenues (Details)
Revenues (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 177,884,000 | $ 240,031,000 |
Contract with customer, asset and liability | ||
Remaining performance obligations | true | |
Contract assets | $ 0 | 0 |
Cost to obtain or fulfill contracts | 0 | |
Product Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 145,850,000 | 235,472,000 |
Venlafaxine ER/VERT | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 25,576,000 | 75,601,000 |
Methylphenidate ER | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 31,699,000 | 73,205,000 |
Divigel | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 31,629,000 | 26,794,000 |
Nitrofurantoin Product [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 10,443,000 | 5,726,000 |
Lorzone | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 4,058,000 | 15,004,000 |
OB Complete | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 6,948,000 | 9,851,000 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 35,497,000 | 29,291,000 |
Royalty Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 4,107,000 | 3,641,000 |
License and contract revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 27,927,000 | $ 918,000 |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Invoice payment due period | 30 days | |
Minimum | Product Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Invoice payment due period | 30 days | |
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 ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total trade accounts receivable, net | $ 26,412 | $ 43,914 |
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 | $ (9,921) | (14,624) |
Commercial rebates | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reserves | (7,344) | (13,579) |
Discounts and allowances | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reserves | (775) | (1,591) |
Doubtful accounts | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Reserves | (138) | |
Trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross trade accounts receivable | 38,546 | 70,958 |
Royalty accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross trade accounts receivable | 1,267 | 702 |
Other receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross trade accounts receivable | $ 4,639 | $ 2,186 |
Accounts Receivable, Sales an_4
Accounts Receivable, Sales and Allowances - Adjustment to gross product sales (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revenues | $ 177,884 | $ 240,031 |
Product Revenue | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross product sales | 321,493 | 764,267 |
Revenues | 145,850 | 235,472 |
Product Revenue | Chargebacks | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (122,592) | (345,366) |
Product Revenue | Government And Managed Care Rebates [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (18,211) | (20,092) |
Product Revenue | Commercial rebates | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (22,488) | (147,173) |
Product Revenue | Product returns | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (2,825) | 3,932 |
Product Revenue | Discounts and allowances | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | (7,003) | (15,719) |
Product Revenue | Advertising and promotions | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Adjustments to gross products sales | $ (2,524) | $ (4,377) |
Accounts Receivable, Sales an_5
Accounts Receivable, Sales and Allowances - Allowance for customer deduction (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Trade accounts receivable | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | $ 29,932 | $ 91,797 |
Provision | 152,089 | 508,068 |
Charges processed | (163,981) | (569,933) |
Balance at end of period | 18,040 | 29,932 |
Chargebacks | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 14,624 | |
Balance at end of period | 9,921 | 14,624 |
Chargebacks | Trade accounts receivable | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 14,624 | 38,861 |
Provision | 122,592 | 345,366 |
Charges processed | (127,295) | (369,603) |
Balance at end of period | 9,921 | 14,624 |
Commercial rebates | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 13,579 | |
Balance at end of period | 7,344 | 13,579 |
Commercial rebates | Trade accounts receivable | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 13,579 | 49,232 |
Provision | 22,488 | 147,173 |
Charges processed | (28,723) | (182,826) |
Balance at end of period | 7,344 | 13,579 |
Discounts and allowances | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 1,591 | |
Balance at end of period | 775 | 1,591 |
Discounts and allowances | Trade accounts receivable | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 1,591 | 3,510 |
Provision | 7,003 | 15,719 |
Charges processed | (7,819) | (17,638) |
Balance at end of period | 775 | 1,591 |
Doubtful accounts | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 138 | |
Balance at end of period | 138 | |
Doubtful accounts | Trade accounts receivable | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 138 | 194 |
Provision | 6 | (190) |
Charges processed | $ (144) | 134 |
Balance at end of period | $ 138 |
Accounts Receivable, Sales an_6
Accounts Receivable, Sales and Allowances - Accrued liabilities for customer deductions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accrued liabilities | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | $ 38,324 | $ 58,445 |
Provision | 21,036 | 16,160 |
Charges processed | (33,889) | (36,281) |
Balance at end of period | 25,471 | 38,324 |
Product returns | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Adjustments during the period | 7,100 | 25,300 |
Product returns | Accrued liabilities | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 33,457 | 48,464 |
Provision | 2,825 | (3,932) |
Charges processed | (14,256) | (11,075) |
Balance at end of period | 22,026 | 33,457 |
Government And Managed Care Rebates [Member] | Accrued liabilities | ||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | 4,867 | 9,981 |
Provision | 18,211 | 20,092 |
Charges processed | (19,633) | (25,206) |
Balance at end of period | $ 3,445 | $ 4,867 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Inventories | ||
Finished goods | $ 13,352 | $ 15,319 |
Work in process | 618 | 778 |
Raw materials and supplies | 3,964 | 5,208 |
Total | 17,934 | 21,305 |
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 | 1,069 | 1,561 |
Provision | 1,001 | 2,322 |
Charges processed | (1,144) | (2,814) |
Balance at end of period | $ 926 | $ 1,069 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, excluding construction in progress | $ 45,152 | $ 43,116 |
Accumulated depreciation | (18,980) | (14,292) |
Property, plant and equipment, excluding construction in progress | 26,172 | 28,824 |
Construction in progress | 1,882 | 1,414 |
Property, plant and equipment, net | 28,054 | 30,238 |
Depreciation expense | 5,000 | 4,400 |
Remaining construction in progress expenditures | 2,800 | |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, excluding construction in progress | 2,120 | 2,120 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, excluding construction in progress | 11,671 | 11,643 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, excluding construction in progress | 3,580 | 3,423 |
Machinery | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, excluding construction in progress | 17,399 | 16,034 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, excluding construction in progress | 1,368 | 1,388 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross, excluding construction in progress | $ 9,014 | $ 8,508 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Other Intangible Assets | ||
Goodwill, accumulated impairment | $ 86,300,000 | $ 86,300,000 |
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | 100,855,000 | 100,855,000 |
Goodwill impairment | 0 | 0 |
Goodwill, Ending Balance | $ 100,855,000 | $ 100,855,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Major Categories (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Impairment of intangibles | $ 72,183 | $ 283,747 | |
Accumulated amortization | (228,291) | (212,246) | |
Impairment | (72,183) | (283,747) | |
Net carrying amount, finite-lived | 30,668 | ||
Gross carrying amount | 366,232 | 649,979 | |
Net carrying amount | 65,758 | 153,986 | $ 490,390 |
Fully-impaired intangible assets, gross carrying amount | 85,900 | 28,300 | |
Fully-impaired assets, accumulated amortization | 62,100 | 10,400 | |
IPR&D | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Impairment of intangibles | 28,910 | ||
Reclassifications | 0 | (19,700) | |
Impairment | (28,910) | ||
Gross carrying amount, Indefinite-lived | 64,000 | 64,000 | |
Indefinite-lived intangible assets | 35,090 | 64,000 | |
Net carrying amount | 35,090 | 64,000 | 83,700 |
Distribution Rights | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Impairment of intangibles | 9,461 | 64,719 | |
Gross carrying amount, finite-lived | 33,714 | 98,433 | |
Accumulated amortization | (23,893) | (22,291) | |
Impairment | (9,461) | (64,719) | |
Net carrying amount, finite-lived | 360 | 11,423 | |
Net carrying amount | $ 360 | $ 11,423 | 81,204 |
Weighted average remaining amortization period (Years) | 9 months 18 days | 10 years 1 month 6 days | |
Product Rights | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Impairment of intangibles | $ 19,539 | $ 146,033 | |
Gross carrying amount, finite-lived | 202,567 | 348,600 | |
Accumulated amortization | (164,336) | (152,348) | |
Impairment | (19,539) | (146,033) | |
Net carrying amount, finite-lived | 18,692 | 50,219 | |
Net carrying amount | $ 18,692 | $ 50,219 | 217,473 |
Weighted average remaining amortization period (Years) | 2 years 1 month 6 days | 3 years 1 month 6 days | |
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 | $ 13,485 | |
Accumulated amortization | (3,741) | (3,035) | |
Net carrying amount, finite-lived | 9,744 | 10,450 | |
Net carrying amount | $ 9,744 | $ 10,450 | 11,156 |
Weighted average remaining amortization period (Years) | 14 years | 15 years | |
Developed Technology | |||
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Impairment of intangibles | $ 14,273 | $ 72,995 | |
Gross carrying amount, finite-lived | 52,466 | 125,461 | |
Accumulated amortization | (36,321) | (34,572) | |
Impairment | (14,273) | (72,995) | |
Net carrying amount, finite-lived | 1,872 | 17,894 | |
Net carrying amount | $ 1,872 | $ 17,894 | $ 96,857 |
Weighted average remaining amortization period (Years) | 8 years 7 months 6 days | 10 years 10 months 24 days |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Changes in Net Carrying Amount of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of major categories of the Company’s intangible assets and the weighted average remaining amortization period | |||
Balance at the beginning of the period | $ 490,390 | $ 153,986 | $ 490,390 |
Amortization | (16,045) | (52,657) | |
Impairments | (72,183) | (283,747) | |
Balance at the end of the period | 65,758 | 153,986 | |
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 | 83,700 | 64,000 | 83,700 |
Impairments | (28,910) | ||
Reclassifications | (19,700) | ||
Balance at the end of the period | 35,090 | 64,000 | |
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 | 81,204 | 11,423 | 81,204 |
Amortization | (1,602) | (5,062) | |
Impairments | (9,461) | (64,719) | |
Balance at the end of the period | 360 | 11,423 | |
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 | 217,473 | 50,219 | 217,473 |
Amortization | (11,988) | (40,921) | |
Impairments | (19,539) | (146,033) | |
Reclassifications | 19,700 | 19,700 | |
Balance at the end of the period | 18,692 | 50,219 | |
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 | 11,156 | 10,450 | 11,156 |
Amortization | (706) | (706) | |
Balance at the end of the period | 9,744 | 10,450 | |
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 | $ 96,857 | 17,894 | 96,857 |
Amortization | (1,749) | (5,968) | |
Impairments | (14,273) | (72,995) | |
Balance at the end of the period | $ 1,872 | $ 17,894 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Fair value (Details) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Oct. 01, 2019item | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Goodwill and Intangible Asset Impairment | $ 72,200,000 | |||||
Impairment of goodwill | 0 | $ 0 | ||||
Impairment of intangibles | $ 72,183,000 | 283,747,000 | ||||
Measurement Input, Discount Rate [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Measurement input | item | 0.095 | 0.095 | 0.165 | |||
Measurement Input, Probability Of Success [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Measurement input | item | 0.696 | 0.696 | ||||
IPR&D | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Goodwill and Intangible Asset Impairment | $ 28,900,000 | |||||
Impairment of intangibles | 28,910,000 | |||||
Product Rights | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Impairment of intangibles | 19,539,000 | 146,033,000 | ||||
Distribution Rights | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Impairment of intangibles | 9,461,000 | 64,719,000 | ||||
Developed Technology | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Impairment of intangibles | 14,273,000 | 72,995,000 | ||||
Venlafaxine ER/VERT | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Goodwill and Intangible Asset Impairment | 20,200,000 | |||||
Impairment of intangibles | 137,700,000 | |||||
Venlafaxine ER/VERT | Product Rights | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Impairment of intangibles | $ 9,500,000 | |||||
Venlafaxine ER/VERT | Distribution Rights | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Impairment of intangibles | $ 64,700,000 | |||||
Venlafaxine ER/VERT | Developed Technology | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Impairment of intangibles | $ 10,700,000 | $ 73,000,000 | ||||
Methylphenidate ER | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Goodwill and Intangible Asset Impairment | 19,500,000 | |||||
Impairment of intangibles | 128,100,000 | |||||
Osmolex ER [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Impairment of intangibles | 17,700,000 | |||||
Corvite [Member] | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Impairment of intangibles | $ 200,000 | |||||
OB Complete | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Goodwill and Intangible Asset Impairment | $ 3,600,000 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Other Intangible Assets | ||
Amortization expense | $ 16,045 | $ 52,657 |
Amortization expense of acquired intangible assets | ||
2021 | 10,193 | |
2022 | 5,625 | |
2023 | 4,739 | |
2024 | 2,790 | |
Thereafter | 7,321 | |
Net carrying amount, finite-lived | $ 30,668 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Liabilities Abstract | ||
Accrued product returns | $ 22,026 | $ 33,457 |
Accrued royalties | 2,246 | 3,649 |
Accrued compensation | 8,022 | 10,998 |
Accrued government and managed care rebates | 3,445 | 4,867 |
Accrued research and development | 1,000 | 3,028 |
Accrued expenses and other liabilities | 10,550 | 8,477 |
Customer coupons | 200 | 777 |
Deferred revenue | 28 | |
Accrued Liabilities | $ 47,517 | $ 65,253 |
Leases (Details)
Leases (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Number of non-cancelable leases | item | 2 | |
Lease, Practical Expedient, Lessor Single Lease Component [true false] | true | |
Operating Lease, Right-of-Use Asset | $ 2,755 | $ 4,983 |
Finance Lease, Right-of-Use Asset | $ 58 | 188 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet | |
Total leased assets | $ 2,813 | 5,171 |
Operating Lease, Liability, Current | 1,457 | 2,062 |
Finance Lease, Liability, Current | 40 | 127 |
Operating Lease, Liability, Noncurrent | 1,436 | 3,116 |
Finance Lease, Liability, Noncurrent | 4 | 44 |
Total lease liabilities | $ 2,937 | $ 5,349 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 11 months 27 days | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 3 years |
Leases - Lease cost (Details)
Leases - Lease cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lease, Cost [Abstract] | ||
Lease, Cost, Total | $ 2,153 | $ 2,565 |
Selling, general and administrative expenses | ||
Lease, Cost [Abstract] | ||
Operating lease cost | 1,525 | 1,926 |
Research and development | ||
Lease, Cost [Abstract] | ||
Operating lease cost | 104 | 139 |
Cost of goods sold | ||
Lease, Cost [Abstract] | ||
Operating lease cost | 392 | 366 |
Depreciation And Amortization Caption [Member] | ||
Lease, Cost [Abstract] | ||
Amortization of leased assets | 130 | 130 |
Interest Expense [Member] | ||
Lease, Cost [Abstract] | ||
Interest on lease liabilities | $ 2 | $ 4 |
Leases - Maturities (Details)
Leases - Maturities (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2021 | $ 1,589 |
2022 | 955 |
2023 | 554 |
Payments due, total | 3,098 |
Interest | 207 |
Lease liabilities | 2,891 |
Maximum | |
Finance Lease, Liability, Payment, Due [Abstract] | |
Finance lease total payments | 100 |
Interest | 100 |
Net finance lease liability | $ 100 |
Leases - Additional information
Leases - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lease, Cost [Abstract] | ||
Weighted average remaining lease term, operating leases | 2 years 2 months 27 days | 2 years 10 months 10 days |
Weighted average remaining lease term, finance leases | 1 year 5 months 19 days | 1 year 3 months 29 days |
Weighted average discount rate, operating leases | 5.60% | 5.26% |
Weighted average discount rate, finance leases | 1.99% | 1.81% |
Operating cash flows from operating leases | $ (1,927) | $ (2,431) |
Operating cash flows from finance leases | (2) | (4) |
Financing cash flows from finance leases | (127) | (130) |
Leased assets obtained in exchange for new operating lease liabilities | 200 | 1,400 |
Leased assets obtained in exchange for new finance lease liabilities | 0 | |
Disposal, leased assets | $ 600 | 400 |
Maximum | ||
Lease, Cost [Abstract] | ||
Leased assets obtained in exchange for new finance lease liabilities | $ 100 |
Financing Arrangements - Compon
Financing Arrangements - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financing Arrangements | ||
Long-term debt | $ 219,525 | $ 267,950 |
Long‑term debt, net of non‑current deferred financing costs | 219,525 | 267,950 |
Deferred financing costs | 1,800 | |
CIT Bank, N.A. Term Loan | ||
Financing Arrangements | ||
Long-term debt | 219,525 | 267,950 |
Deferred financing costs | $ 1,800 | $ 3,400 |
Financing Arrangements - Term l
Financing Arrangements - Term loan (Details) | Dec. 21, 2017USD ($) | Feb. 03, 2016USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Nov. 10, 2016USD ($) |
Financing Arrangements | |||||
Deferred financing costs | $ 1,800,000 | ||||
Debt issuance costs written off | $ 496,000 | ||||
CIT Bank, N.A. Term Loan | |||||
Financing Arrangements | |||||
Proceeds from secured debt | $ 160,000,000 | ||||
Quarterly principal payment, as a percent | 0.625% | ||||
Debt instrument term | 6 years | 5 years | |||
Face amount of debt | $ 327,500,000 | $ 117,500,000 | |||
Minimum leverage ratio, first period | 4.75 | ||||
Minimum leverage ratio, second period | 4.5 | ||||
Minimum fixed charge coverage ratio | 1.25 | ||||
Repayment of principal | $ 50,000,000 | ||||
Deferred financing costs | 1,800,000 | $ 3,400,000 | |||
Debt issuance costs written off | $ 500,000 | ||||
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) | 4.75% | 5.79% | |||
Face amount of debt | 277,500,000 | ||||
Repayment of principal | $ 42,300,000 | ||||
Term A Loan | Entity Leverage Ratio In Category One Per Loan Agreement [Member] | Minimum | |||||
Financing Arrangements | |||||
Leverage ratio threshold | 2 | ||||
Term A Loan | Entity Leverage Ratio In Category Two Per Loan Agreement [Member] | Maximum | |||||
Financing Arrangements | |||||
Leverage ratio threshold | 2 | ||||
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) | 5.25% | 6.29% | |||
Face amount of debt | 50,000,000 | ||||
Repayment of principal | $ 7,700,000 | ||||
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 | ||||
Debt issuance costs | $ 400,000 | $ 1,100,000 | |||
Revolving Credit Facility [Member] | Entity Leverage Ratio In Category One Per Loan Agreement [Member] | Minimum | |||||
Financing Arrangements | |||||
Leverage ratio threshold | 2 | ||||
Revolving Credit Facility [Member] | Entity Leverage Ratio In Category Two Per Loan Agreement [Member] | Maximum | |||||
Financing Arrangements | |||||
Leverage ratio threshold | 2 | ||||
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, 2020USD ($) | Dec. 31, 2019USD ($) |
Revolving Credit Facility [Member] | ||||
Financing Arrangements | ||||
Debt issuance costs | $ 400,000 | $ 1,100,000 | ||
Increase in borrowing capacity | $ 50,000,000 | |||
Debt instrument term | 5 years | |||
Amount outstanding | $ 0 | $ 0 | ||
Aggregate borrowing capacity | $ 30,000,000 | |||
Availability under the facility | $ 50,000,000 | |||
Revolving Credit Facility [Member] | Entity Leverage Ratio In Category One Per Loan Agreement [Member] | ||||
Financing Arrangements | ||||
Commitment fee, as a percent | 0.50% | |||
Revolving Credit Facility [Member] | Entity Leverage Ratio In Category One Per Loan Agreement [Member] | Minimum | ||||
Financing Arrangements | ||||
Leverage ratio threshold | 2 | |||
Revolving Credit Facility [Member] | Entity Leverage Ratio In Category Two Per Loan Agreement [Member] | ||||
Financing Arrangements | ||||
Commitment fee, as a percent | 0.38% | |||
Revolving Credit Facility [Member] | Entity Leverage Ratio In Category Two Per Loan Agreement [Member] | Maximum | ||||
Financing Arrangements | ||||
Leverage ratio threshold | 2 | |||
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 | ||||
Amount outstanding | $ 0 | $ 0 | ||
Aggregate borrowing capacity | $ 5,000,000 |
Financing Arrangements - Maturi
Financing Arrangements - Maturities (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Financing Arrangements | |
Deferred financing costs | $ 1,800 |
Maturities of Long-term Debt [Abstract] | |
2022 | 219,525 |
Long-term debt, cumulative maturities | $ 219,525 |
Concentrations and Credit Risks
Concentrations and Credit Risks (Details) | 12 Months Ended | |
Dec. 31, 2020itemcustomer | Dec. 31, 2019itemcustomer | |
Purchases | Supplier concentration risk | ||
Concentrations and Credit Risk | ||
Number of suppliers | item | 2 | 3 |
Purchases | Supplier concentration risk | Minimum | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 86.00% | 92.00% |
Product Revenue | Gross Sales | Customer concentration risk | ||
Concentrations and Credit Risk | ||
Number of customers | customer | 3 | 3 |
Concentration risk (as a percent) | 94.00% | 97.00% |
Product Revenue | Gross Sales | Customer concentration risk | Amerisource Bergen | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 31.00% | 12.00% |
Product Revenue | Gross Sales | Customer concentration risk | Cardinal Health | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 20.00% | 47.00% |
Product Revenue | Gross Sales | Customer concentration risk | McKesson | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 43.00% | 38.00% |
Product Revenue | Gross Sales | Product Concentration Risk [Member] | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 33.00% | 57.00% |
Number of products | item | 1 | 1 |
Product Revenue | Gross Accounts Receivable | Customer concentration risk | ||
Concentrations and Credit Risk | ||
Number of customers | customer | 3 | 3 |
Product Revenue | Gross Accounts Receivable | Credit concentration risk | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 93.00% | 94.00% |
Product Revenue | Gross Accounts Receivable | Credit concentration risk | Amerisource Bergen | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 21.00% | 21.00% |
Product Revenue | Gross Accounts Receivable | Credit concentration risk | Cardinal Health | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 20.00% | 22.00% |
Product Revenue | Gross Accounts Receivable | Credit concentration risk | McKesson | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 52.00% | 51.00% |
Royalty Revenue | Gross Sales | Customer concentration risk | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 77.00% | 66.00% |
Royalty Revenue | Gross Sales | Customer concentration risk | Customer 4 [Member] | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 53.00% | 54.00% |
Royalty Revenue | Gross Sales | Customer concentration risk | Customer 5 [Member] | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 24.00% | 12.00% |
Royalty Revenue | Gross Accounts Receivable | Customer concentration risk | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 66.00% | 93.00% |
Royalty Revenue | Gross Accounts Receivable | Customer concentration risk | Customer 4 [Member] | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 54.00% | 93.00% |
Royalty Revenue | Gross Accounts Receivable | Customer concentration risk | Customer 5 [Member] | ||
Concentrations and Credit Risk | ||
Concentration risk (as a percent) | 12.00% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) | Feb. 03, 2016itemshares | Dec. 31, 2020shares | Dec. 31, 2018shares |
Equity Incentive Plan 2018 [Member] | |||
Incentive plans | |||
Number of shares authorized for grant | 4,100,000 | ||
2016 Equity Incentive Plan | |||
Incentive plans | |||
Number of shares authorized for grant | 75,000 | ||
Award term | 10 years | ||
Number of award components | item | 2 | ||
Number of shares issuable | 3,015,572 | ||
2016 Equity Incentive Plan | Time | |||
Incentive plans | |||
Vesting percentage | 25.00% | ||
Vesting period | 4 years |
Shareholders' Equity - Share re
Shareholders' Equity - Share repurchase program, ESPP, SBC (Details) - USD ($) | Jan. 04, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Equity, Class of Treasury Stock [Line Items] | ||||
Repurchase authorization, number of shares | 5,251,892 | |||
Shares repurchased, in shares | 1,435,725 | 673,182 | ||
Shares repurchased, value | $ 8,101,000 | $ 2,787,000 | ||
Maximum deduction per pay period | $ 2,000 | |||
Share price, as percentage of fair market value | 85.00% | |||
ESPP expense recognized | $ 113,860 | $ 31,619 | ||
ESPP, shares issued during the period | 51,905 | 0 | ||
Share-based compensation expense | $ 4,800,000 | $ 4,900,000 | ||
Employee Share Purchase Plan 2019 [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Unrecognized compensation cost | $ 0 | $ 0 | ||
Subsequent Events | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
ESPP, shares issued during the period | 39,321 |
Shareholders' Equity - Options
Shareholders' Equity - Options (Details) - USD ($) | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Number of Options | ||||
Granted | 0 | |||
Weighted Average Exercise Price, Options | ||||
Options vested in period, fair value | $ 8,832 | $ 6,431 | ||
Unrecognized compensation cost related to nonvested options | $ 800,000 | $ 2,200,000 | $ 800,000 | |
Options | ||||
Weighted Average Exercise Price, Options | ||||
Unrecognized compensation cost, recognition period | 1 year 3 months 18 days | 1 year 6 months | ||
Equity Incentive Plan 2018 [Member] | ||||
Number of Options | ||||
Granted | 0 | |||
Weighted Average Exercise Price, Options | ||||
Outstanding at the beginning of period | $ 7 | $ 7 | $ 7 | |
Expired / Forfeited | 7 | 7 | ||
Outstanding at at the end of period | $ 7 | 7 | $ 7 | $ 7 |
Vested options at the end of period, exercise price | $ 0 | |||
Options outstanding, weighted average contractual term | 8 years 8 months 12 days | 9 years 9 months 18 days | ||
Options vested, weighted average contractual term | 7 years 8 months 12 days | |||
Equity Incentive Plan 2018 [Member] | Time | ||||
Number of Options | ||||
Outstanding at the beginning of period | 134,200 | 178,600 | 178,600 | |
Expired / Forfeited | (37,800) | (44,400) | ||
Outstanding at at the end of period | 96,400 | 134,200 | 178,600 | 96,400 |
2016 Equity Incentive Plan | ||||
Number of Options | ||||
Granted | 0 | |||
Weighted Average Exercise Price, Options | ||||
Options outstanding, weighted average contractual term | 5 years 4 months 26 days | 6 years 4 months 26 days | 7 years 6 months | |
Options vested, weighted average contractual term | 5 years 4 months 26 days | 6 years 4 months 26 days | ||
Options outstanding, intrinsic value | $ 0 | $ 0 | ||
2016 Equity Incentive Plan | Performance | ||||
Weighted Average Exercise Price, Options | ||||
Outstanding at the beginning of period | $ 14.96 | $ 14.96 | $ 14.96 | |
Expired / Forfeited | 15.21 | 14.95 | ||
Outstanding at at the end of period | 14.95 | 14.96 | $ 14.96 | 14.95 |
Vested options at the end of period, exercise price | $ 14.95 | $ 14.96 | $ 14.95 | |
2016 Equity Incentive Plan | Time | ||||
Number of Options | ||||
Outstanding at the beginning of period | 2,959,886 | 3,015,572 | 3,015,572 | |
Expired / Forfeited | (132,786) | |||
Outstanding at at the end of period | 2,827,100 | 2,959,886 | 3,015,572 | 2,827,100 |
Vested options at end of period, number | 2,099,950 | 1,459,005 | 2,099,950 | |
2016 Equity Incentive Plan | Options | Time | ||||
Number of Options | ||||
Expired / Forfeited | (55,686) |
Shareholders' Equity - Valuatio
Shareholders' Equity - Valuation Assumptions (Details) - PSUs | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Expected volatility | 90.00% |
Risk-free interest rate, minimum | 0.21% |
Risk-free interest rate, maximum | 0.24% |
Performance period in years | 3 years |
Shareholders' Equity - RSUs and
Shareholders' Equity - RSUs and PSUs (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost, recognition period | 3 years | |
Unrecognized compensation cost | $ 3.2 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Granted | 825,997 | |
Forfeited | (36,198) | |
Outstanding at end of period, shares | 789,799 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Grant date fair value, shares granted | $ 4.99 | |
Grant date fair value, shares forfeited | 4.90 | |
Grant date fair value, shares outstanding at end of period | $ 4.99 | |
Remaining contractual term | 3 years 4 days | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Unrecognized compensation cost, recognition period | 2 years 9 months 18 days | 3 years 2 months 12 days |
Unrecognized compensation cost | $ 8.5 | $ 8 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding at beginning of period, shares | 1,434,233 | |
Granted | 976,429 | 1,486,020 |
Vested | (300,788) | |
Forfeited | (118,317) | (51,787) |
Outstanding at end of period, shares | 1,991,557 | 1,434,233 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Grant date fair value, shares outstanding at beginning of period | $ 7.19 | |
Grant date fair value, shares granted | 4.46 | $ 7.19 |
Grant date fair value, shares vested | 6.73 | |
Grant date fair value, shares forfeited | 6.07 | 7.18 |
Grant date fair value, shares outstanding at end of period | $ 5.99 | $ 7.19 |
Number of shares that vested during the period | 300,788 | |
Remaining contractual term | 2 years 1 month 10 days | 3 years 2 months 12 days |
Restricted Stock Units (RSUs) [Member] | Director [Member] | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Restricted Stock Units (RSUs) [Member] | Director [Member] | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years |
Shareholders' Equity - Equity o
Shareholders' Equity - Equity offering (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 16, 2020 | Jan. 13, 2020 | Oct. 22, 2018 | Dec. 31, 2020 |
Subsidiary, Sale of Stock [Line Items] | ||||
Number of ordinary shares issued | 5,000,000 | 6,900,000 | ||
Sale of Stock, Price Per Share | $ 5 | |||
Issuance of ordinary shares, net of offering costs | $ 30,600 | $ 31,800 | $ 62,440 | |
Over-Allotment Option [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of ordinary shares issued | 900,000 | 997,500 |
Earnings (Loss) per Ordinary _3
Earnings (Loss) per Ordinary Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Performance And Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 2,781,356 | 1,434,233 |
Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 2,923,500 | 3,093,786 |
Shares to be purchased through employee stock purchase plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 39,321 | 29,550 |
Commitments and Contingencies -
Commitments and Contingencies - Royalty Obligations (Details) - Royalty obligations $ in Thousands | Dec. 31, 2020USD ($) |
Summary of Company’s enforceable and legally binding royalty obligations | |
Less than 1 year | $ 1,000 |
1 to 3 years | 3,000 |
3 to 5 years | 2,000 |
More than 5 years | 83 |
Royalty obligations | $ 6,083 |
Commitments and Contingencies_2
Commitments and Contingencies - Defined contribution plan (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Defined Contribution Plan Disclosure [Line Items] | ||
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% | |
Maximum contribution that employer will match, as a percent | 3.00% | |
Recognized expenses | $ | $ 0.5 | $ 1.3 |
Minimum | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Maximum contribution that employer will match, as a percent | 3.00% | |
Maximum | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Maximum contribution that employer will match, as a percent | 5.00% |
Commitments and Contingencies_3
Commitments and Contingencies - Legal (Details) $ in Thousands | Dec. 15, 2020USD ($) | Jan. 31, 2021USD ($) | Jul. 22, 2019item |
Loss Contingencies [Line Items] | |||
Loss Contingency, Pending Claims, Number | item | 2 | ||
Settlement to be paid | $ 5,250 | ||
Subsequent Events | |||
Loss Contingencies [Line Items] | |||
Proceeds from sale | $ 7,500 | ||
Agreement Term | 6 years | ||
Agreement Extension Period | 2 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Feb. 03, 2016 | Dec. 31, 2020 | Dec. 31, 2019 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||
U.S. operations | $ 66,836 | $ 140,664 | |
Non-U.S. operations | 17,450 | 157,358 | |
Loss before income taxes | 84,286 | 298,022 | |
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Current tax benefit (provision) - federal | 4,541 | (1,387) | |
Current tax benefit (provision) - state | (232) | 292 | |
Current tax benefit (provision) - foreign | (985) | (791) | |
Total current tax benefit (expenses) | 3,324 | (1,886) | |
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Deferred tax benefit (provision) - current | (82) | 15,396 | |
Deferred tax benefit (provision) - state | 712 | ||
Deferred tax benefit (provision)- foreign | 1,455 | 12,899 | |
Total deferred tax benefit | 1,373 | 29,007 | |
Total benefit for income taxes | $ 4,697 | $ 27,121 | |
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, 2020 | Dec. 31, 2019 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Federal tax at 21% statutory rate, as a percent | 21.00% | 21.00% |
State and local income taxes, net of federal benefit, as a percent | 1.11% | 0.91% |
Differences in tax effects on foreign income, as a percent | (3.38%) | (6.43%) |
Federal tax credits, as a percent | 1.35% | 0.59% |
Uncertain tax positions, as a percent | 1.40% | 0.04% |
NOL carryback rate differential, as a percent | 3.87% | 0.00% |
Tax audit adjustments, as a percent | (3.65%) | 0.00% |
Change in valuation allowance, as a percent | (15.52%) | (7.02%) |
Permanent adjustments, as a percent | (0.79%) | 0.00% |
Other, as a percent | 0.18% | 0.01% |
Effective tax rate, as a percent | 5.57% | 9.10% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Components of Deferred Tax Assets [Abstract] | ||
Accounts receivable | $ 31 | |
Accrued expenses | $ 5,921 | 9,535 |
Inventory | 295 | 243 |
Investment in partnership | 2,393 | 8,696 |
Net operating losses | 1,285 | 2,627 |
Operating lease liabilities | 657 | 1,121 |
Tax credits | 6,486 | 3,249 |
Share compensation | 1,816 | 1,399 |
Intangible assets | 19,082 | |
Other | 3,328 | 1,685 |
Less: valuation allowance | (27,811) | (21,216) |
Components of Deferred Tax Liabilities [Abstract] | ||
Prepaid expenses | (658) | (689) |
Property plant & equipment | (3,261) | (3,252) |
Operating lease assets | (623) | (1,115) |
Intangible assets | (9,254) | (3,814) |
Total deferred income taxes | $ (344) | (1,500) |
Vertical/Trigen Holdings, LLC [Member] | ||
Components of Deferred Tax Liabilities [Abstract] | ||
Ownership by parent (as a percent) | 100.00% | |
Vertical/Trigen | ||
Components of Deferred Tax Liabilities [Abstract] | ||
Total deferred income taxes | $ (4,600) | |
Deferred Tax Assets, Net | $ 14,900 |
Income Taxes - Carryovers and a
Income Taxes - Carryovers and allowances (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Income Tax Disclosure [Line Items] | ||
Tax credit carryovers | $ 6,700 | $ 4,600 |
Increase in valuation allowance | 6,600 | |
Loss carryback benefit | $ 3,200 | |
Effective tax rate impact of loss carryback benefit (as a percent) | 3.80% | |
Number of subsidiaries involved in audit adjustment | item | 2 | |
Additional liability from audit adjustment | $ 1,900 | |
Tax settlement, tax expense recorded | 1,400 | |
Income Tax Examination, Penalties and Interest Expense | 500 | |
Net tax effect | 4,697 | 27,121 |
Domestic Tax Authority [Member] | ||
Income Tax Disclosure [Line Items] | ||
Net operating loss carryovers | 29,100 | 2,200 |
Foreign Tax Authority [Member] | ||
Income Tax Disclosure [Line Items] | ||
Net operating loss carryovers | $ 3,800 | $ 9,900 |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||
Unrecognized tax benefits that would affect tax rate | $ 0 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized Tax Benefits, Beginning Balance | 2,677,000 | $ 2,218,000 |
Additions related to current tax provisions | 171,000 | 459,000 |
Releases related to prior period tax positions | (2,677,000) | |
Unrecognized Tax Benefits, Ending Balance | $ 171,000 | 2,677,000 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense [Abstract] | ||
Increase (decrease) in provision related to unrecognized tax benefits interest expense | (100,000) | |
Interest and penalties accrued, unrecognized tax benefits | $ 200,000 |
Related Parties (Details)
Related Parties (Details) - Avista - USD ($) $ in Thousands | Jan. 01, 2020 | Nov. 30, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||
Amount per agreement | $ 1,700 | $ 2,400 | $ 275 | |
Accrued liability | $ 200 | |||
Related party expenses | $ 1,000 | 1,900 | ||
Maximum | ||||
Related Party Transaction [Line Items] | ||||
Accrued liability | $ 100 |