Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 01, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39294 | |
Entity Registrant Name | ASSERTIO HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-0598378 | |
Entity Address, Address Line One | 100 South Saunders Road | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Lake Forest | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60045 | |
City Area Code | 224 | |
Local Phone Number | 419-7106 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | ASRT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Smaller Reporting Company | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 48,293,613 | |
Entity Central Index Key | 0001808665 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 64,826 | $ 36,810 |
Accounts receivable, net | 44,680 | 44,361 |
Inventories, net | 14,268 | 7,489 |
Prepaid and other current assets | 2,720 | 14,838 |
Total current assets | 126,494 | 103,498 |
Property and equipment, net | 935 | 1,527 |
Intangible assets, net | 191,617 | 216,054 |
Other long-term assets | 4,298 | 5,468 |
Total assets | 323,344 | 326,547 |
Current liabilities: | ||
Accounts payable | 8,374 | 6,685 |
Accrued rebates, returns and discounts | 48,608 | 52,662 |
Accrued liabilities | 10,992 | 14,699 |
Long-term debt, current portion | 2,175 | 12,174 |
Contingent consideration, current portion | 10,900 | 14,500 |
Other current liabilities | 11,247 | 34,299 |
Total current liabilities | 92,296 | 135,019 |
Long-term debt | 65,982 | 61,319 |
Contingent consideration | 25,759 | 23,159 |
Other long-term liabilities | 4,392 | 4,636 |
Total liabilities | 188,429 | 224,133 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized; 48,196,618 and 44,640,444 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively. | 5 | 4 |
Additional paid-in capital | 543,064 | 531,636 |
Accumulated deficit | (408,154) | (429,226) |
Total shareholders’ equity | 134,915 | 102,414 |
Total liabilities and shareholders' equity | $ 323,344 | $ 326,547 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, issued (in shares) | 48,196,618 | 44,640,444 |
Common stock, outstanding (in shares) | 48,196,618 | 44,640,444 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Total revenues | $ 34,212 | $ 25,472 | $ 105,884 | $ 77,686 |
Costs and expenses: | ||||
Cost of sales | 4,009 | 3,050 | 12,734 | 10,936 |
Selling, general and administrative expenses | 11,900 | 9,013 | 33,084 | 41,377 |
Fair value of contingent consideration | 3,900 | 300 | 6,845 | 1,902 |
Amortization of intangible assets | 7,969 | 7,175 | 24,438 | 20,939 |
Restructuring charges | 0 | 0 | 0 | 1,089 |
Total costs and expenses | 27,778 | 19,538 | 77,101 | 76,243 |
Income from operations | 6,434 | 5,934 | 28,783 | 1,443 |
Other (expense) income: | ||||
Interest expense | (2,052) | (2,495) | (6,648) | (7,783) |
Other gain | 2 | 344 | 453 | 747 |
Total other expense | (2,050) | (2,151) | (6,195) | (7,036) |
Net income (loss) before income taxes | 4,384 | 3,783 | 22,588 | (5,593) |
Income tax expense | (210) | (46) | (1,516) | (294) |
Net income (loss) | 4,174 | 3,737 | 21,072 | (5,887) |
Comprehensive income (loss) | $ 4,174 | $ 3,737 | $ 21,072 | $ (5,887) |
Basic net income (loss) per share (in dollars per share) | $ 0.09 | $ 0.08 | $ 0.45 | $ (0.14) |
Diluted net income (loss) per share (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.42 | $ (0.14) |
Shares used in computing basic net income (loss) per share (in shares) | 48,180 | 44,969 | 46,566 | 42,550 |
Shares used in computing diluted net income (loss) per share (in shares) | 57,386 | 45,055 | 50,470 | 42,550 |
Product sales, net | ||||
Revenues: | ||||
Total revenues | $ 34,279 | $ 25,997 | $ 105,258 | $ 77,271 |
Royalties and milestones | ||||
Revenues: | ||||
Total revenues | 473 | 416 | 1,916 | 1,391 |
Other revenue | ||||
Revenues: | ||||
Total revenues | $ (540) | $ (941) | $ (1,290) | $ (976) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Common Stock Restricted stock units | Common Stock Performance stock units | Additional Paid-In Capital | Accumulated Deficit |
Balances (in shares) at Dec. 31, 2020 | 28,392,000 | |||||
Balances at Dec. 31, 2020 | $ 55,514 | $ 3 | $ 483,456 | $ (427,945) | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock in conjunction with vesting of restricted stock units, net of employee's withholding liability (in shares) | 211,000 | 13,000 | ||||
Issuance of common stock in conjunction with vesting of restricted stock units, net of employee's withholding liability | (388) | (388) | ||||
Issuance of common stock upon exercise of warrant (in shares) | 347,000 | |||||
Stock-based compensation | 772 | 772 | ||||
Issuance of common stock upon exercise of options (in shares) | 73,000 | |||||
Issuance of common stock upon exercise of options | 0 | |||||
Issuance of common stock in connection with stock offerings (in shares) | 14,400,000 | |||||
Issuance of common stock in connection with stock offerings | 44,861 | $ 1 | 44,860 | |||
Net income (loss) | 4,544 | 4,544 | ||||
Comprehensive loss (income) | 4,544 | |||||
Balances (in shares) at Mar. 31, 2021 | 43,436,000 | |||||
Balances at Mar. 31, 2021 | 105,303 | $ 4 | 528,700 | (423,401) | ||
Balances (in shares) at Dec. 31, 2020 | 28,392,000 | |||||
Balances at Dec. 31, 2020 | 55,514 | $ 3 | 483,456 | (427,945) | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (5,887) | |||||
Comprehensive loss (income) | (5,887) | |||||
Balances (in shares) at Sep. 30, 2021 | 44,622,000 | |||||
Balances at Sep. 30, 2021 | 96,860 | $ 4 | 530,689 | (433,833) | ||
Balances (in shares) at Mar. 31, 2021 | 43,436,000 | |||||
Balances at Mar. 31, 2021 | 105,303 | $ 4 | 528,700 | (423,401) | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock in conjunction with vesting of restricted stock units, net of employee's withholding liability (in shares) | 227,000 | |||||
Issuance of common stock in conjunction with vesting of restricted stock units, net of employee's withholding liability | (19) | (19) | ||||
Issuance of common stock upon exercise of warrant (in shares) | 845,000 | |||||
Stock-based compensation | 957 | 957 | ||||
Issuance of common stock upon exercise of options | 193 | 193 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 4,000 | |||||
Stock split fractional shares settlement (in shares) | (18,000) | |||||
Net income (loss) | (14,169) | (14,169) | ||||
Comprehensive loss (income) | (14,169) | |||||
Balances (in shares) at Jun. 30, 2021 | 44,494,000 | |||||
Balances at Jun. 30, 2021 | 92,265 | $ 4 | 529,831 | (437,570) | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock in conjunction with vesting of restricted stock units, net of employee's withholding liability (in shares) | 128,000 | |||||
Issuance of common stock in conjunction with vesting of restricted stock units, net of employee's withholding liability | (8) | (8) | ||||
Stock-based compensation | 866 | 866 | ||||
Net income (loss) | 3,737 | 3,737 | ||||
Comprehensive loss (income) | 3,737 | |||||
Balances (in shares) at Sep. 30, 2021 | 44,622,000 | |||||
Balances at Sep. 30, 2021 | $ 96,860 | $ 4 | 530,689 | (433,833) | ||
Balances (in shares) at Dec. 31, 2021 | 44,640,444 | 44,640,000 | ||||
Balances at Dec. 31, 2021 | $ 102,414 | $ 4 | 531,636 | (429,226) | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock in conjunction with vesting of restricted stock units, net of employee's withholding liability (in shares) | 307,000 | |||||
Issuance of common stock in conjunction with vesting of restricted stock units, net of employee's withholding liability | (598) | (598) | ||||
Issuance of common stock upon exercise of warrant (in shares) | 388,000 | |||||
Stock-based compensation | 982 | 982 | ||||
Net income (loss) | 9,064 | 9,064 | ||||
Comprehensive loss (income) | 9,064 | |||||
Balances (in shares) at Mar. 31, 2022 | 45,335,000 | |||||
Balances at Mar. 31, 2022 | $ 111,862 | $ 4 | 532,020 | (420,162) | ||
Balances (in shares) at Dec. 31, 2021 | 44,640,444 | 44,640,000 | ||||
Balances at Dec. 31, 2021 | $ 102,414 | $ 4 | 531,636 | (429,226) | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 21,072 | |||||
Comprehensive loss (income) | $ 21,072 | |||||
Balances (in shares) at Sep. 30, 2022 | 48,196,618 | 48,197,000 | ||||
Balances at Sep. 30, 2022 | $ 134,915 | $ 5 | 543,064 | (408,154) | ||
Balances (in shares) at Mar. 31, 2022 | 45,335,000 | |||||
Balances at Mar. 31, 2022 | 111,862 | $ 4 | 532,020 | (420,162) | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock in conjunction with vesting of restricted stock units, net of employee's withholding liability (in shares) | 373,000 | |||||
Issuance of common stock in conjunction with vesting of restricted stock units, net of employee's withholding liability | (81) | (81) | ||||
Stock-based compensation | 1,734 | 1,734 | ||||
Issuance of common stock in connection with stock offerings (in shares) | 2,464,000 | |||||
Issuance of common stock in connection with stock offerings | 7,020 | $ 1 | 7,019 | |||
Net income (loss) | 7,834 | 7,834 | ||||
Comprehensive loss (income) | 7,834 | 7,834 | ||||
Balances (in shares) at Jun. 30, 2022 | 48,172,000 | |||||
Balances at Jun. 30, 2022 | 128,369 | $ 5 | 540,692 | (412,328) | ||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock in conjunction with vesting of restricted stock units, net of employee's withholding liability (in shares) | 25,000 | |||||
Issuance of common stock in conjunction with vesting of restricted stock units, net of employee's withholding liability | (28) | (28) | ||||
Stock-based compensation | 2,400 | 2,400 | ||||
Net income (loss) | 4,174 | 4,174 | ||||
Comprehensive loss (income) | $ 4,174 | |||||
Balances (in shares) at Sep. 30, 2022 | 48,196,618 | 48,197,000 | ||||
Balances at Sep. 30, 2022 | $ 134,915 | $ 5 | $ 543,064 | $ (408,154) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Activities | ||
Net income (loss) | $ 21,072 | $ (5,887) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 25,033 | 21,698 |
Amortization of debt issuance costs and Royalty Rights | 128 | 159 |
Recurring fair value measurement of assets and liabilities | 6,845 | 1,902 |
Stock-based compensation | 5,116 | 2,596 |
Provision for inventory and other assets | 828 | (86) |
Changes in assets and liabilities, net of acquisition: | ||
Accounts receivable | (319) | 8,205 |
Inventories | (7,607) | 6,317 |
Prepaid and other assets | 13,288 | 5,777 |
Accounts payable and other accrued liabilities | (7,193) | (22,405) |
Accrued rebates, returns and discounts | (4,058) | (19,284) |
Interest payable | (1,232) | 2,400 |
Net cash provided by operating activities | 51,901 | 1,392 |
Investing Activities | ||
Purchase of Otrexup | (16,889) | 0 |
Net cash used in investing activities | (16,889) | 0 |
Financing Activities | ||
Proceeds from issuance of 2027 Convertible Notes | 65,916 | 0 |
Payments in connection with 2021 Convertible Notes | 0 | (335) |
Payment in connection with 2024 Senior Notes | (70,750) | (4,750) |
Payment of contingent consideration | (7,845) | (2,495) |
Payment of Royalty Rights | (630) | (510) |
Proceeds from issuance of common stock | 7,020 | 44,861 |
Proceeds from exercise of stock options | 0 | 193 |
Shares withheld for payment of employee's withholding tax liability | (707) | (416) |
Net cash (used in) provided by financing activities | (6,996) | 36,548 |
Net increase in cash and cash equivalents | 28,016 | 37,940 |
Cash and cash equivalents at beginning of year | 36,810 | 20,786 |
Cash and cash equivalents at end of period | 64,826 | 58,726 |
Supplemental Disclosure of Cash Flow Information | ||
Net cash refunded for income taxes | (7,822) | 0 |
Cash paid for interest | $ 7,752 | $ 5,216 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements of Assertio Holdings, Inc. (the Company or Assertio) and its subsidiaries and the related footnote information of the Company have been prepared pursuant to the requirements of the Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information that are normally required by U.S. generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, the accompanying interim unaudited condensed consolidated financial statements include all adjustments necessary for a fair presentation of the information for the periods presented. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of results to be expected for the entire year ending December 31, 2022 or future operating periods. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2021 included in Assertio Holdings, Inc.’s Annual Report on Form 10-K filed with the SEC on March 10, 2022 (the 2021 Form 10-K). The Condensed Consolidated Balance Sheet as of December 31, 2021 has been derived from the audited financial statements at that date, as filed in the Company’s 2021 Form 10-K. Reclassifications During the first quarter of 2022, the Company made certain reclassifications within Selling, general and administrative expenses related to changes in the fair value of contingent considerations. These fair value adjustments were reclassified from Selling, general and administrative expenses to Fair value of contingent consideration on the Condensed Consolidated Statements of Comprehensive Income, which impacted previously reported amounts for the three and nine months ended September 30, 2021. The reclassifications were made to separately state changes in the fair value of contingent considerations from Selling, general and administrative expenses. Prior period results were recast to conform with these changes, and resulted in a decrease to Selling, general and administrative expenses and an equal and offsetting increase to Fair value of contingent consideration of $0.3 million and $1.9 million for the three and nine months ended September 30, 2021, respectively. Total cost and expenses and Income (loss) from operations as previously reported remains unchanged. Impact of COVID-19 on our Business Following the outbreak of COVID-19 during early 2020, the Company’s priority was and remains the health and safety of its employees, their families, and the patients it serves. Because COVID-19 impacted the Company’s ability to see in person providers who prescribe our products, the Company transformed its commercial approach during 2020 and increased virtual visits, ultimately eliminating its in-person sales force in favor of a digital sales strategy. Additionally, due to the limitations on elective surgeries and changes in patient behavior since the outbreak of COVID-19, the Company has experienced a decline and subsequent volatility in prescriptions associated with those elective procedures. The extent to which the Company’s operations may continue to be impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including actions by government authorities to contain the outbreak, the emergence of new COVID-19 variants and the related potential for new surges in infections and the impacts of increases in virtual physician visits on prescriber behavior. For example, although many public health restrictions have eased, future surges could result in additional restrictions or other factors that may contribute to decreases in elective procedures. The impact of the pandemic on the global financial markets may reduce the Company’s ability to access capital, which could negatively impact its liquidity. The Company does not yet know the full extent of potential delays or impacts on its business, financing or on healthcare systems or the global economy as a whole. However, these effects could have a material impact on the Company’s liquidity, capital resources, operations and business and those of the third parties on which it relies, including suppliers and distributors. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONSOtrexup Acquisition On December 15, 2021, the Company, through a newly-formed subsidiary, Otter Pharmaceuticals, LLC, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Antares Pharma, Inc. (“Antares”), and concurrently consummated the transaction. Pursuant to the terms of the Purchase Agreement, the Company acquired Antares’ rights, title and interest in and to Otrexup, including certain related assets, intellectual property, contracts, and product inventory for (i) $18.0 million in cash paid at closing, (ii) $16.0 million in cash paid on May 31, 2022 and (iii) and $10.0 million in cash payable on December 15, 2022. The following table summarizes the aggregate amount paid for the assets acquired by the Company in connection with the acquisition of Otrexup (in thousands): Cash paid to Antares at closing $ 18,000 Cash paid in May 2022 16,021 Deferred cash payment due in December 2022 10,000 Transaction costs 1,478 Total purchase price of assets acquired $ 45,499 The acquisition of Otrexup has been accounted for as an asset acquisition in accordance with FASB ASC 805-50. The Company accounted for the acquisition of Otrexup as an asset acquisition because substantially all of the fair value of the assets acquired is concentrated in a single asset, the Otrexup product rights. The Otrexup products rights consist of certain patents and trademarks, at-market contracts and regulatory approvals, customer lists, marketing assets, and other records, and are considered a single asset as they are inextricably linked. ASC 805-10-55-5A includes a screen test, which provides that if substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the assets acquired are not considered to be a business. As an asset acquisition, the cost to acquire the group of assets, including transaction costs, is allocated to the individual assets acquired or liabilities assumed based on their relative fair values. The relative fair values of identifiable assets from the acquisition of Otrexup are based on estimates of fair value using assumptions that the Company believes is reasonable. The following table summarizes the fair value of assets acquired in the acquisition of Otrexup (in thousands): Inventories $ 1,413 Intangible assets 44,086 Total assets acquired $ 45,499 The Otrexup product rights will be amortized over an 8 year period. As of September 30, 2022 and December 31, 2021 deferred cash payable to Antares were $10.0 million and $26.0 million, respectively, and were recorded in Other current liabilities in the Company’s Condensed Consolidated Balance Sheet. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Disaggregated Revenue The following table reflects summary revenue, net for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Product sales, net: INDOCIN products $ 21,869 $ 14,541 $ 66,067 $ 42,214 CAMBIA 5,808 5,038 17,464 17,628 Otrexup 3,004 — 8,699 — Zipsor 259 1,999 2,704 6,802 SPRIX 2,455 2,272 6,437 6,911 Other products 884 2,147 3,887 3,716 Total product sales, net 34,279 25,997 105,258 77,271 Royalties and milestone revenue 473 416 1,916 1,391 Other revenue (540) (941) (1,290) (976) Total revenues $ 34,212 $ 25,472 $ 105,884 $ 77,686 Product Sales, net: For the three and nine months ended September 30, 2022 and 2021, product sales primarily consisted of sales from INDOCIN Products, CAMBIA, Otrexup and SPRIX. The Company acquired Otrexup in December 2021 and began shipping and recognizing product sales for Otrexup in January 2022. Other products sales include product sales for non-promoted products (OXAYDO and SOLUMATRIX). The Company ceased SOLUMATRIX sales beginning in July 2022. Royalties and Milestone Revenue In November 2010, the Company entered into a license agreement with Tribute Pharmaceuticals Canada Ltd. (now known as Miravo Pharmaceuticals) granting them the rights to commercially market CAMBIA in Canada. Miravo independently contracts with manufacturers to produce a specific CAMBIA formulation in Canada. The Company receives royalties on net sales on a quarterly basis as well as certain one-time contingent milestone payments upon the occurrence of certain events. The Company recognized revenue related to CAMBIA in Canada of $0.5 million and $1.5 million for the three and nine months ended September 30, 2022, respectively and $0.4 million and $1.4 million for the three and nine months ended September 30, 2021, respectively. The Company records contract liabilities in the form of deferred revenue resulting from prepayments from customers in Other current liabilities on the Condensed Consolidated Balance Sheets. As of December 31, 2021, contract liabilities were $0.3 million. For the nine months ended September 30, 2022, the Company recorded an additional $0.3 million in contract liabilities and recognized $0.5 million as Milestone revenue associated with completion of service milestones. As of September 30, 2022, contract liabilities were $0.2 million. Other Revenue |
ACCOUNTS RECEIVABLES, NET
ACCOUNTS RECEIVABLES, NET | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLES, NET | ACCOUNTS RECEIVABLES, NET The following table reflects accounts receivables, net, as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Receivables related to product sales, net $ 42,061 $ 43,753 Other 2,619 608 Total accounts receivable, net $ 44,680 $ 44,361 |
INVENTORIES, NET
INVENTORIES, NET | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | INVENTORIES, NET The following table reflects the components of inventory, net as of September 30, 2022 and December 31, 2021 (in thousands): September 30, December 31, 2021 Raw materials $ 1,755 $ 1,242 Work-in-process 2,556 823 Finished goods 9,957 5,424 Total Inventories, net $ 14,268 $ 7,489 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET The following table reflects property and equipment, net as of September 30, 2022 and December 31, 2021 (in thousands): September 30, December 31, 2021 Furniture and office equipment $ 2,353 $ 2,733 Laboratory equipment 20 20 Leasehold improvements 9,787 10,523 12,160 13,276 Less: Accumulated depreciation (11,225) (11,749) Property and equipment, net $ 935 $ 1,527 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS The following table reflects the gross carrying amounts and net book values of intangible assets as of September 30, 2022 and December 31, 2021 (dollar amounts in thousands): September 30, 2022 December 31, 2021 Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Products rights: INDOCIN 9.6 $ 154,100 $ (30,285) $ 123,815 $ 154,100 $ (20,654) $ 133,446 CAMBIA 0.3 51,360 (49,372) 1,988 51,360 (43,410) 7,950 Otrexup 7.2 44,086 (4,133) 39,953 44,086 — 44,086 SPRIX 4.6 39,000 (13,139) 25,861 39,000 (8,960) 30,040 Zipsor 0.0 27,250 (27,250) — 27,250 (26,718) 532 Total Intangible Assets $ 315,796 $ (124,179) $ 191,617 $ 315,796 $ (99,742) $ 216,054 Amortization expense was $8.0 million and $24.4 million for the three and nine months ended September 30, 2022, respectively, and $7.2 million and $20.9 million for the three and nine months ended September 30, 2021, respectively. The following table reflects future amortization expense the Company expects for its intangible assets (in thousands): Year Ending December 31, Estimated Amortization Expense 2022 (remainder) $ 7,969 2023 23,924 2024 23,924 2025 23,924 2026 23,924 Thereafter 87,952 Total $ 191,617 We evaluate long-lived assets, including property and equipment and acquired intangible assets consisting of product rights, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. As of September 30, 2022, we determined that there was an indicator of impairment present based on our market capitalization as of September 30, 2022 compared to our carrying value. After grouping the long-lived assets, including purchased developed technology and trademarks, at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other assets and liabilities, we estimated the future net undiscounted cash flows expected to be generated from the use of the long-lived asset group and its eventual disposition. We then compared the estimated undiscounted cash flows to the carrying amount of the long-lived asset group. Based on this test, we determined that the estimated undiscounted cash flows were in excess of the carrying amount of the long-lived asset group and, accordingly, the long-lived asset group is fully recoverable. |
OTHER LONG-TERM ASSETS
OTHER LONG-TERM ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER LONG-TERM ASSETS | OTHER LONG-TERM ASSETS The following table reflects other long-term assets as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Investment, net $ 1,579 $ 1,579 Operating lease right-of-use assets 262 735 Prepaid asset and deposits 1,760 2,456 Other 697 698 Total other long-term assets $ 4,298 $ 5,468 Investment, net consists of the Company’s investment in NES Therapeutic, Inc. (NES). In August 2018, the Company entered into a Convertible Secured Note Purchase Agreement (Note Agreement) with NES. Pursuant the terms of the Note Agreement, the Company purchased a Convertible Secured Promissory Note (NES Note) for $3.0 million which accrues interest annually at a rate of 10% on $3.0 million principal, with both the principal and accrued interest due at maturity on August 2, 2024. Pursuant to the Note Agreement, the NES Note is convertible into equity based on (i) FDA acceptance of the NDA, (ii) initiation of any required clinical trials by NES, or (iii) a qualified financing event by NES. This investment is accounted as a long-term loan receivable and is valued at amortized cost. As of September 30, 2022, the Company continues to assess an estimated $1.9 million expected credit loss on its investment based on evaluation of probability of default that exists. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES The following table reflects accrued liabilities as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Accrued compensation $ 2,295 $ 4,122 Accrued restructuring costs 137 828 Other accrued liabilities 7,755 8,062 Interest payable 455 1,687 Income tax payable 350 — Total accrued liabilities $ 10,992 $ 14,699 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Long-Term Debt, Unclassified [Abstract] | |
DEBT | DEBT The following table reflects the Company’s debt as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 6.5% Senior Convertible Notes due 2027 $ 70,000 $ — 13% Senior Secured Notes due 2024 — 70,750 Royalty rights obligation 2,175 2,743 Total principal amount 72,175 73,493 Unamortized debt issuance costs (4,018) — Less: current portion of long-term debt (2,175) (12,174) Net, long-term debt $ 65,982 $ 61,319 6.5% Convertible Senior Notes due 2027 On August 22, 2022, Assertio entered into a purchase agreement (the “Purchase Agreement”), with U.S. Bank Trust Company (the “Trustee”), as the Trustee of the initial purchasers (the “Initial Purchasers”) to issue $60.0 million in aggregate principal amount of 6.5% Convertible Senior Notes due 2027 (the “2027 Convertible Notes”). Under the Purchase Agreement, the Initial Purchasers were also granted an overallotment option to purchase up to an additional $10.0 million of the 2027 Convertible Notes solely to cover overallotment (the “Overallotment Option”) within a 13-day period from the date of the initial 2027 Convertible Notes were issued. On August 24, 2022, the Initial Purchasers exercised the Overallotment Option in full for the $10.0 million of additional 2027 Convertible Notes. The 2027 Convertible Notes are senior unsecured obligations of the Company. The terms of the Notes are governed by the Indenture dated August 25, 2022 (the “Indenture”). The terms of the 2027 Convertible Notes allow for conversion into Common Stock, cash, or a combination of cash and Common Stock, at the Company’s election, at an initial conversion rate of 244.2003 shares of the Company’s Common Stock per $1,000 principal amount (equal to an initial Conversion Price of approximately $4.09 per share), subject to adjustments specified in the Indenture (the “Conversion Rate”). The 2027 Convertible Notes will mature on September 1, 2027, unless earlier repurchased or converted. The 2027 Convertible Notes bears interest from August 25, 2022 at a rate of 6.5% per annum payable semiannually in arrears on March 1 and September 1 of each year, beginning on March 1, 2023. Pursuant to the terms of the Indenture, the Company and its restricted subsidiaries must comply with certain covenants, including mergers, consolidations, and divestitures; guarantees of debt by subsidiaries; issuance of preferred and/or disqualified stock; and liens on the Company’s properties or assets. The Company was in compliance with its covenants with respect to the 2027 Convertible Notes as of September 30, 2022. The Company incurred approximately $4.0 million in issuance costs including legal fees, accounting service fees, printing fees, and trustee fees associated with the Notes. The issuance costs were recognized as a discount to the 2027 Convertible Notes and are amortized over the term of the 2027 Convertible Notes using the effective interest method. The effective interest rate for the period is 7.8%. The following table reflects the carrying balance of the 2027 Convertible Notes as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Principal balance $ 70,000 $ — Unamortized debt issuance costs (4,018) — Convertible note payable, net $ 65,982 $ — During the three months ended September 30, 2022, the Company amortized $0.1 million of the debt discount on the 2027 Convertible Notes. All of the embedded features of the 2027 Convertible Notes were either clearly and closely related to the debt host and did not require bifurcation as a derivative liability, or the fair value of the bifurcated features was immaterial to the Company’s financial statements . 13% Senior Secured Notes due 2024 In accordance with the Zyla Merger, Assertio assumed $95.0 million aggregate principal amount of 13% senior secured notes due 2024 (the 2024 Secured Notes) issued pursuant to an indenture (the Existing Indenture) entered into on January 31, 2019, by and among Zyla Life Sciences, the guarantors party thereto (the Guarantors) and Wilmington Savings Fund Society, FSB (as successor to U.S. Bank National Association), as trustee and collateral agent (the Trustee). The 2024 Secured Notes were issued in two series: $50.0 million of Series A-1 Notes and $45.0 million of Series A-2 Notes. The Company used the net proceeds from the 2027 Convertible Note Offering to repurchase $59.0 million aggregate principal amount of its outstanding 2024 Secured Notes and $3.0 million in associated interest payment pursuant to privately negotiated exchange agreements entered into concurrently with the pricing of the 2027 Convertible Note Offering. The 2024 Secured Notes were derecognized upon extinguishment with no gain or loss recognized, as no unamortized cost remained at time of extinguishment. Assertio expects to use the remaining net proceeds of the 2027 Convertible Note Offering for general corporate purposes. As of September 30, 2022 there were no outstanding aggregate principal amounts of the 2024 Secured Notes. Royalty Rights Obligation In accordance with the Zyla Merger, the Company assumed a royalty rights agreements (the Royalty Rights) with each of the holders of its 2024 Secured Notes pursuant to which the Company will pay the holders of the 2024 Secured Notes an aggregate 1.5% royalty on Net Sales (as defined in the Existing Indenture) through December 31, 2022. The Royalty Rights were determined to be a freestanding element with respect to the 2024 Secured Notes and the Company is accounting for the Royalty Rights obligation relating to future royalties as a debt instrument. The Company has Royalty Rights obligations of $2.2 million and $2.7 million as of September 30, 2022 and December 31, 2021, respectively, which are classified as current debt in the Company’s Condensed Consolidated Balance Sheets. The accounting for the Royalty Rights requires the Company to make certain estimates and assumptions about the future net sales. The estimates of the magnitude and timing of net sales are subject to significant variability due to the extended time period associated with the financing transaction and are thus subject to significant uncertainty. Interest Expense Royalty Rights and debt issuance cost are amortized as interest expense using the effective interest method. The following table reflects debt related interest included in Interest expense in the Company’s Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Interest payable on 2027 Convertible Notes $ 456 $ — $ 456 $ — Interest paid on 2024 Secured Notes 1,516 2,454 6,064 7,618 Amortization of debt issuance costs and Royalty Rights 80 41 128 159 Other — — — 6 Total interest expense $ 2,052 $ 2,495 $ 6,648 $ 7,783 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company’s stock-based compensation generally includes time-based stock options and restricted stock units (RSUs) and performance-based stock options and RSUs. For the three and nine months ending September 30, 2022 stock-based compensation of $2.4 million and $5.1 million, respectively, and for the three and nine months ending September 30, 2021, $0.9 million and $2.6 million, respectively, was recognized in Selling, general, and administrative expenses in the Company’s Condensed Consolidated Statements of Comprehensive Income. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | LEASES As of September 30, 2022, the Company has non-cancelable operating leases for its offices and certain office equipment. The Company has the right to renew the term of the Lake Forest lease for one period of five years, provided that written notice is made to the Landlord no later than twelve months prior to the expiration of the initial term of the lease which is on December 31, 2023. In connection with the Zyla Merger, the Company assumed an operating lease for offices in Wayne, Pennsylvania, which terminated in February 2022. Prior to the Company’s corporate headquarters relocation in 2018, the Company had leased its previous corporate office in Newark, California (the Newark lease) which will terminate at the end of November 2022 and will not be renewed. The Newark lease is currently partially subleased through the lease term. Operating lease costs and sublease income related to the Newark facility are accounted for in Other gain (loss) in the Condensed Consolidated Statements of Comprehensive Income. During the first quarter of 2022, the Company recognized a gain of $0.6 million from the early termination and settlement of a Newark facility sublease. The following table reflects lease expense and income for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended Financial Statement Classification 2022 2021 2022 2021 Operating lease cost Selling, general and administrative expenses $ 39 $ 54 $ 118 $ 256 Operating lease cost Other gain 148 148 444 443 Total lease cost $ 187 $ 202 $ 562 $ 699 Sublease Income Other gain $ 168 $ 347 $ 1,111 $ 1,040 The following table reflects supplemental cash flow information related to leases for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 533 $ 667 $ 1,593 $ 2,129 The following table reflects supplemental balance sheet information related to leases as of September 30, 2022 and December 31, 2021 (in thousands): Financial Statement Classification September 30, 2022 December 31, 2021 Liabilities Current operating lease liabilities Other current liabilities $ 673 $ 1,978 Noncurrent operating lease liabilities Other long-term liabilities 105 397 Total lease liabilities $ 778 $ 2,375 |
LEASES | LEASES As of September 30, 2022, the Company has non-cancelable operating leases for its offices and certain office equipment. The Company has the right to renew the term of the Lake Forest lease for one period of five years, provided that written notice is made to the Landlord no later than twelve months prior to the expiration of the initial term of the lease which is on December 31, 2023. In connection with the Zyla Merger, the Company assumed an operating lease for offices in Wayne, Pennsylvania, which terminated in February 2022. Prior to the Company’s corporate headquarters relocation in 2018, the Company had leased its previous corporate office in Newark, California (the Newark lease) which will terminate at the end of November 2022 and will not be renewed. The Newark lease is currently partially subleased through the lease term. Operating lease costs and sublease income related to the Newark facility are accounted for in Other gain (loss) in the Condensed Consolidated Statements of Comprehensive Income. During the first quarter of 2022, the Company recognized a gain of $0.6 million from the early termination and settlement of a Newark facility sublease. The following table reflects lease expense and income for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended Financial Statement Classification 2022 2021 2022 2021 Operating lease cost Selling, general and administrative expenses $ 39 $ 54 $ 118 $ 256 Operating lease cost Other gain 148 148 444 443 Total lease cost $ 187 $ 202 $ 562 $ 699 Sublease Income Other gain $ 168 $ 347 $ 1,111 $ 1,040 The following table reflects supplemental cash flow information related to leases for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 533 $ 667 $ 1,593 $ 2,129 The following table reflects supplemental balance sheet information related to leases as of September 30, 2022 and December 31, 2021 (in thousands): Financial Statement Classification September 30, 2022 December 31, 2021 Liabilities Current operating lease liabilities Other current liabilities $ 673 $ 1,978 Noncurrent operating lease liabilities Other long-term liabilities 105 397 Total lease liabilities $ 778 $ 2,375 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Jubilant HollisterStier Manufacturing and Supply Agreement Pursuant to the Zyla Merger, the Company assumed a Manufacturing and Supply Agreement (the “Agreement”) with Jubilant HollisterStier LLC (“JHS”) pursuant to which the Company engaged JHS to provide certain services related to the manufacture and supply of SPRIX for the Company’s commercial use. Under the Agreement, JHS will be responsible for supplying a minimum of 75% of the Company’s annual requirements of SPRIX. The Company has agreed to purchase a minimum number of batches of SPRIX annually from JHS over the term of the Agreement. Total commitments to JHS through the period ending July 30, 2022 have been met, and total commitments through the period ending July 30, 2023 are approximately $1.1 million. Cosette Pharmaceuticals Supply Agreement Pursuant to the Zyla Merger, the Company assumed a Collaborative License, Exclusive Manufacture and Global Supply Agreement with Cosette Pharmaceuticals, Inc. (formerly G&W Laboratories, Inc.) (the “Supply Agreement”) for the manufacture and supply of INDOCIN Suppositories to Zyla for commercial distribution in the United States. On July 9, 2021, the Company and Cosette entered into Amendment No. 3 to the Supply Agreement, to among other things, extend the expiration date of the Supply Agreement from July 31, 20 23 to July 9, 2028. The Company is obligated to purchase all of its requirements for INDOCIN Suppositories from Cosette Pharmaceuticals, Inc., and is required to meet minimum purchase requirements each calendar year during the extended term of the agreement. Total commitments to Cosette are approximately $6.3 million annually through the end of the contract term. Antares Supply Agreement In connection with the Otrexup acquisition, the Company entered into a Supply Agreement with Antares pursuant to which Antares will manufacture and supply the finished Otrexup products. Under the Supply Agreement, the Company has agreed to annual minimum purchase obligations from Antares, which approximate $2.0 million annually. The Supply Agreement has an initial term through December 2031 with renewal terms beyond. General The Company is currently involved in various lawsuits, claims, investigations and other legal proceedings that arise in the ordinary course of business. The Company recognizes a loss contingency provision in its financial statements when it concludes that a contingent liability is probable, and the amount thereof is estimable. Costs associated with our involvement in legal proceedings are expensed as incurred. Amounts accrued for legal contingencies are based on management’s best estimate of a loss based upon the status of the cases described below, assessments of the likelihood of damages, and the advice of counsel and often result from a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions including timing of related payments. As of September 30, 2022 and December 31, 2021 the Company had a legal contingency accrual of approximately $3.2 million and $3.4 million, respectively. The Company will continue to monitor each matter and adjust accruals as warranted based on new information and further developments in accordance with ASC 450-20- 25. For matters discussed below for which a loss is not probable, or a probable loss cannot be reasonably estimated, no liability has been recorded. Legal expenses are recorded in Selling, general and administrative expense in the Company’s Condensed Consolidated Statements of Comprehensive Income and the related accruals are recorded in Accrued Liabilities in the Company’s Condensed Consolidated Balance Sheets. Other than matters that we have disclosed below, the Company may from time to time become party to actions, claims, suits, investigations or proceedings arising from the ordinary course of its business, including actions with respect to intellectual property claims, breach of contract claims, labor and employment claims and other matters. The Company may also become party to further litigation in federal and state courts relating to opioid drugs. Although actions, claims, suits, investigations and proceedings are inherently uncertain and their results cannot be predicted with certainty, other than the matters set forth below, the Company is not currently involved in any matters that the Company believes may have a material adverse effect on its business, results of operations or financial condition. However, regardless of the outcome, litigation can have an adverse impact on the Company because of associated cost and diversion of management time. Glumetza Antitrust Litigation Antitrust class actions and related direct antitrust actions were filed in the Northern District of California against the Company and several other defendants relating to our former drug Glumetza ® . The plaintiffs sought to represent a putative class of direct purchasers of Glumetza. In addition, several retailers, including CVS Pharmacy, Inc., Rite Aid Corporation, Walgreen Co., the Kroger Co., the Albertsons Companies, Inc., H-E-B, L.P., and Hy-Vee, Inc. (the “Retailer Plaintiffs”), filed substantially similar direct purchaser antitrust claims. On July 30, 2020, Humana Inc. also filed a complaint against the Company and several other defendants in federal court in the Northern District of California alleging similar claims related to Glumetza. The claims asserted by Humana in its federal case were ultimately withdrawn, and analogous claims were instead asserted by Humana in an action it filed in California state court on February 8, 2021, and subsequently amended in September 2021. Additionally, on April 5, 2022, Health Care Service Corporation (“HCSC”) filed a complaint against the Company and the same other defendants in California state court alleging similar claims related to Glumetza. These antitrust cases arise out of a Settlement and License Agreement (the Settlement) that the Company, Santarus, Inc. (Santarus) and Lupin Limited (Lupin) entered into in February 2012 that resolved patent infringement litigation filed by the Company against Lupin regarding Lupin’s Abbreviated New Drug Application for generic 500 mg and 1000 mg tablets of Glumetza. The antitrust plaintiffs allege, among other things, that the Settlement violated the antitrust laws because it allegedly included a “reverse payment” that caused Lupin to delay its entry in the market with a generic version of Glumetza. The alleged “reverse payment” is an alleged commitment on the part of the settling parties not to launch an authorized generic version of Glumetza for a certain period. The antitrust plaintiffs allege that the Company and its co-defendants, which include Lupin as well as Bausch Health (the alleged successor in interest to Santarus), are liable for damages under the antitrust laws for overcharges that the antitrust plaintiffs allege they paid when they purchased the branded version of Glumetza due to delayed generic entry. Plaintiffs seek treble damages for alleged past harm, attorneys’ fees and costs. On September 14, 2021, the Retailer Plaintiffs voluntarily dismissed all claims against the Company pursuant to a settlement agreement with the Company in return for $3.15 million. On February 3, 2022, the Court issued its final order approving a settlement of the direct purchaser class plaintiffs’ claims against the Company in return for $3.85 million. With respect to the Humana lawsuit that is continuing in California state court, on November 24, 2021, the state court granted in part and denied in part a demurrer by the defendants. That case is now moving to discovery, and trial is scheduled for August 25, 2023. The Company intends to defend itself vigorously in the Humana California state court lawsuit , and the more recently filed HCSC lawsuit . A liability for this matter has been recorded in the financial statements. Securities Class Action Lawsuit and Related Matters On August 28, 2022, the U.S. District Court for the Northern District of California issued a final order approving the settlement of a purported federal securities law class action that was pending against the Company, two individuals who formerly served as its chief executive officer and president, and its former chief financial officer, thereby concluding this matter. The action ( Huang v. Depomed et al. , No. 4:17-cv-4830-JST, N.D. Cal.) alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 related to certain prior disclosures of the Company about its business, compliance, and operational policies and practices concerning the sales and marketing of its former opioid products and contended that the conduct supporting the alleged violations affected the value of Company common stock and was seeking damages and other relief. Additionally, on December 14, 2021, the Superior Court of California, Alameda County, issued a final order approving the settlement of the shareholder derivative actions that were filed on behalf of the Company against its officers and directors for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and violations of the federal securities laws, thereby concluding these matters. The claims in the shareholder derivative actions arose out of the same factual allegations as the purported federal securities class action described above. Opioid-Related Request and Subpoenas As a result of the greater public awareness of the public health issue of opioid abuse, there has been increased scrutiny of, and investigation into, the commercial practices of opioid manufacturers generally by federal, state, and local regulatory and governmental agencies. In March 2017, the Company’s subsidiary Assertio Therapeutics, Inc. (Assertio Therapeutics) received a letter from then-Sen. Claire McCaskill (D-MO), the then-Ranking Member on the U.S. Senate Committee on Homeland Security and Governmental Affairs, requesting certain information regarding Assertio Therapeutics’ historical commercialization of opioid products. Assertio Therapeutics voluntarily furnished information responsive to Sen. McCaskill’s request. Since 2017, Assertio Therapeutics has received and responded to subpoenas from the U.S. Department of Justice (DOJ) seeking documents and information regarding its historical sales and marketing of opioid products. Assertio Therapeutics has also received and responded to subpoenas or civil investigative demands focused on its historical promotion and sales of Lazanda, NUCYNTA, and NUCYNTA ER from various state attorneys general seeking documents and information regarding Assertio Therapeutics’ historical sales and marketing of opioid products. In addition, Assertio Therapeutics received and responded to a subpoena from the State of California Department of Insurance (CDI) seeking information relating to its historical sales and marketing of Lazanda. The CDI subpoena also seeks information on Gralise, a non-opioid product formerly in Assertio Therapeutics’ portfolio. In addition, Assertio Therapeutics received and responded to a subpoena from the New York Department of Financial Services seeking information relating to its historical sales and marketing of opioid products. Assertio Therapeutics also from time to time receives and complies with subpoenas from governmental authorities related to investigations primarily focused on third parties, including healthcare practitioners. Assertio Therapeutics is cooperating with the foregoing governmental investigations and inquiries. In July 2022, the Company became aware that the DOJ issued a press release stating that it had settled claims against a physician whom the DOJ alleged had received payments for paid speaking and consulting work from two pharmaceutical companies, including Depomed, Inc. (now known as Assertio Therapeutics), in exchange for prescribing certain of the companies’ respective products. As part of the settlement, the physician did not admit liability for such claims and the press release stated that there has been no determination of any liability for such claims. The Company denies any wrongdoing and disputes DOJ’s characterization of the payments from Depomed. Multidistrict Opioid Litigation A number of pharmaceutical manufacturers, distributors and other industry participants have been named in numerous lawsuits around the country brought by various groups of plaintiffs, including city and county governments, hospitals, individuals and others. In general, the lawsuits assert claims arising from defendants’ manufacturing, distributing, marketing and promoting of FDA-approved opioid drugs. The specific legal theories asserted vary from case to case, but the lawsuits generally include federal and/or state statutory claims, as well as claims arising under state common law. Plaintiffs seek various forms of damages, injunctive and other relief and attorneys’ fees and costs. For such cases filed in or removed to federal court, the Judicial Panel on Multi-District Litigation issued an order in December 2017, establishing a Multi-District Litigation court (MDL Court) in the Northern District of Ohio (In re National Prescription Opiate Litigation, Case No. 1:17-MD-2804). Since that time, more than 2,000 such cases that were originally filed in U.S. District Courts, or removed to federal court from state court, have been filed in or transferred to the MDL Court. Assertio Therapeutics is currently involved in a subset of the lawsuits that have been filed in or transferred to the MDL Court. Assertio Holdings has also been named in one such case. Plaintiffs may file additional lawsuits in which Assertio Therapeutics or Assertio Holdings may be named. Plaintiffs in the pending federal cases involving Assertio Therapeutics or Assertio Holdings include individuals; county, municipal and other governmental entities; employee benefit plans, health insurance providers and other payors; hospitals, health clinics and other health care providers; Native American tribes; and non-profit organizations who assert, for themselves and in some cases for a putative class, federal and state statutory claims and state common law claims, such as conspiracy, nuisance, fraud, negligence, gross negligence, negligent and intentional infliction of emotional distress, deceptive trade practices, and products liability claims (defective design/failure to warn). In these cases, plaintiffs seek a variety of forms of relief, including actual damages to compensate for alleged personal injuries and for alleged past and future costs such as to provide care and services to persons with opioid-related addiction or related conditions, injunctive relief, including to prohibit alleged deceptive marketing practices and abate an alleged nuisance, establishment of a compensation fund, establishment of medical monitoring programs, disgorgement of profits, punitive and statutory treble damages, and attorneys’ fees and costs. No trial date has been set in any of these lawsuits, which are at an early stage of proceedings. Assertio Therapeutics and Assertio Holdings intend to defend themselves vigorously in these matters. State Opioid Litigation Related to the cases in the MDL Court noted above, there have been hundreds of similar lawsuits filed in state courts around the country, in which various groups of plaintiffs assert opioid-drug related claims against similar groups of defendants. Assertio Therapeutics is currently named in a subset of those cases, including cases in Delaware, Missouri, Nevada, Pennsylvania, Texas and Utah. Plaintiffs may file additional lawsuits in which Assertio Therapeutics may be named. In the pending cases involving Assertio Therapeutics, plaintiffs are asserting state common law and statutory claims against the defendants similar in nature to the claims asserted in the MDL cases. Plaintiffs are seeking actual damages, disgorgement of profits, injunctive relief, punitive and statutory treble damages, and attorneys’ fees and costs. The state lawsuits in which Assertio Therapeutics has been served are generally each at an early stage of proceedings. Assertio Therapeutics intends to defend itself vigorously in these matters. Insurance Litigation On January 15, 2019, Assertio Therapeutics was named as a defendant in a declaratory judgment action filed by Navigators Specialty Insurance Company (Navigators) in the U.S. District Court for the Northern District of California (Case No. 3:19-cv-255). Navigators is Assertio Therapeutics’ primary product liability insurer. Navigators was seeking declaratory judgment that opioid litigation claims noticed by Assertio Therapeutics (as further described above under “Multidistrict Opioid Litigation” and “State Opioid Litigation”) are not covered by Assertio Therapeutics ’ life sciences liability policies with Navigators. On February 3, 2021, Assertio Therapeutics entered into a Confidential Settlement Agreement and Mutual Release with Navigators to resolve the declaratory judgment action and Assertio Therapeutics ’ counterclaims. Pursuant to the Settlement Agreement, the parties settled and the coverage action was dismissed without prejudice. Du ring the first quarter of 2021, Assertio Therapeutics received $5.0 million in insurance reimbursement for previous opioid-related spend, which was recognized within Selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Incom e . On July 16, 2021, Assertio Therapeutics filed a complaint for declaratory relief against one of its excess products liability insurers, Lloyd’s of London Newline Syndicate 1218 and related entities (Newline), in the Superior Court of the State of California for the County of Alameda. Newline removed the case to the U.S. District Court for the Northern District of California (Case No. 3:21-cv-06642). Assertio Therapeutics was seeking a declaratory judgment that Newline has a duty to defend Assertio Therapeutics or, alternatively, to reimburse Assertio Therapeutics’ attorneys’ fees and other defense costs for opioid litigation claims noticed by Assertio Therapeutics. On May 18, 2022, Assertio Therapeutics entered into a Confidential Settlement Agreement and Mutual Release with Newline to resolve Assertio Therapeutics’ declaratory judgment action. Pursuant to the Settlement Agreement, the parties settled and the coverage action was dismissed with prejudice. During the second quarter of 2022, Assertio Therapeutics received $2.0 million in insurance reimbursement for previous opioid-related spend, which was recognized within Selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income. On April 1, 2022, Assertio Therapeutics filed a complaint for negligence and breach of fiduciary duty against its former insurance broker, Woodruff-Sawyer & Co. (“Woodruff”), in the Superior Court of the State of California for the County of Alameda (Case No. 22CV009380). Assertio Therapeutics is seeking to recover its damages caused by Woodruff’s negligence and breaches of its fiduciary duties in connection with negotiating and procuring products liability insurance coverage for Assertio Therapeutics. The litigation is in the early stages. Trial is set for February 2, 2024. Indemnification Dispute with Collegium Pharmaceutical, Inc. On May 24, 2022, Assertio Therapeutics filed an action in the Superior Court of Delaware against Collegium Pharmaceutical, Inc. (Collegium) seeking indemnification in excess of $1.8 million for Collegium’s breach of an asset purchase agreement related to Assertio Therapeutics’ former product, Nucynta. Assertio Therapeutics alleges that Collegium agreed to assume certain liabilities associated with customer returns of Nucynta products sold by Collegium, but that Collegium has failed to honor that agreement. On July 14, 2022, Collegium answered the complaint asserting as a defense that, among other things, the Superior Court of Delaware does not have jurisdiction over all aspects of the action because Collegium contends that a portion of the dispute is subject to the alternative dispute resolution procedures under a different agreement. On July 18, 2022, Assertio Therapeutics moved to strike that defense, and on August 8, 2022 in opposition to the motion to strike, Collegium filed a cross-motion to stay the case. Assertio Therapeutics filed its opposition to Collegium’s cross-motion to stay on August 19, 2022. After oral argument on September 20, 2022, the Court granted in part Assertio Therapeutics’ motion to strike and denied in full Collegium’s cross-motion to stay. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES The Company continually evaluates its operations to identify opportunities to streamline operations and optimize operating efficiencies as an anticipation to changes in the business environment. The following table reflects total expenses related to restructuring activities recognized within the Condensed Consolidated Statement of Comprehensive Income as restructuring costs (in thousands): Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Employee compensation costs $ — $ — $ — $ 876 Other exit costs — — — 213 Total restructuring costs $ — $ — $ — $ 1,089 The following table reflects cash activity relating to the Company’s accrued restructuring cost as of September 30, 2022 (in thousands): Employee compensation costs Total Balance as of December 31, 2021 $ 828 $ 828 Cash paid (340) (340) Balance as of March 31, 2022 $ 488 $ 488 Cash paid (150) (150) Balance as of June 30, 2022 $ 338 $ 338 Cash paid (201) (201) Balance as of September 30, 2022 $ 137 $ 137 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS EQUITY At-The-Market Program On December 17, 2021, the Company entered into a Sales Agreement with Roth Capital Partners, LLC (Roth) as sales agent to sell shares of the Company’s common stock, from time to time, through an at-the-market (ATM) offering program having an aggregate offering price of up to $25.0 million. As of September 30, 2022, 2,463,637 shares have been issued and settled at an average price of $3.02, through which the Company received gross proceeds of $7.4 million, and net proceeds after commission and fees of $7.0 million. As a result of the issuance of the 2027 Convertible Notes (See Note 10. Debt), the Company has determined to suspend use of its ATM offering program. Equity Raise On February 9, 2021, the Company completed a registered direct offering with certain institutional investors and accredited investors to sell 5,650,000 shares of our common stock at a purchase price of $2.48 per share. The gross proceeds from the offering were approximately $14.0 million. After placement agent fees and other offering expenses payable by the Company, Assertio received net proceeds of approximately $13.1 million. On February 12, 2021, the Company completed a registered direct offering with certain institutional investors and accredited investors to sell 8,750,000 shares of our common stock at a purchase price of $3.92 per share. The gross proceeds from the offering were approximately $34.3 million. After placement agent fees and other offering expenses payable by the Company, Assertio received net proceeds of approximately $32.2 million. The Company intends to use proceeds from both offerings for general corporate purposes, including general working capital. Warrant Agreements Upon the Zyla Merger, the Company assumed Zyla’s outstanding Warrant Agreements which provides the holder the right to receive shares of the Company’s common stock. The warrants are exercisable at any time at an exercise price of $0.0016 per share, subject to certain ownership limitations including, with respect to Iroko and its affiliates, that no such exercise may increase the aggregate ownership of the Company’s outstanding common stock of such parties above 49% of the number of shares of its common stock then outstanding for a period of 18 months . All of the Company’s outstanding warrants have similar terms whereas under no circumstance may the warrants be net-cash settled. As such, all warrants are equity classified . |
NET INCOME PER SHARE
NET INCOME PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Basic net income per share is calculated by dividing the net income by the weighted-average number of shares of common stock outstanding during the period. Upon consummation of the Zyla Merger in May 2020, the Company inherited outstanding Zyla warrants to purchase Zyla common stock, which were converted into the right to purchase shares of Assertio’s common stock. As these warrants are exercisable at any time at an exercise price of $0.0016 per share, they represent contingently issuable shares and therefore are included in the number of outstanding shares used for the computation of basic income per share. There were zero and 392,095 unexercised shares of common stock issuable upon the exercise of warrants as of September 30, 2022 and 2021, respectively. Diluted net income per share is calculated by dividing the net income by the weighted-average number of shares of common stock outstanding during the period, plus potentially dilutive common shares, consisting of stock options, awards, and equivalents and convertible debt. For purposes of this calculation, convertible debt and options to purchase stock are considered to be potential common shares and are only included in the calculation of diluted net income per share when their effect is dilutive. The Company uses the treasury-stock method to compute diluted earnings per share with respect to its stock options and equivalents. The Company uses the if-converted method to compute diluted earnings per share with respect to its convertible debt. Under the if-converted method, the Company assumes the 2027 Convertible Notes were converted at the beginning of each period presented. As a result, interest expense and any adjustments recognized in net income for the 2027 Convertible Notes is added back to net income used in the diluted earnings per share calculation. Additionally, the diluted shares used in the diluted earnings per share calculation includes the dilution effect of the 2027 Convertible Notes. The following table reflects the calculation of basic and diluted earnings per common share for the three and nine months ended September 30, 2022 and 2021 (in thousands, except for per share amounts): Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Basic net income per share Net income (loss) $ 4,174 $ 3,737 $ 21,072 $ (5,887) Weighted-average common shares and warrants outstanding 48,180 44,969 46,566 42,550 Basic net income (loss) per share $ 0.09 $ 0.08 $ 0.45 $ (0.14) Diluted net income per share Net income (loss) $ 4,174 $ 3,737 $ 21,072 $ (5,887) Add: Interest Expense on convertible debt, net of tax 497 — 487 — Adjusted Net income (loss) 4,671 3,737 21,559 (5,887) Weighted-average common shares and share equivalents outstanding 48,180 44,969 46,566 42,550 Add: effect of dilutive stock-based awards and equivalents 1,960 86 1,462 — Add: effect of dilutive convertible debt under if-converted method 7,246 — 2,442 — Denominator for diluted income per share 57,386 45,055 50,470 42,550 Diluted net income (loss) per share $ 0.08 $ 0.08 $ 0.42 $ (0.14) The following table reflects outstanding potentially dilutive common shares that are not included in the computation of diluted net income per share, because to do so would be anti-dilutive, for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 2021 Convertible Notes — 3 — 4 Stock-based awards and equivalents 2,983 2,297 1,329 2,725 Total potentially dilutive common shares 2,983 2,300 1,329 2,729 |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE The following table reflects the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 Financial Statement Classification Level 1 Level 2 Level 3 Total Liabilities: Short-term contingent consideration Contingent consideration, current portion $ — $ — $ 10,900 $ 10,900 Long-term contingent consideration Contingent consideration — — 25,759 25,759 Total $ — $ — $ 36,659 $ 36,659 December 31, 2021 Financial Statement Classification Level 1 Level 2 Level 3 Total Liabilities: Short-term contingent consideration Contingent consideration, current portion $ — $ — $ 14,500 $ 14,500 Long-term contingent consideration Contingent consideration — — 23,159 23,159 Total $ — $ — $ 37,659 $ 37,659 Pursuant to the May 2020 Zyla Merger, the Company assumed a contingent consideration obligation which is measured at fair value. The Company has obligations to make contingent consideration payments for future royalties to Iroko based upon annual INDOCIN Product net sales over $20.0 million at a 20% royalty through January 2029. The Company classified the acquisition-related contingent consideration liabilities to be settled in cash as Level 3, due to the lack of relevant observable inputs and market activity. During the three and nine months ended September 30, 2022, the Company recognized an expense of $3.9 million and $6.8 million, respectively, for the change in fair value of contingent consideration, which was recognized in Fair value of contingent consideration on the Company’s Condensed Consolidated Statements of Comprehensive Income. For the three and nine months ended September 30, 2021, the Company recognized an expense of $0.3 million and $1.9 million, respectively, for the change in fair value of contingent consideration. The fair value of the contingent consideration is determined using an option pricing model under the income approach based on estimated INDOCIN product revenues through January 2029 and discounted to present value. The significant assumptions used in the calculation of the fair value as of September 30, 2022 included revenue volatility of 30%, discount rate of 8.5%, credit spread of 4.0% and updated projections of future INDOCIN Product revenues. Contingent consideration related to CAMBIA was $0.2 million as of September 30, 2022 and December 31, 2021. The following table summarizes changes in fair value that are measured on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Fair value, beginning of the period $ 36,759 $ 37,659 $ 37,659 $ 38,552 Change in fair value of contingent consideration recorded within costs and expenses 3,900 300 6,845 1,902 Cash payment related to contingent consideration (4,000) — (7,845) (2,495) Fair value, end of the period $ 36,659 $ 37,959 $ 36,659 $ 37,959 The Company estimates the fair value of its convertible notes based on a market approach which represents a Level 2 valuation. The estimated fair value of the 2027 Convertible Notes, which the Company issued on August 22, 2022, was approximately $64.3 million (par value $70.0 million) as of September 30, 2022. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three and nine months ended September 30, 2022. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES As of September 30, 2022, the Company’s net deferred tax assets are fully offset by a valuation allowance, with the exception of a deferred tax liability of $0.3 million for certain separate filing state jurisdictions. The valuation allowance is determined in accordance with the provisions of ASC 740, Income Taxes, which require an assessment of both negative and positive evidence when measuring the need for a valuation allowance. Based on the weight of available evidence, the Company recorded a valuation allowance against the majority of its net deferred tax assets. However, given the current earnings trend, sufficient positive evidence may become available for the Company to release all or a portion of the valuation allowance within twelve months. The exact timing and amount of the valuation allowance releases are subject to change based on the level of profitability achieved in future periods. The Company will continue to assess the realizability of its deferred tax assets on a quarterly basis. For the nine months ended September 30, 2022, the Company recorded an income tax expense of $1.5 million. The difference between the income tax expense of $1.5 million and the tax at the statutory rate of 21.0% to date on current year operations is principally due to the partial release of valuation allowance related to the current year movement in deferred tax assets. The Company files income tax returns in the United States federal jurisdiction and in various states, and the tax returns filed for the years 2007 through 2020 and the applicable statutes of limitation have not expired with respect to those returns. Because of NOLs and unutilized R&D credits, substantially all of the Company’s tax years remain open to examination. Interest and penalties, if any, related to unrecognized tax benefits, would be recognized as income tax expense by the Company. At September 30, 2022, the Company did not have significant accrued interest and penalties associated with unrecognized tax benefits. During the first quarter of 2022, the Company received a refund of $8.3 million for the carryback of net operating losses under the Cares Act. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The tax legislation includes a new book-minimum tax on certain large corporations, an excise tax on stock buybacks, and tax incentives to address climate change mitigation and clean energy. The Company considered the income tax accounting implications of the IRA legislation to the Company’s income tax provision calculation for the period ended September 30, 2022 and determined that the impact was not significant. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSOn October 27, 2022, Assertio announced the closing of a transaction to acquire an exclusive license for Sympazan® (clobazam) oral film from Aquestive Therapeutics, Inc. (Aquestive). Under the terms of the definitive agreement, the Company acquired an exclusive license for the Sympazan intellectual property from Aquestive for an upfront payment of $9.0 million. Assertio also entered into a long-term supply agreement with Aquestive for Sympazan. Additionally, Aquestive will continue to prosecute an existing patent application that could extend patent coverage to as late as 2039. Upon patent allowance, Assertio will pay a $6.0 million milestone payment and royalties to Aquestive. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of Assertio Holdings, Inc. (the Company or Assertio) and its subsidiaries and the related footnote information of the Company have been prepared pursuant to the requirements of the Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information that are normally required by U.S. generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, the accompanying interim unaudited condensed consolidated financial statements include all adjustments necessary for a fair presentation of the information for the periods presented. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of results to be expected for the entire year ending December 31, 2022 or future operating periods. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2021 included in Assertio Holdings, Inc.’s Annual Report on Form 10-K filed with the SEC on March 10, 2022 (the 2021 Form 10-K). The Condensed Consolidated Balance Sheet as of December 31, 2021 has been derived from the audited financial statements at that date, as filed in the Company’s 2021 Form 10-K. |
Reclassifications | Reclassifications During the first quarter of 2022, the Company made certain reclassifications within Selling, general and administrative expenses related to changes in the fair value of contingent considerations. These fair value adjustments were reclassified from Selling, general and administrative expenses to Fair value of contingent consideration on the Condensed Consolidated Statements of Comprehensive Income, which impacted previously reported amounts for the three and nine months ended September 30, 2021. The reclassifications were made to separately state changes in the fair value of contingent considerations from Selling, general and administrative expenses. Prior period results were recast to conform with these changes, and resulted in a decrease to Selling, general and administrative expenses and an equal and offsetting increase to Fair value of contingent consideration of $0.3 million and $1.9 million for the three and nine months ended September 30, 2021, respectively. Total cost and expenses and Income (loss) from operations as previously reported remains unchanged. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Asset Acquisition | The following table summarizes the aggregate amount paid for the assets acquired by the Company in connection with the acquisition of Otrexup (in thousands): Cash paid to Antares at closing $ 18,000 Cash paid in May 2022 16,021 Deferred cash payment due in December 2022 10,000 Transaction costs 1,478 Total purchase price of assets acquired $ 45,499 The following table summarizes the fair value of assets acquired in the acquisition of Otrexup (in thousands): Inventories $ 1,413 Intangible assets 44,086 Total assets acquired $ 45,499 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Net Revenue | The following table reflects summary revenue, net for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Product sales, net: INDOCIN products $ 21,869 $ 14,541 $ 66,067 $ 42,214 CAMBIA 5,808 5,038 17,464 17,628 Otrexup 3,004 — 8,699 — Zipsor 259 1,999 2,704 6,802 SPRIX 2,455 2,272 6,437 6,911 Other products 884 2,147 3,887 3,716 Total product sales, net 34,279 25,997 105,258 77,271 Royalties and milestone revenue 473 416 1,916 1,391 Other revenue (540) (941) (1,290) (976) Total revenues $ 34,212 $ 25,472 $ 105,884 $ 77,686 |
ACCOUNTS RECEIVABLES, NET (Tabl
ACCOUNTS RECEIVABLES, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts Receivables, Net | The following table reflects accounts receivables, net, as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Receivables related to product sales, net $ 42,061 $ 43,753 Other 2,619 608 Total accounts receivable, net $ 44,680 $ 44,361 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | The following table reflects the components of inventory, net as of September 30, 2022 and December 31, 2021 (in thousands): September 30, December 31, 2021 Raw materials $ 1,755 $ 1,242 Work-in-process 2,556 823 Finished goods 9,957 5,424 Total Inventories, net $ 14,268 $ 7,489 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | The following table reflects property and equipment, net as of September 30, 2022 and December 31, 2021 (in thousands): September 30, December 31, 2021 Furniture and office equipment $ 2,353 $ 2,733 Laboratory equipment 20 20 Leasehold improvements 9,787 10,523 12,160 13,276 Less: Accumulated depreciation (11,225) (11,749) Property and equipment, net $ 935 $ 1,527 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Gross Carrying Amounts and Net Book Values of Intangible Assets and Goodwill | The following table reflects the gross carrying amounts and net book values of intangible assets as of September 30, 2022 and December 31, 2021 (dollar amounts in thousands): September 30, 2022 December 31, 2021 Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value Products rights: INDOCIN 9.6 $ 154,100 $ (30,285) $ 123,815 $ 154,100 $ (20,654) $ 133,446 CAMBIA 0.3 51,360 (49,372) 1,988 51,360 (43,410) 7,950 Otrexup 7.2 44,086 (4,133) 39,953 44,086 — 44,086 SPRIX 4.6 39,000 (13,139) 25,861 39,000 (8,960) 30,040 Zipsor 0.0 27,250 (27,250) — 27,250 (26,718) 532 Total Intangible Assets $ 315,796 $ (124,179) $ 191,617 $ 315,796 $ (99,742) $ 216,054 |
Schedule of the Future Amortization Expenses of Intangible Assets | The following table reflects future amortization expense the Company expects for its intangible assets (in thousands): Year Ending December 31, Estimated Amortization Expense 2022 (remainder) $ 7,969 2023 23,924 2024 23,924 2025 23,924 2026 23,924 Thereafter 87,952 Total $ 191,617 |
OTHER LONG-TERM ASSETS (Tables)
OTHER LONG-TERM ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Long-Term Assets | The following table reflects other long-term assets as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Investment, net $ 1,579 $ 1,579 Operating lease right-of-use assets 262 735 Prepaid asset and deposits 1,760 2,456 Other 697 698 Total other long-term assets $ 4,298 $ 5,468 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Payable and Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Liabilities | The following table reflects accrued liabilities as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Accrued compensation $ 2,295 $ 4,122 Accrued restructuring costs 137 828 Other accrued liabilities 7,755 8,062 Interest payable 455 1,687 Income tax payable 350 — Total accrued liabilities $ 10,992 $ 14,699 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Long-Term Debt, Unclassified [Abstract] | |
Schedule of Long-Term Debt | The following table reflects the Company’s debt as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 6.5% Senior Convertible Notes due 2027 $ 70,000 $ — 13% Senior Secured Notes due 2024 — 70,750 Royalty rights obligation 2,175 2,743 Total principal amount 72,175 73,493 Unamortized debt issuance costs (4,018) — Less: current portion of long-term debt (2,175) (12,174) Net, long-term debt $ 65,982 $ 61,319 |
Schedule of Carrying Values Convertible Notes | The following table reflects the carrying balance of the 2027 Convertible Notes as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 December 31, 2021 Principal balance $ 70,000 $ — Unamortized debt issuance costs (4,018) — Convertible note payable, net $ 65,982 $ — |
Schedule of Debt Related Interest | The following table reflects debt related interest included in Interest expense in the Company’s Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Interest payable on 2027 Convertible Notes $ 456 $ — $ 456 $ — Interest paid on 2024 Secured Notes 1,516 2,454 6,064 7,618 Amortization of debt issuance costs and Royalty Rights 80 41 128 159 Other — — — 6 Total interest expense $ 2,052 $ 2,495 $ 6,648 $ 7,783 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of Lease Expense | The following table reflects lease expense and income for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended Financial Statement Classification 2022 2021 2022 2021 Operating lease cost Selling, general and administrative expenses $ 39 $ 54 $ 118 $ 256 Operating lease cost Other gain 148 148 444 443 Total lease cost $ 187 $ 202 $ 562 $ 699 Sublease Income Other gain $ 168 $ 347 $ 1,111 $ 1,040 The following table reflects supplemental cash flow information related to leases for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases $ 533 $ 667 $ 1,593 $ 2,129 |
Schedule of Supplemental Balance Sheet Information | The following table reflects supplemental balance sheet information related to leases as of September 30, 2022 and December 31, 2021 (in thousands): Financial Statement Classification September 30, 2022 December 31, 2021 Liabilities Current operating lease liabilities Other current liabilities $ 673 $ 1,978 Noncurrent operating lease liabilities Other long-term liabilities 105 397 Total lease liabilities $ 778 $ 2,375 |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges | The following table reflects total expenses related to restructuring activities recognized within the Condensed Consolidated Statement of Comprehensive Income as restructuring costs (in thousands): Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Employee compensation costs $ — $ — $ — $ 876 Other exit costs — — — 213 Total restructuring costs $ — $ — $ — $ 1,089 |
Schedule of Accrued Restructuring and Severance Costs | The following table reflects cash activity relating to the Company’s accrued restructuring cost as of September 30, 2022 (in thousands): Employee compensation costs Total Balance as of December 31, 2021 $ 828 $ 828 Cash paid (340) (340) Balance as of March 31, 2022 $ 488 $ 488 Cash paid (150) (150) Balance as of June 30, 2022 $ 338 $ 338 Cash paid (201) (201) Balance as of September 30, 2022 $ 137 $ 137 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Earnings Per Common Share | The following table reflects the calculation of basic and diluted earnings per common share for the three and nine months ended September 30, 2022 and 2021 (in thousands, except for per share amounts): Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Basic net income per share Net income (loss) $ 4,174 $ 3,737 $ 21,072 $ (5,887) Weighted-average common shares and warrants outstanding 48,180 44,969 46,566 42,550 Basic net income (loss) per share $ 0.09 $ 0.08 $ 0.45 $ (0.14) Diluted net income per share Net income (loss) $ 4,174 $ 3,737 $ 21,072 $ (5,887) Add: Interest Expense on convertible debt, net of tax 497 — 487 — Adjusted Net income (loss) 4,671 3,737 21,559 (5,887) Weighted-average common shares and share equivalents outstanding 48,180 44,969 46,566 42,550 Add: effect of dilutive stock-based awards and equivalents 1,960 86 1,462 — Add: effect of dilutive convertible debt under if-converted method 7,246 — 2,442 — Denominator for diluted income per share 57,386 45,055 50,470 42,550 Diluted net income (loss) per share $ 0.08 $ 0.08 $ 0.42 $ (0.14) |
Schedule of Anti-Dilutive Securities Excluded from Computation of Diluted Net Income Per Share | The following table reflects outstanding potentially dilutive common shares that are not included in the computation of diluted net income per share, because to do so would be anti-dilutive, for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 2021 Convertible Notes — 3 — 4 Stock-based awards and equivalents 2,983 2,297 1,329 2,725 Total potentially dilutive common shares 2,983 2,300 1,329 2,729 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Hierarchy for Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table reflects the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 (in thousands): September 30, 2022 Financial Statement Classification Level 1 Level 2 Level 3 Total Liabilities: Short-term contingent consideration Contingent consideration, current portion $ — $ — $ 10,900 $ 10,900 Long-term contingent consideration Contingent consideration — — 25,759 25,759 Total $ — $ — $ 36,659 $ 36,659 December 31, 2021 Financial Statement Classification Level 1 Level 2 Level 3 Total Liabilities: Short-term contingent consideration Contingent consideration, current portion $ — $ — $ 14,500 $ 14,500 Long-term contingent consideration Contingent consideration — — 23,159 23,159 Total $ — $ — $ 37,659 $ 37,659 |
Schedule of Changes in Fair Value | The following table summarizes changes in fair value that are measured on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Fair value, beginning of the period $ 36,759 $ 37,659 $ 37,659 $ 38,552 Change in fair value of contingent consideration recorded within costs and expenses 3,900 300 6,845 1,902 Cash payment related to contingent consideration (4,000) — (7,845) (2,495) Fair value, end of the period $ 36,659 $ 37,959 $ 36,659 $ 37,959 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Revenue Reclassification (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Out of period adjustment | ||||
Selling, general and administrative expenses | $ (11,900) | $ (9,013) | $ (33,084) | $ (41,377) |
Fair value of contingent consideration | $ (3,900) | (300) | $ (6,845) | (1,902) |
Revision of Prior Period, Reclassification, Adjustment | ||||
Out of period adjustment | ||||
Selling, general and administrative expenses | 300 | 1,900 | ||
Fair value of contingent consideration | $ (300) | $ 1,900 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 15, 2022 | May 31, 2022 | Dec. 15, 2021 | May 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||||
Cash paid | $ 16,889 | $ 0 | |||||
Otrexup | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid | $ 18,000 | $ 16,021 | |||||
Deferred cash payment due in December 2022 | $ 16,000 | $ 10,000 | $ 26,000 | ||||
Acquired finite-lived intangible assets, useful life | 8 years | ||||||
Otrexup | Subsequent Event | |||||||
Business Acquisition [Line Items] | |||||||
Deferred cash payment due in December 2022 | $ 10,000 |
ACQUISITIONS - Schedule of Asse
ACQUISITIONS - Schedule of Asset Acquisition (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
May 31, 2022 | Dec. 15, 2021 | May 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Asset Acquisition [Line Items] | ||||||
Cash paid | $ 16,889 | $ 0 | ||||
Otrexup | ||||||
Asset Acquisition [Line Items] | ||||||
Cash paid | $ 18,000 | $ 16,021 | ||||
Deferred cash payment due in December 2022 | $ 16,000 | $ 10,000 | $ 26,000 | |||
Transaction costs | 1,478 | |||||
Total purchase price of assets acquired | 45,499 | |||||
Inventories | 1,413 | |||||
Intangible assets | 44,086 | |||||
Total assets acquired | $ 45,499 |
REVENUE - Schedule of Disaggreg
REVENUE - Schedule of Disaggregated Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 34,212 | $ 25,472 | $ 105,884 | $ 77,686 |
Total product sales, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 34,279 | 25,997 | 105,258 | 77,271 |
INDOCIN products | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 21,869 | 14,541 | 66,067 | 42,214 |
CAMBIA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 5,808 | 5,038 | 17,464 | 17,628 |
Otrexup | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 3,004 | 0 | 8,699 | 0 |
Zipsor | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 259 | 1,999 | 2,704 | 6,802 |
SPRIX | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 2,455 | 2,272 | 6,437 | 6,911 |
Other products | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 884 | 2,147 | 3,887 | 3,716 |
Royalties and milestones | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 473 | 416 | 1,916 | 1,391 |
Other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ (540) | $ (941) | $ (1,290) | $ (976) |
REVENUE - Narrative - Royalties
REVENUE - Narrative - Royalties and Milestone Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Contract liabilities | $ 0.2 | $ 0.2 | $ 0.3 | ||
Increase in contract liability | 0.3 | ||||
CAMBIA | Canada | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Revenue recognized | $ 0.5 | $ 0.4 | 1.5 | $ 1.4 | |
Royalties and milestones | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Revenue recognized | $ 0.5 |
ACCOUNTS RECEIVABLES, NET - Sch
ACCOUNTS RECEIVABLES, NET - Schedule of Accounts Receivables, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
ACCOUNTS RECEIVABLES, NET | ||
Total accounts receivable, net | $ 44,680 | $ 44,361 |
Receivables related to product sales, net | ||
ACCOUNTS RECEIVABLES, NET | ||
Total accounts receivable, net | 42,061 | 43,753 |
Other | ||
ACCOUNTS RECEIVABLES, NET | ||
Total accounts receivable, net | $ 2,619 | $ 608 |
ACCOUNTS RECEIVABLES, NET - Nar
ACCOUNTS RECEIVABLES, NET - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Allowance for cash discounts for prompt payment | $ 1 | $ 0.9 |
INVENTORIES, NET - Schedule of
INVENTORIES, NET - Schedule of Inventories, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory | ||
Raw materials | $ 1,755 | $ 1,242 |
Work-in-process | 2,556 | 823 |
Finished goods | 9,957 | 5,424 |
Total Inventories, net | $ 14,268 | $ 7,489 |
INVENTORIES, NET - Narrative (D
INVENTORIES, NET - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Inventory reserves | $ 2 | $ 3.7 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 12,160 | $ 13,276 |
Less: Accumulated depreciation | (11,225) | (11,749) |
Property and equipment, net | 935 | 1,527 |
Furniture and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,353 | 2,733 |
Laboratory equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 20 | 20 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 9,787 | $ 10,523 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 0.2 | $ 0.2 | $ 0.6 | $ 0.8 |
INTANGIBLE ASSETS - Summary of
INTANGIBLE ASSETS - Summary of Gross Carrying Amounts and Net Book Values of Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Intangible assets | ||
Gross Carrying Amount | $ 315,796 | $ 315,796 |
Accumulated Amortization | (124,179) | (99,742) |
Total | $ 191,617 | 216,054 |
INDOCIN | Product Rights | ||
Intangible assets | ||
Remaining useful life | 9 years 7 months 6 days | |
Gross Carrying Amount | $ 154,100 | 154,100 |
Accumulated Amortization | (30,285) | (20,654) |
Total | $ 123,815 | 133,446 |
CAMBIA | Product Rights | ||
Intangible assets | ||
Remaining useful life | 3 months 18 days | |
Gross Carrying Amount | $ 51,360 | 51,360 |
Accumulated Amortization | (49,372) | (43,410) |
Total | $ 1,988 | 7,950 |
Otrexup | Product Rights | ||
Intangible assets | ||
Remaining useful life | 7 years 2 months 12 days | |
Gross Carrying Amount | $ 44,086 | 44,086 |
Accumulated Amortization | (4,133) | 0 |
Total | $ 39,953 | 44,086 |
SPRIX | Product Rights | ||
Intangible assets | ||
Remaining useful life | 4 years 7 months 6 days | |
Gross Carrying Amount | $ 39,000 | 39,000 |
Accumulated Amortization | (13,139) | (8,960) |
Total | $ 25,861 | 30,040 |
Zipsor | Product Rights | ||
Intangible assets | ||
Remaining useful life | 0 years | |
Gross Carrying Amount | $ 27,250 | 27,250 |
Accumulated Amortization | (27,250) | (26,718) |
Total | $ 0 | $ 532 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 7,969 | $ 7,175 | $ 24,438 | $ 20,939 |
INTANGIBLE ASSETS - Summary o_2
INTANGIBLE ASSETS - Summary of Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 (remainder) | $ 7,969 | |
2023 | 23,924 | |
2024 | 23,924 | |
2025 | 23,924 | |
2026 | 23,924 | |
Thereafter | 87,952 | |
Total | $ 191,617 | $ 216,054 |
OTHER LONG-TERM ASSETS (Details
OTHER LONG-TERM ASSETS (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Aug. 31, 2018 | Sep. 30, 2022 | Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Investment, net | $ 1,579 | $ 1,579 | |
Operating lease right-of-use assets | 262 | 735 | |
Prepaid asset and deposits | 1,760 | 2,456 | |
Other | 697 | 698 | |
Total other long-term assets | 4,298 | $ 5,468 | |
Summary of Investment Holdings [Line Items] | |||
Credit loss allowance | $ 1,900 | ||
NES Therapeutic, Inc. | |||
Summary of Investment Holdings [Line Items] | |||
Payment for convertible notes receivable | $ 3,000 | ||
Convertible notes receivable, interest rate | 10% | ||
Convertible notes receivable | $ 3,000 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Accrued compensation | $ 2,295 | $ 4,122 |
Accrued restructuring costs | 137 | 828 |
Other accrued liabilities | 7,755 | 8,062 |
Interest payable | 455 | 1,687 |
Income tax payable | 350 | 0 |
Total accrued liabilities | $ 10,992 | $ 14,699 |
DEBT - Schedule of Long-term De
DEBT - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Aug. 22, 2022 | Dec. 31, 2021 | May 20, 2020 |
Debt Instrument [Line Items] | ||||
Gross, long-term debt | $ 72,175 | $ 73,493 | ||
Unamortized debt issuance costs | (4,018) | 0 | ||
Less: current portion of long-term debt | (2,175) | (12,174) | ||
Net, long-term debt | 65,982 | 61,319 | ||
Royalty rights obligation | ||||
Debt Instrument [Line Items] | ||||
Gross, long-term debt | 2,200 | 2,700 | ||
Convertible notes | 6.5% Senior Convertible Notes due 2027 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.50% | |||
Gross, long-term debt | $ 70,000 | 0 | ||
Senior Notes | Senior Secured Notes Due 2024 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 13% | 13% | ||
Gross, long-term debt | $ 0 | 70,750 | ||
Senior Notes | Royalty rights obligation | ||||
Debt Instrument [Line Items] | ||||
Gross, long-term debt | $ 2,175 | $ 2,743 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | 3 Months Ended | |||
Aug. 22, 2022 USD ($) $ / shares Rate | May 20, 2020 USD ($) series | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||
Gross, long-term debt | $ 72,175,000 | $ 73,493,000 | ||
6.5% Senior Convertible Notes due 2027 | Convertible notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.50% | |||
Aggregate principal amount | $ 60,000,000 | |||
Additional purchase capacity | $ 10,000,000 | |||
Number of days to cover over allotment (in days) | 13 days | |||
Conversion ratio | 0.2442003 | |||
Conversion price (in dollars per share) | $ / shares | $ 4.09 | |||
Debt issuance costs | $ 4,000,000 | |||
Effective interest rate (as a percent) | Rate | 7.80% | |||
Amortization of debt discount | 100,000 | |||
Gross, long-term debt | $ 70,000,000 | 0 | ||
Senior Secured Notes Due 2024 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 13% | 13% | ||
Aggregate principal amount | $ 95,000,000 | |||
Number of series issued | series | 2 | |||
Repayment of debt, principal | $ 59,000,000 | |||
Repayment of debt, interest | 3,000,000 | |||
Gross, long-term debt | 0 | 70,750,000 | ||
Secured Notes, Series A-1 Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 50,000,000 | |||
Secured Notes, Series A-2 Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 45,000,000 | |||
Royalty rights obligation | ||||
Debt Instrument [Line Items] | ||||
Gross, long-term debt | 2,200,000 | 2,700,000 | ||
Royalty rights obligation | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Royalty payments, percentage of revenue | 1.50% | |||
Gross, long-term debt | $ 2,175,000 | $ 2,743,000 |
DEBT - Schedule of Carrying Val
DEBT - Schedule of Carrying Values Convertible Notes (Details) - 6.5% Senior Convertible Notes due 2027 - Convertible notes - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Principal balance | $ 70,000 | $ 0 |
Unamortized Debt Issuance Expense | (4,018) | 0 |
Convertible note payable, net | $ 65,982 | $ 0 |
DEBT - Schedule of Interest Exp
DEBT - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||||
Amortization of debt issuance costs and Royalty Rights | $ 80 | $ 41 | $ 128 | $ 159 |
Total interest expense | 2,052 | 2,495 | 6,648 | 7,783 |
Senior Notes | 6.5% Senior Convertible Notes due 2027 | ||||
Debt Instrument [Line Items] | ||||
Interest payable on notes | 456 | 0 | 456 | 0 |
Senior Notes | Senior Secured Notes Due 2024 | ||||
Debt Instrument [Line Items] | ||||
Interest payable on notes | 0 | 0 | 0 | 6 |
Convertible notes | ||||
Debt Instrument [Line Items] | ||||
Interest payable on notes | $ 1,516 | $ 2,454 | $ 6,064 | $ 7,618 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards granted (in shares) | 1.5 | |||
Average fair market value (in dollars per share) | $ 2.54 | |||
Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted (in shares) | 1 | |||
Average market fair value (in dollars per share) | $ 2.28 | |||
Performance-Based Stock Options And Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Average fair market value (in dollars per share) | $ 2.02 | |||
Options granted (in shares) | 2 | |||
Selling, General and Administrative Expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 2.4 | $ 0.9 | $ 5.1 | $ 2.6 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Mar. 31, 2022 USD ($) | Sep. 30, 2022 renewal_Option | |
Leases [Abstract] | ||
Operating lease, number of renewal options | renewal_Option | 1 | |
Operating lease, renewal term | 5 years | |
Gain on early termination of sublease | $ | $ 0.6 |
LEASES - Lease Cost Components
LEASES - Lease Cost Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Lessee, Lease, Description [Line Items] | ||||
Total lease cost | $ 187 | $ 202 | $ 562 | $ 699 |
Selling, general and administrative expenses | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease cost | 39 | 54 | 118 | 256 |
Other gain | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease cost | 148 | 148 | 444 | 443 |
Sublease Income | $ 168 | $ 347 | $ 1,111 | $ 1,040 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Cash paid for amounts included in measurement of liabilities: | ||||
Operating cash flows from operating leases | $ 533 | $ 667 | $ 1,593 | $ 2,129 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Liabilities | ||
Current operating lease liabilities | $ 673 | $ 1,978 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Noncurrent operating lease liabilities | $ 105 | $ 397 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Total lease liabilities | $ 778 | $ 2,375 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Supply Agreements (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Supply Commitment [Line Items] | |
Purchase obligation, percentage | 75% |
Antares | |
Supply Commitment [Line Items] | |
Annual purchase obligation | $ 2 |
Supply Agreement | JHS | |
Supply Commitment [Line Items] | |
Annual purchase obligation | 1.1 |
Supply Agreement | Cosette | |
Supply Commitment [Line Items] | |
Annual purchase obligation | $ 6.3 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Legal Matters (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Legal contingency accrual | $ 3.2 | $ 3.4 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Glumetza Antitrust Litigation (Details) - USD ($) $ in Thousands | Sep. 22, 2021 | Sep. 14, 2021 |
Glumetza Antitrust Litigation | ||
Loss Contingencies [Line Items] | ||
Settlement amount | $ 3,850 | $ 3,150 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Multidistrict Opioid Litigation (Details) | Sep. 30, 2022 case |
Multidistrict Opioid Litigation | |
Legal matters | |
Number of industry-wide opioid litigation cases (more than) | 2,000 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Insurance Litigation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2021 | Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Insurance reimbursement | $ 2 | $ 5 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - Indemnification Dispute (Details) $ in Millions | May 24, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Indemnification (in excess of) | $ 1.8 |
RESTRUCTURING CHARGES - Schedul
RESTRUCTURING CHARGES - Schedule of Restructuring Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring costs | ||||
Employee compensation costs | $ 0 | $ 0 | $ 0 | $ 876 |
Other exit costs | 0 | 0 | 0 | 213 |
Total restructuring costs | $ 0 | $ 0 | $ 0 | $ 1,089 |
RESTRUCTURING CHARGES - Sched_2
RESTRUCTURING CHARGES - Schedule of Accrued Restructuring Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Accrued restructuring and severance costs rollforward | |||
Balance at beginning of period | $ 338 | $ 488 | $ 828 |
Cash paid | (201) | (150) | (340) |
Balance at end of period | 137 | 338 | 488 |
Employee compensation costs | |||
Accrued restructuring and severance costs rollforward | |||
Balance at beginning of period | 338 | 488 | 828 |
Cash paid | (201) | (150) | (340) |
Balance at end of period | $ 137 | $ 338 | $ 488 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |||||
Feb. 12, 2021 | Feb. 09, 2021 | May 20, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 17, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock offering, shares sold (in shares) | 8,750,000 | 5,650,000 | ||||
Stock offering, purchase price (in dollars per share) | $ 3.92 | $ 2.48 | ||||
Stock offering, gross proceeds | $ 34.3 | $ 14 | ||||
Stock offering, net proceeds | $ 32.2 | $ 13.1 | ||||
Warrants exercised (in shares) | 0 | 392,095 | ||||
Common shares issued (in shares) | 0 | 387,802 | ||||
Warrants outstanding | $ 0 | |||||
Zyla Life Sciences | Iroko | Warrant Agreements | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Exercise aggregate ownership percentage maximum threshold | 49% | |||||
Exercise aggregate ownership percentage term | 18 months | |||||
Zyla Life Sciences | Money market funds | Zyla Life Sciences | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Purchase price, number of shares outstanding, per share (in dollars per share) | $ 0.0016 | |||||
At The Market Program | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate offering price | $ 25 | |||||
Stock offering, shares sold (in shares) | 2,463,637 | |||||
Stock offering, purchase price (in dollars per share) | $ 3.02 | |||||
Stock offering, gross proceeds | $ 7.4 | |||||
Stock offering, net proceeds | $ 7 |
NET INCOME PER SHARE - Narrativ
NET INCOME PER SHARE - Narrative (Details) - Zyla Life Sciences - Warrant - $ / shares | Sep. 30, 2022 | Sep. 30, 2021 | May 31, 2020 |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Warrant, exercise price per share (in dollars per share) | $ 0.0016 | ||
Purchase price, number of shares outstanding (in shares) | 0 | 392,095 |
NET INCOME PER SHARE - Schedule
NET INCOME PER SHARE - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Basic net income per share | ||||||||
Net income (loss) | $ 4,174 | $ 7,834 | $ 9,064 | $ 3,737 | $ (14,169) | $ 4,544 | $ 21,072 | $ (5,887) |
Weighted average common shares and warrants/share equivalents outstanding (in shares) | 48,180 | 44,969 | 46,566 | 42,550 | ||||
Basic net income (loss) per share (in dollars per share) | $ 0.09 | $ 0.08 | $ 0.45 | $ (0.14) | ||||
Diluted net income per share | ||||||||
Net income (loss) | $ 4,174 | $ 7,834 | $ 9,064 | $ 3,737 | $ (14,169) | $ 4,544 | $ 21,072 | $ (5,887) |
Add: Interest Expense on convertible debt, net of tax | 497 | 0 | 487 | 0 | ||||
Adjusted Net income (loss) | $ 4,671 | $ 3,737 | $ 21,559 | $ (5,887) | ||||
Weighted average common shares and warrants/share equivalents outstanding (in shares) | 48,180 | 44,969 | 46,566 | 42,550 | ||||
Add: effect of dilutive stock-based awards and equivalents (in shares) | 1,960 | 86 | 1,462 | 0 | ||||
Add: effect of dilutive convertible debt (in shares) | 7,246 | 0 | 2,442 | 0 | ||||
Denominator for diluted income per share (in shares) | 57,386 | 45,055 | 50,470 | 42,550 | ||||
Diluted net income (loss) per share (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.42 | $ (0.14) |
NET INCOME PER SHARE - Schedu_2
NET INCOME PER SHARE - Schedule Dilutive Shares Information (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares (in shares) | 2,983 | 2,300 | 1,329 | 2,729 |
Stock-based awards and equivalents | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares (in shares) | 2,983 | 2,297 | 1,329 | 2,725 |
2021 Convertible Notes | Convertible notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive common shares (in shares) | 0 | 3 | 0 | 4 |
FAIR VALUE - Schedule of Fair V
FAIR VALUE - Schedule of Fair Value Hierarchy for Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Liabilities: | ||
Contingent consideration, current portion | $ 10,900 | $ 14,500 |
Contingent consideration | 25,759 | 23,159 |
Recurring | ||
Liabilities: | ||
Contingent consideration, current portion | 10,900 | 14,500 |
Contingent consideration | 25,759 | 23,159 |
Total | 36,659 | 37,659 |
Recurring | Level 1 | ||
Liabilities: | ||
Contingent consideration, current portion | 0 | 0 |
Contingent consideration | 0 | 0 |
Total | 0 | 0 |
Recurring | Level 2 | ||
Liabilities: | ||
Contingent consideration, current portion | 0 | 0 |
Contingent consideration | 0 | 0 |
Total | 0 | 0 |
Recurring | Level 3 | ||
Liabilities: | ||
Contingent consideration, current portion | 10,900 | 14,500 |
Contingent consideration | 25,759 | 23,159 |
Total | $ 36,659 | $ 37,659 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||
May 20, 2020 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Schedule of Cash and Cash Equivalents and Marketable Securities [Line Items] | ||||||
Fair value of contingent consideration | $ 3,900,000 | $ 300,000 | $ 6,845,000 | $ 1,902,000 | ||
Level 2 | ||||||
Schedule of Cash and Cash Equivalents and Marketable Securities [Line Items] | ||||||
Fair Value Of Convertible Notes, Par Value | 70,000,000 | 70,000,000 | ||||
Convertible Debt, Fair Value Disclosures | $ 64,300,000 | $ 64,300,000 | ||||
Revenue volatility | ||||||
Schedule of Cash and Cash Equivalents and Marketable Securities [Line Items] | ||||||
Contingent consideration, measurement input | 0.30 | 0.30 | ||||
Discounted Cash Flow | Discount rate | ||||||
Schedule of Cash and Cash Equivalents and Marketable Securities [Line Items] | ||||||
Contingent consideration, measurement input | 0.085 | 0.085 | ||||
Discounted Cash Flow | Credit spread | ||||||
Schedule of Cash and Cash Equivalents and Marketable Securities [Line Items] | ||||||
Contingent consideration, measurement input | 0.040 | 0.040 | ||||
Zyla Life Sciences | ||||||
Schedule of Cash and Cash Equivalents and Marketable Securities [Line Items] | ||||||
Contingent consideration, royalty percentage | 20% | |||||
CAMBIA | ||||||
Schedule of Cash and Cash Equivalents and Marketable Securities [Line Items] | ||||||
Contingent consideration | $ 200,000 | $ 200,000 | $ 200,000 | |||
INDOCIN | Zyla Life Sciences | Iroko | ||||||
Schedule of Cash and Cash Equivalents and Marketable Securities [Line Items] | ||||||
Contingent payment consideration, future royalties covenant, product net sales (over) | $ 20,000,000 |
FAIR VALUE - Schedule of Change
FAIR VALUE - Schedule of Changes in Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Changes in fair value of all financial liabilities measured at fair value on a recurring basis | ||||
Change in fair value of contingent consideration recorded within costs and expenses [Extensible Enumeration] | Costs and Expenses | Costs and Expenses | Costs and Expenses | Costs and Expenses |
Contingent consideration | Level 3 | ||||
Changes in fair value of all financial liabilities measured at fair value on a recurring basis | ||||
Fair value, beginning of the period | $ 36,759 | $ 37,659 | $ 37,659 | $ 38,552 |
Change in fair value of contingent consideration recorded within costs and expenses | 3,900 | 300 | 6,845 | 1,902 |
Cash payment related to contingent consideration | (4,000) | 0 | (7,845) | (2,495) |
Fair value, end of the period | $ 36,659 | $ 37,959 | $ 36,659 | $ 37,959 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||||
Deferred tax liability | $ 300 | $ 300 | |||
Income tax expense | $ (210) | $ (46) | $ (1,516) | $ (294) | |
Income tax refund | $ 8,300 |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) - Subsequent Event - License - Aquestive Therapeutics, Inc. $ in Millions | Oct. 27, 2022 USD ($) |
Subsequent Event [Line Items] | |
Upfront fees | $ 9 |
Payments for royalties | $ 6 |