Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 31, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'AMAG PHARMACEUTICALS INC. | ' |
Entity Central Index Key | '0000792977 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 21,736,357 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $30,946 | $46,293 |
Investments | 182,595 | 180,750 |
Accounts receivable, net | 8,778 | 6,410 |
Inventories | 14,694 | 12,451 |
Receivable from collaboration | 250 | 263 |
Assets held for sale | 1,934 | 2,000 |
Prepaid and other current assets | 5,900 | 6,213 |
Restricted cash | 460 | ' |
Total current assets | 245,557 | 254,380 |
Property and equipment, net | 1,741 | 3,297 |
Intangible assets, net | 16,866 | ' |
Restricted cash | 400 | 460 |
Total assets | 264,564 | 258,137 |
Current liabilities: | ' | ' |
Accounts payable | 1,001 | 3,515 |
Accrued expenses | 20,032 | 20,338 |
Deferred revenues | 10,027 | 9,104 |
Total current liabilities | 31,060 | 32,957 |
Long-term liabilities: | ' | ' |
Deferred revenues | 44,428 | 50,350 |
Acquisition-related contingent consideration, net of current portion | 13,097 | ' |
Other long-term liabilities | 1,728 | 2,033 |
Total liabilities | 90,313 | 85,340 |
Commitments and contingencies (Notes M & N) | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, par value $0.01 per share, 2,000,000 shares authorized; none issued | ' | ' |
Common stock, par value $0.01 per share, 58,750,000 shares authorized; 21,735,707 and 21,506,754 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 217 | 215 |
Additional paid-in capital | 640,176 | 632,487 |
Accumulated other comprehensive loss | -3,536 | -3,247 |
Accumulated deficit | -462,606 | -456,658 |
Total stockholders' equity | 174,251 | 172,797 |
Total liabilities and stockholders' equity | $264,564 | $258,137 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 58,750,000 | 58,750,000 |
Common stock, shares issued | 21,735,707 | 21,506,754 |
Common stock, shares outstanding | 21,735,707 | 21,506,754 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues: | ' | ' | ' | ' |
U.S. Feraheme product sales, net | $19,347 | $16,186 | $52,381 | $43,906 |
License fee and other collaboration revenues | 1,998 | 1,566 | 6,056 | 19,911 |
Other product sales and royalties | 271 | -10 | 708 | 417 |
Total revenues | 21,616 | 17,742 | 59,145 | 64,234 |
Costs and expenses: | ' | ' | ' | ' |
Cost of product sales | 2,547 | 4,323 | 8,634 | 10,193 |
Research and development expenses | 4,530 | 5,260 | 13,983 | 25,393 |
Selling, general and administrative expenses | 14,934 | 12,160 | 44,150 | 40,442 |
Restructuring expenses | ' | 562 | ' | 1,620 |
Total costs and expenses | 22,011 | 22,305 | 66,767 | 77,648 |
Other income (expense): | ' | ' | ' | ' |
Interest and dividend income, net | 246 | 295 | 773 | 1,026 |
Gains on sale of assets | ' | ' | 865 | ' |
Gains (losses) on investments, net | 4 | 2 | 36 | -1,469 |
Total other income (expense) | 250 | 297 | 1,674 | -443 |
Net loss before income taxes | -145 | -4,266 | -5,948 | -13,857 |
Income tax benefit | ' | 299 | ' | 793 |
Net loss | ($145) | ($3,967) | ($5,948) | ($13,064) |
Net loss per share: | ' | ' | ' | ' |
Basic and diluted (in dollars per share) | ($0.01) | ($0.19) | ($0.28) | ($0.61) |
Weighted average shares outstanding used to compute net loss per share: | ' | ' | ' | ' |
Basic and diluted (in shares) | 21,691 | 21,403 | 21,613 | 21,374 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ' | ' | ' | ' |
Net loss | ($145) | ($3,967) | ($5,948) | ($13,064) |
Unrealized gains (losses) on securities: | ' | ' | ' | ' |
Holding gains (losses) arising during period, net of tax | 399 | 176 | -310 | 222 |
Reclassification adjustment for (gains) losses included in net income (loss) | ' | -2 | 21 | 1,469 |
Net unrealized gains (losses) on securities | 399 | 174 | -289 | 1,691 |
Total comprehensive income (loss) | $254 | ($3,793) | ($6,237) | ($11,373) |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net loss | ($5,948) | ($13,064) |
Adjustments to reconcile net loss to net cash used in operating activities | ' | ' |
Depreciation and amortization | 2,935 | 2,742 |
Impairment loss on assets held for sale | ' | 800 |
Amortization of premium/discount on purchased securities | 2,076 | 2,181 |
Write-off of inventory | 502 | 598 |
Non-cash equity-based compensation expense | 5,886 | 5,312 |
Non-cash income tax benefit | ' | -793 |
(Gains) losses on sale of assets | -865 | ' |
(Gains) losses on investments, net | -36 | 1,469 |
Change in fair value of contingent consideration | 279 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable, net | -2,368 | -1,431 |
Inventories | 640 | 3,262 |
Receivable from collaboration | 13 | -349 |
Prepaid and other current assets | 313 | -1,339 |
Accounts payable and accrued expenses | -7,033 | -13,386 |
Deferred revenues | -4,999 | -3,668 |
Other long-term liabilities | -305 | -302 |
Total adjustments | -2,962 | -4,904 |
Net cash used in operating activities | -8,910 | -17,968 |
Cash flows from investing activities: | ' | ' |
Proceeds from sales or maturities of investments | 84,454 | 102,540 |
Purchase of investments | -88,629 | -105,305 |
Acquisition of MuGard Rights and inventory | -3,434 | ' |
Proceeds from sale of assets | 977 | ' |
Change in restricted cash | -400 | ' |
Capital expenditures | -1,206 | -47 |
Net cash used in investing activities | -8,238 | -2,812 |
Cash flows from financing activities: | ' | ' |
Payment of contingent consideration | -4 | ' |
Proceeds from the exercise of stock options | 1,629 | 56 |
Proceeds from the issuance of common stock under ESPP | 176 | 150 |
Net cash provided by financing activities | 1,801 | 206 |
Net decrease in cash and cash equivalents | -15,347 | -20,574 |
Cash and cash equivalents at beginning of the period | 46,293 | 63,474 |
Cash and cash equivalents at end of the period | 30,946 | 42,900 |
Supplemental data: | ' | ' |
Accrued fixed asset purchases | $193 | ' |
Description_of_Business
Description of Business | 9 Months Ended |
Sep. 30, 2013 | |
Description of Business | ' |
Description of Business | ' |
A. Description of Business | |
AMAG Pharmaceuticals, Inc., a Delaware corporation, was founded in 1981. We are a specialty pharmaceutical company that markets Feraheme® (ferumoxytol) Injection for Intravenous, or IV, use to treat iron deficiency anemia, or IDA, and MuGard® Mucoadhesive Oral Wound Rinse for the management of oral mucositis. | |
Currently, our principal source of revenue is from the sale of Feraheme, which was approved for marketing in the U.S. in June 2009 by the U.S. Food and Drug Administration, or the FDA, for use as an IV iron replacement therapy for the treatment of IDA in adult patients with chronic kidney disease, or CKD. We began selling Feraheme in the U.S. in July 2009 through our own commercial organization, including a specialty sales force. We sell Feraheme to authorized wholesalers and specialty distributors, who in turn, sell Feraheme to healthcare providers who administer Feraheme primarily within hospitals, hematology and oncology centers, and nephrology clinics. | |
Outside of the U.S., ferumoxytol has been granted marketing approval in Canada, Switzerland and the European Union, or EU, for use as an IV iron replacement therapy for the treatment of IDA in adult patients with CKD. The European marketing authorization is valid in the current EU member states as well as in Iceland and Norway. Under our amended agreement with Takeda Pharmaceutical Company Limited, or Takeda, Takeda has an exclusive license to market and sell ferumoxytol in Canada, the EU and Switzerland, as well as certain other geographic territories. In Canada, Takeda promotes ferumoxytol under the trade name Feraheme and in the EU and Switzerland, Takeda promotes ferumoxytol under the trade name Rienso® 30mg/ml solution for Injection. | |
On June 6, 2013, or the Acquisition Date, we entered into a License Agreement with Access Pharmaceuticals, Inc., or Access, under which we acquired the U.S. commercial rights to MuGard, or the Access License Agreement. MuGard was launched by Access in 2010 after receiving 510(k) clearance from the FDA and is indicated for the management of oral mucositis/stomatitis (that may be caused by radiotherapy and/or chemotherapy) and all types of oral wounds (mouth sores and injuries), including aphthous ulcers/canker sores and traumatic ulcers, such as those caused by oral surgery or ill-fitting dentures or braces. Under the Access License Agreement, we obtained an exclusive, royalty-bearing license, with the right to grant sublicenses, to certain intellectual property rights, including know-how, patents and trademarks, to use, import, offer for sale, sell, manufacture and commercialize MuGard in the U.S. and its territories, or the U.S. Territory, for the management of all diseases or conditions of the oropharyngeal cavity, including mucositis, or the MuGard Rights. Additional details regarding the Access License Agreement and the MuGard Rights can be found in Note G. | |
We are subject to risks common to companies in the pharmaceutical industry including, but not limited to, our primary dependence on the success of Feraheme/Rienso, uncertainty of the regulatory approval process for the broader Feraheme/Rienso indication or for potential alternative manufacturing facilities and processes, the potential development of significant safety or drug interaction problems with respect to Feraheme/Rienso, uncertainties related to the protection of our proprietary technology related to Feraheme, our dependence on third parties to manufacture Feraheme/Rienso and MuGard, uncertainties related to potential collaborations, in-licensing arrangements or acquisition agreements, competition in our industry, uncertainties regarding market acceptance of Feraheme/Rienso or MuGard, our reliance on a limited number of customers for Feraheme, uncertainties related to patient insurance coverage and third-party reimbursement rates and terms for Feraheme/Rienso or MuGard, our reliance on Takeda to commercialize Feraheme/Rienso in certain territories outside of the U.S., the potential inability of our or Access’ third-party manufacturers to operate their facilities in compliance with current good manufacturing practices and manufacture sufficient quantities of Feraheme/Rienso or MuGard, uncertainties related to the impact of current and future healthcare initiatives and legislation, our third-party manufacturers, or Access’ potential inability to obtain raw or other materials, our potential inadvertent failure to comply with reporting and payment obligations under government pricing programs, our potential inability to become profitable in the future, our limited experience commercializing and distributing a pharmaceutical product, our dependence on key personnel, the potential fluctuation of our operating results, potential differences between actual future results and the estimates or assumptions used by us in preparation of our condensed consolidated financial statements, our potential inadvertent failure to comply with the regulations of the FDA or other federal, state or foreign government agencies, the volatility of our stock price, uncertainties related to the actions of activist stockholders, potential product liability, potential legislative and regulatory changes, and potential costs and liabilities associated with pending or future litigation or patent challenges. | |
Throughout this Quarterly Report on Form 10-Q, AMAG Pharmaceuticals, Inc. and our consolidated subsidiaries are collectively referred to as “the Company,” “we,” “us,” or “our.” |
Basis_of_Presentation_and_Summ
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | ' | |||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | ' | |||||||||||||
B. Basis of Presentation and Summary of Significant Accounting Policies | ||||||||||||||
Basis of Presentation | ||||||||||||||
These condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments necessary for a fair statement of the financial position and results of operations of the Company for the interim periods presented. Such adjustments consisted only of normal recurring items. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. As of the Acquisition Date, our financial statements include the assets, liabilities, operating results and cash flows related to the MuGard Rights. | ||||||||||||||
In accordance with accounting principles generally accepted in the United States of America for interim financial reports and the instructions for Form 10-Q and the rules of the Securities and Exchange Commission, certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. Our accounting policies are described in the Notes to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2012. Interim results are not necessarily indicative of the results of operations for the full year. These interim financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2012. | ||||||||||||||
Use of Estimates and Assumptions | ||||||||||||||
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. The most significant estimates and assumptions are used in, but are not limited to, revenue recognition related to product sales and collaboration agreements, product sales allowances and accruals, assessing investments for potential other-than-temporary impairment and determining values of investments, the fair value of our assets held for sale, contingent consideration, the impairment of long-lived assets, including intangible assets, accrued expenses, income taxes and equity-based compensation expense. Actual results could differ materially from those estimates. | ||||||||||||||
Principles of Consolidation | ||||||||||||||
The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries, AMAG Europe Limited and AMAG Securities Corporation. AMAG Europe Limited was incorporated in October 2009 in London, England. AMAG Securities Corporation is a Massachusetts corporation which was incorporated in August 2007. All intercompany account balances and transactions between the companies have been eliminated. | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Under current accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. | ||||||||||||||
Current accounting guidance establishes a hierarchy used to categorize how fair value is measured and which is based on three levels of inputs, of which the first two are considered observable and the third unobservable, as follows: | ||||||||||||||
Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||
We hold certain assets and liabilities that are required to be measured at fair value on a recurring basis, including our cash equivalents, investments, and contingent consideration. The following tables represent the fair value hierarchy as of September 30, 2013 and December 31, 2012 for those assets and liabilities that we measure at fair value on a recurring basis (in thousands): | ||||||||||||||
Fair Value Measurements at September 30, 2013 Using: | ||||||||||||||
Quoted Prices in Active | Significant Other | Significant | ||||||||||||
Markets for Identical | Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Assets: | ||||||||||||||
Money market funds | $ | 22,736 | $ | 22,736 | $ | — | $ | — | ||||||
Corporate debt securities | 129,664 | — | 129,664 | — | ||||||||||
U.S. treasury and government agency securities | 52,931 | — | 52,931 | — | ||||||||||
Total Assets | $ | 205,331 | $ | 22,736 | $ | 182,595 | $ | — | ||||||
Liabilities: | ||||||||||||||
Acquisition-related contingent consideration | $ | 13,975 | $ | — | $ | — | $ | 13,975 | ||||||
Total Liabilities | $ | 13,975 | $ | — | $ | — | $ | 13,975 | ||||||
Fair Value Measurements at December 31, 2012 Using: | ||||||||||||||
Quoted Prices in Active | Significant Other | Significant | ||||||||||||
Markets for Identical | Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Money market funds | $ | 24,058 | $ | 24,058 | $ | — | $ | — | ||||||
Corporate debt securities | 111,690 | — | 111,690 | — | ||||||||||
U.S. treasury and government agency securities | 59,569 | — | 59,569 | — | ||||||||||
Commercial paper | 9,491 | — | 9,491 | — | ||||||||||
$ | 204,808 | $ | 24,058 | $ | 180,750 | $ | — | |||||||
With the exception of our money market funds and our acquisition-related contingent consideration, the fair value of our investments listed in the table above is primarily determined from independent pricing services. Independent pricing services normally derive security prices from recently reported trades for identical or similar securities, making adjustments based upon other significant observable market transactions. At the end of each reporting period, we perform quantitative and qualitative analyses of prices received from third parties to determine whether prices are reasonable estimates of fair value. After completing our analyses, we did not adjust or override any fair value measurements provided by our pricing services as of either September 30, 2013 or December 31, 2012. In addition, there were no transfers or reclassifications of any securities between Level 1 and Level 2 during the nine months ended September 30, 2013. | ||||||||||||||
We are accounting for the acquisition of the MuGard Rights as a business combination under the acquisition method of accounting. Additional details regarding the Access License Agreement and the MuGard Rights can be found in Note G. The fair value measurements of contingent consideration obligations and the related intangible asset arising from business combinations are determined using unobservable, or Level 3, inputs. These inputs include (i) the estimated amount and timing of projected cash flows; (ii) the probability of the achievement of the factors on which the contingency is based; and (iii) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases (decreases) in any of those inputs in isolation could result in a significantly lower or higher fair value measurement. | ||||||||||||||
During the three months ended September 30, 2013, we completed the valuation for the acquisition of the MuGard Rights. Some of the amounts previously estimated have changed during the measurement period, including the amounts and timing of cash flows related to the royalties we expect to pay to Access under the Access License Agreement. The measurement period adjustments represent revisions to estimates in the interim period subsequent to the acquisition and initial accounting date. As a result of these changes, the fair value of the contingent consideration, which was originally assessed to be $14.0 million as of the Acquisition Date has been adjusted to $13.7 million as of the Acquisition Date. These measurement period adjustments have been retrospectively applied to our condensed consolidated balance sheet at June 30, 2013. | ||||||||||||||
The following table presents a reconciliation of contingent consideration obligations related to our acquisition of the MuGard Rights measured on a recurring basis using Level 3 inputs as of September 30, 2013 (in thousands): | ||||||||||||||
Balance as of June 6, 2013 | $ | — | ||||||||||||
Acquisition date fair value of contingent consideration | 13,700 | |||||||||||||
Balance as of June 30, 2013 | $ | 13,700 | ||||||||||||
Payments made | (4 | ) | ||||||||||||
Adjustments to fair value of contingent consideration | 279 | |||||||||||||
Balance as of September 30, 2013 | $ | 13,975 | ||||||||||||
During the three and nine months ended September 30, 2013, we recorded $0.3 million in expense related to the increase in fair value of the contingent consideration liability. This expense represents the time value of money impact of the contingent consideration fair value assessment as of September 30, 2013 and is included in selling, general and administrative expenses in our condensed consolidated statements of operations. As of September 30, 2013, we estimate that the undiscounted royalty amounts we could pay under the Access License Agreement may range from $28.0 million to $34.0 million over a ten year period, which is our best estimate of the period over which we expect the majority of the asset’s cash flows to be derived. This measure is based on significant Level 3 inputs not observable in the market. Key assumptions include a discount rate of approximately 15%. As of September 30, 2013, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the Acquisition Date. | ||||||||||||||
In addition, in connection with the acquisition of the MuGard Rights, we acquired an intangible asset of $16.9 million, which was originally determined based on fair value measurements. These measures were based on significant Level 3 inputs not observable in the market. Key assumptions include a discount rate of 19%. We believe the estimated fair values of the MuGard Rights are based on reasonable assumptions, however, we cannot provide assurance that the underlying assumptions used to forecast the cash flows will materialize as we estimated and thus, our actual results may vary significantly from the estimated results. | ||||||||||||||
Assets Held for Sale | ||||||||||||||
During 2012, we determined that certain assets related to our Cambridge, Massachusetts manufacturing facility, including the related land, building and certain equipment, met the criteria established by current accounting guidance for classifying assets as held for sale. As a result, during 2012, we reclassified these assets from property and equipment to assets held for sale in our condensed consolidated balance sheet. In anticipation of a future sale, we valued these assets at the lower of their carrying amount or fair value less cost to sell to arrive at the estimated fair value of $2.0 million as of December 31, 2012. During the nine months ended September 30, 2013, we sold $0.5 million of equipment related to our Cambridge, Massachusetts manufacturing facility. In connection with these sales, we recorded a gain of $0.4 million during the nine months ended September 30, 2013 and reduced the carrying value of our assets held for sale by $0.1 million to $1.9 million at September 30, 2013. The fair values of the land, building, and equipment were estimated using Level 3 inputs, which included offers received from potential purchasers, real estate appraisals and other estimates from third-parties. On October 30, 2013, we sold our Cambridge, Massachusetts manufacturing facility, including the land, building and related personal property, to 61 Mooney Street LLC. Refer to Note P for additional information. | ||||||||||||||
Revenue Recognition and Related Sales Allowances and Accruals | ||||||||||||||
An analysis of our product sales allowances and accruals for the three and nine months ended September 30, 2013 and 2012 is as follows (in thousands): | ||||||||||||||
Three Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Provision for U.S. Feraheme sales allowances and accruals | ||||||||||||||
Discounts and chargebacks | $ | 10,205 | $ | 6,644 | ||||||||||
Government and other rebates | 3,044 | 1,595 | ||||||||||||
Medicaid rebate reserve adjustment | (625 | ) | (861 | ) | ||||||||||
Returns | 265 | (1,122 | ) | |||||||||||
Total provision for U.S. Feraheme sales allowances and accruals | $ | 12,889 | $ | 6,256 | ||||||||||
Total gross U.S. Feraheme sales | $ | 32,236 | $ | 22,442 | ||||||||||
Total provision for U.S. Feraheme sales allowances and accruals as a percent of total gross U.S. Feraheme sales | 40 | % | 28 | % | ||||||||||
Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Provision for U.S. Feraheme sales allowances and accruals | ||||||||||||||
Discounts and chargebacks | $ | 26,925 | $ | 19,382 | ||||||||||
Government and other rebates | 8,106 | 4,487 | ||||||||||||
Medicaid rebate reserve adjustment | (568 | ) | (621 | ) | ||||||||||
Returns | 697 | (1,680 | ) | |||||||||||
Total provision for U.S. Feraheme sales allowances and accruals | $ | 35,160 | $ | 21,568 | ||||||||||
Total gross U.S. Feraheme sales | $ | 87,541 | $ | 65,474 | ||||||||||
Total provision for U.S. Feraheme sales allowances and accruals as a percent of total gross U.S. Feraheme sales | 40 | % | 33 | % | ||||||||||
We generally offer our wholesalers, specialty distributors and other customers a limited right to return Feraheme purchased directly from us, based on the product’s expiration date which, once packaged, is currently five years in the U.S. Reserves for Feraheme returns for U.S. sales are recorded in the period the related revenue is recognized, resulting in a reduction to product sales. We evaluate our estimated product returns rate each period based on the historical return patterns and known or expected changes in the marketplace. We did not significantly adjust our reserve for product returns during the nine months ended September 30, 2013. During the nine months ended September 30, 2012, we reduced our reserve by approximately $2.1 million as a result of a lower expected rate of product returns based on our actual returns experience to date as well as the lapse of the product return period on certain manufactured Feraheme lots that carried a two-year expiration period. The product returns provision applied to gross product sales for the nine months ended September 30, 2013 was $0.7 million as compared to a credit of $1.7 million for the nine months ended September 30, 2012. | ||||||||||||||
In addition, as part of our sales allowances and accruals, we reserve for estimated Medicaid rebates associated with instances where Medicaid will act as the insurer and for which we are required to pay a statutory rebate to Medicaid. We regularly assess our Medicaid reserve balance and the rate at which we accrue for claims against product sales. If we determine in future periods that our actual rebate experience is not indicative of expected claims, if our actual claims experience changes, or if other factors affect estimated claims rates, we may be required to adjust our current Medicaid accumulated reserve estimate, which could significantly affect our earnings in the period of the adjustment. During each of the nine months ended September 30, 2013 and 2012, we revised our estimated Medicaid reserve rate based on actual product-specific rebate claims received since the July 2009 launch of Feraheme, our expectations of state level activities, and estimated rebate claims not yet submitted, which resulted in a $0.6 million reduction of our then estimated Medicaid rebate reserve related to prior period Feraheme sales. These changes in estimates are reflected as an increase in our net product sales for the nine months ended September 30, 2013 and 2012 and resulted in reductions to our gross to net percentage in the respective periods. The reduction of our estimated Medicaid rebate reserve had an impact of $0.03 per basic and diluted share for the each of the nine months ended September 30, 2013 and 2012. | ||||||||||||||
Acquisitions | ||||||||||||||
We account for acquired businesses using the acquisition method of accounting, which requires, with limited exceptions, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the estimated fair values of the net assets acquired is recorded as goodwill. | ||||||||||||||
Intangible Assets | ||||||||||||||
Intangible assets with definite useful lives are amortized to their estimated residual values over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | ||||||||||||||
Contingent Consideration | ||||||||||||||
Contingent consideration arising from a business combination is included as part of the acquisition cost and is recognized at fair value as of the acquisition date. Any liability resulting from contingent consideration is remeasured to its fair value at each reporting date until the contingency is resolved. These changes in fair value are recognized in our condensed consolidated statements of operations. | ||||||||||||||
Concentrations and Significant Customer Information | ||||||||||||||
Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash, investments, and accounts receivable. As of September 30, 2013, our cash, cash equivalents and investments amounted to approximately $213.5 million. We currently invest our excess cash primarily in U.S. government and agency money market funds, and investments in corporate debt securities and U.S. treasury and government agency securities. As of September 30, 2013, we had approximately $22.7 million of our total $30.9 million cash and cash equivalents balance invested in institutional money market funds, of which $13.9 million was invested in a single fund, which is collateralized solely by U.S. treasury and government agency securities. | ||||||||||||||
Our operations are located solely within the U.S. We are focused principally on developing, manufacturing, and commercializing Feraheme/Rienso and commercializing MuGard. We perform ongoing credit evaluations of our customers and generally do not require collateral. The following table sets forth customers who represented 10% or more of our total revenues for the nine months ended September 30, 2013 and 2012: | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
AmerisourceBergen Drug Corporation | 43 | % | 34 | % | ||||||||||
McKesson Corporation | 23 | % | 17 | % | ||||||||||
Cardinal Health, Inc. | 16 | % | 11 | % | ||||||||||
Takeda Pharmaceuticals Company Limited | 11 | % | 31 | % | ||||||||||
In addition, approximately 32% and 33% of our end-user demand during the nine months ended September 30, 2013 and 2012, respectively, was generated by members of a single group purchasing organization with which we have contracted. Revenues from customers outside of the U.S. amounted to approximately 11% and 32% of our total revenues for the nine months ended September 30, 2013 and 2012, respectively, and were primarily related to collaboration revenue recognized in connection with our collaboration agreement with Takeda, which is headquartered in Japan. | ||||||||||||||
We are currently solely dependent on a single supply chain for our Feraheme/Rienso drug substance and finished drug product. We are exposed to a significant loss of revenue from the sale of Feraheme/Rienso if our suppliers and/or manufacturers cannot fulfill demand for any reason. |
Investments
Investments | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Investments | ' | |||||||||||||
Investments | ' | |||||||||||||
C. Investments | ||||||||||||||
As of September 30, 2013 and December 31, 2012, our investments equaled $182.6 million and $180.8 million, respectively, and consisted of securities classified as available-for-sale in accordance with accounting standards which provide guidance related to accounting and classification of certain investments in debt and equity securities. | ||||||||||||||
The following is a summary of our investments as of September 30, 2013 and December 31, 2012 (in thousands): | ||||||||||||||
September 30, 2013 | ||||||||||||||
Gross | Gross | Estimated | ||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||
Cost | Gains | Losses | Value | |||||||||||
Corporate debt securities | ||||||||||||||
Due in one year or less | $ | 45,645 | $ | 67 | $ | (2 | ) | $ | 45,710 | |||||
Due in one to three years | 84,020 | 92 | (158 | ) | 83,954 | |||||||||
U.S. treasury and government agency securities | ||||||||||||||
Due in one year or less | 22,551 | 25 | — | 22,576 | ||||||||||
Due in one to three years | 30,321 | 53 | (19 | ) | 30,355 | |||||||||
Total investments | $ | 182,537 | $ | 237 | $ | (179 | ) | $ | 182,595 | |||||
December 31, 2012 | ||||||||||||||
Gross | Gross | Estimated | ||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||
Cost | Gains | Losses | Value | |||||||||||
Corporate debt securities | ||||||||||||||
Due in one year or less | $ | 52,332 | $ | 88 | $ | (6 | ) | $ | 52,414 | |||||
Due in one to three years | 59,176 | 137 | (37 | ) | 59,276 | |||||||||
U.S. treasury and government agency securities | ||||||||||||||
Due in one year or less | 24,795 | 86 | — | 24,881 | ||||||||||
Due in one to three years | 34,606 | 84 | (2 | ) | 34,688 | |||||||||
Commercial paper | ||||||||||||||
Due in one year or less | 9,494 | 1 | (4 | ) | 9,491 | |||||||||
Total investments | $ | 180,403 | $ | 396 | $ | (49 | ) | $ | 180,750 | |||||
Impairments and Unrealized Losses on Investments | ||||||||||||||
We did not recognize any other-than-temporary impairment losses in our condensed consolidated statements of operations related to our securities during any of the three or nine month periods ended September 30, 2013 and 2012. We considered various factors, including the length of time that each security was in an unrealized loss position and our ability and intent to hold these securities until the recovery of their amortized cost basis occurs. Future events may occur, or additional information may become available, which may cause us to identify credit losses where we do not expect to receive cash flows sufficient to recover the entire amortized cost basis of a security and which may necessitate the recording of future realized losses on securities in our portfolio. Significant losses in the estimated fair values of our investments could have a material adverse effect on our earnings in future periods. | ||||||||||||||
Realized Gains and Losses on Investments | ||||||||||||||
Gains and losses are determined on the specific identification method. Realized gains were insignificant during both the three and nine months ended September 30, 2013. During the nine months ended September 30, 2012 we recorded realized losses of $1.5 million to our condensed consolidated statements of operations related to the sale of our then-remaining auction rate securities portfolio. |
Accounts_Receivable_Net
Accounts Receivable, Net | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Accounts Receivable, Net | ' | |||||
Accounts Receivable, Net | ' | |||||
D. Accounts Receivable, Net | ||||||
Our net accounts receivable were $8.8 million and $6.4 million as of September 30, 2013 and December 31, 2012, respectively, and primarily represented amounts due from wholesalers and distributors to whom we sell Feraheme directly. Accounts receivable are recorded net of reserves for estimated chargeback obligations, prompt payment discounts and any allowance for doubtful accounts. Reserves for other sales-related allowances such as rebates, distribution and other fees, and product returns are included in accrued expenses in our condensed consolidated balance sheets. | ||||||
Customers which represented greater than 10% of our accounts receivable balances as of September 30, 2013 and December 31, 2012 were as follows: | ||||||
September 30, 2013 | December 31, 2012 | |||||
AmerisourceBergen Drug Corporation | 48 | % | 48 | % | ||
Cardinal Health, Inc. | 28 | % | 18 | % | ||
McKesson Corporation | 19 | % | 28 | % |
Inventories
Inventories | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventories | ' | |||||||
Inventories | ' | |||||||
E. Inventories | ||||||||
Our major classes of inventories were as follows as of September 30, 2013 and December 31, 2012 (in thousands): | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Raw materials | $ | 5,151 | $ | 2,652 | ||||
Work in process | 5,835 | 2,524 | ||||||
Finished goods | 3,708 | 7,275 | ||||||
Total inventories | $ | 14,694 | $ | 12,451 | ||||
In May 2013, Takeda recalled one specific batch of Rienso from the Swiss market. The batch was only distributed to and sold in Switzerland and the recall was limited to the specific batch and specifically in Switzerland. We and Takeda have completed an investigation regarding the specific Swiss batch of Rienso and the reported adverse events and Takeda has filed a report with the Swiss Agency for Therapeutic Products, commonly known as SwissMedic. During the nine months ended September 30, 2013, we expensed $0.5 million of inventory related to this batch of Rienso which we no longer believed was suitable for sale and which was the subject of the voluntary recall by Takeda in the Swiss market. |
Property_and_Equipment_Net
Property and Equipment, Net | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Property and Equipment, Net | ' | |||||||
Property and Equipment, Net | ' | |||||||
F. Property and Equipment, Net | ||||||||
Property and equipment consisted of the following as of September 30, 2013 and December 31, 2012, respectively (in thousands): | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Buildings and improvements | $ | 953 | $ | 5,373 | ||||
Laboratory and production equipment | 343 | 115 | ||||||
Furniture and fixtures | 1,828 | 5,326 | ||||||
Construction in process | 34 | 228 | ||||||
3,158 | 11,042 | |||||||
Less - accumulated depreciation | (1,417 | ) | (7,745 | ) | ||||
Property and equipment, net | $ | 1,741 | $ | 3,297 | ||||
In September 2013, we relocated our corporate offices from Lexington, Massachusetts to Waltham, Massachusetts. In connection with our relocation, we recorded $1.4 million of new leasehold improvements and furniture and fixtures related to our new location. In addition, during the nine months ended September 30, 2013, we recorded $2.8 million of depreciation expense, including $1.9 million of accelerated depreciation expense related to fixed assets at our prior office facility. |
Business_Combination
Business Combination | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Business Combination | ' | ||||
Business Combination | ' | ||||
G. Business Combination | |||||
As part of our strategy to expand our portfolio with additional commercial-stage specialty products, in June 2013, we entered into the Access License Agreement pursuant to which we obtained an exclusive, royalty-bearing license, with the right to grant sublicenses, to certain intellectual property rights, including know-how, patents and trademarks, to use, import, offer for sale, sell, manufacture and commercialize MuGard in the U.S. Territory for the management of all diseases or conditions of the oropharyngeal cavity, including mucositis. | |||||
MuGard was launched by Access in 2010 after receiving 510(k) clearance from the FDA and is indicated for the management of oral mucositis/stomatitis (that may be caused by radiotherapy and/or chemotherapy) and all types of oral wounds (mouth sores and injuries), including aphthous ulcers/canker sores and traumatic ulcers, such as those caused by oral surgery or ill-fitting dentures or braces. | |||||
Access will continue to manufacture MuGard and we have entered into or plan to enter into separate quality and supply agreements with Access under which we will purchase MuGard inventory from Access. Our inventory purchases will be at the price actually paid by Access to purchase it from a third-party plus a mark-up to cover administration, handling and overhead. | |||||
In consideration for the license, we paid Access an upfront payment of $3.3 million in June 2013. We will also pay Access royalties on future net sales of MuGard until the later of (i) the expiration of the licensed patents or (ii) the tenth anniversary of the first commercial sale of MuGard under the Access License Agreement in the U.S. Territory, or the Royalty Term. These tiered, double-digit royalty rates decrease for any part of the Royalty Term occurring after the expiration of the licensed patents and are subject to off-set against certain of our expenses. After the expiration of the Royalty Term, the license shall become a fully paid-up, royalty-free and perpetual license in the U.S. Territory. In addition to making an upfront payment of $3.3 million, we also acquired $0.2 million of existing MuGard inventory from Access, which was included in our condensed consolidated balance sheet as of the Acquisition Date. | |||||
We did not assume any pre-existing liabilities related to the MuGard business, contingent or otherwise, arising prior to the Acquisition Date. We are accounting for the acquisition of the MuGard Rights as a business combination under the acquisition method of accounting since we acquired the U.S. commercial rights for MuGard and inventory, and obtained access to certain related regulatory assets, employees and other assets, including certain patent and trademark rights, contracts, and related books and records, held by Access which are exclusively related to MuGard (inputs), including the infrastructure to sell, distribute and market MuGard (processes) and net sales of MuGard (outputs). In addition, during the term of the Access License Agreement, we will have control over sales, distribution and marketing of MuGard in the U.S. as Access has assigned to us all of its right, title and interest in MuGard-related internet and social media outlets and other sales, marketing and promotional materials currently owned or controlled by Access. Access will no longer commercialize, market, promote, sell or make public communications relating to MuGard in the U.S Territory, except as may be agreed to by us. Access has also agreed to not, directly or indirectly, research, develop, market, sell or commercialize any medical devices that directly compete with MuGard for the treatment of any diseases or conditions of the oropharyngeal cavity in the U.S. Territory. | |||||
We estimated the fair value of the acquired MuGard Rights using the income approach. The income approach uses valuation techniques to convert future amounts to a single present amount (discounted). This approach begins with a forecast of the net cash flows expected to be generated by the asset over its estimated useful life. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. Some of the more significant estimates and assumptions inherent in the income approach include the following: | |||||
· The amount and timing of projected future cash flows, adjusted for the probability of marketing success; | |||||
· The discount rate selected to measure the risks inherent in the future cash flows; and | |||||
· An assessment of the asset’s life-cycle and the competitive trends impacting the asset. | |||||
The following table summarizes the total consideration for the MuGard Rights (in thousands): | |||||
Consideration: | |||||
Cash | $ | 3,434 | |||
Acquisition-related contingent consideration | 13,700 | ||||
Total consideration | $ | 17,134 | |||
The $17.1 million total consideration includes the estimated fair value of the contingent consideration at the Acquisition Date. During the three months ended September 30, 2013, we completed the valuation for the acquisition of the MuGard Rights. Some of the amounts previously estimated have changed during the measurement period, including the amounts and timing of cash flows related to the royalties we expect to pay to Access under the Access License Agreement. As a result of these changes, the fair value of the contingent consideration, which was originally assessed to be $14.0 million as of the Acquisition Date, has been adjusted to $13.7 million as of the Acquisition Date, and the fair value of the intangible asset, which was originally assessed to be $17.2 million, was determined to be $16.9 million as of the Acquisition Date, both reflecting an adjustment of $0.3 million. The revised Acquisition Date fair value of the contingent consideration was determined based on various market factors, including an analysis of estimated sales using a discount rate of approximately 15%. As of September 30, 2013, we estimated that the undiscounted royalty amounts we could pay under the Access License Agreement may range from $28.0 million to $34.0 million over a ten year period, which is our best estimate of the period over which we expect the majority of the asset’s cash flows to be derived. The $0.3 million adjustment to the fair value estimate was based on significant Level 3 inputs not observable in the market. The measurement period adjustments represent updates made to the preliminary valuation based on revisions to estimates in the interim period subsequent to the acquisition and initial accounting date. These measurement period adjustments have been retrospectively applied to our condensed consolidated balance sheet at June 30, 2013. There was no impact from this adjustment to our condensed consolidated statement of operations for the three months ended June 30, 2013. | |||||
We have classified $0.9 million of the contingent consideration as a short-term liability, which was included in accrued expenses in our condensed consolidated balance sheet as of September 30, 2013. | |||||
The following table summarizes the estimated fair values of the assets acquired related to the business combination as of the Acquisition Date (in thousands): | |||||
Assets Acquired: | |||||
MuGard intangible asset | $ | 16,893 | |||
Inventory | 241 | ||||
Net identifiable assets acquired | $ | 17,134 | |||
The Acquisition Date fair value of the intangible asset was determined based on various market factors, including an analysis of estimated sales using a discount rate of 19%. This measure is based on significant Level 3 inputs not observable in the market. Such valuations require significant estimates and assumptions including but not limited to: estimating future cash flows from product sales and developing appropriate discount and probability rates. We believe the estimated fair values of the MuGard Rights are based on reasonable assumptions, however, we cannot provide assurance that the underlying assumptions used to forecast the cash flows will materialize as we estimated and thus, our actual results may vary significantly from the estimated results. | |||||
Commencing from the Acquisition Date, our condensed consolidated financial statements include the assets, liabilities, operating results and cash flows from the acquired product. As a result, our condensed consolidated financial statements for the nine months ended September 30, 2013 reflect less than four months of MuGard activity. Revenues related to MuGard sales for the nine months ended September 30, 2013 were not material. | |||||
Transaction costs are not included as a component of consideration transferred and are expensed as incurred. We incurred approximately $0.8 million of acquisition-related costs during the nine months ended September 30, 2013. These costs were primarily related to professional and legal fees and are included in selling, general and administrative expenses in our condensed consolidated statements of operations for the nine months ended September 30, 2013. | |||||
Pro forma results of operations would not be materially different as a result of the acquisition of the MuGard Rights and therefore are not presented. |
Intangible_Assets_Net
Intangible Assets, Net | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Intangible Assets, Net | ' | ||||
Intangible Assets, Net | ' | ||||
H. Intangible Assets, Net | |||||
In June 2013, we acquired the MuGard Rights from Access and recorded $16.9 million to finite-lived intangible assets based on the estimated fair value of the MuGard Rights as of the Acquisition Date. | |||||
We will amortize the MuGard Rights using an economic consumption model over ten years, which represents our best estimate of the period over which we expect the majority of the asset’s cash flows to be derived. We believe this is the best approximation of the period over which we will derive the majority of value of the MuGard Rights. We recorded less than $0.1 million of amortization related to the MuGard Rights in cost of product sales in our condensed consolidated statements of operations for each of the three and nine months ended September 30, 2013 and as a result, our intangible asset related to the MuGard Rights remained at $16.9 million as of September 30, 2013. | |||||
Intangible assets are reviewed for impairment at least annually and whenever facts or circumstances suggest that the carrying value of these assets may not be recoverable. Our policy is to identify and record impairment losses, if necessary, on intangible assets when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. | |||||
We expect future annual amortization expense related to our intangible asset to be as follows (in thousands): | |||||
Period | Estimated | ||||
Amortization | |||||
Expense | |||||
Year Ended December 31, 2013 | $ | 41 | |||
Year Ended December 31, 2014 | 660 | ||||
Year Ended December 31, 2015 | 915 | ||||
Year Ended December 31, 2016 | 1,215 | ||||
Year Ended December 31, 2017 | 1,616 | ||||
Year Ended December 31, 2018 | 2,103 | ||||
Thereafter | 10,316 | ||||
Total | $ | 16,866 |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Taxes | ' |
Income Taxes | ' |
I. Income Taxes | |
Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using future enacted rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. | |
For the three and nine months ended September 30, 2013, we did not recognize any tax expense or benefit due to our continued net operating loss position. For the three and nine months ended September 30, 2012, we recognized a $0.3 million and $0.8 million current federal income tax benefit, respectively, which was primarily the result of a decrease in unrealized losses associated with the sale of our then-remaining auction rate security portfolio in the second quarter of 2012. Due to the uncertainty surrounding the realization of favorable tax attributes in future tax returns, we have recorded a full valuation allowance against our otherwise recognizable net deferred tax assets. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accumulated Other Comprehensive Loss | ' | |||||||
Accumulated Other Comprehensive Loss | ' | |||||||
J. Accumulated Other Comprehensive Loss | ||||||||
In February 2013, the Financial Accounting Standards Board issued an amendment to the accounting guidance for the reporting of amounts reclassified out of accumulated other comprehensive loss, or AOCI. The amendment expands the existing disclosure by requiring entities to present information about significant items reclassified out of AOCI by component. In addition, an entity is required to provide information about the effects on net income of significant amounts reclassified out of each component of AOCI to net income either on the face of the income statement or as a separate disclosure in the notes of the financial statements. The amendment is effective for annual or interim reporting periods beginning after December 31, 2012. The adoption of this accounting pronouncement did not have a material impact on our financial statement disclosures. | ||||||||
The changes in AOCI, net of tax, for the three and nine months ended September 30, 2013 consisted of the following (in thousands): | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, 2013 | September 30, 2013 | |||||||
Beginning Balance | $ | (3,935 | ) | $ | (3,247 | ) | ||
Other comprehensive income (loss) before reclassifications | 399 | (310 | ) | |||||
Gain (loss) reclassified from other accumulated comprehensive loss | — | 21 | ||||||
Ending Balance | $ | (3,536 | ) | $ | (3,536 | ) | ||
The amounts reclassified from other comprehensive loss for the nine months ended September 30, 2013 primarily represented realized gains on investments, which are included in our condensed consolidated statement of operations under “Gains (losses) on investments, net.” |
Net_Loss_per_Share
Net Loss per Share | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Net Loss per Share | ' | |||||||||||||
Net Loss per Share | ' | |||||||||||||
K. Net Loss per Share | ||||||||||||||
We compute basic net loss per share by dividing net loss by the weighted average number of common shares outstanding during the relevant period. The components of basic and diluted net loss per share were as follows (in thousands, except per share data): | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Net loss | $ | (145 | ) | $ | (3,967 | ) | $ | (5,948 | ) | $ | (13,064 | ) | ||
Weighted average common shares outstanding | 21,691 | 21,403 | 21,613 | 21,374 | ||||||||||
Net loss per share: | ||||||||||||||
Basic and diluted | $ | (0.01 | ) | $ | (0.19 | ) | $ | (0.28 | ) | $ | (0.61 | ) | ||
The following table sets forth the potential common shares issuable upon the exercise of outstanding options and the vesting of restricted stock units (prior to consideration of the treasury stock method), that were excluded from our computation of diluted net loss per share because such options and restricted stock units were anti-dilutive (in thousands): | ||||||||||||||
As of September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Options to purchase shares of common stock | 2,717 | 2,315 | ||||||||||||
Shares of common stock issuable upon the vesting of restricted stock units | 497 | 468 | ||||||||||||
Total | 3,214 | 2,783 |
EquityBased_Compensation
Equity-Based Compensation | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Equity-Based Compensation | ' | |||||||||||||
Equity-Based Compensation | ' | |||||||||||||
L. Equity-Based Compensation | ||||||||||||||
We currently maintain two equity compensation plans, including our Third Amended and Restated 2007 Equity Incentive Plan, or the 2007 Plan, and our Amended and Restated 2000 Stock Plan, or the 2000 Plan. | ||||||||||||||
Third Amended and Restated 2007 Equity Incentive Plan | ||||||||||||||
Our 2007 Plan was originally approved by our stockholders in November 2007. In each of May 2009, May 2010 and May 2013, our stockholders approved proposals to amend and restate our 2007 Plan to, among other things, increase the number of shares authorized for issuance thereunder by 600,000, 800,000 and 1,100,000 shares, respectively. | ||||||||||||||
As of September 30, 2013, we have granted options and restricted stock units covering 6,220,350 shares of common stock under our 2007 Plan, of which 2,532,981 stock options and 626,122 restricted stock units have expired or terminated, and of which 137,865 options have been exercised and 423,997 shares of common stock have been issued pursuant to restricted stock units that became fully vested. The number of options and restricted stock units outstanding under this plan as of September 30, 2013 was 2,157,148 and 342,237, respectively. The remaining number of shares available for future grants as of September 30, 2013 was 2,074,125, not including shares subject to outstanding awards under the 2000 Plan, which will be added to the total number of shares available for issuance under the 2007 Plan to the extent that such awards expire or terminate for any reason prior to exercise. All outstanding stock options granted under our 2007 Plan have an exercise price equal to the closing price of a share of our common stock on the grant date and have either a seven or ten-year term. | ||||||||||||||
Amended and Restated 2000 Stock Plan | ||||||||||||||
As of September 30, 2013, the number of shares underlying outstanding options which were issued pursuant to our 2000 Plan was 104,941. There were no restricted stock units outstanding as of September 30, 2013. In November 2007, the 2000 Plan was succeeded by our 2007 Plan and, accordingly, no further grants may be made under this plan. Any shares that remained available for issuance under the 2000 Plan as of the date of adoption of the 2007 Plan are included in the number of shares that may be issued under the 2007 Plan. Any shares subject to outstanding awards granted under the 2000 Plan that expire or terminate for any reason prior to exercise will be added to the total number of shares available for issuance under the 2007 Plan. | ||||||||||||||
Other Equity Compensation Grants | ||||||||||||||
In February 2013, we granted restricted stock units to certain members of our senior management covering a maximum of 82,500 shares of common stock, which are subject to a performance condition tied to the price of our common stock. These restricted stock units vest, if at all, at the end of the three-year period ending December 31, 2015 based on the achievement of a minimum, target or maximum stock price range. In the event that the minimum stock price range is not achieved at the measurement date, none of the restricted stock units will vest. The maximum total fair value of these restricted stock units is $0.7 million, which are being recognized to expense over a period of three years from the date of grant, net of any estimated and actual forfeitures. | ||||||||||||||
During the nine months ended September 30, 2013 and 2012, our Board of Directors, or the Board, granted options to purchase 210,000 and 300,000 shares of our common stock, respectively, to certain members of our senior management to induce them to accept employment with us. These options were granted at an exercise price equal to the fair market value of a share of our common stock on the respective grant dates. The options will be exercisable in four equal annual installments beginning on the first anniversary of the respective grant dates. Of the 210,000 options granted in 2013, 45,000 were forfeited during the nine months ended September 30, 2013. The assumptions used to value these options are substantially the same as those described in Note I to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2012. In addition, during the nine months ended September 30, 2013 and 2012, our Board granted 95,000 and 100,000 restricted stock units, respectively, to certain members of our senior management to induce them to accept employment with us. These grants will vest in four equal annual installments beginning on the first anniversary of the respective grant dates. Of the 95,000 restricted stock units granted in 2013, 15,000 were forfeited during the nine months ended September 30, 2013. The foregoing grants were made pursuant to inducement grants outside of our 2007 Plan as permitted under the NASDAQ Global Market rules. We assessed the terms of these awards and determined there was no possibility that we would have to settle these awards in cash and therefore, equity accounting was applied. | ||||||||||||||
Equity-based compensation expense | ||||||||||||||
Equity-based compensation expense, for the three and nine months ended September 30, 2013 and 2012 consisted of the following (in thousands): | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Cost of product sales | $ | 25 | $ | 52 | $ | 83 | $ | 198 | ||||||
Research and development | 337 | 473 | 1,634 | 1,420 | ||||||||||
Selling, general and administrative | 1,303 | 1,525 | 4,169 | 3,694 | ||||||||||
Total equity-based compensation expense | $ | 1,665 | $ | 2,050 | $ | 5,886 | $ | 5,312 | ||||||
We reduce the equity-based compensation expense being recognized to account for estimated forfeitures, which we estimate based primarily on historical experience, adjusted for unusual events such as our corporate restructuring in 2012, which resulted in higher than expected turnover and forfeitures in that year. Under current accounting guidance, forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Commitments and Contingencies | ' | ||||
Commitments and Contingencies | ' | ||||
M. Commitments and Contingencies | |||||
Facility Lease Obligations | |||||
In June 2013, we entered into a lease agreement with BP Bay Colony LLC, or the Landlord, for the lease of certain real property located at 1100 Winter Street, Waltham, Massachusetts, or the Premises, for use as our principal executive offices. The Landlord agreed to build out the Premises, which was completed in September 2013. The initial term of the lease is five years and two months with one five-year extension term at our option. During the extension period, the base rent will be an amount agreed upon by us and the Landlord. In addition to base rent, we are also required to pay a proportionate share of the Landlord’s operating costs. The lease requires us to pay base rent during the initial term as follows: | |||||
Period | Minimum | ||||
Lease | |||||
Payments | |||||
Year Ended December 31, 2013 | $ | 131,553 | |||
Year Ended December 31, 2014 | 1,127,595 | ||||
Year Ended December 31, 2015 | 1,127,595 | ||||
Year Ended December 31, 2016 | 1,127,595 | ||||
Year Ended December 31, 2017 | 1,127,595 | ||||
Thereafter | 1,033,629 | ||||
Total | $ | 5,675,562 | |||
The Landlord agreed to pay for certain agreed-upon improvements and we agreed to pay for any increased costs due to changes by us to the agreed-upon plans. We record all tenant improvements paid by us as leasehold improvements and amortize these improvements over the shorter of the estimated useful life of the improvement or the remaining life of the initial lease term. Amortization of leasehold improvements is included in depreciation expense. | |||||
In addition, in connection with our new facility lease, in June 2013 we delivered to the Landlord a security deposit of $0.4 million in the form of an irrevocable letter of credit. This security deposit will be reduced to $0.3 million on the second anniversary of the date the lease commenced. The cash securing this letter of credit is classified on our balance sheet as of September 30, 2013 as a long-term asset and is restricted in its use. | |||||
In June 2013, we also entered into an Assignment and Assumption of Lease, or the Assignment Agreement, with Shire Human Genetic Therapies, Inc., or Shire, effecting the assignment to Shire of the right to occupy our former office space located at 100 Hayden Avenue, Lexington, Massachusetts, or the Prior Space. Under the Assignment Agreement, the assignment to Shire became effective on September 21, 2013, the date of our departure from the Prior Space, and Shire assumed all of our obligations as the tenant of the Prior Space. The Assignment Agreement also provided for the conveyance of furniture and other personal property by us to Shire. | |||||
Legal Proceedings | |||||
We accrue a liability for legal contingencies when we believe that it is both probable that a liability has been incurred and that we can reasonably estimate the amount of the loss. We review these accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and our views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made. For the matters referenced below, the liability is not probable or the amount cannot be reasonably estimated and, therefore, accruals have not been made. In addition, in accordance with the relevant authoritative guidance, for any matters in which the likelihood of material loss is at least reasonably possible, we will provide disclosure of the possible loss or range of loss. If a reasonable estimate cannot be made, however, we will provide disclosure to that effect. | |||||
A purported class action complaint was originally filed on March 18, 2010 in the U.S. District Court for the District of Massachusetts, entitled Silverstrand Investments et. al. v. AMAG Pharm., Inc., et. al., Civil Action No. 1:10-CV-10470-NMG, and was amended on September 15, 2010 and on December 17, 2010. The second amended complaint, or SAC, filed on December 17, 2010 alleged that we and our former President and Chief Executive Officer, former Chief Financial Officer, the then-members of our Board, and certain underwriters in our January 2010 offering of common stock violated certain federal securities laws, specifically Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended, and that our former President and Chief Executive Officer and former Chief Financial Officer violated Section 15 of such Act, respectively, by making certain alleged omissions in a registration statement filed in January 2010. The plaintiffs sought unspecified damages on behalf of a purported class of purchasers of our common stock pursuant to our common stock offering on or about January 21, 2010. On August 11 and 15, 2011, respectively, the District Court issued an Opinion and Order dismissing the SAC with prejudice for failure to state a claim upon which relief could be granted. On September 14, 2011, the plaintiffs filed a Notice of Appeal to the U.S. Court of Appeals for the First Circuit, or the Court of Appeals. The Court of Appeals heard oral argument on May 11, 2012. On February 4, 2013, the Court of Appeals affirmed in part and reversed in part the District Court’s Opinion and Order and remanded the case to the District Court. On February 19, 2013, we filed a Petition for Panel Rehearing and Rehearing En Banc, which was denied on March 15, 2013. On March 22, 2013, we filed a Motion to Stay the Mandate remanding the case to the District Court pending review by the U.S. Supreme Court of the Court of Appeals’ February 4, 2013 decision. The Court of Appeals granted the Motion to Stay the Mandate on April 8, 2013. On June 13, 2013, we filed a Petition for a Writ of Certiorari, or the Petition, with the U.S. Supreme Court seeking review of the Court of Appeal’s decision and to have that decision overturned. On October 7, 2013 the U.S. Supreme Court denied our Petition, resulting in the case’s return to the District Court for further proceedings relative to the SAC’s surviving claims. Our response to the SAC is due on or before November 6, 2013. The plaintiffs will submit an opposition to our response on or before December 6, 2013. We are currently unable to predict the outcome or reasonably estimate the range of potential loss associated with this matter, if any, and have therefore not recorded any potential estimated liability as we do not believe that such a liability is probable nor do we believe that a range of loss is currently estimable. | |||||
In July 2010, Sandoz GmbH, or Sandoz, filed with the European Patent Office, or the EPO, an opposition to a previously issued patent which covers ferumoxytol in EU jurisdictions. In October 2012, at an oral hearing, the Opposition Division of the EPO revoked this patent. In December 2012, our notice of appeal of that decision was recorded with the EPO, which also suspended the revocation of our patent. On May 13, 2013, we filed a statement of grounds of appeal and on September 27, 2013, Sandoz filed a response to that statement. We will continue to defend the validity of this patent throughout the appeals process, which we expect to take two to three years. However, in the event that we do not experience a successful outcome from the appeals process, under EU regulations ferumoxytol would still be entitled to eight years of data protection and ten years of market exclusivity from the date of approval, which we believe would create barriers to entry for any generic version of ferumoxytol into the EU market until sometime between 2020 and 2022. This decision had no impact on our revenues for the nine months ended September 30, 2013. However, any future unfavorable outcome in this matter could negatively affect the magnitude and timing of future revenues, including royalties and milestone payments we may receive from Takeda pursuant to our collaboration agreement with Takeda. We do not expect to incur any related liability regardless of the outcome of the appeal and therefore have not recorded any liability as of September 30, 2013. We continue to believe the patent is valid and intend to vigorously appeal the decision. | |||||
We may periodically become subject to other legal proceedings and claims arising in connection with ongoing business activities, including claims or disputes related to product liability matters or related to patents that have been issued or that are pending in the field of research on which we are focused. Other than the above actions, we are not aware of any material claims against us as of September 30, 2013. We expense legal costs as they are incurred. | |||||
Acquisition-related Contingent Consideration | |||||
In connection with the acquisition of the MuGard Rights, we have agreed to pay Access royalties on future sales of MuGard. We have estimated the fair value of the contingent consideration related to the acquisition of the MuGard Rights to be $14.0 million as of September 30, 2013. The fair value of these contingent payments was calculated based on estimated sales and were discounted using a rate of approximately 15%. Changes in contingent consideration expense result from changes in the assumptions regarding probabilities of the estimated timing and amount of royalty payments to Access and the discount rate used to estimate the fair value of the liability. Contingent consideration expense may change significantly as we gain more information related to sales of MuGard, impacting our assumptions. The assumptions used in estimating fair value require significant judgment. The use of different assumptions and judgments could result in a materially different estimate of fair value. |
Collaborative_Agreements
Collaborative Agreements | 9 Months Ended |
Sep. 30, 2013 | |
Collaborative Agreements | ' |
Collaborative Agreements | ' |
N. Collaborative Agreements | |
Our commercial strategy includes the formation of collaborations with other pharmaceutical companies to facilitate the sale and distribution of Feraheme/Rienso, primarily outside of the U.S, as well as expanding our portfolio through the in-license or purchase of additional commercialized specialty pharmaceutical products. In addition to our collaborative agreements described in Note N to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2012, we were a party to the collaboration arrangements described below as of September 30, 2013. | |
Takeda | |
In March 2010, we entered into a License, Development and Commercialization Agreement, or the Takeda Agreement, with Takeda under which we granted exclusive rights to Takeda to develop and commercialize Feraheme/Rienso as a therapeutic agent in Europe, certain Asia-Pacific countries (excluding Japan, China and Taiwan), the Commonwealth of Independent States, Canada, India and Turkey. In June 2012, we entered into an amendment to the Takeda Agreement, or the Amended Takeda Agreement, which removed the Commonwealth of Independent States from the territories under which Takeda has the exclusive rights to develop and commercialize Feraheme/Rienso. In addition, the Amended Takeda Agreement modified the timing and pricing arrangements for a supply agreement to be entered into between us and Takeda in the future, the terms related to primary and secondary manufacturing for drug substance and drug product, certain patent-related provisions, and the re-allocation of certain of the agreed-upon milestone payments. We analyzed the Amended Takeda Agreement and determined that the amended terms did not result in a material modification of the original Takeda Agreement (and thus did not require us to change our accounting model) because (i) there were no changes to the deliverables under the original Takeda Agreement as a result of the amendment, and (ii) the change in arrangement consideration as a result of the amendment was not quantitatively material in relation to the total arrangement consideration. | |
Under the Amended Takeda Agreement, except under limited circumstances, we have retained the right to manufacture Feraheme/Rienso and, accordingly, are responsible for supply of Feraheme/Rienso to Takeda at a fixed price per unit, which is capped for a certain period of time. We are also responsible for conducting, and bearing the costs related to, certain pre-defined clinical studies with the costs of future modifications or additional studies to be allocated between the parties according to an agreed-upon cost-sharing mechanism. We have determined that our obligations under the Amended Takeda Agreement have not changed from those under the original Takeda Agreement and include the following four deliverables: the license, access to future know-how and improvements to the Feraheme/Rienso technology, regulatory and clinical research activities, and the manufacturing and supply of product. | |
Pursuant to the accounting guidance in effect in March 2010, when we signed the original Takeda Agreement and which governed revenue recognition on multiple element arrangements, we evaluated the four deliverables under the original Takeda Agreement and determined that our obligation to provide manufacturing supply of product meets the criteria for separation and is therefore treated as a single unit of accounting, which we refer to as the supply unit of accounting. Further, we concluded that the license is not separable from the undelivered future know-how and technological improvements or the undelivered regulatory and clinical research activities. Accordingly, these deliverables are being combined and also treated as a single unit of accounting, which we refer to as the combined unit of accounting. With respect to the combined unit of accounting, our obligation to provide access to our future know-how and technological improvements is the final deliverable and is an obligation which exists throughout the term of the Amended Takeda Agreement. | |
In connection with the execution of the original Takeda Agreement, we received a $60.0 million upfront payment from Takeda in April 2010, which we recorded as deferred revenue, as well as approximately $1.0 million reimbursed to us during 2010 for certain expenses incurred prior to entering the agreement, which we considered an additional upfront payment. Because we cannot reasonably estimate the total level of effort required to complete the obligations under the combined deliverable, we are recognizing the entire $60.0 million upfront payment, the $1.0 million reimbursed to us in 2010, as well as any non-substantive milestone payments that are achieved into revenues on a straight-line basis over a period of ten years from March 31, 2010, the date on which we originally entered the Takeda Agreement, which represented the then-current patent life of Feraheme/Rienso and our best estimate of the period over which we will substantively perform our obligations. We continue to believe that the then-current patent life of Feraheme/Rienso is our best estimate of the period over which we will substantively perform our obligations under this agreement. | |
In addition, the remaining milestone payments we may be entitled to receive under the Amended Takeda Agreement could over time equal up to $186.0 million. For any milestone payments we may receive based upon the approval by certain regulatory agencies, we have determined that these will be deemed substantive milestones and, therefore, will be accounted for as revenue in the period in which they are achieved. In June 2012, we earned a $15.0 million milestone payment from Takeda based on the European Commission marketing authorization for ferumoxytol. We deemed the $15.0 million milestone payment as a substantive milestone and therefore recognized the full amount as revenue in the six months ended June 30, 2012 in our condensed consolidated statements of operations. We have also determined that any non-substantive milestone payments will be accounted for in accordance with our revenue attribution method for the upfront payment, as described above. During 2012, we received an aggregate of $18.0 million in milestone payments from Takeda associated with the commercial launches of Feraheme/Rienso in Canada and the EU, which we deemed to be non-substantive milestone payments. Revenues related to the combined unit of accounting are recorded in license fee and other collaboration revenues in our condensed consolidated statement of operations. During the three and nine months ended September 30, 2013, we recorded $2.0 million and $5.9 million in revenues, respectively, associated with the upfront payment and the $18.0 million in non-substantive milestone payments we received in 2012. Any potential non-substantive milestone payments that may be received in the future will be recognized as revenue on a cumulative catch up basis when they become due and payable. | |
We have received and may also receive additional regulatory approval and performance-based milestone payments, reimbursement of certain out-of-pocket regulatory and clinical supply costs, defined payments for supply of Feraheme/Rienso, and tiered double-digit royalties on net product sales in the agreed-upon territories under the Amended Takeda Agreement. | |
Under the terms of the Amended Takeda Agreement, Takeda is responsible for reimbursing us for certain out-of-pocket regulatory and clinical trial supply costs associated with carrying out our regulatory and clinical research activities under the collaboration agreement. Because we are acting as the principal in carrying out these services, any reimbursement payments received from Takeda are recorded in license fee and other collaboration revenues in our condensed consolidated statement of operations to match the costs that we incur during the period in which we perform those services. During the three and nine months ended September 30, 2013, we recorded less than $0.1 million and $0.1 million associated with other reimbursement revenues received from Takeda, respectively. | |
At the time of shipment, we defer recognition of all revenue for Feraheme/Rienso sold to our licensees in our condensed consolidated balance sheets. We recognize revenues from product sales to our licensees, the related cost of goods sold, and any royalty revenues due from our licensees, in our condensed consolidated statement of operations at the time our licensees report to us that sales have been made to their customers. During the three and nine months ended September 30, 2013, we recognized $0.1 million and $0.3 million, respectively, in product sales and royalty revenue related to the Amended Takeda Agreement and we have included this revenue in other product sales and royalties in our condensed consolidated statement of operations. As of September 30, 2013, we had approximately $2.1 million in deferred revenue related to product shipped to Takeda but not yet sold through to Takeda’s customers, and $1.9 million in deferred cost of product sales, which are included in our condensed consolidated balance sheet. |
Restructuring
Restructuring | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Restructuring | ' | |||||||
Restructuring | ' | |||||||
O. Restructuring | ||||||||
During 2012 and 2011, we initiated corporate restructurings, including a workforce reduction plan. The majority of the workforce reduction plan in 2012 was associated with our manufacturing and development infrastructure, including our decision to divest our Cambridge, Massachusetts manufacturing facility. The workforce reductions were substantially completed by the end of 2012 and the majority of the related expenses were paid by the end of 2012. | ||||||||
The following table outlines the components of our restructuring expenses which were recorded in operating expenses and current liabilities for the three and nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||
Three Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Accrued restructuring, beginning of period | $ | 329 | $ | 1,728 | ||||
Employee severance, benefits and related costs | — | 441 | ||||||
Payments | (213 | ) | (902 | ) | ||||
Inventory and other adjustments | — | 166 | ||||||
Accrued restructuring, end of period | $ | 116 | $ | 1,433 | ||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Accrued restructuring, beginning of period | $ | 1,383 | $ | 2,366 | ||||
Employee severance, benefits and related costs | — | 1,019 | ||||||
Payments | (1,267 | ) | (2,029 | ) | ||||
Inventory and other adjustments | — | 77 | ||||||
Accrued restructuring, end of period | $ | 116 | $ | 1,433 |
Subsequent_Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Event | ' |
Subsequent Event | ' |
P. Subsequent Event | |
On October 22, 2013, we entered into an Agreement of Sale with 61 Mooney Street LLC for the sale of our Cambridge, Massachusetts manufacturing facility, including the land, building and related personal property. The closing occurred on October 30, 2013, at which time we received $2.0 million in consideration. We do not expect to recognize a material gain or loss on this transaction. |
Basis_of_Presentation_and_Summ1
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | ' | |||||||||||||
Use of Estimates and Assumptions | ' | |||||||||||||
Use of Estimates and Assumptions | ||||||||||||||
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. The most significant estimates and assumptions are used in, but are not limited to, revenue recognition related to product sales and collaboration agreements, product sales allowances and accruals, assessing investments for potential other-than-temporary impairment and determining values of investments, the fair value of our assets held for sale, contingent consideration, the impairment of long-lived assets, including intangible assets, accrued expenses, income taxes and equity-based compensation expense. Actual results could differ materially from those estimates. | ||||||||||||||
Principles of Consolidation | ' | |||||||||||||
Principles of Consolidation | ||||||||||||||
The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries, AMAG Europe Limited and AMAG Securities Corporation. AMAG Europe Limited was incorporated in October 2009 in London, England. AMAG Securities Corporation is a Massachusetts corporation which was incorporated in August 2007. All intercompany account balances and transactions between the companies have been eliminated. | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Fair Value Measurements | ||||||||||||||
Under current accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. | ||||||||||||||
Current accounting guidance establishes a hierarchy used to categorize how fair value is measured and which is based on three levels of inputs, of which the first two are considered observable and the third unobservable, as follows: | ||||||||||||||
Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||
We hold certain assets and liabilities that are required to be measured at fair value on a recurring basis, including our cash equivalents, investments, and contingent consideration. The following tables represent the fair value hierarchy as of September 30, 2013 and December 31, 2012 for those assets and liabilities that we measure at fair value on a recurring basis (in thousands): | ||||||||||||||
Fair Value Measurements at September 30, 2013 Using: | ||||||||||||||
Quoted Prices in Active | Significant Other | Significant | ||||||||||||
Markets for Identical | Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Assets: | ||||||||||||||
Money market funds | $ | 22,736 | $ | 22,736 | $ | — | $ | — | ||||||
Corporate debt securities | 129,664 | — | 129,664 | — | ||||||||||
U.S. treasury and government agency securities | 52,931 | — | 52,931 | — | ||||||||||
Total Assets | $ | 205,331 | $ | 22,736 | $ | 182,595 | $ | — | ||||||
Liabilities: | ||||||||||||||
Acquisition-related contingent consideration | $ | 13,975 | $ | — | $ | — | $ | 13,975 | ||||||
Total Liabilities | $ | 13,975 | $ | — | $ | — | $ | 13,975 | ||||||
Fair Value Measurements at December 31, 2012 Using: | ||||||||||||||
Quoted Prices in Active | Significant Other | Significant | ||||||||||||
Markets for Identical | Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Money market funds | $ | 24,058 | $ | 24,058 | $ | — | $ | — | ||||||
Corporate debt securities | 111,690 | — | 111,690 | — | ||||||||||
U.S. treasury and government agency securities | 59,569 | — | 59,569 | — | ||||||||||
Commercial paper | 9,491 | — | 9,491 | — | ||||||||||
$ | 204,808 | $ | 24,058 | $ | 180,750 | $ | — | |||||||
With the exception of our money market funds and our acquisition-related contingent consideration, the fair value of our investments listed in the table above is primarily determined from independent pricing services. Independent pricing services normally derive security prices from recently reported trades for identical or similar securities, making adjustments based upon other significant observable market transactions. At the end of each reporting period, we perform quantitative and qualitative analyses of prices received from third parties to determine whether prices are reasonable estimates of fair value. After completing our analyses, we did not adjust or override any fair value measurements provided by our pricing services as of either September 30, 2013 or December 31, 2012. In addition, there were no transfers or reclassifications of any securities between Level 1 and Level 2 during the nine months ended September 30, 2013. | ||||||||||||||
We are accounting for the acquisition of the MuGard Rights as a business combination under the acquisition method of accounting. Additional details regarding the Access License Agreement and the MuGard Rights can be found in Note G. The fair value measurements of contingent consideration obligations and the related intangible asset arising from business combinations are determined using unobservable, or Level 3, inputs. These inputs include (i) the estimated amount and timing of projected cash flows; (ii) the probability of the achievement of the factors on which the contingency is based; and (iii) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases (decreases) in any of those inputs in isolation could result in a significantly lower or higher fair value measurement. | ||||||||||||||
During the three months ended September 30, 2013, we completed the valuation for the acquisition of the MuGard Rights. Some of the amounts previously estimated have changed during the measurement period, including the amounts and timing of cash flows related to the royalties we expect to pay to Access under the Access License Agreement. The measurement period adjustments represent revisions to estimates in the interim period subsequent to the acquisition and initial accounting date. As a result of these changes, the fair value of the contingent consideration, which was originally assessed to be $14.0 million as of the Acquisition Date has been adjusted to $13.7 million as of the Acquisition Date. These measurement period adjustments have been retrospectively applied to our condensed consolidated balance sheet at June 30, 2013. | ||||||||||||||
The following table presents a reconciliation of contingent consideration obligations related to our acquisition of the MuGard Rights measured on a recurring basis using Level 3 inputs as of September 30, 2013 (in thousands): | ||||||||||||||
Balance as of June 6, 2013 | $ | — | ||||||||||||
Acquisition date fair value of contingent consideration | 13,700 | |||||||||||||
Balance as of June 30, 2013 | $ | 13,700 | ||||||||||||
Payments made | (4 | ) | ||||||||||||
Adjustments to fair value of contingent consideration | 279 | |||||||||||||
Balance as of September 30, 2013 | $ | 13,975 | ||||||||||||
During the three and nine months ended September 30, 2013, we recorded $0.3 million in expense related to the increase in fair value of the contingent consideration liability. This expense represents the time value of money impact of the contingent consideration fair value assessment as of September 30, 2013 and is included in selling, general and administrative expenses in our condensed consolidated statements of operations. As of September 30, 2013, we estimate that the undiscounted royalty amounts we could pay under the Access License Agreement may range from $28.0 million to $34.0 million over a ten year period, which is our best estimate of the period over which we expect the majority of the asset’s cash flows to be derived. This measure is based on significant Level 3 inputs not observable in the market. Key assumptions include a discount rate of approximately 15%. As of September 30, 2013, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the Acquisition Date. | ||||||||||||||
In addition, in connection with the acquisition of the MuGard Rights, we acquired an intangible asset of $16.9 million, which was originally determined based on fair value measurements. These measures were based on significant Level 3 inputs not observable in the market. Key assumptions include a discount rate of 19%. We believe the estimated fair values of the MuGard Rights are based on reasonable assumptions, however, we cannot provide assurance that the underlying assumptions used to forecast the cash flows will materialize as we estimated and thus, our actual results may vary significantly from the estimated results. | ||||||||||||||
Assets Held for Sale | ' | |||||||||||||
Assets Held for Sale | ||||||||||||||
During 2012, we determined that certain assets related to our Cambridge, Massachusetts manufacturing facility, including the related land, building and certain equipment, met the criteria established by current accounting guidance for classifying assets as held for sale. As a result, during 2012, we reclassified these assets from property and equipment to assets held for sale in our condensed consolidated balance sheet. In anticipation of a future sale, we valued these assets at the lower of their carrying amount or fair value less cost to sell to arrive at the estimated fair value of $2.0 million as of December 31, 2012. During the nine months ended September 30, 2013, we sold $0.5 million of equipment related to our Cambridge, Massachusetts manufacturing facility. In connection with these sales, we recorded a gain of $0.4 million during the nine months ended September 30, 2013 and reduced the carrying value of our assets held for sale by $0.1 million to $1.9 million at September 30, 2013. The fair values of the land, building, and equipment were estimated using Level 3 inputs, which included offers received from potential purchasers, real estate appraisals and other estimates from third-parties. On October 30, 2013, we sold our Cambridge, Massachusetts manufacturing facility, including the land, building and related personal property, to 61 Mooney Street LLC. Refer to Note P for additional information. | ||||||||||||||
Revenue Recognition and Related Sales Allowances and Accruals | ' | |||||||||||||
Revenue Recognition and Related Sales Allowances and Accruals | ||||||||||||||
An analysis of our product sales allowances and accruals for the three and nine months ended September 30, 2013 and 2012 is as follows (in thousands): | ||||||||||||||
Three Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Provision for U.S. Feraheme sales allowances and accruals | ||||||||||||||
Discounts and chargebacks | $ | 10,205 | $ | 6,644 | ||||||||||
Government and other rebates | 3,044 | 1,595 | ||||||||||||
Medicaid rebate reserve adjustment | (625 | ) | (861 | ) | ||||||||||
Returns | 265 | (1,122 | ) | |||||||||||
Total provision for U.S. Feraheme sales allowances and accruals | $ | 12,889 | $ | 6,256 | ||||||||||
Total gross U.S. Feraheme sales | $ | 32,236 | $ | 22,442 | ||||||||||
Total provision for U.S. Feraheme sales allowances and accruals as a percent of total gross U.S. Feraheme sales | 40 | % | 28 | % | ||||||||||
Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Provision for U.S. Feraheme sales allowances and accruals | ||||||||||||||
Discounts and chargebacks | $ | 26,925 | $ | 19,382 | ||||||||||
Government and other rebates | 8,106 | 4,487 | ||||||||||||
Medicaid rebate reserve adjustment | (568 | ) | (621 | ) | ||||||||||
Returns | 697 | (1,680 | ) | |||||||||||
Total provision for U.S. Feraheme sales allowances and accruals | $ | 35,160 | $ | 21,568 | ||||||||||
Total gross U.S. Feraheme sales | $ | 87,541 | $ | 65,474 | ||||||||||
Total provision for U.S. Feraheme sales allowances and accruals as a percent of total gross U.S. Feraheme sales | 40 | % | 33 | % | ||||||||||
We generally offer our wholesalers, specialty distributors and other customers a limited right to return Feraheme purchased directly from us, based on the product’s expiration date which, once packaged, is currently five years in the U.S. Reserves for Feraheme returns for U.S. sales are recorded in the period the related revenue is recognized, resulting in a reduction to product sales. We evaluate our estimated product returns rate each period based on the historical return patterns and known or expected changes in the marketplace. We did not significantly adjust our reserve for product returns during the nine months ended September 30, 2013. During the nine months ended September 30, 2012, we reduced our reserve by approximately $2.1 million as a result of a lower expected rate of product returns based on our actual returns experience to date as well as the lapse of the product return period on certain manufactured Feraheme lots that carried a two-year expiration period. The product returns provision applied to gross product sales for the nine months ended September 30, 2013 was $0.7 million as compared to a credit of $1.7 million for the nine months ended September 30, 2012. | ||||||||||||||
In addition, as part of our sales allowances and accruals, we reserve for estimated Medicaid rebates associated with instances where Medicaid will act as the insurer and for which we are required to pay a statutory rebate to Medicaid. We regularly assess our Medicaid reserve balance and the rate at which we accrue for claims against product sales. If we determine in future periods that our actual rebate experience is not indicative of expected claims, if our actual claims experience changes, or if other factors affect estimated claims rates, we may be required to adjust our current Medicaid accumulated reserve estimate, which could significantly affect our earnings in the period of the adjustment. During each of the nine months ended September 30, 2013 and 2012, we revised our estimated Medicaid reserve rate based on actual product-specific rebate claims received since the July 2009 launch of Feraheme, our expectations of state level activities, and estimated rebate claims not yet submitted, which resulted in a $0.6 million reduction of our then estimated Medicaid rebate reserve related to prior period Feraheme sales. These changes in estimates are reflected as an increase in our net product sales for the nine months ended September 30, 2013 and 2012 and resulted in reductions to our gross to net percentage in the respective periods. The reduction of our estimated Medicaid rebate reserve had an impact of $0.03 per basic and diluted share for the each of the nine months ended September 30, 2013 and 2012. | ||||||||||||||
Acquisitions | ' | |||||||||||||
Acquisitions | ||||||||||||||
We account for acquired businesses using the acquisition method of accounting, which requires, with limited exceptions, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the estimated fair values of the net assets acquired is recorded as goodwill. | ||||||||||||||
Intangible Assets | ' | |||||||||||||
Intangible Assets | ||||||||||||||
Intangible assets with definite useful lives are amortized to their estimated residual values over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | ||||||||||||||
Contingent Consideration | ' | |||||||||||||
Contingent Consideration | ||||||||||||||
Contingent consideration arising from a business combination is included as part of the acquisition cost and is recognized at fair value as of the acquisition date. Any liability resulting from contingent consideration is remeasured to its fair value at each reporting date until the contingency is resolved. These changes in fair value are recognized in our condensed consolidated statements of operations. |
Basis_of_Presentation_and_Summ2
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | ' | |||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | ' | |||||||||||||
The following tables represent the fair value hierarchy as of September 30, 2013 and December 31, 2012 for those assets and liabilities that we measure at fair value on a recurring basis (in thousands): | ||||||||||||||
Fair Value Measurements at September 30, 2013 Using: | ||||||||||||||
Quoted Prices in Active | Significant Other | Significant | ||||||||||||
Markets for Identical | Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Assets: | ||||||||||||||
Money market funds | $ | 22,736 | $ | 22,736 | $ | — | $ | — | ||||||
Corporate debt securities | 129,664 | — | 129,664 | — | ||||||||||
U.S. treasury and government agency securities | 52,931 | — | 52,931 | — | ||||||||||
Total Assets | $ | 205,331 | $ | 22,736 | $ | 182,595 | $ | — | ||||||
Liabilities: | ||||||||||||||
Acquisition-related contingent consideration | $ | 13,975 | $ | — | $ | — | $ | 13,975 | ||||||
Total Liabilities | $ | 13,975 | $ | — | $ | — | $ | 13,975 | ||||||
Fair Value Measurements at December 31, 2012 Using: | ||||||||||||||
Quoted Prices in Active | Significant Other | Significant | ||||||||||||
Markets for Identical | Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Money market funds | $ | 24,058 | $ | 24,058 | $ | — | $ | — | ||||||
Corporate debt securities | 111,690 | — | 111,690 | — | ||||||||||
U.S. treasury and government agency securities | 59,569 | — | 59,569 | — | ||||||||||
Commercial paper | 9,491 | — | 9,491 | — | ||||||||||
$ | 204,808 | $ | 24,058 | $ | 180,750 | $ | — | |||||||
Schedule of reconciliation of contingent consideration obligations related to acquisition of MuGard rights measured on recurring basis using Level 3 inputs | ' | |||||||||||||
The following table presents a reconciliation of contingent consideration obligations related to our acquisition of the MuGard Rights measured on a recurring basis using Level 3 inputs as of September 30, 2013 (in thousands): | ||||||||||||||
Balance as of June 6, 2013 | $ | — | ||||||||||||
Acquisition date fair value of contingent consideration | 13,700 | |||||||||||||
Balance as of June 30, 2013 | $ | 13,700 | ||||||||||||
Payments made | (4 | ) | ||||||||||||
Adjustments to fair value of contingent consideration | 279 | |||||||||||||
Balance as of September 30, 2013 | $ | 13,975 | ||||||||||||
Analysis of product sales allowances and accruals | ' | |||||||||||||
An analysis of our product sales allowances and accruals for the three and nine months ended September 30, 2013 and 2012 is as follows (in thousands): | ||||||||||||||
Three Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Provision for U.S. Feraheme sales allowances and accruals | ||||||||||||||
Discounts and chargebacks | $ | 10,205 | $ | 6,644 | ||||||||||
Government and other rebates | 3,044 | 1,595 | ||||||||||||
Medicaid rebate reserve adjustment | (625 | ) | (861 | ) | ||||||||||
Returns | 265 | (1,122 | ) | |||||||||||
Total provision for U.S. Feraheme sales allowances and accruals | $ | 12,889 | $ | 6,256 | ||||||||||
Total gross U.S. Feraheme sales | $ | 32,236 | $ | 22,442 | ||||||||||
Total provision for U.S. Feraheme sales allowances and accruals as a percent of total gross U.S. Feraheme sales | 40 | % | 28 | % | ||||||||||
Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Provision for U.S. Feraheme sales allowances and accruals | ||||||||||||||
Discounts and chargebacks | $ | 26,925 | $ | 19,382 | ||||||||||
Government and other rebates | 8,106 | 4,487 | ||||||||||||
Medicaid rebate reserve adjustment | (568 | ) | (621 | ) | ||||||||||
Returns | 697 | (1,680 | ) | |||||||||||
Total provision for U.S. Feraheme sales allowances and accruals | $ | 35,160 | $ | 21,568 | ||||||||||
Total gross U.S. Feraheme sales | $ | 87,541 | $ | 65,474 | ||||||||||
Total provision for U.S. Feraheme sales allowances and accruals as a percent of total gross U.S. Feraheme sales | 40 | % | 33 | % | ||||||||||
Schedule of customers representing 10% or more of revenues | ' | |||||||||||||
Nine Months Ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
AmerisourceBergen Drug Corporation | 43 | % | 34 | % | ||||||||||
McKesson Corporation | 23 | % | 17 | % | ||||||||||
Cardinal Health, Inc. | 16 | % | 11 | % | ||||||||||
Takeda Pharmaceuticals Company Limited | 11 | % | 31 | % |
Investments_Tables
Investments (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Investments | ' | |||||||||||||
Summary of investments | ' | |||||||||||||
The following is a summary of our investments as of September 30, 2013 and December 31, 2012 (in thousands): | ||||||||||||||
September 30, 2013 | ||||||||||||||
Gross | Gross | Estimated | ||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||
Cost | Gains | Losses | Value | |||||||||||
Corporate debt securities | ||||||||||||||
Due in one year or less | $ | 45,645 | $ | 67 | $ | (2 | ) | $ | 45,710 | |||||
Due in one to three years | 84,020 | 92 | (158 | ) | 83,954 | |||||||||
U.S. treasury and government agency securities | ||||||||||||||
Due in one year or less | 22,551 | 25 | — | 22,576 | ||||||||||
Due in one to three years | 30,321 | 53 | (19 | ) | 30,355 | |||||||||
Total investments | $ | 182,537 | $ | 237 | $ | (179 | ) | $ | 182,595 | |||||
December 31, 2012 | ||||||||||||||
Gross | Gross | Estimated | ||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||
Cost | Gains | Losses | Value | |||||||||||
Corporate debt securities | ||||||||||||||
Due in one year or less | $ | 52,332 | $ | 88 | $ | (6 | ) | $ | 52,414 | |||||
Due in one to three years | 59,176 | 137 | (37 | ) | 59,276 | |||||||||
U.S. treasury and government agency securities | ||||||||||||||
Due in one year or less | 24,795 | 86 | — | 24,881 | ||||||||||
Due in one to three years | 34,606 | 84 | (2 | ) | 34,688 | |||||||||
Commercial paper | ||||||||||||||
Due in one year or less | 9,494 | 1 | (4 | ) | 9,491 | |||||||||
Total investments | $ | 180,403 | $ | 396 | $ | (49 | ) | $ | 180,750 |
Accounts_Receivable_Net_Tables
Accounts Receivable, Net (Tables) | 9 Months Ended | |||||
Sep. 30, 2013 | ||||||
Accounts Receivable, Net | ' | |||||
Schedule of customers representing greater than 10% of accounts receivable balances | ' | |||||
September 30, 2013 | December 31, 2012 | |||||
AmerisourceBergen Drug Corporation | 48 | % | 48 | % | ||
Cardinal Health, Inc. | 28 | % | 18 | % | ||
McKesson Corporation | 19 | % | 28 | % |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventories | ' | |||||||
Schedule of major classes of inventories | ' | |||||||
Our major classes of inventories were as follows as of September 30, 2013 and December 31, 2012 (in thousands): | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Raw materials | $ | 5,151 | $ | 2,652 | ||||
Work in process | 5,835 | 2,524 | ||||||
Finished goods | 3,708 | 7,275 | ||||||
Total inventories | $ | 14,694 | $ | 12,451 |
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Property and Equipment, Net | ' | |||||||
Schedule of property and equipment | ' | |||||||
Property and equipment consisted of the following as of September 30, 2013 and December 31, 2012, respectively (in thousands): | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Buildings and improvements | $ | 953 | $ | 5,373 | ||||
Laboratory and production equipment | 343 | 115 | ||||||
Furniture and fixtures | 1,828 | 5,326 | ||||||
Construction in process | 34 | 228 | ||||||
3,158 | 11,042 | |||||||
Less - accumulated depreciation | (1,417 | ) | (7,745 | ) | ||||
Property and equipment, net | $ | 1,741 | $ | 3,297 |
Business_Combination_Tables
Business Combination (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Business Combination | ' | ||||
Summary of total consideration for the MuGard Rights | ' | ||||
The following table summarizes the total consideration for the MuGard Rights (in thousands): | |||||
Consideration: | |||||
Cash | $ | 3,434 | |||
Acquisition-related contingent consideration | 13,700 | ||||
Total consideration | $ | 17,134 | |||
Summary of estimated fair values of the assets acquired related to the business combination | ' | ||||
The following table summarizes the estimated fair values of the assets acquired related to the business combination as of the Acquisition Date (in thousands): | |||||
Assets Acquired: | |||||
MuGard intangible asset | $ | 16,893 | |||
Inventory | 241 | ||||
Net identifiable assets acquired | $ | 17,134 |
Intangible_Assets_Net_Tables
Intangible Assets, Net (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Intangible Assets, Net | ' | ||||
Schedule of expected future annual amortization expense related to intangible asset | ' | ||||
We expect future annual amortization expense related to our intangible asset to be as follows (in thousands): | |||||
Period | Estimated | ||||
Amortization | |||||
Expense | |||||
Year Ended December 31, 2013 | $ | 41 | |||
Year Ended December 31, 2014 | 660 | ||||
Year Ended December 31, 2015 | 915 | ||||
Year Ended December 31, 2016 | 1,215 | ||||
Year Ended December 31, 2017 | 1,616 | ||||
Year Ended December 31, 2018 | 2,103 | ||||
Thereafter | 10,316 | ||||
Total | $ | 16,866 |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accumulated Other Comprehensive Loss | ' | |||||||
Schedule of changes in AOCI, net of tax | ' | |||||||
The changes in AOCI, net of tax, for the three and nine months ended September 30, 2013 consisted of the following (in thousands): | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, 2013 | September 30, 2013 | |||||||
Beginning Balance | $ | (3,935 | ) | $ | (3,247 | ) | ||
Other comprehensive income (loss) before reclassifications | 399 | (310 | ) | |||||
Gain (loss) reclassified from other accumulated comprehensive loss | — | 21 | ||||||
Ending Balance | $ | (3,536 | ) | $ | (3,536 | ) |
Net_Loss_per_Share_Tables
Net Loss per Share (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Net Loss per Share | ' | |||||||||||||
Schedule of components of basic and diluted net loss per share | ' | |||||||||||||
The components of basic and diluted net loss per share were as follows (in thousands, except per share data): | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Net loss | $ | (145 | ) | $ | (3,967 | ) | $ | (5,948 | ) | $ | (13,064 | ) | ||
Weighted average common shares outstanding | 21,691 | 21,403 | 21,613 | 21,374 | ||||||||||
Net loss per share: | ||||||||||||||
Basic and diluted | $ | (0.01 | ) | $ | (0.19 | ) | $ | (0.28 | ) | $ | (0.61 | ) | ||
Schedule of anti-dilutive securities excluded from computation of diluted net loss per share | ' | |||||||||||||
The following table sets forth the potential common shares issuable upon the exercise of outstanding options and the vesting of restricted stock units (prior to consideration of the treasury stock method), that were excluded from our computation of diluted net loss per share because such options and restricted stock units were anti-dilutive (in thousands): | ||||||||||||||
As of September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Options to purchase shares of common stock | 2,717 | 2,315 | ||||||||||||
Shares of common stock issuable upon the vesting of restricted stock units | 497 | 468 | ||||||||||||
Total | 3,214 | 2,783 |
EquityBased_Compensation_Table
Equity-Based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Equity-Based Compensation | ' | |||||||||||||
Schedule of equity-based compensation expense | ' | |||||||||||||
Equity-based compensation expense, for the three and nine months ended September 30, 2013 and 2012 consisted of the following (in thousands): | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Cost of product sales | $ | 25 | $ | 52 | $ | 83 | $ | 198 | ||||||
Research and development | 337 | 473 | 1,634 | 1,420 | ||||||||||
Selling, general and administrative | 1,303 | 1,525 | 4,169 | 3,694 | ||||||||||
Total equity-based compensation expense | $ | 1,665 | $ | 2,050 | $ | 5,886 | $ | 5,312 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Commitments and Contingencies | ' | ||||
Schedule of future minimum rent payments | ' | ||||
Period | Minimum | ||||
Lease | |||||
Payments | |||||
Year Ended December 31, 2013 | $ | 131,553 | |||
Year Ended December 31, 2014 | 1,127,595 | ||||
Year Ended December 31, 2015 | 1,127,595 | ||||
Year Ended December 31, 2016 | 1,127,595 | ||||
Year Ended December 31, 2017 | 1,127,595 | ||||
Thereafter | 1,033,629 | ||||
Total | $ | 5,675,562 |
Restructuring_Tables
Restructuring (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Restructuring | ' | |||||||
Schedule of components of restructuring expenses and current liabilities | ' | |||||||
The following table outlines the components of our restructuring expenses which were recorded in operating expenses and current liabilities for the three and nine months ended September 30, 2013 and 2012 (in thousands): | ||||||||
Three Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Accrued restructuring, beginning of period | $ | 329 | $ | 1,728 | ||||
Employee severance, benefits and related costs | — | 441 | ||||||
Payments | (213 | ) | (902 | ) | ||||
Inventory and other adjustments | — | 166 | ||||||
Accrued restructuring, end of period | $ | 116 | $ | 1,433 | ||||
Nine Months Ended September 30, | ||||||||
2013 | 2012 | |||||||
Accrued restructuring, beginning of period | $ | 1,383 | $ | 2,366 | ||||
Employee severance, benefits and related costs | — | 1,019 | ||||||
Payments | (1,267 | ) | (2,029 | ) | ||||
Inventory and other adjustments | — | 77 | ||||||
Accrued restructuring, end of period | $ | 116 | $ | 1,433 |
Basis_of_Presentation_and_Summ3
Basis of Presentation and Summary of Significant Accounting Policies (Details) (Recurring basis, USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Transfers or reclassifications of securities from Level 1 to Level 2 | $0 | ' |
Transfers or reclassifications of securities from Level 2 to Level 1 | 0 | ' |
Total | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 205,331 | 204,808 |
Total Liabilities | 13,975 | ' |
Total | Acquisition-related contingent consideration | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Liabilities | 13,975 | ' |
Total | Money market funds | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 22,736 | 24,058 |
Total | Corporate debt securities | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 129,664 | 111,690 |
Total | U.S. treasury and government agency securities | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 52,931 | 59,569 |
Total | Commercial paper | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | ' | 9,491 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 22,736 | 24,058 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 22,736 | 24,058 |
Significant Other Observable Inputs (Level 2) | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 182,595 | 180,750 |
Significant Other Observable Inputs (Level 2) | Corporate debt securities | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 129,664 | 111,690 |
Significant Other Observable Inputs (Level 2) | U.S. treasury and government agency securities | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | 52,931 | 59,569 |
Significant Other Observable Inputs (Level 2) | Commercial paper | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Assets | ' | 9,491 |
Significant Unobservable Inputs (Level 3) | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Liabilities | 13,975 | ' |
Significant Unobservable Inputs (Level 3) | Acquisition-related contingent consideration | ' | ' |
Fair value of assets and liabilities measured on a recurring basis | ' | ' |
Total Liabilities | $13,975 | ' |
Basis_of_Presentation_and_Summ4
Basis of Presentation and Summary of Significant Accounting Policies (Details 2) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended |
Jun. 06, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Reconciliation of contingent consideration obligations related to acquisition of MuGard rights | ' | ' | ' |
Adjustments to fair value of contingent consideration | ' | ' | $279,000 |
Recurring basis | Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Business Combination | ' | ' | ' |
Total Liabilities | ' | 13,975,000 | 13,975,000 |
Access | MuGard Rights | ' | ' | ' |
Business Combination | ' | ' | ' |
Fair value of the contingent consideration | 13,700,000 | 14,000,000 | 14,000,000 |
Period over which estimated undiscounted royalty amounts could be paid | ' | ' | '10 years |
Reconciliation of contingent consideration obligations related to acquisition of MuGard rights | ' | ' | ' |
Balance at beginning of period | ' | 13,700,000 | ' |
Acquisition-date fair value of contingent consideration | 13,700,000 | ' | ' |
Payments made | ' | -4,000 | ' |
Adjustments to fair value of contingent consideration | 300,000 | 279,000 | 300,000 |
Balance at end of period | ' | 13,975,000 | 13,975,000 |
Access | MuGard Rights | Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Business Combination | ' | ' | ' |
Intangible assets | ' | 16,900,000 | 16,900,000 |
Discount rate (as a percent) | ' | 19.00% | 19.00% |
Access | MuGard Rights | Recurring basis | Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Business Combination | ' | ' | ' |
Fair value of the contingent consideration | 13,700,000 | ' | ' |
Discount rate (as a percent) | ' | 15.00% | 15.00% |
Access | MuGard Rights | Minimum | ' | ' | ' |
Business Combination | ' | ' | ' |
Estimated undiscounted royalty amounts payable | ' | 28,000,000 | 28,000,000 |
Access | MuGard Rights | Maximum | ' | ' | ' |
Business Combination | ' | ' | ' |
Estimated undiscounted royalty amounts payable | ' | 34,000,000 | 34,000,000 |
Access | MuGard Rights | Previously reported | ' | ' | ' |
Business Combination | ' | ' | ' |
Fair value of the contingent consideration | 14,000,000 | ' | ' |
Access | MuGard Rights | Previously reported | Recurring basis | Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Business Combination | ' | ' | ' |
Fair value of the contingent consideration | $14,000,000 | ' | ' |
Basis_of_Presentation_and_Summ5
Basis of Presentation and Summary of Significant Accounting Policies (Details 3) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Assets held for sale | ' | ' |
Fair market value of assets held for sale | $1,934,000 | $2,000,000 |
Reduction in the carrying value of assets held for sale | 100,000 | ' |
Proceeds from sale of equipment | 500,000 | ' |
Gain on sale of equipment | $400,000 | ' |
Basis_of_Presentation_and_Summ6
Basis of Presentation and Summary of Significant Accounting Policies (Details 4) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Provision for U.S. Feraheme sales allowances and accruals | ' | ' | ' | ' |
Discounts and chargebacks | $10,205,000 | $6,644,000 | $26,925,000 | $19,382,000 |
Government and other rebates | 3,044,000 | 1,595,000 | 8,106,000 | 4,487,000 |
Medicaid rebate reserve adjustment | -625,000 | -861,000 | -568,000 | -621,000 |
Returns | 265,000 | -1,122,000 | 697,000 | -1,680,000 |
Total provision for U.S. Feraheme sales allowances and accruals | 12,889,000 | 6,256,000 | 35,160,000 | 21,568,000 |
Total gross U.S. Feraheme sales | 32,236,000 | 22,442,000 | 87,541,000 | 65,474,000 |
Total provision for U.S. Feraheme sales allowances and accruals as a percent of total gross U.S. Feraheme sales | 40.00% | 28.00% | 40.00% | 33.00% |
Product Returns | ' | ' | ' | ' |
Current expiration period for packaged products | ' | ' | '5 years | ' |
Reduction of reserve for product returns | ' | ' | ' | 2,100,000 |
Expiration period for certain manufactured Feraheme lots | ' | ' | ' | '2 years |
Product returns provision applied to gross sales | ' | ' | 700,000 | 1,700,000 |
Reduction in Medicaid rebate reserves | ' | ' | $600,000 | $600,000 |
Reduction in estimated Medicaid rebate reserve, impact per basic and diluted share (in dollars per share) | ' | ' | $0.03 | $0.03 |
Basis_of_Presentation_and_Summ7
Basis of Presentation and Summary of Significant Accounting Policies (Details 5) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | Sales Revenue, Net | |||||
Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Revenue Concentration Risk | Geographical Concentration Risk | Geographical Concentration Risk | |||||
AmerisourceBergen Drug Corporation. | AmerisourceBergen Drug Corporation. | McKesson Corporation | McKesson Corporation | Cardinal Health, Inc | Cardinal Health, Inc | Takeda Pharmaceutical Company Limited (outside the U.S.) | Takeda Pharmaceutical Company Limited (outside the U.S.) | GPO | GPO | |||||||
Investment Concentration Risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash, cash equivalents and investments | $213,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment in institutional money market funds | 22,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | 30,946,000 | 46,293,000 | 42,900,000 | 63,474,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount invested in a single money market fund collateralized by U.S. treasury and government agency securities | $13,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Customers representing 10% or more of revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of revenues from major customer | ' | ' | ' | ' | 43.00% | 34.00% | 23.00% | 17.00% | 16.00% | 11.00% | 11.00% | 31.00% | 32.00% | 33.00% | ' | ' |
Percentage of revenues From customers outside of the U.S. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Approximate percentage of revenues from customers outside the U.S. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11.00% | 32.00% |
Investments_Details
Investments (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Summary Of Short- and Long-term Investments | ' | ' |
Available-for-sale securities, Amortized Cost | $182,537 | $180,403 |
Available-for-sale securities, Gross Unrealized Gains | 237 | 396 |
Available-for-sale securities, Gross Unrealized Losses | -179 | -49 |
Available-for-sale securities, Estimated Fair Value | 182,595 | 180,750 |
Corporate debt securities | ' | ' |
Summary Of Short- and Long-term Investments | ' | ' |
Available-for-sale securities due in one year or less, Amortized Cost | 45,645 | 52,332 |
Available-for-sale securities due in one to three years, Amortized Cost | 84,020 | 59,176 |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 67 | 88 |
Available-for-sale securities due in one to three years, Gross Unrealized Gains | 92 | 137 |
Available-for-sale securities due in one year or less, Gross Unrealized Losses | -2 | -6 |
Available-for-sale securities due in one to three years, Gross Unrealized Losses | -158 | -37 |
Available-for-sale securities due in one year or less, Estimated Fair Value | 45,710 | 52,414 |
Available-for-sale securities due in one to three years, Estimated Fair Value | 83,954 | 59,276 |
U.S. treasury and government agency securities | ' | ' |
Summary Of Short- and Long-term Investments | ' | ' |
Available-for-sale securities due in one year or less, Amortized Cost | 22,551 | 24,795 |
Available-for-sale securities due in one to three years, Amortized Cost | 30,321 | 34,606 |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 25 | 86 |
Available-for-sale securities due in one to three years, Gross Unrealized Gains | 53 | 84 |
Available-for-sale securities due in one to three years, Gross Unrealized Losses | -19 | -2 |
Available-for-sale securities due in one year or less, Estimated Fair Value | 22,576 | 24,881 |
Available-for-sale securities due in one to three years, Estimated Fair Value | 30,355 | 34,688 |
Commercial paper | ' | ' |
Summary Of Short- and Long-term Investments | ' | ' |
Available-for-sale securities due in one year or less, Amortized Cost | ' | 9,494 |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | ' | 1 |
Available-for-sale securities due in one year or less, Gross Unrealized Losses | ' | -4 |
Available-for-sale securities due in one year or less, Estimated Fair Value | ' | $9,491 |
Investments_Details_2
Investments (Details 2) (Auction rate securities, USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2012 |
Auction rate securities | ' |
Realized Gains and Losses on Investments | ' |
Realized losses | $1.50 |
Accounts_Receivable_Net_Detail
Accounts Receivable, Net (Details) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Accounts Receivable, Net | ' | ' |
Net Accounts receivable | 8,778 | 6,410 |
Accounts Receivable. | Accounts receivable balances | AmerisourceBergen Drug Corporation. | ' | ' |
Customers representing greater than 10% of accounts receivable balances | ' | ' |
Accounts receivable by major customer (as a percent) | 48.00% | 48.00% |
Accounts Receivable. | Accounts receivable balances | Cardinal Health, Inc | ' | ' |
Customers representing greater than 10% of accounts receivable balances | ' | ' |
Accounts receivable by major customer (as a percent) | 28.00% | 18.00% |
Accounts Receivable. | Accounts receivable balances | McKesson Corporation | ' | ' |
Customers representing greater than 10% of accounts receivable balances | ' | ' |
Accounts receivable by major customer (as a percent) | 19.00% | 28.00% |
Inventories_Details
Inventories (Details) (USD $) | 1 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | 31-May-13 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
item | ||||
Inventories | ' | ' | ' | ' |
Raw materials | ' | $5,151 | ' | $2,652 |
Work in process | ' | 5,835 | ' | 2,524 |
Finished goods | ' | 3,708 | ' | 7,275 |
Total inventories | ' | 14,694 | ' | 12,451 |
Number of specific batches of Rienso recalled by Takeda | 1 | ' | ' | ' |
Inventory expensed | ' | $502 | $598 | ' |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 |
Buildings and improvements | Buildings and improvements | Laboratory and production equipment | Laboratory and production equipment | Furniture and fixtures | Furniture and fixtures | Construction in process | Construction in process | Corporate office | Leasehold improvements and furniture and fixtures | |||
Property and Equipment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and Equipment, gross | $3,158,000 | $11,042,000 | $953,000 | $5,373,000 | $343,000 | $115,000 | $1,828,000 | $5,326,000 | $34,000 | $228,000 | ' | $1,400,000 |
Less - accumulated depreciation | -1,417,000 | -7,745,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, net | 1,741,000 | 3,297,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,800,000 | ' |
Accelerated depreciation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,900,000 | ' |
Business_Combination_Details
Business Combination (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Jun. 06, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Consideration: | ' | ' | ' | ' |
Adjustment in fair value estimate of the contingent liability | ' | ' | ' | $279,000 |
MuGard Rights | ' | ' | ' | ' |
Assets Acquired | ' | ' | ' | ' |
Acquired finite-lived intangible assets | ' | ' | 16,900,000 | 16,900,000 |
Access | MuGard Rights | ' | ' | ' | ' |
Business Combination | ' | ' | ' | ' |
Upfront payment in consideration of license | ' | 3,300,000 | ' | ' |
Consideration: | ' | ' | ' | ' |
Cash | 3,434,000 | ' | ' | ' |
Acquisition-related contingent consideration | 13,700,000 | ' | 14,000,000 | 14,000,000 |
Total consideration | 17,134,000 | ' | ' | ' |
Adjustment in fair value estimate of the contingent liability | 300,000 | ' | 279,000 | 300,000 |
Adjustment in fair value estimate of the intangible asset | 300,000 | ' | ' | ' |
Period over which estimated undiscounted royalty amounts could be paid | ' | ' | ' | '10 years |
Contingent consideration classified as short-term liability | ' | ' | 900,000 | 900,000 |
Assets Acquired | ' | ' | ' | ' |
Acquired finite-lived intangible assets | 16,893,000 | ' | ' | ' |
Inventory | 241,000 | ' | ' | ' |
Net identifiable assets acquired | 17,134,000 | ' | ' | ' |
Acquisition-related costs | ' | ' | ' | 800,000 |
Access | MuGard Rights | Significant Unobservable Inputs (Level 3) | ' | ' | ' | ' |
Fair value inputs | ' | ' | ' | ' |
Discount rate (as a percent) | ' | ' | 19.00% | 19.00% |
Access | MuGard Rights | Recurring basis | Significant Unobservable Inputs (Level 3) | ' | ' | ' | ' |
Consideration: | ' | ' | ' | ' |
Acquisition-related contingent consideration | 13,700,000 | ' | ' | ' |
Fair value inputs | ' | ' | ' | ' |
Discount rate (as a percent) | ' | ' | 15.00% | 15.00% |
Access | MuGard Rights | Minimum | ' | ' | ' | ' |
Consideration: | ' | ' | ' | ' |
Estimated undiscounted royalty amounts payable | ' | ' | 28,000,000 | 28,000,000 |
Access | MuGard Rights | Maximum | ' | ' | ' | ' |
Consideration: | ' | ' | ' | ' |
Estimated undiscounted royalty amounts payable | ' | ' | 34,000,000 | 34,000,000 |
Assets Acquired | ' | ' | ' | ' |
Period of MuGuard activity reflected in the condensed consolidated financial statements | ' | ' | ' | '4 months |
Access | MuGard Rights | Previously reported | ' | ' | ' | ' |
Consideration: | ' | ' | ' | ' |
Acquisition-related contingent consideration | 14,000,000 | ' | ' | ' |
Assets Acquired | ' | ' | ' | ' |
Acquired finite-lived intangible assets | 17,200,000 | ' | ' | ' |
Access | MuGard Rights | Previously reported | Recurring basis | Significant Unobservable Inputs (Level 3) | ' | ' | ' | ' |
Consideration: | ' | ' | ' | ' |
Acquisition-related contingent consideration | $14,000,000 | ' | ' | ' |
Intangible_Assets_Net_Details
Intangible Assets, Net (Details) (USD $) | Sep. 30, 2013 | Jun. 06, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
MuGard Rights | MuGard Rights | MuGard Rights | MuGard Rights | ||
Maximum | Maximum | ||||
Intangible Assets, Net | ' | ' | ' | ' | ' |
Acquired finite-lived intangible assets | ' | ' | $16,900,000 | ' | ' |
Useful life | ' | '10 years | ' | ' | ' |
Amortization of MuGard intangible asset | ' | ' | ' | 100,000 | 100,000 |
Expected future annual amortization expense | ' | ' | ' | ' | ' |
Year Ended December 31, 2013 | ' | ' | 41,000 | ' | ' |
Year Ended December 31, 2014 | ' | ' | 660,000 | ' | ' |
Year Ended December 31, 2015 | ' | ' | 915,000 | ' | ' |
Year Ended December 31, 2016 | ' | ' | 1,215,000 | ' | ' |
Year Ended December 31, 2017 | ' | ' | 1,616,000 | ' | ' |
Year Ended December 31, 2018 | ' | ' | 2,103,000 | ' | ' |
Thereafter | ' | ' | 10,316,000 | ' | ' |
Total | $16,866,000 | ' | $16,866,000 | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2012 | Sep. 30, 2012 |
Income Taxes | ' | ' |
Current federal income tax benefit | $0.30 | $0.80 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Changes in accumulated other comprehensive income, net of tax | ' | ' |
Beginning Balance | ($3,935) | ($3,247) |
Other comprehensive income (loss) before reclassifications | 399 | -310 |
Gain (loss) reclassified from other accumulated comprehensive loss | ' | 21 |
Ending Balance | ($3,536) | ($3,536) |
Net_Loss_per_Share_Details
Net Loss per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Components of basic and diluted net loss per share | ' | ' | ' | ' |
Net loss | ($145) | ($3,967) | ($5,948) | ($13,064) |
Weighted average common shares outstanding | 21,691 | 21,403 | 21,613 | 21,374 |
Net loss per share: | ' | ' | ' | ' |
Basic and diluted (in dollars per share) | ($0.01) | ($0.19) | ($0.28) | ($0.61) |
Anti-dilutive securities excluded from the computation of diluted net loss per share | ' | ' | ' | ' |
Anti-dilutive securities (in shares) | ' | ' | 3,214 | 2,783 |
Stock options | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computation of diluted net loss per share | ' | ' | ' | ' |
Anti-dilutive securities (in shares) | ' | ' | 2,717 | 2,315 |
Shares of common stock issuable upon the vesting of restricted stock units | ' | ' | ' | ' |
Anti-dilutive securities excluded from the computation of diluted net loss per share | ' | ' | ' | ' |
Anti-dilutive securities (in shares) | ' | ' | 497 | 468 |
EquityBased_Compensation_Detai
Equity-Based Compensation (Details) (USD $) | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||||||||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2013 | Feb. 28, 2013 | Feb. 28, 2013 | 31-May-13 | 31-May-10 | 31-May-09 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Feb. 28, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Feb. 28, 2013 | Sep. 30, 2013 | Sep. 30, 2012 |
item | Restricted stock units | Restricted stock units | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2007 Equity Incentive Plan | 2000 Stock Plan | 2000 Stock Plan | Other Equity Compensation Grants | Other Equity Compensation Grants | Other Equity Compensation Grants | Other Equity Compensation Grants | Other Equity Compensation Grants | Other Equity Compensation Grants | |
Senior management | Senior management | Stock options | Stock options | Restricted stock units | Stock options | Stock options | Stock options | Restricted stock units | Restricted stock units | Restricted stock units | |||||||
Maximum | Minimum | Maximum | Senior management | Senior management | Senior management | Senior management | Senior management | Senior management | |||||||||
Equity-Based Compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of equity compensation plans | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity compensation plans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares authorized for issuance | ' | ' | ' | 1,100,000 | 800,000 | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of options and restricted stock units granted (in shares) | ' | ' | ' | ' | ' | ' | 6,220,350 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of stock options expired or terminated (in shares) | ' | ' | ' | ' | ' | ' | 2,532,981 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of restricted stock units forfeited (in shares) | ' | ' | ' | ' | ' | ' | 626,122 | ' | ' | ' | ' | ' | ' | ' | ' | 15,000 | ' |
Stock options exercised (in shares) | ' | ' | ' | ' | ' | ' | 137,865 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock issued pursuant to vested restricted stock units | ' | ' | ' | ' | ' | ' | 423,997 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of stock options outstanding (in shares) | ' | ' | ' | ' | ' | ' | 2,157,148 | ' | ' | 104,941 | ' | ' | ' | ' | ' | ' | ' |
Number of restricted stock units outstanding (in shares) | ' | ' | ' | ' | ' | ' | 342,237 | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' |
Remaining number of shares available for future grants | ' | ' | ' | ' | ' | ' | 2,074,125 | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' |
Expiration term | ' | ' | ' | ' | ' | ' | ' | '7 years | '10 years | ' | ' | ' | ' | ' | ' | ' | ' |
Number of options granted (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 210,000 | 300,000 | ' | ' | ' |
Number of options forfeited (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 45,000 | ' | ' | ' | ' |
Number of restricted stock units granted (in shares) | ' | 82,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95,000 | 100,000 |
Award vesting period | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | '4 years | ' | ' |
Fair value of awards issued | ' | ' | $0.70 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expense recognition period | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
EquityBased_Compensation_Detai1
Equity-Based Compensation (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Equity-based compensation expense | ' | ' | ' | ' |
Total equity-based compensation expense | $1,665 | $2,050 | $5,886 | $5,312 |
Cost of product sales | ' | ' | ' | ' |
Equity-based compensation expense | ' | ' | ' | ' |
Total equity-based compensation expense | 25 | 52 | 83 | 198 |
Research and development | ' | ' | ' | ' |
Equity-based compensation expense | ' | ' | ' | ' |
Total equity-based compensation expense | 337 | 473 | 1,634 | 1,420 |
Selling, general and administrative | ' | ' | ' | ' |
Equity-based compensation expense | ' | ' | ' | ' |
Total equity-based compensation expense | $1,303 | $1,525 | $4,169 | $3,694 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Jun. 30, 2013 | |
item | ||
Minimum | ' | ' |
Patent appeals and market exclusivity | ' | ' |
Estimated term to defend the validity of patent through the appeals process | '2 years | ' |
Ferumoxytol term of data and market exclusivity even if there is no successful outcome from the appeals process | '8 years | ' |
Maximum | ' | ' |
Patent appeals and market exclusivity | ' | ' |
Estimated term to defend the validity of patent through the appeals process | '3 years | ' |
Ferumoxytol term of data and market exclusivity even if there is no successful outcome from the appeals process | '10 years | ' |
Real property | ' | ' |
Facility Lease Obligations | ' | ' |
Initial lease term | '5 years 2 months | ' |
Number of successive five year extension terms | 1 | ' |
Extension period of the lease terms | '5 years | ' |
Minimum Lease Payments | ' | ' |
Year Ended December 31, 2013 | $131,553 | ' |
Year Ended December 31, 2014 | 1,127,595 | ' |
Year Ended December 31, 2015 | 1,127,595 | ' |
Year Ended December 31, 2016 | 1,127,595 | ' |
Year Ended December 31, 2017 | 1,127,595 | ' |
Thereafter | 1,033,629 | ' |
Total | 5,675,562 | ' |
Security deposit in the form of an irrevocable letter of credit | ' | 400,000 |
Security deposit as on second anniversary of the commencement date | ' | $300,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (Access, MuGard Rights, USD $) | 3 Months Ended | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 06, 2013 |
Acquisition-related Contingent Consideration | ' | ' | ' |
Fair value of the contingent consideration | 14,000 | 14,000 | $13,700 |
Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Acquisition-related Contingent Consideration | ' | ' | ' |
Discount rate (as a percent) | 19.00% | 19.00% | ' |
Recurring basis | Significant Unobservable Inputs (Level 3) | ' | ' | ' |
Acquisition-related Contingent Consideration | ' | ' | ' |
Fair value of the contingent consideration | ' | ' | $13,700 |
Discount rate (as a percent) | 15.00% | 15.00% | ' |
Collaborative_Agreements_Detai
Collaborative Agreements (Details) (Takeda, USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Apr. 30, 2010 | Mar. 31, 2010 | Sep. 30, 2013 | Jun. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2010 |
item | item | ||||||
Collaborative Agreements | ' | ' | ' | ' | ' | ' | ' |
Number of deliverables | ' | ' | 4 | ' | 4 | ' | ' |
Upfront payment received | $60 | ' | ' | ' | ' | ' | ' |
Additional upfront payment | ' | ' | ' | ' | ' | ' | 1 |
Period of recognition of deferred revenues | ' | '10 years | ' | ' | ' | ' | ' |
Milestone revenue received | ' | ' | ' | ' | ' | 18 | ' |
Deferred revenue recognized in earnings related to upfront payment of an $18.0 million milestone payment | ' | ' | 2 | ' | 5.9 | ' | ' |
Milestone payments revenue recognized under the agreement | ' | ' | ' | 15 | ' | ' | ' |
Product sales and royalty revenue recognized | ' | ' | 0.1 | ' | 0.3 | ' | ' |
Deferred revenues | ' | ' | 2.1 | ' | 2.1 | ' | ' |
Deferred costs | ' | ' | 1.9 | ' | 1.9 | ' | ' |
Maximum | ' | ' | ' | ' | ' | ' | ' |
Collaborative Agreements | ' | ' | ' | ' | ' | ' | ' |
Milestone payments expected to be received under the agreement | ' | ' | 186 | ' | 186 | ' | ' |
Other reimbursement revenues | ' | ' | $0.10 | ' | $0.10 | ' | ' |
Restructuring_Details
Restructuring (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Components of restructuring expenses and reserve | ' | ' | ' | ' |
Accrued restructuring, beginning of period | $329 | $1,728 | $1,383 | $2,366 |
Employee severance, benefits and related costs | ' | 441 | ' | 1,019 |
Payments | -213 | -902 | -1,267 | -2,029 |
Inventory and other adjustments | ' | 166 | ' | 77 |
Accrued restructuring, end of period | $116 | $1,433 | $116 | $1,433 |
Subsequent_Event_Details
Subsequent Event (Details) (Subsequent event, Cambridge, Massachusetts manufacturing facility, Agreement of sale with 61 Mooney Street, LLC, USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Oct. 30, 2013 |
Subsequent event | Cambridge, Massachusetts manufacturing facility | Agreement of sale with 61 Mooney Street, LLC | ' |
Subsequent event | ' |
Consideration received for the sale of manufacturing facility | $2 |