Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Document and Entity Information | ||
Entity Registrant Name | AMAG PHARMACEUTICALS INC. | |
Entity Central Index Key | 792977 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 30,532,621 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $243,801 | $119,296 |
Investments | 117,338 | 24,890 |
Accounts receivable, net | 56,176 | 38,172 |
Inventories | 35,939 | 40,610 |
Receivable from collaboration | 4,518 | |
Deferred tax assets | 54,896 | 32,094 |
Prepaid and other current assets | 11,381 | 14,456 |
Total current assets | 519,531 | 274,036 |
Property and equipment, net | 1,439 | 1,519 |
Goodwill | 205,824 | 205,824 |
Intangible assets, net | 876,426 | 887,908 |
Restricted cash | 2,397 | 2,397 |
Other long-term assets | 14,825 | 17,249 |
Total assets | 1,620,442 | 1,388,933 |
Current liabilities: | ||
Accounts payable | 5,958 | 7,301 |
Accrued expenses | 88,811 | 80,811 |
Current portion of long-term debt | 38,250 | 34,000 |
Deferred revenues | 33,563 | 44,376 |
Total current liabilities | 166,582 | 166,488 |
Long-term liabilities: | ||
Long-term debt, net | 281,904 | 293,905 |
Convertible 2.5% senior notes, net | 169,090 | 167,441 |
Acquisition-related contingent consideration | 220,537 | 217,984 |
Deferred tax liabilities | 106,030 | 77,619 |
Other long-term liabilities | 5,123 | 5,543 |
Total liabilities | 949,266 | 928,980 |
Commitments and contingencies | ||
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; 30,531,621 and 25,599,550 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 305 | 256 |
Additional paid-in capital | 991,959 | 793,757 |
Accumulated other comprehensive loss | -3,549 | -3,617 |
Accumulated deficit | -317,539 | -330,443 |
Total stockholders' equity | 671,176 | 459,953 |
Total liabilities and stockholders' equity | $1,620,442 | $1,388,933 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets | ||
Convertible senior notes, interest rate (as a percent) | 2.50% | 2.50% |
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 | 30,531,621 | 25,599,550 |
Common stock, shares outstanding | 30,531,621 | 25,599,550 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues: | ||
U.S. product sales, net | $77,415 | $17,523 |
License fee, collaboration and other revenues | 12,090 | 3,312 |
Total revenues | 89,505 | 20,835 |
Costs and expenses: | ||
Cost of product sales | 21,026 | 2,837 |
Research and development expenses | 6,988 | 6,498 |
Selling, general and administrative expenses | 32,112 | 17,491 |
Restructuring expenses | 571 | |
Total costs and expenses | 60,697 | 26,826 |
Operating income (loss) | 28,808 | -5,991 |
Other income (expense): | ||
Interest expense | -10,367 | -1,476 |
Interest and dividend income, net | 71 | 265 |
Other Income | 100 | |
Total other income (expense) | -10,296 | -1,111 |
Net income (loss) before income taxes | 18,512 | -7,102 |
Income tax expense | 5,608 | |
Net income (loss) | $12,904 | ($7,102) |
Net Income (Loss) per share: | ||
Basic | $0.47 | ($0.33) |
Diluted | $0.39 | ($0.33) |
Weighted average shares outstanding used to compute net income (loss) per share: | ||
Basic | 27,213 | 21,824 |
Diluted | 38,245 | 21,824 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Consolidated Statements of Comprehensive Income (Loss) | ||
Net income (loss) | $12,904 | ($7,102) |
Unrealized gains on securities: | ||
Holding gains arising during period, net of tax | 68 | 77 |
Net unrealized gains on securities | 68 | 77 |
Total comprehensive income (loss) | $12,972 | ($7,025) |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net income (loss) | $12,904 | ($7,102) |
Adjustments to reconcile net income ( loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 14,519 | 162 |
Amortization of premium/discount on purchased securities | 56 | 664 |
Write-down of inventory to net realizable value | 1,437 | |
Non-cash equity-based compensation expense | 2,668 | 1,930 |
Amortization of debt discount and debt issuance costs | 2,401 | 851 |
Other income | -100 | |
Change in fair value of contingent consideration | 2,599 | 789 |
Deferred tax liabilities | 5,608 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | -18,004 | -3,273 |
Inventories | 3,326 | -2,521 |
Receivable from collaboration | 4,518 | 76 |
Prepaid and other current assets | 3,076 | -1,014 |
Other long-term assets | 2,106 | 885 |
Accounts payable and accrued expenses | 4,852 | -1,101 |
Deferred revenues | -10,813 | -3,075 |
Other long-term liabilities | -420 | 318 |
Total adjustments | 16,492 | -3,972 |
Net cash provided by (used in) operating activities | 29,396 | -11,074 |
Cash flows from investing activities: | ||
Proceeds from sales or maturities of investments | 1,459 | 26,706 |
Purchase of investments | -93,895 | -25,046 |
Proceeds from sale of assets | 100 | |
Capital expenditures | -55 | -124 |
Change in restricted cash | 2,883 | |
Net cash (used in) provided by investing activities | -92,491 | 4,519 |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock, net of underwriting discounts and other expenses | 189,150 | |
Long-term debt principal payment | -8,185 | |
Proceeds from issuance of convertible 2.5% senior notes | 200,000 | |
Payment of debt issuance costs | -6,361 | |
Proceeds from issuance of warrants | 25,620 | |
Purchase of convertible bond hedges | -39,760 | |
Payment of contingent consideration | -84 | -31 |
Proceeds from the exercise of stock options | 6,719 | 1,017 |
Net cash provided by financing activities | 187,600 | 180,485 |
Net increase in cash and cash equivalents | 124,505 | 173,930 |
Cash and cash equivalents at beginning of the year | 119,296 | 26,986 |
Cash and cash equivalents at end of the year | 243,801 | 200,916 |
Supplemental data of cash flow information: | ||
Interest paid on long-term debt | 6,380 | |
Interest paid on convertible 2.5% senior notes | $2,500 |
Description_of_Business
Description of Business | 3 Months Ended |
Mar. 31, 2015 | |
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 Makena® (hydroxyprogesterone caproate injection), Feraheme® (ferumoxytol) Injection for Intravenous (“IV”) use and MuGard® Mucoadhesive Oral Wound Rinse. | |
On November 12, 2014, we acquired Lumara Health Inc. (“Lumara Health”), a privately held pharmaceutical company specializing in women’s health. In connection with the acquisition of Lumara Health, we acquired Makena, a progestin indicated to reduce the risk of preterm birth in women with a singleton pregnancy who have a history of singleton spontaneous preterm birth. We sell Makena to specialty pharmacies and distributors, who, in turn, sell Makena to healthcare providers, hospitals, government agencies and integrated delivery systems. Additional details regarding the acquisition of Lumara Health can be found in Note C, “Business Combinations,” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. | |
We also market and sell Feraheme, which was approved for marketing in the U.S. in June 2009 by the U.S. Food and Drug Administration for use as an IV iron replacement therapy for the treatment of iron deficiency anemia in adult patients with chronic kidney disease. We began selling Feraheme in the U.S. in July 2009 through our 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. | |
In addition, in June 2013, we entered into a license agreement with PlasmaTech Biopharmaceuticals, Inc. (“PlasmaTech”) (formerly known as Access Pharmaceuticals, Inc.) (the “MuGard License Agreement”), under which we acquired the U.S. commercial rights to MuGard for the management of oral mucositis (the “MuGard Rights”). | |
Throughout this Quarterly Report on Form 10-Q, AMAG Pharmaceuticals, Inc. and our consolidated subsidiaries are collectively referred to as “the Company,” “AMAG,” “we,” “us,” or “our.” Unless the context suggests otherwise, references to “Feraheme” refer to both Feraheme (the trade name for ferumoxytol in the U.S. and Canada) and Rienso (the trade name for ferumoxytol in the European Union (“EU”) and Switzerland). | |
Basis_of_Presentation_and_Summ
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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 (“GAAP”). | ||||||||
In accordance with GAAP 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, 2014. 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, 2014. | ||||||||
Use of Estimates and Assumptions | ||||||||
The preparation of condensed consolidated financial statements in conformity with GAAP 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 to determine amounts and values of, but are not limited to: revenue recognition related to product sales and collaboration agreements; product sales allowances and accruals; potential other-than-temporary impairment of investments; acquisition date fair value and subsequent fair value estimates used to assess impairment of long-lived assets, including goodwill, in-process research and development (“IPR&D”) and other intangible assets; contingent consideration; debt obligations; accrued expenses; income taxes and equity-based compensation expense. Actual results could differ materially from those estimates. | ||||||||
Cash and Cash Equivalents | ||||||||
Cash and cash equivalents consist principally of cash held in commercial bank accounts, money market funds and U.S. Treasury securities having an original maturity of less than three months. We consider all highly liquid investments with a maturity of three months or less as of the acquisition date to be cash equivalents. At March 31, 2015 and December 31, 2014, substantially all of our cash and cash equivalents were held in either commercial bank accounts or money market funds. | ||||||||
Principles of Consolidation | ||||||||
The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. Our results of operations for the three months ended March 31, 2015, include the results of Lumara Health, which we acquired on November 12, 2014 (the “Lumara Acquisition Date”). | ||||||||
Revenue Recognition | ||||||||
We recognize revenue from the sale of our products as well as license fee, collaboration and other revenues, including milestone payments, other product sale revenues, and royalties we receive from our licensees. Revenue is recognized when the following criteria are met: persuasive evidence of an arrangement exists; delivery of product has occurred or services have been rendered; the sales price charged is fixed or determinable; and collection is reasonably assured. | ||||||||
Our U.S. product sales, which primarily represented revenues from Makena and Feraheme in the first quarter of 2015 and Feraheme in the first quarter of 2014, were offset by provisions for allowances and accruals as follows (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Gross U.S. product sales | $ | 125,517 | $ | 31,661 | ||||
Provision for U.S. product sales allowances and accruals: | ||||||||
Contractual adjustments | 35,134 | 13,973 | ||||||
Governmental rebates | 12,968 | 165 | ||||||
Total provision for U.S product sales allowances and accruals | 48,102 | 14,138 | ||||||
U.S. product sales, net | $ | 77,415 | $ | 17,523 | ||||
We recognize U.S. product sales revenue net of certain allowances and accruals in our condensed consolidated statement of operations at the time of sale. Our contractual adjustments include provisions for returns, pricing and prompt payment discounts, as well as wholesaler distribution fees, and volume-based and other commercial rebates. Governmental rebates relate to our reimbursement arrangements with state Medicaid programs. | ||||||||
We did not materially adjust our product sales allowances and accruals during the three months ended March 31, 2015 or 2014. If we determine in future periods that our actual experience is not indicative of our expectations, if our actual experience changes, or if other factors affect our estimates, we may be required to adjust our allowances and accruals estimates, which would affect our net product sales in the period of the adjustment and could be significant. | ||||||||
The increases in contractual adjustments and governmental rebates primarily reflects the addition of Makena to our product portfolio in connection with the November 2014 acquisition of Lumara Health. | ||||||||
IPR&D | ||||||||
IPR&D acquired in a business combination is capitalized on our condensed consolidated balance sheet at the acquisition-date fair value, net of any accumulated impairment losses. IPR&D is tested for impairment on an annual basis or more frequently if indicators of impairment are present, until completion or abandonment of the projects. If we determine that IPR&D becomes impaired or is abandoned, the carrying value of the IPR&D is written down to its fair value with the related impairment charge recognized in our condensed consolidated statement of operations in the period in which the impairment occurs. Upon successful completion of each project and launch of the product, we will make a separate determination of the estimated useful life of the IPR&D intangible asset and the related amortization will be recorded as an expense prospectively over its estimated useful life. | ||||||||
Concentrations and Significant Customer Information | ||||||||
Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents, investments, and accounts receivable. As of March 31, 2015, our cash, cash equivalents and investments amounted to approximately $361.1 million. We currently invest our excess cash primarily in corporate debt securities, commercial paper, certificates of deposit and municipal securities. As of March 31, 2015, approximately $193.9 million of our total $243.8 million cash and cash equivalents balance was invested in institutional money market funds, of which $190.8 million was invested in a single fund. | ||||||||
Our operations are located entirely within the U.S. We are focused principally on developing, manufacturing, and commercializing Makena and Feraheme 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 three months ended March 31, 2015 and 2014: | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
AmerisourceBergen Drug Corporation | 30% | 39% | ||||||
Takeda Pharmaceuticals Company Limited | 13% | 11% | ||||||
McKesson Corporation | 10% | 22% | ||||||
Cardinal Health, Inc. | <10% | 15% | ||||||
In addition, approximately 23% and 28% of our Feraheme end-user demand during the three months ended March 31, 2015 and 2014, respectively, was generated by members of a single GPO with which we have contracted. Revenues from customers outside of the U.S. amounted to approximately 13% and 16% of our total revenues for the three months ended March 31, 2015 and 2014, respectively, and were principally related to Feraheme collaboration revenue recognized in connection with a license, development and commercialization agreement with our former partner Takeda Pharmaceutical Company Limited (“Takeda”), which is headquartered in Japan. | ||||||||
We are currently solely dependent on a single supply chain for Feraheme drug substance and finished drug product and a single supply chain for Makena finished drug product. We are exposed to a significant loss of revenue from the sale of Feraheme and Makena if our suppliers and/or manufacturers cannot fulfill demand for any reason. | ||||||||
Business_Combinations
Business Combinations | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Business Combinations | |||||
Business Combinations | |||||
C.BUSINESS COMBINATIONS | |||||
As part of our strategy to expand our portfolio with additional commercial-stage products, in November 2014, we acquired Lumara Health through which we acquired its product Makena. | |||||
On November 12, 2014, we completed our acquisition of Lumara Health at which time Lumara Health became our wholly-owned subsidiary. By virtue of the acquisition of Lumara Health, we acquired Lumara Health’s existing commercial product, Makena, a progestin indicated to reduce the risk of preterm birth in women with a singleton pregnancy who have a history of singleton spontaneous preterm birth. Under the terms of the acquisition agreement, we acquired 100% of the equity ownership of Lumara Health, excluding the assets and liabilities of the Women’s Health Division and certain other assets and liabilities, which were divested by Lumara Health prior to closing, for $600.0 million in cash (subject to finalization of certain adjustments related to Lumara Health’s financial position at the time of closing, including adjustments related to net working capital, net debt and transaction expenses) and issued approximately 3.2 million shares of our common stock, par value $0.01, having a value of approximately $112.0 million at the time of closing, to the holders of common stock, stock options, and restricted stock units (“RSUs”) of Lumara Health. | |||||
We have agreed to pay additional merger consideration, up to a maximum of $350.0 million, based upon the achievement of certain net sales milestones of Makena for the period from December 1, 2014 through December 19, 2019. This contingent consideration is recorded as a liability and measured at fair value based upon significant unobservable inputs. See Note E, “Fair Value Measurements,” for additional information. See Note C to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2014 for additional information. | |||||
The following table summarizes the components of the estimated total purchase price at fair value, subject to adjustment upon finalization of Lumara Health’s net working capital, net debt and transaction expenses as of the Lumara Acquisition Date (in thousands): | |||||
Total Acquisition | |||||
Date Fair Value | |||||
Cash consideration | $ | 600,000 | |||
Fair value of 3.2 million shares of AMAG common stock | 111,964 | ||||
Fair value of contingent milestone payments | 205,000 | ||||
Estimated working capital and other adjustments | 821 | ||||
Purchase price paid at closing | 917,785 | ||||
Less: | |||||
Due from sellers | (5,119 | ) | |||
Cash acquired from Lumara Health | (5,219 | ) | |||
Total purchase price | $ | 907,447 | |||
We accounted for the acquisition of Lumara Health as a business combination using the acquisition method of accounting. Under the acquisition method of accounting, the total purchase price of an acquisition is allocated to the net tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. The following table summarizes the preliminary fair values assigned to the assets acquired and the liabilities assumed by us at the Lumara Acquisition Date (in thousands): | |||||
Accounts receivable | $ | 34,918 | |||
Inventories | 30,300 | ||||
Prepaid and other current assets | 3,322 | ||||
Deferred income tax assets | 94,965 | ||||
Property and equipment | 60 | ||||
Makena marketed product | 797,100 | ||||
IPR&D | 79,100 | ||||
Restricted cash | 1,997 | ||||
Other long-term assets | 3,412 | ||||
Accounts payable | (3,807 | ) | |||
Accrued expenses | (41,532 | ) | |||
Deferred income tax liabilities | (293,649 | ) | |||
Other long-term liabilities | (4,563 | ) | |||
Total estimated identifiable net assets | $ | 701,623 | |||
Goodwill | 205,824 | ||||
Total | $ | 907,447 | |||
The preliminary values assigned to accounts receivable, prepaid and other current assets, other long-term assets, accounts payable, accrued expenses, deferred income taxes, other long-term liabilities and goodwill presented in the table above are subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed. Any adjustments to the preliminary fair value of these acquired assets and liabilities assumed will be made as soon as practicable but not later than one year from the Lumara Acquisition Date. | |||||
Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the fair values of the net assets acquired and liabilities assumed. The $205.8 million of goodwill resulting from the acquisition was primarily due to the net deferred tax liabilities recorded on the fair value adjustments to Lumara Health’s inventories and identifiable intangible assets. The goodwill is not deductible for income tax purposes. | |||||
Investments
Investments | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Investments | ||||||||||||||
Investments | ||||||||||||||
D.INVESTMENTS | ||||||||||||||
As of March 31, 2015 and December 31, 2014, our investments equaled $117.3 million and $24.9 million, respectively, and consisted of securities classified as available-for-sale. | ||||||||||||||
The following is a summary of our investments as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||||||||
March 31, 2015 | ||||||||||||||
Gross | Gross | Estimated | ||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||
Cost | Gains | Losses | Value | |||||||||||
Corporate debt securities | ||||||||||||||
Due in one year or less | $ | 15,167 | $ | 13 | $ | — | $ | 15,180 | ||||||
Due in one to three years | 47,352 | 45 | (10 | ) | 47,387 | |||||||||
Commercial paper | ||||||||||||||
Due in one year or less | 30,460 | 2 | (1 | ) | 30,461 | |||||||||
Due in one to three years | — | — | — | — | ||||||||||
Certificates of deposit | ||||||||||||||
Due in one year or less | 15,000 | — | (1 | ) | 14,999 | |||||||||
Due in one to three years | — | — | — | — | ||||||||||
Municipal securities | ||||||||||||||
Due in one year or less | — | — | — | — | ||||||||||
Due in one to three years | 9,315 | — | (4 | ) | 9,311 | |||||||||
Total investments | $ | 117,294 | $ | 60 | $ | (16 | ) | $ | 117,338 | |||||
December 31, 2014 | ||||||||||||||
Gross | Gross | Estimated | ||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||
Cost | Gains | Losses | Value | |||||||||||
Corporate debt securities | ||||||||||||||
Due in one year or less | $ | 11,656 | $ | 3 | $ | (4 | ) | $ | 11,655 | |||||
Due in one to three years | 13,258 | 10 | (33 | ) | 13,235 | |||||||||
Total investments | $ | 24,914 | $ | 13 | $ | (37 | ) | $ | 24,890 | |||||
The $92.4 million increase in our total investments was primarily due to the sale of approximately 4.6 million shares of our common stock at a public offering price of $44.00 per share in March 2015, resulting in gross proceeds to us of approximately $201.2 million, prior to underwriting discounts of $12.1 million and $0.2 million in commissions and other offering expenses. | ||||||||||||||
Impairments and Unrealized Gains and 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 the three month periods ended March 31, 2015 and 2014. 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. As of March 31, 2015, none of our investments has been in an unrealized loss position for more than one year. 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. | ||||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Fair Value Measurements | ||||||||||||||
E.FAIR VALUE MEASUREMENTS | ||||||||||||||
The following tables represent the fair value hierarchy as of March 31, 2015 and December 31, 2014 for those assets and liabilities that we measure at fair value on a recurring basis (in thousands): | ||||||||||||||
Fair Value Measurements at March 31, 2015 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 | $ | 193,868 | $ | 193,868 | $ | — | $ | — | ||||||
Corporate debt securities | 62,567 | — | 62,567 | — | ||||||||||
Commercial paper | 30,461 | — | 30,461 | — | ||||||||||
Certificates of deposit | 14,999 | — | 14,999 | — | ||||||||||
Municipal securities | 9,311 | — | 9,311 | — | ||||||||||
Total Assets | $ | 311,206 | $ | 193,868 | $ | 117,338 | $ | — | ||||||
Liabilities: | ||||||||||||||
Contingent consideration - Lumara Health | $ | 209,037 | $ | — | $ | — | $ | 209,037 | ||||||
Contingent consideration - MuGard | 12,222 | — | — | 12,222 | ||||||||||
Total Liabilities | $ | 221,259 | $ | — | $ | — | $ | 221,259 | ||||||
Fair Value Measurements at December 31, 2014 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 | $ | 77,254 | $ | 77,254 | $ | — | $ | — | ||||||
Corporate debt securities | 24,890 | — | 24,890 | — | ||||||||||
Total Assets | $ | 102,144 | $ | 77,254 | $ | 24,890 | $ | — | ||||||
Liabilities: | ||||||||||||||
Contingent consideration - Lumara Health | $ | 206,600 | $ | — | $ | — | $ | 206,600 | ||||||
Contingent consideration - MuGard | 12,102 | — | — | 12,102 | ||||||||||
Total Liabilities | $ | 218,702 | $ | — | $ | — | $ | 218,702 | ||||||
Investments | ||||||||||||||
Our money market funds are classified as Level 1 assets under the fair value hierarchy as these assets have been valued using quoted market prices in active markets without any valuation adjustment. Our investments are classified as Level 2 assets under the fair value hierarchy as these assets were primarily determined from independent pricing services, which 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 March 31, 2015. In addition, there were no transfers or reclassifications of any securities between Level 1 and Level 2 during the three months ended March 31, 2015. | ||||||||||||||
Contingent consideration | ||||||||||||||
We accounted for the acquisitions of Lumara Health and the MuGard Rights as business combinations under the acquisition method of accounting. Additional details regarding the Lumara Health acquisition and the MuGard License Agreement can be found in Note C, “Business Combinations” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. The fair value measurements of contingent consideration obligations and the related intangible assets arising from business combinations are determined using unobservable inputs (“Level 3”). These inputs include (a) the estimated amount and timing of projected cash flows; (b) the probability of the achievement of the factors on which the contingency is based; and (c) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases or decreases in any of those inputs in isolation could result in a significantly lower or higher fair value measurement. | ||||||||||||||
The following table presents a reconciliation of contingent consideration obligations related to the acquisition of Lumara Health and the MuGard Rights measured on a recurring basis using Level 3 inputs as of March 31, 2015 (in thousands): | ||||||||||||||
Balance as of December 31, 2014 | $ | 218,702 | ||||||||||||
Payments made | (84 | ) | ||||||||||||
Adjustments to fair value of contingent consideration | 2,599 | |||||||||||||
Other adjustments | 42 | |||||||||||||
Balance as of March 31, 2015 | $ | 221,259 | ||||||||||||
The $2.6 million increase in the fair value of the contingent consideration liability was due to the time value of money. This adjustment is included in selling, general and administrative expenses in our condensed consolidated statements of operations. We have classified all of the Lumara Health contingent consideration as a long-term liability in our condensed consolidated balance sheet as of March 31, 2015. We have classified $0.7 million of the MuGard contingent consideration as a short-term liability, which was included in accrued expenses in our condensed consolidated balance sheet as of March 31, 2015. | ||||||||||||||
The fair value of the contingent milestone payments payable by us to the former stockholders of Lumara Health was determined based on our probability-adjusted discounted cash flows estimated to be realized from the net sales of Makena from December 1, 2014 through December 31, 2019. The cash flows were discounted at a rate of 5%, which we believe is reasonable given the level of certainty of the pay-out. | ||||||||||||||
The fair value of the contingent royalty payments payable by us to PlasmaTech was determined based on various market factors, including an analysis of estimated sales using a discount rate of approximately 15%. As of March 31, 2015, we estimate that the undiscounted royalty amounts we could pay under the MuGard License Agreement may range from $20.0 million to $28.0 million over a ten year period beginning on June 6, 2013, the acquisition date, which is our best estimate of the period over which we expect the majority of the asset’s cash flows to be derived. | ||||||||||||||
We believe the estimated fair values of Lumara Health and 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. | ||||||||||||||
Debt | ||||||||||||||
In February 2014, we issued $200.0 million of 2.5% convertible senior notes due February 15, 2019 (the “Convertible Notes”). As of March 31, 2015, the fair value of our Convertible Notes was approximately $433.5 million, which differs from their carrying values. The fair value of our Convertible Notes is influenced by interest rates and our stock price and stock price volatility and is determined by prices for the Convertible Notes observed in market trading, which are Level 2 inputs. | ||||||||||||||
In November 2014, we borrowed $340.0 million under a term loan facility to fund a portion of the purchase price of Lumara Health (the “Term Loan Facility”). The fair value of our outstanding borrowings under the Term Loan Facility was approximately $345.7 million at March 31, 2015, which differs from their carrying values. The fair value of our Term Loan debt is influenced by interest rates, which are Level 2 inputs. | ||||||||||||||
See Note P, “Debt,” for additional information on our debt obligations. | ||||||||||||||
Accounts_Receivable_Net
Accounts Receivable, Net | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Accounts Receivable, Net | ||||||
Accounts Receivable, Net | ||||||
F.ACCOUNTS RECEIVABLE, NET | ||||||
Our net accounts receivable were $56.2 million and $38.2 million as of March 31, 2015 and December 31, 2014, respectively, and primarily represented amounts due from wholesalers, distributors and specialty pharmacies to whom we sell our products directly. Accounts receivable are recorded net of reserves for estimated chargeback obligations, prompt payment discounts and any allowance for doubtful accounts. | ||||||
Customers which represented greater than 10% of our accounts receivable balances as of March 31, 2015 and December 31, 2014 were as follows: | ||||||
March 31, 2015 | December 31, 2014 | |||||
AmerisourceBergen Drug Corporation | 51% | 45% | ||||
McKesson Corporation | <10% | 12% | ||||
Cardinal Health, Inc. | <10% | 10% | ||||
Inventories
Inventories | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventories | ||||||||
Inventories | ||||||||
G.INVENTORIES | ||||||||
Our major classes of inventories were as follows as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Raw materials | $ | 15,757 | $ | 14,188 | ||||
Work in process | 5,900 | 5,965 | ||||||
Finished goods | 14,282 | 20,457 | ||||||
Total | $ | 35,939 | $ | 40,610 | ||||
Included in other long-term assets: | ||||||||
Raw materials | 5,908 | 7,798 | ||||||
Total Inventories | $ | 41,847 | $ | 48,408 | ||||
During the three months ended March 31, 2015, we reserved $3.6 million of Makena inventory, which may not be saleable. This amount included a fair value adjustment of $3.3 million. | ||||||||
In the fourth quarter of 2014, we recorded the acquired Makena inventory at a fair value of $30.3 million, which required a $26.1 million step-up adjustment to recognize the inventory at its expected net realizable value. We are amortizing and recognizing the step-up adjustment as cost of product sales in our condensed consolidated statements of operations as the related inventories are sold. During the three months ended March 31, 2015, we recognized $2.9 million of the fair value adjustment as cost of product sales. In connection with the fair value step-up adjustment of Makena inventory, we have recorded a portion of the associated raw material inventory and associated step-up adjustment in other long-term assets as we believe that the amount of inventory purchased in the acquisition exceeds our normal inventory cycle. | ||||||||
Goodwill_IPRD_and_Other_Intang
Goodwill, IPR&D and Other Intangible Assets, Net | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Goodwill, IPR&D and Other Intangible Assets, Net | ||||||||||||||||||||
Goodwill, IPR&D and Other Intangible Assets, Net | ||||||||||||||||||||
H.GOODWILL, IPR&D AND OTHER INTANGIBLE ASSETS, NET | ||||||||||||||||||||
Goodwill | ||||||||||||||||||||
In connection with our November 2014 acquisition of Lumara Health, we recognized $205.8 million of goodwill as of December 31, 2014. Our goodwill as of March 31, 2015 remained unchanged from the balance of December 31, 2014. As of March 31, 2015, we had no accumulated impairment losses related to goodwill. See Note C, “Business Combinations” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information. | ||||||||||||||||||||
Intangible Assets, Net | ||||||||||||||||||||
Our identifiable intangible assets consist of license agreements, product rights and other identifiable intangible assets, which result from product and business acquisitions. As of March 31, 2015 and December 31, 2014, our identifiable intangible assets consisted of the following (in thousands): | ||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | |||||||||||||||
Amortization | Amortization | |||||||||||||||||||
Amortizable intangible assets: | ||||||||||||||||||||
Makena Marketed Product | $ | 797,100 | $ | 16,245 | $ | 780,855 | $ | 797,100 | $ | 4,834 | $ | 792,266 | ||||||||
MuGard Rights | 16,893 | 422 | 16,471 | 16,893 | 351 | 16,542 | ||||||||||||||
813,993 | 16,667 | 797,326 | 813,993 | 5,185 | 808,808 | |||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||
IPR&D | 79,100 | — | 79,100 | 79,100 | — | 79,100 | ||||||||||||||
Total intangible assets | $ | 893,093 | $ | 16,667 | $ | 876,426 | $ | 893,093 | $ | 5,185 | $ | 887,908 | ||||||||
The Makena intangible asset (the “Makena Marketed Product”) and IPR&D intangible assets were acquired in November 2014 in connection with our acquisition of Lumara Health. Amortization of the Makena Marketed Product asset is being recognized using an economic consumption model over twenty years, which we believe is an appropriate amortization period due to the estimated economic lives of the product rights and related intangibles. | ||||||||||||||||||||
The MuGard Rights were acquired from PlasmaTech in June 2013. Amortization of the MuGard Rights is being recognized 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 $11.5 million and less than $0.1 million for the three months ended March 31, 2015 and 2014, respectively, in amortization expense related to the Makena Marketed Product and the MuGard Rights. Amortization expense is recorded in cost of product sales in our condensed consolidated statements of operations. We expect amortization expense related to our finite-lived intangible assets for the next five fiscal years to be as follows (in thousands): | ||||||||||||||||||||
Period | Estimated | |||||||||||||||||||
Amortization | ||||||||||||||||||||
Expense | ||||||||||||||||||||
Remainder of Year Ended December 31, 2015 | $ | 40,404 | ||||||||||||||||||
Year Ended December 31, 2016 | 64,977 | |||||||||||||||||||
Year Ended December 31, 2017 | 76,679 | |||||||||||||||||||
Year Ended December 31, 2018 | 84,359 | |||||||||||||||||||
Year Ended December 31, 2019 | 55,746 | |||||||||||||||||||
Total | $ | 322,165 | ||||||||||||||||||
Accrued_Expenses
Accrued Expenses | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accrued Expenses | ||||||||
Accrued expenses | ||||||||
I.ACCRUED EXPENSES | ||||||||
As of March 31, 2015 and December 31, 2014, our accrued expenses consisted of the following (in thousands): | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Commercial rebates, fees and returns | $ | 56,625 | $ | 44,807 | ||||
Professional, consulting and other outside services | 20,940 | 23,157 | ||||||
Salaries, bonuses and other compensation | 8,406 | 10,176 | ||||||
Restructuring expense | 2,118 | 1,953 | ||||||
Short-term contingent consideration | 722 | 718 | ||||||
Total accrued expenses | $ | 88,811 | $ | 80,811 | ||||
Income_Taxes
Income Taxes | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Income Taxes | ||||||||
Income Taxes | ||||||||
J.INCOME TAXES | ||||||||
The following table summarizes our effective tax rate and income tax expense for the three months ended March 31, 2015 and 2014 (in thousands except for percentages): | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Effective tax rate | 30 | % | 0 | % | ||||
Income tax expense | $ | 5,608 | $ | — | ||||
For the three months ended March 31, 2015, we recognized income tax expense of $5.6 million, representing an effective tax rate of 30%. The difference between the expected statutory federal tax rate of 35% and the 30% effective tax rate was attributable to the impact of state income taxes offset by the net benefit of federal orphan drug tax credits and the impact of a valuation allowance release related to certain deferred tax assets. We did not recognize any income tax benefit or expense for the three months ended March 31, 2014 as we were subject to a full valuation allowance due to our net operating loss position at the time. | ||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Accumulated Other Comprehensive Loss | |||||
Accumulated Other Comprehensive Income (Loss) | |||||
K.ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||||
The table below presents information about the effects of net income (loss) of significant amounts reclassified out of accumulated other comprehensive loss, net of tax, during the three months ended March 31, 2015 (in thousands): | |||||
Three Months Ended | |||||
March 31, 2015 | |||||
Beginning Balance | $ | -3,617 | |||
Other comprehensive income (loss) before reclassifications | 68 | ||||
Reclassification adjustment for (gains) included in net income (loss) | — | ||||
Ending Balance | $ | -3,549 | |||
There were no amounts reclassified from other comprehensive loss for the three months ended March 31, 2015 or 2014. | |||||
Basic_and_Diluted_Net_Income_L
Basic and Diluted Net Income (Loss) per Share | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Basic and Diluted Net Income (Loss) per Share | ||||||||
Basic and Diluted Net Income (Loss) per Share | ||||||||
L.BASIC AND DILUTED NET INCOME (LOSS) PER SHARE | ||||||||
We compute basic net income (loss) per share by dividing net income (loss) by the weighted average number of common shares outstanding during the relevant period. Diluted net income (loss) per common share has been computed by dividing net income (loss) by the diluted number of shares outstanding during the period. Except where the result would be antidilutive to net income (loss), diluted net income (loss) per common share would be computed assuming the impact of the conversion of Convertible Notes, the exercise of outstanding stock options, the vesting of RSUs, and the exercise of warrants. | ||||||||
We have a choice to settle the conversion obligation under the Convertible Notes in cash, shares or any combination of the two. Pursuant to certain covenants in our Term Loan Facility, which we entered into to partially fund the acquisition of Lumara Health, we may be restricted from settling the conversion obligation in whole or in part with cash unless certain conditions in the Term Loan Facility are satisfied, including a first lien leverage ratio. Therefore, during the three months ended March 31, 2015, we utilized the if-converted method to reflect the impact of the conversion of the Convertible Notes.This method assumes the conversion of the Convertible Notes into shares of our common stock and reflects the elimination of the interest expense related to the Convertible Notes. In connection with the issuance of the Convertible Notes, in February 2014, we entered into convertible bond hedges. The convertible bond hedges are not included for purposes of calculating the number of diluted shares outstanding, as their effect would be anti-dilutive. The convertible bond hedges are generally expected, but not guaranteed, to reduce the potential dilution and/or offset the cash payments we are required to make upon conversion of the Convertible Notes. See Note P, “Debt,” for additional information. | ||||||||
The dilutive effect of the warrants, stock options and RSUs has been calculated using the treasury stock method. | ||||||||
The components of basic and diluted net income (loss) per share for the three months ended March 31, 2015 and 2014 were as follows (in thousands, except per share data): | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Net income (loss) | $ | 12,904 | $ | (7,102 | ) | |||
Weighted average common shares outstanding | 27,213 | 21,824 | ||||||
Effect of dilutive securities: | ||||||||
Stock options and restricted stock units | 1,552 | — | ||||||
Warrants | 7,382 | — | ||||||
Convertible 2.5% senior notes | 2,098 | — | ||||||
Shares used in calculating dilutive net income (loss) per share | 38,245 | 21,824 | ||||||
Net income (loss) per share: | ||||||||
Basic | $ | 0.47 | $ | (0.33 | ) | |||
Diluted | $ | 0.39 | $ | (0.33 | ) | |||
The following table sets forth the potential common shares issuable upon the exercise of outstanding options, the vesting of RSUs and the exercise of warrants (prior to consideration of the treasury stock method), which were excluded from our computation of diluted net income (loss) per share because their inclusion would have been anti-dilutive (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Options to purchase shares of common stock | 856 | 3,335 | ||||||
Shares of common stock issuable upon the vesting of restricted stock units | 298 | 481 | ||||||
Warrants | — | 7,382 | ||||||
Total | 1,154 | 11,198 | ||||||
During the three months ended March 31, 2014, the average common stock price was below the exercise price of the warrants. | ||||||||
EquityBased_Compensation
Equity-Based Compensation | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Equity-Based Compensation | ||||||||||
Equity-Based Compensation | ||||||||||
M.EQUITY-BASED COMPENSATION | ||||||||||
We currently maintain three equity compensation plans, including our Third Amended and Restated 2007 Equity Incentive Plan (the “2007 Plan”), our Amended and Restated 2000 Stock Plan (the “2000 Plan”) (under which we no longer grant awards) and the Lumara Health Inc. Amended and Restated 2013 Incentive Compensation Plan (the “Lumara Health 2013 Plan”). All outstanding stock options granted under each of our equity compensation plans have an exercise price equal to the closing price of a share of our common stock on the grant date. | ||||||||||
In November 2007, the 2000 Plan was succeeded by our 2007 Plan and, accordingly, no further grants may be made under the 2000 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. As of March 31, 2015, there were 1,087,015 shares remaining available for issuance under the 2007 Plan, not including shares subject to outstanding awards under the 2000 Plan. Further, all outstanding options under the 2007 Plan have either a seven or ten-year term and all outstanding options under the 2000 Plan have a ten-year term. | ||||||||||
In November 2014, we assumed the Lumara Health 2013 Plan in connection with the acquisition of Lumara Health. The total number of shares issuable pursuant to awards under this plan as of the effective date of the acquisition and after taking into account any adjustments as a result of the acquisition, was 200,000 shares. As of March 31, 2015, there were 2,525 shares remaining available for issuance under the Lumara Health 2013 Plan. All outstanding options under the Lumara Health 2013 Plan have a ten-year term. | ||||||||||
During the three months ended March 31, 2015, we also granted equity through inducement grants outside of the equity plans, as discussed below, to certain newly hired executive officers and employees. | ||||||||||
Stock Options | ||||||||||
The following table summarizes stock option activity in our equity plans for the three months ended March 31, 2015: | ||||||||||
2007 Equity | 2000 Equity | 2013 Lumara | Total | |||||||
Plan | Plan | Equity Plan | ||||||||
Outstanding at December 31, 2014 | 2,051,017 | 35,266 | 44,000 | 2,130,283 | ||||||
Granted | 347,600 | — | 73,250 | 420,850 | ||||||
Exercised | (295,334 | ) | (8,637 | ) | — | (303,971 | ) | |||
Expired or terminated | (46,576 | ) | — | — | (46,576 | ) | ||||
Outstanding at March 31, 2015 | 2,056,707 | 26,629 | 117,250 | 2,200,586 | ||||||
Restricted Stock Units | ||||||||||
The following table summarizes RSU activity in our equity plans for the three months ended March 31, 2015: | ||||||||||
2007 Equity | 2000 Equity | 2013 Lumara | Total | |||||||
Plan | Plan | Equity Plan | ||||||||
Outstanding at December 31, 2014 | 360,826 | — | 20,000 | 380,826 | ||||||
Granted | 215,300 | — | 60,225 | 275,525 | ||||||
Exercised | (37,100 | ) | — | — | (37,100 | ) | ||||
Expired or terminated | (5,750 | ) | — | — | (5,750 | ) | ||||
Outstanding at March 31, 2015 | 533,276 | — | 80,225 | 613,501 | ||||||
Other Equity Compensation Grants | ||||||||||
During the three months ended March 31, 2015, our Board granted options to purchase 20,500 shares of our common stock and 2,500 RSUs to certain new-hire employees to induce them to accept employment with us. The 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 and will be exercisable in four equal annual installments beginning on the first anniversary of the respective grant dates. The RSU grant will vest in three equal annual installments beginning on the first anniversary of the respective grant date. The foregoing grants were made pursuant to inducement grants outside of our stockholder approved equity plans as permitted under the NASDAQ Stock Market listing 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 months ended March 31, 2015 and 2014 consisted of the following (in thousands): | ||||||||||
Three Months Ended March 31, | ||||||||||
2015 | 2014 | |||||||||
Cost of product sales | $ | 41 | $ | 28 | ||||||
Research and development | 478 | 449 | ||||||||
Selling, general and administrative | 2,149 | 1,453 | ||||||||
Total equity-based compensation expense | 2,668 | 1,930 | ||||||||
Income tax effect | (1,035 | ) | — | |||||||
After-tax effect of equity-based compensation expense | $ | 1,633 | $ | 1,930 | ||||||
We reduce the compensation expense being recognized to account for estimated forfeitures, which we estimate based primarily on historical experience, adjusted for unusual events such as corporate restructurings, which may result in higher than expected turnover and forfeitures. 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. | ||||||||||
Stockholders_Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2015 | |
Stockholders' Equity | |
Stockholders' Equity | |
N.STOCKHOLDERS’ EQUITY | |
March 2015 Public Offering of Common Stock | |
In March 2015, we sold approximately 4.6 million shares of our common stock at a public offering price of $44.00 per share, resulting in gross proceeds to us of approximately $201.2 million, prior to underwriting discounts of $12.1 million and $0.2 million in commissions and other offering expenses. | |
Change in Stockholder’s Equity | |
Total stockholder’s equity increased by $211.2 million during the three months ended March 31, 2015. This increase was primarily driven by $188.9 million in net proceeds related to the March 2015 public offering of common stock, as discussed above, $12.9 million from our net income, $6.7 million from the exercise of stock options and $2.7 million related to equity-based compensation expense. | |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | |
O.COMMITMENTS AND CONTINGENCIES | |
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. | |
Makena Securities Litigation | |
During October and November 2011, three complaints were filed in the United States District Court for the Eastern District of Missouri (the “Court”) against K-V Pharmaceutical Company (“KV”) (since renamed as Lumara Health) and certain individual defendants, alleging violations of the anti-fraud provisions of the federal securities laws on behalf of all purchasers of the publicly traded securities of KV between February 14, 2011 and April 4, 2011: Julianello v. K-V Pharmaceutical Co., et al. (filed October 19, 2011); Mukku v. K-V Pharmaceutical Co., et al. (filed October 31, 2011), and Cheong v. K-V Pharmaceutical Co., et al. (filed November 2, 2011). On March 8, 2012, the three cases were consolidated and the consolidated action is now styled In Re K-V Pharmaceutical Company Securities Litigation, Case No. 4:11-CV-1816-AGF. On May 4, 2012, the Court appointed Lori Anderson as the Lead Plaintiff in the matter, and an amended complaint was filed on July 24, 2012. The amended complaint alleges class members were damaged by purchasing KV stock at artificially inflated prices due to defendants’ purportedly misleading statements regarding KV’s exclusivity over Makena. On April 22, 2013, the individual defendants moved to dismiss the complaint and oral argument was held before the Court on November 26, 2013. KV joined in the motion to dismiss on February 10, 2014. On March 27, 2014, the Court entered an order granting defendants’ motion to dismiss the class action complaint without prejudice to the plaintiff’s ability to file a second amended complaint with respect to a limited issue of whether defendants’ statements about Lumara Health’s financial assistance program for Makena were materially false or misleading. On April 16, 2014, plaintiff filed a motion to reconsider asking the Court to reconsider its order restricting the scope of plaintiff’s ability to amend its complaint. The Court denied plaintiff’s motion to reconsider and entered a judgment granting defendants’ motion to dismiss on June 6, 2014. On July 1, 2014, plaintiff filed a Notice of Appeal with the United States Court of Appeals for the Eighth Circuit. The Court of Appeals heard oral argument on March 12, 2015 and the parties are awaiting a decision from the Court. In accordance with the Sixth Amended Joint Chapter 11 Plan of Reorganization for K-V Discovery Solutions and Its Affiliated Debtors, which became effective on September 16, 2013, the recovery in this matter, if any, is limited to the “extent of any insurance and/or any proceeds therefrom (excluding any self-insured retention obligation or deductible) that may provide coverage for any liability of Lumara Health for the claims asserted in this litigation”. | |
European Patent Organization Appeal | |
In July 2010, Sandoz GmbH (“Sandoz”) filed with the European Patent Office (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 filed a reply to that response on March 17, 2014 and oral proceedings for the appeal is scheduled for June 16, 2015. In the event that we withdraw our appeal or 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 year ended December 31, 2014. However, any future unfavorable outcome in this matter could negatively affect the magnitude and timing of future revenues. 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 March 31, 2015. 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 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 at March 31, 2015. We expense legal costs as they are incurred. | |
Collaborative_Agreements
Collaborative Agreements | 3 Months Ended |
Mar. 31, 2015 | |
Collaborative Agreements | |
Collaborative Agreements | |
P.COLLABORATIVE AGREEMENTS | |
Our commercial strategy includes the formation of collaborations with other pharmaceutical companies to expand our portfolio through the in-license or acquisition of additional pharmaceutical products or companies, including revenue-generating commercial products and late-state development assets. | |
In December 2014, we terminated our License, Development and Commercialization Agreement (the “Takeda Agreement”), as amended in June 2012 (the “Amended Takeda Agreement”), with Takeda (the “Takeda Termination Agreement”). Under the terms of the Amended Takeda Agreement, Takeda had exclusive rights to develop and commercialize Feraheme as a therapeutic agent in certain agreed-upon territories outside of the U.S. We are in the process of regaining all worldwide development and commercialization rights for Feraheme following the transfer of the outstanding marketing authorizations to us. Pursuant to the Takeda Termination Agreement, we and Takeda have agreed to effectuate the termination of the Amended Takeda Agreement on a rolling basis, whereby the termination will be effective for a particular geographic territory (e.g., countries under the regulatory jurisdictions of Health Canada, the European Medicines Agency and SwissMedic) upon the earlier of effectiveness of the transfer to us or a withdrawal of the marketing authorization for such territory, with the final effective termination date to be on the third such effective date. In February 2015, we and Takeda mutually decided to withdraw the marketing authorization for Rienso in the EU and Switzerland, which was effective as of April 13, 2015. We are currently assessing the commercial opportunity for Feraheme in Canada and are working with Takeda to transition the marketing authorization to us. | |
In connection with the execution of the original Takeda Agreement, we received a total of $61.0 million in upfront payments from Takeda in 2010, which we recorded as deferred revenue and were recognizing 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 and our best estimate of the period over which we were to substantively perform our obligations. In addition, during 2012, we received an aggregate of $18.0 million in milestone payments from Takeda associated with the commercial launches of Feraheme in the EU and Canada, which we deemed to be non-substantive milestone payments and were amortizing over the original life of the Takeda Agreement. | |
In addition, in consideration for the early termination of the Amended Takeda Agreement and the activities to be performed by us earlier than contemplated under the Amended Takeda Agreement, and in lieu of any future cost-sharing and milestone payments contemplated by the Amended Takeda Agreement, Takeda agreed to make certain payments to us, subject to certain terms and conditions, including up to approximately $6.7 million in connection with clinical study obligations, pharmacovigilance activities, regulatory filings and support, commercialization and back-office support and distribution expenditures and a $3.0 million milestone payment payable subject to certain regulatory conditions. | |
During the three months ended March 31, 2015, we recognized $12.0 million in revenues associated with the amortization of the remaining deferred revenue balance and have recorded it in license fee, collaboration and other revenues in our condensed consolidated statement of operations. As of March 31, 2015, all remaining upfront, milestone and other payments received to date have been classified as short-term deferred revenues as we expect to recognize the remaining $33.6 million balance of the deferred revenue related to Takeda within the next nine months. | |
Debt
Debt | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Debt | |||||
Debt | |||||
Q.DEBT | |||||
2.5% Convertible Notes | |||||
On February 14, 2014, we issued $200.0 million aggregate principal amount of Convertible Notes, which includes $25.0 million principal amount of Convertible Notes issued pursuant to the full exercise of an over-allotment option granted to the underwriters in the offering. We received net proceeds of $193.3 million from the sale of the Convertible Notes, after deducting fees and expenses of $6.7 million. We used $14.1 million of the net proceeds from the sale of the Convertible Notes to pay the cost of the convertible bond hedges, as described below (after such cost was partially offset by the proceeds to us from the sale of warrants in the warrant transactions described below). | |||||
The Convertible Notes are governed by the terms of an indenture between us, as issuer, and Wilmington Trust, National Association, as the Trustee. The Convertible Notes are senior unsecured obligations and bear interest at a rate of 2.5% per year, payable semi-annually in arrears on February 15 and August 15 of each year. The Convertible Notes will mature on February 15, 2019, unless earlier repurchased or converted. Upon conversion of the Convertible Notes at a holder’s election, such Convertible Notes will be convertible into cash, shares of our common stock, or a combination thereof, at our election (subject to certain limitations in the Term Loan Facility), at a conversion rate of approximately 36.9079 shares of common stock per $1,000 principal amount of the Convertible Notes, which corresponds to an initial conversion price of approximately $27.09 per share of our common stock. | |||||
The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of stock dividends and payment of cash dividends. At any time prior to the close of business on the business day immediately preceding May 15, 2018, holders may convert their Convertible Notes at their option only under the following circumstances: | |||||
-1 | during any calendar quarter (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; | ||||
-2 | during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; or | ||||
-3 | upon the occurrence of specified corporate events. | ||||
On or after May 15, 2018 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. Based on the last reported sale price of our common stock during the last 30 trading days of the calendar quarter ended March 31, 2015, the Convertible Notes are convertible for the calendar quarter ending June 30, 2015 pursuant to clause (1) above. | |||||
In accordance with accounting guidance for debt with conversion and other options, we separately account for the liability and equity components of the Convertible Notes by allocating the proceeds between the liability component and the embedded conversion option (“equity component”) due to our ability to settle the Convertible Notes in cash, common stock or a combination of cash and common stock, at our option (subject to certain limitations in the Term Loan Facility). The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The allocation was performed in a manner that reflected our non-convertible debt borrowing rate for similar debt. The equity component of the Convertible Notes was recognized as a debt discount and represents the difference between the proceeds from the issuance of the Convertible Notes and the fair value of the liability of the Convertible Notes on their respective dates of issuance. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense using the effective interest method over five years (the “life of the Convertible Notes”). The equity component is not remeasured as long as it continues to meet the conditions for equity classification. | |||||
Our outstanding Convertible Note balances as March 31, 2015 consisted of the following (in thousands): | |||||
March 31, 2015 | |||||
Liability component: | |||||
Principal | $ | 200,000 | |||
Less: debt discount, net | (30,910 | ) | |||
Net carrying amount | $ | 169,090 | |||
Equity component | $ | 38,188 | |||
In connection with the issuance of the Convertible Notes, we incurred approximately $6.7 million of debt issuance costs, which primarily consisted of underwriting, legal and other professional fees, and allocated these costs to the liability and equity components based on the allocation of the proceeds. Of the total $6.7 million of debt issuance costs, $1.3 million were allocated to the equity component and recorded as a reduction to additional paid-in capital and $5.4 million were allocated to the liability component and recorded as assets on the balance sheet. The portion allocated to the liability component is amortized to interest expense over the expected life of the Convertible Notes using the effective interest method. | |||||
We determined the expected life of the debt was equal to the five year term on the Convertible Notes. As of March 31, 2015, the carrying value of the Convertible Notes was $169.1 million and the fair value of the Convertible Notes was $433.5 million. The effective interest rate on the liability component was 7.23% for the period from the date of issuance through March 31, 2015. The following table sets forth total interest expense recognized related to the Convertible Notes during the year ended March 31, 2015 (in thousands): | |||||
Three Months Ended | |||||
March 31, 2015 | |||||
Contractual interest expense | $ | 1,250 | |||
Amortization of debt issuance costs | 234 | ||||
Amortization of debt discount | 1,649 | ||||
Total interest expense | $ | 3,133 | |||
Convertible Bond Hedge and Warrant Transactions | |||||
In connection with the pricing of the Convertible Notes and in order to reduce the potential dilution to our common stock and/or offset cash payments due upon conversion of the Convertible Notes, on February 11, 2014 and February 13, 2014, we entered into convertible bond hedge transactions covering approximately 7.4 million shares of our common stock underlying the $200.0 million aggregate principal amount of the Convertible Notes, including the exercise of the over-allotment option, with the Call Spread Counterparties. The convertible bond hedges have an exercise price of approximately $27.09 per share, subject to adjustment upon certain events, and are exercisable when and if the Convertible Notes are converted. If upon conversion of the Convertible Notes, the price of our common stock is above the exercise price of the convertible bond hedges, the Call Spread Counterparties will deliver shares of our common stock and/or cash with an aggregate value approximately equal to the difference between the price of our common stock at the conversion date and the exercise price, multiplied by the number of shares of our common stock related to the convertible bond hedges being exercised. The convertible bond hedges are separate transactions entered into by us and are not part of the terms of the Convertible Notes or the warrants, discussed below. Holders of the Convertible Notes will not have any rights with respect to the convertible bond hedges. We paid $39.8 million for these convertible bond hedges and recorded this amount as a reduction to additional paid-in capital, net of tax, in the first quarter of 2014. | |||||
In February 2014, we also entered into separate warrant transactions with each of the Call Spread Counterparties relating to, in the aggregate, approximately 7.4 million shares of our common stock underlying the $200.0 million aggregate principal amount of the Convertible Notes, including the exercise of the over-allotment option. The initial exercise price of the warrants is $34.12 per share, subject to adjustment upon certain events, which is 70% above the last reported sale price of our common stock of $20.07 on February 11, 2014. The warrants would separately have a dilutive effect to the extent that the market value per share of our common stock, as measured under the terms of the warrants, exceeds the applicable exercise price of the warrants. The warrants were issued to the Call Spread Counterparties pursuant to the exemption from registration set forth in Section 4(a)(2) of the Securities Act of 1933, as amended. We received $25.7 million for these warrants and recorded this amount to additional paid-in capital in the first quarter of 2014. | |||||
Aside from the initial payment of a $39.8 million premium to the Call Spread Counterparties under the convertible bond hedges, which is partially offset by the receipt of a $25.7 million premium under the warrants, we are not required to make any cash payments to the Call Spread Counterparties under the convertible bond hedges and will not receive any proceeds if the warrants are exercised. | |||||
Term Loan Facility | |||||
On November 12, 2014 (the “Closing Date”) we borrowed $340.0 million under the Term Loan Facility to fund a portion of the purchase price of Lumara Health. At March 31, 2015, the carrying value of the outstanding borrowings, net of unamortized original issue costs and other lender fees and expenses, was $320.2 million. | |||||
We must repay the Term Loan Facility in installments of (a) $8.5 million per quarter due on the last day of each quarter beginning with the quarter ending March 31, 2015 through the quarter ending December 31, 2015, and (b) $12.75 million per quarter due on the last day of each quarter beginning with the quarter ending March 31, 2016 through the quarter ending September 30, 2020, with the balance due in a final installment on November 12, 2020. The Term Loan Facility matures on November 12, 2020, except that the maturity date of Term Loan Facility will accelerate to September 30, 2018 if: | |||||
(a) | more than $25.0 million in aggregate principal amount of our Convertible Notes remain outstanding and not converted to common stock or refinanced and replaced with debt that matures following, and has no amortization prior to, the date that is six and one half years following the Closing Date; and | ||||
(b) | the aggregate principal amount of all loans borrowed under the Term Loan Facility (including all undrawn incremental commitments) is greater than $50.0 million on and as of such date (the “Maturity Date”). | ||||
The Term Loan Facility includes an annual mandatory prepayment of the Term Loan Facility from 75% of our excess cash flow as measured on an annual basis, beginning with the fiscal year ending December 31, 2015, with step-downs to 50%, 25% and 0% of our excess cash flow if our Total Net Leverage Ratio (as defined in the Term Loan Facility), tested as of the last day of our fiscal year, is less than or equal to 2.00 to 1.00, 1.00 to 1.00 and 0.50 to 1.00, respectively. Excess cash flow is generally defined as our adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) less debt service costs, unfinanced capital expenditures, unfinanced acquisition expenditures, and current income taxes paid, as adjusted for changes in our working capital. Additionally, the Term Loan Facility requires mandatory prepayment of the term loan from the net cash proceeds of (i) certain debt issuances and (ii) certain asset sales outside the ordinary course of business and from proceeds of property insurance and condemnation events, in each case of this clause (ii) subject to our right to reinvest such proceeds in our business. Any voluntary prepayment or mandatory prepayment pursuant to the preceding sentence shall be accompanied by a prepayment premium equal to (a) 2.0% of the principal amount of such prepayment, if such prepayment is made on or prior to the date that is twelve months after the Closing Date or (b) 1.0% of the principal amount of such prepayment, if such prepayment is made after the date that is twelve months after the Closing Date and on or prior to the date that is twenty-four months after the Closing Date. | |||||
The Term Loan Facility has a lien on substantially all of our assets, including a pledge of 100% of the equity interests in our domestic subsidiaries and an obligation to pledge 65% of the equity interests in our direct foreign subsidiaries. | |||||
The Term Loan Facility contains customary affirmative covenants for transactions of this type and other affirmative covenants agreed to by the parties, including, among others, the provision of annual and quarterly financial statements and compliance certificates, maintenance of property, insurance, compliance with laws and environmental matters. The Term Loan Facility contains customary negative covenants for transactions of this type and other negative covenants agreed to by the parties, including, among others, restrictions on the incurrence of indebtedness, granting of liens, making investments and acquisitions, paying dividends, repurchases of equity interests in the Company, entering into affiliate transactions and asset sales. The Term Loan Facility also provides for a number of customary events of default, including, among others, payment, bankruptcy, covenant, representation and warranty, change of control and judgment defaults. In addition, the Term Loan Facility contains certain restrictions regarding the use of our funds to pay certain debts. | |||||
The Term Loan Facility requires that we comply with a Total Net Leverage Ratio. Under the terms of the Term Loan Facility, we must maintain a Total Net Leverage Ratio that is less than or equal to 4.60 to 1.00 for the fiscal quarter ended March 31, 2015 and declining over time to a range of 1.00 to 1.00 for the fiscal quarter ending September 30, 2017 and each fiscal quarter thereafter through the Maturity Date. For purposes of testing our Total Net Leverage Ratio, we are permitted to net from our outstanding total indebtedness up to $25.0 million of our domestic unrestricted cash and cash equivalents. As of March 31, 2015, we were in compliance with these covenants. | |||||
All obligations under the Term Loan Facility are unconditionally guaranteed by substantially all of our direct and indirect domestic subsidiaries. These guarantees are secured by substantially all of the present and future property and assets of such subsidiaries. | |||||
Restructuring
Restructuring | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Restructuring | |||||
Restructuring | |||||
R.RESTRUCTURING | |||||
In connection with the Lumara Health acquisition, we initiated a restructuring program in the fourth quarter of 2014, which included severance benefits primarily related to certain former Lumara Health employees. As a result of the restructuring, we recorded charges of approximately $0.6 million in the three months ended March 31, 2015. We expect to pay substantially all of these restructuring costs during 2015. | |||||
The following table outlines the components of our restructuring expenses which were included in current liabilities for the three months ended March 31, 2015 (in thousands): | |||||
March 31, 2015 | |||||
Accrued restructuring, beginning of period | $ | 1,953 | |||
Employee severance, benefits and related costs | 571 | ||||
Payments | (406 | ) | |||
Accrued restructuring, end of period | $ | 2,118 | |||
Recently_Issued_and_Proposed_A
Recently Issued and Proposed Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2015 | |
Recently Issued and Proposed Accounting Pronouncements | |
Recently Issued and Proposed Accounting Pronouncements | |
S.RECENTLY ISSUED AND PROPOSED ACCOUNTING PRONOUNCEMENTS | |
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. | |
In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual and interim periods beginning on or after December 15, 2015. As of March 31, 2015 we have $5.7 million in debt issuance costs associated with our Convertible Notes and Term Loan Facility that would be reclassified from a long-term asset to a reduction in the carrying amount of our debt. | |
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU No. 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures, if required. ASU 2014-15 will be effective for annual reporting periods ending after December 15, 2016, which will be our fiscal year ending December 31, 2016, and to annual and interim periods thereafter. We are in the process of evaluating the impact of adoption of ASU 2014-15 on our condensed consolidated financial statements and related disclosures and currently do not expect it to have a material impact our results of operations, cash flows or financial position. | |
In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, as a new Topic, Accounting Standards Codification Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In April 2015, the FASB proposed a one year delay in the effective date of this standard, which would have been effective for us on January 1, 2017. | |
Basis_of_Presentation_and_Summ1
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
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 GAAP 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 to determine amounts and values of, but are not limited to: revenue recognition related to product sales and collaboration agreements; product sales allowances and accruals; potential other-than-temporary impairment of investments; acquisition date fair value and subsequent fair value estimates used to assess impairment of long-lived assets, including goodwill, in-process research and development (“IPR&D”) and other intangible assets; contingent consideration; debt obligations; accrued expenses; income taxes and equity-based compensation expense. Actual results could differ materially from those estimates. | ||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | |||||||
Cash and cash equivalents consist principally of cash held in commercial bank accounts, money market funds and U.S. Treasury securities having an original maturity of less than three months. We consider all highly liquid investments with a maturity of three months or less as of the acquisition date to be cash equivalents. At March 31, 2015 and December 31, 2014, substantially all of our cash and cash equivalents were held in either commercial bank accounts or money market funds. | ||||||||
Principles of Consolidation | Principles of Consolidation | |||||||
The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. Our results of operations for the three months ended March 31, 2015, include the results of Lumara Health, which we acquired on November 12, 2014 (the “Lumara Acquisition Date”). | ||||||||
Revenue Recognition | Revenue Recognition | |||||||
We recognize revenue from the sale of our products as well as license fee, collaboration and other revenues, including milestone payments, other product sale revenues, and royalties we receive from our licensees. Revenue is recognized when the following criteria are met: persuasive evidence of an arrangement exists; delivery of product has occurred or services have been rendered; the sales price charged is fixed or determinable; and collection is reasonably assured. | ||||||||
Our U.S. product sales, which primarily represented revenues from Makena and Feraheme in the first quarter of 2015 and Feraheme in the first quarter of 2014, were offset by provisions for allowances and accruals as follows (in thousands): | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Gross U.S. product sales | $ | 125,517 | $ | 31,661 | ||||
Provision for U.S. product sales allowances and accruals: | ||||||||
Contractual adjustments | 35,134 | 13,973 | ||||||
Governmental rebates | 12,968 | 165 | ||||||
Total provision for U.S product sales allowances and accruals | 48,102 | 14,138 | ||||||
U.S. product sales, net | $ | 77,415 | $ | 17,523 | ||||
We recognize U.S. product sales revenue net of certain allowances and accruals in our condensed consolidated statement of operations at the time of sale. Our contractual adjustments include provisions for returns, pricing and prompt payment discounts, as well as wholesaler distribution fees, and volume-based and other commercial rebates. Governmental rebates relate to our reimbursement arrangements with state Medicaid programs. | ||||||||
We did not materially adjust our product sales allowances and accruals during the three months ended March 31, 2015 or 2014. If we determine in future periods that our actual experience is not indicative of our expectations, if our actual experience changes, or if other factors affect our estimates, we may be required to adjust our allowances and accruals estimates, which would affect our net product sales in the period of the adjustment and could be significant. | ||||||||
The increases in contractual adjustments and governmental rebates primarily reflects the addition of Makena to our product portfolio in connection with the November 2014 acquisition of Lumara Health. | ||||||||
IPR&D | IPR&D | |||||||
IPR&D acquired in a business combination is capitalized on our condensed consolidated balance sheet at the acquisition-date fair value, net of any accumulated impairment losses. IPR&D is tested for impairment on an annual basis or more frequently if indicators of impairment are present, until completion or abandonment of the projects. If we determine that IPR&D becomes impaired or is abandoned, the carrying value of the IPR&D is written down to its fair value with the related impairment charge recognized in our condensed consolidated statement of operations in the period in which the impairment occurs. Upon successful completion of each project and launch of the product, we will make a separate determination of the estimated useful life of the IPR&D intangible asset and the related amortization will be recorded as an expense prospectively over its estimated useful life. | ||||||||
Concentrations and Significant Customer Information | Concentrations and Significant Customer Information | |||||||
Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents, investments, and accounts receivable. As of March 31, 2015, our cash, cash equivalents and investments amounted to approximately $361.1 million. We currently invest our excess cash primarily in corporate debt securities, commercial paper, certificates of deposit and municipal securities. As of March 31, 2015, approximately $193.9 million of our total $243.8 million cash and cash equivalents balance was invested in institutional money market funds, of which $190.8 million was invested in a single fund. | ||||||||
Our operations are located entirely within the U.S. We are focused principally on developing, manufacturing, and commercializing Makena and Feraheme 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 three months ended March 31, 2015 and 2014: | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
AmerisourceBergen Drug Corporation | 30% | 39% | ||||||
Takeda Pharmaceuticals Company Limited | 13% | 11% | ||||||
McKesson Corporation | 10% | 22% | ||||||
Cardinal Health, Inc. | <10% | 15% | ||||||
In addition, approximately 23% and 28% of our Feraheme end-user demand during the three months ended March 31, 2015 and 2014, respectively, was generated by members of a single GPO with which we have contracted. Revenues from customers outside of the U.S. amounted to approximately 13% and 16% of our total revenues for the three months ended March 31, 2015 and 2014, respectively, and were principally related to Feraheme collaboration revenue recognized in connection with a license, development and commercialization agreement with our former partner Takeda Pharmaceutical Company Limited (“Takeda”), which is headquartered in Japan. | ||||||||
We are currently solely dependent on a single supply chain for Feraheme drug substance and finished drug product and a single supply chain for Makena finished drug product. We are exposed to a significant loss of revenue from the sale of Feraheme and Makena if our suppliers and/or manufacturers cannot fulfill demand for any reason. | ||||||||
Basis_of_Presentation_and_Summ2
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Summary of Significant Accounting Policies | ||||||||
Analysis of U.S. product sales allowances and accruals | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Gross U.S. product sales | $ | 125,517 | $ | 31,661 | ||||
Provision for U.S. product sales allowances and accruals: | ||||||||
Contractual adjustments | 35,134 | 13,973 | ||||||
Governmental rebates | 12,968 | 165 | ||||||
Total provision for U.S product sales allowances and accruals | 48,102 | 14,138 | ||||||
U.S. product sales, net | $ | 77,415 | $ | 17,523 | ||||
Schedule of customers representing 10% or more of revenues | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
AmerisourceBergen Drug Corporation | 30% | 39% | ||||||
Takeda Pharmaceuticals Company Limited | 13% | 11% | ||||||
McKesson Corporation | 10% | 22% | ||||||
Cardinal Health, Inc. | <10% | 15% | ||||||
Business_Combination_Tables
Business Combination (Tables) (Lumara Health) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Lumara Health | |||||
Summary of the components of the estimated purchase price | |||||
Total Acquisition | |||||
Date Fair Value | |||||
Cash consideration | $ | 600,000 | |||
Fair value of 3.2 million shares of AMAG common stock | 111,964 | ||||
Fair value of contingent milestone payments | 205,000 | ||||
Estimated working capital and other adjustments | 821 | ||||
Purchase price paid at closing | 917,785 | ||||
Less: | |||||
Due from sellers | (5,119 | ) | |||
Cash acquired from Lumara Health | (5,219 | ) | |||
Total purchase price | $ | 907,447 | |||
Summary of estimated fair values of the assets acquired and liabilities assumed related to the business combination | |||||
Accounts receivable | $ | 34,918 | |||
Inventories | 30,300 | ||||
Prepaid and other current assets | 3,322 | ||||
Deferred income tax assets | 94,965 | ||||
Property and equipment | 60 | ||||
Makena marketed product | 797,100 | ||||
IPR&D | 79,100 | ||||
Restricted cash | 1,997 | ||||
Other long-term assets | 3,412 | ||||
Accounts payable | (3,807 | ) | |||
Accrued expenses | (41,532 | ) | |||
Deferred income tax liabilities | (293,649 | ) | |||
Other long-term liabilities | (4,563 | ) | |||
Total estimated identifiable net assets | $ | 701,623 | |||
Goodwill | 205,824 | ||||
Total | $ | 907,447 | |||
Investments_Tables
Investments (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Investments | ||||||||||||||
Summary of investments | ||||||||||||||
March 31, 2015 | ||||||||||||||
Gross | Gross | Estimated | ||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||
Cost | Gains | Losses | Value | |||||||||||
Corporate debt securities | ||||||||||||||
Due in one year or less | $ | 15,167 | $ | 13 | $ | — | $ | 15,180 | ||||||
Due in one to three years | 47,352 | 45 | (10 | ) | 47,387 | |||||||||
Commercial paper | ||||||||||||||
Due in one year or less | 30,460 | 2 | (1 | ) | 30,461 | |||||||||
Due in one to three years | — | — | — | — | ||||||||||
Certificates of deposit | ||||||||||||||
Due in one year or less | 15,000 | — | (1 | ) | 14,999 | |||||||||
Due in one to three years | — | — | — | — | ||||||||||
Municipal securities | ||||||||||||||
Due in one year or less | — | — | — | — | ||||||||||
Due in one to three years | 9,315 | — | (4 | ) | 9,311 | |||||||||
Total investments | $ | 117,294 | $ | 60 | $ | (16 | ) | $ | 117,338 | |||||
December 31, 2014 | ||||||||||||||
Gross | Gross | Estimated | ||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||
Cost | Gains | Losses | Value | |||||||||||
Corporate debt securities | ||||||||||||||
Due in one year or less | $ | 11,656 | $ | 3 | $ | (4 | ) | $ | 11,655 | |||||
Due in one to three years | 13,258 | 10 | (33 | ) | 13,235 | |||||||||
Total investments | $ | 24,914 | $ | 13 | $ | (37 | ) | $ | 24,890 | |||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | ||||||||||||||
Fair Value Measurements at March 31, 2015 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 | $ | 193,868 | $ | 193,868 | $ | — | $ | — | ||||||
Corporate debt securities | 62,567 | — | 62,567 | — | ||||||||||
Commercial paper | 30,461 | — | 30,461 | — | ||||||||||
Certificates of deposit | 14,999 | — | 14,999 | — | ||||||||||
Municipal securities | 9,311 | — | 9,311 | — | ||||||||||
Total Assets | $ | 311,206 | $ | 193,868 | $ | 117,338 | $ | — | ||||||
Liabilities: | ||||||||||||||
Contingent consideration - Lumara Health | $ | 209,037 | $ | — | $ | — | $ | 209,037 | ||||||
Contingent consideration - MuGard | 12,222 | — | — | 12,222 | ||||||||||
Total Liabilities | $ | 221,259 | $ | — | $ | — | $ | 221,259 | ||||||
Fair Value Measurements at December 31, 2014 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 | $ | 77,254 | $ | 77,254 | $ | — | $ | — | ||||||
Corporate debt securities | 24,890 | — | 24,890 | — | ||||||||||
Total Assets | $ | 102,144 | $ | 77,254 | $ | 24,890 | $ | — | ||||||
Liabilities: | ||||||||||||||
Contingent consideration - Lumara Health | $ | 206,600 | $ | — | $ | — | $ | 206,600 | ||||||
Contingent consideration - MuGard | 12,102 | — | — | 12,102 | ||||||||||
Total Liabilities | $ | 218,702 | $ | — | $ | — | $ | 218,702 | ||||||
Schedule of reconciliation of contingent consideration obligations related to acquisitions measured on recurring basis using Level 3 inputs | ||||||||||||||
Balance as of December 31, 2014 | $ | 218,702 | ||||||||||||
Payments made | (84 | ) | ||||||||||||
Adjustments to fair value of contingent consideration | 2,599 | |||||||||||||
Other adjustments | 42 | |||||||||||||
Balance as of March 31, 2015 | $ | 221,259 | ||||||||||||
Accounts_Receivable_Net_Tables
Accounts Receivable, Net (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Accounts Receivable, Net | ||||||
Schedule of customers representing greater than 10% of accounts receivable balances | ||||||
March 31, 2015 | December 31, 2014 | |||||
AmerisourceBergen Drug Corporation | 51% | 45% | ||||
McKesson Corporation | <10% | 12% | ||||
Cardinal Health, Inc. | <10% | 10% | ||||
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventories | ||||||||
Schedule of major classes of inventories | ||||||||
Our major classes of inventories were as follows as of March 31, 2015 and December 31, 2014 (in thousands): | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Raw materials | $ | 15,757 | $ | 14,188 | ||||
Work in process | 5,900 | 5,965 | ||||||
Finished goods | 14,282 | 20,457 | ||||||
Total | $ | 35,939 | $ | 40,610 | ||||
Included in other long-term assets: | ||||||||
Raw materials | 5,908 | 7,798 | ||||||
Total Inventories | $ | 41,847 | $ | 48,408 | ||||
Goodwill_IRPD_and_Other_Intang
Goodwill, IRP&D and Other Intangible Assets, Net (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Goodwill, IPR&D and Other Intangible Assets, Net | ||||||||||||||||||||
Schedule of identifiable intangible assets | ||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | |||||||||||||||
Amortization | Amortization | |||||||||||||||||||
Amortizable intangible assets: | ||||||||||||||||||||
Makena Marketed Product | $ | 797,100 | $ | 16,245 | $ | 780,855 | $ | 797,100 | $ | 4,834 | $ | 792,266 | ||||||||
MuGard Rights | 16,893 | 422 | 16,471 | 16,893 | 351 | 16,542 | ||||||||||||||
813,993 | 16,667 | 797,326 | 813,993 | 5,185 | 808,808 | |||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||
IPR&D | 79,100 | — | 79,100 | 79,100 | — | 79,100 | ||||||||||||||
Total intangible assets | $ | 893,093 | $ | 16,667 | $ | 876,426 | $ | 893,093 | $ | 5,185 | $ | 887,908 | ||||||||
Schedule of expected future annual amortization expense related to intangible assets | ||||||||||||||||||||
Period | Estimated | |||||||||||||||||||
Amortization | ||||||||||||||||||||
Expense | ||||||||||||||||||||
Remainder of Year Ended December 31, 2015 | $ | 40,404 | ||||||||||||||||||
Year Ended December 31, 2016 | 64,977 | |||||||||||||||||||
Year Ended December 31, 2017 | 76,679 | |||||||||||||||||||
Year Ended December 31, 2018 | 84,359 | |||||||||||||||||||
Year Ended December 31, 2019 | 55,746 | |||||||||||||||||||
Total | $ | 322,165 | ||||||||||||||||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Accrued Expenses | ||||||||
Schedule of accrued expenses | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Commercial rebates, fees and returns | $ | 56,625 | $ | 44,807 | ||||
Professional, consulting and other outside services | 20,940 | 23,157 | ||||||
Salaries, bonuses and other compensation | 8,406 | 10,176 | ||||||
Restructuring expense | 2,118 | 1,953 | ||||||
Short-term contingent consideration | 722 | 718 | ||||||
Total accrued expenses | $ | 88,811 | $ | 80,811 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Income Taxes | ||||||||
Schedule of effective income tax rate and expense | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Effective tax rate | 30 | % | 0 | % | ||||
Income tax expense | $ | 5,608 | $ | — | ||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive (Loss) (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Accumulated Other Comprehensive Loss | |||||
Schedule of changes in accumulated other comprehensive loss, net of tax | |||||
Three Months Ended | |||||
March 31, 2015 | |||||
Beginning Balance | $ | -3,617 | |||
Other comprehensive income (loss) before reclassifications | 68 | ||||
Reclassification adjustment for (gains) included in net income (loss) | — | ||||
Ending Balance | $ | -3,549 | |||
Basic_and_Diluted_Net_Income_L1
Basic and Diluted Net Income (Loss) per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Basic and Diluted Net Income (Loss) per Share | ||||||||
Schedule of components of basic and diluted net income (loss) per share | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Net income (loss) | $ | 12,904 | $ | (7,102 | ) | |||
Weighted average common shares outstanding | 27,213 | 21,824 | ||||||
Effect of dilutive securities: | ||||||||
Stock options and restricted stock units | 1,552 | — | ||||||
Warrants | 7,382 | — | ||||||
Convertible 2.5% senior notes | 2,098 | — | ||||||
Shares used in calculating dilutive net income (loss) per share | 38,245 | 21,824 | ||||||
Net income (loss) per share: | ||||||||
Basic | $ | 0.47 | $ | (0.33 | ) | |||
Diluted | $ | 0.39 | $ | (0.33 | ) | |||
Schedule of anti-dilutive securities from computation of diluted net Income (loss) per share | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Options to purchase shares of common stock | 856 | 3,335 | ||||||
Shares of common stock issuable upon the vesting of restricted stock units | 298 | 481 | ||||||
Warrants | — | 7,382 | ||||||
Total | 1,154 | 11,198 | ||||||
EquityBased_Compensation_Table
Equity-Based Compensation (Tables) | 3 Months Ended | |||||||||
Mar. 31, 2015 | ||||||||||
Equity-Based Compensation | ||||||||||
Summary of details regarding stock options granted under equity incentive plans | ||||||||||
2007 Equity | 2000 Equity | 2013 Lumara | Total | |||||||
Plan | Plan | Equity Plan | ||||||||
Outstanding at December 31, 2014 | 2,051,017 | 35,266 | 44,000 | 2,130,283 | ||||||
Granted | 347,600 | — | 73,250 | 420,850 | ||||||
Exercised | (295,334 | ) | (8,637 | ) | — | (303,971 | ) | |||
Expired or terminated | (46,576 | ) | — | — | (46,576 | ) | ||||
Outstanding at March 31, 2015 | 2,056,707 | 26,629 | 117,250 | 2,200,586 | ||||||
Summary of details regarding restricted stock units granted under equity incentive plans | ||||||||||
2007 Equity | 2000 Equity | 2013 Lumara | Total | |||||||
Plan | Plan | Equity Plan | ||||||||
Outstanding at December 31, 2014 | 360,826 | — | 20,000 | 380,826 | ||||||
Granted | 215,300 | — | 60,225 | 275,525 | ||||||
Exercised | (37,100 | ) | — | — | (37,100 | ) | ||||
Expired or terminated | (5,750 | ) | — | — | (5,750 | ) | ||||
Outstanding at March 31, 2015 | 533,276 | — | 80,225 | 613,501 | ||||||
Schedule of equity-based compensation expense | ||||||||||
Three Months Ended March 31, | ||||||||||
2015 | 2014 | |||||||||
Cost of product sales | $ | 41 | $ | 28 | ||||||
Research and development | 478 | 449 | ||||||||
Selling, general and administrative | 2,149 | 1,453 | ||||||||
Total equity-based compensation expense | 2,668 | 1,930 | ||||||||
Income tax effect | (1,035 | ) | — | |||||||
After-tax effect of equity-based compensation expense | $ | 1,633 | $ | 1,930 | ||||||
Debt_Tables
Debt (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Debt | |||||
Schedule of outstanding convertible note balances | |||||
March 31, 2015 | |||||
Liability component: | |||||
Principal | $ | 200,000 | |||
Less: debt discount, net | (30,910 | ) | |||
Net carrying amount | $ | 169,090 | |||
Equity component | $ | 38,188 | |||
Schedule of total interest expense recognized related to the Convertible Notes | |||||
Three Months Ended | |||||
March 31, 2015 | |||||
Contractual interest expense | $ | 1,250 | |||
Amortization of debt issuance costs | 234 | ||||
Amortization of debt discount | 1,649 | ||||
Total interest expense | $ | 3,133 | |||
Restructuring_Tables
Restructuring (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Restructuring | |||||
Schedule of components of restructuring expenses and current liabilities | |||||
March 31, 2015 | |||||
Accrued restructuring, beginning of period | $ | 1,953 | |||
Employee severance, benefits and related costs | 571 | ||||
Payments | (406 | ) | |||
Accrued restructuring, end of period | $ | 2,118 | |||
Basis_of_Presentation_and_Summ3
Basis of Presentation and Summary of Significant Accounting Policies (Details ) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Provision for U.S. product sales allowances and accruals | ||
Gross U.S. product sales | $125,517 | $31,661 |
Contractual adjustments | 35,134 | 13,973 |
Governmental Rebates | 12,968 | 165 |
Total provision for U.S product sales allowances and accruals | 48,102 | 14,138 |
U.S. products sales, net | $77,415 | $17,523 |
Basis_of_Presentation_and_Summ4
Basis of Presentation and Summary of Significant Accounting Policies (Details 2) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investment Concentration Risk | ||||
Cash, cash equivalents and investments | 361,100,000 | |||
Investment in institutional money market funds | 193,900,000 | |||
Cash and cash equivalents | 243,801,000 | 200,916,000 | 119,296,000 | 26,986,000 |
Amount invested in a single fund | 190,800,000 | |||
Sales Revenue, Net | Customer Concentration Risk | Amerisource Bergen Drug Corporation | ||||
Customers representing 10% or more of revenues | ||||
Percentage of revenues from major customer | 30.00% | 39.00% | ||
Sales Revenue, Net | Customer Concentration Risk | Takeda Pharmaceutical Company Limited | ||||
Customers representing 10% or more of revenues | ||||
Percentage of revenues from major customer | 13.00% | 11.00% | ||
Sales Revenue, Net | Customer Concentration Risk | McKesson Corporation | ||||
Customers representing 10% or more of revenues | ||||
Percentage of revenues from major customer | 10.00% | 22.00% | ||
Sales Revenue, Net | Customer Concentration Risk | Cardinal Health Inc | ||||
Customers representing 10% or more of revenues | ||||
Percentage of revenues from major customer | 10.00% | 15.00% | ||
Sales Revenue, Net | Customer Concentration Risk | Group Purchasing Organization | ||||
Customers representing 10% or more of revenues | ||||
Percentage of revenues from major customer | 23.00% | 28.00% | ||
Sales Revenue, Net | Geographic Concentration Risk | ||||
Percentage of revenues From customers outside of the U.S. | ||||
Approximate percentage of revenues from customers outside the U.S. | 13.00% | 16.00% |
Business_Combination_Details
Business Combination (Details) (USD $) | 0 Months Ended | ||
Share data in Millions, except Per Share data, unless otherwise specified | Nov. 12, 2014 | Mar. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||
Common stock, par value (in dollars per share) | $0.01 | $0.01 | |
Future contingent payments, maximum | $350,000,000 | ||
Lumara Health | |||
Business Acquisition [Line Items] | |||
Ownership percentage acquired | 100.00% | ||
Cash consideration | 600,000,000 | ||
Shares of AMAG common stock issued in business combination | 3.2 | ||
Fair value of 3.2 million shares of AMAG common stock | $111,964,000 | ||
Lumara Health | Common Stock | |||
Business Acquisition [Line Items] | |||
Common stock, par value (in dollars per share) | $0.01 |
Business_Combination_Details_2
Business Combination (Details 2) (USD $) | 0 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 12, 2014 | Mar. 31, 2015 | Dec. 31, 2014 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $205,824 | $205,824 | |
Lumara Health | |||
Business Acquisition [Line Items] | |||
Cash consideration | 600,000 | ||
Fair value of 3.2 million shares of AMAG common stock | 111,964 | ||
Fair value of contingent milestone payments | 205,000 | ||
Estimated working capital and other adjustments | 821 | ||
Purchase price paid at closing | 917,785 | ||
Due from sellers | -5,119 | ||
Cash acquired from Lumara Health | -5,219 | ||
Total purchase price paid | 907,447 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Accounts receivable | 34,918 | ||
Inventories | 30,300 | ||
Prepaid and other current assets | 3,322 | ||
Deferred income tax liabilities | 94,965 | ||
Property and equipment | 60 | ||
Makena marketed product | 797,100 | ||
IPR & D | 79,100 | ||
Restricted cash | 1,997 | ||
Other long-term assets | 3,412 | ||
Accounts payable | -3,807 | ||
Accrued expenses | -41,532 | ||
Deferred income tax liabilities | -293,649 | ||
Other long-term liabilities | -4,563 | ||
Total estimated identifiable net assets | 701,623 | ||
Goodwill | 205,824 | 205,800 | |
Total | $907,447 |
Investments_Details
Investments (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | |
Share data in Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Summary of Investments | ||||
Total investments | $117,294,000 | $117,294,000 | $117,294,000 | $24,914,000 |
Available-for-sale securities, Gross Unrealized Gains | 60,000 | 60,000 | 60,000 | 13,000 |
Available-for-sale securities, Gross Unrealized Losses | -16,000 | -16,000 | -16,000 | -37,000 |
Available-for-sale securities, Estimated Fair Value | 117,338,000 | 117,338,000 | 117,338,000 | 24,890,000 |
Underwriting Discounts For Initial Public Offering | 12,100,000 | 12,100,000 | ||
Underwriting Commissions And Other Offering Expenses | 200,000 | 200,000 | ||
Equity [Abstract] | ||||
Increase in total investments | 92,400,000 | |||
Number of shares sold in an underwritten public offering | 4.6 | |||
Sale price of common stock (in dollars per share) | $44 | $44 | $44 | |
Proceeds from the issuance of common stock, net of underwriting discounts and other expenses | 201,200,000 | 189,150,000 | ||
Corporate debt securities | ||||
Summary of Investments | ||||
Available-for-sale securities due in one year or less, Amortized Cost | 15,167,000 | 15,167,000 | 15,167,000 | 11,656,000 |
Available-for-sale securities due in one to three years, Amortized Cost | 47,352,000 | 47,352,000 | 47,352,000 | 13,258,000 |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 13,000 | 13,000 | 13,000 | 3,000 |
Available-for-sale securities due in one to three years, Gross Unrealized Gains | 45,000 | 45,000 | 45,000 | 10,000 |
Available-for-sale securities due in one year or less, Gross Unrealized Losses | -4,000 | |||
Available-for-sale securities due in one to three years, Gross Unrealized Losses | -10,000 | -10,000 | -10,000 | -33,000 |
Available-for-sale securities due in one year or less, Estimated Fair Value | 15,180,000 | 15,180,000 | 15,180,000 | 11,655,000 |
Available-for-sale securities due in one to three years, Estimated Fair Value | 47,387,000 | 47,387,000 | 47,387,000 | 13,235,000 |
Commercial Paper | ||||
Summary of Investments | ||||
Available-for-sale securities due in one year or less, Amortized Cost | 30,460,000 | 30,460,000 | 30,460,000 | |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 2,000 | 2,000 | 2,000 | |
Available-for-sale securities due in one year or less, Gross Unrealized Losses | -1,000 | -1,000 | -1,000 | |
Available-for-sale securities due in one year or less, Estimated Fair Value | 30,461,000 | 30,461,000 | 30,461,000 | |
Certificates of deposit | ||||
Summary of Investments | ||||
Available-for-sale securities due in one year or less, Amortized Cost | 15,000,000 | 15,000,000 | 15,000,000 | |
Available-for-sale securities due in one year or less, Gross Unrealized Losses | -1,000 | -1,000 | -1,000 | |
Available-for-sale securities due in one year or less, Estimated Fair Value | 14,999,000 | 14,999,000 | 14,999,000 | |
Municipal securities | ||||
Summary of Investments | ||||
Available-for-sale securities due in one to three years, Amortized Cost | 9,315,000 | 9,315,000 | 9,315,000 | |
Available-for-sale securities due in one to three years, Gross Unrealized Losses | -4,000 | -4,000 | -4,000 | |
Available-for-sale securities due in one to three years, Estimated Fair Value | $9,311,000 | $9,311,000 | $9,311,000 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Fair Value, Measurements, Recurring, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | |
Estimate of Fair Value Measurement | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 311,206 | 102,144 |
Total Liabilities | 221,259 | 218,702 |
Estimate of Fair Value Measurement | PlasmaTech Biopharmaceuticals Inc | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 12,222 | 12,102 |
Estimate of Fair Value Measurement | Acquisition Related Contingent Consideration | Lumara Health | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 209,037 | 206,600 |
Estimate of Fair Value Measurement | Money market funds | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 193,868 | 77,254 |
Estimate of Fair Value Measurement | Corporate debt securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 62,567 | 24,890 |
Estimate of Fair Value Measurement | Commercial paper | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 30,461 | |
Estimate of Fair Value Measurement | Certificates of deposit | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 14,999 | |
Estimate of Fair Value Measurement | Municipal securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 9,311 | |
Fair Value, Inputs, Level 1 | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 193,868 | 77,254 |
Fair Value, Inputs, Level 1 | Money market funds | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 193,868 | 77,254 |
Fair Value, Inputs, Level 2 | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 117,338 | 24,890 |
Fair Value, Inputs, Level 2 | Corporate debt securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 62,567 | 24,890 |
Fair Value, Inputs, Level 2 | Commercial paper | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 30,461 | |
Fair Value, Inputs, Level 2 | Certificates of deposit | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 14,999 | |
Fair Value, Inputs, Level 2 | Municipal securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 9,311 | |
Fair Value, Inputs, Level 3 | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 221,259 | 218,702 |
Fair Value, Inputs, Level 3 | PlasmaTech Biopharmaceuticals Inc | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 12,222 | 12,102 |
Fair Value, Inputs, Level 3 | Acquisition Related Contingent Consideration | Lumara Health | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | $209,037 | $206,600 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 2) (USD $) | 3 Months Ended | |||||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Feb. 14, 2014 | Nov. 30, 2014 | Nov. 12, 2014 | |
Reconciliation of contingent consideration obligations related to acquisitions | ||||||
Adjustments to fair value of contingent consideration | $2,599,000 | $789,000 | ||||
Contingent consideration classified as short term liability | 722,000 | 718,000 | ||||
Interest rate (as a percent) | 2.50% | 2.50% | ||||
Estimated fair value of the Convertible Notes | 433,500,000 | |||||
Convertible Debt | ||||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||||
Aggregate principal amount of notes issued | 200,000,000 | |||||
Interest rate (as a percent) | 2.50% | |||||
Term Loan | ||||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||||
Aggregate principal amount of notes issued | 340,000,000 | |||||
Fair Value, Inputs, Level 2 | Convertible Debt | ||||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||||
Estimated fair value of the Convertible Notes | 433,500,000 | |||||
Fair Value, Inputs, Level 2 | Term Loan | ||||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||||
Estimated fair value of the Convertible Notes | 345,700,000 | |||||
Licensing Agreements | ||||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||||
Balance at beginning of period | 218,702,000 | |||||
Payments made | -84,000 | |||||
Adjustments to fair value of contingent consideration | 2,599,000 | |||||
Other adjustments | 42,000 | |||||
Balance at end of period | 221,259,000 | |||||
PlasmaTech Biopharmaceuticals Inc | Licensing Agreements | ||||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||||
Period over which estimated undiscounted royalty amounts could be paid | 10 years | |||||
Contingent consideration classified as short term liability | 700,000 | |||||
PlasmaTech Biopharmaceuticals Inc | Licensing Agreements | Fair Value, Inputs, Level 3 | ||||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||||
Discount rate (as a percent) | 15.00% | |||||
PlasmaTech Biopharmaceuticals Inc | Licensing Agreements | Minimum | ||||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||||
Estimated undiscounted royalty amounts payable | 20,000,000 | |||||
PlasmaTech Biopharmaceuticals Inc | Licensing Agreements | Maximum | ||||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||||
Estimated undiscounted royalty amounts payable | 28,000,000 | |||||
Lumara Health | ||||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||||
Acquisition-related contingent consideration | 205,000,000 | |||||
Acquired finite-lived intangible assets | $79,100,000 | |||||
Discount rate (as a percent) | 5.00% |
Accounts_Receivable_Net_Detail
Accounts Receivable, Net (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Accounts Receivable, Net | ||
Net Accounts receivable | 56,176 | 38,172 |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Amerisource Bergen Drug Corporation | ||
Customers representing greater than 10% of accounts receivable balances | ||
Accounts receivable by major customer (as a percent) | 51.00% | 45.00% |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | McKesson Corporation | ||
Customers representing greater than 10% of accounts receivable balances | ||
Accounts receivable by major customer (as a percent) | 12.00% | |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | McKesson Corporation | Maximum | ||
Customers representing greater than 10% of accounts receivable balances | ||
Accounts receivable by major customer (as a percent) | 10.00% | |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Cardinal Health Inc | ||
Customers representing greater than 10% of accounts receivable balances | ||
Accounts receivable by major customer (as a percent) | 10.00% | |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Cardinal Health Inc | Maximum | ||
Customers representing greater than 10% of accounts receivable balances | ||
Accounts receivable by major customer (as a percent) | 10.00% |
Inventories_Details
Inventories (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | |
Inventories disclosure | |||
Raw materials | $14,188,000 | $15,757,000 | |
Work in process | 5,965,000 | 5,900,000 | |
Finished goods | 20,457,000 | 14,282,000 | |
Total inventories | 40,610,000 | 35,939,000 | |
Raw materials | 7,798,000 | 5,908,000 | |
Total Inventories | 48,408,000 | 41,847,000 | |
Inventory expensed | 1,437,000 | ||
Fair Value Adjustment to Inventory | |||
Inventories disclosure | |||
Inventories | 30,300,000 | ||
Fair value adjustment | 26,100,000 | ||
Cost of Sales | |||
Inventories disclosure | |||
Inventory expensed | 3,600,000 | ||
Cost of Sales | Fair Value Adjustment to Inventory | |||
Inventories disclosure | |||
Fair value adjustment | 2,900,000 | ||
Inventory expensed | $3,300,000 |
Goodwill_IPRD_and_Other_Intang1
Goodwill, IPR&D and Other Intangible Assets, Net (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Nov. 12, 2014 | |
Intangible Assets, Net | ||||
Goodwill | $205,824,000 | $205,824,000 | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Cost | 813,993,000 | 813,993,000 | ||
Accumulated Amortization | 16,667,000 | 5,185,000 | ||
Net | 797,326,000 | 808,808,000 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Intangible assets, net | 876,426,000 | 887,908,000 | ||
Expected future annual amortization expense | ||||
Remainder of Year Ended December 31, 2015 | 40,404,000 | |||
Year Ended December 31, 2016 | 64,977,000 | |||
Year Ended December 31, 2017 | 76,679,000 | |||
Year Ended December 31, 2018 | 84,359,000 | |||
Year Ended December 31, 2019 | 55,746,000 | |||
Total | 322,165,000 | |||
Lumara Health | ||||
Intangible Assets, Net | ||||
Goodwill | 205,800,000 | 205,824,000 | ||
Useful life | 20 years | |||
PlasmaTech Biopharmaceuticals Inc | ||||
Intangible Assets, Net | ||||
Useful life | 10 years | |||
Licensing Agreements | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Accumulated Amortization | 16,667,000 | 5,185,000 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Cost | 893,093,000 | 893,093,000 | ||
Intangible assets, net | 876,426,000 | 887,908,000 | ||
Licensing Agreements | Lumara Health | ||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Cost | 79,100,000 | 79,100,000 | ||
Net | 79,100,000 | 79,100,000 | ||
Licensing Agreements | ||||
Intangible Assets, Net | ||||
Amortization of intangible assets | 11,500,000 | |||
Licensing Agreements | Maximum | ||||
Intangible Assets, Net | ||||
Amortization of intangible assets | 100,000 | |||
Licensing Agreements | Lumara Health | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Cost | 797,100,000 | 797,100,000 | ||
Accumulated Amortization | 16,245,000 | 4,834,000 | ||
Net | 780,855,000 | 792,266,000 | ||
Licensing Agreements | PlasmaTech Biopharmaceuticals Inc | ||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||
Cost | 16,893,000 | 16,893,000 | ||
Accumulated Amortization | 422,000 | 351,000 | ||
Net | $16,471,000 | $16,542,000 |
Acrued_Expenses_Details
Acrued Expenses (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Accrued Expenses | ||
Commercial rebates, fees and returns | $56,625 | $44,807 |
Professional, consulting and other outside services | 20,940 | 23,157 |
Salaries, bonuses, and other compensation | 8,406 | 10,176 |
Restructuring expense | 2,118 | 1,953 |
Short-term contingent consideration | 722 | 718 |
Total accrued expenses | $88,811 | $80,811 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Taxes | ||
Effective tax rate | 30.00% | 0.00% |
Income tax expense | $5,608 | |
Statutory U.S. federal tax rate (as a percent) | 35.00% | 35.00% |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Changes in accumulated other comprehensive income, net of tax | ||
Beginning Balance | ($3,617,000) | |
Other comprehensive income (loss) before reclassifications | 68,000 | |
Ending Balance | -3,549,000 | |
Gain (loss) reclassified from other accumulated comprehensive loss | $0 | $0 |
Basic_and_Diluted_Net_Income_L2
Basic and Diluted Net Income (Loss) per Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Components of basic and diluted net income (loss) per share | ||
Net income (loss) | $12,904 | ($7,102) |
Weighted average common shares outstanding (basic) | 27,213 | 21,824 |
Effect of dilutive securities: | ||
Stock options and restricted stock units (in shares) | 1,552 | |
Warrants | 7,382 | |
Convertible 2.5% senior notes | 2,098 | |
Shares used in calculating dilutive net income (loss) per share (in shares) | 38,245 | 21,824 |
Net income (loss) per share: | ||
Basic (in dollars per share) | $0.47 | ($0.33) |
Diluted (in dollars per share) | $0.39 | ($0.33) |
Anti-dilutive securities (in shares) | 1,154 | 11,198 |
Employee and Non Employee Stock Option | ||
Net income (loss) per share: | ||
Anti-dilutive securities (in shares) | 856 | 3,335 |
Employee and Non Employee Restricted Stock Units | ||
Net income (loss) per share: | ||
Anti-dilutive securities (in shares) | 298 | 481 |
Warrants | ||
Net income (loss) per share: | ||
Anti-dilutive securities (in shares) | 7,382 |
EquityBased_Compensation_Detai
Equity-Based Compensation (Details) | 3 Months Ended |
Mar. 31, 2015 | |
plan | |
Equity compensation plans | |
Number of equity compensation plans | 3 |
Equity Incentive Plan 2007 | |
Equity compensation plans | |
Remaining number of shares available for future grants | 1,087,015 |
Equity Incentive Plan 2007 | Employee and Non Employee Stock Option | Minimum | |
Equity compensation plans | |
Expiration term | 7 years |
Equity Incentive Plan 2007 | Employee and Non Employee Stock Option | Maximum | |
Equity compensation plans | |
Expiration term | 10 years |
Stock 2000 Plan | Employee and Non Employee Stock Option | |
Equity compensation plans | |
Expiration term | 10 years |
Lumara 2013 Plan | |
Equity compensation plans | |
Shares authorized for issuance | 200,000 |
Remaining number of shares available for future grants | 2,525 |
Lumara 2013 Plan | Employee and Non Employee Stock Option | |
Equity compensation plans | |
Expiration term | 10 years |
Other Equity Compensation Grants | Employee and Non Employee Stock Option | Senior Management [Member] | |
Equity compensation plans | |
Award vesting period | 4 years |
Granted (in shares) | 20,500 |
Other Equity Compensation Grants | Employee and Non Employee Restricted Stock Units | Senior Management [Member] | |
Equity compensation plans | |
Award vesting period | 3 years |
Granted (in shares) | 2,500 |
EquityBased_Compensation_Detai1
Equity-Based Compensation (Details 2) | 3 Months Ended |
Mar. 31, 2015 | |
Employee and Non Employee Stock Option | |
Options | |
Outstanding at beginning of period (in shares) | 2,130,283 |
Granted (in shares) | 420,850 |
Exercised (in shares) | -303,971 |
Expired and/or forfeited (in shares) | -46,576 |
Outstanding at end of period (in shares) | 2,200,586 |
Employee and Non Employee Stock Option | Equity Incentive Plan 2007 | |
Options | |
Outstanding at beginning of period (in shares) | 2,051,017 |
Granted (in shares) | 347,600 |
Exercised (in shares) | -295,334 |
Expired and/or forfeited (in shares) | -46,576 |
Outstanding at end of period (in shares) | 2,056,707 |
Employee and Non Employee Stock Option | Stock 2000 Plan | |
Options | |
Outstanding at beginning of period (in shares) | 35,266 |
Exercised (in shares) | -8,637 |
Outstanding at end of period (in shares) | 26,629 |
Employee and Non Employee Stock Option | Lumara 2013 Plan | |
Options | |
Outstanding at beginning of period (in shares) | 44,000 |
Granted (in shares) | 73,250 |
Outstanding at end of period (in shares) | 117,250 |
Employee and Non Employee Restricted Stock Units | |
Options | |
Outstanding at beginning of period (in shares) | 380,826 |
Granted (in shares) | 275,525 |
Exercised (in shares) | -37,100 |
Expired and/or forfeited (in shares) | -5,750 |
Outstanding at end of period (in shares) | 613,501 |
Employee and Non Employee Restricted Stock Units | Equity Incentive Plan 2007 | |
Options | |
Outstanding at beginning of period (in shares) | 360,826 |
Granted (in shares) | 215,300 |
Exercised (in shares) | -37,100 |
Expired and/or forfeited (in shares) | -5,750 |
Outstanding at end of period (in shares) | 533,276 |
Employee and Non Employee Restricted Stock Units | Lumara 2013 Plan | |
Options | |
Outstanding at beginning of period (in shares) | 20,000 |
Granted (in shares) | 60,225 |
Outstanding at end of period (in shares) | 80,225 |
EquityBased_Compensation_Detai2
Equity-Based Compensation (Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Equity-based compensation expense | ||
Total equity-based compensation expense | $2,668 | $1,930 |
Income tax effect | -1,035 | |
After-tax effect of equity-based compendation expense | 1,633 | 1,930 |
Cost of Sales | ||
Equity-based compensation expense | ||
Total equity-based compensation expense | 41 | 28 |
Research and Development Expense | ||
Equity-based compensation expense | ||
Total equity-based compensation expense | 478 | 449 |
Selling, General and Administrative Expenses [Member] | ||
Equity-based compensation expense | ||
Total equity-based compensation expense | $2,149 | $1,453 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | ||
Share data in Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Feb. 28, 2014 |
Stockholders' Equity | |||||
Increase in total stockholders' equity | $211,200,000 | ||||
Net proceeds from sale of common stock after deducting fees, commissions and other expenses related to offering | 188,900,000 | ||||
Increase in total stockholders' equity allocated to stock-based compensation expense | 2,668,000 | 1,930,000 | |||
Increase in total stockholders' equity due to proceeds from exercise of stock options | 6,719,000 | 1,017,000 | |||
Increase in total stockholders' equity partially offset by net loss | -12,904,000 | 7,102,000 | |||
Common Stock Transactions | |||||
Number of shares sold in an underwritten public offering | 4.6 | ||||
Share price (in dollars per share) | $44 | $44 | |||
Proceeds from the issuance of common stock | 201,200,000 | 189,150,000 | |||
Underwriting discounts | 12,100,000 | 12,100,000 | |||
Underwriting commissions and other offering expenses | $200,000 | $200,000 | |||
Exercise price (in dollars per share) | $34.12 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Minimum | |
Patent appeals and market exclusivity | |
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 | |
Ferumoxytol term of data and market exclusivity even if there is no successful outcome from the appeals process | 10 years |
Collaborative_Agreements_Detai
Collaborative Agreements (Details) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Apr. 30, 2010 | Mar. 31, 2010 | Mar. 31, 2015 | Dec. 31, 2012 | Dec. 31, 2014 | |
Collaborative Agreements | |||||
Deferred revenues, short-term | $33,563,000 | $44,376,000 | |||
License Development and Commercialization Agreement with Takeda [Member] | |||||
Collaborative Agreements | |||||
Upfront payment received | 61,000,000 | ||||
Period of recognition of deferred revenues | 10 years | 9 months | |||
Milestone revenue | 18,000,000 | ||||
Deferred revenue recognized in earnings related to the amortization of the deferred revenue balance | 12,000,000 | ||||
Deferred revenues, short-term | 33,600,000 | ||||
License Development and Commercialization Agreement with Takeda [Member] | Termination Agreement [Member] | |||||
Collaborative Agreements | |||||
Milestone payments expected to be received under the agreement | 3,000,000 | ||||
License Development and Commercialization Agreement with Takeda [Member] | Termination Agreement [Member] | Maximum | |||||
Collaborative Agreements | |||||
Milestone revenue | $6,700,000 |
Debt_Details
Debt (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||||
Share data in Millions, except Per Share data, unless otherwise specified | Feb. 13, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Feb. 14, 2014 | Dec. 31, 2014 | Feb. 28, 2014 | Feb. 11, 2014 |
Liability component: | |||||||
Principal | $200,000,000 | ||||||
Less: debt discount, net | -30,910,000 | ||||||
Net carrying amount | 169,090,000 | 167,441,000 | |||||
Debt Instrument, Fair Value Disclosure | 433,500,000 | ||||||
Equity component | 38,188,000 | ||||||
Interest rate (as a percent) | 2.50% | 2.50% | |||||
Sale price of common stock (in dollars per share) | $44 | ||||||
Total interest expense recognized | |||||||
Total interest expense | 10,367,000 | 1,476,000 | |||||
Convertible Bond Hedge | |||||||
Common stock covered under convertible bond hedge (in shares) | 7.4 | ||||||
Exercise price (in dollars per unit) | $27.09 | ||||||
Purchase of convertible bond hedges, net of tax | 39,760,000 | ||||||
Warrant Transactions | |||||||
Number of shares of common stock called by warrants | 7.4 | ||||||
Exercise price (in dollars per share) | $34.12 | ||||||
Exercise price above last reported sale price of common stock (as a percent) | 70.00% | ||||||
Proceeds from issuance of warrants | 25,620,000 | ||||||
Convertible Debt | |||||||
Liability component: | |||||||
Net carrying amount | 169,100,000 | ||||||
Net proceeds from issuance of convertible debt | 193,300,000 | ||||||
Aggregate principal amount of notes issued | 200,000,000 | ||||||
Amount pertaining to full exercise of over-allotment of debt by underwriters | 25,000,000 | ||||||
Fees and expenses | 6,700,000 | ||||||
Proceeds used to pay the cost of the bond hedges (after such cost was partially offset by proceeds from the sale of warrants) | 14,100,000 | ||||||
Interest rate (as a percent) | 2.50% | ||||||
Initial conversion rate of common stock per $1000 of principal amount of Notes (in shares) | 36.9079 | ||||||
Principal amount used for debt instrument conversion ratio | 1,000 | ||||||
Initial conversion price of convertible notes into common stock (in dollars per share) | $27.09 | ||||||
Sale price of common stock (in dollars per share) | $20.07 | ||||||
Debt issuance costs allocated to equity component | 1,300,000 | ||||||
Debt issuance costs allocated to the liability component | 5,400,000 | ||||||
Expected life of the debt | 5 years | ||||||
Effective interest rate on liability component (as a percent) | 7.23% | ||||||
Total interest expense recognized | |||||||
Contractual interest expense | 1,250,000 | ||||||
Amortization of debt issuance costs | 234,000 | ||||||
Amortization of debt discount | 1,649,000 | ||||||
Total interest expense | 3,133,000 | ||||||
Convertible Debt | Debt Instrument Convertible Covenant One [Member] | |||||||
Liability component: | |||||||
Number of days during 30 consecutive trading days in which the closing price of the entity's common stock must exceed or equal the conversion price for the notes to be convertible | 20 | ||||||
Number of consecutive trading days during which the closing price of the entity's common stock must exceed or equal the conversion price for at least 20 days in order for the notes to be convertible | 30 days | ||||||
Percentage of the closing sales price of the entity's common stock that the conversion price must exceed or be equal in order for the notes to be convertible | 130.00% | ||||||
Convertible Debt | Debt Instrument Convertible Covenant Two [Member] | |||||||
Liability component: | |||||||
Principal amount used for debt instrument conversion ratio | 1,000 | ||||||
Number of consecutive business days after any five consecutive trading day period during the note measurement period | 5 days | ||||||
Number of consecutive trading days before five consecutive business days during the note measurement period | 5 days | ||||||
Convertible Debt | Debt Instrument Convertible Covenant Two [Member] | Maximum | |||||||
Liability component: | |||||||
Percentage of product of the last reported sale price of the entity's common stock and the conversion rate of convertible debt instruments | 98.00% | ||||||
Convertible Debt | Debt Instrument Convertible Covenant Three [Member] | |||||||
Liability component: | |||||||
Principal amount used for debt instrument conversion ratio | $1,000 |
Debt_Details_2
Debt (Details 2) (USD $) | 3 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2014 | Nov. 12, 2014 | |
Debt | |||||
Interest rate (as a percent) | 2.50% | 2.50% | |||
Long-term Debt, Total | $281,904,000 | $293,905,000 | |||
Term Loan | |||||
Debt | |||||
Principal amount of debt issued | 340,000,000 | ||||
Term Loan | Credit Facility | |||||
Debt | |||||
Principal amount of debt issued | 340,000,000 | ||||
Loans Payable | 320,200,000 | ||||
Installment payment amount | 12,750,000 | 8,500,000 | |||
Prepayment Premium, Percentage Of Principal Amount Of Prepayment If Prepayment Made Before 12 Months From Closing Date | 2.00% | ||||
Prepayment Premium, Percentage Of Principal Amount Of Prepayment If Prepayment Made After 12 Months But Before 24 Months From Closing Date | 1.00% | ||||
Percentage of equity interests in domestic subsidiaries pledged as collateral for borrowing (as a percent) | 100.00% | ||||
Percentage of equity interests in direct foreign subsidiaries pledged as collateral for borrowing (as a percent) | 65.00% | ||||
Term Loan | Credit Facility | Excess Cash Flows, Range One | |||||
Debt | |||||
Annual Mandatory Prepayment Of Term Loans From Excess Cash Flows Range Percentage | 75.00% | ||||
Total Net Leverage Ratio | 2 | ||||
Term Loan | Credit Facility | Excess Cash Flows, Range Two | |||||
Debt | |||||
Annual Mandatory Prepayment Of Term Loans From Excess Cash Flows Range Percentage | 50.00% | ||||
Total Net Leverage Ratio | 1 | ||||
Term Loan | Credit Facility | Excess Cash Flows, Range Three | |||||
Debt | |||||
Annual Mandatory Prepayment Of Term Loans From Excess Cash Flows Range Percentage | 25.00% | ||||
Total Net Leverage Ratio | 0.5 | ||||
Term Loan | Credit Facility | Excess Cash Flows, Range Four | |||||
Debt | |||||
Annual Mandatory Prepayment Of Term Loans From Excess Cash Flows Range Percentage | 0.00% | ||||
Term Loan | Credit Facility | Forecast | |||||
Debt | |||||
Minimum Principal Amount Of Convertible Notes Outstanding That Triggers Maturity Acceleration | 25,000,000 | ||||
Minimum Principal Amount Of Term Loans Outstanding That Triggers Maturity Acceleration | 50,000,000 | ||||
Term Loan | Maximum | Credit Facility | |||||
Debt | |||||
Cash netted from ratio calculation | $25,000,000 | ||||
Term Loan | Maximum | Credit Facility | March 30, 2015 | |||||
Debt | |||||
Total Net Leverage Ratio | 4.6 | ||||
Term Loan | Maximum | Credit Facility | September 30, 2017 | |||||
Debt | |||||
Total Net Leverage Ratio | 1 |
Restructuring_Details
Restructuring (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Components of restructuring expenses and reserve | |
Accrued restructuring, beginning of period | $1,953 |
Employee severance, benefits and related costs | 571 |
Payments | -406 |
Accrued restructuring, end of period | $2,118 |
Recently_Issued_and_Proposed_A1
Recently Issued and Proposed Accounting Pronouncements (Details) (The amendments ASU 2015-03 debt issuance costs, USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
The amendments ASU 2015-03 debt issuance costs | |
Reclassified debt issuance costs | $5.70 |