Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 02, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | AMAG PHARMACEUTICALS INC. | |
Entity Central Index Key | 792,977 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 34,703,924 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 167,530 | $ 119,296 |
Investments | 275,343 | 24,890 |
Accounts receivable, net | 73,689 | 38,172 |
Inventories | 37,217 | 40,610 |
Receivable from collaboration | 4,518 | |
Deferred tax assets | 53,164 | 32,094 |
Prepaid and other current assets | 17,725 | 14,456 |
Restricted cash | 30,755 | |
Total current assets | 655,423 | 274,036 |
Property, plant and equipment, net | 30,357 | 1,519 |
Goodwill | 637,400 | 205,824 |
Intangible assets, net | 1,211,547 | 887,908 |
Restricted cash | 2,397 | 2,397 |
Other long-term assets | 17,289 | 17,249 |
Total assets | 2,554,413 | 1,388,933 |
Current liabilities: | ||
Accounts payable | 3,661 | 7,301 |
Accrued expenses | 102,656 | 80,093 |
Payable to former CBR shareholders | 36,259 | |
Current portion of long-term debt | 17,500 | 34,000 |
Current portion of acquisition-related contingent consideration | 96,756 | 718 |
Deferred revenues | 10,012 | 44,376 |
Total current liabilities | 266,844 | 166,488 |
Long-term liabilities: | ||
Long-term debt, net | 815,067 | 293,905 |
Convertible 2.5% notes, net | 172,594 | 167,441 |
Acquisition-related contingent consideration | 126,189 | 217,984 |
Deferred tax liabilities | 247,615 | 77,619 |
Deferred revenues | 1,889 | |
Other long-term liabilities | 4,254 | 5,543 |
Total liabilities | $ 1,634,452 | $ 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, 117,500,000 shares authorized at September 30, 2015 and 58,750,000 authorized at December 31, 2014; 34,703,770 and 25,599,550 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | $ 347 | $ 256 |
Additional paid-in capital | 1,228,199 | 793,757 |
Accumulated other comprehensive (loss) | (3,720) | (3,617) |
Accumulated deficit | (304,865) | (330,443) |
Total stockholders' equity | 919,961 | 459,953 |
Total liabilities and stockholders' equity | $ 2,554,413 | $ 1,388,933 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets | ||
Convertible 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 | 117,500,000 | 58,750,000 |
Common stock, shares issued | 34,703,770 | 25,599,550 |
Common stock, shares outstanding | 34,703,770 | 25,599,550 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues: | ||||
U.S. product sales, net | $ 88,917 | $ 23,009 | $ 250,984 | $ 63,017 |
Service revenues, net | 7,177 | 7,177 | ||
License fee and other collaboration revenues | 58 | 2,485 | 51,380 | 8,114 |
Total revenues | 96,152 | 25,494 | 309,541 | 71,131 |
Costs and expenses: | ||||
Cost of product sales | 19,088 | 2,968 | 59,793 | 8,548 |
Cost of services | 3,261 | 3,261 | ||
Research and development expenses | 19,809 | 5,358 | 34,981 | 16,396 |
Selling, general and administrative expenses | 46,141 | 10,958 | 110,054 | 44,733 |
Acquisition-related costs | 8,500 | 1,917 | 11,153 | 1,917 |
Restructuring expenses | 738 | 1,752 | ||
Total costs and expenses | 97,537 | 21,201 | 220,994 | 71,594 |
Operating (loss) income | (1,385) | 4,293 | 88,547 | (463) |
Other income (expense): | ||||
Interest expense | (14,222) | (3,129) | (34,794) | (7,656) |
Loss on debt extinguishment | (10,449) | (10,449) | ||
Interest and dividend income, net | 524 | 291 | 967 | 809 |
Other income (expense) | (9,182) | 3 | (9,180) | 119 |
Total other income (expense) | (33,329) | (2,835) | (53,456) | (6,728) |
Net income (loss) before income taxes | (34,714) | 1,458 | 35,091 | (7,191) |
Income tax benefit (expense) | 14,130 | (9,513) | ||
Net income (loss) | $ (20,584) | $ 1,458 | $ 25,578 | $ (7,191) |
Net (loss) income per share: | ||||
Basic | $ (0.62) | $ 0.07 | $ 0.84 | $ (0.33) |
Diluted | $ (0.62) | $ 0.06 | $ 0.73 | $ (0.33) |
Weighted average shares outstanding used to compute net income (loss) per share: | ||||
Basic | 33,223 | 21,984 | 30,379 | 21,912 |
Diluted | 33,223 | 23,467 | 34,962 | 21,912 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated Statements of Comprehensive Income | ||||
Net income (loss) | $ (20,584) | $ 1,458 | $ 25,578 | $ (7,191) |
Unrealized (losses) gains on securities: | ||||
Holding (losses) gains arising during period, net of tax | (228) | (305) | 107 | (76) |
Reclassification adjustment for (losses) gains included in net income (loss) | 9 | (4) | 12 | |
Net unrealized (losses) gains on securities | (228) | (296) | 103 | (64) |
Total comprehensive income (loss) | $ (20,812) | $ 1,162 | $ 25,681 | $ (7,255) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 25,578 | $ (7,191) |
Adjustments to reconcile net income ( loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 51,346 | 655 |
Amortization of premium/discount on purchased securities | 1,505 | 1,823 |
Write-down of inventory to net realizable value | 869 | 1,119 |
Gain (loss) on disposal of property and equipment | (102) | |
Non-cash equity-based compensation expense | 11,572 | 6,153 |
Loss on debt extinguishment | 6,426 | |
Amortization of debt discount and debt issuance costs | 8,463 | 4,531 |
Gains on investments, net | (2) | (17) |
Change in fair value of contingent consideration | 4,525 | (2,535) |
Deferred income taxes | 17,557 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (24,075) | (4,031) |
Inventories | (1,013) | (2,496) |
Receivable from collaboration | 4,518 | (654) |
Prepaid and other current assets | (89) | (2,211) |
Other long-term assets | 5,959 | 1,001 |
Accounts payable and accrued expenses | (4,013) | 87 |
Other short-term liabilities | (1,688) | |
Deferred revenues | (35,575) | (6,659) |
Other long-term liabilities | (1,288) | 137 |
Repayment of term loan attributable to original issue discount | (12,491) | |
Net cash provided by (used in) operating activities | 58,084 | (10,390) |
Cash flows from investing activities: | ||
Acquisition of Lumara Health, net of acquired cash | 562 | |
Acquisition of CBR, net | (682,163) | |
Proceeds from sales or maturities of investments | 74,021 | 58,592 |
Purchase of investments | (326,080) | (63,747) |
Change in restricted cash | (3) | 2,883 |
Capital expenditures, net of proceeds from sale of assets | (440) | (42) |
Net cash (used in) investing activities | (934,103) | (2,314) |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock, net of underwriting discounts and other expenses | 407,477 | |
Long-term debt principal payments | (327,509) | |
Proceeds from issuance of convertible 2.5% notes | 200,000 | |
Proceeds from long-term debt | 839,125 | |
Payment of debt issuance costs | (10,000) | (6,711) |
Proceeds from issuance of warrants | 25,620 | |
Purchase of convertible bond hedges | (39,760) | |
Payment of contingent consideration | (322) | (186) |
Proceeds from the exercise of stock options | 15,482 | 2,909 |
Net cash provided by financing activities | 924,253 | 181,872 |
Net increase in cash and cash equivalents | 48,234 | 169,168 |
Cash and cash equivalents at beginning of the period | 119,296 | 26,986 |
Cash and cash equivalents at end of the period | 167,530 | 196,154 |
Supplemental data of cash flow information: | ||
Cash paid for taxes | 1,794 | |
Cash paid for interest | $ 23,766 | $ 2,514 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2015 | |
Description of Business | |
Description of Business | AMAG PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) A. DESCRIPTION OF BUSINESS AMAG Pharmaceuticals, Inc., a Delaware corporation, was founded in 1981. We use our business and clinical expertise to bring medical therapies and other innovations to market that provide clear benefits and improve people’s lives. We have a diverse portfolio of products and services with a focus on maternal health, anemia management and cancer supportive care, including Makena® (hydroxyprogesterone caproate injection), services related to the preservation of umbilical cord blood stem cell and cord tissue units operated through Cord Blood Registry® (“CBR”), Feraheme® (ferumoxytol) Injection for Intravenous (“IV”) use and MuGard® Mucoadhesive Oral Wound Rinse. 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.” On August 17, 2015, we acquired CBR Acquisition Holdings Corp. (“CBR Holdings”), at which time CBR Holdings became a wholly-owned subsidiary of AMAG. CBR Holdings, through its wholly-owned subsidiary, Cbr Systems, Inc., operated CBR , which we purchased for $700.0 million in cash consideration, subject to estimated working capital, indebtedness and other adjustments . CBR is a private umbilical cord blood stem cell and cord tissue bank which offers pregnant women and their families the ability to collect, process and cryogenically preserve newborn umbilical cord blood stem cells and cord tissue units (the “CBR Services”). We market and sell CBR Services directly to consumers. Additional details regarding the CBR acquisition can be found in Note C, “ Business Combinations .” Also , on August 17, 2015, in connection with the CBR acquisition, we completed a private placement of $500.0 million aggregate principal amount of 7.875% Senior Notes due 2023 (the “2023 Senior Notes”) and entered into a credit agreement with a group of lenders, including Jefferies Finance LLC (“Jefferies”), as administrative and collateral agent, that provided us with, among other things, a six -year $350.0 million term loan facility (the “2015 Term Loan Facility”). We borrowed the full $350.0 million available under the 2015 Term Loan Facility on August 17, 2015. We used the net proceeds from the August 2015 Offering, discussed below, the offering of the 2023 Senior Notes and borrowings under the 2015 Term Loan Facility along with existing cash to fund the acquisition of CBR, to repay the remaining $323.0 million outstanding principal amount under our then existing five -year term loan facility (the “2014 Term Loan Facility”), and to pay prepayment premiums, fees and expenses in connection with the foregoing. See Note Q, “ Debt ,” for more information. On August 5, 2015, we sold approximately 3.6 million shares of our common stock at a public offering price of $63.75 per share (the “August 2015 Offering”), resulting in net proceeds to us of approximately $218.6 million. On July 22, 2015, we entered into an option agreement with Velo Bio, LLC (“Velo”), a privately held life-sciences company that granted us an option to acquire the rights to an orphan drug candidate, digoxin immune fab (“DIF”), a polyclonal antibody in clinical development for the treatment of severe preeclampsia in pregnant women. We made an upfront payment of $10.0 million in the third quarter of 2015 for the option to acquire the global rights to the DIF program (the “DIF Rights”), which was recorded in research and development expenses in our condensed consolidated statements of operations. We have concluded that Velo is a variable interest entity (“VIE”), in which we are not the primary beneficiary. We do not have power, through our variable interest, to direct the activities that most significantly impact the economic performance of Velo. Specifically, we do not have any voting rights or final decision-making authority over Velo’s operational or financial activities. Accordingly, we did not consolidate Velo as of September 30, 2015. The $10.0 million payment represents the maximum exposure to any potential losses associated with this VIE. DIF has been granted both orphan drug and fast-track review designations by the U.S. Food and Drug Administration (“FDA”) for the use in treating severe preeclampsia. Under the option agreement, Velo will complete a dose ranging study and a Phase 2b/3a clinical study. Following the conclusion of the DIF Phase 2b/3a study, we may terminate, or, for additional consideration, exercise or extend, our option to acquire the DIF Rights. If we exercise the option to acquire the DIF Rights, we would be responsible for additional costs in pursuing FDA approval, and would be obligated to pay certain milestone payments and single-digit royalties based on regulatory approval and commercial performance of the product to Velo. If we exercise the option, we will be responsible for payments totaling up to $65.0 million (including the payment of the option exercise price and the regulatory milestone payments) and up to an additional $250.0 million in sales milestone payments based on the achievement of annual sales milestones at targets ranging from $100.0 million to $900.0 million. We anticipate that results from the pivotal Phase 2b/3a study could be available as early as 2018. In November 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. Makena was approved by the FDA in February 2011 and was granted orphan drug exclusivity through February 3, 2018. We sell Makena to specialty pharmacies , specialty distributors, home infusion companies and former compounding pharmacies, which , 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.” We also market and sell Feraheme , which was approved for marketing in the U.S. in June 2009 by the FDA for use as an IV iron replacement therapy for the treatment of iron deficiency anemia (“IDA”) 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 June 2013, we entered into a license agreement with Abeona Therapeutics, Inc. (“Abeona”) (formerly known as PlasmaTech Biopharmaceuticals, Inc. and 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”). |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | B. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments necessary for a fair statement of the financial position and results of operations of the Company for the interim periods presented. Such adjustments consisted only of normal recurring items. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“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. 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 nine months ended September 30, 2015, include the results of Lumara Health, which we acquired on November 12, 2014 (the “Lumara Acquisition Date”) and CBR Holdings, since August 17, 2015 (the “CBR Acquisition Date”). 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 and services 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 September 30, 2015 and December 31, 2014, substantially all of our cash and cash equivalents were held in either commercial bank accounts or money market funds. Restricted Cash As of September 30, 2015, we classified $30.8 million as short-term restricted cash for certain payments owed to former CBR shareholders in connection with a sale transaction involving CBR, which was completed in September 2012 and which payment obligations were assumed by us in our August 2015 acquisition of CBR. The related liability was recorded in “ Payable to former CBR shareholders ” on our condensed consolidated balance sheet at September 30, 2015 and was paid in full in October 2015. As of September 30, 2015 and December 31, 2014, we classified $2.4 million as long-term restricted cash, which included $2.0 million held in a restricted fund previously established by Lumara Health in connection with its Chapter 11 plan of reorganization to pay potential claims against its former directors and officers and a $0.4 million security deposit delivered to the landlord of our Waltham, Massachusetts headquarters in the form of a revocable letter of credit. 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 September 30, 2015, our cash, cash equivalents and investments amounted to approximately $442.9 million. We currently invest our excess cash primarily in corporate debt securities, commercial paper, certificates of deposit and municipal securities. As of September 30, 2015, approximately $35.3 million of our total $167.5 million cash and cash equivalents balance was invested in institutional money market funds, of which $34.3 million was invested in a single fund. Our operations are located primarily within the U.S. We focus on developing, manufacturing, and commercializing Makena and Feraheme and commercializing MuGard . In addition, we are focused on marketing and selling the CBR Services. We perform ongoing credit evaluations of our customers and generally do not require collateral. The following table sets forth customers or partners who represented 10% or more of our total revenues for the three and nine months ended September 30, 2015 and 2014: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 AmerisourceBergen Drug Corporation % % % % McKesson Corporation % % % % Cardinal Health, Inc. % % % % Takeda Pharmaceuticals Company Limited — % % % % In addition, approximately 25% and 27% of our Feraheme end-user demand during the nine months ended September 30, 2015 and 2014, respectively, was generated by members of a single group purchasing organization with which we have contracted. Revenues from outside of the U.S. amounted to approximately 17% and 11% of our total revenues for the nine months ended September 30, 2015 and 2014, respectively, and were principally related to deferred Feraheme revenue recognized in connection with the termination of our license, development and commercialization agreement with Takeda Pharmaceutical Company Limited (“Takeda”), which is headquartered in Japan. Our net accounts receivable primarily represented amounts due for products sold directly to wholesalers, distributors, and specialty pharmacies and amounts due for CBR Services sold directly to consumers . Accounts receivable for our products 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 September 30, 2015 and December 31, 2014 were as follows: September 30, 2015 December 31, 2014 AmerisourceBergen Drug Corporation % % McKesson Corporation % % We are currently solely dependent on a single supplier for Feraheme drug substance (produced in two separate facilities) and finished drug product and a single supply chain for Makena finished drug product. In addition, we rely on single sources for certain materials required to provide the CBR Services. We would be exposed to a significant loss of revenue from the sale of our products and services if our suppliers and/or manufacturers cannot fulfill demand for any reason. Revenue Recognition We recognize revenue from the sale of our products and services as well as license fee, collaboration and other revenues, including milestone payments, other product 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. Product Sales Revenue Our U.S. product sales, which primarily represented revenues from both Makena and Feraheme in the first nine months of 2015 and Feraheme in the first nine months of 2014, were offset by provisions for allowances and accruals as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Gross U.S. product sales $ $ $ $ Provision for U.S. product sales allowances and accruals: Contractual adjustments Governmental rebates Total provision for U.S. product sales allowances and accruals U.S. product sales, net $ $ $ $ We recognize U.S. product sales 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. The increases in contractual adjustments and governmental rebates primarily reflect the addition of Makena to our product portfolio in connection with the November 2014 acquisition of Lumara Health. During the nine months ended September 30, 2015, we reduced our Makena related Medicaid and other reserves by $5.3 million and we reduced our chargeback reserves by $1.9 million, all of which were initially recorded at the time of the Lumara acquisition. These adjustments were recorded to goodwill during the nine months ended September 30, 2015, as they occurred within the acquisition measurement period. We did not materially adjust our product sales allowances and accruals during the three or nine months ended September 30, 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. Service Revenue For multiple element arrangements, we allocate revenue to all deliverables based on their relative selling prices. We determine the selling price to be used for allocating revenue to deliverables as follows (i) vendor specific objective evidence; (ii) third-party evidence of selling price and (iii) the best estimate of the selling price. Vendor specific objective evidence generally exists only when we sell the deliverable separately and it is the price actually charged by us for that deliverable. Any discounts given to the customer are allocated by applying the relative selling price method. We have identified two deliverables contained in the revenue arrangements for the CBR Services, which involve the storage of umbilical cord blood and/or cord tissue products, namely: (i) enrollment, including the provision of a collection kit and unit processing, with revenue for this deliverable recognized after the collection and successful processing of a cord blood/cord tissue unit; and (ii) the storage of a specimen for either an annual fee or a prepayment of 18 years or the lifetime of the newborn donor (“lifetime option”). For the lifetime option, storage fees are not charged during the lifetime of the newborn donor. However, if the newborn donor dies and his/her legal guardian chooses to continue to store the newborn stem cells and/or cord tissue, the number of remaining years of storage covered by the lifetime option without additional charge is calculated by taking the average of male and female life expectancies based on lifetime actuarial tables published by the Social Security Administration and in effect at the time of the newborn’s birth and subtracting the age at death. We have allocated revenue between these two deliverables using the relative selling price method. The selling price for the enrollment, collection kit and processing deliverable and the lifetime option are estimated based on the published selling prices because we do not have vendor specific objective evidence or third-party evidence of selling price for these elements. The selling price for the annual storage option is determined based on vendor specific objective evidence as we have standalone renewals to support the selling price. Deferred revenue includes (i) amounts collected in advance of unit processing and (ii) amounts associated with unearned storage fees collected at the beginning of the storage contract term, net of allocated discounts. Amounts not expected to be recognized within the next year are classified as long-term deferred revenues. 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. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations | |
Business Combinations | C. BUSINESS COMBINATIONS CBR Acquisition On August 17, 2015 , we acquired CBR Holdings, at which time CBR Holdings became a wholly-owned subsidiary of AMAG. CBR Holdings, through its wholly-owned subsidiary, Cbr Systems, Inc., operated CBR, a privately held umbilical cord blood stem cell and cord tissue collection, processing and storage company , which we purchased for $700.0 million in cash consideration, subject to estimated working capital, indebtedness and other adjustments. We believe CBR is a strong strategic fit for our growing business and offers a unique opportunity to reach a broader population of expectant mothers who may benefit from our product offerings in the maternal health space, including Makena. The following table summarizes the components of the estimated total purchase price for CBR, subject to finalization of the net working capital, indebtedness and other adjustments as of the CBR Acquisition Date (in thousands): Cash consideration $ Estimated working capital, indebtedness and other adjustments Purchase price paid at closing Plus: Estimated purchase price payable to sellers Total purchase price $ The net working capital and other adjustments were estimated to be $17.8 million at closing, which included $7.2 million for the excess of the payable to former CBR shareholders over the restricted cash balance at closing. Subsequent to the closing, we estimated that the net working capital and other adjustments will be approximately $17.6 million, resulting in an increase to the cash consideration paid for CBR of approximately $0.2 million. Accordingly, we recorded a $0.2 million reduction to other amounts due from the sellers recorded in prepaid expenses and other current assets in the condensed consolidated balance sheet at September 30, 2015. We accounted for the acquisition of CBR 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. We have made a preliminary allocation of the purchase price to the net tangible and intangible assets acquired and liabilities assumed, based on available information and various assumptions we believe are reasonable, with the remaining purchase price recorded as goodwill. Due to the close proximity of the acquisition date to the quarter ended September 30, 2015, we were unable to complete our analysis of fair value. The following table summarizes the preliminary fair values assigned to the CBR assets acquired and the liabilities assumed by us along with the resulting goodwill at the CBR Acquisition Date (in thousands): Accounts receivable $ Inventories Prepaid and other current assets Restricted cash - short-term Property, plant and equipment Customer relationships Trade name and trademarks Favorable lease Deferred income tax assets Other long-term assets Accounts payable Accrued expenses Deferred revenues Payable to former CBR shareholders Deferred income tax liabilities Total estimated identifiable net assets $ Goodwill Total $ The values assigned to the assets and liabilities presented in the table above are preliminary and subject to change as additional information becomes available concerning the acquisition date fair value and tax basis of the assets acquired and liabilities assumed in the transaction. 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 CBR Acquisition Date. The gross contractual amount of accounts receivable at the CBR Acquisition Date was $11.6 million. The fair value amounts for CBR’s customer relationships, trade names and trademarks were determined based on assumptions that market participants would use in pricing an asset, based on the most advantageous market for the assets (i.e., its highest and best use). The final fair value determination for the identifiable intangible assets may differ from the preliminary estimates, and such differences could be material. We determined the fair value of the customer relationships, using an income approach, which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining life. Some of the more significant assumptions used in the income approach from the perspective of a market participant include the estimated net cash flows for each year for the identifiable intangible asset (including service revenues, cost of services, research and development costs, selling general and administrative costs and working capital/contributory asset charges), the discount rate that measures the risk inherent in each cash flow stream, as well as other factors. The fair value of the trade names and trademarks was determined using the relief from royalty method which is an income approach. No assurances can be given that the underlying assumptions used to determine the fair value of the customer relationships, trade names and trademarks will not change. For this and other reasons, actual results may vary significantly from the estimated results. We believe the fair values assigned to the CBR customer relationships, and the trade names and trademarks are based upon reasonable estimates and assumptions given available facts and circumstances as of the CBR Acquisition Date. If these assets are not successful, sales and profitability may be adversely affected in future periods, and as a result, the value of the assets may become impaired. The CBR customer relationships will be amortized to selling, general and administrative expenses based on an economic consumption model over an expected useful life of approximately 20 years. The trade names and trademark intangible asset is deemed to be an indefinite-lived asset, which is not amortized but will be subject to periodic assessments of impairment. Based on the preliminary fair value adjustments primarily related to deferred revenue and identifiable intangible assets acquired, we recorded a net deferred tax liability of $144.9 million in our condensed consolidated balance sheet as of September 30, 2015 using a combined federal and state statutory income tax rate of 37% . The net deferred tax liability represents the $149.5 million of deferred tax liabilities recorded in acquisition accounting (primarily related to the fair value adjustments to CBR’s deferred revenue and identifiable intangible assets) offset by $4.6 million of deferred tax assets acquired from CBR. These tax estimates are preliminary and subject to change based on, among other things, management’s final determination of the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed by jurisdiction, the deductibility of acquisition-related costs and other costs deducted by CBR prior to the acquisition, and management’s assessment of the combined company’s ability to utilize the future benefits from acquired and legacy deferred tax assets. Acquisition-related costs are not included as a component of consideration transferred and are expensed as incurred. We incurred approximately $8.5 million and $11.2 million of acquisition-related costs in the three and nine months ended September 30, 2015, respectively, related to the CBR acquisition. These costs primarily represented financial advisory fees, legal fees, due diligence and other costs and expenses. During the post-closing period in the three months ended September 30, 2015, CBR generated approximately $7.2 million of revenue. We determined that separate disclosure of CBR’s earnings for the post acquisition period in the three and nine months ended September 30, 2015 is not practicable due to the integration of CBR’s operations into our business upon acquisition. Lumara Health Acquisition On November 12, 2014, we acquired Lumara Health at which time Lumara Health became our wholly-owned subsidiary. By virtue of the acquisition, we acquired Lumara Health’s existing commercial product, Makena . 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 certain net working capital, net debt and transaction expense adjustments, and issued approximately 3.2 million shares of our common stock, par value $0.01 per share, having a value of approximately $112.0 million at the time of closing, to the holders of common stock 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 31, 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 ,” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and Note C, “ Business Combinations ,” 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 total purchase price paid for Lumara Health, as adjusted for the final net working capital and other adjustments (in thousands): Cash consideration $ Fair value of AMAG common stock issued Fair value of contingent milestone payments Estimated working capital and other adjustments Purchase price paid at closing Less: Cash received on finalization of the net working capital and other adjustments Cash acquired from Lumara Health Total purchase price $ In June 2015 , we received $0.6 million from the former stockholders of Lumara Health in connection with the final settlement of the net working capital, net debt and transaction expenses as of the Lumara Acquisition Date. In addition, during the nine months ended September 30, 2015, we adjusted the preliminary fair values assigned to the assets acquired and the liabilities assumed by us at the Lumara Acquisition Date, as discussed in Note H, “ Goodwill, IPR&D and Other Intangible Assets, Net .” These measurement period adjustments have been reflected as a current period adjustment to these balances during the nine months ended September 30, 2015 in accordance with the guidance in Accounting Standards Update (“ASU”) 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”), which we adopted early. The following table summarizes the fair values assigned to assets acquired and the liabilities assumed by us along with the resulting goodwill at the Lumara Health Acquisition Date, as adjusted for certain measurement period adjustments for Lumara Health recorded during the nine months ended September 30, 2015 (in thousands): Accounts receivable $ Inventories Prepaid and other current assets Deferred income tax assets Property and equipment Makena marketed product IPR&D Restricted cash - long term Other long-term assets Accounts payable Accrued expenses Deferred income tax liabilities Other long-term liabilities Total estimated identifiable net assets $ Goodwill Total $ Unaudited Pro Forma Supplemental Information The following supplemental unaudited pro forma information presents our revenue and net income (loss) on a pro forma combined basis, including Lumara Health and CBR , and assuming that the CBR acquisition occurred on January 1, 2014 and that the Lumara Health acquisition occurred on January 1, 2013. For purposes of preparing the following pro forma information, certain items recorded during the three and nine months ended September 30, 2015, such as the $8.5 million and $11.2 million of acquisition-related costs, the $10.4 million loss on debt extinguishment , $9.2 million of other one-time fees and expenses incurred in connection with the CBR acquisition financing are reflected in 2014 as if the CBR acquisition occurred on January 1, 2014. Certain items recorded in 2014, such as the $1.9 million of acquisition-related costs incurred in connection with the acquisition of Lumara Health have been excluded from 2014 as the pro forma results assume the Lumara Health acquisition occurred on January 1, 2013. The pro forma amounts do not include any expected cost savings or restructuring actions which may be achievable or which may occur subsequent to the acquisition of Lumara Health or CBR or the impact of any non-recurring activity. The following table presents unaudited pro forma consolidated results (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Pro forma combined revenues $ $ $ $ Pro forma combined net income (loss) $ $ $ $ Pro forma net income (loss) per diluted share $ $ $ $ The pro forma adjustments reflected in the pro forma combined net income (loss) in the above table primarily represent adjustments to historical amortization of intangible assets, adjustments to historical depreciation of property, plant and equipment and reductions to historical CBR revenues due to fair value adjustments in purchase accounting to intangible assets, property, plant and equipment and deferred revenue, respectively. In addition, the pro forma combined net income (loss) includes increased interest expense due to the increase in total term loan borrowings and the issuance of the 2023 Senior Notes in connection with the CBR acquisition. Income taxes for all periods were adjusted accordingly. This pro forma financial information is not necessarily indicative of our consolidated operating results that would have been reported had the transactions been completed as described herein, nor is such information necessarily indicative of our consolidated results for any future period. Goodwill 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. In connection with our August 2015 acquisition of CBR, we recognized $439.3 million of goodwill as of September 30, 2015, primarily due to deferred tax liabilities recorded on the fair value adjustments, primarily those adjustments relating to intangible assets and deferred revenue, and to the synergies expected from combining our operations with CBR. In connection with our November 2014 acquisition of Lumara Health, we recognized $198.1 million of goodwill as of September 30, 2015, primarily due to the net deferred tax liabilities recorded on the fair value adjustments to Lumara Health’s inventories and identifiable intangible asset . The $637.4 million of goodwill resulting from the CBR and Lumara Health acquisitions is not deductible for income tax purposes. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2015 | |
Investments | |
Investments | D. INVESTMENTS As of September 30, 2015 and December 31, 2014, our investments equaled $275.3 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 September 30, 2015 and December 31, 2014 (in thousands): September 30, 2015 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Corporate debt securities Due in one year or less $ $ $ $ Due in one to three years Commercial paper Due in one year or less — Certificates of deposit Due in one year or less — Municipal securities Due in one year or less — Due in one to three years Total investments $ $ $ $ December 31, 2014 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Corporate debt securities Due in one year or less $ $ $ $ Due in one to three years Total investments $ $ $ $ The $250.5 million increase in our total investments was primarily due to the $188.8 million of net proceeds from our March 2015 public equity offering, as discussed in Note N, “ Stockholders’ Equity . ” 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 any of the three or nine month periods ended September 30, 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. 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 | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | E. FAIR VALUE MEASUREMENTS The following tables represent the fair value hierarchy as of September 30, 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 September 30, 2015 Using: Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets: Money market funds $ $ $ — $ — Corporate debt securities — — Commercial paper — — Certificates of deposit — — Municipal securities — — Total Assets $ $ $ $ — Liabilities: Contingent consideration-Lumara Health $ $ — $ — $ Contingent consideration-MuGard — — Total Liabilities $ $ — $ — $ Fair Value Measurements at December 31, 2014 Using: Quoted Prices in Active Significant Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets: Money market funds $ $ $ — $ — Corporate debt securities — — Total Assets $ $ $ $ — Liabilities: Contingent consideration - Lumara Health $ $ — $ — $ Contingent consideration - MuGard — — Total Liabilities $ $ — $ — $ 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 September 30, 2015. In addition, there were no transfers or reclassifications of any securities between Level 1 and Level 2 during the nine months ended September 30, 2015. Contingent consideration We accounted for the acquisitions of Lumara Health, CBR and the MuGard Rights as business combinations under the acquisition method of accounting. Additional details regarding the Lumara Health acquisition can be found in Note C, “ Business Combinations . ” There were no contingent consideration obligations related to the CBR acquisition. 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 acquisitions of Lumara Health and the MuGard Rights measured on a recurring basis using Level 3 inputs as of September 30, 2015 (in thousands): Balance as of December 31, 2014 $ Payments made Adjustments to fair value of contingent consideration Other adjustments Balance as of September 30, 2015 $ The $4.5 million of adjustments to the fair value of the contingent consideration liability were due primarily to a $7.7 million increase to the Makena contingent consideration related to the time value of money, partially offset by a $3.2 million reduction to the MuGard contingent consideration due to changes in estimated amounts and timing of cash flows related to the royalties we expect to pay to Abeona under the MuGard License Agreement. These adjustments are included in selling, general and administrative expenses in our condensed consolidated statements of operations. We have classified $96.1 million of the Makena contingent consideration and $0.7 million of the MuGard contingent consideration as short-term liabilities in our condensed consolidated balance sheet as of September 30, 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 estimated likelihood of the pay-out. The fair value of the contingent royalty payments payable by us to Abeona was determined based on various market factors, including an analysis of estimated sales using a discount rate of approximately 12% . As of September 30, 2015, we estimate that the undiscounted royalty amounts we could pay under the MuGard License Agreement, based on current projections, may range from $10.0 million to $18.0 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 We estimate the fair value of our debt obligations by using quoted market prices obtained from third-party pricing services, which is classified as a Level 2 input. As of September 30, 2015, the estimated fair value of our 2023 Senior Notes and 2.5% Convertible Notes were approximately $477.5 million and $322.1 million, respectively, and the estimated fair value of our term loan facilities were approximately equal to their respective book values. See Note Q, " Debt " for additional information on our debt obligations. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | |
Inventories | F. Inventories Our major classes of inventories were as follows as of September 30, 2015 and December 31, 2014 (in thousands): September 30, 2015 December 31, 2014 Raw materials $ $ Work in process Finished goods Inventories included in current assets Included in other long-term assets: Raw materials Total inventories $ $ The decrease in inventories as of September 30, 2015 as compared to December 31, 2014, was primarily due to inventory sold to customers, partially offset by the inclusion of CBR inventory acquired in connection with the August 2015 acquisition of CBR, which consists of cord blood and cord tissue collection kits and processing bags. 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 primarily as cost of product sales in our condensed consolidated statements of operations as the related inventories are sold. During the three and nine months ended September 30, 2015, we recognized $1.6 million and $7.5 million of the fair value adjustment as cost of product sales, respectively. In connection with the fair value step-up adjustment of the 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 . During the nine months ended September 30, 2015, we expensed $3.6 million of Makena inventory and $0.6 million of Feraheme inventory, which may not be saleable, and was recorded in cost of product sales in our condensed consolidated statements of operations. This amount included a fair value adjustment of $3.3 million. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Property and Equipment, Net | |
Property and Equipment, Net | G. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following as of September 30, 2015 and December 31, 2014 (in thousands): September 30, 2015 December 31, 2014 Land $ $ — Land improvements Building and improvements — Computer equipment and software — Furniture and fixtures Leasehold improvements Laboratory and production equipment Construction in progress — Less: accumulated depreciation Property, plant and equipment, net $ $ We acquired land and a building in Tucson, Arizona as well as other fixed assets in connection with the CBR acquisition. |
Goodwill, IPR&D and Other Intan
Goodwill, IPR&D and Other Intangible Assets, Net | 9 Months Ended |
Sep. 30, 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 August 2015 acquisition of CBR, we recognized $439.3 million of goodwill as of September 30, 2015. In connection with our November 2014 acquisition of Lumara Health, we recognized $205.8 mil lion of goodwill as of December 31, 2014. During the nine months ended September 30, 2015, the Lumara Health goodwill balance decreased by $7.7 million, which was comprised primarily of a $7.2 million reduction associated with adjustments to our Makena revenue reserves and a $5.0 million reduction related to net deferred tax liabilities, partially offset by a $4.5 million increase associated with the final settlement of net working capital with the former stockholders of Lumara Health. These measurement period adjustments have been reflected as a current period adjustment to these balances during the nine months ended September 30, 2015 in accordance with the guidance in ASU 2015-16, which we adopted early. As of September 30 , 2015, we had no accumulated impairment losses related to goodwill. See Note C, “ Business Combinations .” IPR&D and Other Intangible Assets, Net As of September 30, 2015 and December 31, 2014, our identifiable intangible assets consisted of the following (in thousands): September 30, 2015 December 31, 2014 Accumulated Accumulated Cost Amortization Net Cost Amortization Net Amortizable intangible assets: Makena base technology $ $ $ $ $ $ CBR customer relationships — — — Favorable lease — — — MuGard Rights Indefinite-lived intangible assets: Makena IPR&D — — CBR trade names and trademarks — — — — Total intangible assets $ $ $ $ $ $ As of September 30, 2015, the weighted average remaining amortization periods for our definite-lived intangible assets were as follows: Weighted Average Remaining Amortization Periods (in Years) Makena base technology CBR customer relationships Favorable lease MuGard Rights 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 Abeona 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. The CBR intangible assets (the CBR customer relationships and the favorable lease) were acquired in August 2015 in connection with our acquisition of CBR. Amortization of the CBR customer relationships is being recognized using an estimated useful life of twenty years, which we believe is an appropriate amortization period due to the estimated economic lives of the CBR intangible assets . The favorable lease is being amortized on a straight-line basis over the remaining term of the lease. Total amortization expense for the three months ended September 30, 2015 and 2014 was $13.9 million and $0.1 million, respectively, and for the nine months ended September 30, 2015 and 2014 was $38.8 million and $0.2 million, respectively. The increase in amortization expense is due to the amortization of the Makena and CBR related intangible assets. Amortization expense for Makena and MuGard is recorded in cost of product sales in our condensed consolidated statements of operations. Amortization expense for CBR related intangibles is recorded in selling, general and administrat ive expenses in our condensed consolidated statements of operations. We expect amortization expense related to our finite-lived intangible assets to be as follows (in thousands): Estimated Amortization Period Expense Remainder of 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2015 | |
Accrued Expenses | |
Accrued expenses | I. ACCRUED EXPENSES As of September 30, 2015 and December 31, 2014, our accrued expenses consisted of the following (in thousands): September 30, 2015 December 31, 2014 Commercial rebates, fees and returns $ $ Professional, license, and other fees and expenses Salaries, bonuses, and other compensation Restructuring expense Total accrued expenses $ $ |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Income Taxes | J. Income Taxes The following table summarizes our effective tax rate and income tax expense for the three and nine months ended September 30, 2015 and 2014 (in thousands except for percentages): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Effective tax rate % — % % — % Income tax benefit (expense) $ $ — $ $ — For the three months ended September 30, 2015, we recognized an income tax benefit of $14.1 million, representing an effective tax rate of 41% . The difference between the expected statutory federal tax rate of 35% and the 41% effective tax rate for the three months ended September 30, 2015, was attributable to the impact of a valuation allowance release related to certain deferred tax assets and the impact of state income taxes, partially offset by non-deductible transaction costs associated with the acquisition of CBR and non-deductible contingent consideration expense associated with Lumara Health. For the nine months ended September 30, 2015, we recognized income tax expense of $9.5 million, representing an effective tax rate of 27% . The difference between the expected statutory federal tax rate of 35% and the 27% effective tax rate for the nine months ended September 30, 2015, was attributable to the impact of a valuation allowance release related to certain deferred tax assets, partially offset by the impact of state income taxes, non-deductible transaction costs associated with the acquisition of CBR, and non-deductible contingent consideration expense associated with Lumara Health. We did not recognize any income tax benefit or expense for the three or nine months ended September 30, 2014 as we were subject to a full valuation allowance due to our net operating loss position at those times. During the three months ended September 30, 2015, we reduced our net deferred tax liabilities initially recorded at the time of the Lumara acquisition by $5.4 million. These adjustments were recorded to goodwill during the three months ended September 30, 2015, as they occurred within the acquisition measurement period. The decrease in net deferred tax liabilities was primarily attributable to an increase in net operating loss carryforwards expected to be utilized in future periods, which was partially offset by the tax impact of the Makena revenue reserve measurement period adjustments recorded during the nine months ended September 30, 2015. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 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, associated with unrealized gains (losses) on securities during the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Beginning Balance $ $ $ $ Other comprehensive income (loss) before reclassifications Gain (loss) reclassified from other accumulated comprehensive loss — Ending Balance $ $ $ $ |
Basic and Diluted Net Income (L
Basic and Diluted Net Income (Loss) per Share | 9 Months Ended |
Sep. 30, 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 restricted stock units (“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 2015 Term Loan Facility, which we entered into to partially fund the acquisition of CBR, we may be restricted from settling the conversion obligation in whole or in part with cash unless certain conditions in the 2015 Term Loan Facility are satisfied, including a total leverage ratio. During the three and nine months ended September 30, 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. Prior to the acquisition of Lumara Health in November 2014, we intended to settle the principal value of the Convertible Notes in cash and the excess conversion premium in shares. The dilutive effect of the conversion premium is reflected in the calculation of diluted earnings per share for the three months ended September 30, 2014, as if it were a freestanding written call option on our shares. The impact of the conversion premium has been considered in the calculation of diluted net income per share for the three months ended September 30, 2014 by applying the closing price of our common stock on September 30, 2014 to calculate the number of shares issuable under the conversion premium. 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 Q, “ 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 and nine months ended September 30, 2015 and 2014 were as follows (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income (loss) $ $ $ $ Weighted average common shares outstanding Effect of dilutive securities: Warrants — — — Stock options and RSUs — — Convertible 2.5% notes — — — Shares used in calculating dilutive net income (loss) per share Net income (loss) per share: Basic $ $ $ $ Diluted $ $ $ $ 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), and the conversion of the 2.5% Convertible Notes, 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 September 30, Nine months ended September 30, 2015 2014 2015 2014 Options to purchase shares of common stock Shares of common stock issuable upon the vesting of RSUs Warrants — Convertible 2.5% notes Total During the three and nine months ended September 30, 2014, the average common stock price was below the exercise price of the warrants. |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Equity-Based Compensation | |
Equity-Based Compensation | M. EQUITY-BASED COMPENSATION We currently maintain four equity compensation plans, namely our Third Amended and Restated 2007 Equity Incentive Plan, as amended (the “2007 Plan”), our Amended and Restated 2000 Stock Plan (the “2000 Plan”) (under which we no longer grant awards), the Lumara Health Inc. Amended and Restated 2013 Incentive Compensation Plan (the “Lumara Health 2013 Plan”) and our 2015 Employee Stock Purchase Plan (“2015 ESPP”). All outstanding stock options granted under each of our equity compensation plans other than our 2015 ESPP (discussed below) 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 September 30, 2015, there were 2,221,192 shares remaining available for issuance under the 2007 Plan, including 1,700,000 shares which were added to the 2007 Plan upon approval by our stockholders of an amendment to our 2007 Plan at our Meeting of Stockholders held on May 21, 2015 (the “Annual Meeting”). Such 2,221,192 amount does not include 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 September 30, 2015, there were 2,650 shares remaining available for issuance under the Lumara Health 2013 Plan, which are available for grants to certain employees, officers, directors, consultants, and advisors of AMAG and our subsidiaries who are newly-hired or who previously performed services for Lumara Health. All outstanding options under the Lumara Health 2013 Plan have a ten -year term. At our Annual Meeting, our stockholders approved our 2015 ESPP, which authorizes the issuance of up to 200,000 shares of our common stock to eligible employees. The terms of the 2015 ESPP permit eligible employees to purchase shares (subject to certain plan and tax limitations) in semi-annual offerings through payroll deductions of up to an annual maximum of 10% of the employee’s “compensation” as defined in the 2015 ESPP. Shares are purchased at a price equal to 85% of the fair market value of our common stock on either the first or last business day of the offering period, whichever is lower. As of September 30, 2015, no shares have been issued under our 2015 ESPP. During the nine months ended September 30, 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 nine months ended September 30, 2015: 2007 Equity 2000 Equity 2013 Lumara Plan Plan Equity Plan Total Outstanding at December 31, 2014 Granted — Exercised — Expired or terminated — — Outstanding at September 30, 2015 Restricted Stock Units The following table summarizes RSU activity in our equity plans for the nine months ended September 30, 2015: 2007 Equity 2000 Equity 2013 Lumara Plan Plan Equity Plan Total Outstanding at December 31, 2014 — Granted — Vested — — Expired or terminated — Outstanding at September 30, 2015 — Other Equity Compensation Grants During the nine months ended September 30, 2015, our Board or Compensation Committee granted options to purchase 220,000 shares of our common stock and 82,250 RSUs to certain new-hire employees to induce them to accept employment with us (collectively, “Inducement Awards”). 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 grants will vest in three equal annual installments beginning on the first anniversary of the respective grant dates. 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 . As of September 30, 2015, there were 873,100 options and 187,575 RSUs outstanding under Inducement Awards. Equity-based compensation expense Equity-based compensation expense for the three and nine months ended September 30, 2015 and 2014 consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Cost of product sales $ $ $ $ Research and development Selling, general and administrative Total equity-based compensation expense $ $ $ $ Income tax effect — — After-tax effect of equity-based compensation expense $ $ $ $ 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. As a result of our historical net losses, we did not provide an income tax effect incurred during the three and nine months ended September 30, 2014. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity | |
Stockholders' Equity | N. STOCKHOLDERS’ EQUITY August 2015 Public Offering of Common Stock In August 2015, we sold approximately 3.6 million shares of our common stock at a public offering price of $63.75 per share, resulting in net proceeds to us of approximately $218.6 million. 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 net proceeds to us of approximately $188. 8 million. 2015 Annual Meeting At our Annual Meeting, our stockholders approved proposals to (i) amend our Certificate of Incorporation, as amended and restated and then currently in effect, to increase the number of authorized shares of our common stock from 58,750,000 shares to 117,500,000 shares (which amendment was subsequently filed with the Secretary of State of the State of Delaware) and (ii) amend our 2007 Plan to, among other things, increase the number of shares of our common stock available for issuance thereunder by 1,700,000 shares. Change in Stockholders’ Equity Total stockholders’ equity increased by $460.0 million during the nine months ended September 30, 2015. This increase was primarily driven by $188. 8 million and $218.6 million in net proceeds related to the March 2015 and August 2015 public offerings of common stock, respectively, as discussed above, $25. 6 million from our net income, $15.5 million from the exercise of stock options and $11.6 million related to equity-based compensation expense. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 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 certain 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 referred to as 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 alleged 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”). The Court of Appeals heard oral argument on March 12, 2015 and on July 2, 2015, affirmed the Court’s decision to dismiss the case. The time periods for the plaintiffs to appeal this decision have lapsed. Therefore, we consider this matter closed. 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. We recorded a notice of appeal at the EPO in December 2012, which suspended the revocation of our patent. The oral proceedings for the appeal occurred on June 16, 2015, where the decision revoking the patent was set aside and remitted back to the Opposition Division for further consideration. In the event that we do not experience a successful outcome at the Opposition Division, under EU regulations ferumoxytol would still be entitled to eight years of data protection and ten years of market exclusivity from the date of approval, which we believe would create barriers to entry for any generic version of ferumoxytol into the EU market until sometime between 2020 and 2022. This decision had no impact on our revenues for the nine months ended September 30, 2015. However, any future unfavorable outcome in this matter could negatively affect the magnitude and timing of future revenues, if we were to resume commercialization efforts in the EU. We do not expect to incur any related liability regardless of the outcome of the appeal and therefore did not record any liability as of September 30, 2015. We continue to believe the patent is valid and intend to vigorously prosecute the patent before the Opposition Division. Other On July 20, 2015, the Federal Trade Commission (the “FTC”) notified us that it is conducting an investigation into whether Lumara Health or its predecessor has engaged in unfair methods of competition with respect to Makena or any hydroxyprogesterone caproate product. We are fully cooperating with the FTC and have provided a thorough response to the FTC and are awaiting their review of our response. The FTC noted in its letter that the existence of the investigation does not indicate that the FTC has concluded that Lumara Health or its predecessor has violated the law and we believe that our contracts and practices comply with relevant law and policy, including the federal Drug Quality and Security Act (the “DQSA”), which was enacted in November 2013, and public statements from and enforcement actions by the FDA regarding its implementation of the DQSA. We have provided the FTC with a response that provides a brief overview of the DQSA for context, which we believe will be helpful, including (i) how the statute outlined that large-scale compounding of products that are copies or near-copies of FDA-approved drugs (like Makena ) is not in the interests of public safety, (ii) our belief that the DQSA has had a significant impact on the compounding of hydroxyprogesterone caproate, and (iii) how our contracts with former compounders do allow those compounders to continue to serve physicians and patients with respect to supplying medically necessary alternative/altered forms of hydroxyprogesterone caproate. Given the early stages of this inquiry, we cannot at this time assess potential outcome of this investigation. 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 September 30, 2015. We expense legal costs as they are incurred. Purchase Commitments In connection with our acquisition of CBR, we have certain minimum purchase commitments associated with an agreement entered into by CBR prior to our acquisition. This agreement expires in December 2018, with the remaining amount of minimum purchase commitments totaling $7.9 million. |
Collaborative Agreements
Collaborative Agreements | 9 Months Ended |
Sep. 30, 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, services or companies, including revenue-generating commercial products, services and late-stage development assets. In December 2014, we entered into an agreement (the “Takeda Termination Agreement”), which terminated our License, Development and Commercialization Agreement with Takeda (as amended, the “Takeda Agreement”). Under the terms of the 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. Pursuant to the Takeda Termination Agreement, the termination of the Takeda Agreement was effective on a rolling basis, whereby the termination was effective for a particular geographic territory (i.e., 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. On April 13, 2015, the marketing authorization for ferumoxytol was withdrawn in the EU and Switzerland. On June 25, 2015, the transfer from Takeda to us of the Feraheme marketing authorization in Canada became effective and marked the final termination date of the Takeda Agreement. In connection with the final termination of the Takeda Agreement, we recognized into revenues the remaining balances of deferred revenue related to the upfront and milestone payments we received from Takeda during the life of the agreement as well as amounts associated with the terms of the Takeda Termination Agreement. During the nine months ended September 30, 2015, we recognized $44.4 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. In addition, we recognized $5.2 million of additional revenues in the nine months ended September 30, 2015 related to payments made by Takeda upon the final termination date as required under the terms of the Takeda Termination Agreement. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt | |
Debt | Q. Debt Our outstanding debt obligations as of September 30, 2015 and December 31, 2014 consisted of the following (in thousands): September 30, 2015 December 31, 2014 2023 Senior Notes $ $ — 2015 Term Loan Facility — 2.5% Convertible Notes 2014 Term Loan Facility - Total long-term debt Less: current maturities Long-term debt, net of current maturities $ $ 2023 Senior Notes On August 17, 2015, in connection with the CBR acquisition, we completed a private placement of $500.0 million aggregate principal amount of 2023 Senior Notes. The 2023 Senior Notes were issued pursuant to an Indenture, dated as of August 17, 2015 (the “Indenture”), by and among the Company, certain subsidiaries of the Company acting as guarantors of the 2023 Senior Notes and Wilmington Trust, National Association, as trustee. The Indenture contains certain customary negative covenants, which are subject to a number of limitations and exceptions. Certain of the covenants will be suspended during any period in which the 2023 Senior Notes receive investment grade ratings. The 2023 Senior Notes, which are senior unsecured obligations of the Company, will mature on September 1, 2023 and will bear interest at a rate of 7.875% per year, with interest payable semi-annually on September 1 and March 1 of each year, beginning on March 1, 2016. We may redeem some or all of the 2023 Senior Notes at any time, or from time to time, on or after September 1, 2018 at the redemption prices listed in the Indenture, plus accrued and unpaid interest to, but not including, the date of redemption. In addition, prior to September 1, 2018, we may redeem up to 35% of the aggregate principal amount of the 2023 Senior Notes utilizing the net cash proceeds from certain equity offerings, at a redemption price of 107.875% of the principal amount thereof, plus accrued and unpaid interest to, but not including, the date of redemption; provided that at least 65% of the aggregate amount of the 2023 Senior Notes originally issued under the Indenture remain outstanding after such redemption. We may also redeem all or some of the 2023 Senior Notes at any time, or from time to time, prior to September 1, 2018, at a price equal to 100% of the principal amount of the 2023 Senior Notes to be redeemed, plus a “make-whole” premium plus accrued and unpaid interest, if any, to the date of redemption. Upon the occurrence of a “change of control,” as defined in the Indenture, we are required to offer to repurchase the 2023 Senior Notes at 101% of the aggregate principal amount thereof, plus any accrued and unpaid interest to, but not including, the repurchase date. The Indenture contains customary events of default, which allow either the trustee or the holders of not less 25% in aggregate principal amount of the then-outstanding 2023 Senior Notes to accelerate, or in certain cases, will automatically cause the acceleration of, the amounts due under the 2023 Senior Notes. At September 30, 2015, the carrying value of the outstanding borrowings, net of unamortized original issue costs and other lender fees and expenses, was $490.1 million. In connection with the CBR acquisition , we incurred a $6.8 million bridge loan commitment fee, which was included in other income (expense) in our condensed consolidated statement of operations and paid in the third quarter of 2015. 2015 Term Loan Facility On August 17, 2015, to fund a portion of the purchase price of CBR, we entered into a credit agreement with a group of lenders, including Jefferies as administrative and collateral agent , that provided us with, among other things, a six -year $350.0 million term loan facility. We borrowed the full $350.0 million available under the 2015 Term Loan Facility on August 17, 2015. The credit agreement also allows for the incurrence of incremental loans in an amount up to $225.0 million. At September 30, 2015, the carrying value of the outstanding borrowings, net of unamortized original issue costs and other lender fees and expenses, was $342.5 million. The unamortized original issue costs and other lender fees and expenses, including a prepayment penalty, included $7.3 million of the unamortized original issue costs and other lender fees and expenses from the 2014 Term Loan Facility as a result of accounting guidance for the modification of debt arrangements. We also recorded $2.4 million of fees and expenses from the 2014 Term Loan Facility in other income (expense) in our condensed consolidated statement of operations . We must repay the 2015 Term Loan Facility in installments of (a) $4.4 million per quarter due on the last day of each quarter beginning with the quarter ending December 31, 2015. The 2015 Term Loan Facility matures on August 17, 2021. The 2015 Term Loan Facility includes an annual mandatory prepayment of the debt in an amount equal to 50% of our excess cash flow (as defined in the 2015 Term Loan Facility) as measured on an annual basis, beginning with the year ending December 31, 2016. On or after December 31, 2016, the applicable excess cash flow percentage shall be reduced based on the total net leverage ratio as of the last day of the period. 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, contingent consideration paid, and current income taxes as well as other adjustments specified in the credit agreement. The 2015 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 a pledge 65% of the voting equity interests and 100% of the non-voting equity interests in our direct foreign subsidiaries. The 2015 Term Loan Facility contains customary events of default and affirmative and negative covenants for transactions of this type. All obligations under the 2015 Term Loan Facility are unconditionally guaranteed by substantially all of our direct and indirect domestic subsidiaries, with certain exceptions. These guarantees are secured by substantially all of the present and future property and assets of such subsidiaries, with certain exclusions. 2.5% Convertible Notes On February 14, 2014, we issued $200.0 million aggregate principal amount of Convertible Notes. 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 2015 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 September 30, 2015, the Convertible Notes are convertible for the calendar quarter ended September 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 2015 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 equity component is not remeasured as long as it continues to meet the conditions for equity classification. Our outstanding Convertible Note balances as September 30, 2015 consisted of the following (in thousands): September 30, 2015 Liability component: Principal $ Less: debt discount, net Net carrying amount $ Equity component $ 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 using the effective interest method over five years. We determined the expected life of the debt was equal to the five year term on the Convertible Notes. As of September 30, 2015, the carrying value of the Convertible Notes was $ 172.6 million and the fair value of the Convertible Notes was $322.1 million. The effective interest rate on the liability component was 7.23% for the period from the date of issuance through September 30, 2015. As of September 30, 2015, the “if-converted value” exceeded the remaining principal amount of the Convertible Notes by $93.3 million. The following table sets forth total interest expense recognized related to the Convertible Notes during the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Contractual interest expense $ $ $ $ Amortization of debt issuance costs Amortization of debt discount Total interest expense $ $ $ $ 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, with the c all 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. 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 $39.8 million to the call spread counterparties for the convertible bond hedges, which is partially offset by the receipt of $25.7 million for 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. 2014 Term Loan Facility On November 12, 2014, we borrowed $340.0 million under the 2014 Term Loan Facility to fund a portion of the purchase price of Lumara Health. On August 17, 2015, we repaid the remaining $323.0 million outstanding principal amount and recognized a $10.4 million loss on debt extinguishment as a result of the early repayment, which we have recorded in other income (expense) in our condensed consolidated statement of operations . |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring | |
Restructuring | R. RESTRUCTURING In connection with the August 2015 CBR acquisition and the November 2014 Lumara Health acquisition, we initiated a restructuring program in the third quarter of 2015 and the fourth quarter of 2014, which included severance benefits primarily related to certain former CBR and Lumara Health employees, respectively. As a result of these restructurings, we recorded charges of approximately $0.7 million and $ 1. 8 million in the three and nine months ended September 30, 2015, respectively. In addition, we currently expect to record $2.1 million of additional restructuring charges. We expect to pay substantially all of these restructuring costs by the end of 2016. The following table outlines the components of our restructuring expenses which were included in current liabilities for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Accrued restructuring, beginning of period $ $ — $ $ — Employee severance, benefits and related costs — — Payments — — Accrued restructuring, end of period $ $ — $ $ — |
Recently Issued and Proposed Ac
Recently Issued and Proposed Accounting Pronouncements | 9 Months Ended |
Sep. 30, 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. In September 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments . This statement eliminates the requirement for an acquirer to retrospectively adjust provisional amounts recorded in a business combination to reflect new information about the facts and circumstances that existed as of the acquisition date and that, if known, would have affected measurement or recognition of amounts initially recognized. As an alternative, the amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the financial statements of the period in which adjustments to provisional amounts are determined, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The new standard is effective prospectively for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, with early adoption permitted. The guidance is to be applied prospectively to adjustments to provisional amounts that occur after the effective date of the guidance, with earlier application permitted for financial statements that have not been issued. Our early adoption of ASU 2015-16 in the third quarter of 2015 did not have a material impact on our financial position or results of operations. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . The new standard applies only to inventory for which cost is determined by methods other than last-in, first-out and the retail inventory method, which includes inventory that is measured using first-in, first-out or average cost. Inventory within the scope of this standard is required to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new standard will be effective for us on January 1, 2017. The adoption of this standard is not expected to have an impact on our results of operations, cash flows or financial position. In May 2015, the FASB issued ASU 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (“ASU 2015-07”). Under this standard, investments measured at net asset value, as a practical expedient for fair value, will be excluded from the fair value hierarchy. The only criterion for categorizing investments in the fair value hierarchy will be the observability of the inputs. The standard is effective for us for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including for financial statement periods that have not yet been issued. We do not expect the adoption of ASU 2015-07 to have a material impact on our disclosures. 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 September 30, 2015 we have $11.8 million in debt issuance costs associated with our current debt obligations that would be reclassified from a long-term asset to a reduction in the carrying amount of our debt. In February 2015, the FASB issued ASU No. 2015-02, “ Consolidation (Topic 810) - Amendments to the Consolidation Analysis .” This statement eliminates the deferral of the requirements of ASU No. 2009-17, “ Consolidations (Topic 810) - Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities ” for certain interests in investment funds and provides a scope exception from Topic 810 for certain investments in money market funds. The ASU also makes several modifications to the consolidation guidance for VIEs and general partners’ investments in limited partnerships, as well as modifications to the evaluation of whether limited partnerships are VIEs or voting interest entities. The guidance is effective for interim and annual reporting periods beginning after December 15, 2015, and early adoption is permitted. The adoption of this standard is not expected to have an impact on our results of operations, cash flows or financial position. 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 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 do not expect it to have a material impact our results of operations, cash flows or financial position. In May 2014, the FASB issued ASU 2014 ‑09, Revenue from Contracts with Customers, as a new Topic, Accounting Standards Codification Topic 606 (“ASU 2014-09”) . 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 August 2015, the FASB finalized a one year delay in the effective date of this standard, which will now be effective for us on January 1, 2018, however early adoption is permitted any time after the original effective date, which for us is January 1, 2017. We have not yet selected a transition method and are currently evaluating the impact of ASU 2014-09 on our condensed consolidated financial statements. |
Basis of Presentation and Sum26
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
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 nine months ended September 30, 2015, include the results of Lumara Health, which we acquired on November 12, 2014 (the “Lumara Acquisition Date”) and CBR Holdings, since August 17, 2015 (the “CBR Acquisition Date”). |
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 and services 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 September 30, 2015 and December 31, 2014, substantially all of our cash and cash equivalents were held in either commercial bank accounts or money market funds. |
Restricted Cash | Restricted Cash As of September 30, 2015, we classified $30.8 million as short-term restricted cash for certain payments owed to former CBR shareholders in connection with a sale transaction involving CBR, which was completed in September 2012 and which payment obligations were assumed by us in our August 2015 acquisition of CBR. The related liability was recorded in “ Payable to former CBR shareholders ” on our condensed consolidated balance sheet at September 30, 2015 and was paid in full in October 2015. As of September 30, 2015 and December 31, 2014, we classified $2.4 million as long-term restricted cash, which included $2.0 million held in a restricted fund previously established by Lumara Health in connection with its Chapter 11 plan of reorganization to pay potential claims against its former directors and officers and a $0.4 million security deposit delivered to the landlord of our Waltham, Massachusetts headquarters in the form of a revocable letter of credit. |
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 September 30, 2015, our cash, cash equivalents and investments amounted to approximately $442.9 million. We currently invest our excess cash primarily in corporate debt securities, commercial paper, certificates of deposit and municipal securities. As of September 30, 2015, approximately $35.3 million of our total $167.5 million cash and cash equivalents balance was invested in institutional money market funds, of which $34.3 million was invested in a single fund. Our operations are located primarily within the U.S. We focus on developing, manufacturing, and commercializing Makena and Feraheme and commercializing MuGard . In addition, we are focused on marketing and selling the CBR Services. We perform ongoing credit evaluations of our customers and generally do not require collateral. The following table sets forth customers or partners who represented 10% or more of our total revenues for the three and nine months ended September 30, 2015 and 2014: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 AmerisourceBergen Drug Corporation % % % % McKesson Corporation % % % % Cardinal Health, Inc. % % % % Takeda Pharmaceuticals Company Limited — % % % % In addition, approximately 25% and 27% of our Feraheme end-user demand during the nine months ended September 30, 2015 and 2014, respectively, was generated by members of a single group purchasing organization with which we have contracted. Revenues from outside of the U.S. amounted to approximately 17% and 11% of our total revenues for the nine months ended September 30, 2015 and 2014, respectively, and were principally related to deferred Feraheme revenue recognized in connection with the termination of our license, development and commercialization agreement with Takeda Pharmaceutical Company Limited (“Takeda”), which is headquartered in Japan. Our net accounts receivable primarily represented amounts due for products sold directly to wholesalers, distributors, and specialty pharmacies and amounts due for CBR Services sold directly to consumers . Accounts receivable for our products 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 September 30, 2015 and December 31, 2014 were as follows: September 30, 2015 December 31, 2014 AmerisourceBergen Drug Corporation % % McKesson Corporation % % We are currently solely dependent on a single supplier for Feraheme drug substance (produced in two separate facilities) and finished drug product and a single supply chain for Makena finished drug product. In addition, we rely on single sources for certain materials required to provide the CBR Services. We would be exposed to a significant loss of revenue from the sale of our products and services if our suppliers and/or manufacturers cannot fulfill demand for any reason. |
Revenue Recognition | Revenue Recognition We recognize revenue from the sale of our products and services as well as license fee, collaboration and other revenues, including milestone payments, other product 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. Product Sales Revenue Our U.S. product sales, which primarily represented revenues from both Makena and Feraheme in the first nine months of 2015 and Feraheme in the first nine months of 2014, were offset by provisions for allowances and accruals as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Gross U.S. product sales $ $ $ $ Provision for U.S. product sales allowances and accruals: Contractual adjustments Governmental rebates Total provision for U.S. product sales allowances and accruals U.S. product sales, net $ $ $ $ We recognize U.S. product sales 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. The increases in contractual adjustments and governmental rebates primarily reflect the addition of Makena to our product portfolio in connection with the November 2014 acquisition of Lumara Health. During the nine months ended September 30, 2015, we reduced our Makena related Medicaid and other reserves by $5.3 million and we reduced our chargeback reserves by $1.9 million, all of which were initially recorded at the time of the Lumara acquisition. These adjustments were recorded to goodwill during the nine months ended September 30, 2015, as they occurred within the acquisition measurement period. We did not materially adjust our product sales allowances and accruals during the three or nine months ended September 30, 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. Service Revenue For multiple element arrangements, we allocate revenue to all deliverables based on their relative selling prices. We determine the selling price to be used for allocating revenue to deliverables as follows (i) vendor specific objective evidence; (ii) third-party evidence of selling price and (iii) the best estimate of the selling price. Vendor specific objective evidence generally exists only when we sell the deliverable separately and it is the price actually charged by us for that deliverable. Any discounts given to the customer are allocated by applying the relative selling price method. We have identified two deliverables contained in the revenue arrangements for the CBR Services, which involve the storage of umbilical cord blood and/or cord tissue products, namely: (i) enrollment, including the provision of a collection kit and unit processing, with revenue for this deliverable recognized after the collection and successful processing of a cord blood/cord tissue unit; and (ii) the storage of a specimen for either an annual fee or a prepayment of 18 years or the lifetime of the newborn donor (“lifetime option”). For the lifetime option, storage fees are not charged during the lifetime of the newborn donor. However, if the newborn donor dies and his/her legal guardian chooses to continue to store the newborn stem cells and/or cord tissue, the number of remaining years of storage covered by the lifetime option without additional charge is calculated by taking the average of male and female life expectancies based on lifetime actuarial tables published by the Social Security Administration and in effect at the time of the newborn’s birth and subtracting the age at death. We have allocated revenue between these two deliverables using the relative selling price method. The selling price for the enrollment, collection kit and processing deliverable and the lifetime option are estimated based on the published selling prices because we do not have vendor specific objective evidence or third-party evidence of selling price for these elements. The selling price for the annual storage option is determined based on vendor specific objective evidence as we have standalone renewals to support the selling price. Deferred revenue includes (i) amounts collected in advance of unit processing and (ii) amounts associated with unearned storage fees collected at the beginning of the storage contract term, net of allocated discounts. Amounts not expected to be recognized within the next year are classified as long-term deferred revenues. |
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. |
Basis of Presentation and Sum27
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Analysis of U.S. product sales allowances and accruals | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Gross U.S. product sales $ $ $ $ Provision for U.S. product sales allowances and accruals: Contractual adjustments Governmental rebates Total provision for U.S. product sales allowances and accruals U.S. product sales, net $ $ $ $ |
Schedule of customers representing 10% or more of revenues | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 AmerisourceBergen Drug Corporation % % % % McKesson Corporation % % % % Cardinal Health, Inc. % % % % Takeda Pharmaceuticals Company Limited — % % % % |
Schedule of customers representing greater than 10% of accounts receivable balances | September 30, 2015 December 31, 2014 AmerisourceBergen Drug Corporation % % McKesson Corporation % % |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Pro forma consolidated financial information | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Pro forma combined revenues $ $ $ $ Pro forma combined net income (loss) $ $ $ $ Pro forma net income (loss) per diluted share $ $ $ $ |
CBR Acquisition Holdings Corp | |
Summary of the components of the estimated purchase price | The following table summarizes the components of the estimated total purchase price for CBR, subject to finalization of the net working capital, indebtedness and other adjustments as of the CBR Acquisition Date (in thousands): Cash consideration $ Estimated working capital, indebtedness and other adjustments Purchase price paid at closing Plus: Estimated purchase price payable to sellers Total purchase price $ |
Summary of estimated fair values of the assets acquired and liabilities assumed related to the business combination | The following table summarizes the preliminary fair values assigned to the CBR assets acquired and the liabilities assumed by us along with the resulting goodwill at the CBR Acquisition Date (in thousands): Accounts receivable $ Inventories Prepaid and other current assets Restricted cash - short-term Property, plant and equipment Customer relationships Trade name and trademarks Favorable lease Deferred income tax assets Other long-term assets Accounts payable Accrued expenses Deferred revenues Payable to former CBR shareholders Deferred income tax liabilities Total estimated identifiable net assets $ Goodwill Total $ |
Lumara Health | |
Summary of the components of the estimated purchase price | The following table summarizes the components of the total purchase price paid for Lumara Health, as adjusted for the final net working capital and other adjustments (in thousands): Cash consideration $ Fair value of AMAG common stock issued Fair value of contingent milestone payments Estimated working capital and other adjustments Purchase price paid at closing Less: Cash received on finalization of the net working capital and other adjustments Cash acquired from Lumara Health Total purchase price $ |
Summary of estimated fair values of the assets acquired and liabilities assumed related to the business combination | The following table summarizes the fair values assigned to assets acquired and the liabilities assumed by us along with the resulting goodwill at the Lumara Health Acquisition Date, as adjusted for certain measurement period adjustments for Lumara Health recorded during the nine months ended September 30, 2015 (in thousands): Accounts receivable $ Inventories Prepaid and other current assets Deferred income tax assets Property and equipment Makena marketed product IPR&D Restricted cash - long term Other long-term assets Accounts payable Accrued expenses Deferred income tax liabilities Other long-term liabilities Total estimated identifiable net assets $ Goodwill Total $ |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investments | |
Summary of investments | September 30, 2015 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Corporate debt securities Due in one year or less $ $ $ $ Due in one to three years Commercial paper Due in one year or less — Certificates of deposit Due in one year or less — Municipal securities Due in one year or less — Due in one to three years Total investments $ $ $ $ December 31, 2014 Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Corporate debt securities Due in one year or less $ $ $ $ Due in one to three years Total investments $ $ $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurements | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements at September 30, 2015 Using: Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets: Money market funds $ $ $ — $ — Corporate debt securities — — Commercial paper — — Certificates of deposit — — Municipal securities — — Total Assets $ $ $ $ — Liabilities: Contingent consideration-Lumara Health $ $ — $ — $ Contingent consideration-MuGard — — Total Liabilities $ $ — $ — $ Fair Value Measurements at December 31, 2014 Using: Quoted Prices in Active Significant Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets: Money market funds $ $ $ — $ — Corporate debt securities — — Total Assets $ $ $ $ — Liabilities: Contingent consideration - Lumara Health $ $ — $ — $ Contingent consideration - MuGard — — Total Liabilities $ $ — $ — $ |
Schedule of reconciliation of contingent consideration obligations related to acquisitions measured on recurring basis using Level 3 inputs | Balance as of December 31, 2014 $ Payments made Adjustments to fair value of contingent consideration Other adjustments Balance as of September 30, 2015 $ |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | |
Schedule of major classes of inventories | September 30, 2015 December 31, 2014 Raw materials $ $ Work in process Finished goods Inventories included in current assets Included in other long-term assets: Raw materials Total inventories $ $ |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property and Equipment, Net | |
Schedule of property and equipment | September 30, 2015 December 31, 2014 Land $ $ — Land improvements Building and improvements — Computer equipment and software — Furniture and fixtures Leasehold improvements Laboratory and production equipment Construction in progress — Less: accumulated depreciation Property, plant and equipment, net $ $ |
Goodwill, IRP&D and Other Intan
Goodwill, IRP&D and Other Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill, IPR&D and Other Intangible Assets, Net | |
Schedule of identifiable intangible assets | As of September 30, 2015 and December 31, 2014, our identifiable intangible assets consisted of the following (in thousands): September 30, 2015 December 31, 2014 Accumulated Accumulated Cost Amortization Net Cost Amortization Net Amortizable intangible assets: Makena base technology $ $ $ $ $ $ CBR customer relationships — — — Favorable lease — — — MuGard Rights Indefinite-lived intangible assets: Makena IPR&D — — CBR trade names and trademarks — — — — Total intangible assets $ $ $ $ $ $ |
Schedule of weighted average remaining amortization periods of intangible assets | Weighted Average Remaining Amortization Periods (in Years) Makena base technology CBR customer relationships Favorable lease MuGard Rights |
Schedule of expected future annual amortization expense related to intangible assets | Estimated Amortization Period Expense Remainder of 2015 $ 2016 2017 2018 2019 Thereafter Total $ |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accrued Expenses | |
Schedule of accrued expenses | September 30, 2015 December 31, 2014 Commercial rebates, fees and returns $ $ Professional, license, and other fees and expenses Salaries, bonuses, and other compensation Restructuring expense Total accrued expenses $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes | |
Schedule of effective income tax rate and expense | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Effective tax rate % — % % — % Income tax benefit (expense) $ $ — $ $ — |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Loss | |
Schedule of changes in accumulated other comprehensive loss, net of tax | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Beginning Balance $ $ $ $ Other comprehensive income (loss) before reclassifications Gain (loss) reclassified from other accumulated comprehensive loss — Ending Balance $ $ $ $ |
Basic and Diluted Net Income 37
Basic and Diluted Net Income (Loss) per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Basic and Diluted Net Income (Loss) per Share | |
Schedule of components of basic and diluted net income (loss) per share | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income (loss) $ $ $ $ Weighted average common shares outstanding Effect of dilutive securities: Warrants — — — Stock options and RSUs — — Convertible 2.5% notes — — — Shares used in calculating dilutive net income (loss) per share Net income (loss) per share: Basic $ $ $ $ Diluted $ $ $ $ |
Schedule of anti-dilutive securities from computation of diluted net Income (loss) per share | Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 Options to purchase shares of common stock Shares of common stock issuable upon the vesting of RSUs Warrants — Convertible 2.5% notes Total |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity-Based Compensation | |
Summary of details regarding stock options granted under equity incentive plans | 2007 Equity 2000 Equity 2013 Lumara Plan Plan Equity Plan Total Outstanding at December 31, 2014 Granted — Exercised — Expired or terminated — — Outstanding at September 30, 2015 |
Summary of details regarding restricted stock units granted under equity incentive plans | 2007 Equity 2000 Equity 2013 Lumara Plan Plan Equity Plan Total Outstanding at December 31, 2014 — Granted — Vested — — Expired or terminated — Outstanding at September 30, 2015 — |
Schedule of equity-based compensation expense | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Cost of product sales $ $ $ $ Research and development Selling, general and administrative Total equity-based compensation expense $ $ $ $ Income tax effect — — After-tax effect of equity-based compensation expense $ $ $ $ |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Schedule of outstanding debt obligations | Our outstanding debt obligations as of September 30, 2015 and December 31, 2014 consisted of the following (in thousands): September 30, 2015 December 31, 2014 2023 Senior Notes $ $ — 2015 Term Loan Facility — 2.5% Convertible Notes 2014 Term Loan Facility - Total long-term debt Less: current maturities Long-term debt, net of current maturities $ $ |
Schedule of total interest expense recognized related to the Convertible Notes | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Contractual interest expense $ $ $ $ Amortization of debt issuance costs Amortization of debt discount Total interest expense $ $ $ $ |
Convertible Debt | |
Schedule of outstanding debt obligations | September 30, 2015 Liability component: Principal $ Less: debt discount, net Net carrying amount $ Equity component $ |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Restructuring | |
Schedule of components of restructuring expenses and current liabilities | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Accrued restructuring, beginning of period $ $ — $ $ — Employee severance, benefits and related costs — — Payments — — Accrued restructuring, end of period $ $ — $ $ — |
Description of Business (Detail
Description of Business (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Aug. 17, 2015 | Aug. 05, 2015 | Jul. 22, 2015 | Aug. 31, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | Nov. 12, 2014 |
Description of Business | ||||||||
Number of shares sold in an underwritten public offering | 3.6 | 4.6 | ||||||
Proceeds from the issuance of common stock, net | $ 218,600 | $ 218,600 | $ 188,800 | $ 407,477 | ||||
Interest rate (as a percent) | 2.50% | 2.50% | ||||||
Repayments of debt | $ 327,509 | |||||||
Velo Bio, LLC | ||||||||
Description of Business | ||||||||
Upfront payment made related to option to acquire the global rights to the DIF program ("DIF Rights") | $ 10,000 | |||||||
Maximum payments to be made, upon the exercise of the option to acquire the global rights to the DIF program ("DIF Rights"), excluding sales milestone payments | 65,000 | |||||||
Maximum sales milestone payments to be made based on the achievement of annual sales milestones at specified targets | 250,000 | |||||||
Minimum | Velo Bio, LLC | ||||||||
Description of Business | ||||||||
Annual sales milestone target | 100,000 | |||||||
Maximum | Velo Bio, LLC | ||||||||
Description of Business | ||||||||
Annual sales milestone target | $ 900,000 | |||||||
2023 Senior Notes | ||||||||
Description of Business | ||||||||
Principal amount of debt issued | $ 500,000 | |||||||
Interest rate (as a percent) | 7.875% | 7.875% | ||||||
2015 Term Loan Facility | ||||||||
Description of Business | ||||||||
Principal amount of debt issued | $ 350,000 | |||||||
Debt term | 6 years | |||||||
2014 Term Loan Facility | ||||||||
Description of Business | ||||||||
Principal amount of debt issued | $ 340,000 | |||||||
Debt term | 5 years | |||||||
Repayments of debt | $ 323,000 | |||||||
Common Stock | ||||||||
Description of Business | ||||||||
Number of shares sold in an underwritten public offering | 3.6 | |||||||
Sale price of common stock (in dollars per share) | $ 63.75 | |||||||
CBR Acquisition Holdings Corp | ||||||||
Description of Business | ||||||||
Cash consideration | $ 700,000 |
Basis of Presentation and Sum42
Basis of Presentation and Summary of Significant Accounting Policies Restricted Cash (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Restricted Cash | |
Restricted cash | $ 30,755 |
Landlord of Waltham | |
Restricted Cash | |
Restricted cash | 400 |
Lumara Health | |
Restricted Cash | |
Restricted cash | $ 2,000 |
Basis of Presentation and Sum43
Basis of Presentation and Summary of Significant Accounting Policies - Concentrations and Significant Customer Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investment Concentration Risk | ||||||
Cash, cash equivalents and investments | $ 442,900 | $ 442,900 | ||||
Investment in institutional money market funds | 35,300 | 35,300 | ||||
Cash and cash equivalents | 167,530 | $ 196,154 | 167,530 | $ 196,154 | $ 119,296 | $ 26,986 |
Amount invested in a single fund | $ 34,300 | $ 34,300 | ||||
Sales Revenue, Net | Customer Concentration Risk | Maximum | ||||||
Investment Concentration Risk | ||||||
Concentration risk (as a percent) | 10.00% | |||||
Sales Revenue, Net | Customer Concentration Risk | Amerisource Bergen Drug Corporation | ||||||
Investment Concentration Risk | ||||||
Concentration risk (as a percent) | 28.00% | 40.00% | 25.00% | 39.00% | ||
Sales Revenue, Net | Customer Concentration Risk | McKesson Corporation | ||||||
Investment Concentration Risk | ||||||
Concentration risk (as a percent) | 13.00% | 24.00% | 11.00% | 24.00% | ||
Sales Revenue, Net | Customer Concentration Risk | Cardinal Health Inc | ||||||
Investment Concentration Risk | ||||||
Concentration risk (as a percent) | 7.00% | 18.00% | 5.00% | 18.00% | ||
Sales Revenue, Net | Customer Concentration Risk | Takeda Pharmaceutical Company Limited | ||||||
Investment Concentration Risk | ||||||
Concentration risk (as a percent) | 10.00% | 17.00% | 10.00% | |||
Sales Revenue, Net | Customer Concentration Risk | Group Purchasing Organization | ||||||
Investment Concentration Risk | ||||||
Concentration risk (as a percent) | 25.00% | 27.00% | ||||
Sales Revenue, Net | Geographic Concentration Risk | ||||||
Investment Concentration Risk | ||||||
Approximate percentage of revenues from customers outside the U.S. | 17.00% | 11.00% | ||||
Accounts Receivable | Credit Concentration Risk | Amerisource Bergen Drug Corporation | ||||||
Investment Concentration Risk | ||||||
Concentration risk (as a percent) | 41.00% | 45.00% | ||||
Accounts Receivable | Credit Concentration Risk | McKesson Corporation | ||||||
Investment Concentration Risk | ||||||
Concentration risk (as a percent) | 8.00% | 12.00% |
Basis of Presentation and Sum44
Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Provision for U.S. product sales allowances and accruals | ||||
Gross U.S. product sales | $ 145,131 | $ 41,396 | $ 407,238 | $ 113,550 |
Contractual adjustments | 41,851 | 18,179 | 116,236 | 49,953 |
Governmental Rebates | 14,363 | 208 | 40,018 | 580 |
Total provision for U.S product sales allowances and accruals | 56,214 | 18,387 | 156,254 | 50,533 |
U.S. products sales, net | 88,917 | $ 23,009 | 250,984 | $ 63,017 |
Medicaid reserves adjustments relating to Makena | 5,300 | |||
Chargeback reserves adjustments relating Makena | 1,900 | |||
Restricted Cash | ||||
Restricted cash | $ 30,755 | $ 30,755 |
Business Combination - Activity
Business Combination - Activity (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Aug. 17, 2015 | Nov. 12, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||||
Cash received on finalization of the net working capital and other adjustments | $ (562) | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||
Goodwill | $ 637,400 | $ 637,400 | $ 205,824 | ||||
Combined federal and state statutory income tax rate (as a percent) | 37.00% | ||||||
Net deferred tax liability | 144,900 | $ 144,900 | |||||
Acquisition-related costs | $ 8,500 | $ 1,917 | $ 11,153 | $ 1,917 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Future contingent payments, maximum | $ 350,000 | ||||||
CBR Acquisition Holdings Corp | |||||||
Business Acquisition [Line Items] | |||||||
Cash consideration | $ 700,000 | ||||||
Estimated working capital and other adjustments | (17,837) | ||||||
Purchase price paid at closing | 682,163 | ||||||
Plus: Estimated purchase price payable to sellers | 188 | ||||||
Total purchase price paid | 682,351 | ||||||
Excess of payable to former shareholders | 7,200 | ||||||
Net working capital and other adjustment | $ 17,600 | ||||||
Increase in cash consideration | 200 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||
Accounts receivable | 9,509 | ||||||
Inventories | 4,443 | ||||||
Prepaid and other current assets | 8,487 | ||||||
Restricted cash | 30,752 | ||||||
Property, plant and equipment | 29,669 | ||||||
Deferred income tax assets | 4,555 | ||||||
Other long-term assets | 198 | ||||||
Accounts payable | (2,853) | ||||||
Accrued expenses | (13,575) | ||||||
Deferred revenues | (3,100) | ||||||
Payable to former CBR shareholders | (37,947) | ||||||
Deferred income tax liabilities | (149,497) | ||||||
Total estimated identifiable net assets | 243,064 | ||||||
Goodwill | 439,287 | 439,300 | $ 439,300 | ||||
Total | 682,351 | ||||||
Contractual amount of accounts receivable | $ 11,600 | ||||||
Useful life | 20 years | 20 years | |||||
Net deferred tax liability | 149,500 | $ 149,500 | |||||
Acquisition-related costs | 8,500 | 11,200 | |||||
Revenue generated after the acquisition date | 7,200 | 7,200 | |||||
CBR Acquisition Holdings Corp | CBR Customer Relationships | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||
Finite-lived intangible assets | $ 297,000 | ||||||
CBR Acquisition Holdings Corp | CBR Trade Names and Trademarks | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||
Indefinite-lived intangible assets | 65,000 | ||||||
CBR Acquisition Holdings Corp | Favorable Lease | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||
Finite-lived intangible assets | $ 423 | ||||||
Lumara Health | |||||||
Business Acquisition [Line Items] | |||||||
Cash consideration | 600,000 | ||||||
Fair value of AMAG common stock isued | 111,964 | ||||||
Fair value of contingent milestone payments | 205,000 | ||||||
Estimated working capital and other adjustments | 821 | ||||||
Purchase price paid at closing | 917,785 | ||||||
Cash received on finalization of the net working capital and other adjustments | (562) | ||||||
Cash acquired from Lumara Health | (5,219) | ||||||
Total purchase price paid | $ 912,004 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||
Accounts receivable | 36,852 | 36,852 | |||||
Inventories | 30,300 | 30,300 | |||||
Prepaid and other current assets | 3,322 | 3,322 | |||||
Restricted cash | 1,997 | 1,997 | |||||
Property, plant and equipment | 60 | 60 | |||||
Finite-lived intangible assets | 797,100 | 797,100 | |||||
Deferred income tax assets | 102,355 | 102,355 | |||||
Other long-term assets | 3,412 | 3,412 | |||||
Accounts payable | (3,807) | (3,807) | |||||
Accrued expenses | (36,561) | (36,561) | |||||
Deferred income tax liabilities | (295,676) | (295,676) | |||||
Other long-term liabilities | (4,563) | (4,563) | |||||
Total estimated identifiable net assets | 713,891 | 713,891 | |||||
Goodwill | 198,113 | 198,113 | $ 205,800 | ||||
Total | 912,004 | $ 912,004 | |||||
Useful life | 20 years | ||||||
Acquisition-related costs | $ 1,900 | ||||||
Ownership percentage acquired | 100.00% | ||||||
Final settlement adjustment | $ 4,500 | ||||||
Lumara Health | Makena IPR&D | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||
Indefinite-lived intangible assets | $ 79,100 | $ 79,100 | |||||
Common Stock | Lumara Health | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||||
Shares of AMAG common stock issued in business combination | 3.2 | ||||||
Common stock, par value (in dollars per share) | $ 0.01 |
Business Combination - Pro form
Business Combination - Pro forma (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Pro Forma Supplemental Information | |||||
Acquisition-related costs | $ 8,500 | $ 1,917 | $ 11,153 | $ 1,917 | |
Loss on debt extinguishment | (10,449) | (10,449) | |||
Pro forma combined revenues | 110,244 | 100,091 | 381,650 | 257,536 | |
Pro forma combined net income (loss) | $ (5,116) | $ (983) | $ 24,220 | $ (52,043) | |
Pro forma net income (loss) per diluted share | $ (0.15) | $ (0.04) | $ 0.69 | $ (2.07) | |
CBR Acquisition Holdings Corp | |||||
Pro Forma Supplemental Information | |||||
Acquisition-related costs | $ 8,500 | $ 11,200 | |||
Other one-time fees and expenses incurred in connection with the acquisition | 9,200 | 9,200 | |||
Loss on debt extinguishment | $ 10,400 | $ 10,400 | |||
Lumara Health | |||||
Pro Forma Supplemental Information | |||||
Acquisition-related costs | $ 1,900 |
Investments (Details)
Investments (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 05, 2015 | Aug. 31, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Summary of Investments | |||||
Available-for-sale securities, Amortized Cost | $ 275,470 | $ 24,914 | |||
Available-for-sale securities, Gross Unrealized Gains | 164 | 13 | |||
Available-for-sale securities, Gross Unrealized Losses | (291) | (37) | |||
Available-for-sale securities, Estimated Fair Value | 275,343 | 24,890 | |||
Equity [Abstract] | |||||
Increase in total investments | 250,500 | ||||
Proceeds from the issuance of common stock, net | $ 218,600 | $ 218,600 | $ 188,800 | 407,477 | |
Common Stock | |||||
Equity [Abstract] | |||||
Sale price of common stock (in dollars per share) | $ 63.75 | ||||
Corporate debt securities | |||||
Summary of Investments | |||||
Available-for-sale securities due in one year or less, Amortized Cost | 26,244 | 11,656 | |||
Available-for-sale securities due in one to three years, Amortized Cost | 147,615 | 13,258 | |||
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 8 | 3 | |||
Available-for-sale securities due in one to three years, Gross Unrealized Gains | 25 | 10 | |||
Available-for-sale securities due in one year or less, Gross Unrealized Losses | (10) | (4) | |||
Available-for-sale securities due in one to three years, Gross Unrealized Losses | (276) | (33) | |||
Available-for-sale securities due in one year or less, Estimated Fair Value | 26,242 | 11,655 | |||
Available-for-sale securities due in one to three years, Estimated Fair Value | 147,364 | $ 13,235 | |||
Commercial Paper | |||||
Summary of Investments | |||||
Available-for-sale securities due in one year or less, Amortized Cost | 7,488 | ||||
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 2 | ||||
Available-for-sale securities due in one year or less, Estimated Fair Value | 7,490 | ||||
Certificates of deposit | |||||
Summary of Investments | |||||
Available-for-sale securities due in one year or less, Amortized Cost | 10,000 | ||||
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 1 | ||||
Available-for-sale securities due in one year or less, Estimated Fair Value | 10,001 | ||||
Municipal securities | |||||
Summary of Investments | |||||
Available-for-sale securities due in one year or less, Amortized Cost | 13,874 | ||||
Available-for-sale securities due in one to three years, Amortized Cost | 70,249 | ||||
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 11 | ||||
Available-for-sale securities due in one to three years, Gross Unrealized Gains | 117 | ||||
Available-for-sale securities due in one to three years, Gross Unrealized Losses | (5) | ||||
Available-for-sale securities due in one year or less, Estimated Fair Value | 13,885 | ||||
Available-for-sale securities due in one to three years, Estimated Fair Value | $ 70,361 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Hierarchy (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | $ 310,668 | $ 102,144 |
Total Liabilities | 222,945 | 218,702 |
Transfers or reclassifications of securities from Level 1 to Level 2 | 0 | |
Transfers or reclassifications of securities from Level 2 to Level 1 | 0 | |
Acquisition Related Contingent Consideration | MuGard | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 8,660 | 12,102 |
Acquisition Related Contingent Consideration | Lumara Health | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 214,285 | 206,600 |
Money market funds | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 35,325 | 77,254 |
Corporate debt securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 173,606 | 24,890 |
Commercial paper. | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 7,490 | |
Certificates of deposit | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 10,001 | |
Municipal securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 84,246 | |
Fair Value, Inputs, Level 1 | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 35,325 | 77,254 |
Fair Value, Inputs, Level 1 | Money market funds | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 35,325 | 77,254 |
Fair Value, Inputs, Level 2 | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 275,343 | 24,890 |
Fair Value, Inputs, Level 2 | Corporate debt securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 173,606 | 24,890 |
Fair Value, Inputs, Level 2 | Commercial paper. | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 7,490 | |
Fair Value, Inputs, Level 2 | Certificates of deposit | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 10,001 | |
Fair Value, Inputs, Level 2 | Municipal securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 84,246 | |
Fair Value, Inputs, Level 3 | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 222,945 | 218,702 |
Fair Value, Inputs, Level 3 | Acquisition Related Contingent Consideration | MuGard | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 8,660 | 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 | $ 214,285 | $ 206,600 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Feb. 14, 2014 | |
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Balance at beginning of period | $ 218,702 | |||
Payments made | (322) | |||
Adjustments to fair value of contingent consideration | 4,525 | $ (2,535) | ||
Other adjustments | 40 | |||
Balance at end of period | $ 222,945 | |||
Interest rate (as a percent) | 2.50% | 2.50% | ||
Estimated fair value of long-term debt | $ 322,100 | |||
2023 Senior Notes | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Estimated fair value of long-term debt | $ 477,500 | |||
Convertible Debt | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Aggregate principal amount of debt issued | $ 200,000 | |||
Interest rate (as a percent) | 2.50% | |||
Estimated fair value of long-term debt | $ 322,100 | |||
Abeona Therapeutics, Inc | Licensing Agreements | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Period over which estimated undiscounted royalty amounts could be paid | 10 years | |||
Abeona Therapeutics, Inc | Licensing Agreements | Fair Value, Inputs, Level 3 | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Discount rate (as a percent) | 12.00% | |||
Abeona Therapeutics, Inc | Licensing Agreements | Minimum | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Estimated undiscounted royalty amounts payable | $ 10,000 | |||
Abeona Therapeutics, Inc | Licensing Agreements | Maximum | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Estimated undiscounted royalty amounts payable | $ 18,000 | |||
Lumara Health | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Discount rate (as a percent) | 5.00% | |||
Makena | Licensing Agreements | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Adjustments to fair value of contingent consideration | $ 7,700 | |||
Makena | Abeona Therapeutics, Inc | Licensing Agreements | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Contingent consideration classified as short term liability | 96,100 | |||
MuGard | Abeona Therapeutics, Inc | Licensing Agreements | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Adjustments to fair value of contingent consideration | (3,200) | |||
MuGard | Lumara Health | Licensing Agreements | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Contingent consideration classified as short term liability | $ 700 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Inventories disclosure | ||||
Raw materials | $ 18,556 | $ 14,188 | $ 18,556 | |
Work in process | 1,506 | 5,965 | 1,506 | |
Finished goods | 17,155 | 20,457 | 17,155 | |
Inventories included in current assets | 37,217 | 40,610 | 37,217 | |
Raw materials | 2,654 | 7,798 | 2,654 | |
Total Inventories | 39,871 | 48,408 | 39,871 | |
Inventory expensed | 869 | $ 1,119 | ||
Makena | ||||
Inventories disclosure | ||||
Inventory expensed | 3,600 | |||
U.S. Feraheme | ||||
Inventories disclosure | ||||
Inventory expensed | 600 | |||
Fair Value Adjustment to Inventory | ||||
Inventories disclosure | ||||
Inventories | 30,300 | |||
Fair value adjustment | $ 26,100 | |||
Cost of Sales | Fair Value Adjustment to Inventory | ||||
Inventories disclosure | ||||
Fair value adjustment | $ 1,600 | 7,500 | ||
Inventory expensed | $ 3,300 |
Property, Plant and Equipment (
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Property and Equipment | ||
Property, plant and equipment, gross | $ 33,063 | $ 2,497 |
Less - accumulated depreciation | (2,706) | (978) |
Property and equipment, net | 30,357 | 1,519 |
Land | ||
Property and Equipment | ||
Property, plant and equipment, gross | 700 | |
Land Improvements | ||
Property and Equipment | ||
Property, plant and equipment, gross | 300 | |
Building and Improvements | ||
Property and Equipment | ||
Property, plant and equipment, gross | 9,500 | |
Computer Equipment and Software | ||
Property and Equipment | ||
Property, plant and equipment, gross | 12,625 | |
Furniture and Fixtures | ||
Property and Equipment | ||
Property, plant and equipment, gross | 1,785 | 1,574 |
Leasehold Improvements | ||
Property and Equipment | ||
Property, plant and equipment, gross | 1,710 | 430 |
Laboratory and Production Equipment | ||
Property and Equipment | ||
Property, plant and equipment, gross | 5,165 | $ 493 |
Construction in Progress | ||
Property and Equipment | ||
Property, plant and equipment, gross | $ 1,278 |
Goodwill, IPR&D and Other Int52
Goodwill, IPR&D and Other Intangible Assets, Net (Details) - USD ($) $ in Thousands | Aug. 17, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Intangible Assets, Net | ||||||
Goodwill | $ 637,400 | $ 637,400 | $ 205,824 | |||
Amortizable intangible assets | ||||||
Cost | 1,111,416 | 1,111,416 | 813,993 | |||
Accumulated Amortization | 43,969 | 43,969 | 5,185 | |||
Net | 1,067,447 | 1,067,447 | 808,808 | |||
Amortization expense | 13,900 | $ 100 | 38,800 | $ 200 | ||
Intangible assets | ||||||
Total Cost | 1,255,516 | 1,255,516 | 893,093 | |||
Total Intangible assets, net | 1,211,547 | 1,211,547 | 887,908 | |||
Expected future annual amortization expense | ||||||
Remainder of 2015 | 14,295 | 14,295 | ||||
2,016 | 77,324 | 77,324 | ||||
2,017 | 92,191 | 92,191 | ||||
2,018 | 99,532 | 99,532 | ||||
2,019 | 70,750 | 70,750 | ||||
Thereafter | 713,355 | 713,355 | ||||
Total | 1,067,447 | 1,067,447 | ||||
CBR Acquisition Holdings Corp | ||||||
Intangible Assets, Net | ||||||
Goodwill | $ 439,287 | 439,300 | $ 439,300 | |||
Intangible assets | ||||||
Useful life | 20 years | 20 years | ||||
Lumara Health | ||||||
Intangible Assets, Net | ||||||
Goodwill | 198,113 | $ 198,113 | 205,800 | |||
Decrease to goodwill | 7,700 | |||||
Revenue reserves adjustment | 7,200 | |||||
Reduction in deferred tax liabilities | 5,400 | 5,000 | ||||
Final settlement adjustment | 4,500 | |||||
Goodwill accumulated impairment losses | 0 | $ 0 | ||||
Intangible assets | ||||||
Useful life | 20 years | |||||
Abeona Therapeutics, Inc | ||||||
Intangible assets | ||||||
Useful life | 10 years | |||||
Makena IPR&D | ||||||
Indefinite-lived intangible assets | ||||||
Cost | 79,100 | $ 79,100 | 79,100 | |||
CBR Trade Names and Trademarks | ||||||
Indefinite-lived intangible assets | ||||||
Cost | 65,000 | 65,000 | ||||
Makena Marketed Product | ||||||
Amortizable intangible assets | ||||||
Cost | 797,100 | 797,100 | 797,100 | |||
Accumulated Amortization | 42,825 | 42,825 | 4,834 | |||
Net | 754,275 | $ 754,275 | 792,266 | |||
Intangible assets | ||||||
Remaining amortization period | 8 years 7 months 6 days | |||||
CBR Customer Relationships | ||||||
Amortizable intangible assets | ||||||
Cost | 297,000 | $ 297,000 | ||||
Accumulated Amortization | 357 | 357 | ||||
Net | 296,643 | $ 296,643 | ||||
Intangible assets | ||||||
Remaining amortization period | 10 years 4 months 24 days | |||||
Favorable Lease | ||||||
Amortizable intangible assets | ||||||
Cost | 423 | $ 423 | ||||
Accumulated Amortization | 25 | 25 | ||||
Net | 398 | $ 398 | ||||
Intangible assets | ||||||
Remaining amortization period | 1 year 6 months | |||||
MuGuard Rights | ||||||
Amortizable intangible assets | ||||||
Cost | 16,893 | $ 16,893 | 16,893 | |||
Accumulated Amortization | 762 | 762 | 351 | |||
Net | $ 16,131 | $ 16,131 | $ 16,542 | |||
Intangible assets | ||||||
Remaining amortization period | 5 years 10 months 24 days |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Accrued Expenses | ||
Commercial rebates, fees and returns | $ 53,288 | $ 44,807 |
Professional, license, and other fees and expenses | 37,016 | 23,157 |
Salaries, bonuses, and other compensation | 11,200 | 10,176 |
Restructuring expense | 1,152 | 1,953 |
Total accrued expenses | $ 102,656 | $ 80,093 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Effective tax rate | 41.00% | 27.00% |
Income tax benefit (expense) | $ 14,130 | $ (9,513) |
Statutory U.S. federal tax rate (as a percent) | 35.00% | 35.00% |
Lumara Health | ||
Reduction in deferred tax liabilities | $ 5,400 | $ 5,000 |
Accumulated Other Comprehensi55
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Changes in accumulated other comprehensive income, net of tax | ||||
Beginning Balance | $ (3,948) | $ (3,259) | $ (3,617) | $ (3,491) |
Other comprehensive income (loss) before reclassifications | 228 | (305) | (107) | (76) |
Gain (loss) reclassified from other accumulated comprehensive loss | 9 | 4 | 12 | |
Ending Balance | $ (3,720) | $ (3,555) | $ (3,720) | $ (3,555) |
Basic and Diluted Net Income 56
Basic and Diluted Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Components of basic and diluted net income (loss) per share | ||||
Net income (loss) | $ (20,584) | $ 1,458 | $ 25,578 | $ (7,191) |
Weighted average common shares outstanding | 33,223 | 21,984 | 30,379 | 21,912 |
Effect of dilutive securities: | ||||
Warrants (in shares) | 3,015 | |||
Stock options and RSUs (in shares) | 369 | 1,568 | ||
Convertible 2.5% notes (in shares) | 1,114 | |||
Shares used in calculating dilutive net income (loss) per share (in shares) | 33,223 | 23,467 | 34,962 | 21,912 |
Net income (loss) per share: | ||||
Basic (in dollars per share) | $ (0.62) | $ 0.07 | $ 0.84 | $ (0.33) |
Diluted (in dollars per share) | $ (0.62) | $ 0.06 | $ 0.73 | $ (0.33) |
Anti-dilutive securities (in shares) | 18,465 | 15,952 | 8,330 | 18,605 |
Employee and Non Employee Stock Option | ||||
Net income (loss) per share: | ||||
Anti-dilutive securities (in shares) | 2,989 | 2,013 | 791 | 3,081 |
Employee and Non Employee Restricted Stock Units | ||||
Net income (loss) per share: | ||||
Anti-dilutive securities (in shares) | 712 | 289 | 157 | 760 |
Warrants | ||||
Net income (loss) per share: | ||||
Anti-dilutive securities (in shares) | 7,382 | 7,382 | 7,382 | |
Convertible Debt | ||||
Net income (loss) per share: | ||||
Anti-dilutive securities (in shares) | 7,382 | 6,268 | 7,382 | 7,382 |
Equity-Based Compensation - Pla
Equity-Based Compensation - Plan Information (Details) | May. 21, 2015shares | Sep. 30, 2015planshares | Dec. 31, 2014shares |
Equity compensation plans | |||
Number of equity compensation plans | plan | 4 | ||
Employee and Non Employee Stock Option | |||
Equity compensation plans | |||
Number of stock options outstanding (in shares) | 2,116,205 | 2,130,283 | |
Employee and Non Employee Restricted Stock Units | |||
Equity compensation plans | |||
Number of stock options outstanding (in shares) | 524,055 | 380,826 | |
Equity Incentive Plan 2007 | |||
Equity compensation plans | |||
Additional shares authorized for issuance | 1,700,000 | ||
Remaining number of shares available for future grants | 2,221,192 | ||
Equity Incentive Plan 2007 | Employee and Non Employee Stock Option | |||
Equity compensation plans | |||
Number of stock options outstanding (in shares) | 1,982,165 | 2,051,017 | |
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 | ||
Equity Incentive Plan 2007 | Employee and Non Employee Restricted Stock Units | |||
Equity compensation plans | |||
Number of stock options outstanding (in shares) | 446,705 | 360,826 | |
Stock 2000 Plan | Employee and Non Employee Stock Option | |||
Equity compensation plans | |||
Number of stock options outstanding (in shares) | 14,040 | 35,266 | |
Expiration term | 10 years | ||
Lumara 2013 Plan | |||
Equity compensation plans | |||
Shares authorized for issuance | 200,000 | ||
Remaining number of shares available for future grants | 2,650 | ||
Lumara 2013 Plan | Employee and Non Employee Stock Option | |||
Equity compensation plans | |||
Number of stock options outstanding (in shares) | 120,000 | 44,000 | |
Expiration term | 10 years | ||
Lumara 2013 Plan | Employee and Non Employee Restricted Stock Units | |||
Equity compensation plans | |||
Number of stock options outstanding (in shares) | 77,350 | 20,000 | |
Other Equity Compensation Grants | Employee and Non Employee Stock Option | Senior Management [Member] | |||
Equity compensation plans | |||
Award vesting period | 4 years | ||
Number of stock options outstanding (in shares) | 873,100 | ||
Granted (in shares) | 220,000 | ||
Other Equity Compensation Grants | Employee and Non Employee Restricted Stock Units | Senior Management [Member] | |||
Equity compensation plans | |||
Award vesting period | 3 years | ||
Number of restricted stock units outstanding (in shares) | 187,575 | ||
Granted (in shares) | 82,250 | ||
2015 ESPP | |||
Equity compensation plans | |||
Shares authorized for issuance | 200,000 | ||
Purchase price per share as a percentage of fair market value of common stock on the first or last day of the plan period | 85.00% | ||
Annual maximum percentage of employee compensation available for ESPP share purchases (as a percent) | 10.00% | ||
Shares issued | 0 |
Equity-Based Compensation - Act
Equity-Based Compensation - Activity (Details) | 9 Months Ended |
Sep. 30, 2015shares | |
Employee and Non Employee Stock Option | |
Options | |
Outstanding at beginning of period (in shares) | 2,130,283 |
Granted (in shares) | 916,475 |
Exercised (in shares) | (673,407) |
Expired and/or forfeited (in shares) | (257,146) |
Outstanding at end of period (in shares) | 2,116,205 |
Employee and Non Employee Stock Option | Equity Incentive Plan 2007 | |
Options | |
Outstanding at beginning of period (in shares) | 2,051,017 |
Granted (in shares) | 840,475 |
Exercised (in shares) | (652,181) |
Expired and/or forfeited (in shares) | (257,146) |
Outstanding at end of period (in shares) | 1,982,165 |
Employee and Non Employee Stock Option | Stock 2000 Plan | |
Options | |
Outstanding at beginning of period (in shares) | 35,266 |
Exercised (in shares) | (21,226) |
Outstanding at end of period (in shares) | 14,040 |
Employee and Non Employee Stock Option | Lumara 2013 Plan | |
Options | |
Outstanding at beginning of period (in shares) | 44,000 |
Granted (in shares) | 76,000 |
Outstanding at end of period (in shares) | 120,000 |
Employee and Non Employee Restricted Stock Units | |
Options | |
Outstanding at beginning of period (in shares) | 380,826 |
Granted (in shares) | 314,179 |
Vested (in shares) | (72,832) |
Expired and/or forfeited (in shares) | (98,118) |
Outstanding at end of period (in shares) | 524,055 |
Employee and Non Employee Restricted Stock Units | Equity Incentive Plan 2007 | |
Options | |
Outstanding at beginning of period (in shares) | 360,826 |
Granted (in shares) | 253,954 |
Vested (in shares) | (72,832) |
Expired and/or forfeited (in shares) | (95,243) |
Outstanding at end of period (in shares) | 446,705 |
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 |
Expired and/or forfeited (in shares) | (2,875) |
Outstanding at end of period (in shares) | 77,350 |
Equity-Based Compensation - Exp
Equity-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Equity-based compensation expense | ||||
Total equity-based compensation expense | $ 4,888 | $ 1,946 | $ 11,572 | $ 6,153 |
Income tax effect | (871) | (3,464) | ||
After-tax effect of equity-based compensation expense | 4,017 | 1,946 | 8,108 | 6,153 |
Cost of Sales | ||||
Equity-based compensation expense | ||||
Total equity-based compensation expense | 159 | 32 | 254 | 89 |
Research and Development Expense | ||||
Equity-based compensation expense | ||||
Total equity-based compensation expense | 1,028 | 466 | 2,071 | 1,274 |
Selling, General and Administrative Expenses [Member] | ||||
Equity-based compensation expense | ||||
Total equity-based compensation expense | $ 3,701 | $ 1,448 | $ 9,247 | $ 4,790 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 05, 2015 | May. 21, 2015 | Aug. 31, 2015 | Mar. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Equity compensation plans | |||||||||
Common Stock, Shares Authorized | 117,500,000 | 117,500,000 | 117,500,000 | 58,750,000 | |||||
Common Stock Transactions | |||||||||
Number of shares sold in an underwritten public offering | 3,600,000 | 4,600,000 | |||||||
Share price (in dollars per share) | $ 63.75 | $ 44 | |||||||
Proceeds from the issuance of common stock, net of underwriting discounts and other expenses | $ 218,600 | $ 218,600 | $ 188,800 | $ 407,477 | |||||
Increase in total stockholders' equity | 460,000 | ||||||||
Net income (loss) | $ (20,584) | $ 1,458 | 25,578 | $ (7,191) | |||||
Increase in total stockholders' equity due to proceeds from exercise of stock options | 15,482 | 2,909 | |||||||
Increase in total stockholders' equity allocated to stock-based compensation expense | $ 11,572 | $ 6,153 | |||||||
Prior to amendment | |||||||||
Equity compensation plans | |||||||||
Common Stock, Shares Authorized | 58,750,000 | ||||||||
Equity Incentive Plan 2007 | |||||||||
Equity compensation plans | |||||||||
Additional shares authorized for issuance | 1,700,000 |
Commitments and Contingenciess
Commitments and Contingenciess - (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Purchase Commitments | |
Remaining minimum purchase commitments | $ 7.9 |
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) - Termination Agreement $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Collaborative Agreements | |
Deferred revenue recognized in earnings related to the amortization of the deferred revenue balance | $ 44.4 |
Additional revenue recognized related to Takeda | $ 5.2 |
Debt - Summary (Details)
Debt - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Debt | ||
Total long-term debt | $ 1,005,161 | $ 495,346 |
Less: current maturities | 17,500 | 34,000 |
Long-term debt, net of current maturities | 987,661 | 461,346 |
2023 Senior Notes | ||
Debt | ||
Total long-term debt | 490,108 | |
2015 Term Loan Facility | ||
Debt | ||
Total long-term debt | 342,459 | |
Convertible Notes 2.5 Percent | ||
Debt | ||
Total long-term debt | $ 172,594 | 167,441 |
2014 Term Loan Facility | ||
Debt | ||
Total long-term debt | $ 327,905 |
Debt - Bonds, Term Loan Facilit
Debt - Bonds, Term Loan Facility, Convertible Debt (Details) $ / shares in Units, shares in Millions | Aug. 17, 2015USD ($) | Feb. 14, 2014USD ($) | Feb. 13, 2014$ / sharesshares | Sep. 30, 2015USD ($)$ / shares | Sep. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Sep. 30, 2015USD ($)item$ / shares | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Nov. 12, 2014USD ($) | Feb. 28, 2014$ / sharesshares | Feb. 11, 2014$ / shares |
Debt | ||||||||||||
Repayments of debt | $ 327,509,000 | |||||||||||
Loss on debt extinguishment | $ (10,449,000) | $ (10,449,000) | ||||||||||
Interest rate (as a percent) | 2.50% | 2.50% | 2.50% | |||||||||
Amount outstanding, net | $ 1,005,161,000 | $ 1,005,161,000 | $ 495,346,000 | |||||||||
Liability component: | ||||||||||||
Principal | 200,000,000 | 200,000,000 | ||||||||||
Less: debt discount, net | (27,406,000) | (27,406,000) | ||||||||||
Net carrying amount | 172,594,000 | 172,594,000 | 167,441,000 | |||||||||
Fair value of debt | 322,100,000 | 322,100,000 | ||||||||||
Equity component | 38,188,000 | 38,188,000 | ||||||||||
Total interest expense recognized | ||||||||||||
Total interest expense | $ 14,222,000 | $ 3,129,000 | $ 34,794,000 | $ 7,656,000 | ||||||||
Convertible Bond Hedge | ||||||||||||
Common stock covered under convertible bond hedge (in shares) | shares | 7.4 | |||||||||||
Exercise price (in dollars per unit) | $ / shares | $ 27.09 | |||||||||||
Purchase of convertible bond hedges, net of tax | $ 39,800,000 | 39,760,000 | ||||||||||
Warrant Transactions | ||||||||||||
Number of shares of common stock called by warrants | shares | 7.4 | |||||||||||
Exercise price (in dollars per share) | $ / shares | $ 34.12 | |||||||||||
Exercise price above last reported sale price of common stock (as a percent) | 70.00% | |||||||||||
Proceeds from issuance of warrants | $ 25,700,000 | 25,620,000 | ||||||||||
Minimum | ||||||||||||
Debt | ||||||||||||
Redemption price as a percentage of principal, at any time (as a percent) | 25.00% | |||||||||||
Convertible Debt | ||||||||||||
Debt | ||||||||||||
Aggregate principal amount of debt issued | $ 200,000,000 | |||||||||||
Interest rate (as a percent) | 2.50% | 2.50% | ||||||||||
Debt term | 5 years | |||||||||||
Net proceeds from issuance of convertible debt | 193,300,000 | |||||||||||
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 | |||||||||||
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 | $ 1,000 | ||||||||||
Initial conversion price of convertible notes into common stock (in dollars per share) | $ / shares | $ 27.09 | $ 27.09 | ||||||||||
Liability component: | ||||||||||||
Net carrying amount | $ 172,600,000 | $ 172,600,000 | ||||||||||
Amount of if convertible value exceed the principal amount | 93,300,000 | |||||||||||
Fair value of debt | $ 322,100,000 | $ 322,100,000 | ||||||||||
Debt issuance costs allocated to equity component | 1,300,000 | |||||||||||
Debt issuance costs allocated to the liability component | $ 5,400,000 | |||||||||||
Effective interest rate on liability component (as a percent) | 7.23% | 7.23% | ||||||||||
Total interest expense recognized | ||||||||||||
Contractual interest expense | $ 1,250,000 | 1,250,000 | $ 3,750,000 | 3,125,000 | ||||||||
Amortization of debt issuance costs | 253,000 | 234,000 | 733,000 | 564,000 | ||||||||
Amortization of debt discount | 1,777,000 | 1,645,000 | 5,153,000 | 3,967,000 | ||||||||
Total interest expense | 3,280,000 | $ 3,129,000 | $ 9,636,000 | $ 7,656,000 | ||||||||
Warrant Transactions | ||||||||||||
Sale price of common stock (in dollars per share) | $ / shares | $ 20.07 | |||||||||||
Convertible Debt | Debt Instrument Convertible Covenant One [Member] | ||||||||||||
Debt | ||||||||||||
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 | item | 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] | ||||||||||||
Debt | ||||||||||||
Principal amount used for debt instrument conversion ratio | 1,000 | $ 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 | ||||||||||||
Debt | ||||||||||||
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] | ||||||||||||
Debt | ||||||||||||
Principal amount used for debt instrument conversion ratio | $ 1,000 | $ 1,000 | ||||||||||
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 | item | 30 | |||||||||||
2023 Senior Notes | ||||||||||||
Debt | ||||||||||||
Aggregate principal amount of debt issued | $ 500,000,000 | |||||||||||
Interest rate (as a percent) | 7.875% | 7.875% | 7.875% | |||||||||
Percentage of principal amount of debt that may be redeemed utilizing net cash proceeds from certain equity offerings, and provided that a certain percentage of the originally issued debt remains outstanding after such redemption | 35.00% | |||||||||||
Redemption price as a percentage of principal, which may be redeemed utilizing net cash proceeds from certain equity offerings, and provided that a certain percentage of the originally issued debt remains outstanding after such redemption | 107.875% | |||||||||||
Redemption price as a percentage of principal, at any time (as a percent) | 100.00% | |||||||||||
Increase in redemption price of principal | 101 | |||||||||||
Amount outstanding, net | $ 490,108,000 | $ 490,108,000 | ||||||||||
Bridge loan commitment fee | $ 6,800,000 | |||||||||||
2023 Senior Notes | Minimum | ||||||||||||
Debt | ||||||||||||
Percentage of principal amount of debt that must remain outstanding for certain redemption terms to be applicable | 65.00% | |||||||||||
2015 Term Loan Facility | ||||||||||||
Debt | ||||||||||||
Aggregate principal amount of debt issued | $ 350,000,000 | |||||||||||
Debt term | 6 years | |||||||||||
Amount outstanding, net | 342,459,000 | $ 342,459,000 | ||||||||||
2015 Term Loan Facility | Term Loan | ||||||||||||
Debt | ||||||||||||
Debt term | 6 years | |||||||||||
Maximum borrowing capacity for incremental loans | $ 350,000,000 | |||||||||||
Amount outstanding, net | 342,500,000 | |||||||||||
Unamortized debt issuance costs | 7,300,000 | |||||||||||
Installment payment amount | $ 4,400,000 | |||||||||||
Annual mandatory prepayment of debt as a percentage of excess cash flow | 50.00% | |||||||||||
Percentage of equity interests in domestic subsidiaries pledged as collateral for borrowing (as a percent) | 100.00% | |||||||||||
Percentage of voting equity interests in direct foreign subsidiaries pledged as collateral for borrowing (as a percent) | 65.00% | |||||||||||
Percentage of non-voting equity interests in direct foreign subsidiaries pledged as collateral for borrowing (as a percent) | 100.00% | |||||||||||
Fees and expenses | $ 2,400,000 | |||||||||||
Liability component: | ||||||||||||
Debt issuance costs allocated to the liability component | 7,300,000 | |||||||||||
2015 Term Loan Facility | Incremental Loans | ||||||||||||
Debt | ||||||||||||
Maximum borrowing capacity for incremental loans | 225,000,000 | |||||||||||
Convertible Notes 2.5 Percent | ||||||||||||
Debt | ||||||||||||
Amount outstanding, net | 172,594,000 | 172,594,000 | 167,441,000 | |||||||||
2014 Term Loan Facility | ||||||||||||
Debt | ||||||||||||
Aggregate principal amount of debt issued | $ 340,000,000 | |||||||||||
Repayments of debt | $ 323,000,000 | |||||||||||
Debt term | 5 years | |||||||||||
Amount outstanding, net | $ 327,905,000 | |||||||||||
2014 Term Loan Facility | Term Loan | ||||||||||||
Debt | ||||||||||||
Repayments of debt | $ 323,000,000 | |||||||||||
Loss on debt extinguishment | 10,400,000 | |||||||||||
CBR Acquisition Holdings Corp | ||||||||||||
Debt | ||||||||||||
Loss on debt extinguishment | $ 10,400,000 | $ 10,400,000 | ||||||||||
CBR Acquisition Holdings Corp | 2023 Senior Notes | Private Placement | ||||||||||||
Debt | ||||||||||||
Aggregate principal amount of debt issued | $ 500,000,000 |
Restructuring (Details)
Restructuring (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | |
Components of restructuring expenses and reserve | ||
Restructuring charges | $ 738 | $ 1,752 |
Expected additional restructuring charges | 2,100 | 2,100 |
Accrued restructuring, beginning of period | 1,253 | 1,953 |
Employee severance, benefits and related costs | 635 | 1,490 |
Payments | (736) | (2,291) |
Accrued restructuring, end of period | $ 1,152 | $ 1,152 |
Recently Issued and Proposed 66
Recently Issued and Proposed Accounting Pronouncements (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
The amendments ASU 2015-03 debt issuance costs | |
Reclassified debt issuance costs | $ 11.8 |