Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 12, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | AMAG PHARMACEUTICALS INC. | ||
Entity Central Index Key | 792,977 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2,125,000 | ||
Entity Common Stock, Shares Outstanding | 34,748,689 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 228,705 | $ 119,296 |
Investments | 237,626 | 24,890 |
Accounts receivable, net | 85,678 | 38,172 |
Inventories | 40,645 | 40,610 |
Receivable from collaboration | 428 | 4,518 |
Deferred tax assets | 32,094 | |
Prepaid and other current assets | 13,592 | 14,456 |
Total current assets | 606,674 | 274,036 |
Property, plant and equipment, net | 28,725 | 1,519 |
Goodwill | 639,188 | 205,824 |
Intangible assets, net | 1,196,771 | 887,908 |
Restricted cash | 2,593 | 2,397 |
Other long-term assets | 13,481 | 17,249 |
Total assets | 2,487,432 | 1,388,933 |
Current liabilities: | ||
Accounts payable | 4,906 | 7,301 |
Accrued expenses | 106,363 | 80,093 |
Current portion of long-term debt | 17,500 | 34,000 |
Current portion of acquisition-related contingent consideration | 96,967 | 718 |
Deferred revenues | 20,185 | 44,376 |
Total current liabilities | 245,921 | 166,488 |
Long-term liabilities: | ||
Long-term debt, net | 811,250 | 293,905 |
Convertible 2.5% notes, net | 174,390 | 167,441 |
Acquisition-related contingent consideration | 125,592 | 217,984 |
Deferred tax liabilities | 189,145 | 77,619 |
Deferred revenues | 5,093 | |
Other long-term liabilities | 3,777 | 5,543 |
Total liabilities | $ 1,555,168 | $ 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 December 31, 2015 and 58,750,000 authorized at December 31, 2014; 34,733,117 and 25,599,550 shares issued and outstanding at December 31, 2015 and 2014, respectively | $ 347 | $ 256 |
Additional paid-in capital | 1,233,786 | 793,757 |
Accumulated other comprehensive (loss) | (4,205) | (3,617) |
Accumulated deficit | (297,664) | (330,443) |
Total stockholders' equity | 932,264 | 459,953 |
Total liabilities and stockholders' equity | $ 2,487,432 | $ 1,388,933 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
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 | 34,733,117 | 25,599,550 |
Common stock, shares outstanding | 34,733,117 | 25,599,550 |
2.5 Percent Convertible Notes | ||
Convertible notes, interest rate (as a percent) | 2.50% | 2.50% |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | |||
U.S. product sales, net | $ 341,816 | $ 109,998 | $ 71,692 |
Service revenues, net | 24,132 | ||
License fee and other collaboration revenues | 52,328 | 14,386 | 9,164 |
Total revenues | 418,276 | 124,384 | 80,856 |
Costs and expenses: | |||
Cost of product sales | 78,509 | 20,306 | 11,960 |
Cost of services | 9,992 | ||
Research and development expenses | 42,878 | 24,160 | 20,564 |
Selling, general and administrative expenses | 160,309 | 72,254 | 59,167 |
Acquisition-related costs | 11,232 | 9,478 | 782 |
Restructuring expenses | 4,136 | 2,023 | |
Total costs and expenses | 307,056 | 128,221 | 92,473 |
Operating income (loss) | 111,220 | (3,837) | (11,617) |
Other income (expense): | |||
Interest expense | (53,251) | (14,697) | |
Loss on debt extinguishment | (10,449) | ||
Interest and dividend income, net | 1,512 | 975 | 1,051 |
Other income (expense) | (9,188) | 217 | 964 |
Total other income (expense) | (71,376) | (13,505) | 2,015 |
Net income (loss) before income taxes | 39,844 | (17,342) | (9,602) |
Income tax expense (benefit) | 7,065 | (153,159) | |
Net income (loss) | $ 32,779 | $ 135,817 | $ (9,602) |
Net income (loss) per share: | |||
Basic | $ 1.04 | $ 6.06 | $ (0.44) |
Diluted | $ 0.93 | $ 5.45 | $ (0.44) |
Weighted average shares outstanding used to compute net income (loss) per share: | |||
Basic | 31,471 | 22,416 | 21,703 |
Diluted | 35,308 | 25,225 | 21,703 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Comprehensive Income | |||
Net income (loss) | $ 32,779 | $ 135,817 | $ (9,602) |
Unrealized (losses) gains on securities: | |||
Holding losses arising during period, net of tax | (4) | (191) | (268) |
Reclassification adjustment for (losses) gains included in net income (loss) | (584) | 65 | 24 |
Net unrealized losses on securities | (588) | (126) | (244) |
Total comprehensive income (loss) | $ 32,191 | $ 135,691 | $ (9,846) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total |
Balance at Dec. 31, 2012 | $ 215 | $ 632,487 | $ (3,247) | $ (456,658) | $ 172,797 |
Balance (in shares) at Dec. 31, 2012 | 21,507 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net shares issued in connection with the exercise of stock options and vesting of restricted stock units | $ 3 | 1,274 | 1,277 | ||
Net shares issued in connection with the exercise of stock options and restricted stock units (in shares) | 252 | ||||
Shares issued in connection with employee stock purchase plan | 176 | 176 | |||
Shares issued in connection with employee stock purchase plan (in shares) | 14 | ||||
Non-cash equity-based compensation | 8,004 | 8,004 | |||
Unrealized losses on securities, net of tax | (244) | (244) | |||
Net income (loss) | (9,602) | (9,602) | |||
Balance at Dec. 31, 2013 | $ 218 | 641,941 | (3,491) | (466,260) | 172,408 |
Balance (in shares) at Dec. 31, 2013 | 21,773 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Equity component of Convertible Notes, net of issuance costs | 36,907 | 36,907 | |||
Purchase of convertible bond hedges, net of tax | (39,760) | (39,760) | |||
Sale of warrants | 25,620 | 25,620 | |||
Net shares issued in connection with the acquisition of Lumara Health | $ 32 | 111,932 | 111,964 | ||
Net shares issued in connection with acquisition (in shares) | 3,210 | ||||
Net shares issued in connection with the exercise of stock options and vesting of restricted stock units | $ 6 | 8,492 | 8,498 | ||
Net shares issued in connection with the exercise of stock options and restricted stock units (in shares) | 617 | ||||
Non-cash equity-based compensation | 8,625 | 8,625 | |||
Unrealized losses on securities, net of tax | (126) | (126) | |||
Net income (loss) | 135,817 | 135,817 | |||
Balance at Dec. 31, 2014 | $ 256 | 793,757 | (3,617) | (330,443) | 459,953 |
Balance (in shares) at Dec. 31, 2014 | 25,600 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Shares issued in connection with financings, net of issuance costs of $24.7 million | $ 82 | 407,395 | 407,477 | ||
Shares issued in connection with financings, net of issuance costs of $24.7 million (in shares) | 8,196 | ||||
Net shares issued in connection with the exercise of stock options and vesting of restricted stock units | $ 9 | 15,397 | 15,406 | ||
Net shares issued in connection with the exercise of stock options and restricted stock units (in shares) | 937 | ||||
Non-cash equity-based compensation | 17,237 | 17,237 | |||
Unrealized losses on securities, net of tax | (588) | (588) | |||
Net income (loss) | 32,779 | 32,779 | |||
Balance at Dec. 31, 2015 | $ 347 | $ 1,233,786 | $ (4,205) | $ (297,664) | $ 932,264 |
Balance (in shares) at Dec. 31, 2015 | 34,733 |
CONSOLIDATED STATEMENTS OF STO7
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Consolidated Statements of Stockholders' Equity | |
Issuance costs associated with financings | $ 24.7 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 32,779 | $ 135,817 | $ (9,602) |
Adjustments to reconcile net income ( loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 69,103 | 6,984 | 3,085 |
Amortization of premium/discount on purchased securities | 2,152 | 2,080 | 2,758 |
Write-down of inventory to net realizable value | 1,235 | 1,309 | 2,175 |
Gain (loss) on disposal of property and equipment | (103) | (924) | |
Non-cash equity-based compensation expense | 17,237 | 8,625 | 8,004 |
Non-cash loss on debt extinguishment | 6,426 | ||
Amortization of debt discount and debt issuance costs | 11,379 | 6,870 | |
Gains on investments, net | (14) | (114) | (40) |
Change in fair value of contingent consideration | 4,271 | (681) | 1,074 |
Deferred income taxes | 5,007 | (153,159) | |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (36,913) | 3,588 | (432) |
Inventories | (5,237) | (1,360) | (1,040) |
Receivable from collaboration | 4,090 | (4,239) | (15) |
Prepaid and other current assets | 4,034 | 2,331 | 2,817 |
Other long-term assets | 9,209 | 1,964 | (1,964) |
Accounts payable and accrued expenses | 7,876 | 10,694 | (5,730) |
Deferred revenues | (22,197) | (8,384) | (6,694) |
Other long-term liabilities | (1,965) | (808) | (246) |
Repayment of term loan attributable to original issue discount | (12,491) | ||
Net cash provided by (used in) operating activities | 95,981 | 11,414 | (6,774) |
Cash flows from investing activities: | |||
Proceeds from sales or maturities of investments | 208,966 | 223,568 | 106,030 |
Purchase of investments | (424,759) | (63,747) | (115,046) |
Change in restricted cash | (195) | 2,883 | (2,823) |
Capital expenditures, net of proceeds from sale of assets | (1,259) | (44) | 1,338 |
Net cash (used in) investing activities | (899,041) | (432,942) | (13,935) |
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 2015 term loan | 344,750 | ||
Proceeds from long-term debt | 490,000 | 327,509 | |
Payment of debt issuance costs | (10,004) | (7,760) | |
Proceeds from issuance of warrants | 25,620 | ||
Purchase of convertible bond hedges | (39,760) | ||
Payment of contingent consideration | (456) | (270) | (51) |
Payment to former CBR shareholders | (7,195) | ||
Proceeds from the exercise of stock options | 15,406 | 8,499 | 1,277 |
Proceeds from the issuance of common stock under ESPP | 176 | ||
Net cash provided by financing activities | 912,469 | 513,838 | 1,402 |
Net increase (decrease) in cash and cash equivalents | 109,409 | 92,310 | (19,307) |
Cash and cash equivalents at beginning of the period | 119,296 | 26,986 | 46,293 |
Cash and cash equivalents at end of the period | 228,705 | 119,296 | 26,986 |
Supplemental data of cash flow information: | |||
Cash paid for taxes | 2,373 | ||
Cash paid for interest | 28,014 | 2,500 | |
Non-cash investing activities: | |||
Fair value of acquisition-related contingent consideration | 205,000 | 13,700 | |
Fair value of common stock issued in connection with the Lumara Health acquisition | 111,964 | ||
Lumara Health | |||
Adjustments to reconcile net income ( loss) to net cash provided by (used in) operating activities: | |||
Change in fair value of contingent consideration | 8,300 | 1,600 | |
Cash flows from investing activities: | |||
Acquisition of Lumara Health, net of acquired cash | 562 | (595,602) | |
CBR Acquisition Holdings Corp | |||
Cash flows from investing activities: | |||
Acquisition of CBR, net | (682,356) | ||
MuGard | |||
Adjustments to reconcile net income ( loss) to net cash provided by (used in) operating activities: | |||
Change in fair value of contingent consideration | $ (4,000) | $ (2,300) | |
Cash flows from investing activities: | |||
Acquisition of MuGard Rights and inventory | $ (3,434) |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2015 | |
Description of Business | |
Description of Business | A. DESCRIPTION OF BUSINESS AMAG Pharmaceuticals, Inc., a Delaware corporation, was founded in 1981. We use our business and clinical expertise to develop and commercialize products 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 our product Makena ® (hydroxyprogesterone caproate injection), which we acquired in November 2014, services related to the collection, processing and storage of umbilical cord blood stem cell and cord tissue units (the “CBR Services”) operated through Cord Blood Registry ® (“CBR”), which we acquired in August 2015, our product Feraheme ® (ferumoxytol) for intravenous (“IV”) use and MuGard ® Mucoadhesive Oral Wound Rinse. We are subject to risks common to companies in the pharmaceutical industry including, but not limited to (as such risks pertain to our business) our dependence on the success of our product portfolio and maintaining commercialization of our products and services, including Makena, the CBR Services and Feraheme ; intense competition, including from generic products; maintaining and defending the proprietary nature of our technology; our dependence upon third-party manufacturers; our reliance on other third parties in our business, including to conduct our clinical trials and undertake our product distribution; our reliance on and the extent of reimbursement from third parties for the use of our products, including Makena ’s high Medicaid reimbursement concentration; the impact of Makena ’s loss of orphan drug exclusivity in February 2018; competition from compounded pharmacies; our ability to implement Makena ’s next generation development programs (which we previously referred to as the lifecycle management program); perceptions related to pricing and access for Makena ; the potential for cord blood stem cell and cord tissue science and its recognition in regenerative medicine; if our storage facility in Tucson, Arizon a is damaged or destroyed; post-approval commitments for Makena ; limitations on Feraheme sales given its narrow chronic kidney disease indication and the potential impact on sales of any actual or perceived safety problems; our ability to receive regulatory approval for Feraheme in the broader iron deficiency anemia indication and Feraheme ’s ability to compete in such market even if regulatory approval is received; our customer concentration, especially with regard to Feraheme ; uncertainties regarding federal and state legislative initiatives; potential inability to obtain raw or other materials; our potential inadvertent failure to comply with federal, state or foreign healthcare fraud and abuse laws, marketing disclosure laws or other federal, state or foreign laws and regulations; uncertainties regarding reporting and payment obligations under government pricing programs and our level of indebtedness, our access to sufficient capital, the availability of net operating loss carryforwards and other tax assets, employee retention, our ability to be profitable in the future, the potential fluctuation of our operating results, potential differences between actual future results and the estimates or assumptions used by us in preparation of our consolidated financial statements, the volatility of our stock price, potential litigation, including securities and product liability suits and the impact of market overhang on our stock price. Throughout this Annual Report on Form 10-K, AMAG Pharmaceuticals, Inc. and our consolidated subsidiaries are collectively referred to as “the Company,” “AMAG,” “we,” “us,” or “our.” |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”) and include the accounts of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Our results of operations for 2015 include the results of CBR, subsequent to August 17, 2015, the date of acquisition. See Note C, “ Business Combinations ,” for additional information. Use of Estimates and Assumptions The preparation of 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; product sales allowances and accruals; investments; inventory; 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; certain accrued liabilities, including clinical trial accruals and restructuring liabilities; 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 at the date of acquisition. We consider all highly liquid investments with a maturity of three months or less as of the acquisition date to be cash equivalents. At December 31, 2015 and December 31, 2014, substantially all of our cash and cash equivalents were held in either commercial bank accounts or money market funds. Investments We account for and classify our investments as either “available-for-sale,” “trading,” or “held-to-maturity,” in accordance with the accounting guidance related to the accounting and classification of certain investments in debt and equity securities. The determination of the appropriate classification by us is based primarily on management’s intent to sell the investment at the time of purchase. As of December 31, 2015 and 2014, all of our investments were classified as available ‑for ‑sale securities. Available ‑for ‑sale securities are those securities which we view as available for use in current operations, if needed. We generally classify our available ‑for ‑sale securities as short ‑term investments, even though the stated maturity date may be one year or more beyond the current balance sheet date. Available ‑for ‑sale investments are stated at fair value with their unrealized gains and losses included in accumulated other comprehensive loss within the consolidated statements of stockholders’ equity, until such gains and losses are realized in other income (expense) within the consolidated statements of operations or until an unrealized loss is considered other ‑than ‑temporary. We recognize other ‑than ‑temporary impairments of our debt securities when there is a decline in fair value below the amortized cost basis and if (a) we have the intent to sell the security or (b) it is more likely than not that we will be required to sell the security prior to recovery of its amortized cost basis. If either of these conditions is met, we recognize the difference between the amortized cost of the security and its fair value at the impairment measurement date in our consolidated statement s of operations. If neither of these conditions is met, we must perform additional analyses to evaluate whether the unrealized loss is associated with the creditworthiness of the issuer of the security rather than other factors, such as interest rates or market factors. If we determine from this analysis that we do not expect to receive cash flows sufficient to recover the entire amortized cost of the security, a credit loss exists, the impairment is considered other-than-temporary and is recognized in our consolidated statements of operations. Fair Value Measurements Under current accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Current accounting guidance establishes a hierarchy used to categorize how fair value is measured and is based on three levels of inputs, of which the first two are considered observable and the third unobservable, as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We hold certain assets and liabilities that are required to be measured at fair value on a recurring basis, including our cash equivalents, investments, and acquisition-related contingent consideration. Inventory Inventory is stated at the lower of cost or market (net realizable value), with approximate cost being determined on a first-in, first-out basis. Prior to initial approval from the FDA or other regulatory agencies, we expense costs relating to the production of inventory in the period incurred, unless we believe regulatory approval and subsequent commercialization of the product candidate is probable and we expect the future economic benefit from sales of the product to be realized, at which point we capitalize the costs as inventory. We assess the costs capitalized prior to regulatory approval each quarter for indicators of impairment, such as a reduced likelihood of approval. We expense costs associated with clinical trial material as research and development expense. On a quarterly basis, we analyze our inventory levels to determine whether we have any obsolete, expired, or excess inventory. If any inventory is expected to expire prior to being sold, has a cost basis in excess of its net realizable value, is in excess of expected sales requirements as determined by internal sales forecasts, or fails to meet commercial sale specifications, the inventory is written-down through a charge to cost of product sales. The determination of whether inventory costs will be realizable requires estimates by management of future expected inventory requirements, based on sales forecasts. Once packaged, Makena currently has a shelf-life of three years and Feraheme has a shelf-life of five years. As a result of comparison to internal sales forecasts, we expect to fully realize the carrying value of our current Makena and Feraheme finished goods inventory. If actual market conditions are less favorable than those projected by management, inventory write-downs may be required. Charges for inventory write-downs are not reversed if it is later determined that the product is saleable. Restricted Cash As of December 31, 2015 and 2014, we classified $2.6 million and $2.4 million as restricted cash, respectively, which included $2.0 million held in a restricted fund previously established by Lumara Health Inc. (“Lumara Health”) in connection with its Chapter 11 plan of reorganization to pay potential claims against its former directors and officers. In addition, the restricted cash balances included a $0.6 million and a $0.4 million security deposit delivered to the landlord of our Waltham, Massachusetts headquarters in the form of an irrevocable letter of credit as of December 31, 2015 and 2014, respectively. 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 December 31, 2015, our cash, cash equivalents and investments amounted to approximately $466.3 million. We currently hold our excess cash primarily in institutional money market funds, corporate debt securities and commercial paper. As of December 31, 2015, approximately $ 73.7 million of our total $228.7 mi llion cash and cash equivalents balance was invested in institutional money market funds, of which $40.7 million was invested in a single fund. Our operations are located entirely within the U.S. We focus on developing, manufacturing, and commercializing Makena and Feraheme, commercializing MuGard , and marketing and selling the CBR Services. We perform ongoing credit evaluations of our product sales 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 2015, 2014 and 2013: Years Ended December 31, 2015 2014 2013 AmerisourceBergen Drug Corporation % % % Takeda Pharmaceuticals Company Limited % % % McKesson Corporation % % % Cardinal Health, Inc. <10 % % % In addition, approximately 26% , 26% and 30% of our Feraheme end-user demand in 2015, 2014 and 2013, respectively, was generated by members of a single group purchasing organization (“GPO”) with whom we have contracted. Revenues from outside of the U.S. amounted to approximately 12% , 12% and 11% of our total revenues for 2015, 2014 and 2013, respectively, and were principally related to deferred Feraheme revenue recognized in connection with the termination of our license, development and commercialization agreement (the “Takeda Agreement”) with Takeda Pharmaceutical Company Limited (“Takeda”), which is headquartered in Japan. Our net accounts receivable were $85.7 million and $38. 2 million as of December 31, 2015 and 2014, respectively, and primarily represented amounts due for products sold directly to wholesalers, distributors and specialty pharmacies and amounts due for CBR Services sold directly to consumers. As part of our credit management policy, we perform ongoing credit evaluations of our product sales customers, and we have not required collateral from any customer. We have not experienced significant bad debts and have not established an allowance for doubtful accounts on our product sales at either December 31, 2015 or 2014. We maintain an allowance for doubtful accounts for estimated losses inherent in our CBR service revenues portfolio. In establishing the allowance, we consider historical losses adjusted to take into account current market conditions and customers’ financial conditions, the amount of receivables in dispute, and the current receivables aging and current payment patterns. Account balances are charged off against the allowance after all collection means have been exhausted and the potential for recovery is considered remote. If the financial condition of any of our significant product sales customers was to deteriorate and result in an impairment of its ability to make payments owed to us, an allowance for doubtful accounts may be required which could have a material effect on earnings in the period of any such adjustment. Customers which represented greater than 10% of our accounts receivable balances as of December 31, 2015 and 2014 were as follows: December 31, 2015 2014 AmerisourceBergen Drug Corporation % % McKesson Corporation <10 % % We are currently 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 support 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. Property, Plant and Equipment Property, plant and equipment are recorded at cost and depreciated when placed into service using the straight-line method based on their estimated useful lives as follows: Useful Life Buildings and improvements 15 - 40 Years Computer equipment and software 5 Years Furniture and fixtures 5 Years Leasehold improvements Lesser of Lease or Asset Life Laboratory and production equipment 5 Years Land improvements 10 Years Costs for capital assets not yet placed in service are capitalized on our balance sheets and will be depreciated in accordance with the above guidelines once placed into service. Costs for maintenance and repairs are expensed as incurred. Upon sale or other disposition of property, plant and equipment, the cost and related depreciation are removed from the accounts and any resulting gain or loss is charged to our consolidated statements of operations. Long-lived assets to be held and used are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their estimated fair values. Assets classified as held for sale are no longer subject to depreciation and are recorded at the lower of carrying value or estimated net realizable value . Business Combinations We account for acquired businesses using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Acquisition-related costs are expensed as incurred. Any excess of the consideration transferred over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Acquisition-Related Contingent Consideration Contingent consideration arising from a business combination is included as part of the purchase price and is recognized at its estimated fair value as of the acquisition date. Subsequent to the acquisition date, we measure contingent consideration arrangements at fair value for each period until the contingency is resolved. These changes in fair value are recognized in selling, general and administrative expenses in our consolidated statements of operations. Changes in fair values reflect new information about the likelihood of the payment of the contingent consideration and the passage of time. Goodwill and Intangible Assets Goodwill is not amortized, but is reviewed for impairment annually as of October 31, or more frequently if indicators of impairment are present. We determine whether goodwill may be impaired by comparing the carrying value of our single reporting unit, including goodwill, to the fair value of the reporting unit. If the fair value is less than the carrying amount, a more detailed analysis is performed to determine whether goodwill is impaired. The impairment loss, if any, is measured as the excess of the carrying value of the goodwill over the fair value of the goodwill and is recorded in our consolidated statements of operations. Finite-lived intangible assets are amortized to their estimated residual values over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When such facts and circumstances exist, management compares the projected undiscounted future cash flows associated with the asset over its estimated useful life against the carrying amount. The impairment loss, if any, is measured as the excess of the carrying amount of the asset over its fair value. Acquired IPR&D represents the fair value assigned to research and development assets that we acquire and have not been completed at the acquisition date. The fair value of IPR&D acquired in a business combination is capitalized on our consolidated balance sheet at the acquisition-date fair value and is determined by estimating the costs to develop the technology into commercially viable products, estimating the resulting revenue from the projects, and discounting the projected net cash flows to present value . IPR&D is not amortized, but rather is reviewed for impairment on an annual basis or more frequently if indicators of impairment are present, until the project is completed or abandoned. If we determine that IPR&D becomes impaired or is abandoned, the carrying value is written down to its fair value with the related impairment charge recognized in our 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. Additionally, we have other indefinite-lived intangible assets which we acquired through our business combinations. These assets are reviewed for impairment on an annual basis or more frequently if indicators of impairment are present. If we determine that the asset becomes impaired, the carrying value is written down to its fair value with the related impairment charge recognized in our consolidated statements of operations in the period in which the impairment occurs. Patents We expense all patent-related costs in selling, general and administrative expenses as incurred. Revenue Recognition and Related Sales Allowances and Accruals Our primary sources of revenue during the reporting period s were: (i) product revenues from Makena and Feraheme ; (ii) service revenues associated with the CBR Services; and (iii) license fee s , collaboration and other revenues, which primarily include d milestone payments received from our collaboration agreements, royalties received from our license agreements, and international product revenues of Feraheme derived from our collaboration agreement with Takeda. 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 Revenue We recognize product revenues net of certain allowances and accruals in our consolidated statements 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. In addition, we also monitor our distribution channel to determine whether additional allowances or accruals are required based on inventory in our sales channel. Calculating these gross to net sales adjustments involves estimates and judgments based primarily on actual product sales data, forecasted customer buying patterns, and market research data related to utilization rates by various end-users. 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. Our product revenues were offset by provisions for allowances and accruals as follows (in thousands): Years Ended December 31, 2015 2014 2013 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 $ $ $ Classification of Product Sales Allowances and Accruals Product sales allowances and accruals are primarily comprised of both direct and indirect fees, discounts and rebates and provisions for estimated product returns. Direct fees, discounts and rebates are contractual fees and price adjustments payable to wholesalers, specialty distributors and other customers that purchase products directly from us. Indirect fees, discounts and rebates are contractual price adjustments payable to healthcare providers and organizations, such as certain physicians, clinics, hospitals, GPOs, and dialysis organizations that typically do not purchase products directly from us but rather from wholesalers and specialty distributors. In accordance with guidance related to accounting for fees and consideration given by a vendor to a customer, including a reseller of a vendor’s products, these fees, discounts and rebates are presumed to be a reduction of the selling price. Product sales allowances and accruals are based on definitive contractual agreements or legal requirements (such as Medicaid laws and regulations) related to the purchase and/or utilization of the product by these entities and are recorded in the same period that the related revenue is recognized. We estimate product sales allowances and accruals using either historical, actual and/or other data, including estimated patient usage, applicable contractual rebate rates, contract performance by the benefit providers, other current contractual and statutory requirements, historical market data based upon experience of our products and other products similar to them, specific known market events and trends such as competitive pricing and new product introductions, current and forecasted customer buying patterns and inventory levels, and the shelf life of our products. As part of this evaluation, we also review changes to federal and other legislation, changes to rebate contracts, changes in the level of discounts, and changes in product sales trends. Although allowances and accruals are recorded at the time of product sale, certain rebates are typically paid out, on average, up to three months or longer after the sale. Allowances against receivable balances primarily relate to prompt payment discounts, provider chargebacks and certain government agency rebates and are recorded at the time of sale, resulting in a reduction in product sales revenue and the reporting of product sales receivables net of allowances. Accruals related to Medicaid and provider volume rebates, wholesaler and distributor fees, GPO fees, other discounts to healthcare providers and product returns are recorded at the time of sale, resulting in a reduction in product sales and the recording of an increase in accrued expenses. Discounts We typically offer a 2% prompt payment discount to our customers as an incentive to remit payment in accordance with the stated terms of the invoice, generally thirty days. Because we anticipate that those customers who are offered this discount will take advantage of the discount, we accrue 100% of the prompt payment discount at the time of sale, based on the gross amount of each invoice. We adjust the accrual quarterly to reflect actual experience. Chargebacks Chargeback reserves represent our estimated obligations resulting from the difference between the prices at which we sell our products to wholesalers and the sales price ultimately paid to wholesalers under fixed price contracts by third-party payers, including governmental agencies. We determine our chargeback estimates based on actual product sales data and forecasted customer buying patterns. Actual chargeback amounts are determined at the time of resale to the qualified healthcare provider, and we generally issue credits for such amounts within several weeks of receiving notification from the wholesaler. Estimated chargeback amounts are recorded at the time of sale, and we adjust the allowance quarterly to reflect actual experience. Distributor/Wholesaler and Group Purchasing Organization Fees Fees under our arrangements with distributors and wholesalers are usually based upon units of product purchased during the prior month or quarter and are usually paid by us within several weeks of our receipt of an invoice from the wholesaler or distributor, as the case may be. Fees under our arrangements with GPOs are usually based upon member purchases during the prior quarter and are generally billed by the GPO within 30 days after period end. Current accounting standards related to consideration given by a vendor to a customer, including a reseller of a vendor’s products, specify that cash consideration given by a vendor to a customer is presumed to be a reduction of the selling price of the vendor’s products or services and therefore should be characterized as a reduction of product sales. Consideration should be characterized as a cost incurred if we receive, or will receive, an identifiable benefit (goods or services) in exchange for the consideration and we can reasonably estimate the fair value of the benefit received. Because the fees we pay to wholesalers do not meet the foregoing conditions to be characterized as a cost, we have characterized these fees as a reduction of product sales and have included them in government and other rebates in the table above. We generally pay such amounts within several weeks of our receipt of an invoice from the distributor, wholesaler or GPO. Accordingly, we accrue the estimated fee due at the time of sale, based on the contracted price invoiced to the customer. We adjust the accrual quarterly to reflect actual experience. Product Returns Consistent with industry practice, we generally offer our wholesalers, specialty distributors and other customers a limited right to return our products based on the product’s expiration date. Currently the expiration dates for Feraheme and Makena are five years and three years , respectively. We estimate product returns based on the historical return patterns and known or expected changes in the marketplace. We track actual returns by individual production lots. Returns on lots eligible for credits under our returned goods policy are monitored and compared with historical return trends and rates. We expect that wholesalers and healthcare providers will not stock significant inventory due to the cost of the product, the expense to store our products, and/or that our products are readily available for distribution. We record an estimate of returns at the time of sale. If necessary, our estimated rate of returns may be adjusted for actual return experience as it becomes available and for known or expected changes in the marketplace. During 2014, we reduced our reserve for Feraheme product returns by approximately $1.8 million, primarily as a result of a lower than expected rate of product returns. We did not significantly adjust our reserve for product returns during 2015 or 2013. The reduction of our reserve had an impact of increasing our 2014 net income by $0.08 and $0.07 per basic and diluted share, respectively. To date, our product returns of Feraheme have been relatively limited; however, returns experience may change over time. As we continue to gain more historical experience with actual returns and continue to gain additional experience with return rates for Makena , we may be required to make a future adjustment to our product returns estimate, which would result in a corresponding change to our net product sales in the period of adjustment and could be significant. Government and Other Rebates Government and other rebate reserves relate to our reimbursement arrangements with state Medicaid programs, and contractual or performance rebate agreements with certain classes of trade. We determine our estimates for Medicaid rebates, if applicable, based on actual product sales data and our historical product claims experience. In estimating these reserves, we provide for a Medicaid rebate associated with both those expected instances where Medicaid will act as the primary insurer as well as in those instances where we expect Medicaid will act as the secondary insurer. For rebates associated with reaching defined performance goals, we determine our estimates using actual product sales data and forecasted customer buying and utilization patterns. Rebate amounts generally are invoiced quarterly and are paid in arrears, and we expect to pay such amounts within several weeks of notification by the Medicaid or provider entity. Estimated government and other rebates are recorded at the time of sale and, with the exception of Medicaid as discussed below, we adjust the accrual quarterly to reflect actual experience. During 2013, we revised our estimated Feraheme Medicaid reserve rate based on actual product-specific rebate claims received since the 2009 launch of Feraheme , our expectations of state level activities, and estimated rebate claims not yet submitted, which resulted in a reduction of our then estimated Medicaid rebate reserve related to prior period Feraheme sales of $0.6 million. These changes in estimates were reflected as an increase in our net product sales for 2013 and resulted in a reduction to our gross to net percentages in 2013. The reduction of our estimated Medicaid rebate reserve had an impact of $0.03 per basic and diluted share in 2013. We did not significantly adjust our Medicaid rebate reserve during 2015 and 2014. We regularly assess our Medicaid reserve balance and the rate at which we accrue for claims against product sales. If we determine in future periods that our actual rebate experience is not indicative of expected claims, if actual claims experience changes, or if other factors affect estimated claims rates, we may be required to adjust our current Medicaid accumulated reserve estimate, which would affect net product sales in the period of the adjustment and could be significant. Multiple Element Arrangements We evaluate revenue from arrangements that have multiple elements to determine whether the components of the arrangement represent separate units of accounting as defined in the accounting guidance related to revenue arrangements with multiple deliverables. Under current accounting guidance, which governs any agreements that contain multiple elements that are either entered into or materially modified subsequent to January 1, 2011, companies are required to establish the selling price of its products and services based on a separate revenue recognition process using management’s best estimate of the selling price when there is no vendor-specific objective evidence or third-party evidence to determine the selling price of that item. If a delivered element is not considered to have standalone value, all elements of the arrangement are recognized as revenue as a single unit of accounting over the period of performance for the last such undelivered item or services. Significant management judgment is required in determining what elements constitute deliverables and what deliverables or combination of deliverables should be considered units of accounting. When multiple deliverables are combined and accounted for as a single unit of accounting, we base our revenue recognition pattern on the last to be delivered element. Revenue is recognized using either a proportional performance or straight-line method, depending on whether we can reasonably estimate the level of effort required to complete our performance obligations under an arrangement and whether such performance obligations are provided on a best-efforts basis. To the extent we cannot reasonably estimate our performance obligations, we recognize revenue on a straight-line basis over the period we expect to complete our performance obligations. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which we are expected to complete our performance obligations under an arrangement. We may have to revise our estimates based on changes in the expected level of effort or the period we expect to complete our performance obligations. For multiple element arran |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations | |
Business Combinations | C. BUSINESS COMBINATIONS As part of our strategy to expand our portfolio, in August 2015, we acquired CBR and in November 2014, we acquired Lumara Health and its product Makena . In addition, in June 2013, we entered into a license agreement (the “ MuGard License Agreement ”) with Abeona Therapeutics, Inc. (“Abeona”) (formerly known as PlasmaTech Biopharmaceuticals, Inc. and Access Pharmaceuticals, Inc.) pursuant to which we acquired the U.S. commercial rights to MuGard for the management of oral mucositis and stomatitis (the “MuGard Rights”). CBR Acquisition On August 17, 2015 (the “CBR Acquisition Date”) , we acquired CBR from CBR Acquisition Holdings Corp. 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. 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. The following table summarizes the components of the total purchase price paid for CBR, as adjusted for the final net working capital, indebtedness and other adjustments (in thousands): Total Acquisition Date Fair Value Cash consideration $ Estimated working capital, indebtedness and other adjustments Purchase price paid at closing Cash paid on finalization of the net working capital, indebtedness and other adjustments Total purchase price $ The following table summarizes the preliminary fair values assigned to the CBR assets acquired and liabilities assumed by us along with the resulting goodwill at the CBR Acquisition Date (in thousands): Total Acquisition Date Fair Value Accounts receivable $ Inventories Prepaid and other current assets Restricted cash - short-term Property, plant and equipment Customer relationships Trade name and trademarks Favorable lease asset Deferred income tax assets Other long-term assets Accounts payable Accrued expenses Deferred revenues - short-term Payable to former CBR shareholders Deferred income tax liabilities Other long-term liabilities Total estimated identifiable net assets $ Goodwill Total $ Measurement period adjustments recorded in the fourth quarter of 2015, which are reflected in the table above, consisted primarily of reductions to accounts receivable, inventories, prepaid and other current assets and property, plant and equipment totaling $1.9 million and increases to accrued expenses and long-term liabilities totaling $0.5 million, which resulted in an increase to goodwill of $1.8 million, net of $0.6 million of deferred taxes. These measurement period adjustments have been reflected as current period adjustments in the fourth quarter of 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 early adopted in the third quarter of 2015. Any remaining 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 of $11.7 million was adjusted to its fair value of $8.7 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). 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, 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 also an income approach. 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 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 fair value adjustments primarily related to deferred revenue and identifiable intangible assets acquired, we recorded a net deferred tax liability of $144.3 million in our consolidated balance sheet as of December 31, 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 $5.2 million of deferred tax assets acquired from CBR. These tax estimates are preliminary and subject to change based on, among other things, any adjustments to management’s 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 recorded 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. We incurred approximately $11.2 million of acquisition-related costs in 2015 related to the CBR acquisition. These costs primarily represented financial advisory fees, legal fees, due diligence and other costs and expenses. 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 2015 condensed consolidated statement of operations and paid in the third quarter of 2015. During the post-acquisition period in 2015, CBR generated approximately $24.1 million of revenue. Separate disclosure of CBR’s earnings for the post-acquisition period in 2015 is not practicable due to the integration of CBR’s operations into our business upon acquisition. Lumara Health Acquisition On November 12, 2014 ( the “ Lumara Health Acquisition Date”), 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 and other adjustments, and issued approximately 3.2 million shares of our common stock, having a value of approximately $112.0 million at the time of closing, to the holders of common stock of Lumara Health. The acquisition of Lumara Health provided a strategic commercial entry into the maternal health business. The addition of Lumara Health’s rapidly growing Makena product, the only FDA-approved therapy to reduce the risk of preterm birth in certain at-risk women, added a complementary commercial platform to our portfolio and transformed us into a multi-product specialty pharmaceutical company. We 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 as follows: · A one-time payment of $100.0 million payable upon achievement of $300.0 million in aggregate net sales in any consecutive 12 - month period, commencing in the month f ollowing the Lumara Health Acquisition Date (“the First Milestone”); plu s · A one-time payment of $100.0 million payable upon achievement of $400.0 million in aggregate net sales in any consecutive 12 -month period commencing in the month following the last month in the First Milestone period (the “Second Milestone”); if the Third Milestone payment (described below) has been or is required to be made prior to achieving the Second Milestone, the Second Milestone payment shall be reduced from $100.0 million to $50.0 million; plus · A one-time payment of $50.0 million payable if aggregate net sales equal or exceed $700.0 million in any consecutive 24 calendar month period (which may include the First Milestone period) (the “Third Milestone”); however, no Third Milestone payment will be made if the Second Milestone payment has been or is required to be made in the full amount of $100.0 million; plus · A one-time payment of $100.0 million payable upon achievement of $500.0 million in aggregate net sales in any consecutive 12 month period commencing in the month following the last month in the Second Milestone period (the “Fourth Milestone”); plus · A one-time payment of $50.0 million payable upon achievement of $200.0 million in aggregate net sales in each of the five (5) consecutive calendar years from and including the 2015 calendar year to the 2019 calendar year (the “Fifth Milestone”). In the event that the conditions to more than one contingent payment are met in any calendar year, any portion of the total amount of contingent payment due in such calendar year in excess of $100.0 million shall be deferred until the next calendar year in which less than $100.0 million in contingent payments is due. This contingent consideration is recorded as a liability and measured at fair value based upon significant unobservable inputs. 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): Total Acquisition Date Fair Value 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 $ At the closing, $35.0 million of the cash consideration was contributed to a separate escrow fund (the “Indemnification Escrow”) to secure the former Lumara Health security holders’ obligations to indemnify us for certain matters, including breaches of representations and warranties, covenants included in the Lumara Agreement, payments made by us to dissenting stockholders, specified tax claims, excess parachute claims, and certain claims related to the Women’s Health D ivision of Lumara Health, which was divested by Lumara Health prior to the closing. The portion of the Indemnification Escrow that has not been reduced by any claims by us and is not subject to any unresolved claims will be released to the former Lumara Health security holders at the earlier of (a) March 15, 2016 or (b) five days after the date on which our audited financial statements for our fiscal year ending December 31, 2015 are filed with the Securities and Exchange Commission. The fair value of the 3.2 million shares of AMAG common stock was determined based on the closing price of our common stock on the NASDAQ Global Select Market (“NASDAQ”) of $34.88 per share on November 11, 2014, the closing price immediately prior to the closing of the transaction. The fair value of the contingent milestone payments was determined based on our probability-adjusted discounted cash flows estimated to be realized from the net sales of Makena from December 1, 2014 through December 31, 2019. The cash flows were discounted at a rate of 5% , which we believe is reasonable given the level of certainty of the pay-out. The following table summarizes the fair values assigned to assets acquired and 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 2015 (in thousands): Total Acquisition Date Fair Value Accounts receivable $ Inventories Prepaid and other current assets Deferred income tax assets Property and equipment Makena Base Technology 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 $ During 2015, we finalized the fair values assigned to the assets acquired and liabilities assumed by us at the Lumara Health Acquisition Date. The measurement period adjustments recorded in 2015 consisted primarily of a $7.2 million reduction to our Makena revenue reserves and a $5.4 million reduction related to net deferred tax liabilities, partially offset by a $4.5 million increase in the purchase price associated with the final settlement of net working capital with the former stockholders. These measurement period adjustments have been reflected as current period adjustments during 2015 in accordance with the guidance in ASU 2015-16. The gross contractual amount of accounts receivable at the Lumara Health Acquisition Date was $40.5 million. The $30.3 million fair value of inventories included a fair value step-up adjustment of $26.1 million, which will be amortized and recognized as cost of product sales in our consolidated statements of operations as the related inventories are sold. We recognized $11.6 million and $1.3 million of the fair value adjustment as cost of product sales during the years ended December 31, 2015 and December 31, 2014, respectively. An additional $1.2 million of the fair value adjustment was recognized as research and development expense during the year ended December 31, 2015. The remaining $12.0 million is estimated to be recognized as follows: $4.8 million in 2016, $4.0 million in 2017 and $3. 2 million in 2018. The fair value amounts for the Makena base technology (“Makena Base Technology”) and IPR&D 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). We determined the fair value of the Makena Base Technology and the IPR&D using the income approach. Some of the more significant assumptions used in the income approach for these assets include the estimated net cash flows for each year for each project or product, the discount rate that measures the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, competitive trends impacting the asset and each cash flow stream as well as other factors, including the major risks and uncertainties associated with the timely and successful completion of the IPR&D projects, such as legal and regulatory risk. The fair value of the acquired IPR&D asset represents the value assigned to acquired research and development projects that, as of the Lumara Health Acquisition Date, had not established technological feasibility and had no alternative future use, including certain programs associated with the Makena next generation development programs to extend the brand franchise beyond the February 2018 exclusivity date, such as new routes of administration, the use of new delivery technologies, as well as reformulation technologies. We believe the fair values assigned to the Makena Base Technology and IPR&D assets are based upon reasonable estimates and assumptions given available facts and circumstances as of the Lumara Health Acquisition Date. If these assets are not successful or successfully developed, sales and profitability may be adversely affected in future periods, and as a result, the value of the assets may become impaired. Both AMAG and Lumara Health had deferred tax assets for which full valuation allowances were provided in the pre-acquisition financial statements. However, we considered certain of the deferred tax liabilities recorded in acquisition accounting as sources of income to support realization of Lumara Health’s deferred tax assets. We recorded a net deferred tax liability of $193.3 million in our consolidated balance sheet in acquisition accounting using a combined federal and state statutory income tax rate of 38.8% . The net deferred tax liability represents the $295.7 million of deferred tax liabilities recorded in acquisition accounting (primarily related to the fair value adjustments to Lumara Health’s inventories and identifiable intangible assets) offset by $102.4 million of deferred tax assets acquired from Lumara Health which we have determined, are ‘more likely than not’ to be realized. See Note J, “ Income Taxes ,” for additional information. We incurred approximately $9.5 million of acquisition-related costs in 2014 related to the acquisition of Lumara Health. These costs primarily represented financial advisory fees, legal fees, due diligence and other costs and expenses. During the post-acquisition period in fiscal 2014, Lumara Health generated $22.5 million of revenue from sales of Makena . Separate disclosure of Lumara Health’s earnings for the post-acquisition period in fiscal 2014 is not practicable due to the integration of Lumara Health’s operations into our business upon acquisition. 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 CBR and Lumara Health, 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 2015, such as the $11.2 million of acquisition-related costs, the $10.4 million loss on debt extinguishment, and $9.2 million of other one-time fees and expens es incurred in connection with the CBR acquisition financing, are excluded from 2015 and reflected in 2014. In addition, certain items recorded in 2014, such as the $153.2 million tax benefit and the $9.5 million of acquisition-related costs incurred in connection with the acquisition of Lumara Health , are excluded from 2014 and reflected in 2013. Further, the pro forma combined net income (loss) in fiscal 2013 does not give effect to the elimination of approximately $385.9 million of non-recurring reorganization gains, net of losses and expenses, realized in connection with Lumara Health’s exit from bankruptcy in September 2013 as such amounts are not directly related to the acquisition of Lumara Health. The pro forma amounts do not include any expected cost savings or restructuring actions which may be achievable or may occur subsequent to the acquisition of Lumara Health or CBR, or the impact of any non-recurring activity. The following table presents the unaudited pro forma consolidated results (in thousands): Years Ended December 31, 2015 2014 2013 Pro forma combined revenues $ $ $ Pro forma combined net income (loss) $ $ $ 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, to historical depreciation of property, plant and equipment, and reductions to historical CBR revenues due to fair value purchase accounting adjustments to intangible assets, property, plant and equipment and deferred revenue. In addition, the pro forma combined net income (loss) includes increased interest expense due to the increase in term loan bor rowings and the issuance of $500.0 million aggregate principal amount of 7.875% Senior Notes due 2023 (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 In connection with the CBR acquisition, we recognized $441.1 million of goodwill, primarily due to the synergies expected from combining our operations with CBR and to deferred tax liabilities recorded on the fair value adjustments, primarily those relating to intangible assets and deferred revenue. In connection with the Lumara Health acquisition, we recognized $198.1 million of goodwill, primarily due to the net deferred tax liabilities recorded on the fair value adjustments to Lumara Health’s inventories and identifiable intangible asset. The $639.2 million of goodwill resulting from the CBR and Lumara Health acquisitions is not deductible for income tax purposes. MuGard License Agreement In June 2013, we entered into the MuGard License Agreement with Abeona , under which we obtained an exclusive, royalty ‑bearing license, with the right to grant sublicenses, to certain intellectual property rights, including know ‑how, patents and trademarks, to use, import, offer for sale, sell, manufacture and commercialize MuGard in the U.S. and its territories (the “U.S. Territory ”) . In consideration for the license, we paid Abeona an upfront payment of $3.3 million on June 6, 2013 (the “MuGard License Date”). We are required to pay royalties to Abeona on future net sales of MuGard until the later of (a) the expiration of the licensed patents or (b) the tenth anniversary of the first commercial sale of MuGard under the MuGard License Agreement in the U.S. Territory (“the “ MuGard Royalty Term”). These tiered, double-digit royalty rates decrease for any part of the MuGard Royalty Term occurring after the expiration of the licensed patents and are subject to off-set against certain of our expenses. After the expiration of the MuGard Royalty Term, the license shall become a fully paid-up, royalty-free and perpetual license in the U.S. Territory. We did not assume any pre-existing liabilities related to the MuGard business, contingent or otherwise, arising prior to the MuGard License Date. We accounted for the acquisition of the MuGard Rights as a business combination under the acquisition method of accounting since we acquired the U.S. commercial rights for MuGard and inventory, and obtained access to certain related regulatory assets and product supply, employees and other assets, including certain patent and trademark rights, contracts, and related books and records, held by Abeona, which are exclusively related to MuGard . In addition, during the term of the MuGard License Agreement, we will have control over sales, distribution and marketing of MuGard in the U.S. as Abeona has assigned to us all of its right, title and interest in MuGard -related internet and social media outlets and other sales, marketing and promotional materials currently owned or controlled by Abeona. Abeona will no longer commercialize, market, promote, sell or make public communications relating to MuGard in the U.S Territory, except as may be agreed to by us. Abeona has also agreed to not, directly or indirectly, research, develop, market, sell or commercialize any medical devices that directly compete with MuGard for the treatment of any diseases or conditions of the oropharyngeal cavity in the U.S. Territory. The following table summarizes the total consideration for the MuGard Rights (in thousands): Total Acquisition Date Fair Value Cash $ Acquisition-related contingent consideration Total consideration $ During 2013, we completed the valuation for the acquisition of the MuGard Rights and determined the fair value of the contingent consideration and the intangible asset as of the MuGard License Date to be $13.7 million and $ 16.9 million, respectively. The acquisition date fair value of the contingent consideration was determined based on various market factors, including an analysis of estimated sales and using a discount rate of approximately 15% . The following table summarizes the fair values of the assets acquired related to the business combination as of the MuGard License Date (in thousands): Total Acquisition Date Fair Value MuGard intangible asset $ Inventory Total identifiable assets acquired $ We incurred approximately $0.8 million of acquisition-related costs in 2013, which were primarily related to professional and legal fees. Pro forma results of operations would not be materially different as a result of the acquisition of the MuGard Rights and therefore are not presented. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments | |
Investments | D. INVESTMENTS As of December 31, 2015 and 2014, our investments equaled $237.6 million and $ 24.9 million , respectively, and consisted of securities classified as available-for-sale in accordance with accounting standards which provide guidance related to accounting and classification of certain investments in debt and equity securities. The following is a summary of our investments as of December 31, 2015 and 2014 (in thousands): December 31, 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 Municipal securities Due in one year or less — — 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 $ $ $ $ Impairments and Unrealized Gains and Losses on Investments We did not recognize any other-than-temporary impairment losses in our consolidated statements of operations related to our securities during 2015, 2014 or 2013. We considered various factors, including the length of time that each security was in an unrealized loss position and our ability and intent to hold these securities until the recovery of their amortized cost basis occurs. As of December 31, 2015, none of our investments has been in an unrealized loss position for more than one year. Future events may occur, or additional information may become available, which may cause us to identify credit losses where we do not expect to receive cash flows sufficient to recover the entire amortized cost basis of a security and 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 | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | E. FAIR VALUE MEASUREMENTS The following tables represent the fair value hierarchy as of December 31, 2015 and 2014, for those assets and liabilities that we measure at fair value on a recurring basis (in thousands): Fair Value Measurements at December 31, 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 — — 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 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 — — 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 and do not have any restrictions on redemption. 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 December 31, 2015 or 2014. In addition, there were no transfers or reclassifications of any securities between Level 1 and Level 2 during 2015 or 2014. Contingent consideration We accounted for the acquisitions of each of Lumara Health, CBR and the MuGard Rights as business combinations under the acquisition method of accounting. Additional details regarding our acquisitions and license agreements 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 classified as Level 3 assets under the fair value hierarchy as these assets have been valued using unobservable inputs. 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 obligat ions related to the acquisition of Lumara Health and the MuGard Rights (in thousands): Balance as of January 1, 2014 $ Payments made Adjustments to fair value of contingent consideration Acquisition date fair value of Lumara Health contingent consideration Other adjustments Balance as of December 31, 2014 $ Payments made Adjustments to fair value of contingent consideration Other adjustments Balance as of December 31, 2015 $ The $4.3 million increase in adjustments to the fair value of the contingent consideration liability in 2015 were due primarily to a $8.3 million increase to the Makena contingent consideration related to the time value of money, partially offset by a $4.0 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 Lic ense Agreement as a result of an update to the total forecasted net sales for MuGard . During 2014, we also revised our forecast of total projected net sales for MuGard and reassessed the fair value of the contingent consideration liability related to the MuGard Rights. As a result, we reduced our contingent consideration liability by $2.3 million for year ended December 31, 2014. This reduction was partially offset by a $1.6 million increase to the Makena contingent consideration liability related to the time value of money. These adjustments we re included in selling, general and administrative expenses in our consolidated statements of operations. We have classified $96.4 million of the Makena contingent consideration and $0.6 million of the MuGard contingent consideration as short-term liabilities in our consolidated balance sheet as of December 31, 2015. The fair value of the contingent milestone payments payable by us to the former stockholders of Lumara Health was determined based on our probability-adjusted discounted cash flows estimated to be realized from the net sales of Makena from December 1, 2014 through December 31, 2019. The cash flows were discounted at a rate of 5% , which we believe is reasonable given the estimated likelihood of the pay-out. As of December 31, 2015, the total undiscounted milestone payment amounts we could pay in connection with the Lumara Health acquisition is $350.0 million over the period from December 1, 2014 to December 31, 2019. 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 December 31, 2015, we estimate that the undiscounted royalty amounts we could pay under the MuGard License Agreement, based on current projections, may range from $9 .0 million to $13.0 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, 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 December 31, 2015, the estimated fair value of our 2023 Senior Notes was $437.5 million. As of December 31, 2015 and 2014, the estimated fair value of our 2.5% Convertible Notes was approximately $246.0 million and $332.0 million, respectively, which differed from their carrying values. In addition, the estimated fair value of our 2015 and 2014 term loan facilities was $337.8 million and $342.0 million, which differed from their carry values. See Note R, " Debt " for additional information on our debt obligations. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2015 | |
Inventories | |
Inventories | F. INVENTORIES Our major classes of inventories were as follows as of December 31, 2015 and 2014 (in thousands): December 31, 2015 2014 Raw materials $ $ Work in process Finished goods Inventories included in current assets Included in other long-term assets: Raw materials — Total inventories $ $ Total inventories as of December 31, 2015 decreased by $7.8 million as compared to 2014 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. Additionally, d uring 2015 we expensed $3.6 million of Makena inventory and $1.0 million of Feraheme commercial inventory, respectively, which may not be saleable and which was recorded in cost of product sales in our consolidated statements of operations. The $3.6 million of expensed Makena inventory included a fair value adjustment of $3.3 million. During 2014, we expensed $0.7 million of Feraheme commercial inventory, which we determined would be solely used in development activities at our third-party suppliers and which we recorded in research and development expenses in our consolidated statements of operations. As of December 31, 2015, we believed that FDA approval and subsequent commercialization of the single-dose preservative-free formulation of Makena was probable and therefore capitalized approximately $3.8 million of inventory related to the single-dose preservative-free formulation of Makena , which included a fair value adjustment of $1.5 million. In February 2016, we received FDA approval for the single-dose formulation of Makena for inventory produced at Hospira, Inc. and we expect to begin commercialization of it in the second quarter of 2016. In the fourth quarter of 2014, we recorded the acquired Makena inventory at fair value of $30.3 million, which required a $26.1 million step-up adjustment to recognize the inventory at its expected net realizable value. We are amortizing and recognizing the step-up adjustment as cost of product sales in our consolidated statements of operations as the related inventories are sold and we record step-up costs associated with clinical trial material as research and development expense . See Note C, " Business Combinations ," for additional information. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment, Net | |
Property and Equipment, Net | G. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following as of December 31, 2015 and 2014 (in thousands): December 31, 2015 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 $ $ During 2015, we acquired land and a building in Tucson, Arizona as well as other fixed assets in connection with the CBR acquisition. During 2015, 2014 and 2013 we incurred $3.9 million, $0.5 million and $3.0 million of depreciation expense, respectively. The $3.0 million of depreciation expense in 2013 included $1.9 million of accelerated depreciation expense related to fixed assets at our prior office facility that was sold. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets, Net | |
Goodwill, IPR&D and Other Intangible Assets, Net | H. GOODWILL AND INTANGIBLE ASSETS, NET Goodwill Our goodwill balance consisted of the following (in thousands): Balance at January 1, 2014 $ — Goodwill acquired through Lumara Health acquisition Balance as of December 31, 2014 Goodwill acquired through CBR acquisition Measurement period adjustments related to Lumara Health acquisition Balance as of December 31, 2015 $ The measurement period adjustments related to the Lumara Health acquisition were comprised primarily of a $7.2 million reduction associated with adjustments to our Makena revenue reserves and a $5.4 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 current period adjustments have been recorded in accordance with the guidance in ASU 2015-16, which we early adopted in 2015. As of December 31, 2015, we had no accumulated impairment losses related to goodwill. See Note C, “ Business Combinations, ” for additional information. Intangible Assets As of December 31, 2015 and 2014, our identifiable intangible assets consisted of the following (in thousands): December 31, 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 int angible assets $ $ $ $ $ $ As of December 31, 2015, the weighted average remaining amortization period for our finite-lived intangible assets was 8.9 years. The Makena Base Technology and IPR&D intangible assets were acquired in November 2014 in connection with our acquisition of Lumara Health . Amortization of the Makena Base Technology 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 CBR intangible assets (the CBR customer relationships, favorable lease and trade names and trademarks) 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. 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. We have assessed the MuGard Rights for potential impairment at December 31, 2015 and concluded that the projected undiscounted cash flows continued to exceed the carrying value of this intangible asset. However, if we are not able to expand reimbursement and coverage for MuGard as planned and therefore revenues do not increase as projected, this intangible may be subject to future potential impairment. See Note C, “ Business Combinations ,” for additional information on our intangible assets. Total amortization expense for 2015, 2014 and 2013 was $53.5 million, $5.1 million, and less than $0.1 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 consolidated statements of operations. Amortization expense for CBR related intangibles is recorded in selling, general and administrative expenses in our 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 Year Ending December 31, 2016 $ Year Ending December 31, 2017 Year Ending December 31, 2018 Year Ending December 31, 2019 Year Ending December 31, 2020 Thereafter Total $ |
Current and Long- Term Liabilit
Current and Long- Term Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Current and Long-Term Liabilities | |
Current and Long-Term Liabilities | I. CURRENT AND LONG-TERM LIABILITIES Accrued Expenses Accrued expenses consisted of the following as of December 31, 2015 and 2014 (in thousands): December 31, 2015 2014 Commercial rebates, fees and returns $ $ Professional, license, and other fees and expenses Interest expense Salaries, bonuses, and other compensation Restructuring expense Total accrued expenses $ $ Deferred Revenues Our deferred revenues balance as of December 31, 2015 is primarily related to our CBR service revenues and 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. Our deferred revenues balance as of December 31, 2014 included amortization of upfront payments and milestone payments recognized under the Takeda Agreement , under which Takeda had exclusive rights to develop and commercialize Feraheme as a therapeutic agent in certain agreed-upon territories outside of the U.S. In December 2014, we entered into a termination agreement with Takeda (the “Takeda Termination Agreement”), which terminated the obligations between the parties on a rolling basis, with final termination effective in June 2015. In connection with the final termination of the Takeda Agreement, in 2015 we recognized into revenues the remaining balance of $44.4 million of deferred revenue related to the upfront and milestone payments we received from Takeda during the life of the agreement and recorded it in license fee, collaboration and other revenues in our 2015 consolidated statement of operations. Other Long ‑Term Liabilities Other long-term liabilities at December 31, 2015 and 2014 consisted of deferred rent related to the lease of our principal executive offices in Waltham, Massachusetts as well as our lease obligations assumed under the lease of Lumara Health’s former principal executive offices in St. Louis, Missouri, which was terminated in May 2015. In addition, other long-term liabilities include future payments to be made to certain states in compliance with a 2011 Lumara Health Settlement Agreement with the Department of Justice, which resolved certain claims under the qui tam provisions of the False Claims Act. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | J. INCOME TAXES For the years ended December 31, 2015, 2014, and 2013, all of our profit or loss before income taxes was from U.S. operations. The income tax expense (benefit) consisted of the following (in thousands): Years Ended December 31, 2015 2014 2013 Current: Federal $ — $ — $ — State — — Total current $ $ — $ — Deferred: Federal $ $ $ — State — Total deferred $ $ $ — Total income tax expense (benefit) $ $ $ — The reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate wa s as follows: Years Ended December 31, 2015 2014 2013 Statutory U.S. federal tax rate % % % State taxes, net of federal benefit Equity-based compensation expense Contingent consideration — Transaction costs — Other permanent items, net Tax credits Valuation allowance Other, net — — Effective tax rate % % % For the year ended December 31, 2015, we recogni zed income tax expense of $7.1 million, representing an effective tax rate of 17.7%. The difference between the expected statutory federal tax rate of 35.0% and the 17.7% effective tax rate for 2015 was primarily attributable to the impact of a valuation allowance release related to certain deferred tax assets, partially offset by non-deductible transaction costs associated with the acquisition of CBR, and non-deductible contingent consideration expense associated with Lumara Health. We released a portion of our valuation allowance for the year ended December 31, 2014, due to taxable temporary differences available as a source of income as a result of the Lumara Health acquisition. As of December 31, 2014, we maintained a partial valuation allowance as we benefitted only those deferred tax assets to the extent that existing taxable temporary differences could be used as a source of future income to realize the benefits of those deferred tax assets. During the year ended December 31, 2015, we achieved a positive income position, and also acquired additional taxable temporary differences available as a source of income as a result of the CBR acquisition. Based primarily on this evidence, we have concluded that the majority of our deferred tax assets are more likely than not to be realized. For the year ended December 31, 2014, we recognized an income tax benefit of $153.2 million, representing an effective tax rate of (883.2%) . The difference between the statutory tax rate and the effective tax rate was attributable to a non-recurring benefit of $153.2 million for the release of a portion of the valuation allowance due to taxable temporary differences available as a source of income to realize the benefit of certain pre-existing AMAG deferred tax assets as a result of the Lumara Health acquisition. Excluding the impact of this item, our overall tax provision and effective tax rate would have been zero. Other factors resulting in a difference between the statutory tax rate and the effective tax rate included certain non-deductible stock compensation expenses, non-deductible transaction costs and contingent consideration associated with the acquisition of Lumara Health, and other non-deductible expenses for tax purposes. We did not recognize any federal or state income tax expense or benefit for the year ended December 31, 2013 as we were subject to a full valuation allowance. See Note C, “ Business Combinations ,” for more information on the Lumara Health and CBR acquisitions. Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using future enacted rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2015, we elected to early adopt new guidance issued by the FASB in November 2015 (ASU 2015-17), which simplifies the presentation of deferred income taxes by eliminating the need for entities to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. We adopted this guidance prospectively and, as a result, prior consolidated balance sheets were not retrospectively adjusted. As of December 31, 2014, we allocated the valuation allowance between current and noncurrent deferred tax assets and liabilities. As a result of this allocation, we had recorded a long-term deferred tax liability of $77.6 million and a short-term deferred tax asset of $32.1 million on the balance sheet. The components of our deferred tax assets and liabilities we re as follows (in thousands): December 31, 2015 2014 Assets Net operating loss carryforwards $ $ Tax credit carryforwards Deferred revenue Equity-based compensation expense Capitalized research & development Intangibles — Debt instruments — Reserves Property, plant and equipment — Other Liabilities Property, plant and equipment depreciation — Intangible assets and inventory Debt instruments — Other Valuation allowance Net deferred taxes $ $ The decrease in our tax credit carryforwards is primarily related to the results of studies of research and development (“R&D”) tax credit s and other tax attributes completed during the year ended December 31, 2015. The stud ies resulted in the write-off of federal and state R&D credit carryforwards of $3.1 million and $2.8 million, respectively. Additionally, uncertain tax benefits of $12.7 million were recorded related to the federal and state R&D credit carryforwards and net operating loss (“NOL”) carryforwards . The uncertain tax benefits are described in more detail below. A valuation allowance was recorded against the R&D credit carryforwards and other tax attributes for the year ended December 31, 2014. The valuation allowance decreased by approximately $21.7 million for the year ended December 31, 2015 primarily due to the results of the R&D tax credit study, as well as our conclusion that it is more likely than not that we will realize the benefit of the majority of our deferred tax assets, as discussed above. At December 31, 2015, the remaining valuation allowance related primarily to our federal capital loss carryforward and our state NOL carryforwards acquired from Lumara Health. At December 31, 2015, we had federal and state NOL carryforwards of approximately $502.5 million and $415.3 million, respectively of which $280.5 million and $275.0 million federal and state NOL carryforwards, were acquired as part of the Lumara Health transaction, respectively. Also included in the state NOL carryforwards at December 31, 2015 were $24.6 million of state NOL carryforwards which were acquired as part of the CBR transaction. The state NOL carryforwards acquired from Lumara Health are subject to a full valuation allowance as it is not more likely than not that they will be realized. We also had federal capital loss carryforwards of $1.7 million to offset future capital gains. At December 31, 2015, $55.6 million and $30.5 million of federal and state NOLs, respectively, related to excess equity-based compensation tax deductions the benefits for which will be recorded to additional paid-in capital when recognized through a reduction of cash taxes paid. The federal and state NOLs expire at various dates through 2035. The capital loss carryforwards will expire through 2017. We have federal tax credits of approximately $5.5 million to offset future tax liabilities of which $1.9 million were acquired as part of the Lumara Health transaction. We have state tax credits of $1.1 million to offset future tax liabilities. These federal and state tax credits will expire periodically through 2035 if not utilized. Utilization of our NOLs and R&D credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986 (“Section 382”) as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change as defined by Section 382 results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three ‑year period. Since our formation, we have raised capital through the issuance of capital stock on several occasions. These financings, combined with the purchasing shareholders’ subsequent disposition of those shares, could result in a change of control, as defined by Section 382. We conducted an analysis under Section 382 to determine if historical changes in ownership through December 31, 2015 would limit or otherwise restrict our ability to utilize these NOL and R&D credit carryforwards. As a result of this analysis, we do not believe there are any significant limitations on our ability to utilize these carryforwards. However, future changes in ownership after December 31, 2015 could affect the limitation in future years and any limitation may result in expiration of a portion of the NOL or R&D credit carryforwards before utilization. We had no uncertain tax benefits recorded prior to 2015. During the year ended December 31, 2015, we added $12.7 million of uncertain tax benefits related to tax positions of prior tax years, as discussed below. During the year ended December 31, 2015, we completed studies of our historical R&D tax credits and other tax attributes , including those acquired in connection with the Lumara Health transaction. The increase in our unrecognized tax benefits is att ributable to the results of these stud ies , which identified uncertain tax benefits of $12.7 million re lated to federal and state R&D credits and NOL carryforwards . These amounts have been recorded as a reduction to our deferred tax assets. A valuation allowance was recorded against these attributes at December 31, 2014, therefore there was no impact to income tax expense as a result of recording the unrecognized tax benefits during the year ended December 31, 2015. The amount of uncertain tax benefits that, if recognized, would impact our effective tax rate is $12.4 million. We have not recorded any interest or penalties on any unrecognized benefits since inception. We would recognize both accrued interest and penalties related to unrecognized benefits in income tax expense. We do not expect our uncertain tax benefits to change significantly in the next 12 months. The statute of limitations for assessment by the Internal Revenue Service (the “IRS”) and most state tax authorities is closed for tax years prior to December 31, 2012, although carryforward attributes that were generated prior to tax year 2012 may still be adjusted upon examination by the IRS or state tax authorities if they either have been or will be used in a future period. We file income tax returns in the U.S. federal and various state jurisdictions. There are currently no federal or state audits in progress. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Income (Loss) | K. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The table below presents information about the effects of net income (loss) of significant amounts reclassified out of accumulated other comprehensive income (loss) (“AOCI”), net of tax, associated with unrealized gains (losses) on securities during 2015 and 2014 (in thousands): December 31, 2015 2014 Beginning balance $ $ Other comprehensive income (loss) before reclassifications Gain (loss) reclassified from accumulated other comprehensive income (loss) Ending balance $ $ |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Equity-Based Compensation | |
Equity-Based Compensation | L. 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”), 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. Our 2007 Plan was originally approved by our stockholders in November 2007, and succeeded our 2000 Plan, under which 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 of our stock available for issuance under the 2007 Plan. The total number of shares issuable pursuant to awards under this plan is 6,215,325 , including the 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 “2015 Annual Meeting”). As of December 31, 2015, there were 2,231,795 shares remaining available for issuance under the 2007 Plan, which excludes shares subject to outstanding awards under the 2000 Plan. 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 December 31, 2015, there were 39,984 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. The 2007 Plan and the Lumara Health 2013 Plan provides for the grant of stock options, RSUs, restricted stock, stock, stock appreciation rights and other equity interests in our company. We generally issue common stock from previously authorized but unissued shares to satisfy option exercises and restricted stock awards. The terms and conditions of each award are determined by our Board of Directors (the “Board”) or the Compensation Committee of our Board. The terms and conditions of each award assumed in the acquisition of Lumara Health were previously determined by Lumara Health prior to being assumed in connection with the acquisition, subject to applicable adjustments made in connection with such acquisition. At our 2015 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. P lan periods consist of six-month periods typically commencing June 1 and ending November 30 and commencing December 1 and ending May 31. As of December 31, 2015, no shares have been issued under our 2015 ESPP. During 2015, 2014 and 2013, we also granted equity through inducement grants outside of these plans to certain newly hired executive officers and certain employees. All outstanding stock options granted as inducement awards have an exercise price equal to the closing price of a share of our common stock on the grant date. Stock Options The following table summarizes stock option activity in our equity plans for the twelve months ended December 31, 2015: 2007 Equity 2000 Equity 2013 Lumara Plan Plan Equity Plan Total Outstanding at December 31, 2014 Granted — Exercised — Expired or terminated — Outstanding at December 31, 2015 Restricted Stock Units The following table summarizes RSU activity in our equity plans for the twelve months ended December 31, 2015: 2007 Equity 2000 Equity 2013 Lumara Plan Plan Equity Plan Total Outstanding at December 31, 2014 — Granted — Vested — Expired or terminated — Outstanding at December 31, 2015 — Other Equity Compensation Grants During 2015, 2014 and 2013, our Board granted options to purchase 220,000 , 165,000 and 270,000 shares of our common stock, respectively, and 82,250 , 87,900 and 115,000 RSUs, respectively, 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. Since we first began issuing inducement grants outside of our plans in 2012 as permitted under the NASDAQ Stock Market listing rules, we have issued a total of 1,646,250 shares of common stock pursuant to inducement grants, of which 243,875 stock options and 90,001 RSUs have been expired or terminated and of which 186,250 options have been exercised and 139,474 shares of common stock have been issued pursuant to RSUs that became fully vested. As of December 31, 2015, there were 830,975 options and 155,675 RSUs outstanding under Inducement Awards. In August 2014, we granted certain members of our senior management performance-based RSUs under our 2007 Plan covering a maximum of 195,000 shares of common stock, which will be earned, if at all, based on the achievement of certain (a) targets based upon the calculated value expected to be realized with respect to certain business and corporate development transactions and (b) stock price minimums, during the 30-month period ending January 2, 2017, measured as of January 4, 2016 and January 2, 2017. Fifty percent of the RSU grant that was earned through January 4, 2016 vested as of such date, and 100% of the RSU grant that is earned through January 2, 2017 (less the portion previously vested) shall vest as of January 2, 2017, subject to the continued employment of the grantee through each such date. As of January 4, 2016, the first measurement date, 60,000 shares were cancelled due to employee terminations, 83,070 shares were earned and 41,535 shares vested. The maximum total fair value of these RSUs is $2.1 million, which will be recognized to expense over a period of approximately three years from the date the vesting conditions outlined in these grants are deemed probable, net of any estimated and actual forfeitures. We recognized $0.2 million and $0.1 million of expense related to these awards during 2015 and 2014, respectively, based on the target for expected value to be realized that was considered probable of occurring at that time. In February 2013, we granted RSUs under our 2007 Plan to certain members of our senior management covering a maximum of 82,500 shares of common stock, which are subject to a performance condition tied to the price of our common stock. At the end of the three ‑year period performance period ended December 31, 2015, the RSUs earned based on the achievement of the target stock price range were vested on January 15, 2016. On this date, 36,600 shares vested based upon the achievement of the target stock price. There were 27,500 shares cancelled due to employee terminations and another 18,400 shares cancelled due to non-achievement of the maximum target stock price range. The maximum total fair value of these RSUs was $0.5 million, which was recognized to expense over a period of three years from the date of grant, net of actual forfeitures. Equity ‑based compensation expense Equity ‑based compensation expense for 2015, 2014 and 2013 consisted of the following (in thousands): Years Ended December 31, 2015 2014 2013 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, there was no income tax effect on our equity-based compensation expense for 2014 and 2013. We have not recognized any excess tax benefits from equity-based compensation in additional paid-in capital because the excess tax benefits have not yet reduced cash taxes paid. Accordingly, there was no impact recorded in cash flows from financing activities or cash flows from operating activities as reported in the accompanying consolidated statements of cash flows. The following table summarizes the weighted average assumptions we utilized for purposes of valuing grants of options to our employees and non ‑employee directors: Years Ended December 31, 2015 2014 2013 Non-Employee Non-Employee Non-Employee Employees Directors Employees Directors Employees Directors Risk free interest rate (%) Expected volatility (%) Expected option term (years) Dividend yield none none none none none none Risk free interest rates utilized are based upon published U.S. Treasury yields at the date of the grant for the expected option term. During 2015 , 2014 and 2013, we estimated our expected stock price volatility by using the historical volatility of our own common stock price over the prior period equivalent to our expected option term, in order to better reflect expected future volatility. To compute the expected option term, we analyze historical exercise experience as well as expected stock option exercise patterns. The following table summarizes details regarding stock options granted under our equity incentive plans for the year ended December 31, 2015: December 31, 2015 Weighted Average Remaining Aggregate Intrinsic Weighted Average Contractual Value ($ in Options Exercise Price Term millions) Outstanding at beginning of year $ — $ — Granted — — Exercised — — Expired and/or forfeited — — Outstanding at end of year $ $ Outstanding at end of year - vested and unvested expected to vest $ $ Exercisable at end of year $ $ The weighted average grant date fair value of stock options granted during 2015, 2014 and 2013 was $23.57 , $10.63 and $8.60 , respectively. A total of 846,011 stock options vested during 2015. The aggregate intrinsic value of options exercised during 2015, 2014 and 2013, excluding purchases made pursuant to our employee stock purchase plans, measured as of the exercise date, was approximately $31.2 million, $5.9 million and $1.0 million, respectively. The intrinsic value of a stock option is the amount by which the fair market value of the underlying stock on a specific date exceeds the exercise price of the common stock option. The following table summarizes details regarding RSUs granted under our equity incentive plans for the year ended December 31, 2015: December 31, 2015 Weighted Average Restricted Grant Date Stock Units Fair Value Outstanding at beginning of year $ Granted Vested Forfeited Outstanding at end of year $ Outstanding at end of year and expected to vest $ The weighted average grant date fair value of RSUs granted during 2015, 2014 and 2013 was $52.71 , $22.88 and $16.31 , respectively. The total grant date fair value of RSUs that vested during 2015, 2014 and 2013 was $3.5 million, $2.7 million and $2.8 million, respectively. At December 31, 2015, the amount of unrecorded equity ‑based compensation expense for both option and RSU awards, net of forfeitures, attributable to future periods was approximately $44.8 million. Of this amount, $28.2 million was associated with stock options and is expected to be amortized on a straight ‑line basis to expense over a weighted average period of approximately three years, and $16.6 million was associated with RSUs and is expected to be amortized on a straight ‑line basis to expense over a weighted average period of approximately two years. Such amounts will be amortized primarily to research and development or selling, general and administrative expense. These future estimates are subject to change based upon a variety of future events, which include, but are not limited to, changes in estimated forfeiture rates, employee turnover, and the issuance of new stock options and other equity ‑based awards. |
Employee Savings Plan
Employee Savings Plan | 12 Months Ended |
Dec. 31, 2015 | |
Employee Savings Plan | |
Employee Savings Plan | M. EMPLOYEE SAVINGS PLAN We provide a 401(k) Plan to our employees by which they may defer compensation for income tax purposes under Section 401(k) of the Internal Revenue Code. Each employee may elect to defer a percentage of his or her salary up to a specified maximum. Our 401(k) Plan provides, among other things, for a company contribution of 3% of each employee’s combined salary and certain other compensation for the plan year. Salary deferred by employees and contributions by us to the 401(k) Plan are not taxable to employees until withdrawn from the 401(k) Plan and contributions are deductible by us when made. The amount of our company contribution for the 401(k) Plan was $1.8 million, $0.8 million and $0.7 million for 2015, 2014 and 2013, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity | |
Stockholders' Equity | N. STOCKHOLDERS’ EQUITY Preferred Stock Our certificate of incorporation authorizes our Board to issue preferred stock from time to time in one or more series. The rights, preferences, restrictions, qualifications and limitations of such stock are determined by our Board. In September 2009, our Board adopted a shareholder rights plan (the “Rights Agreement”). On February 11, 2014, in connection with the pricing of the Convertible Notes, we and American Stock Transfer & Trust Company, LLC (the “Rights Agent”) entered into an amendment (the “Convertible Notes Amendment”) to the Rights Agreement. The Convertible Notes Amendment, among other things, provides that, notwithstanding anything in the Rights Agreement to the contrary, each of JPMorgan Chase Bank, National Association, London Branch, Morgan Stanley & Co. International plc and Royal Bank of Canada (together the “Call Spread Counterparties”) shall be deemed not to beneficially own any common shares underlying, or synthetically owned pursuant to, any warrant held by such Call Spread Counterparty, any common shares held by such Call Spread Counterparty (or any affiliate thereof) to hedge its exposure with respect to the convertible bond hedges and warrants, any common shares underlying, or synthetically owned pursuant to, any Derivative Securities (as such term is defined in the Rights Agreement), including the Convertible Notes, held, or entered into, by such Call Spread Counterparty (or any affiliate thereof) to hedge its exposure with respect to the convertible bond hedges and warrants or any Convertible Notes held by such Call Spread Counterparty (or any affiliate thereof) in its capacity as underwriter in the notes offering. On September 26, 2014, we adopted another amendment to our Rights Agreement (which was approved by our stockholders at our 2015 annual meeting of stockholders) to help preserve our substantial tax assets associated with NOLs and other tax benefits by deterring certain stockholders from increasing their percentage ownership in our stock (the “NOL Amendment”). The NOL Amendment shortens the expiration date of the Rights Agreement from September 17, 2019 to March 31, 2017, decreases the exercise price of the rights from $250.00 to $80.00 in connection therewith, and makes changes to the definition of “beneficial ownership,” as used in the Rights Agreement, as amended, to make it consistent with how ownership is defined under Section 382 of the Internal Revenue Code of 1986, as amended. The original Rights Agreement provided for a dividend distribution of one preferred share purchase right (a “Right”) for each outstanding share of our common stock, which dividend was paid on September 17, 2009. Rights will separate from the common stock and will become exercisable upon the earlier of (a) the close of business on the 10th calendar day following the first public announcement that a person or group of affiliated or associated persons has acquired beneficial ownership of 4.99% or more (which percentage had been 20% before the NOL Amendment) of the outstanding shares of common stock, other than as a result of repurchases of stock by us or certain inadvertent actions by a stockholder or (b) the close of business on the 10th business day (or such later day as the Board may determine) following the commencement of a tender offer or exchange offer that could result, upon its consummation, in a person or group becoming the beneficial owner of 4.99% or more (which percentage had been 20% before the NOL Amendment) of the outstanding shares of common stock (the earlier of such dates being herein referred to as the “Distribution Date”). The NOL Amendment provides that the Rights are not exercisable until the Distribution Date and will expire at the earliest of: (a) March 31, 2017; (b) the time at which the Rights are redeemed or exchanged; (c) the effective date of the repeal of Section 382 or any successor statute if the Board determines that the NOL Rights Plan is no longer necessary or desirable for the preservation of our tax benefits; (d) the first day of our taxable year to which the Board determines that no tax benefits may be carried forward; or (e) September 26, 2015 if stockholder approval of the NOL Amendment has not been obtained by or on such date. There can be no assurance that the NOL Amendment will result in us being able to preserve all or any of the substantial tax assets associated with NOLs and other tax benefits. Common Stock Transactions 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. 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. At our 2015 Annual Meeting, our stockholders approved a proposal to 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). Share Repurchase Program In January 2016, we announced that our Board authorized a program to repurchase up to $60.0 million in shares of our common stock. The repurchase program does not have an expiration date and may be suspended for periods or discontinued at any time. Under the program, we may purcha se our stock from time to time at the discretion of management in the open market or in privately negotiated transactions. The number of shares repurchased and the timing of the purchases will depend on a number of factors, including share price, trading volume and general market conditions, along with working capital requirements, general business conditions and other factors. We may also from time to time establish a trading plan under Rule 10b5-1 of the Securities and Exchange Act of 1934 to facilitate purchases of our shares under this program. |
Business Segments
Business Segments | 12 Months Ended |
Dec. 31, 2015 | |
Business Segments | |
Business Segments | O. BUSINESS SEGMENTS We have determined that we conduct our operations in one business segment: the manufacture, development and commercialization of products and services for use in treating various conditions, with a focus on maternal health, anemia management and cancer supportive care. Long ‑lived assets consist entirely of property, plant and equipment and are located in the U.S. for all periods presented. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | P. COMMITMENTS AND CONTINGENCIES Commitments Our long-term contractual obligations include commitments and estimated purchase obligations entered into in the normal course of business. These include commitments related to our facility leases, purchases of inventory and other purchases related to our products, debt obligations, and other purchase obligations . Facility Lease Obligations In June 2013, we entered into a lease agreement with BP Bay Colony LLC (the “Landlord”) for the lease of certain real property located at 1100 Winter Street, Waltham, Massachusetts (the “Waltham Premises”) for use as our principal executive offices. Beginning in September 2013, the initial term of the lease is five years and two months with one five ‑year extension term at our option. During 2015, we entered into several amendments to the original lease to add additional space and to extend the term of the original lease to June 2021. In addition to base rent, we are also required to pay a proportionate share of the Landlord’s operating costs. The Landlord agreed to pay for certain agreed-upon improvements to the Waltham Premises and we agreed to pay for any increased costs due to changes by us to the agreed-upon plans. We record all tenant improvements paid by us as leasehold improvements and amortize these improvements over the shorter of the estimated useful life of the improvement or the remaining life of the initial lease term. Amortization of leasehold improvements is included in depreciation expense. In addition, in connection with our facility lease for the Waltham Premises, in June 2013 we delivered to the Landlord a security deposit of $0.4 million in the form of an irrevocable letter of credit. This security deposit was increased to $0. 6 million in 2015. The cash securing this letter of credit is classified on our balance sheet as of December 31, 2015 and 2014 as a long-term asset and is restricted in its use. In connection with November 2014 acquisition of Lumara Health, we assumed the lease of certain real property located at 16640 Chesterfield Grove Road, Chesterfield, Missouri (the “St. Louis Premises”). We terminated the lease in May 2015. In connection with the August 2015 acquisition of CBR, we assumed the lease of certain real property located at 1200 Bayhill Dri ve, San Bruno, California . The lease expires in September 2017 and provides for a 3% annual increase in rent. Facility-related rent expense, net of deferred rent amortization, for all the leased properties was $1.5 million, $0.8 million and $1.5 million for 2015, 2014, and 2013, respectively. Future minimum payments under our non-cancelable facility-related leases as of December 31, 2015 are as follows (in thousands): Minimum Lease Period Payments Year Ending December 31, 2016 $ Year Ending December 31, 2017 Year Ending December 31, 2018 Year Ending December 31, 2019 Year Ending December 31, 2020 Thereafter Total $ Purchase Commitments I n 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 as of December 31, 2015 . Contingent Consideration Related to Business Combinations In connection with our acquisition of Lumara Health in November 2014, we agreed to pay up to an additional $350.0 million based on the achievement of certain sales milestones. Due to the contingent nature of these milestone payments, we cannot predict the amount or timing of such payments with certainty. See Note C, “ Business Combinations ,” for more information on the Lumara Health acquisition and related milestone payments . Contingent Regulatory and Commercial Milestone Payments In connection with the option agreement entered into with Velo Bio, LLC (“Velo”) , if we exe rcise the option to acquire the global rights to the DIF program (the “DIF Rights”) , 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 r esults from the pivotal Phase 2b /3a clinical study could be available as early as 2018, and as such no contingencies related to this agreement have been recorded in our consolidated financial statements as of December 31, 2015. In connection with a development and license agreement (the “Antares Agreement”) with Antares Pharma, Inc. (“Antares”), we are required to pay royalties to Antares on net sales of the auto-injection system for use with hydroxyprogesterone caproate (the “Product”) commencing on Product launch in a particular country until the Product is no longer developed, marketed, sold or offered for sale in such country (the “Antares Royalty Term”). The roya lty rates range from high single digit to low double digits and are tiered based on levels of net sales of Products and decrease after the expiration of licensed patents or where there are generic equivalents to the Product being sold in a particular country. Other Funding Commitments As of December 31, 2015, we had several ongoing clinical studies in various clinical trial stages. Our most significant clinical trial expenditures were to clinical research organizations (“CROs”). The contracts with CROs are generally cancellable, with notice, at our option. We have recorded accrued expenses in our consolidated balance sheet of approximately $1.6 million representing expenses incurred with these organizations as of December 31, 2015, net of any amounts prepaid to these CROs. Severance Arrangements We have entered into employment agreements or other arrangements with most of our executive officers and certain other employees, which provide for the continuation of salary and certain benefits and, in certain instances, the acceleration of the vesting of certain equity awards to such individuals in the event that the individual is terminated other than for cause, as defined in the applicable employment agreements or arrangements. Indemnification Obligations As permitted under Delaware law, pursuant to our certificate of incorporation, by ‑laws and agreements with all of our current directors, executive officers, and certain of our employees, we are obligated to indemnify such individuals for certain events or occurrences while the officer, director or employee is, or was, serving at our request in such capacity. The maximum potential amount of future payments we could be required to make under these indemnification obligations is not capped. Our director and officer insurance policy limits our initial exposure to $1.5 million and our policy provides significant coverage. As a result, we believe the estimated fair value of these indemnification obligations is likely to be immaterial. We are also a party to a number of other agreements entered into in the ordinary course of business, which contain typical provisions and which obligate us to indemnify the other parties to such agreements upon the occurrence of certain events. Such indemnification obligations are usually in effect from the date of execution of the applicable agreement for a period equal to the applicable statute of limitations. Our aggregate maximum potential future liability under such indemnification provisions is uncertain. Except for expenses we incurred related to the Silverstrand class action lawsuit, which was settled in 2015, we have not incurred any expenses as a result of such indemnification provisions. Accordingly, we have determined that the estimated aggregate fair value of our potential liabilities under such indemnification provisions is not significant, and we have not recorded any liability related to such indemnification. 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. We expense legal costs as they are incurred. Sandoz Paragraph IV Certification Letter On February 5, 2016, we received a Paragraph IV certification notice letter regarding an Abbreviated New Drug Application submitted to the FDA by Sandoz Inc. (“Sandoz”) requesting approval to engage in commercial manufacture, use and sale of a generic version of ferumoxytol. A generic version of Feraheme can be marketed only with the approval of the FDA of the respective application for such generic version. The Drug Price Competition and Patent Term Restoration Act of 1984, as amended , requires an applicant whose subject drug is a drug listed in the FDA publication, “Approved Drug Products with Therapeutic Equivalence Evaluations,” also known as the “Orange Book,” to notify the patent ‑holder of their application and potential infringement of their patent rights. The Paragraph IV certification notice is required to contain a detailed factual and legal statement explaining the basis for the applicant’s opinion that the proposed product does not infringe the subject patents, that such patents are invalid, or both. Receipt of the certification notice triggers a 45 day window during which we may bring a patent infringement suit in federal district court against the applicant seeking approval of a product. In its notice letter, Sandoz claims that our ferumoxytol patents are invalid, unenforceable and/or not infringed by Sandoz’s manufacture, use, sale or offer for sale of the generic version. We are evaluating the notice letter and intend to vigorously enforce our intellectual property rights relating to ferumoxytol. We plan to initiate a patent infringement suit to defend the patents identified in the notice letter. If we were to commence such a suit, the FDA is generally prohibited from granting approval of an application until the earliest of 30 months from the date the FDA accepted the application for filing, the conclusion of litigation in the generic’s favor, or expiration of the patent(s) (though such stay may be shortened or lengthened if either party fails to cooperate in the litigation). If the litigation is resolved in favor of the applicant or the challenged patent expires during the 30 ‑month stay period, the stay is lifted and the FDA may thereafter approve the application based on the applicable standards for approval. European Patent Organization Appeal In July 2010, 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 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 December 31, 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 allow those compounders to continue to serve physicians and patients with respect to supplying medically necessary alternative/altered forms of hydroxypr ogesterone caproate. 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 December 31, 2015. |
Collaborative Agreements
Collaborative Agreements | 12 Months Ended |
Dec. 31, 2015 | |
Collaborative Agreements | |
Collaborative Agreements | Q. COLLABORATION, LICENSE AND OTHER STRATEGIC AGREEMENTS Our commercial strategy includes expanding our portfolio through the in-license or acquisition of additional pharmaceutical products or companies, including revenue-generating commercial products and late-state development assets. As of December 31, 2015, we were a party to the following collaborations: Takeda In December 2014, we ent ered into the Takeda Termination Agreement , which terminated 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 balance 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. In 2015, we recognized $44.4 million in revenues associated with the amortization of the remaining deferred revenue balance and recorded it in license fee, collaboration and other revenues in our condensed consolidated statement of operations. In addition, we recognized $6.7 million of additional revenues in 2015 related to payments made by Takeda upon the final termination date as required under the terms of the Takeda Termination Agreement. Prior to entering into the Takeda Termination Agreement, under the terms of the Amended Takeda Agreement, Takeda was responsible for reimbursing us for certain out-of-pocket regulatory and clinical trial supply costs associated with carrying out our regulatory and clinical research activities under the collaboration agreement. Because we were acting as the principal in carrying out these services, any reimbursement payments received from Takeda were recorded in license fee, collaboration and other revenues in our consolidated statements of operations to match the costs that we incurred during the period in which we performed those services. We did not record any reimbursement revenues from Takeda during 2015, and recorded $1.7 million and $0.5 million for 2014 and 2013, respectively. Prior to entering into the Takeda Termination Agreement, at the time of shipment, we deferred recognition of all revenue for Feraheme sold to Takeda on our consolidated balance sheets. We recognized revenues from product sales to Takeda, the related cost of product sales, and any royalty revenues due from Takeda, in our consolidated statements of operations at the time Takeda reported to us that sales had been made to their customers. During 2015 and 2014, we recognized $1.1 million and $3.5 million in license fee , collaboration and other revenues, respectively. No cost of product sales were recognized in 2015. In 2014, we recognized $2.8 million of cost of product sales related to the Amended Takeda Agreement, which included all amounts previously deferred prior to the termination of the Amended Takeda Agreement, and we have included in other product sales and royalties, and cost of product sales, respectively, in our consolidated statement of operations. Velo In July 2015, we entered into an option agreement with 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 DIF Rights . DIF has been granted both orphan drug and fast-track review designations by the FDA for 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. We have determined that Velo is a variable interest entity (“VIE”) as it does not have enough equity to finance its activities without additional financial support. As we do not have the power to direct the activities of the VIE that most significantly affect its economic performance, which we have determined to be the Phase 2b/3a clinical study, we are not the primary beneficiary of and do not consolidate the VIE. Antares In September 2014, Lumara Health entered into the Antares Agreement with Antares, which in connection with our acquisition of Lumara Health in November of 2014, grants us an exclusive, worldwide, royalty-bearing license, with the right to sublicense, to certain intellectual property rights, including know-how, patents and trademarks, to develop, use, sell, offer for sale and import and export the Product. In consideration for the license, to support joint meetings and a development strategy with the FDA, and for initial tooling and process validation, Lumara Health paid Antares an up-front payment in October 2014 . Under the Antares Agreement, we are responsible for the clinical development and preparation, submission and maintenance of all regulatory applications in each country where we desire to market and sell the Product, including the U.S. We are required to pay royalties to Antares on net sales of the Product commencing on Product launch in a particular country for the Antares Royalty Term . The roya lty rates range from high single digit to low double digits and are tiered based on levels of net sales of Products and decrease after the expiration of licensed patents or where there are generic equivalents to the Product being sold in a particular country. Antares is the exclusive supplier of our requirements for the auto-injection system devices for the Products and Antares remains responsible for the manufacture and supply of the devices and assembly of the Product. We are responsible for the supply of the drug to be used in the assembly of the finished Product. The development and license agreement terminates at the end of the Antares Royalty Term, but is subject to early termination by us for convenience, by Antares if we do not submit regulatory filings in the U.S. by a certain date and by either party upon an uncured breach by or bankruptcy of the other party. Abeona Please refer to Note C, “ Business Combinations ,” for a detailed description of the MuGard License Agreement. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt | |
Debt | R. DEBT Our outstanding debt obligations as of December 31, 2015 and December 31, 2014 consisted of the following (in thousands): December 31, 2015 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 than 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 December 31, 2015, the carrying value of the outstanding borrowings, net of unamortized original issue costs and other lender fees and expenses, was $490.3 million. 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 Finance LLC 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 December 31, 2015, the carrying value of the outstanding borrowings, net of unamortized original issue costs and other lender fees and expenses, was $338.4 million. The unamortized original issue costs and other lender fees and expenses, including a prepayment penalty, included $6.8 million of the unamortized original issue costs and other lender fees and expenses from our then existing five-year term loan facility (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 consolidated statement of operations . The 2015 Term Loan Facility bears interest, at our option, at the London Interbank Offered Rate (“LIBOR”) plus a margin of 3.75% or the prime rate plus a margin of 2.75% . The LIBOR is subject to a 1.00% floor and the prime rate is subject to a 2.00% floor. As of December 31, 2015, the stated interest rate, based on the LIBOR, was 4.75% , and the effective interest rate was 5.65% . 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 of 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 2015, the Convertible Notes were not convertible as of December 31, 2015. 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 December 31, 2015 consisted of the following (in thousands): December 31, 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 our consolidated balance sheets. 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 December 31, 2015, the carrying value of the Convertible Notes was $174.4 million. The effective interest rate on the liability component was 7.23% for the period from the date of issuance through December 31, 2015. As of December 31, 2015, the “if-converted value” exceeded the remaining principal amount of the Convertible Notes by $22.9 million. The following table sets forth total interest expense recognized related to the Convertible Notes during the years ended December 31, 2015 and December 31, 2014 (in thousands): Years Ended December 31, 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, in February 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 call spread counterparties. The convertible bond hedges have an exercise price of approximately $27.09 per share, subject to adjustment upon certain events, and are exercisable when and if the Convertible Notes are converted. If upon conversion of the Convertible Notes, the price of our common stock is above the exercise price of the convertible bond hedges, the call spread counterparties will deliver shares of our common stock and/or cash with an aggregate value approximately equal to the difference between the price of our common stock at the conversion date and the exercise price, multiplied by the number of shares of our common stock related to the convertible bond hedges being exercised. The convertible bond hedges are separate transactions entered into by us and are not part of the terms of the Convertible Notes or the warrants, discussed below. Holders of the Convertible Notes will not have any rights with respect to the convertible bond hedges. We paid $39.8 million for these convertible bond hedges and recorded this amount as a reduction to additional paid-in capital, net of tax, in 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 $2 5 .7 million f or these warrants and recorded this amount to additional paid-in capital in 2014. Aside from the initial payment of $39.8 million to the call spread counterparties for the convertible bond hedges, which was 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 In November 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 consolidated statement of operations . Future Payments Future annual principal payments on our long-term debt as of December 31, 2015 were as follows: Year Ending December 31, 2016 $ Year Ending December 31, 2017 Year Ending December 31, 2018 Year Ending December 31, 2019 Year Ending December 31, 2020 Thereafter Total $ |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring | |
Restructuring | S. RESTRUCTURING In connection with the CBR and Lumara Health acquisitions, we initiated restructuring programs in the third quarter of 2015 and the fourth quarter of 2014, respectively, which included severance benefits primarily related to certain former CBR and Lumara Health employees. As a result of these restructurings, we recorded charges of approximately $4.1 million and $2.0 million in 2015 and 2014, respectively. In addition, we currently expect to record $0.9 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 2015 and 2014 (in thousands): Years Ended December 31, 2015 2014 Accrued restructuring, beginning of period $ $ — Employee severance, benefits and related costs Payments Accrued restructuring, end of period $ $ |
Consolidated Quarterly Financia
Consolidated Quarterly Financial Data-Unaudited | 12 Months Ended |
Dec. 31, 2015 | |
Consolidated Quarterly Financial Data-Unaudited | |
Consolidated Quarterly Financial Data-Unaudited | T. CONSOLIDATED QUARTERLY FINANCIAL DATA—UNAUDITED The following tables provide unaudited consolidated quarterly financial data for 2015 and 2014 (in thousands, except per share data): March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 Total revenues (a) $ $ $ $ Gross profit (a) Operating expenses (a) Net income (loss) (b) $ $ $ $ Net income (loss) per share - basic $ $ $ $ Net income (loss) per share - diluted $ $ $ $ March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 Total revenues (c) $ $ $ $ Gross profit (c) Operating expenses (c) Net income (loss) (d) $ $ $ $ Net income (loss) per share - basic $ $ $ $ Net income (loss) per share - diluted $ $ $ $ The sum of quarterly income (loss) per share totals differ from annual income (loss) per share totals due to rounding. (a) In August 2015, we acquired CBR and recorded $24.1 million and $10.0 million in CBR service revenue and cost of services, respectively, in 2015 and additional operating costs incurred as a result of the acquisition. (b) In August 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 consolidated statements of operations. (c) In November 2014, we acquired Lumara Health and recorded $22.5 million in Makena sales in 2014 and additional operating costs incurred as a result of the acquisition. (d) In the fourth quarter of 2014, we recognized a $153.2 million income tax benefit in connection with the 2014 Lumara Health acquisition. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts | |
Valuation and Qualifying Accounts | U. VALUATION AND QUALIFYING ACCOUNTS (IN THOUSANDS) Balance at Deductions Balance at Beginning Charged to End of of Period Additions (a) Reserves Period Year ended December 31, 2015: Allowance for doubtful accounts (a) $ — $ $ — $ Accounts receivable allowances (b) $ $ $ $ Rebates, fees and returns reserves $ $ $ $ Year ended December 31, 2014: Accounts receivable allowances (b) $ $ $ $ Rebates, fees and returns reserves $ $ $ $ Year ended December 31, 2013: Accounts receivable allowances (b) $ $ $ $ Rebates, fees and returns reserves $ $ $ $ (a) Additions to allowance for doubtful accounts are recorded in selling, general and administrative expenses. Additions to rebates, fees and returns reserves are recorded as a reduction of revenues. (b) These accounts receivable allowances represent discounts and other chargebacks related to the provision for our product sales . |
Recently Issued and Proposed Ac
Recently Issued and Proposed Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2015 | |
Recently Issued and Proposed Accounting Pronouncements | |
Recently Issued and Proposed Accounting Pronouncements | V. 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 November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740); Balance Sheet Classification of Deferred Taxes . This statement requires entities to present deferred tax assets and deferred tax liabilities as noncurrent in a classified balance sheet. This statement is effective for annual reporting periods beginning after December 15, 2016, and including interim periods within those annual reporting periods, and entities are permitted to apply either prospectively or retrospectively, with early adoption permitted. We early adopted this guidance prospectively in the fourth quarter of 2015 to simplify the current period presentation of our deferred income taxes, noting prior periods were not retrospectively adjusted. For additional information, please see Note J, “ Income Taxes ,” to our consolidated financial statements included in this Annual Report on Form 10 ‑K . In September 2015, the FASB issued 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. Additional details regarding our measurement period adjustments can be found in Note C, “ Business Combinations, ” to our consolidated financial statements included in this Annual Report on Form 10 ‑K . 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 stan dard is not expected to have a material 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. In August 2015, the FASB issued ASU No. 2015-15, Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (“ASU 2015-15”), which allows presentation of debt issuance costs related to line-of-credit arrangements as either in accordance with the amendments in ASU 2015-03, or as an asset with subsequent amortization of the debt issuance costs ratably over the term of the arrangement. These updates are effective for annual and interim periods beginning on or after December 15, 2015. As of December 31, 2015, we have $11.2 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 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 20 15, the FASB issued ASU 2015-14, Revenue from Contracts with Customers , Topic 606, Deferral of the Effective Date, which defers the effective date of this standard by one year to annual reporting periods beginning after December 15, 2017, including interim periods within that year, which for us is January 1, 2018. 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 this standard on our consolidated financial statements. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”) and include the accounts of our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Our results of operations for 2015 include the results of CBR, subsequent to August 17, 2015, the date of acquisition. See Note C, “ Business Combinations ,” for additional information. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of 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; product sales allowances and accruals; investments; inventory; 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; certain accrued liabilities, including clinical trial accruals and restructuring liabilities; 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 at the date of acquisition. We consider all highly liquid investments with a maturity of three months or less as of the acquisition date to be cash equivalents. At December 31, 2015 and December 31, 2014, substantially all of our cash and cash equivalents were held in either commercial bank accounts or money market funds. |
Investments | Investments We account for and classify our investments as either “available-for-sale,” “trading,” or “held-to-maturity,” in accordance with the accounting guidance related to the accounting and classification of certain investments in debt and equity securities. The determination of the appropriate classification by us is based primarily on management’s intent to sell the investment at the time of purchase. As of December 31, 2015 and 2014, all of our investments were classified as available ‑for ‑sale securities. Available ‑for ‑sale securities are those securities which we view as available for use in current operations, if needed. We generally classify our available ‑for ‑sale securities as short ‑term investments, even though the stated maturity date may be one year or more beyond the current balance sheet date. Available ‑for ‑sale investments are stated at fair value with their unrealized gains and losses included in accumulated other comprehensive loss within the consolidated statements of stockholders’ equity, until such gains and losses are realized in other income (expense) within the consolidated statements of operations or until an unrealized loss is considered other ‑than ‑temporary. We recognize other ‑than ‑temporary impairments of our debt securities when there is a decline in fair value below the amortized cost basis and if (a) we have the intent to sell the security or (b) it is more likely than not that we will be required to sell the security prior to recovery of its amortized cost basis. If either of these conditions is met, we recognize the difference between the amortized cost of the security and its fair value at the impairment measurement date in our consolidated statement s of operations. If neither of these conditions is met, we must perform additional analyses to evaluate whether the unrealized loss is associated with the creditworthiness of the issuer of the security rather than other factors, such as interest rates or market factors. If we determine from this analysis that we do not expect to receive cash flows sufficient to recover the entire amortized cost of the security, a credit loss exists, the impairment is considered other-than-temporary and is recognized in our consolidated statements of operations. |
Fair Value Measurements | Fair Value Measurements Under current accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Current accounting guidance establishes a hierarchy used to categorize how fair value is measured and is based on three levels of inputs, of which the first two are considered observable and the third unobservable, as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We hold certain assets and liabilities that are required to be measured at fair value on a recurring basis, including our cash equivalents, investments, and acquisition-related contingent consideration. |
Inventory | Inventory Inventory is stated at the lower of cost or market (net realizable value), with approximate cost being determined on a first-in, first-out basis. Prior to initial approval from the FDA or other regulatory agencies, we expense costs relating to the production of inventory in the period incurred, unless we believe regulatory approval and subsequent commercialization of the product candidate is probable and we expect the future economic benefit from sales of the product to be realized, at which point we capitalize the costs as inventory. We assess the costs capitalized prior to regulatory approval each quarter for indicators of impairment, such as a reduced likelihood of approval. We expense costs associated with clinical trial material as research and development expense. On a quarterly basis, we analyze our inventory levels to determine whether we have any obsolete, expired, or excess inventory. If any inventory is expected to expire prior to being sold, has a cost basis in excess of its net realizable value, is in excess of expected sales requirements as determined by internal sales forecasts, or fails to meet commercial sale specifications, the inventory is written-down through a charge to cost of product sales. The determination of whether inventory costs will be realizable requires estimates by management of future expected inventory requirements, based on sales forecasts. Once packaged, Makena currently has a shelf-life of three years and Feraheme has a shelf-life of five years. As a result of comparison to internal sales forecasts, we expect to fully realize the carrying value of our current Makena and Feraheme finished goods inventory. If actual market conditions are less favorable than those projected by management, inventory write-downs may be required. Charges for inventory write-downs are not reversed if it is later determined that the product is saleable. |
Restricted Cash | Restricted Cash As of December 31, 2015 and 2014, we classified $2.6 million and $2.4 million as restricted cash, respectively, which included $2.0 million held in a restricted fund previously established by Lumara Health Inc. (“Lumara Health”) in connection with its Chapter 11 plan of reorganization to pay potential claims against its former directors and officers. In addition, the restricted cash balances included a $0.6 million and a $0.4 million security deposit delivered to the landlord of our Waltham, Massachusetts headquarters in the form of an irrevocable letter of credit as of December 31, 2015 and 2014, respectively. |
Property and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost and depreciated when placed into service using the straight-line method based on their estimated useful lives as follows: Useful Life Buildings and improvements 15 - 40 Years Computer equipment and software 5 Years Furniture and fixtures 5 Years Leasehold improvements Lesser of Lease or Asset Life Laboratory and production equipment 5 Years Land improvements 10 Years Costs for capital assets not yet placed in service are capitalized on our balance sheets and will be depreciated in accordance with the above guidelines once placed into service. Costs for maintenance and repairs are expensed as incurred. Upon sale or other disposition of property, plant and equipment, the cost and related depreciation are removed from the accounts and any resulting gain or loss is charged to our consolidated statements of operations. Long-lived assets to be held and used are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their estimated fair values. Assets classified as held for sale are no longer subject to depreciation and are recorded at the lower of carrying value or estimated net realizable value |
Business Combinations | Business Combinations We account for acquired businesses using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Acquisition-related costs are expensed as incurred. Any excess of the consideration transferred over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. |
Acquisition-related Contingent Consideration | Acquisition-Related Contingent Consideration Contingent consideration arising from a business combination is included as part of the purchase price and is recognized at its estimated fair value as of the acquisition date. Subsequent to the acquisition date, we measure contingent consideration arrangements at fair value for each period until the contingency is resolved. These changes in fair value are recognized in selling, general and administrative expenses in our consolidated statements of operations. Changes in fair values reflect new information about the likelihood of the payment of the contingent consideration and the passage of time. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is not amortized, but is reviewed for impairment annually as of October 31, or more frequently if indicators of impairment are present. We determine whether goodwill may be impaired by comparing the carrying value of our single reporting unit, including goodwill, to the fair value of the reporting unit. If the fair value is less than the carrying amount, a more detailed analysis is performed to determine whether goodwill is impaired. The impairment loss, if any, is measured as the excess of the carrying value of the goodwill over the fair value of the goodwill and is recorded in our consolidated statements of operations. Finite-lived intangible assets are amortized to their estimated residual values over their estimated useful lives and reviewed for impairment if certain events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When such facts and circumstances exist, management compares the projected undiscounted future cash flows associated with the asset over its estimated useful life against the carrying amount. The impairment loss, if any, is measured as the excess of the carrying amount of the asset over its fair value. Acquired IPR&D represents the fair value assigned to research and development assets that we acquire and have not been completed at the acquisition date. The fair value of IPR&D acquired in a business combination is capitalized on our consolidated balance sheet at the acquisition-date fair value and is determined by estimating the costs to develop the technology into commercially viable products, estimating the resulting revenue from the projects, and discounting the projected net cash flows to present value . IPR&D is not amortized, but rather is reviewed for impairment on an annual basis or more frequently if indicators of impairment are present, until the project is completed or abandoned. If we determine that IPR&D becomes impaired or is abandoned, the carrying value is written down to its fair value with the related impairment charge recognized in our 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. Additionally, we have other indefinite-lived intangible assets which we acquired through our business combinations. These assets are reviewed for impairment on an annual basis or more frequently if indicators of impairment are present. If we determine that the asset becomes impaired, the carrying value is written down to its fair value with the related impairment charge recognized in our consolidated statements of operations in the period in which the impairment occurs. |
Patents | Patents We expense all patent-related costs in selling, general and administrative expenses as incurred. |
Revenue Recognition and Related Sales Allowances and Accruals | Revenue Recognition and Related Sales Allowances and Accruals Our primary sources of revenue during the reporting period s were: (i) product revenues from Makena and Feraheme ; (ii) service revenues associated with the CBR Services; and (iii) license fee s , collaboration and other revenues, which primarily include d milestone payments received from our collaboration agreements, royalties received from our license agreements, and international product revenues of Feraheme derived from our collaboration agreement with Takeda. 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 Revenue We recognize product revenues net of certain allowances and accruals in our consolidated statements 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. In addition, we also monitor our distribution channel to determine whether additional allowances or accruals are required based on inventory in our sales channel. Calculating these gross to net sales adjustments involves estimates and judgments based primarily on actual product sales data, forecasted customer buying patterns, and market research data related to utilization rates by various end-users. 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. Our product revenues were offset by provisions for allowances and accruals as follows (in thousands): Years Ended December 31, 2015 2014 2013 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 $ $ $ Classification of Product Sales Allowances and Accruals Product sales allowances and accruals are primarily comprised of both direct and indirect fees, discounts and rebates and provisions for estimated product returns. Direct fees, discounts and rebates are contractual fees and price adjustments payable to wholesalers, specialty distributors and other customers that purchase products directly from us. Indirect fees, discounts and rebates are contractual price adjustments payable to healthcare providers and organizations, such as certain physicians, clinics, hospitals, GPOs, and dialysis organizations that typically do not purchase products directly from us but rather from wholesalers and specialty distributors. In accordance with guidance related to accounting for fees and consideration given by a vendor to a customer, including a reseller of a vendor’s products, these fees, discounts and rebates are presumed to be a reduction of the selling price. Product sales allowances and accruals are based on definitive contractual agreements or legal requirements (such as Medicaid laws and regulations) related to the purchase and/or utilization of the product by these entities and are recorded in the same period that the related revenue is recognized. We estimate product sales allowances and accruals using either historical, actual and/or other data, including estimated patient usage, applicable contractual rebate rates, contract performance by the benefit providers, other current contractual and statutory requirements, historical market data based upon experience of our products and other products similar to them, specific known market events and trends such as competitive pricing and new product introductions, current and forecasted customer buying patterns and inventory levels, and the shelf life of our products. As part of this evaluation, we also review changes to federal and other legislation, changes to rebate contracts, changes in the level of discounts, and changes in product sales trends. Although allowances and accruals are recorded at the time of product sale, certain rebates are typically paid out, on average, up to three months or longer after the sale. Allowances against receivable balances primarily relate to prompt payment discounts, provider chargebacks and certain government agency rebates and are recorded at the time of sale, resulting in a reduction in product sales revenue and the reporting of product sales receivables net of allowances. Accruals related to Medicaid and provider volume rebates, wholesaler and distributor fees, GPO fees, other discounts to healthcare providers and product returns are recorded at the time of sale, resulting in a reduction in product sales and the recording of an increase in accrued expenses. Discounts We typically offer a 2% prompt payment discount to our customers as an incentive to remit payment in accordance with the stated terms of the invoice, generally thirty days. Because we anticipate that those customers who are offered this discount will take advantage of the discount, we accrue 100% of the prompt payment discount at the time of sale, based on the gross amount of each invoice. We adjust the accrual quarterly to reflect actual experience. Chargebacks Chargeback reserves represent our estimated obligations resulting from the difference between the prices at which we sell our products to wholesalers and the sales price ultimately paid to wholesalers under fixed price contracts by third-party payers, including governmental agencies. We determine our chargeback estimates based on actual product sales data and forecasted customer buying patterns. Actual chargeback amounts are determined at the time of resale to the qualified healthcare provider, and we generally issue credits for such amounts within several weeks of receiving notification from the wholesaler. Estimated chargeback amounts are recorded at the time of sale, and we adjust the allowance quarterly to reflect actual experience. Distributor/Wholesaler and Group Purchasing Organization Fees Fees under our arrangements with distributors and wholesalers are usually based upon units of product purchased during the prior month or quarter and are usually paid by us within several weeks of our receipt of an invoice from the wholesaler or distributor, as the case may be. Fees under our arrangements with GPOs are usually based upon member purchases during the prior quarter and are generally billed by the GPO within 30 days after period end. Current accounting standards related to consideration given by a vendor to a customer, including a reseller of a vendor’s products, specify that cash consideration given by a vendor to a customer is presumed to be a reduction of the selling price of the vendor’s products or services and therefore should be characterized as a reduction of product sales. Consideration should be characterized as a cost incurred if we receive, or will receive, an identifiable benefit (goods or services) in exchange for the consideration and we can reasonably estimate the fair value of the benefit received. Because the fees we pay to wholesalers do not meet the foregoing conditions to be characterized as a cost, we have characterized these fees as a reduction of product sales and have included them in government and other rebates in the table above. We generally pay such amounts within several weeks of our receipt of an invoice from the distributor, wholesaler or GPO. Accordingly, we accrue the estimated fee due at the time of sale, based on the contracted price invoiced to the customer. We adjust the accrual quarterly to reflect actual experience. Product Returns Consistent with industry practice, we generally offer our wholesalers, specialty distributors and other customers a limited right to return our products based on the product’s expiration date. Currently the expiration dates for Feraheme and Makena are five years and three years , respectively. We estimate product returns based on the historical return patterns and known or expected changes in the marketplace. We track actual returns by individual production lots. Returns on lots eligible for credits under our returned goods policy are monitored and compared with historical return trends and rates. We expect that wholesalers and healthcare providers will not stock significant inventory due to the cost of the product, the expense to store our products, and/or that our products are readily available for distribution. We record an estimate of returns at the time of sale. If necessary, our estimated rate of returns may be adjusted for actual return experience as it becomes available and for known or expected changes in the marketplace. During 2014, we reduced our reserve for Feraheme product returns by approximately $1.8 million, primarily as a result of a lower than expected rate of product returns. We did not significantly adjust our reserve for product returns during 2015 or 2013. The reduction of our reserve had an impact of increasing our 2014 net income by $0.08 and $0.07 per basic and diluted share, respectively. To date, our product returns of Feraheme have been relatively limited; however, returns experience may change over time. As we continue to gain more historical experience with actual returns and continue to gain additional experience with return rates for Makena , we may be required to make a future adjustment to our product returns estimate, which would result in a corresponding change to our net product sales in the period of adjustment and could be significant. Government and Other Rebates Government and other rebate reserves relate to our reimbursement arrangements with state Medicaid programs, and contractual or performance rebate agreements with certain classes of trade. We determine our estimates for Medicaid rebates, if applicable, based on actual product sales data and our historical product claims experience. In estimating these reserves, we provide for a Medicaid rebate associated with both those expected instances where Medicaid will act as the primary insurer as well as in those instances where we expect Medicaid will act as the secondary insurer. For rebates associated with reaching defined performance goals, we determine our estimates using actual product sales data and forecasted customer buying and utilization patterns. Rebate amounts generally are invoiced quarterly and are paid in arrears, and we expect to pay such amounts within several weeks of notification by the Medicaid or provider entity. Estimated government and other rebates are recorded at the time of sale and, with the exception of Medicaid as discussed below, we adjust the accrual quarterly to reflect actual experience. During 2013, we revised our estimated Feraheme Medicaid reserve rate based on actual product-specific rebate claims received since the 2009 launch of Feraheme , our expectations of state level activities, and estimated rebate claims not yet submitted, which resulted in a reduction of our then estimated Medicaid rebate reserve related to prior period Feraheme sales of $0.6 million. These changes in estimates were reflected as an increase in our net product sales for 2013 and resulted in a reduction to our gross to net percentages in 2013. The reduction of our estimated Medicaid rebate reserve had an impact of $0.03 per basic and diluted share in 2013. We did not significantly adjust our Medicaid rebate reserve during 2015 and 2014. We regularly assess our Medicaid reserve balance and the rate at which we accrue for claims against product sales. If we determine in future periods that our actual rebate experience is not indicative of expected claims, if actual claims experience changes, or if other factors affect estimated claims rates, we may be required to adjust our current Medicaid accumulated reserve estimate, which would affect net product sales in the period of the adjustment and could be significant. Multiple Element Arrangements We evaluate revenue from arrangements that have multiple elements to determine whether the components of the arrangement represent separate units of accounting as defined in the accounting guidance related to revenue arrangements with multiple deliverables. Under current accounting guidance, which governs any agreements that contain multiple elements that are either entered into or materially modified subsequent to January 1, 2011, companies are required to establish the selling price of its products and services based on a separate revenue recognition process using management’s best estimate of the selling price when there is no vendor-specific objective evidence or third-party evidence to determine the selling price of that item. If a delivered element is not considered to have standalone value, all elements of the arrangement are recognized as revenue as a single unit of accounting over the period of performance for the last such undelivered item or services. Significant management judgment is required in determining what elements constitute deliverables and what deliverables or combination of deliverables should be considered units of accounting. When multiple deliverables are combined and accounted for as a single unit of accounting, we base our revenue recognition pattern on the last to be delivered element. Revenue is recognized using either a proportional performance or straight-line method, depending on whether we can reasonably estimate the level of effort required to complete our performance obligations under an arrangement and whether such performance obligations are provided on a best-efforts basis. To the extent we cannot reasonably estimate our performance obligations, we recognize revenue on a straight-line basis over the period we expect to complete our performance obligations. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which we are expected to complete our performance obligations under an arrangement. We may have to revise our estimates based on changes in the expected level of effort or the period we expect to complete our performance obligations. 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. Amounts received prior to satisfying the above revenue recognition criteria are recorded as deferred revenue in our consolidated balance sheets. Deferred revenue associated with our service revenues 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. Service Revenue We have identified two deliverables contained in the revenue arrangements for the CBR Services, which include: (i) enrollment, including the provision of a collection kit and cord blood and cord tissue unit processing, which are delivered at the beginning of the relationship (the “processing services”), with revenue for this deliverable recognized after the collection and successful processing of the cord blood and cord tissue; and (ii) the storage of newborn cord blood and cord tissue units (the “storage services”), for either an annual fee or a prepayment of 18 years or the lifetime of the newborn donor (“lifetime option”), with revenue for this deliverable recognized ratably over the applicable storage period. 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 in effect at the time of the newborn’s birth and subtracting the age at death. As there are other vendors who provide processing services and storage services at separately stated list prices, the processing services and storage services, including the first year storage, each have standalone value to the customer, and therefore represent separate deliverables. The selling price for the processing services are estimated based on the best estimate of selling price because we do not have vendor specific objective evidence or third-party evidence of selling price for these elements. The selling price for the storage services is determined based on vendor specific objective evidence as we have standalone renewals to support the selling price. License Fee, Collaboration and Other Revenues The terms of product development and commercialization agreements entered into between us and our collaborative licensees may include non-refundable license fees, payments based on the achievement of certain milestones and performance goals, reimbursement of certain out-of-pocket costs, including research and development expenses, payment for manufacturing services, and royalties on product sales. We recognize license fee and research and development revenue under collaborative arrangements over the term of the applicable agreements using a proportional performance model, if practical. Otherwise, we recognize such revenue on a straight-line basis. Under this model, revenue is generally recognized in an amount equal to the lesser of the amount due under the agreements or an amount based on the proportional performance to date. In cases where project costs or other performance metrics are not estimable but there is an established contract period, revenues are recognized on a straight-line basis over the term of the relevant agreement. In cases where we are reimbursed for certain research and development costs associated with our collaboration agreements and where we are acting as the principal in carrying out these services, any reimbursement payments are recorded in license fee, collaboration and other revenues in our consolidated statement of operations to match the costs that we incur during the period in which we perform those services. Nonrefundable payments and fees are recorded as deferred revenue upon receipt and may require deferral of revenue recognition to future periods. Our collaboration agreements may entitle us to additional payments upon the achievement of performance-based milestones. If a milestone involves substantive effort on our part and its achievement is not considered probable at the inception of the collaboration, we recognize the milestone consideration as revenue in the period in which the milestone is achieved only if it meets the following additional criteria: · The milestone consideration received is commensurate with either the level of effort required to achieve the milestone or the enhancement of the value of the item delivered as a result of a specific outcome resulting from our performance to achieve the milestone; · The milestone is related solely to our past performance; and · The milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement. There is significant judgment involved in determining whether a milestone meets all of these criteria. For milestones that do not meet the above criteria and are therefore not considered substantive milestones, we recognize that portion of the milestone payment equal to the percentage of the performance period completed at the time the milestone is achieved and the above conditions are met. The remaining portion of the milestone will be recognized over the remaining performance period using a proportional performance or straight-line method. |
Research and Development Expenses | Research and Development Expenses Research and development expenses include external expenses, such as costs of clinical trials, contract research and development expenses, certain manufacturing research and development costs, regulatory filing fees, consulting and professional fees and expenses, and internal expenses, such as compensation of employees engaged in research and development activities, the manufacture of product needed to support research and development efforts, related costs of facilities, and other general costs related to research and development. Manufacturing costs are generally expensed as incurred until a product has received the necessary initial regulatory approval. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and included in selling, general and administrative expenses in our consolidated statements of operations. Advertising costs , including promotional expenses, costs related to trade shows and CBR print media advertising space were $8.0 million , $2.1 million and $1.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Shipping and Handling Costs | Shipping and Handling Costs We bill customers of our CBR Services a fee for the shipping of the collection kits to CBR. |
Equity-Based Compensation | Equity-Based Compensation Equity-based compensation cost is generally measured at the estimated grant date fair value and recorded to expense over the requisite service period, which is generally the vesting period. Because equity-based compensation expense is based on awards ultimately expected to vest, we must make certain judgments about whether employees, officers, directors, consultants and advisors will complete the requisite service period, and reduce the compensation expense being recognized for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based upon historical experience and adjusted for unusual events such as corporate restructurings, which can result in higher than expected turnover and forfeitures. If factors change and we employ different assumptions in future periods, the compensation expense that we record in the future may differ significantly from what we have recorded in the current period. We estimate the fair value of equity-based compensation involving stock options based on the Black-Scholes option pricing model. Th is model require s the input of several factors such as the expected option term, the expected risk-free interest rate over the expected option term, the expected volatility of our stock price over the expected option term, and the expected dividend yield over the expected option term and are subject to various assumptions. The fair value of awards calculated using the Black-Scholes option pricing model i s generally amortized on a straight-line basis over the requisite service period, and is recognized based on the proportionate amount of the requisite service period that has been rendered during each reporting period. We estimate the fair value of our restricted stock units (“RSUs”) whose vesting is contingent upon market conditions using the Monte-Carlo simulation model. The fair value of RSUs where vesting is contingent upon market conditions is amortized based upon the estimated derived service period. The fair value of RSUs granted to our employees and directors is determined based upon the quoted closing market price per share on the date of grant, adjusted for estimated forfeitures . We believe our valuation methodologies are appropriate for estimating the fair value of the equity awards we grant to our employees and directors. Our equity award valuations are estimates and may not be reflective of actual future results or amounts ultimately realized by recipients of these grants. These amounts are subject to future quarterly adjustments based upon a variety of factors, which include, but are not limited to, changes in estimated forfeiture rates and the issuance of new equity-based awards. |
Income Taxes | Income Taxes Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using future enacted rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of our deferred tax assets will not be realized. We account for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity, and changes in facts or circumstances related to a tax position. We evaluate uncertain tax positions on a quarterly basis and adjust the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. Any changes to these estimates, based on the actual results obtained and/or a change in assumptions, could impact our income tax provision in future periods. Interest and penalty charges, if any, related to unrecognized tax benefits would be classified as a provision for income tax in our consolidated statement of operations. |
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 December 31, 2015, our cash, cash equivalents and investments amounted to approximately $466.3 million. We currently hold our excess cash primarily in institutional money market funds, corporate debt securities and commercial paper. As of December 31, 2015, approximately $ 73.7 million of our total $228.7 mi llion cash and cash equivalents balance was invested in institutional money market funds, of which $40.7 million was invested in a single fund. Our operations are located entirely within the U.S. We focus on developing, manufacturing, and commercializing Makena and Feraheme, commercializing MuGard , and marketing and selling the CBR Services. We perform ongoing credit evaluations of our product sales 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 2015, 2014 and 2013: Years Ended December 31, 2015 2014 2013 AmerisourceBergen Drug Corporation % % % Takeda Pharmaceuticals Company Limited % % % McKesson Corporation % % % Cardinal Health, Inc. <10 % % % In addition, approximately 26% , 26% and 30% of our Feraheme end-user demand in 2015, 2014 and 2013, respectively, was generated by members of a single group purchasing organization (“GPO”) with whom we have contracted. Revenues from outside of the U.S. amounted to approximately 12% , 12% and 11% of our total revenues for 2015, 2014 and 2013, respectively, and were principally related to deferred Feraheme revenue recognized in connection with the termination of our license, development and commercialization agreement (the “Takeda Agreement”) with Takeda Pharmaceutical Company Limited (“Takeda”), which is headquartered in Japan. Our net accounts receivable were $85.7 million and $38. 2 million as of December 31, 2015 and 2014, respectively, and primarily represented amounts due for products sold directly to wholesalers, distributors and specialty pharmacies and amounts due for CBR Services sold directly to consumers. As part of our credit management policy, we perform ongoing credit evaluations of our product sales customers, and we have not required collateral from any customer. We have not experienced significant bad debts and have not established an allowance for doubtful accounts on our product sales at either December 31, 2015 or 2014. We maintain an allowance for doubtful accounts for estimated losses inherent in our CBR service revenues portfolio. In establishing the allowance, we consider historical losses adjusted to take into account current market conditions and customers’ financial conditions, the amount of receivables in dispute, and the current receivables aging and current payment patterns. Account balances are charged off against the allowance after all collection means have been exhausted and the potential for recovery is considered remote. If the financial condition of any of our significant product sales customers was to deteriorate and result in an impairment of its ability to make payments owed to us, an allowance for doubtful accounts may be required which could have a material effect on earnings in the period of any such adjustment. Customers which represented greater than 10% of our accounts receivable balances as of December 31, 2015 and 2014 were as follows: December 31, 2015 2014 AmerisourceBergen Drug Corporation % % McKesson Corporation <10 % % |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Our comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes changes in equity that are excluded from net income (loss), which for all periods presented in these consolidated financial statements related to unrealized holding gains and losses on available-for-sale investments, net of tax. |
Basic and Diluted Net Income ( Loss) per Share | 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 common 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 the $200.0 million of 2.5% convertible senior notes due February 15, 2019 (the “Convertible Notes”), the exercise of outstanding stock options, the vesting of RSUs, and the exercise of warrants. We have a choice to settle the conversion obligation under the Convertible Notes in cash, shares or any combination of the two. Pursuant to certain covenants in our six-year $350.0 million term loan facility (the “ 2015 Term Loan Facility”), which we entered into in 2015 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. Since the November 2014 acquisition of Lumara Health, 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. We utilized the treasury stock method to reflect the dilutive effect of the conversion premium in 2014, as if it were a freestanding written call option on our shares prior to the November 2014 acquisition of Lumara Health. The impact of the conversion premium has been considered in the calculation of diluted net income per share for 2014 by applying the closing price of our common stock on December 31, 2014 to calculate the number of shares issuable under the conversion premium. 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 2015, 2014 and 2013 were as follows (in thousands, except per share data): Years Ended December 31, 2015 2014 2013 Net income (loss) - basic $ $ $ Dilutive effect of convertible 2.5% notes — — Net income (loss) - diluted $ $ $ 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 , 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): Years Ended December 31, 2015 2014 2013 Options to purchase shares of common stock Shares of common stock issuable upon the vesting of RSUs Warrants — — Convertible 2.5% notes — — Total 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. During 2015, the average common stock price was above the exercise price of the warrants and during 2014, the average common stock price was below the exercise price of the warrants. |
Reclassifications | Reclassifications Certain amounts in prior periods have been reclassified in order to conform to the current period presentation. In 2015, we reclassified certain immaterial revenue amounts in 2014 and 2013 within the consolidated statements of operations to more accurately reflect the underlying revenue typ e. |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Schedule of customers representing 10% or more of revenues | Years Ended December 31, 2015 2014 2013 AmerisourceBergen Drug Corporation % % % Takeda Pharmaceuticals Company Limited % % % McKesson Corporation % % % Cardinal Health, Inc. <10 % % % |
Schedule of customers representing greater than 10% of accounts receivable balances | December 31, 2015 2014 AmerisourceBergen Drug Corporation % % McKesson Corporation <10 % % |
Schedule of property, plant and equipment estimated useful lives | Useful Life Buildings and improvements 15 - 40 Years Computer equipment and software 5 Years Furniture and fixtures 5 Years Leasehold improvements Lesser of Lease or Asset Life Laboratory and production equipment 5 Years Land improvements 10 Years |
Analysis of U.S. product sales allowances and accruals | Our product revenues were offset by provisions for allowances and accruals as follows (in thousands): Years Ended December 31, 2015 2014 2013 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 components of basic and diluted net income (loss) per share | The components of basic and diluted net income (loss) per share for 2015, 2014 and 2013 were as follows (in thousands, except per share data): Years Ended December 31, 2015 2014 2013 Net income (loss) - basic $ $ $ Dilutive effect of convertible 2.5% notes — — Net income (loss) - diluted $ $ $ 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 excluded from computation of diluted net loss per share | The following table sets forth the potential common shares issuable upon the exercise of outstanding options, the vesting of RSUs , 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): Years Ended December 31, 2015 2014 2013 Options to purchase shares of common stock Shares of common stock issuable upon the vesting of RSUs Warrants — — Convertible 2.5% notes — — Total |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
CBR Acquisition Holdings Corp | |
Summary of the components of the estimated purchase price | The following table summarizes the components of the total purchase price paid for CBR, as adjusted for the final net working capital, indebtedness and other adjustments (in thousands): Total Acquisition Date Fair Value Cash consideration $ Estimated working capital, indebtedness and other adjustments Purchase price paid at closing Cash paid on finalization of the net working capital, indebtedness and other adjustments 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 liabilities assumed by us along with the resulting goodwill at the CBR Acquisition Date (in thousands): Total Acquisition Date Fair Value Accounts receivable $ Inventories Prepaid and other current assets Restricted cash - short-term Property, plant and equipment Customer relationships Trade name and trademarks Favorable lease asset Deferred income tax assets Other long-term assets Accounts payable Accrued expenses Deferred revenues - short-term Payable to former CBR shareholders Deferred income tax liabilities Other long-term liabilities Total estimated identifiable net assets $ Goodwill Total $ |
Pro forma consolidated financial information | The following table presents the unaudited pro forma consolidated results (in thousands): Years Ended December 31, 2015 2014 2013 Pro forma combined revenues $ $ $ Pro forma combined net income (loss) $ $ $ |
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): Total Acquisition Date Fair Value 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 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 2015 (in thousands): Total Acquisition Date Fair Value Accounts receivable $ Inventories Prepaid and other current assets Deferred income tax assets Property and equipment Makena Base Technology 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 $ |
MuGard | |
Summary of the components of the estimated purchase price | The following table summarizes the total consideration for the MuGard Rights (in thousands): Total Acquisition Date Fair Value Cash $ Acquisition-related contingent consideration Total consideration $ |
Summary of estimated fair values of the assets acquired and liabilities assumed related to the business combination | The following table summarizes the fair values of the assets acquired related to the business combination as of the MuGard License Date (in thousands): Total Acquisition Date Fair Value MuGard intangible asset $ Inventory Total identifiable assets acquired $ |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments | |
Summary of investments | The following is a summary of our investments as of December 31, 2015 and 2014 (in thousands): December 31, 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 Municipal securities Due in one year or less — — 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) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables represent the fair value hierarchy as of December 31, 2015 and 2014, for those assets and liabilities that we measure at fair value on a recurring basis (in thousands): Fair Value Measurements at December 31, 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 — — 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 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 — — Total Assets $ $ $ $ — Liabilities: Contingent consideration - Lumara Health $ $ — $ — $ Contingent consideration - MuGard — — Total Liabilities $ $ — $ — $ |
Lumara Health | |
Schedule of reconciliation of contingent consideration obligations related to acquisitions measured on recurring basis using Level 3 inputs | The following table presents a reconciliation of contingent consideration obligat ions related to the acquisition of Lumara Health and the MuGard Rights (in thousands): Balance as of January 1, 2014 $ Payments made Adjustments to fair value of contingent consideration Acquisition date fair value of Lumara Health contingent consideration Other adjustments Balance as of December 31, 2014 $ Payments made Adjustments to fair value of contingent consideration Other adjustments Balance as of December 31, 2015 $ |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventories | |
Schedule of major classes of inventories | Our major classes of inventories were as follows as of December 31, 2015 and 2014 (in thousands): December 31, 2015 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 (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment, Net | |
Schedule of property and equipment | Property, plant and equipment consisted of the following as of December 31, 2015 and 2014 (in thousands): December 31, 2015 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 and Intangible Asset38
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets, Net | |
Schedule of goodwill balance | Our goodwill balance consisted of the following (in thousands): Balance at January 1, 2014 $ — Goodwill acquired through Lumara Health acquisition Balance as of December 31, 2014 Goodwill acquired through CBR acquisition Measurement period adjustments related to Lumara Health acquisition Balance as of December 31, 2015 $ |
Schedule of identifiable intangible assets | As of December 31, 2015 and 2014, our identifiable intangible assets consisted of the following (in thousands): December 31, 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 int angible assets $ $ $ $ $ $ |
Schedule of expected future annual amortization expense related to intangible assets | We expect amortization expense related to our finite-lived intangible assets to be as follows (in thousands) : Estimated Amortization Period Expense Year Ending December 31, 2016 $ Year Ending December 31, 2017 Year Ending December 31, 2018 Year Ending December 31, 2019 Year Ending December 31, 2020 Thereafter Total $ |
Current and Long-Term Liabiliti
Current and Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Current and Long-Term Liabilities | |
Schedule of accrued expenses | Accrued expenses consisted of the following as of December 31, 2015 and 2014 (in thousands): December 31, 2015 2014 Commercial rebates, fees and returns $ $ Professional, license, and other fees and expenses Interest expense Salaries, bonuses, and other compensation Restructuring expense Total accrued expenses $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Schedule of income tax expense (benefit) | The income tax expense (benefit) consisted of the following (in thousands): Years Ended December 31, 2015 2014 2013 Current: Federal $ — $ — $ — State — — Total current $ $ — $ — Deferred: Federal $ $ $ — State — Total deferred $ $ $ — Total income tax expense (benefit) $ $ $ — |
Schedule of reconciliation of the statutory U.S. federal income tax rate to the entity's effective income tax rate | The reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate wa s as follows: Years Ended December 31, 2015 2014 2013 Statutory U.S. federal tax rate % % % State taxes, net of federal benefit Equity-based compensation expense Contingent consideration — Transaction costs — Other permanent items, net Tax credits Valuation allowance Other, net — — Effective tax rate % % % |
Schedule of components of the entity's deferred tax assets and liabilities | The components of our deferred tax assets and liabilities we re as follows (in thousands): December 31, 2015 2014 Assets Net operating loss carryforwards $ $ Tax credit carryforwards Deferred revenue Equity-based compensation expense Capitalized research & development Intangibles — Debt instruments — Reserves Property, plant and equipment — Other Liabilities Property, plant and equipment depreciation — Intangible assets and inventory Debt instruments — Other Valuation allowance Net deferred taxes $ $ |
Accumulated Other Comprehensi41
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Loss | |
Schedule of changes in accumulated other comprehensive loss, net of tax | The table below presents information about the effects of net income (loss) of significant amounts reclassified out of accumulated other comprehensive income (loss) (“AOCI”), net of tax, associated with unrealized gains (losses) on securities during 2015 and 2014 (in thousands): December 31, 2015 2014 Beginning balance $ $ Other comprehensive income (loss) before reclassifications Gain (loss) reclassified from accumulated other comprehensive income (loss) Ending balance $ $ |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of details regarding stock options granted under equity incentive plans | December 31, 2015 Weighted Average Remaining Aggregate Intrinsic Weighted Average Contractual Value ($ in Options Exercise Price Term millions) Outstanding at beginning of year $ — $ — Granted — — Exercised — — Expired and/or forfeited — — Outstanding at end of year $ $ Outstanding at end of year - vested and unvested expected to vest $ $ Exercisable at end of year $ $ |
Summary of details regarding restricted stock units granted under equity incentive plans | December 31, 2015 Weighted Average Restricted Grant Date Stock Units Fair Value Outstanding at beginning of year $ Granted Vested Forfeited Outstanding at end of year $ Outstanding at end of year and expected to vest $ |
Schedule of equity-based compensation expense | Equity ‑based compensation expense for 2015, 2014 and 2013 consisted of the following (in thousands): Years Ended December 31, 2015 2014 2013 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 $ $ $ |
Summary of weighted average assumptions used for valuing option awards granted | Years Ended December 31, 2015 2014 2013 Non-Employee Non-Employee Non-Employee Employees Directors Employees Directors Employees Directors Risk free interest rate (%) Expected volatility (%) Expected option term (years) Dividend yield none none none none none none |
Equity Compensation Plans | |
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 December 31, 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 December 31, 2015 — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies | |
Schedule of future minimum rent payments | Future minimum payments under our non-cancelable facility-related leases as of December 31, 2015 are as follows (in thousands): Minimum Lease Period Payments Year Ending December 31, 2016 $ Year Ending December 31, 2017 Year Ending December 31, 2018 Year Ending December 31, 2019 Year Ending December 31, 2020 Thereafter Total $ |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of outstanding debt obligations | Our outstanding debt obligations as of December 31, 2015 and December 31, 2014 consisted of the following (in thousands): December 31, 2015 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 | The following table sets forth total interest expense recognized related to the Convertible Notes during the years ended December 31, 2015 and December 31, 2014 (in thousands): Years Ended December 31, 2015 2014 Contractual interest expense $ $ Amortization of debt issuance costs Amortization of debt discount Total interest expense $ $ |
Schedule of Future annual principal payments on long-term debt | Year Ending December 31, 2016 $ Year Ending December 31, 2017 Year Ending December 31, 2018 Year Ending December 31, 2019 Year Ending December 31, 2020 Thereafter Total $ |
Convertible 2.5% notes | |
Schedule of outstanding debt obligations | Our outstanding Convertible Note balances as December 31, 2015 consisted of the following (in thousands): December 31, 2015 Liability component: Principal $ Less: debt discount, net Net carrying amount $ Equity component $ |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring | |
Schedule of components of restructuring expenses and current liabilities | The following table outlines the components of our restructuring expenses which were included in current liabilities for 2015 and 2014 (in thousands): Years Ended December 31, 2015 2014 Accrued restructuring, beginning of period $ $ — Employee severance, benefits and related costs Payments Accrued restructuring, end of period $ $ |
Consolidated Quarterly Financ46
Consolidated Quarterly Financial Data-Unaudited (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Consolidated Quarterly Financial Data-Unaudited | |
Schedule of unaudited consolidated quarterly financial data | The following tables provide unaudited consolidated quarterly financial data for 2015 and 2014 (in thousands, except per share data): March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 Total revenues (a) $ $ $ $ Gross profit (a) Operating expenses (a) Net income (loss) (b) $ $ $ $ Net income (loss) per share - basic $ $ $ $ Net income (loss) per share - diluted $ $ $ $ March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 Total revenues (c) $ $ $ $ Gross profit (c) Operating expenses (c) Net income (loss) (d) $ $ $ $ Net income (loss) per share - basic $ $ $ $ Net income (loss) per share - diluted $ $ $ $ The sum of quarterly income (loss) per share totals differ from annual income (loss) per share totals due to rounding. (a) In August 2015, we acquired CBR and recorded $24.1 million and $10.0 million in CBR service revenue and cost of services, respectively, in 2015 and additional operating costs incurred as a result of the acquisition. (b) In August 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 consolidated statements of operations. (c) In November 2014, we acquired Lumara Health and recorded $22.5 million in Makena sales in 2014 and additional operating costs incurred as a result of the acquisition. (d) In the fourth quarter of 2014, we recognized a $153.2 million income tax benefit in connection with the 2014 Lumara Health acquisition. |
Valuation and Qualifying Acco47
Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts | |
Schedule of valuation and qualifying accounts | Balance at Deductions Balance at Beginning Charged to End of of Period Additions (a) Reserves Period Year ended December 31, 2015: Allowance for doubtful accounts (a) $ — $ $ — $ Accounts receivable allowances (b) $ $ $ $ Rebates, fees and returns reserves $ $ $ $ Year ended December 31, 2014: Accounts receivable allowances (b) $ $ $ $ Rebates, fees and returns reserves $ $ $ $ Year ended December 31, 2013: Accounts receivable allowances (b) $ $ $ $ Rebates, fees and returns reserves $ $ $ $ (a) Additions to allowance for doubtful accounts are recorded in selling, general and administrative expenses. Additions to rebates, fees and returns reserves are recorded as a reduction of revenues. These accounts receivable allowances represent discounts and other chargebacks related to the provision for our product sales. |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Inventory and Restricted Cash (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Restricted Cash | ||
Total restricted cash | $ 2.6 | $ 2.4 |
Security deposit in the form of an irrevocable letter of credit | 0.6 | 0.4 |
Lumara Health | ||
Restricted Cash | ||
Total restricted cash | $ 2 | $ 2 |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Concentrations and Significant Customer Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Investment Concentration Risk | ||||
Cash, cash equivalents and investments | $ 466,300 | |||
Investment in institutional money market funds | 73,700 | |||
Cash and cash equivalents | 228,705 | $ 119,296 | $ 26,986 | $ 46,293 |
Amount invested in a single fund | 40,700 | |||
Concentrations and Significant Customer Information | ||||
Accounts receivable, net | $ 85,678 | $ 38,172 | ||
Minimum | ||||
Concentrations and Significant Customer Information | ||||
Concentration risk (as a percent) | 10.00% | |||
Sales Revenue, Net | Customer Concentration Risk | Amerisource Bergen Drug Corporation | ||||
Concentrations and Significant Customer Information | ||||
Concentration risk (as a percent) | 25.00% | 34.00% | 41.00% | |
Sales Revenue, Net | Customer Concentration Risk | Takeda Pharmaceutical Company Limited | ||||
Concentrations and Significant Customer Information | ||||
Concentration risk (as a percent) | 12.00% | 11.00% | 11.00% | |
Sales Revenue, Net | Customer Concentration Risk | McKesson Corporation | ||||
Concentrations and Significant Customer Information | ||||
Concentration risk (as a percent) | 11.00% | 21.00% | 24.00% | |
Sales Revenue, Net | Customer Concentration Risk | Cardinal Health Inc | ||||
Concentrations and Significant Customer Information | ||||
Concentration risk (as a percent) | 15.00% | 16.00% | ||
Sales Revenue, Net | Customer Concentration Risk | Cardinal Health Inc | Maximum | ||||
Concentrations and Significant Customer Information | ||||
Concentration risk (as a percent) | 10.00% | |||
Sales Revenue, Net | Customer Concentration Risk | Group Purchasing Organization | ||||
Concentrations and Significant Customer Information | ||||
Concentration risk (as a percent) | 26.00% | 26.00% | 30.00% | |
Sales Revenue, Net | Geographic Concentration Risk | ||||
Concentrations and Significant Customer Information | ||||
Approximate percentage of revenues from customers outside the U.S. | 12.00% | 12.00% | 11.00% | |
Accounts Receivable | Customer Concentration Risk | Amerisource Bergen Drug Corporation | ||||
Concentrations and Significant Customer Information | ||||
Concentration risk (as a percent) | 43.00% | 45.00% | ||
Accounts Receivable | Customer Concentration Risk | McKesson Corporation | ||||
Concentrations and Significant Customer Information | ||||
Concentration risk (as a percent) | 12.00% | |||
Accounts Receivable | Customer Concentration Risk | McKesson Corporation | Maximum | ||||
Concentrations and Significant Customer Information | ||||
Concentration risk (as a percent) | 10.00% |
Summary of Significant Accoun50
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Building and Improvements | Minimum | |
Property and Equipment | |
Estimated useful lives | 15 years |
Building and Improvements | Maximum | |
Property and Equipment | |
Estimated useful lives | 40 years |
Computer equipment and software | |
Property and Equipment | |
Estimated useful lives | 5 years |
Furniture and Fixtures | |
Property and Equipment | |
Estimated useful lives | 5 years |
Laboratory and Production Equipment | |
Property and Equipment | |
Estimated useful lives | 5 years |
Land improvements | |
Property and Equipment | |
Estimated useful lives | 10 years |
Summary of Significant Accoun51
Summary of Significant Accounting Policies - Product Revenue and Other (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Provision for U.S. product sales allowances and accruals | |||
Gross U.S. product sales | $ 561,255 | $ 190,512 | $ 120,195 |
Contractual adjustments | 161,665 | 73,262 | 48,433 |
Government rebates | 57,774 | 7,252 | 70 |
Total provision for U.S product sales allowances and accruals | 219,439 | 80,514 | 48,503 |
U.S. products sales, net | $ 341,816 | 109,998 | 71,692 |
Typical average period from time of product sale to payment of rebate, up to or longer than | 3 months | ||
Discounts | |||
Percentage of prompt payment discount to customers | 2.00% | ||
Period within which discount is offered to customers for prompt payment | 30 days | ||
Accrued percentage of the prompt payment discount | 100.00% | ||
Product Returns | |||
Reduction of reserve for product returns | $ 1,800 | ||
Reduction of product return reserve impact on earnings per share basic (in dollars per share) | $ 0.08 | ||
Reduction of product return reserve impact on earnings per share diluted (in dollars per share) | $ 0.07 | ||
Government and Other Rebates | |||
Reduction in Medicaid rebate reserves | $ 600 | ||
Reduction in estimated Medicaid rebate reserve, impact per basic and diluted share (in dollars per share) | $ 0.03 | ||
Distributor/Wholesaler and Group Purchasing Organization Fees | |||
Period within which fees are billed by the GPO | 30 days | ||
Advertising Costs | |||
Advertising costs, including promotional expenses and costs related to trade shows | $ 8,000 | $ 2,100 | $ 1,900 |
U.S. Feraheme | |||
Product Returns | |||
Expiration period for products | 5 years | ||
Makena | |||
Product Returns | |||
Expiration period for products | 3 years |
Summary of Significant Accoun52
Summary of Significant Accounting Policies - Basic and Diluted Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Basis of Presentation and Summary of Significant Accounting Policies | |||||||||||
Net income (loss) - basic | $ 7,201 | $ (20,584) | $ 33,258 | $ 12,904 | $ 143,008 | $ 1,458 | $ (1,547) | $ (7,102) | $ 32,779 | $ 135,817 | $ (9,602) |
Dilutive effect of convertible 2.5% notes | 1,654 | ||||||||||
Net income (loss) - diluted | $ 32,779 | $ 137,471 | $ (9,602) | ||||||||
Weighted average common shares outstanding | 31,471 | 22,416 | 21,703 | ||||||||
Effect of dilutive securities: | |||||||||||
Warrants (in shares) | 2,466 | ||||||||||
Stock options and RSUs (in shares) | 1,371 | 520 | |||||||||
Convertible 2.5% notes (in shares) | 2,289 | ||||||||||
Shares used in calculating dilutive net income (loss) per share (in shares) | 35,308 | 25,225 | 21,703 | ||||||||
Net income (loss) per share: | |||||||||||
Basic | $ 0.21 | $ (0.62) | $ 1.09 | $ 0.47 | $ 5.98 | $ 0.07 | $ (0.07) | $ (0.33) | $ 1.04 | $ 6.06 | $ (0.44) |
Diluted | $ 0.20 | $ (0.62) | $ 0.82 | $ 0.39 | $ 4.67 | $ 0.07 | $ (0.07) | $ (0.33) | $ 0.93 | $ 5.45 | $ (0.44) |
Anti-dilutive securities excluded from the computation of diluted net income (loss) per share | |||||||||||
Anti-dilutive securities (in shares) | 9,168 | 10,412 | 3,285 | ||||||||
Employee and Non Employee Stock Option | |||||||||||
Anti-dilutive securities excluded from the computation of diluted net income (loss) per share | |||||||||||
Anti-dilutive securities (in shares) | 1,619 | 2,708 | 2,820 | ||||||||
Employee and Non Employee Restricted Stock Units | |||||||||||
Anti-dilutive securities excluded from the computation of diluted net income (loss) per share | |||||||||||
Anti-dilutive securities (in shares) | 167 | 322 | 465 | ||||||||
Warrants | |||||||||||
Anti-dilutive securities excluded from the computation of diluted net income (loss) per share | |||||||||||
Anti-dilutive securities (in shares) | 7,382 | ||||||||||
Convertible 2.5% notes | |||||||||||
Anti-dilutive securities excluded from the computation of diluted net income (loss) per share | |||||||||||
Anti-dilutive securities (in shares) | 7,382 |
Business Combination - Activity
Business Combination - Activity - CBR (Details) - USD ($) $ in Thousands | Aug. 17, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | $ 639,188 | $ 639,188 | $ 205,824 | ||
Measurement period adjustments | |||||
Increase in goodwill due to measurement period adjustments | (7,711) | ||||
Other disclosures | |||||
Net deferred tax liability | 189,145 | 189,145 | 77,619 | ||
Acquisition-related costs | 11,232 | $ 9,478 | $ 782 | ||
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 | ||||
Cash paid on finalization of net working capital, indebtedness and other adjustments | 193 | ||||
Total purchase price | 682,356 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Accounts receivable | 8,660 | ||||
Inventories | 3,825 | ||||
Prepaid and other current assets | 8,360 | ||||
Restricted cash - short-term | 30,752 | ||||
Property, plant and equipment | 29,401 | ||||
Deferred income tax assets | 5,155 | ||||
Other long-term assets | 198 | ||||
Accounts payable | (2,853) | ||||
Accrued expenses | (13,798) | ||||
Deferred revenues - short-term | (3,100) | ||||
Payable to former CBR shareholders | (37,947) | ||||
Deferred income tax liabilities | (149,530) | ||||
Other long-term liabilities | (200) | ||||
Total estimated identifiable net assets | 241,281 | ||||
Goodwill | 441,075 | 441,100 | 441,100 | ||
Total | 682,356 | ||||
Measurement period adjustments | |||||
Measurement period adjustments, decrease in assets | 1,900 | ||||
Measurement period adjustments, increase in liabilities | 500 | ||||
Increase in goodwill due to measurement period adjustments | 1,800 | ||||
Measurement period adjustments, deferred taxes | 600 | ||||
Other disclosures | |||||
Contractual amount of accounts receivable | 11,700 | ||||
Contractual amount of accounts receivable expected to be collectible | 8,700 | ||||
Net deferred tax liability | $ 144,300 | $ 144,300 | |||
Combined federal and state statutory income tax rate (as a percent) | 37.00% | ||||
Acquisition-related costs | $ 11,200 | ||||
Revenue generated after the acquisition date | $ 24,100 | ||||
CBR Acquisition Holdings Corp | CBR Customer Relationships | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | $ 297,000 | ||||
Other disclosures | |||||
Useful life | 20 years | 20 years | |||
CBR Acquisition Holdings Corp | Favorable Lease | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Finite-lived intangible assets | $ 358 | ||||
CBR Acquisition Holdings Corp | Other Income (expense) | |||||
Other disclosures | |||||
Bridge loan, commitment fee | 6,800 | ||||
CBR Trade Names and Trademarks | CBR Acquisition Holdings Corp | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Indefinite-lived intangible assets | $ 65,000 |
Business Combination - Activi54
Business Combination - Activity - Lumara (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Nov. 12, 2014 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 31, 2015 | Mar. 31, 2015 | Nov. 11, 2014 |
Business Acquisition [Line Items] | ||||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Components of total purchase price: | ||||||||
Fair value of AMAG common stock issued | $ 111,964 | |||||||
Fair value of contingent milestone payments | $ 205,000 | 205,000 | $ 13,700 | |||||
Fair values assigned to assets acquired and the liabilities assumed | ||||||||
Goodwill | 205,824 | $ 639,188 | 205,824 | |||||
Other disclosures | ||||||||
Share price (in dollars per share) | $ 63.75 | $ 44 | $ 34.88 | |||||
Net deferred tax liability | 77,619 | 189,145 | 77,619 | |||||
Acquisition-related costs | 11,232 | 9,478 | $ 782 | |||||
Lumara Health | ||||||||
Business Acquisition [Line Items] | ||||||||
Ownership percentage acquired | 100.00% | |||||||
Additional merger consideration based upon achievement of certain net sales milestones | ||||||||
Future contingent payments, maximum | $ 350,000 | |||||||
Maximum amount of contingent payments due in any calendar year | 100,000 | |||||||
Components of total purchase price: | ||||||||
Cash consideration | 600,000 | |||||||
Fair value of AMAG common stock issued | 111,964 | |||||||
Fair value of contingent milestone payments | 205,000 | |||||||
Estimated working capital and other adjustments | 821 | |||||||
Purchase price paid at closing | 917,785 | |||||||
Less: Cash received on finalization of the net working capital and other adjustments | (562) | |||||||
Cash acquired from Lumara Health | (5,219) | |||||||
Total purchase price | 912,004 | |||||||
Fair values assigned to assets acquired and the liabilities assumed | ||||||||
Accounts receivable | 36,852 | |||||||
Inventories | 30,300 | |||||||
Prepaid and other current assets | 3,322 | |||||||
Deferred income tax assets | 102,355 | |||||||
Property and equipment | 60 | |||||||
Restricted cash - short-term | 1,997 | |||||||
Other long-term assets | 3,412 | |||||||
Accounts payable | (3,807) | |||||||
Accrued expenses | (36,561) | |||||||
Deferred income tax liabilities | (295,676) | |||||||
Other long-term liabilities | (4,563) | |||||||
Total estimated identifiable net assets | 713,891 | |||||||
Goodwill | 198,113 | 198,100 | ||||||
Total | 912,004 | |||||||
Gross accounts receivable | $ 40,500 | |||||||
Other disclosures | ||||||||
Discount rate (as a percent) | 5.00% | |||||||
Gross accounts receivable | $ 40,500 | |||||||
Inventory, fair value step-up adjustment | 26,100 | 12,000 | ||||||
2,016 | 4,800 | |||||||
2,017 | 4,000 | |||||||
2,018 | 3,200 | |||||||
Net deferred tax liability | $ 193,300 | |||||||
Combined federal and state statutory income tax rate (as a percent) | 38.80% | |||||||
Acquisition-related costs | 9,500 | |||||||
Revenue generated after the acquisition date | $ 22,500 | |||||||
Lumara Health | Cost of Sales | ||||||||
Other disclosures | ||||||||
Amortization of fair value adjustment | $ 11,600 | 1,300 | ||||||
Lumara Health | Research and Development Expense | ||||||||
Other disclosures | ||||||||
Amortization of fair value adjustment | 1,200 | |||||||
Lumara Health | Makena IPR&D | ||||||||
Fair values assigned to assets acquired and the liabilities assumed | ||||||||
Indefinite-lived intangible assets | 79,100 | |||||||
Lumara Health | Makena Marketed Product | ||||||||
Fair values assigned to assets acquired and the liabilities assumed | ||||||||
Finite-lived intangible assets | 797,100 | |||||||
First Milestone | Lumara Health | ||||||||
Additional merger consideration based upon achievement of certain net sales milestones | ||||||||
Milestone payment to be paid by company upon milestone achievement | 100,000 | |||||||
Aggregate net sales milestone | $ 300,000 | |||||||
Consecutive time period for achievement of milestone | 12 months | |||||||
Second Milestone | Lumara Health | ||||||||
Additional merger consideration based upon achievement of certain net sales milestones | ||||||||
Milestone payment to be paid by company upon milestone achievement | $ 100,000 | |||||||
Aggregate net sales milestone | $ 400,000 | |||||||
Consecutive time period for achievement of milestone | 12 months | |||||||
Setoff amount upon which milestone payment is subject to under certain conditions | $ 50,000 | |||||||
Third Milestone | Lumara Health | ||||||||
Additional merger consideration based upon achievement of certain net sales milestones | ||||||||
Milestone payment to be paid by company upon milestone achievement | 50,000 | |||||||
Aggregate net sales milestone | $ 700,000 | |||||||
Consecutive time period for achievement of milestone | 24 months | |||||||
Setoff amount upon which milestone payment is subject to under certain conditions | $ 100,000 | |||||||
Fourth Milestone | Lumara Health | ||||||||
Additional merger consideration based upon achievement of certain net sales milestones | ||||||||
Milestone payment to be paid by company upon milestone achievement | 100,000 | |||||||
Aggregate net sales milestone | $ 500,000 | |||||||
Consecutive time period for achievement of milestone | 12 months | |||||||
Fifth Milestone [Member] | Lumara Health | ||||||||
Additional merger consideration based upon achievement of certain net sales milestones | ||||||||
Milestone payment to be paid by company upon milestone achievement | $ 50,000 | |||||||
Aggregate net sales milestone | $ 200,000 | |||||||
Consecutive time period for achievement of milestone | 5 years | |||||||
Indemnification Escrow Fund | Lumara Health | ||||||||
Other disclosures | ||||||||
Escrow fund | $ 35,000 | |||||||
Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares of AMAG common stock issued in business combination | 3,210 | |||||||
Components of total purchase price: | ||||||||
Fair value of AMAG common stock issued | $ 32 | |||||||
Common Stock | Lumara Health | ||||||||
Business Acquisition [Line Items] | ||||||||
Shares of AMAG common stock issued in business combination | 3,200 | |||||||
Early Adoption | ASU 2015-16 | Lumara Health | ||||||||
Measurement period adjustments | ||||||||
Revenue reserves adjustment | 7,200 | |||||||
Reduction in deferred tax liabilities | 5,400 | |||||||
Final settlement adjustment | $ 4,500 |
Business Combination - Pro form
Business Combination - Pro forma (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 17, 2015 | Nov. 12, 2014 | |
Pro Forma Supplemental Information | |||||||
Acquisition-related costs | $ 11,232 | $ 9,478 | $ 782 | ||||
Other one-time fees and expenses incurred in connection with the acquisition | 9,200 | ||||||
Income Tax Expense (Benefit) | 7,065 | (153,159) | |||||
Loss on debt extinguishment | 10,449 | ||||||
Pro forma combined revenues | 490,451 | 364,447 | 179,561 | ||||
Pro forma combined net income (loss) | 28,217 | (57,739) | $ 463,522 | ||||
Goodwill not deductible for tax | $ 205,824 | 639,188 | 205,824 | ||||
Acquisitions | |||||||
Pro Forma Supplemental Information | |||||||
Goodwill not deductible for tax | 639,200 | ||||||
CBR Acquisition Holdings Corp | |||||||
Pro Forma Supplemental Information | |||||||
Acquisition-related costs | 11,200 | ||||||
Goodwill not deductible for tax | 441,100 | $ 441,075 | |||||
Lumara Health | |||||||
Pro Forma Supplemental Information | |||||||
Acquisition-related costs | 9,500 | ||||||
Gain upon exit from reorganization | $ 385,900 | ||||||
Income Tax Expense (Benefit) | $ (153,200) | $ 153,200 | |||||
Goodwill not deductible for tax | $ 198,100 | $ 198,113 |
Business Combination - Activi56
Business Combination - Activity - MuGard (Details) - USD ($) $ in Thousands | Jun. 06, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Consideration: | ||||
Acquisition-related contingent consideration | $ 205,000 | $ 13,700 | ||
Assets Acquired | ||||
Acquisition-related costs | $ 11,232 | $ 9,478 | $ 782 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||||
Fair value inputs | ||||
Discount rate (as a percent) | 15.00% | |||
MuGard | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Upfront payment in consideration of license | $ 3,300 | |||
Consideration: | ||||
Cash consideration | 3,434 | |||
Acquisition-related contingent consideration | 13,700 | |||
Total purchase price | 17,134 | |||
Fair value inputs | ||||
Discount rate (as a percent) | 12.00% | |||
Assets Acquired | ||||
Finite-lived intangible assets | 16,893 | |||
Inventory | 241 | |||
Total assets acquired | $ 17,134 | |||
Acquisition-related costs | $ 800 | |||
MuGard | Minimum | ||||
Fair value inputs | ||||
Estimated undiscounted royalty amounts payable | $ 9,000 | |||
MuGard | Maximum | ||||
Fair value inputs | ||||
Estimated undiscounted royalty amounts payable | $ 13,000 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of Investments | ||
Available-for-sale securities, Amortized Cost | $ 238,568 | $ 24,914 |
Available-for-sale securities, Gross Unrealized Gains | 5 | 13 |
Available-for-sale securities, Gross Unrealized Losses | (947) | (37) |
Available-for-sale securities, Estimated Fair Value | 237,626 | 24,890 |
Corporate debt securities | ||
Summary of Investments | ||
Available-for-sale securities due in one year or less, Amortized Cost | 27,964 | 11,656 |
Available-for-sale securities due in one to three years, Amortized Cost | 173,652 | 13,258 |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 3 | |
Available-for-sale securities due in one to three years, Gross Unrealized Gains | 3 | 10 |
Available-for-sale securities due in one year or less, Gross Unrealized Losses | (38) | (4) |
Available-for-sale securities due in one to three years, Gross Unrealized Losses | (904) | (33) |
Available-for-sale securities due in one year or less, Estimated Fair Value | 27,926 | 11,655 |
Available-for-sale securities due in one to three years, Estimated Fair Value | 172,751 | $ 13,235 |
Commercial Paper | ||
Summary of Investments | ||
Available-for-sale securities due in one year or less, Amortized Cost | 34,452 | |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 2 | |
Available-for-sale securities due in one year or less, Gross Unrealized Losses | (5) | |
Available-for-sale securities due in one year or less, Estimated Fair Value | 34,449 | |
Municipal securities | ||
Summary of Investments | ||
Available-for-sale securities due in one year or less, Amortized Cost | 2,500 | |
Available-for-sale securities due in one year or less, Estimated Fair Value | $ 2,500 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Hierarchy (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | $ 311,302 | $ 102,144 |
Total Liabilities | 222,559 | 218,702 |
Acquisition Related Contingent Consideration | Lumara Health | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 214,895 | 206,600 |
Acquisition Related Contingent Consideration | MuGard | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 7,664 | 12,102 |
Money market funds | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 73,676 | 77,254 |
Corporate debt securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 200,677 | 24,890 |
Commercial paper. | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 34,449 | |
Municipal securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 2,500 | |
Fair Value, Inputs, Level 1 | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 73,676 | 77,254 |
Fair Value, Inputs, Level 1 | Money market funds | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 73,676 | 77,254 |
Fair Value, Inputs, Level 2 | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 237,626 | 24,890 |
Fair Value, Inputs, Level 2 | Corporate debt securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 200,677 | 24,890 |
Fair Value, Inputs, Level 2 | Commercial paper. | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 34,449 | |
Fair Value, Inputs, Level 2 | Municipal securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 2,500 | |
Fair Value, Inputs, Level 3 | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 222,559 | 218,702 |
Fair Value, Inputs, Level 3 | Acquisition Related Contingent Consideration | Lumara Health | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 214,895 | 206,600 |
Fair Value, Inputs, Level 3 | Acquisition Related Contingent Consideration | MuGard | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | $ 7,664 | $ 12,102 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration (Details) - USD ($) $ in Thousands | Nov. 12, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 06, 2013 |
Reconciliation of contingent consideration obligations related to acquisitions | |||||
Acquisition-related contingent consideration | $ 205,000 | $ 13,700 | |||
Adjustments to fair value of contingent consideration | $ 4,271 | (681) | $ 1,074 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||||
Reconciliation of contingent consideration obligations related to acquisitions | |||||
Discount rate (as a percent) | 15.00% | ||||
Lumara Health and MuGard Rights | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||||
Reconciliation of contingent consideration obligations related to acquisitions | |||||
Balance at beginning of period | 218,702 | 14,550 | |||
Payments made | (456) | (270) | |||
Adjustments to fair value of contingent consideration | 4,271 | (681) | |||
Other adjustments | 42 | 103 | |||
Balance at end of period | 222,559 | 218,702 | $ 14,550 | ||
Lumara Health | |||||
Reconciliation of contingent consideration obligations related to acquisitions | |||||
Acquisition-related contingent consideration | $ 205,000 | ||||
Adjustments to fair value of contingent consideration | 8,300 | 1,600 | |||
Estimated undiscounted milestone amounts payable | 350,000 | ||||
Discount rate (as a percent) | 5.00% | ||||
Contingent consideration classified as short term liability | $ 96,400 | ||||
Interest rate (as a percent) | 5.00% | ||||
Lumara Health | Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||||
Reconciliation of contingent consideration obligations related to acquisitions | |||||
Acquisition-related contingent consideration | 205,000 | ||||
MuGard | |||||
Reconciliation of contingent consideration obligations related to acquisitions | |||||
Acquisition-related contingent consideration | $ 13,700 | ||||
Adjustments to fair value of contingent consideration | $ (4,000) | $ (2,300) | |||
Period over which estimated undiscounted royalty amounts could be paid | 10 years | ||||
Discount rate (as a percent) | 12.00% | ||||
Contingent consideration classified as short term liability | $ 600 | ||||
MuGard | Minimum | |||||
Reconciliation of contingent consideration obligations related to acquisitions | |||||
Estimated undiscounted royalty amounts payable | 9,000 | ||||
MuGard | Maximum | |||||
Reconciliation of contingent consideration obligations related to acquisitions | |||||
Estimated undiscounted royalty amounts payable | $ 13,000 |
Fair Value Measurements - Debt
Fair Value Measurements - Debt (Details) - Estimate of Fair Value Measurement - Fair Value, Inputs, Level 2 - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
2023 Senior Notes | ||
Debt | ||
Fair value of debt | $ 437.5 | |
2.5 Percent Convertible Notes | ||
Debt | ||
Fair value of debt | 246 | $ 332 |
2015 Term Loan Facility | ||
Debt | ||
Fair value of debt | $ 337.8 | |
2014 Term Loan Facility | ||
Debt | ||
Fair value of debt | $ 342 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 12, 2014 | |
Inventories disclosure | ||||
Raw materials | $ 19,673 | $ 14,188 | ||
Work in process | 1,985 | 5,965 | ||
Finished goods | 18,987 | 20,457 | ||
Inventories included in current assets | 40,645 | 40,610 | ||
Raw materials | 7,798 | |||
Total Inventories | 40,645 | 48,408 | ||
Decrease in inventories | 7,800 | |||
Inventory expensed | 1,235 | 1,309 | $ 2,175 | |
Single-Dose Preservative-Free Formulation of Makena | ||||
Inventories disclosure | ||||
Total Inventories | 3,800 | |||
Fair value adjustment included in the inventory | 1,500 | |||
Lumara Health | ||||
Inventories disclosure | ||||
Inventory acquired | $ 30,300 | |||
Inventory, fair value step-up adjustment | 12,000 | $ 26,100 | ||
Research and Development Expense | Feraheme Inventory | ||||
Inventories disclosure | ||||
Inventory expensed | $ 700 | |||
Cost of Sales | Makena Inventory | ||||
Inventories disclosure | ||||
Inventory expensed | 3,600 | |||
Inventory fair value adjustment, included in inventory expensed | 3,300 | |||
Cost of Sales | Feraheme Inventory | ||||
Inventories disclosure | ||||
Inventory expensed | $ 1,000 |
Property, Plant and Equipment (
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and Equipment | |||
Property, plant and equipment, gross | $ 33,604 | $ 2,497 | |
Less - accumulated depreciation | (4,879) | (978) | |
Property, plant and equipment, net | 28,725 | 1,519 | |
Depreciation expense | 3,900 | 500 | $ 3,000 |
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 | 13,193 | 894 | |
Furniture and Fixtures | |||
Property and Equipment | |||
Property, plant and equipment, gross | 1,725 | 680 | |
Leasehold Improvements | |||
Property and Equipment | |||
Property, plant and equipment, gross | 1,717 | 430 | |
Laboratory and Production Equipment | |||
Property and Equipment | |||
Property, plant and equipment, gross | 5,683 | $ 493 | |
Construction in Progress | |||
Property and Equipment | |||
Property, plant and equipment, gross | $ 786 | ||
Office Building | |||
Property and Equipment | |||
Accelerated depreciation expense | $ 1,900 |
Goodwill and Intangible Asset63
Goodwill and Intangible Assets, Net (Details) - USD ($) $ in Thousands | Aug. 17, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Intangible Assets, Net | |||||
Goodwill, Beginning Balance | $ 205,824 | ||||
Measurement period adjustments | (7,711) | ||||
Goodwill, Ending Balance | $ 639,188 | 639,188 | $ 205,824 | ||
Amortizable intangible assets | |||||
Cost | 1,111,351 | 1,111,351 | 813,993 | ||
Accumulated Amortization | 58,680 | 58,680 | 5,185 | ||
Net | 1,052,671 | 1,052,671 | 808,808 | ||
Amortization expense | 53,500 | 5,100 | |||
Intangible assets | |||||
Total Cost | 1,255,451 | 1,255,451 | 893,093 | ||
Total Intangible assets, net | 1,196,771 | 1,196,771 | 887,908 | ||
Expected future annual amortization expense | |||||
Year Ended December 31, 2016 | 77,704 | 77,704 | |||
Year Ending December 31, 2017 | 92,816 | 92,816 | |||
Year Ending December 31, 2018 | 100,251 | 100,251 | |||
Year Ending December 31, 2019 | 71,467 | 71,467 | |||
Year Ending December 31, 2020 | 48,890 | 48,890 | |||
Thereafter | 661,543 | 661,543 | |||
Total | 1,052,671 | 1,052,671 | |||
Maximum | |||||
Amortizable intangible assets | |||||
Amortization expense | $ 100 | ||||
CBR Acquisition Holdings Corp | |||||
Intangible Assets, Net | |||||
Goodwill acquired | 441,075 | ||||
Measurement period adjustments | 1,800 | ||||
Goodwill, Ending Balance | $ 441,075 | 441,100 | 441,100 | ||
Lumara Health | |||||
Intangible Assets, Net | |||||
Goodwill acquired | 205,824 | ||||
Goodwill, Ending Balance | 198,100 | 198,100 | |||
Goodwill accumulated impairment losses | 0 | 0 | |||
Lumara Health | ASU 2015-16 | Early Adoption | |||||
Intangible Assets, Net | |||||
Revenue reserves adjustment | 7,200 | ||||
Reduction in deferred tax liabilities | 5,400 | ||||
Final settlement adjustment | 4,500 | ||||
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 | 56,540 | 56,540 | 4,834 | ||
Net | 740,560 | $ 740,560 | 792,266 | ||
Makena Marketed Product | Lumara Health | |||||
Intangible assets | |||||
Useful life | 20 years | ||||
CBR Customer Relationships | CBR Acquisition Holdings Corp | |||||
Amortizable intangible assets | |||||
Cost | 297,000 | $ 297,000 | |||
Accumulated Amortization | 1,061 | 1,061 | |||
Net | 295,939 | $ 295,939 | |||
Intangible assets | |||||
Useful life | 20 years | 20 years | |||
Favorable Lease | |||||
Amortizable intangible assets | |||||
Cost | 358 | $ 358 | |||
Accumulated Amortization | 63 | 63 | |||
Net | 295 | 295 | |||
MuGuard Rights | |||||
Amortizable intangible assets | |||||
Cost | 16,893 | 16,893 | 16,893 | ||
Accumulated Amortization | 1,016 | 1,016 | 351 | ||
Net | $ 15,877 | $ 15,877 | $ 16,542 | ||
Intangible assets | |||||
Useful life | 10 years |
Current and Long- Term Liabil64
Current and Long- Term Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accrued Expenses | ||
Commercial rebates, fees and returns | $ 45,161 | $ 44,807 |
Professional, license, and other fees and expenses | 27,070 | 15,857 |
Interest expense | 18,411 | 7,300 |
Salaries, bonuses, and other compensation | 12,838 | 10,176 |
Restructuring expense | 2,883 | 1,953 |
Total accrued expenses | 106,363 | $ 80,093 |
Takeda Upfront Payments and Milestone Payments Recognized | License Fee, Collaboration and Other Revenues | ||
Deferred Revenues | ||
Deferred revenue recognized in earnings related to the amortization of the deferred revenue balance | $ 44,400 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
State | $ 2,058 | ||
Total Current | 2,058 | ||
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Federal | 9,819 | $ (142,884) | |
State | (4,812) | (10,275) | |
Total Deferred | 5,007 | (153,159) | |
Total income tax expense (benefit) | $ 7,065 | $ (153,159) | |
Reconciliation of statutory U.S. federal income tax rate to effective income tax rate | |||
Statutory U.S. federal tax rate | 35.00% | (34.00%) | (34.00%) |
State taxes, net of federal benefit | 0.10% | (7.90%) | 2.40% |
Equity-based compensation expense | 0.40% | 10.60% | 9.40% |
Contingent consideration | 4.70% | 3.10% | |
Transaction costs | 3.90% | 9.70% | |
Permanent items, net | 3.20% | 3.20% | 5.30% |
Tax credits | (1.70%) | (3.00%) | 0.50% |
Valuation allowance | (28.00%) | (864.90%) | 16.40% |
Other, net | 0.10% | ||
Effective tax rate | 17.70% | (883.20%) | 0.00% |
Income Taxes - Deferred tax com
Income Taxes - Deferred tax components (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Assets | ||
Net operating loss carryforwards | $ 172,944 | $ 188,873 |
Tax credit carryforwards | 6,262 | 24,574 |
Deferred revenue | 626 | 17,216 |
Equity-based compensation expense | 5,464 | 3,436 |
Capitalized research & development | 25,216 | 32,359 |
Intangibles | 272 | |
Debt instruments | 731 | |
Reserves | 8,900 | 7,782 |
Property, plant and equipment | 61 | |
Other | 10,894 | 5,014 |
Liabilities | ||
Property, plant, and equipment depreciation | (2,844) | |
Intangible assets and inventory | (400,357) | (290,491) |
Debt instruments | (1,213) | |
Other | (3,178) | (1,795) |
Net deferred tax liability | (177,286) | (11,968) |
Valuation allowance | (11,859) | (33,557) |
Net deferred taxes | (189,145) | $ (45,525) |
Valuation Allowance | ||
Decrease in valuation allowance | $ 21,700 |
Income Taxes - Carryforwards (D
Income Taxes - Carryforwards (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Carryforwards | ||
NOLs related to excess equity-based compensation tax deductions | $ 172,944 | $ 188,873 |
Uncertain Tax Benefits | ||
Amount of unrecognized tax benefits recorded prior to 2015 | 0 | |
Amount of uncertain tax benefits related to tax positions of prior tax years | 12,700 | |
Impact to income tax expense from unrecognized tax benefits due to valuation allowance | 0 | |
Amount of uncertain tax benefits that, if recognized, would impact the effective tax rate | 12,400 | |
Lumara Health | ||
Uncertain Tax Benefits | ||
Increase in unrecognized tax benefits | 12,700 | |
Federal | ||
Carryforwards | ||
NOL carryforwards | 502,500 | |
NOLs related to excess equity-based compensation tax deductions | 55,600 | |
Tax credit carryforwards | 5,500 | |
Federal | Lumara Health | ||
Carryforwards | ||
NOL carryforwards | 280,500 | |
Tax credit carryforwards | 1,900 | |
Research Tax Credit Carryforward | Federal | ||
Carryforwards | ||
Tax credit carryforwards | 3,100 | |
Capital Loss Carryforward | Federal | ||
Carryforwards | ||
NOL carryforwards | 1,700 | |
State | ||
Carryforwards | ||
NOL carryforwards | 415,300 | |
NOLs related to excess equity-based compensation tax deductions | 30,500 | |
Tax credit carryforwards | 1,100 | |
State | Lumara Health | ||
Carryforwards | ||
NOL carryforwards | 275,000 | |
State | CBR Acquisition Holdings Corp | ||
Carryforwards | ||
NOL carryforwards | 24,600 | |
State | Research Tax Credit Carryforward | ||
Carryforwards | ||
Tax credit carryforwards | $ 2,800 |
Accumulated Other Comprehensi68
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in accumulated other comprehensive income, net of tax | ||
Beginning Balance | $ (3,617) | $ (3,491) |
Other comprehensive income (loss) before reclassifications | (4) | (191) |
Gain (loss) reclassified from other accumulated comprehensive loss | (584) | 65 |
Ending Balance | $ (4,205) | $ (3,617) |
Equity-Based Compensation - Pla
Equity-Based Compensation - Plan Information (Details) | May. 21, 2015shares | Dec. 31, 2015itemshares |
Equity compensation plans | ||
Number of equity compensation plans | item | 4 | |
Equity Incentive Plan 2007 | ||
Equity compensation plans | ||
Shares authorized for issuance | 6,215,325 | |
Additional shares authorized for issuance | 1,700,000 | |
Remaining number of shares available for future grants | 2,231,795 | |
Equity Incentive Plan 2007 | Employee and Non Employee Stock Option | Minimum | ||
Equity compensation plans | ||
Expiration term | 7 years | |
Equity Incentive Plan 2007 | Employee and Non Employee Stock Option | Maximum | ||
Equity compensation plans | ||
Expiration term | 10 years | |
Stock 2000 Plan | Employee and Non Employee Stock Option | ||
Equity compensation plans | ||
Expiration term | 10 years | |
Lumara 2013 Plan | ||
Equity compensation plans | ||
Shares authorized for issuance | 200,000 | |
Remaining number of shares available for future grants | 39,984 | |
Lumara 2013 Plan | Employee and Non Employee Stock Option | ||
Equity compensation plans | ||
Expiration term | 10 years | |
2015 ESPP | ||
Equity compensation plans | ||
Shares authorized for issuance | 200,000 | |
Annual maximum percentage of employee compensation available for ESPP share purchases (as a percent) | 10.00% | |
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% | |
Shares issued | 0 |
Equity-Based Compensation - Act
Equity-Based Compensation - Activity related to Plans (Details) - USD ($) $ in Thousands | Jan. 15, 2016 | Jan. 04, 2016 | Aug. 31, 2014 | Feb. 28, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 |
Additional Disclosures | ||||||||
Total equity-based compensation expense | $ 17,237 | $ 8,625 | $ 8,004 | |||||
Other Equity Compensation Plan Outside The 2007 Plan [Member] | ||||||||
Additional Disclosures | ||||||||
Number of options and restricted stock units granted since inception (in shares) | 1,646,250 | |||||||
Number of stock options expired or terminated since inception (in shares) | 243,875 | |||||||
Number of restricted stock units forfeited since inception (in shares) | 90,001 | |||||||
Stock options exercised since inception (in shares) | 186,250 | |||||||
Shares of common stock issued pursuant to vested restricted stock units since inception | 139,474 | |||||||
Employee and Non Employee Stock Option | ||||||||
Options | ||||||||
Outstanding at beginning of period (in shares) | 2,996,383 | |||||||
Granted (in shares) | 1,215,675 | |||||||
Exercised (in shares) | (836,450) | |||||||
Expired and/or forfeited (in shares) | (471,431) | |||||||
Outstanding at end of period (in shares) | 2,904,177 | 2,996,383 | ||||||
Additional Disclosures | ||||||||
Expense recognition period | 3 years | |||||||
Employee and Non Employee Stock Option | Equity Compensation Plans | ||||||||
Options | ||||||||
Outstanding at beginning of period (in shares) | 2,130,283 | |||||||
Granted (in shares) | 995,675 | |||||||
Exercised (in shares) | (678,950) | |||||||
Expired and/or forfeited (in shares) | (373,806) | |||||||
Outstanding at end of period (in shares) | 2,073,202 | 2,130,283 | ||||||
Employee and Non Employee Stock Option | Equity Incentive Plan 2007 | ||||||||
Options | ||||||||
Outstanding at beginning of period (in shares) | 2,051,017 | |||||||
Granted (in shares) | 919,675 | |||||||
Exercised (in shares) | (657,724) | |||||||
Expired and/or forfeited (in shares) | (349,806) | |||||||
Outstanding at end of period (in shares) | 1,963,162 | 2,051,017 | ||||||
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 | 35,266 | ||||||
Employee and Non Employee Stock Option | Lumara 2013 Plan | ||||||||
Options | ||||||||
Outstanding at beginning of period (in shares) | 44,000 | |||||||
Granted (in shares) | 76,000 | |||||||
Expired and/or forfeited (in shares) | (24,000) | |||||||
Outstanding at end of period (in shares) | 96,000 | 44,000 | ||||||
Employee and Non Employee Stock Option | Other Equity Compensation Grants | Senior Management [Member] | ||||||||
Options | ||||||||
Granted (in shares) | 220,000 | 165,000 | 270,000 | |||||
Outstanding at end of period (in shares) | 830,975 | |||||||
Additional Disclosures | ||||||||
Award vesting period | 4 years | |||||||
Employee and Non Employee Restricted Stock Units | ||||||||
Unvested Restricted Stock Units | ||||||||
Outstanding at beginning of year (in shares) | 541,226 | |||||||
Granted (in shares) | 411,429 | |||||||
Vested (in shares) | (149,572) | |||||||
Forfeited (in shares) | (148,728) | |||||||
Outstanding at end of year (in shares) | 654,355 | 541,226 | ||||||
Outstanding at end of year and expected to vest (in shares) | 567,954 | |||||||
Additional Disclosures | ||||||||
Number of restricted stock units outstanding (in shares) | 541,226 | 541,226 | 654,355 | |||||
Expense recognition period | 2 years | |||||||
Employee and Non Employee Restricted Stock Units | Senior Management [Member] | ||||||||
Options | ||||||||
Granted (in shares) | 82,500 | |||||||
Vested (in shares) | (36,600) | |||||||
Additional Disclosures | ||||||||
Award vesting period | 3 years | |||||||
Shares cancelled due to employee terminations (in shares) | 27,500 | |||||||
Shares cancelled due to non-achievement of maximum target stock price range (in shares) | 18,400 | |||||||
Expense recognition period | 3 years | |||||||
Employee and Non Employee Restricted Stock Units | Equity Compensation Plans | ||||||||
Unvested Restricted Stock Units | ||||||||
Outstanding at beginning of year (in shares) | 380,826,000 | |||||||
Granted (in shares) | 329,179,000 | |||||||
Vested (in shares) | (85,098,000) | |||||||
Forfeited (in shares) | (126,227,000) | |||||||
Outstanding at end of year (in shares) | 498,680,000 | 380,826,000 | ||||||
Additional Disclosures | ||||||||
Number of restricted stock units outstanding (in shares) | 380,826,000 | 380,826,000 | 498,680,000 | |||||
Employee and Non Employee Restricted Stock Units | Equity Incentive Plan 2007 | ||||||||
Unvested Restricted Stock Units | ||||||||
Outstanding at beginning of year (in shares) | 360,826,000 | |||||||
Granted (in shares) | 268,954,000 | |||||||
Vested (in shares) | (73,432,000) | |||||||
Forfeited (in shares) | (110,018,000) | |||||||
Outstanding at end of year (in shares) | 446,330,000 | 360,826,000 | ||||||
Additional Disclosures | ||||||||
Number of restricted stock units outstanding (in shares) | 360,826,000 | 360,826,000 | 446,330,000 | |||||
Employee and Non Employee Restricted Stock Units | Lumara 2013 Plan | ||||||||
Unvested Restricted Stock Units | ||||||||
Outstanding at beginning of year (in shares) | 20,000,000 | |||||||
Granted (in shares) | 60,225,000 | |||||||
Vested (in shares) | (11,666,000) | |||||||
Forfeited (in shares) | (16,209,000) | |||||||
Outstanding at end of year (in shares) | 52,350,000 | 20,000,000 | ||||||
Additional Disclosures | ||||||||
Number of restricted stock units outstanding (in shares) | 20,000,000 | 20,000,000 | 52,350,000 | |||||
Employee and Non Employee Restricted Stock Units | Other Equity Compensation Grants | Senior Management [Member] | ||||||||
Options | ||||||||
Granted (in shares) | 195,000 | |||||||
Unvested Restricted Stock Units | ||||||||
Granted (in shares) | 83,070 | 82,250 | 87,900 | 115,000 | ||||
Vested (in shares) | (41,535) | |||||||
Forfeited (in shares) | (60,000) | |||||||
Outstanding at end of year (in shares) | 155,675 | |||||||
Additional Disclosures | ||||||||
Award vesting period | 3 years | 3 years | 3 years | |||||
Number of restricted stock units outstanding (in shares) | 155,675 | 155,675 | ||||||
Total equity-based compensation expense | $ 200 | $ 100 | ||||||
Fair value of awards granted | $ 2,100 | |||||||
Expense recognition period | 3 years | |||||||
Employee and Non Employee Restricted Stock Units | Maximum | Senior Management [Member] | ||||||||
Additional Disclosures | ||||||||
Fair value of awards granted | $ 500 | |||||||
Share Based Compensation Award Vesting At Specific Date One Member | Employee and Non Employee Restricted Stock Units | Other Equity Compensation Grants | Senior Management [Member] | ||||||||
Additional Disclosures | ||||||||
Vesting rights percentage | 50.00% | |||||||
Share Based Compensation Award Vesting At Specific Date Two Member | Employee and Non Employee Restricted Stock Units | Other Equity Compensation Grants | Senior Management [Member] | ||||||||
Additional Disclosures | ||||||||
Vesting rights percentage | 100.00% |
Equity-Based Compensation - Exp
Equity-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Equity-based compensation expense | |||
Total equity-based compensation expense | $ 17,237 | $ 8,625 | $ 8,004 |
Income tax effect | (4,885) | ||
After-tax effect of equity-based compensation expense | 12,352 | 8,625 | 8,004 |
Cost of Sales | |||
Equity-based compensation expense | |||
Total equity-based compensation expense | 371 | 122 | 121 |
Research and Development Expense | |||
Equity-based compensation expense | |||
Total equity-based compensation expense | 2,992 | 1,596 | 2,149 |
Selling, General and Administrative Expenses [Member] | |||
Equity-based compensation expense | |||
Total equity-based compensation expense | $ 13,874 | $ 6,907 | $ 5,734 |
Equity-Based Compensation - FV
Equity-Based Compensation - FV Assumptions, Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employees [Member] | ||||
Weighted average assumptions utilized for purposes of valuing grants of options to employees and non-employee directors | ||||
Risk free interest rate (as a percent) | 1.55% | 1.56% | 0.95% | |
Expected volatility (as a percent) | 47.00% | 47.00% | 59.00% | |
Expected option term | 5 years | 5 years | 5 years | |
Non Employee Director [Member] | ||||
Weighted average assumptions utilized for purposes of valuing grants of options to employees and non-employee directors | ||||
Risk free interest rate (as a percent) | 1.24% | 1.28% | 0.85% | |
Expected volatility (as a percent) | 46.00% | 46.00% | 46.00% | |
Expected option term | 4 years | 4 years | 4 years | |
Employee and Non Employee Stock Option | ||||
Options | ||||
Outstanding at beginning of period (in shares) | 2,996,383 | |||
Granted (in shares) | 1,215,675 | |||
Exercised (in shares) | (836,450) | |||
Expired and/or forfeited (in shares) | (471,431) | |||
Outstanding at end of period (in shares) | 2,904,177 | 2,996,383 | ||
Outstanding at end of year - vested and unvested expected to vest (in shares) | 2,632,232 | |||
Exercisable at end of year (in shares) | 948,034 | |||
Weighted Average Exercise Price | ||||
Outstanding at beginning of year (in dollars per share) | $ 22.60 | |||
Granted (in dollars per share) | 55.72 | |||
Exercised (in dollars per share) | 21.58 | |||
Expired and/or forfeited (in dollars per share) | 33.66 | |||
Outstanding at end of year (in dollars per share) | 34.97 | $ 22.60 | ||
Outstanding at end of year - vested and unvested expected to vest (in dollars per share) | 34.40 | |||
Exercisable at end of year (in dollars per share) | $ 23.44 | |||
Outstanding at end of year | 7 years 9 months 18 days | |||
Outstanding at end of year - vested and unvested expected to vest | 7 years 9 months 18 days | |||
Exercisable at end of year | 6 years 1 month 6 days | |||
Aggregate Intrinsic Value | ||||
Outstanding at end of year | $ 17,114 | |||
Outstanding at end of year - vested and unvested expected to vest | 16,039 | |||
Exercisable at end of year | $ 9,402 | |||
Additional Disclosures | ||||
Weighted average grant date fair value (in dollars per share) | $ 23.57 | $ 10.63 | $ 8.60 | |
Options vested (in shares) | 846,011 | |||
Aggregate intrinsic value of options exercised (in dollars) | $ 31.2 | $ 5.9 | $ 1 | |
Employee and Non Employee Restricted Stock Units | Senior Management [Member] | ||||
Options | ||||
Granted (in shares) | 82,500 |
Equity-Based Compensation - RSU
Equity-Based Compensation - RSU Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Additional disclosures | |||
Equity-based compensation expense, net of forfeitures, attributable to future periods (in dollars) | $ 44.8 | ||
Employee and Non Employee Restricted Stock Units | |||
Unvested Restricted Stock Units | |||
Outstanding at beginning of year (in shares) | 541,226 | ||
Granted (in shares) | 411,429 | ||
Vested (in shares) | (149,572) | ||
Forfeited (in shares) | (148,728) | ||
Outstanding at end of year (in shares) | 654,355 | 541,226 | |
Outstanding at end of year and expected to vest (in shares) | 567,954 | ||
Weighted Average Grant Date Fair Value | |||
Outstanding at beginning of year (in dollars per share) | $ 20.62 | ||
Granted (in dollars per share) | 52.71 | $ 22.88 | $ 16.31 |
Vested (in dollars per share) | 23.56 | ||
Forfeited (in dollars per share) | 34.78 | ||
Outstanding at end of year (in dollars per share) | 36.90 | $ 20.62 | |
Outstanding at end of year and expected to vest (in dollars per share) | $ 36.85 | ||
Additional disclosures | |||
Total grant date fair value | $ 3.5 | $ 2.7 | $ 2.8 |
Equity-based compensation expense, net of forfeitures, attributable to future periods (in dollars) | $ 16.6 | ||
Weighted average amortization periods | 2 years | ||
Employee and Non Employee Stock Option | |||
Additional disclosures | |||
Equity-based compensation expense, net of forfeitures, attributable to future periods (in dollars) | $ 28.2 | ||
Weighted average amortization periods | 3 years |
Employee Savings Plan (Details)
Employee Savings Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Savings Plan | |||
Company contribution as a percentage of each employee's combined salary and certain other compensation for the plan year under the 401(k) Plan | 3.00% | ||
Amount of company contribution for the 401(k) Plan | $ 1.8 | $ 0.8 | $ 0.7 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Aug. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2016 | May. 21, 2015 | Nov. 11, 2014 | Feb. 28, 2014 | |
Stockholders' Equity | ||||||||
Increase in total stockholders' equity partially offset by debt issuance costs allocated to equity component of the Convertible Notes | $ (36,907) | |||||||
Preferred Stock | ||||||||
Exercise price (in dollars per share) | $ 34.12 | |||||||
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 | $ 34.88 | |||||
Proceeds from the issuance of common stock, net of underwriting discounts and other expenses | $ 218,600 | $ 188,800 | $ 407,477 | |||||
Common stock, shares authorized | 117,500,000 | 58,750,000 | 117,500,000 | |||||
Prior to amendment | ||||||||
Common Stock Transactions | ||||||||
Common stock, shares authorized | 58,750,000 | |||||||
Maximum | ||||||||
Common Stock Transactions | ||||||||
Share repurchase program, authorized amount (in shares) | $ 60,000 | |||||||
Rights [Member] | ||||||||
Preferred Stock | ||||||||
Exercise price (in dollars per share) | $ 80 | |||||||
Exercise price before adjustment (in dollars per share) | $ 250 | |||||||
Percentage of beneficial ownership to acquire to make the Rights exercisable | 4.99% | |||||||
Rights [Member] | Minimum | ||||||||
Preferred Stock | ||||||||
Percentage of ownership before the NOL Amendment | 20.00% |
Business Segments (Details)
Business Segments (Details) | 12 Months Ended |
Dec. 31, 2015item | |
Business Segments | |
Number of business segments | 1 |
Commitments and Contingencies -
Commitments and Contingencies - Leases and Purchase Commitments (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Nov. 12, 2014USD ($) | Jun. 30, 2013USD ($) | |
Facility Lease Obligations | |||||
Security deposit in the form of an irrevocable letter of credit | $ 600 | $ 400 | |||
Rent expense associated with operating leases | 1,500 | $ 800 | $ 1,500 | ||
Purchase Commitments | |||||
Remaining minimum purchase commitments | 7,900 | ||||
Lumara Health | |||||
Contingent consideration | |||||
Undiscounted milestone amounts to be paid, high range | $ 350,000 | ||||
Real Estate | |||||
Minimum Lease Payments | |||||
Year Ended December 31, 2016 | 2,967 | ||||
Year Ended December 31, 2017 | 2,925 | ||||
Year Ended December 31, 2018 | 2,123 | ||||
Year Ended December 31, 2019 | 2,258 | ||||
Year Ended December 31, 2020 | 2,330 | ||||
Thereafter | 1,165 | ||||
Total | $ 13,768 | ||||
Waltham Premises | |||||
Facility Lease Obligations | |||||
Initial lease term | 5 years 2 months | ||||
Number of successive five year extension terms | item | 1 | ||||
Extension period of the lease terms | 5 years | ||||
Security deposit in the form of an irrevocable letter of credit | $ 600 | $ 400 | |||
California Premises | |||||
Facility Lease Obligations | |||||
Percentage of annual increase in rent | 3.00% |
Commitments and Contingencies78
Commitments and Contingencies - Other (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Other Funding Commitments | |
Accrued expenses for clinical studies | $ 1.6 |
Maximum | |
Indemnification Obligations | |
Initial indemnification exposure for actions or events involving officers, directors and certain employees | 1.5 |
Option Agreement with Velo Bio, LLC | |
Contingent Regulatory and Commercial Milestone Payments | |
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 |
Maximum sales milestone payments to be made based on the achievement of annual sales milestones at specified targets | 250 |
Option Agreement with Velo Bio, LLC | Minimum | |
Contingent Regulatory and Commercial Milestone Payments | |
Annual sales milestone target | 100 |
Option Agreement with Velo Bio, LLC | Maximum | |
Contingent Regulatory and Commercial Milestone Payments | |
Annual sales milestone target | $ 900 |
Commitments and Contingencies79
Commitments and Contingencies - Legal Proceedings (Details) - USD ($) $ in Millions | Feb. 05, 2016 | Dec. 31, 2015 |
Sandoz Paragraph IV Certification Letter | ||
Legal Proceedings | ||
Period of time in during which a patent infringement suit can be filed in federal district court after receipt of the Paragraph IV certification | 45 days | |
Minimum period of time before the FDA will grant approval of the application if a patent infringement suit is filed | 30 months | |
European Patent Organization Appeal | ||
Legal Proceedings | ||
Patent revocation, impact on revenue | $ 0 | |
Ferumoxytol | European Patent Organization Appeal | ||
Legal Proceedings | ||
Term of data protection entitled to under EU regulations | 8 years | |
Term of market exclusivity entitled to under EU regulations | 10 years |
Collaborative Agreements (Detai
Collaborative Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Collaborative Agreements | ||||
Cost of product sales | $ 78,509 | $ 20,306 | $ 11,960 | |
Deferred revenues, long-term | 5,093 | |||
Velo Bio option agreement | ||||
Collaborative Agreements | ||||
Upfront payment for option to acquire global rights to DIF program | $ 10,000 | |||
Payments due if the option to acquire the global rights to the DIF program is exercised | 65,000 | |||
Velo Bio option agreement | Maximum | ||||
Collaborative Agreements | ||||
Sales milestone payments based on annual sales milestones | 250,000 | |||
Sales milestone targets | 900,000 | |||
Velo Bio option agreement | Minimum | ||||
Collaborative Agreements | ||||
Sales milestone targets | 100,000 | |||
License Development and Commercialization Agreement with Takeda [Member] | ||||
Collaborative Agreements | ||||
Other reimbursement revenues | 1,700 | $ 500 | ||
Product sales and royalty revenue recognized | 1,100 | 3,500 | ||
Cost of product sales | $ 2,800 | |||
License Development and Commercialization Agreement with Takeda [Member] | Termination Agreement | ||||
Collaborative Agreements | ||||
Deferred revenue recognized in earnings related to the amortization of the deferred revenue balance | 44,400 | |||
Additional revenue recognized related to Takeda | $ 6,700 |
Debt - Summary (Details)
Debt - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt | ||
Total long-term debt | $ 1,003,140 | $ 495,346 |
Less: current maturities | 17,500 | 34,000 |
Long-term debt, net of current maturities | 985,640 | 461,346 |
2023 Senior Notes | ||
Debt | ||
Total long-term debt | 490,335 | |
2015 Term Loan Facility | ||
Debt | ||
Total long-term debt | 338,415 | |
2.5 Percent Convertible Notes | ||
Debt | ||
Total long-term debt | $ 174,390 | 167,441 |
2014 Term Loan Facility | ||
Debt | ||
Total long-term debt | $ 327,905 |
Debt - 2023 Senior Notes (Detai
Debt - 2023 Senior Notes (Details) - 2023 Senior Notes $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($) | Aug. 17, 2015USD ($) | |
Debt | ||
Interest rate (as a percent) | 7.875% | |
Redemption price as a percentage of principal | 107.875% | |
Repurchase price as a percentage of principal amount of notes plus accrued and unpaid interest | 100.00% | |
Carrying value, net | $ 490.3 | |
Maximum | ||
Debt | ||
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% | |
Minimum | ||
Debt | ||
Percentage of principal amount of debt that must remain outstanding for certain redemption terms to be applicable | 65.00% | |
Percentage of aggregate principal that must be held to accelerate amounts due | 25 | |
Change Of Control | ||
Debt | ||
Repurchase price as a percentage of principal amount of notes plus accrued and unpaid interest | 101.00% | |
CBR Acquisition Holdings Corp | Private Placement | ||
Debt | ||
Aggregate principal amount of debt issued | $ 500 |
Debt - 2015 Term Loan Facility
Debt - 2015 Term Loan Facility (Details) - USD ($) $ in Millions | Aug. 17, 2015 | Dec. 31, 2015 | Dec. 31, 2015 |
2015 Term Loan Facility | |||
Debt | |||
Debt term | 6 years | ||
Aggregate principal amount of debt issued | $ 350 | ||
Maximum incremental loan capacity allowed | $ 225 | ||
Net carrying value of outstanding borrowings | $ 338.4 | $ 338.4 | |
Installment payment amount | $ 4.4 | ||
Annual mandatory prepayment of debt as a percentage of excess cash flow | 50.00% | 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% | ||
2015 Term Loan Facility | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Margin rate | 3.75% | ||
Floor for variable rate | 1.00% | ||
Interest rate (as a percent) | 4.75% | 4.75% | |
Effective interest rate | 5.65% | 5.65% | |
2015 Term Loan Facility | Prime Rate | |||
Debt | |||
Margin rate | 2.75% | ||
Floor for variable rate | 2.00% | ||
2014 Term Loan Facility | |||
Debt | |||
Unamortized debt issuance costs | $ 6.8 | $ 6.8 | |
Term loan facility fees and expenses recorded in other income (expense) | $ 2.4 |
Debt - Convertible Notes (Detai
Debt - Convertible Notes (Details) | Feb. 14, 2014USD ($) | Dec. 31, 2015USD ($)item$ / shares | Dec. 31, 2014USD ($) |
Liability component: | |||
Principal | $ 1,045,625,000 | ||
Net carrying amount | 174,390,000 | $ 167,441,000 | |
Total interest expense recognized | |||
Total interest expense | $ 53,251,000 | 14,697,000 | |
Convertible 2.5% notes | |||
Debt | |||
Aggregate principal amount of debt issued | $ 200,000,000 | ||
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 | ||
Interest rate (as a percent) | 2.50% | ||
Initial conversion rate of common stock per $1000 of principal amount of Notes (in shares) | 36.9079 | ||
Principal amount used for debt instrument conversion ratio | $ 1,000 | ||
Initial conversion price of convertible notes into common stock (in dollars per share) | $ / shares | $ 27.09 | ||
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 | ||
Period of amortization of debt discount to interest expense using effective interest method | 5 years | ||
Debt term | 5 years | ||
Effective interest rate on liability component | 7.23% | ||
Liability component: | |||
Principal | $ 200,000,000 | ||
Less: debt discount, net | (25,610,000) | ||
Net carrying amount | 174,390,000 | ||
Equity component | 38,188,000 | ||
Debt issuance costs allocated to equity component | 1,300,000 | ||
Debt issuance costs allocated to the liability component | $ 5,400,000 | ||
Amount of if convertible value exceed the principal amount | 22,900,000 | ||
Total interest expense recognized | |||
Contractual interest expense | 5,000,000 | 4,375,000 | |
Amortization of debt issuance costs | 985,000 | 800,000 | |
Amortization of debt discount | 6,927,000 | 5,629,000 | |
Total interest expense | $ 12,912,000 | $ 10,804,000 | |
Convertible 2.5% notes | 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 | ||
Convertible 2.5% notes | Debt Instrument Convertible Covenant One [Member] | Minimum | |||
Debt | |||
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 2.5% notes | Debt Instrument Convertible Covenant Two [Member] | |||
Debt | |||
Principal amount used for debt instrument conversion ratio | $ 1,000 | ||
Number of consecutive business days after any five consecutive trading day period during the note measurement period | 5 days | ||
Number of consecutive trading days before five consecutive business days during the note measurement period | 5 days | ||
Convertible 2.5% notes | 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 2.5% notes | Debt Instrument Convertible Covenant Three [Member] | |||
Debt | |||
Principal amount used for debt instrument conversion ratio | $ 1,000 | ||
2.5 Percent Convertible Notes | |||
Debt | |||
Interest rate (as a percent) | 2.50% | 2.50% |
Debt - Convertible Bond Hedge,
Debt - Convertible Bond Hedge, Warrant Transactions and 2014 Term Loan Facility (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Aug. 17, 2015 | Feb. 13, 2014 | Aug. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2014 | Feb. 28, 2014 | Feb. 14, 2014 | Feb. 11, 2014 |
Convertible Bond Hedge | ||||||||||
Common stock covered under convertible bond hedge (in shares) | 7.4 | |||||||||
Exercise price (in dollars per unit) | $ 27.09 | |||||||||
Purchase of convertible bond hedges, net of tax | $ 39,800 | |||||||||
Warrant Transactions | ||||||||||
Number of shares of common stock called by warrants | 7.4 | |||||||||
Exercise price (in dollars per share) | $ 34.12 | |||||||||
Exercise price above last reported sale price of common stock (as a percent) | 70.00% | |||||||||
Proceeds from issuance of warrants | $ 25,620 | |||||||||
Sale price of common stock (in dollars per share) | $ 20.07 | |||||||||
Proceeds from Issuance of Warrants | $ 25,620 | |||||||||
2014 Term Loan Facility | ||||||||||
Loss on debt extinguishment | $ 10,449 | |||||||||
Convertible 2.5% notes | ||||||||||
Debt | ||||||||||
Aggregate principal amount of debt issued | $ 200,000 | |||||||||
2014 Term Loan Facility | ||||||||||
2014 Term Loan Facility | ||||||||||
Repayment of debt | $ 323,000 | |||||||||
Loss on debt extinguishment | $ 10,400 | |||||||||
Lumara Health | 2014 Term Loan Facility | ||||||||||
Debt | ||||||||||
Aggregate principal amount of debt issued | $ 340,000 | |||||||||
2014 Term Loan Facility | ||||||||||
Repayment of debt | $ 323,000 | |||||||||
Loss on debt extinguishment | $ 10,400 |
Debt - Future Payments (Details
Debt - Future Payments (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Debt | |
Year Ending December 31, 2016 | $ 17,500 |
Year Ending December 31, 2017 | 17,500 |
Year Ending December 31, 2018 | 17,500 |
Year Ending December 31, 2019 | 217,500 |
Year Ending December 31, 2020 | 17,500 |
Thereafter | 758,125 |
Total long-term debt | $ 1,045,625 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Components of restructuring expenses and reserve | ||
Restructuring charges | $ 4,136 | $ 2,023 |
Accrued restructuring, beginning of period | 1,953 | |
Employee severance, benefits and related costs | 3,874 | 2,023 |
Payments | (2,944) | (70) |
Accrued restructuring, end of period | $ 2,883 | $ 1,953 |
Consolidated Quarterly Financ88
Consolidated Quarterly Financial Data-Unaudited (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 17, 2015 | Aug. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Trading Securities and Other Trading Assets | |||||||||||||||
U.S. product sales, net | $ 341,816 | $ 109,998 | $ 71,692 | ||||||||||||
License fee and other collaboration revenues | 52,328 | 14,386 | 9,164 | ||||||||||||
Total revenues | $ 108,735 | $ 96,152 | $ 123,884 | $ 89,505 | $ 53,253 | $ 25,494 | $ 24,802 | $ 20,835 | 418,276 | 124,384 | 80,856 | ||||
Cost of product sales | 78,509 | 20,306 | 11,960 | ||||||||||||
Gross profit | 83,288 | 73,803 | 104,205 | 68,479 | 41,495 | 22,526 | 22,059 | 17,998 | |||||||
Operating expenses | 60,615 | 75,188 | 43,081 | 39,671 | 44,869 | 18,233 | 20,824 | 23,989 | |||||||
Interest expense | (53,251) | (14,697) | |||||||||||||
Interest and dividend income, net | 1,512 | 975 | 1,051 | ||||||||||||
Net income (loss) before income taxes | 39,844 | (17,342) | (9,602) | ||||||||||||
Income tax benefit (expense) | (7,065) | 153,159 | |||||||||||||
Net income (loss) | $ 7,201 | $ (20,584) | $ 33,258 | $ 12,904 | $ 143,008 | $ 1,458 | $ (1,547) | $ (7,102) | $ 32,779 | $ 135,817 | $ (9,602) | ||||
Net income (loss) per share - basic (in dollars per share) | $ 0.21 | $ (0.62) | $ 1.09 | $ 0.47 | $ 5.98 | $ 0.07 | $ (0.07) | $ (0.33) | $ 1.04 | $ 6.06 | $ (0.44) | ||||
Net income (loss) per share - diluted (in dollars per share) | $ 0.20 | $ (0.62) | $ 0.82 | $ 0.39 | $ 4.67 | $ 0.07 | $ (0.07) | $ (0.33) | $ 0.93 | $ 5.45 | $ (0.44) | ||||
Loss on debt extinguishment | $ 10,449 | ||||||||||||||
CBR Acquisition Holdings Corp | |||||||||||||||
Trading Securities and Other Trading Assets | |||||||||||||||
Total revenues | $ 24,100 | ||||||||||||||
Cost of product sales | $ 10,000 | ||||||||||||||
Lumara Health | |||||||||||||||
Trading Securities and Other Trading Assets | |||||||||||||||
Total revenues | $ 22,500 | ||||||||||||||
Income tax benefit (expense) | $ 153,200 | $ (153,200) | |||||||||||||
2014 Term Loan Facility | |||||||||||||||
Trading Securities and Other Trading Assets | |||||||||||||||
Repayments of Debt | $ 323,000 | ||||||||||||||
Loss on debt extinguishment | $ 10,400 | ||||||||||||||
2014 Term Loan Facility | Lumara Health | |||||||||||||||
Trading Securities and Other Trading Assets | |||||||||||||||
Repayments of Debt | $ 323,000 | ||||||||||||||
Loss on debt extinguishment | $ 10,400 |
Valuation and Qualifying Acco89
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for Doubtful Accounts | |||
Changes in valuation and qualifying accounts | |||
Additions | $ 900 | ||
Balance at End of Period | 900 | ||
Accounts Receivable Allowance | |||
Changes in valuation and qualifying accounts | |||
Balance at Beginning of Period | 11,618 | $ 2,728 | $ 1,771 |
Additions | 93,887 | 60,054 | 37,222 |
Deductions Charged to Reserves | (94,722) | (51,164) | (36,265) |
Balance at End of Period | 10,783 | 11,618 | 2,728 |
Rebates, Fees and Returns Reserves | |||
Changes in valuation and qualifying accounts | |||
Balance at Beginning of Period | 43,892 | 4,819 | 3,448 |
Additions | 120,293 | 52,548 | 11,850 |
Deductions Charged to Reserves | (119,023) | (13,475) | (10,479) |
Balance at End of Period | $ 45,162 | $ 43,892 | $ 4,819 |
Recently Issued and Proposed 90
Recently Issued and Proposed Accounting Pronouncements (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
The amendments ASU 2015-03 debt issuance costs | |
Reclassified debt issuance costs | $ 11.2 |