Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 04, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | AMAG PHARMACEUTICALS INC. | |
Entity Central Index Key | 792,977 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 34,154,044 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 251,110 | $ 228,705 |
Investments | 295,359 | 237,626 |
Accounts receivable, net | 66,086 | 85,678 |
Inventories | 39,564 | 40,645 |
Receivable from collaboration | 428 | |
Prepaid and other current assets | 13,437 | 13,592 |
Total current assets | 665,556 | 606,674 |
Property, plant and equipment, net | 27,173 | 28,725 |
Goodwill | 639,484 | 639,188 |
Intangible assets, net | 1,144,858 | 1,196,771 |
Restricted cash | 2,593 | 2,593 |
Other long-term assets | 1,146 | 2,259 |
Total assets | 2,480,810 | 2,476,210 |
Current liabilities: | ||
Accounts payable | 8,653 | 4,906 |
Accrued expenses | 107,599 | 106,363 |
Current portion of long-term debt | 49,610 | 17,500 |
Current portion of acquisition-related contingent consideration | 98,703 | 96,967 |
Deferred revenues | 32,499 | 20,185 |
Total current liabilities | 297,064 | 245,921 |
Long-term liabilities: | ||
Long-term debt, net | 764,543 | 803,669 |
Convertible 2.5% notes, net | 174,953 | 170,749 |
Acquisition-related contingent consideration | 125,106 | 125,592 |
Deferred tax liabilities | 188,852 | 189,145 |
Deferred revenues | 9,983 | 5,093 |
Other long-term liabilities | 4,142 | 3,777 |
Total liabilities | 1,564,643 | 1,543,946 |
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; 35,154,044 and 34,733,117 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively | 342 | 347 |
Additional paid-in capital | 1,224,670 | 1,233,786 |
Accumulated other comprehensive loss | (3,058) | (4,205) |
Accumulated deficit | (305,787) | (297,664) |
Total stockholders' equity | 916,167 | 932,264 |
Total liabilities and stockholders' equity | $ 2,480,810 | $ 2,476,210 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
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 | 117,500,000 |
Common stock, shares issued | 34,154,044 | 34,733,117 |
Common stock, shares outstanding | 34,154,044 | 34,733,117 |
2.5 Percent Convertible Notes | ||
Convertible notes, interest rate (as a percent) | 2.50% | 2.50% |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues: | ||||
U.S. product sales, net | $ 102,983 | $ 84,652 | $ 192,547 | $ 162,067 |
Service revenues, net | 24,379 | 43,898 | ||
License fee, collaboration and other revenues | 57 | 39,232 | 273 | 51,322 |
Total revenues | 127,419 | 123,884 | 236,718 | 213,389 |
Costs and expenses: | ||||
Cost of product sales | 21,937 | 19,679 | 40,236 | 40,705 |
Cost of services | 5,195 | 10,721 | ||
Research and development expenses | 14,234 | 8,184 | 28,463 | 15,172 |
Selling, general and administrative expenses | 51,924 | 31,801 | 115,098 | 63,913 |
Impairment charges of intangible assets | 15,963 | 15,963 | ||
Acquisition-related costs | 2,653 | 2,653 | ||
Restructuring expenses | 89 | 443 | 712 | 1,014 |
Total costs and expenses | 109,342 | 62,760 | 211,193 | 123,457 |
Operating income | 18,077 | 61,124 | 25,525 | 89,932 |
Other income (expense): | ||||
Interest expense | (18,250) | (10,205) | (36,693) | (20,572) |
Interest and dividend income | 773 | 372 | 1,481 | 443 |
Other income (expense) | 2 | 220 | 2 | |
Total other income (expense) | (17,477) | (9,831) | (34,992) | (20,127) |
Net income (loss) before income taxes | 600 | 51,293 | (9,467) | 69,805 |
Income tax expense (benefit) | 1,196 | 18,035 | (1,344) | 23,643 |
Net income (loss) | $ (596) | $ 33,258 | $ (8,123) | $ 46,162 |
Net income (loss) per share: | ||||
Basic | $ (0.02) | $ 1.09 | $ (0.24) | $ 1.60 |
Diluted | $ (0.02) | $ 0.82 | $ (0.24) | $ 1.23 |
Weighted average shares outstanding used to compute net income (loss) per share: | ||||
Basic | 34,223 | 30,636 | 34,481 | 28,934 |
Diluted | 34,223 | 43,181 | 34,481 | 40,791 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Net income (loss) | $ (596) | $ 33,258 | $ (8,123) | $ 46,162 |
Unrealized gains (losses) on securities: | ||||
Holding gains (losses) arising during period, net of tax | 215 | (396) | 1,147 | (327) |
Reclassification adjustment for gains (losses) included in net income (loss) | (3) | (4) | ||
Net unrealized gains (losses) on securities | 215 | (399) | 1,147 | (331) |
Total comprehensive income (loss) | $ (381) | $ 32,859 | $ (6,976) | $ 45,831 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (8,123) | $ 46,162 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 41,231 | 34,375 |
Impairment of intangible assets | 15,963 | |
Amortization of premium/discount on purchased securities | 351 | 658 |
Write-down of inventory to net realizable value | 278 | |
Non-cash equity-based compensation expense | 11,342 | 6,684 |
Amortization of debt discount and debt issuance costs | 5,940 | 5,501 |
Change in fair value of contingent consideration | 1,399 | 1,639 |
Deferred income taxes | (1,371) | 23,643 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 19,592 | (17,849) |
Inventories | 281 | (1,027) |
Receivable from collaboration | 428 | (1,097) |
Prepaid and other current assets | (273) | 3,331 |
Accounts payable and accrued expenses | 4,700 | 10,231 |
Deferred revenues | 17,204 | (44,376) |
Other assets and liabilities | 1,970 | 3,535 |
Net cash provided by operating activities | 110,634 | 71,688 |
Cash flows from investing activities: | ||
Acquisition of Lumara Health, net of acquired cash | 562 | |
Proceeds from sales or maturities of investments | 42,500 | 6,464 |
Purchase of investments | (98,795) | (291,085) |
Capital expenditures, net of proceeds from sale of assets | (2,587) | (677) |
Net cash used in investing activities | (58,882) | (284,736) |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock, net of underwriting discount and other expenses | 188,864 | |
Long-term debt principal payments | (8,752) | (16,686) |
Payment of contingent consideration | (149) | (190) |
Payments for repurchases of common stock | (20,000) | |
Proceeds from the exercise of stock options | 809 | 11,648 |
Proceeds from the issuance of common stock under ESPP | 760 | |
Payments of employee tax withholding related to equity-based compensation | (2,015) | |
Net cash (used in) provided by financing activities | (29,347) | 183,636 |
Net increase (decrease) in cash and cash equivalents | 22,405 | (29,412) |
Cash and cash equivalents at beginning of the period | 228,705 | 119,296 |
Cash and cash equivalents at end of the period | $ 251,110 | $ 89,884 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2016 | |
Description of Business | |
Description of Business | A. DESCRIPTION OF BUSINESS AMAG Pharmaceuticals, Inc., a Delaware corporation, was founded in 1981. We are a biopharmaceutical company focused on developing and delivering important therapeutics, conducting clinical research in areas of unmet need and creating education and support programs for the patients and families we serve. 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. Throughout this Quarterly Report on Form 10-Q, AMAG Pharmaceuticals, Inc. and our consolidated subsidiaries are collectively referred to as “the Company,” “AMAG,” “we,” “us,” or “our.” |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | B. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments necessary for a fair statement of the financial position and results of operations of the Company for the interim periods presented. Such adjustments consisted only of normal recurring items. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). In accordance with GAAP for interim financial reports and the instructions for Form 10-Q and the rules of the Securities and Exchange Commission, certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. Our accounting policies are described in the Notes to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2015 (our “Annual Report”). Interim results are not necessarily indicative of the results of operations for the full year. These interim financial statements should be read in conjunction with our Annual Report. Principles of Consolidation The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. Our results of operations for the three and six months ended June 30, 2016, include the results of CBR, which we acquired in August 2015. All intercompany balances and transactions have been eliminated in consolidation . Use of Estimates and Assumptions The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. The most significant estimates and assumptions are used to determine amounts and values of, but are not limited to: revenue recognition related to product sales and services revenue; product sales allowances and accruals; allowance for doubtful accounts; 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. 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 June 30, 2016, our cash, cash equivalents and investments amounted to approximately $546.5 million . We currently hold our excess cash primarily in institutional money market funds, corporate debt securities, U.S. treasury and government agency securities, commercial paper and municipal securities. As of June 30, 2016, approximately $19.0 million of our total $251.1 mi llion cash and cash equivalents balance was invested in institutional money market funds. Our operations are located entirely within the U.S. We focus primarily on developing, manufacturing, and commercializing Makena and Feraheme 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 the three and six months ended June 30, 2016 and 2015: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 AmerisourceBergen Drug Corporation % % % % Caremark LLC (Specialty Pharmacy) % <10 % % <10 % McKesson Corporation <10 % <10 % <10 % % Takeda Pharmaceuticals Company Limited — % % — % % Revenues from outside of the U.S. amounted to approximately 24% of our total revenues for the six months ended June 30, 2015 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. Substantially all of the revenue generated during the six months ended June 30, 2016 was generated within the U.S. Our net accounts receivable primarily represented amounts due for products sold directly to wholesalers, distributors, and specialty pharmacies and amounts due for CBR Services sold directly to consumers. Accounts receivable for our products and services are recorded net of reserves for estimated chargeback obligations, prompt payment discounts and any allowance for doubtful accounts. Customers which represented greater than 10% of our accounts receivable balance as of June 30, 2016 and December 31, 2015, respectively, were as follows: June 30, 2016 December 31, 2015 AmerisourceBergen Drug Corporation % % Caremark LLC (Specialty Pharmacy) % <10 % We are currently dependent on a single supplier for Feraheme drug substance (produced in two separate facilities) and 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 could not fulfill demand for any reason. Revenue Recognition Our primary sources of revenue during the reporting periods were: (a) product revenues from Makena and Feraheme ; (b) service revenues associated with the CBR Services; and (c) license fees, collaboration and other revenues, which primarily included milestone payments received from our collaboration agreements, royalties received from our license agreements, and international product revenues of Feraheme derived from our former 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 Our U.S. product sales, which primarily represented revenues from Makena and Feraheme for the three and six months ended June 30, 2016 and 2015, were offset by provisions for allowances and accruals as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Gross U.S. product sales $ $ $ $ Provision for U.S. product sales allowances and accruals: Contractual adjustments Governmental rebates Total provision for U.S. product sales allowances and accruals U.S. product sales, net $ $ $ $ We recognize U.S. product sales net of certain allowances and accruals in our condensed consolidated statement of operations at the time of sale. Our contractual adjustments include provisions for returns, pricing and prompt payment discounts, as well as wholesaler distribution fees, rebates to hospitals that qualify for 340B pricing, and volume-based and other commercial rebates. Governmental rebates relate to our reimbursement arrangements with state Medicaid programs. We did not materially adjust our product sales allowances and accruals during the three or six months ended June 30, 2016. During the three months ended June 30, 2015, we reduced our Makena related Medicaid and chargeback reserves, which were initially recorded at the time of the Lumara acquisition, by $4.0 million and $1.9 million, respectively. These adjustments were recorded to goodwill during the quarter ended June 30, 2015, as it was within one year of the Lumara Health acquisition date. 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. Multiple Element Arrangements 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: (a) vendor specific objective evidence; (b) third-party evidence of selling price and (c) 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 condensed consolidated balance sheets. Deferred revenue associated with our service revenues includes (a) amounts collected in advance of unit processing and (b) 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 Our service revenues for the CBR Services include the following two deliverables: (a) 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 (b) 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 (the “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 is 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. Reclassifications Certain amounts in the prior period have been reclassified in order to conform to the current period presentation. In accordance with Accounting Standards Update (“ASU”) No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , which we adopted in the first quarter of 2016, we reclassified total debt issuance costs related to our outstanding debt obligations from other long-term assets to the carrying amount of our debt, as a direct deduction, in our condensed consolidated balance sheets as of December 31, 2015. See Note S, “ Recently Issued and Proposed Accounting Pronouncements ” for additional information. |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations | |
Business Combinations | C. BUSINESS COMBINATIONS As part of our strategy to expand our product and service portfolio, in August 2015, we acquired CBR and the CBR Services 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”) 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 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, as adju sted for certain measurement period adjustments for CBR recorded since 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 $ During the six months ended June 30, 2016, we recorded measurement period adjustments related to the filing of pre-acquisition federal and state income tax returns and the finalization of other tax-related matters. These measurement period adjustments resulted in a net increase to goodwill of $0.3 million and have been reflected as current period adjustments in the first half of 2016 in accordance with the guidance in ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”). 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 $144.8 million in acquisition accounting using a combined federal and state statutory income tax rate of 37% . The net deferred tax liability represents the $149. 9 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, partially offset by $5.1 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 and management’s assessment of the combined company’s ability to utilize the future benefits from acquired and legacy deferred tax assets. 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 Makena , 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. This contingent consideration is recorded as a liability and measured at fair value based upon significant unobservable inputs. See Note E, “ Fair Value Measurements ,” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and Note C, “ Business Combinations ,” to the Financial Statements in our Annual Report for additional information. The following table summarizes the components of the total purchase price paid for Lumara Health, as adjusted for the final net working capital and other adjustments (in thousands): 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 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 Health acquisition agreement, payments made by us to dissenting stockholders, specified tax claims, excess parachute claims, and certain claims related to the Women’s Health Division of Lumara Health, which was divested by Lumara Health prior to the closing. As of June 30, 2016, the funds held in escrow were substantially distribute d to the former Lumara Health security holders. 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. See Note C, “ Business Combinations ,” to the Financial Statements in our Annual Report for additional information. Goodwill In connection with the CBR acquisition, we recognized $441.4 million of goodwill, primarily due to the synergies expected from combining our operations with CBR and to deferred tax liabilities related to fair value adjustments of 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 $639.5 million of goodwill resulting from the CBR and Lumara Health acquisitions is not deductible for income tax purposes. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2016 | |
Investments | |
Investments | D. INVESTMENTS As of June 30, 2016 and December 31, 2015, our investments equaled $295.4 million and $237.6 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 June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 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 U.S. treasury and government agency 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, 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 $ $ $ $ Impairments and Unrealized Gains and Losses on Investments We did not recognize any other-than-temporary impairment losses in our condensed consolidated statements of operations related to our securities during the three or six months ended June 30, 2016 and 2015. 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 June 30, 2016, 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 | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | E. FAIR VALUE MEASUREMENTS The following tables represent the fair value hierarchy as of June 30, 2016 and December 31, 2015, for those assets and liabilities that we measure at fair value on a recurring basis (in thousands): Fair Value Measurements at June 30, 2016 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 — — U.S. treasury and government agency securities — — Commercial paper — — Municipal securities — — Total Assets $ $ $ $ — Liabilities: Contingent consideration - Lumara Health $ $ — $ — $ Contingent consideration - MuGard — — Total Liabilities $ $ — $ — $ 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 $ $ — $ — $ 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 June 30, 2016. In addition, there were no transfers or reclassifications of any securities between Level 1 and Level 2 during the six months ended June 30, 2016. Contingent consideration 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 obligations related to the acquisition of Lumara Health and the MuGard Rights (in thousands): Balance as of December 31, 2015 $ Payments made Adjustments to fair value of contingent consideration Balance as of June 30, 2016 $ The $1.4 million of adjustments to the fair value of the contingent consideration liability during the six months ended June 30, 2016 were due to a $6.6 million increase to the Makena contingent consideration and a $5.2 million decrease to the MuGard contingent consideration. During the second quarter of 2016, we 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 MuGard -related contingent consideration liability by $5.6 million. These adjustments were included in selling, general and administrative expenses in our condensed consolidated statements of operations. We have classified $98.3 million of the Makena contingent consideration and $ 0.4 million of the MuGard contingent consideration as short-term liabilities in our condensed consolidated balance sheet as of June 30, 2016. The $98.3 million Makena contingent consideration reflects a potential $100.0 million milestone payment expected to be paid in 2016 to the former Lumara Health security holders based on the achievement of a net sales milestone of Makena. 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 June 30, 2016, the total undiscounted milestone payment amounts we could pay in connection with the Lumara Health acquisition was $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 9% . As of June 30, 2016, we estimate that the undiscounted royalty amounts we could pay under the MuGard License Agreement, based on current projections, may range from $2.0 million to $6.0 million over the remainder of the ten year period which commenced 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 June 30, 2016, the estimated fair value of our 2023 Senior Notes, Convertible Notes and 2015 Term Loan Facility (each as defined below) was $443.0 million, $220.5 million and $333.5 million, respectively, which differed from their carrying values. See Note Q, " Debt " for additional information on our debt obligations. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2016 | |
Inventories | |
Inventories | F. INVENTORIES Our major classes of inventories were as follows as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 December 31, 2015 Raw materials $ $ Work in process Finished goods Total inventories $ $ |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment, Net | |
Property, Plant and Equipment, Net | G. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 December 31, 2015 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 Assets,
Goodwill and Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets, Net | |
Goodwill and Intangible Assets, Net | H. GOODWILL AND INTANGIBLE ASSETS, NET Goodwill Our $639.5 million goodwill balance consiste d of $198.1 million of goodwill acquired through the November 2014 Lumara Health acquisition and $441.4 million acquired through the August 2015 CBR acquisition. During the six months ended June 30, 2016, the CBR goodwill increased by $0.3 million related to measurement period net tax adjustments. These measurement period adjustments have been reflected as current period adjustments in accordance with ASU 2015-16, discussed below in Note S, “ Recently Issued and Proposed Accounting Pronouncements .” As of June 30, 2016, we had no accumulated impairment losses related to goodwill. Intangible Assets As of June 30, 2016 and December 31, 2015, our identifiable intangible assets consisted of the following (in thousands): June 30, 2016 December 31, 2015 Accumulated Accumulated Cost Amortization Impairments Net Cost Amortization Net Amortizable intangible assets: Makena base technology $ $ $ — $ $ $ $ CBR customer relationships — Favorable lease — MuGard Rights — Indefinite-lived intangible assets: Makena IPR&D — — — CBR trade names and trademarks — — — Total intangible assets $ $ $ $ $ $ $ As of June 30, 2016, the weighted average remaining amortization period for our finite-lived intangible assets was approximately nine years. The Makena b ase technology and IPR&D intangible assets were acquired in November 2014 in connection with our acquisition of Lumara Health . Amortization of the Makena b ase 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 was being amortized on a straight-line basis over the remaining term of the lease. O n May 4, 2016, we entered into a sublease arrangement for a portion of our CBR office space in San Bruno, California with a sublessee at a rate l ower than the market rate used to determine the favorable lease intangible asset. We reevaluate d the favorable lease asset based on the negotiated sublease rate, resulting in an impairment charge for the full $0.2 million net intangible asset in the second quarter of 2016. The MuGard Rights were acquired from Abeona in June 2013. Amortization of the MuGard Rights was being recognized using an economic consumption model over ten years, which represented our best estimate of the period over which we expected the majority of the asset’s cash flows to be derived. Based on events in the second quarter of 2016, we determined that reimbursement coverage for MuGard by government payors was unlikely based on recent interactions with those agencies and assessed the MuGard Rights for potential impairment. From this assessment, we concluded that based on the lack of broad reimbursement and insurance coverage for MuGard and the resulting decrease in expected revenues and cash flows, the projected undiscounted cash flows were less than the book value, indicating impairment of this intangible asset. As a result of an analysis of the fair value of the net MuGard Rights intangible asset as compared to its recorded book value, we recognized an impairment charge for the full $15.7 million net intangible asse t in the second quarter of 2016 . See Note C, “ Business Combinations ,” for additional information on our intangible assets. Total amortization expense for the six months ended June 30, 2016 and 2015, was $36.0 million and $24.9 million, respectively. Amortization expense for Makena and MuGard is recorded in cost of product sales in our condensed consolidated statements of operations. Amortization expense for the CBR related intangibles is recorded in selling, general and administrative expenses in our condensed consolidated statements of operations. We expect amortization expense related to our finite-lived intangible assets to be as follows (in thousands) : Estimated Amortization Period Expense Remainder of 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 | 6 Months Ended |
Jun. 30, 2016 | |
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 June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 December 31, 2015 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 June 30, 2016 was primarily related to our CBR service revenues and includes: (a) amounts collected in advance of unit processing and (b) amounts associated with unearned storage fees collected at the beginning of the storage contract term, net of allocated discounts. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Taxes | |
Income Taxes | J. INCOME TAXES The following table summarizes our effective tax rate and income tax expense (benefit) for the three and six months ended June 30, 2016 and 2015 (in thousands except for percentages): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Effective tax rate % % % % Income tax expense (benefit) $ $ $ $ For the three and six months ended June 30, 2016, we recogni zed an income tax expense of $1.2 million and an income tax benefit $1.3 million, respectively, representing an effective tax rate of 199% and 14% , respectively . The difference between the expected statutory federal tax rate of 35% and the 199% effective tax rate for for the three months ended June 30, 2016, was primarily attributable to the impact of state income taxes, non-deductible stock compensation, non-deductible contingent consideration expense associated with Lumara Health, and other non-deductible expenses, partially offset by federal research and development and orphan drug tax credits. The effective tax rate for the three months ended June 30, 2016 reflected the significance of these permanent differences in relation to the pre-tax income for the three months ended June 30, 2016. The difference between the expected statutory federal tax rate of 35% and the 14% effective tax rate for the six months ended June 30, 2016, was primarily attributable to the impact of state income taxes and non-deductible stock compensation. The effective tax rates for the three and six months ended June 30, 2016, were also impacted by the impairment of the net intangible asset for the MuGard Rights and related contingent consideration fair value adjustment. We recorded a net tax benefit in the second quarter for these discrete events at a combined federal and state statutory income tax rate of 39% . For the three and six months ended June 30, 2015, we recogni zed income tax expense of $18.0 million and $23.6 million, respectively, representing an effective tax rate of 35% and 34% , respectively. The difference between the expected statutory federal tax rate of 35% and the 34% effective tax rate for the six months ended June 30, 2015, was attributable to the impact of a valuation allowance release related to certain deferred tax assets, partially offset by the impact of state income taxes. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (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 the three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Beginning balance $ $ $ $ Other comprehensive income (loss) before reclassifications Reclassification adjustment for (losses) gains included in net income (loss) — — Ending balance $ $ $ $ |
Basic and Diluted Net Income (L
Basic and Diluted Net Income (Loss) per Share | 6 Months Ended |
Jun. 30, 2016 | |
Basic and Diluted Net Income (Loss) per Share | |
Basic and Diluted Net Income (Loss) per Share | L. BASIC AND DILUTED NET INCOME (LOSS) PER SHARE We compute basic net income (loss) per share by dividing net income (loss) by the weighted average number of common shares outstanding during the relevant period. Diluted net income (loss) per common share has been computed by dividing net income (loss) by the diluted number of 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 restricted stock units (“RSUs”), and the exercise of warrants. We have a choice to settle the conversion obligation under the Convertible Notes in cash, shares or any combination of the two. Pursuant to certain covenants in our 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. We utilize 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. The dilutive effect of the warrants, stock options and RSUs has been calculated using the treasury stock method. The components of basic and diluted net income (loss) per share for the three and six months ended June 30, 2016 and 2015, were as follows (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Net income (loss) $ $ $ $ Weighted average common shares outstanding Effect of dilutive securities: Stock options and RSUs — — Warrants — — 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 Convertible Notes, which were excluded from our computation of diluted net income (loss) per share because their inclusion would have been anti-dilutive (in thousands): Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 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. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Equity-Based Compensation | |
Equity-Based Compensation | M. EQUITY ‑BASED COMPENSATION We currently maintain four equity compensation plans, namely our Third Amended and Restated 2007 Equity Incentive Plan, as amended (the “2007 Plan”), our Amended and Restated 2000 Stock Plan (the “2000 Plan”), 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 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. 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 6,995,325 . As of June 30, 2016, there were 1,704,940 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 June 30, 2016, there were 89,274 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. In May 2015, 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 June 30, 2016, 41,679 shares have been issued under our 2015 ESPP. During the six months ended June 30, 2016, we also granted equity through inducement grants outside of these plans to certain employees to induce them to accept employment with us (collectively, “Inducement Grants”). 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. Stock Options The following table summarizes stock option activity for the six months ended June 30, 2016: 2007 Equity 2000 Equity 2013 Lumara Inducement Plan Plan Equity Plan Grants Total Outstanding at December 31, 2015 Granted — — Exercised — — — Expired or terminated — Outstanding at June 30, 2016 Restricted Stock Units The following table summarizes RSU activity for the six months ended June 30, 2016: 2007 Equity 2000 Equity 2013 Lumara Inducement Plan Plan Equity Plan Grants Total Outstanding at December 31, 2015 — Granted — — Vested — Expired or terminated — Outstanding at June 30, 2016 — Equity ‑based compensation expense Equity ‑based compensation expense for the three and six months ended June 30, 2016 and 2015 consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 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. 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 condensed consolidated statements of cash flows. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity | |
Stockholders' Equity | N. STOCKHOLDERS’ EQUITY Share Repurchase Program In January 2016, we announced that our board of directors 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 purchase 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. During the three and six months ended June 30, 2016, we repurchased and retired 511,744 and 831,744 shares of common stock, respectively, under this repurchase program for $12.4 million and $20.0 million, respectively, at an average purchase price of $24.30 and $24.05 per share, respectively. Change in Stockholders’ Equity Total stockholders’ equity decreased by $16.1 million during the six months ended June 30, 2016. This decrease was primairily driven by $8.1 million from our net loss , $20.0 million related to the repurchase of our securities under our stock repurchase program, partially offset by $0.8 million from the exercise of stock options , $0.8 million from the issuance of common stock under our 2015 ESPP, and $11.3 mill ion related to equity-based compensation expense. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | O. 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 . Purchase Commitments In connection with our acquisition of CBR, we have certain minimum purchase commitments associated with an agreement entered into by CBR prior to our acquisition. The remaining amount of minimum purchase commitments totaled $ 1.8 million as of June 30, 2016. 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 Patent Infringement Lawsuit 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 a patent infringement suit may be filed 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. In March 2016, we initiated a patent infringement suit alleging that Sandoz’ ANDA filing itself constituted an act of infringement and that if it is approved, the manufacture, use, offer for sale, sale or importation of Sandoz’ ferumoxytol products would infringe our patents. By the filing of this complaint , the FDA is generally prohibited from granting approval of Sandoz’ 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). On May 2, 2016, Sandoz filed a response to our patent infringement suit. 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. A ny future unfavorable outcome in this matter could negatively affect the magnitude and timing of future Feraheme revenues. We intend to vigorously enforce our intellectual property rights relating to ferumoxytol. 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 in June 2015, where the decision revoking the patent was set aside and remitted back to the Opposition Division for further consideration. In June 2016, we elected not to continue to challenge the o pposition at the EPO, which will result in the loss of our European patent rights for ferumoxytol . This decision was based on a number of factors , including the fact that we withdrew ferumoxytol from the EU market in 2015 and our strategic focus of resources on U.S.-based commercial efforts . The decision not to challenge the opposition will not affect the fact that in the event that we seek to obtain a new marketing authorization for ferumoxytol in the future, under EU regulations ferumoxytol may still be entitled to the remaining part of the eight years of data protection and ten years of market exclusivity granted at the date of its original approval, which we believe c ould create barriers to entry for any generic version of ferumoxytol into the EU market until sometime between 2020 and 2022. 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 engaged in unfair methods of competition with respect to Makena or any hydroxyprogesterone caproate product. We have fully cooperated with the FTC and provided a thorough response to the FTC in August 2015 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: (a) 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; (b) our belief that the DQSA has had a significant impact on the compounding of hydroxyprogesterone caproate; and (c) 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 hydroxyprogesterone caproate. On or about April 6, 2016, we received Notice of a Lawsuit and Request to Waive Service of a Summons in a case entitled Plumbers’ Local Union No. 690 Health Plan v. Actavis Group et. al. (“Plumbers’ Union”), which was filed in the Court of Common Pleas of Philadelphia County, First Judicial District of Pennsylvania and, after removal to federal court, is now pending in the United States District Court for the Eastern District of Pennsylvani a (Civ. Action No. 16-0065-AB). Thereafter, we were also made aware of a related complaint entitled Delaware Valley Health Care Coalition v. Actavis Group et. al. (“Delaware Valley”), which was filed with the Court of Common Pleas of Philadelphia County, First Judicial District of Pennsylvania District Court of Pennsylvania (Case ID: 16 0200806). The complaints name K- V Pharmaceutical Company (“KV”) (Lumara Health’s predecessor company), certain of its successor entities, subsidiaries and affiliate entities (the “Subsidiaries”), along with a number of other pharmaceutical companies. We acquired Lumara Health in November 2014, a year after KV emerged from bankruptcy protection, at which time it , along with its then existing subsidiaries, became our wholly-owned subsidiary. We have not been served with process or waived ser vice of summons in either case. The actions are being brought alleging unfair and deceptive trade practices with regard to certain pricing practices that allegedly resulted in certain payers overpaying for certain of KV’s generic products. O n July 21, 2016, the Plaintiff in the P lumbers’ Union case dismissed K V Pharmaceutical Company with prejudice to refiling. Thi s resolves the claims against K V in this litigation and we continue to pursue dismissal of the Subsidiaries in the Pl umbers’ Union case as well as K V and the Subsidiaries in the Delaware Valley litigation on similar grounds. Because these remaining cases are in their earliest stages and we have not been served with process in either case, we are currently unable to predict the outcome or reasonably estimate the range of potential loss associated with this matter, if any. 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 as of June 30, 2016. |
Collaboration, License and Othe
Collaboration, License and Other Strategic Agreements | 6 Months Ended |
Jun. 30, 2016 | |
Collaboration, License and Other Strategic Agreements | |
Collaboration, License and Other Strategic Agreements | P. 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 June 30, 2016, we were a party to the following collaborations: Velo In July 2015, we entered into an option agreement with Velo Bio, LLC (“Velo”), a privately held life-sciences company that granted us an option to acquire the rights (the “DIF 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 Phase 2b/3a clinical study, which we expect to begin by the end of 2016. Following the concl usion 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 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 a development and license agreement (the “Antares Agreement”) with Antares Pharma, Inc. (“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 an Antares’ auto-injection system for use with hydroxyprogesterone caproate (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 until the Product is no longer developed, marketed, sold or offered for sale in such country (“ Antares Royalty Term”) . The royalty 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 ,” to the Financial Statements in our Annual Report for a detailed description of the MuGard License Agreement. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt | |
Debt | Q. DEBT Our outstanding debt obligations as of June 30, 2016 and December 31, 2015 consisted of the following (in thousands): June 30, 2016 December 31, 2015 2023 Senior Notes $ $ 2015 Term Loan Facility Convertible Notes 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 us, certain of our subsidiaries 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 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, which automatically cause the acceleration of, the amounts due under the 2023 Senior Notes. At June 30, 2016, the carrying value of the outstanding borrowings, net of issuance costs and other lender fees and expenses, was $489.0 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 June 30, 2016, the carrying value of the outstanding borrowings, net of issuance costs and other lender fees and expenses, was $325.1 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. 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 June 30, 2016, 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 $4.4 million per quarter due on the last day of each quarter beginning with the quarter ended 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. As a result, as of June 30, 2016, $32.1 million was estimated and reclassified from long-term debt to current portion of long-term debt in our condensed consolidated balance sheet as the first excess payment is expected to be made in April 2017. 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 the Convertible Notes. We received net proceeds of $193.3 million from the sale of the Convertible Notes, after deducting fees and expenses of $6.7 million. We used $14.1 million of the net proceeds from the sale of the Convertible Notes to pay the cost of the convertible bond hedges, as described below (after such cost was partially offset by the proceeds to us from the sale of warrants in the warrant transactions described below). The Convertible Notes are governed by the terms of an indenture between us, as issuer, and Wilmington Trust, National Association, as the trustee. The Convertible Notes are senior unsecured obligations and bear interest at a rate of 2.5% per year, payable semi-annually in arrears on February 15 and August 15 of each year. The Convertible Notes will mature on February 15, 2019, unless earlier repurchased or converted. Upon conversion of the Convertible Notes, at a holder’s election, such Convertible Notes will be convertible into cash, shares of our common stock, or a combination thereof, at our election (subject to certain limitations in the 2015 Term Loan Facility), at a conversion rate of approximately 36.9079 shares of common stock per $1,000 principal amount of the Convertible Notes, which corresponds to an initial conversion price of approximately $27.09 per share of our common stock. The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of stock dividends and payment of cash dividends. At any time prior to the close of business on the business day immediately preceding May 15, 2018, holders may convert their Convertible Notes at their option only under the following circumstances: 1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; 2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; or 3) upon the occurrence of specified corporate events. On or after May 15, 2018 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Convertible Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. Based on the last reported sale price of our common stock during the last 30 trading days of the first quarter of 2016, the Convertible Notes were not convertible as of June 30, 2016. 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 of June 30, 2016 consisted of the following (in thousands): June 30, 2016 Liability component: Principal $ Less: debt discount and issuance costs, 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 was allocated to the equity component and recorded as a reduction to additional paid-in capital and $5.4 million was allocated to the liability component and is now recorded as a reduction of the Convertible Notes in our condensed 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 June 30, 2016, the carrying value of the Convertible Notes was $ 175 .0 million. The effective interest rate on the liability component was 7.23% for the period from the date of issuance through June 30, 2016. As of June 30, 2016, the “if-converted value” did not exceed the remaining principal amount of the Convertible Notes. The following table sets forth total interest expense recognized related to the Convertible Notes during the three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 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 $25.7 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. |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring | |
Restructuring | R. 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 $0.1 million and $0.7 million in the three and six months ended June 30, 2016, respectively as compared to $0.4 million and $1.0 million in the same periods in 2015 . We expect to pay substantially all of these restructuring costs by the end of 2016. The following table outlines the components of our restructuring expenses which were included in current liabilities for the three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Accrued restructuring, beginning of period $ $ $ $ Employee severance, benefits and related costs Payments Accrued restructuring, end of period $ $ $ $ |
Recently Issued and Proposed Ac
Recently Issued and Proposed Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2016 | |
Recently Issued and Proposed Accounting Pronouncements | |
Recently Issued and Proposed Accounting Pronouncements | S. RECENTLY ISSUED AND PROPOSED ACCOUNTING PRONOUNCEMENTS From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB”) or other standard setting bodies that are adopted by us as of the specified effective date. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The new standard requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 will be effective for us for fiscal years beginning on or after January 1, 2020, including interim periods within those annual reporting periods and early adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2016-13 in our condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ( “ ASU 2016-09”). The new standard involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 will be effective for us on January 1, 2017. We are currently evaluating the potential impact that this standard may have on our financial position, results of operations and statement of cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). This statement requires entities to recognize on its balance sheet assets and liabilities associated with the rights and obligations created by leases with terms greater than twelve months. This statement is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods and early adoption is permitted. We are currently evaluating the impact of ASU 2016-02 in our condensed consolidated financial statements and we currently expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon our adoption of ASU 2016-02. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for us on January 1, 2018. We are currently evaluating the impact of our pending adoption of ASU 2016-01 in our condensed consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . The new standard applies only to inventory for which cost is determined by methods other than last-in, first-out and the retail inventory method, which includes inventory that is measured using first-in, first-out or average cost. Inventory within the scope of this standard is required to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new standard will be effective for us on January 1, 2017. The adoption of this standard is not expected to have a material 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 in our condensed consolidated financial statements and related disclosures and do not expect it to have a material impact on 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 March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customer Topic 606 s, Principal versus Agent Considerations , which clarifies the implementation guidance on principal versus agent considerations. In Apri l 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers Topic 606, Identifying Performance Obligations and Licensing , which clarifies certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers Topic 606, Narrow-Scope Improvements and Practical Expedients , related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectibility, non-cash consideration and the presentation of sales and other similar taxes collected from customers. We are currently evaluating the method of adoption and the potential impact that Topic 606 may have on our financial position and results of operations. These ASUs are effective for entities for interim and annual reporting periods beginning after December 15, 2017, including interim periods within that year, which for us is the period beginning January 1, 2018. Early adoption is permitted any time after the original effective date, which for us is January 1, 2017. Entities have the choice to apply these ASUs either retrospectively to each reporting period presented or by recognizing the cumulative effect of applying these standards at the date of initial application and not adjusting comparative information. We have not yet selected a transition method and are currently evaluating the impact of this standard in our condensed consolidated financial statements. |
Basis of Presentation and Sum26
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation These condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments necessary for a fair statement of the financial position and results of operations of the Company for the interim periods presented. Such adjustments consisted only of normal recurring items. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). In accordance with GAAP for interim financial reports and the instructions for Form 10-Q and the rules of the Securities and Exchange Commission, certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. Our accounting policies are described in the Notes to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2015 (our “Annual Report”). Interim results are not necessarily indicative of the results of operations for the full year. These interim financial statements should be read in conjunction with our Annual Report. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. Our results of operations for the three and six months ended June 30, 2016, include the results of CBR, which we acquired in August 2015. All intercompany balances and transactions have been eliminated in consolidation . |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. The most significant estimates and assumptions are used to determine amounts and values of, but are not limited to: revenue recognition related to product sales and services revenue; product sales allowances and accruals; allowance for doubtful accounts; 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. |
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 June 30, 2016, our cash, cash equivalents and investments amounted to approximately $546.5 million . We currently hold our excess cash primarily in institutional money market funds, corporate debt securities, U.S. treasury and government agency securities, commercial paper and municipal securities. As of June 30, 2016, approximately $19.0 million of our total $251.1 mi llion cash and cash equivalents balance was invested in institutional money market funds. Our operations are located entirely within the U.S. We focus primarily on developing, manufacturing, and commercializing Makena and Feraheme 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 the three and six months ended June 30, 2016 and 2015: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 AmerisourceBergen Drug Corporation % % % % Caremark LLC (Specialty Pharmacy) % <10 % % <10 % McKesson Corporation <10 % <10 % <10 % % Takeda Pharmaceuticals Company Limited — % % — % % Revenues from outside of the U.S. amounted to approximately 24% of our total revenues for the six months ended June 30, 2015 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. Substantially all of the revenue generated during the six months ended June 30, 2016 was generated within the U.S. Our net accounts receivable primarily represented amounts due for products sold directly to wholesalers, distributors, and specialty pharmacies and amounts due for CBR Services sold directly to consumers. Accounts receivable for our products and services are recorded net of reserves for estimated chargeback obligations, prompt payment discounts and any allowance for doubtful accounts. Customers which represented greater than 10% of our accounts receivable balance as of June 30, 2016 and December 31, 2015, respectively, were as follows: June 30, 2016 December 31, 2015 AmerisourceBergen Drug Corporation % % Caremark LLC (Specialty Pharmacy) % <10 % We are currently dependent on a single supplier for Feraheme drug substance (produced in two separate facilities) and 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 could not fulfill demand for any reason. |
Revenue Recognition | Revenue Recognition Our primary sources of revenue during the reporting periods were: (a) product revenues from Makena and Feraheme ; (b) service revenues associated with the CBR Services; and (c) license fees, collaboration and other revenues, which primarily included milestone payments received from our collaboration agreements, royalties received from our license agreements, and international product revenues of Feraheme derived from our former 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 Our U.S. product sales, which primarily represented revenues from Makena and Feraheme for the three and six months ended June 30, 2016 and 2015, were offset by provisions for allowances and accruals as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Gross U.S. product sales $ $ $ $ Provision for U.S. product sales allowances and accruals: Contractual adjustments Governmental rebates Total provision for U.S. product sales allowances and accruals U.S. product sales, net $ $ $ $ We recognize U.S. product sales net of certain allowances and accruals in our condensed consolidated statement of operations at the time of sale. Our contractual adjustments include provisions for returns, pricing and prompt payment discounts, as well as wholesaler distribution fees, rebates to hospitals that qualify for 340B pricing, and volume-based and other commercial rebates. Governmental rebates relate to our reimbursement arrangements with state Medicaid programs. We did not materially adjust our product sales allowances and accruals during the three or six months ended June 30, 2016. During the three months ended June 30, 2015, we reduced our Makena related Medicaid and chargeback reserves, which were initially recorded at the time of the Lumara acquisition, by $4.0 million and $1.9 million, respectively. These adjustments were recorded to goodwill during the quarter ended June 30, 2015, as it was within one year of the Lumara Health acquisition date. 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. Multiple Element Arrangements 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: (a) vendor specific objective evidence; (b) third-party evidence of selling price and (c) 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 condensed consolidated balance sheets. Deferred revenue associated with our service revenues includes (a) amounts collected in advance of unit processing and (b) 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 Our service revenues for the CBR Services include the following two deliverables: (a) 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 (b) 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 (the “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 is 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. |
Reclassifications | Reclassifications Certain amounts in the prior period have been reclassified in order to conform to the current period presentation. In accordance with Accounting Standards Update (“ASU”) No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , which we adopted in the first quarter of 2016, we reclassified total debt issuance costs related to our outstanding debt obligations from other long-term assets to the carrying amount of our debt, as a direct deduction, in our condensed consolidated balance sheets as of December 31, 2015. See Note S, “ Recently Issued and Proposed Accounting Pronouncements ” for additional information. |
Basis of Presentation and Sum27
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Schedule of customers representing 10% or more of revenues | Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 AmerisourceBergen Drug Corporation % % % % Caremark LLC (Specialty Pharmacy) % <10 % % <10 % McKesson Corporation <10 % <10 % <10 % % Takeda Pharmaceuticals Company Limited — % % — % % |
Schedule of customers representing greater than 10% of accounts receivable balances | June 30, 2016 December 31, 2015 AmerisourceBergen Drug Corporation % % Caremark LLC (Specialty Pharmacy) % <10 % |
Analysis of U.S. product sales allowances and accruals | Our U.S. product sales, which primarily represented revenues from Makena and Feraheme for the three and six months ended June 30, 2016 and 2015, were offset by provisions for allowances and accruals as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 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 $ $ $ $ |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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, as adju sted for certain measurement period adjustments for CBR recorded since 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 $ |
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 $ |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Investments | |
Summary of investments | The following is a summary of our investments as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 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 U.S. treasury and government agency 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, 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 $ $ $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Measurements | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables represent the fair value hierarchy as of June 30, 2016 and December 31, 2015, for those assets and liabilities that we measure at fair value on a recurring basis (in thousands): Fair Value Measurements at June 30, 2016 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 — — U.S. treasury and government agency securities — — Commercial paper — — Municipal securities — — Total Assets $ $ $ $ — Liabilities: Contingent consideration - Lumara Health $ $ — $ — $ Contingent consideration - MuGard — — Total Liabilities $ $ — $ — $ 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 $ $ — $ — $ |
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 obligations related to the acquisition of Lumara Health and the MuGard Rights (in thousands): Balance as of December 31, 2015 $ Payments made Adjustments to fair value of contingent consideration Balance as of June 30, 2016 $ |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Inventories | |
Schedule of major classes of inventories | Our major classes of inventories were as follows as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 December 31, 2015 Raw materials $ $ Work in process Finished goods Total inventories $ $ |
Property, Plant and Equipment32
Property, Plant and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment, Net | |
Schedule of property, plant and equipment, net | Property, plant and equipment, net consisted of the following as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 December 31, 2015 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 Asset33
Goodwill and Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets, Net | |
Schedule of identifiable intangible assets | As of June 30, 2016 and December 31, 2015, our identifiable intangible assets consisted of the following (in thousands): June 30, 2016 December 31, 2015 Accumulated Accumulated Cost Amortization Impairments Net Cost Amortization Net Amortizable intangible assets: Makena base technology $ $ $ — $ $ $ $ CBR customer relationships — Favorable lease — MuGard Rights — Indefinite-lived intangible assets: Makena IPR&D — — — CBR trade names and trademarks — — — Total intangible assets $ $ $ $ $ $ $ |
Schedule of 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 Remainder of 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) | 6 Months Ended |
Jun. 30, 2016 | |
Current and Long-Term Liabilities | |
Schedule of accrued expenses | Accrued expenses consisted of the following as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 December 31, 2015 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) | 6 Months Ended |
Jun. 30, 2016 | |
Income Taxes | |
Schedule of effective income tax rate and expense | The following table summarizes our effective tax rate and income tax expense (benefit) for the three and six months ended June 30, 2016 and 2015 (in thousands except for percentages): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Effective tax rate % % % % Income tax expense (benefit) $ $ $ $ |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (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 the three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Beginning balance $ $ $ $ Other comprehensive income (loss) before reclassifications Reclassification adjustment for (losses) gains included in net income (loss) — — Ending balance $ $ $ $ |
Basic and Diluted Net Income 37
Basic and Diluted Net Income (Loss) per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Basic and Diluted Net Income (Loss) per Share | |
Schedule of components of basic and diluted net income (loss) per share | The components of basic and diluted net income (loss) per share for the three and six months ended June 30, 2016 and 2015, were as follows (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Net income (loss) $ $ $ $ Weighted average common shares outstanding Effect of dilutive securities: Stock options and RSUs — — Warrants — — Convertible 2.5% notes — — Shares used in calculating dilutive net income (loss) per share Net income (loss) per share: Basic $ $ $ $ Diluted $ $ $ $ |
Schedule of anti-dilutive securities from computation of diluted net Income (loss) per share | 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 Convertible Notes, which were excluded from our computation of diluted net income (loss) per share because their inclusion would have been anti-dilutive (in thousands): Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Options to purchase shares of common stock Shares of common stock issuable upon the vesting of RSUs Warrants — — Convertible 2.5% notes — — Total |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Schedule of equity-based compensation expense | Equity ‑based compensation expense for the three and six months ended June 30, 2016 and 2015 consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 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 $ $ $ $ |
Equity Compensation Plans | |
Summary of details regarding stock options granted under equity incentive plans | 2007 Equity 2000 Equity 2013 Lumara Inducement Plan Plan Equity Plan Grants Total Outstanding at December 31, 2015 Granted — — Exercised — — — Expired or terminated — Outstanding at June 30, 2016 |
Summary of details regarding restricted stock units granted under equity incentive plans | 2007 Equity 2000 Equity 2013 Lumara Inducement Plan Plan Equity Plan Grants Total Outstanding at December 31, 2015 — Granted — — Vested — Expired or terminated — Outstanding at June 30, 2016 — |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Schedule of outstanding debt obligations | Our outstanding debt obligations as of June 30, 2016 and December 31, 2015 consisted of the following (in thousands): June 30, 2016 December 31, 2015 2023 Senior Notes $ $ 2015 Term Loan Facility Convertible Notes 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 three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Contractual interest expense $ $ $ $ Amortization of debt issuance costs Amortization of debt discount Total interest expense $ $ $ $ |
Convertible 2.5% notes | |
Schedule of outstanding debt obligations | Our outstanding Convertible Note balances as of June 30, 2016 consisted of the following (in thousands): June 30, 2016 Liability component: Principal $ Less: debt discount and issuance costs, net Net carrying amount $ Equity component $ |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
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 the three and six months ended June 30, 2016 and 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Accrued restructuring, beginning of period $ $ $ $ Employee severance, benefits and related costs Payments Accrued restructuring, end of period $ $ $ $ |
Basis of Presentation and Sum41
Basis of Presentation and Summary of Significant Accounting Policies - Concentrations and Significant Customer Information (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2014 |
Concentrations and Significant Customer Information | |||||||
Cash, cash equivalents and investments | $ 546,500 | $ 546,500 | $ 546,500 | ||||
Investment in institutional money market funds | 19,000 | 19,000 | 19,000 | ||||
Cash and cash equivalents | $ 251,110 | $ 228,705 | $ 251,110 | $ 89,884 | $ 251,110 | $ 89,884 | $ 119,296 |
Sales Revenue, Net | Minimum | |||||||
Concentrations and Significant Customer Information | |||||||
Concentration risk (as a percent) | 10.00% | 10.00% | 10.00% | 10.00% | |||
Sales Revenue, Net | Customer Concentration Risk | Amerisource Bergen Drug Corporation | |||||||
Concentrations and Significant Customer Information | |||||||
Concentration risk (as a percent) | 22.00% | 19.00% | 23.00% | 24.00% | |||
Sales Revenue, Net | Customer Concentration Risk | Caremark LLC (Specialty Pharmacy) | |||||||
Concentrations and Significant Customer Information | |||||||
Concentration risk (as a percent) | 10.00% | 10.00% | |||||
Sales Revenue, Net | Customer Concentration Risk | Caremark LLC (Specialty Pharmacy) | Maximum | |||||||
Concentrations and Significant Customer Information | |||||||
Concentration risk (as a percent) | 10.00% | 10.00% | |||||
Sales Revenue, Net | Customer Concentration Risk | McKesson Corporation | |||||||
Concentrations and Significant Customer Information | |||||||
Concentration risk (as a percent) | 10.00% | ||||||
Sales Revenue, Net | Customer Concentration Risk | McKesson Corporation | Maximum | |||||||
Concentrations and Significant Customer Information | |||||||
Concentration risk (as a percent) | 10.00% | 10.00% | 10.00% | ||||
Sales Revenue, Net | Customer Concentration Risk | Takeda Pharmaceutical Company Limited | |||||||
Concentrations and Significant Customer Information | |||||||
Concentration risk (as a percent) | 32.00% | 24.00% | |||||
Sales Revenue, Net | Geographic Concentration Risk | |||||||
Concentrations and Significant Customer Information | |||||||
Approximate percentage of revenues from customers outside the U.S. | 24.00% | ||||||
Accounts Receivable | Maximum | |||||||
Concentrations and Significant Customer Information | |||||||
Concentration risk (as a percent) | 10.00% | 10.00% | 10.00% | 10.00% | |||
Accounts Receivable | Credit Concentration Risk | Amerisource Bergen Drug Corporation | |||||||
Concentrations and Significant Customer Information | |||||||
Concentration risk (as a percent) | 13.00% | 43.00% | |||||
Accounts Receivable | Credit Concentration Risk | Caremark LLC (Specialty Pharmacy) | |||||||
Concentrations and Significant Customer Information | |||||||
Concentration risk (as a percent) | 11.00% | ||||||
Accounts Receivable | Credit Concentration Risk | Caremark LLC (Specialty Pharmacy) | Maximum | |||||||
Concentrations and Significant Customer Information | |||||||
Concentration risk (as a percent) | 10.00% |
Basis of Presentation and Sum42
Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)item | Jun. 30, 2015USD ($) | |
Provision for U.S. product sales allowances and accruals | ||||
Gross U.S. product sales | $ 176,581 | $ 136,589 | $ 328,773 | $ 262,106 |
Contractual adjustments | 53,938 | 39,251 | 99,519 | 74,385 |
Government rebates | 19,660 | 12,686 | 36,707 | 25,654 |
Total provision for U.S product sales allowances and accruals | 73,598 | 51,937 | 136,226 | 100,039 |
U.S. products sales, net | $ 102,983 | 84,652 | $ 192,547 | $ 162,067 |
Medicaid reserves adjustments relating to Makena | 4,000 | |||
Chargeback reserves adjustments relating Makena | $ 1,900 | |||
Service Revenue | ||||
Number of service revenue deliverables | item | 2 | |||
Prepayment term for storage of newborn cord blood and tissue units | 18 years |
Business Combination - Activity
Business Combination - Activity - CBR (Details) - USD ($) $ in Thousands | Aug. 17, 2015 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | $ 639,484 | $ 639,188 | |||
Other disclosures | |||||
Net deferred tax liability | 188,852 | $ 189,145 | |||
Acquisition-related costs | $ 2,653 | $ 2,653 | |||
CBR Acquisition Holdings Corp | |||||
Business Combinations | |||||
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 | 8,480 | ||||
Restricted cash - short-term | 30,752 | ||||
Property, plant and equipment | 29,401 | ||||
Deferred income tax assets | 5,062 | ||||
Other long-term assets | 496 | ||||
Accounts payable | (2,853) | ||||
Accrued expenses | (13,770) | ||||
Deferred revenues - short-term | (3,100) | ||||
Payable to former CBR shareholders | (37,947) | ||||
Deferred income tax liabilities | (149,873) | ||||
Other long-term liabilities | (506) | ||||
Total estimated identifiable net assets | 240,985 | ||||
Goodwill | 441,371 | 441,400 | |||
Total | 682,356 | ||||
Measurement period adjustments | |||||
Increase in goodwill due to measurement period adjustments | 300 | ||||
Other disclosures | |||||
Contractual amount of accounts receivable | 11,700 | ||||
Contractual amount of accounts receivable expected to be collectible | 8,700 | ||||
Net deferred tax liability | $ 144,800 | ||||
Combined federal and state statutory income tax rate (as a percent) | 37.00% | ||||
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 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 Combinations - Activit
Business Combinations - Activity - Lumara (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Nov. 12, 2014 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Business Combinations | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Fair values assigned to assets acquired and the liabilities assumed | |||||
Goodwill | $ 639,484 | $ 639,188 | |||
Other disclosures | |||||
Net deferred tax liability | 188,852 | $ 189,145 | |||
Acquisition-related costs | $ 2,653 | $ 2,653 | |||
Lumara Health | |||||
Business Combinations | |||||
Ownership percentage acquired | 100.00% | ||||
Additional merger consideration based upon achievement of certain net sales milestones | |||||
Future contingent payments, maximum | $ 350,000 | ||||
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 | ||||
Other disclosures | |||||
Discount rate (as a percent) | 5.00% | ||||
Lumara Health | Makena IPR&D | |||||
Fair values assigned to assets acquired and the liabilities assumed | |||||
Indefinite-lived intangible assets | 79,100 | ||||
Lumara Health | Makena base technology | |||||
Fair values assigned to assets acquired and the liabilities assumed | |||||
Finite-lived intangible assets | 797,100 | ||||
Indemnification Escrow Fund | Lumara Health | |||||
Other disclosures | |||||
Escrow fund | $ 35,000 | ||||
Common Stock | Lumara Health | |||||
Business Combinations | |||||
Shares of AMAG common stock issued in business combination | 3.2 |
Business Combinations - Goodwil
Business Combinations - Goodwill (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Aug. 17, 2015 | Nov. 12, 2014 |
Business Combinations | ||||
Goodwill not deductible for tax | $ 639,484 | $ 639,188 | ||
Acquisitions | ||||
Business Combinations | ||||
Goodwill not deductible for tax | 639,500 | |||
CBR Acquisition Holdings Corp | ||||
Business Combinations | ||||
Goodwill not deductible for tax | 441,400 | $ 441,371 | ||
Lumara Health | ||||
Business Combinations | ||||
Goodwill not deductible for tax | $ 198,100 | $ 198,113 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Summary of Investments | ||
Available-for-sale securities, Amortized Cost | $ 294,511 | $ 238,568 |
Available-for-sale securities, Gross Unrealized Gains | 924 | 5 |
Available-for-sale securities, Gross Unrealized Losses | (76) | (947) |
Available-for-sale securities, Estimated Fair Value | 295,359 | 237,626 |
Securities in a loss position for 12 months or longer | 0 | |
Corporate debt securities | ||
Summary of Investments | ||
Available-for-sale securities due in one year or less, Amortized Cost | 121,864 | 27,964 |
Available-for-sale securities due in one to three years, Amortized Cost | 131,564 | 173,652 |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 30 | |
Available-for-sale securities due in one to three years, Gross Unrealized Gains | 846 | 3 |
Available-for-sale securities due in one year or less, Gross Unrealized Losses | (40) | (38) |
Available-for-sale securities due in one to three years, Gross Unrealized Losses | (36) | (904) |
Available-for-sale securities due in one year or less, Estimated Fair Value | 121,854 | 27,926 |
Available-for-sale securities due in one to three years, Estimated Fair Value | 132,374 | 172,751 |
U.S. treasury and government agency securities | ||
Summary of Investments | ||
Available-for-sale securities due in one year or less, Amortized Cost | 1,044 | |
Available-for-sale securities due in one to three years, Amortized Cost | 4,895 | |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 1 | |
Available-for-sale securities due in one to three years, Gross Unrealized Gains | 46 | |
Available-for-sale securities due in one year or less, Estimated Fair Value | 1,045 | |
Available-for-sale securities due in one to three years, Estimated Fair Value | 4,941 | |
Commercial Paper | ||
Summary of Investments | ||
Available-for-sale securities due in one year or less, Amortized Cost | 32,644 | 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 | 32,644 | 34,449 |
Municipal securities | ||
Summary of Investments | ||
Available-for-sale securities due in one year or less, Amortized Cost | 2,500 | 2,500 |
Available-for-sale securities due in one year or less, Gross Unrealized Gains | 1 | |
Available-for-sale securities due in one year or less, Estimated Fair Value | $ 2,501 | $ 2,500 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Hierarchy (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Fair value of assets and liabilities measured on a recurring basis | ||
Transfers or reclassifications of securities from Level 1 to Level 2 | $ 0 | |
Transfers or reclassifications of securities from Level 2 to Level 1 | 0 | |
Fair Value, Measurements, Recurring | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 314,388,000 | $ 311,302,000 |
Total Liabilities | 223,809,000 | 222,559,000 |
Fair Value, Measurements, Recurring | Acquisition Related Contingent Consideration | Lumara Health | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 221,449,000 | 214,895,000 |
Fair Value, Measurements, Recurring | Acquisition Related Contingent Consideration | MuGard | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 2,360,000 | 7,664,000 |
Fair Value, Measurements, Recurring | Money market funds | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 19,029,000 | 73,676,000 |
Fair Value, Measurements, Recurring | Corporate debt securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 254,228,000 | 200,677,000 |
Fair Value, Measurements, Recurring | U.S. treasury and government agency securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 5,986,000 | |
Fair Value, Measurements, Recurring | Commercial paper. | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 32,644,000 | 34,449,000 |
Fair Value, Measurements, Recurring | Municipal securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 2,501,000 | 2,500,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 19,029,000 | 73,676,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Money market funds | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 19,029,000 | 73,676,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 295,359,000 | 237,626,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Corporate debt securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 254,228,000 | 200,677,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | U.S. treasury and government agency securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 5,986,000 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Commercial paper. | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 32,644,000 | 34,449,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Municipal securities | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Assets | 2,501,000 | 2,500,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 223,809,000 | 222,559,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Acquisition Related Contingent Consideration | Lumara Health | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | 221,449,000 | 214,895,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Acquisition Related Contingent Consideration | MuGard | ||
Fair value of assets and liabilities measured on a recurring basis | ||
Total Liabilities | $ 2,360,000 | $ 7,664,000 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Nov. 12, 2014 | |
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Adjustments to fair value of contingent consideration | $ 1,399 | $ 1,639 | ||
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 | 222,559 | |||
Payments made | (149) | |||
Adjustments to fair value of contingent consideration | 1,399 | |||
Balance at end of period | $ 223,809 | 223,809 | ||
Lumara Health | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Acquisition-related contingent consideration | $ 205,000 | |||
Adjustments to fair value of contingent consideration | 6,600 | |||
Contingent consideration classified as short term liability | 98,300 | 98,300 | ||
Milestone payment expected to be paid in 2016 to the former Lumara Health security holders based on achievement of a net sales milestone of Makena | 100,000 | 100,000 | ||
Estimated undiscounted milestone amounts payable | 350,000 | $ 350,000 | ||
Discount rate (as a percent) | 5.00% | |||
MuGard | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Adjustments to fair value of contingent consideration | 5,600 | $ (5,200) | ||
Contingent consideration classified as short term liability | 400 | $ 400 | ||
Discount rate (as a percent) | 9.00% | |||
Period over which estimated undiscounted royalty amounts could be paid | 10 years | |||
MuGard | Minimum | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Estimated undiscounted royalty amounts payable | 2,000 | $ 2,000 | ||
MuGard | Maximum | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Estimated undiscounted royalty amounts payable | 6,000 | 6,000 | ||
CBR Acquisition Holdings Corp | ||||
Reconciliation of contingent consideration obligations related to acquisitions | ||||
Contingent consideration classified as short term liability | $ 0 | $ 0 |
Fair Value Measurements - Debt
Fair Value Measurements - Debt (Details) - Estimate of Fair Value Measurement - Fair Value, Inputs, Level 2 $ in Millions | Jun. 30, 2016USD ($) |
2023 Senior Notes | |
Debt | |
Fair value of debt | $ 443 |
2.5 Percent Convertible Notes | |
Debt | |
Fair value of debt | 220.5 |
2015 Term Loan Facility | |
Debt | |
Fair value of debt | $ 333.5 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Inventories | ||
Raw materials | $ 14,987 | $ 19,673 |
Work in process | 3,058 | 1,985 |
Finished goods | 21,519 | 18,987 |
Total Inventories | $ 39,564 | $ 40,645 |
Property, Plant and Equipment51
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Property, plant and equipment, net | ||
Property, plant and equipment, gross | $ 36,533 | $ 33,604 |
Less: accumulated depreciation | (9,360) | (4,879) |
Property, plant and equipment, net | 27,173 | 28,725 |
Land | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 700 | 700 |
Land Improvements | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 300 | 300 |
Building and Improvements | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 9,500 | 9,500 |
Computer Equipment and Software | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 13,854 | 13,193 |
Furniture and Fixtures | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 1,985 | 1,725 |
Leasehold Improvements | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 3,364 | 1,717 |
Laboratory and Production Equipment | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | 5,792 | 5,683 |
Construction in Progress | ||
Property, plant and equipment, net | ||
Property, plant and equipment, gross | $ 1,038 | $ 786 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets, Net - Summary (Details) - USD ($) $ in Thousands | Aug. 17, 2015 | Jun. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Nov. 12, 2014 |
Goodwill and Intangible Assets, Net | |||||
Goodwill | $ 639,484 | $ 639,484 | $ 639,188 | ||
Goodwill accumulated impairment losses | 0 | 0 | |||
Amortizable intangible assets | |||||
Cost | 1,111,351 | 1,111,351 | 1,111,351 | ||
Accumulated Amortization | 94,630 | 94,630 | 58,680 | ||
Impairments | 15,963 | 15,963 | |||
Net/Total | 1,000,758 | 1,000,758 | 1,052,671 | ||
Impairment of intangible assets | 15,963 | 15,963 | |||
Intangible assets | |||||
Total Cost | 1,255,451 | 1,255,451 | 1,255,451 | ||
Total intangible assets | 1,144,858 | $ 1,144,858 | 1,196,771 | ||
Weighted Average | |||||
Intangible assets | |||||
Remaining amortization period | 9 years | ||||
CBR Acquisition Holdings Corp | |||||
Goodwill and Intangible Assets, Net | |||||
Goodwill | $ 441,371 | 441,400 | $ 441,400 | ||
Measurement period adjustments | 300 | ||||
Lumara Health | |||||
Goodwill and Intangible Assets, Net | |||||
Goodwill | 198,100 | 198,100 | $ 198,113 | ||
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 | 65,000 | ||
Makena base technology | |||||
Amortizable intangible assets | |||||
Cost | 797,100 | 797,100 | 797,100 | ||
Accumulated Amortization | 86,017 | 86,017 | 56,540 | ||
Net/Total | 711,083 | $ 711,083 | 740,560 | ||
Makena base technology | Lumara Health | |||||
Intangible assets | |||||
Useful life | 20 years | ||||
CBR customer relationships | |||||
Amortizable intangible assets | |||||
Cost | 297,000 | $ 297,000 | 297,000 | ||
Accumulated Amortization | 7,325 | 7,325 | 1,061 | ||
Net/Total | 289,675 | $ 289,675 | 295,939 | ||
CBR customer relationships | CBR Acquisition Holdings Corp | |||||
Intangible assets | |||||
Useful life | 20 years | 20 years | |||
Favorable lease | |||||
Amortizable intangible assets | |||||
Cost | 358 | $ 358 | 358 | ||
Accumulated Amortization | 119 | 119 | 63 | ||
Impairments | 239 | 239 | |||
Net/Total | 295 | ||||
Impairment of intangible assets | 200 | ||||
MuGuard Rights | |||||
Amortizable intangible assets | |||||
Cost | 16,893 | 16,893 | 16,893 | ||
Accumulated Amortization | 1,169 | 1,169 | 1,016 | ||
Impairments | 15,724 | $ 15,724 | |||
Net/Total | $ 15,877 | ||||
Impairment of intangible assets | $ 15,700 | ||||
Intangible assets | |||||
Useful life | 10 years |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets, Net - Amortization Expense (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Goodwill and Intangible Assets, Net | |||
Amortization expense | $ 36,000 | $ 24,900 | |
Expected future annual amortization expense | |||
Remainder of Year Ending December 31, 2016 | 43,446 | ||
Year Ending December 31, 2017 | 90,826 | ||
Year Ending December 31, 2018 | 97,992 | ||
Year Ending December 31, 2019 | 68,993 | ||
Year Ending December 31, 2020 | 46,271 | ||
Thereafter | 653,230 | ||
Net/Total | $ 1,000,758 | $ 1,052,671 |
Current and Long-Term Liabili54
Current and Long-Term Liabilities - Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Accrued Expenses | ||
Commercial rebates, fees and returns | $ 52,860 | $ 45,161 |
Professional, license, and other fees and expenses | 24,600 | 27,070 |
Interest expense | 16,926 | 18,411 |
Salaries, bonuses, and other compensation | 12,106 | 12,838 |
Restructuring expense | 1,107 | 2,883 |
Total accrued expenses | $ 107,599 | $ 106,363 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Taxes | ||||
Effective tax rate | 199.00% | 35.00% | 14.00% | 34.00% |
Income tax expense (benefit) | $ 1,196 | $ 18,035 | $ (1,344) | $ 23,643 |
Statutory U.S. federal tax rate | 35.00% | 35.00% | ||
State taxes, net of federal benefit | 39.00% |
Accumulated Other Comprehensi56
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Changes in accumulated other comprehensive income, net of tax | ||||
Beginning Balance | $ (3,273) | $ (3,549) | $ (4,205) | $ (3,617) |
Other comprehensive income (loss) before reclassifications | 215 | (396) | 1,147 | (327) |
Reclassification adjustment for (losses) gains included in net income (loss) | (3) | (4) | ||
Ending Balance | $ (3,058) | $ (3,948) | $ (3,058) | $ (3,948) |
Basic and Diluted Net Income 57
Basic and Diluted Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Aug. 17, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Components of basic and diluted net income (loss) per share | ||||||
Net income (loss) | $ (596) | $ 33,258 | $ (8,123) | $ 46,162 | ||
Weighted average common shares outstanding | 34,223 | 30,636 | 34,481 | 28,934 | ||
Effect of dilutive securities: | ||||||
Stock options and RSUs (in shares) | 1,785 | 1,639 | ||||
Warrants (in shares) | 3,378 | 2,836 | ||||
Convertible 2.5% notes (in shares) | 7,382 | 7,382 | ||||
Shares used in calculating dilutive net income (loss) per share (in shares) | 34,223 | 43,181 | 34,481 | 40,791 | ||
Net income (loss) per share: | ||||||
Basic (in dollars per share) | $ (0.02) | $ 1.09 | $ (0.24) | $ 1.60 | ||
Diluted (in dollars per share) | $ (0.02) | $ 0.82 | $ (0.24) | $ 1.23 | ||
Anti-dilutive securities (in shares) | 17,769 | 669 | 18,432 | 1,050 | ||
Employee and Non Employee Stock Option | ||||||
Net income (loss) per share: | ||||||
Anti-dilutive securities (in shares) | 2,525 | 601 | 2,694 | 709 | ||
Employee and Non Employee Restricted Stock Units | ||||||
Net income (loss) per share: | ||||||
Anti-dilutive securities (in shares) | 480 | 68 | 974 | 341 | ||
Warrants | ||||||
Net income (loss) per share: | ||||||
Anti-dilutive securities (in shares) | 7,382 | 7,382 | ||||
Convertible 2.5% notes | ||||||
Net income (loss) per share: | ||||||
Anti-dilutive securities (in shares) | 7,382 | 7,382 | ||||
2.5 Percent Convertible Notes | ||||||
Basic and Diluted Net Income (Loss) per Share | ||||||
Principal amount of debt at time of issuance | $ 200,000 | $ 200,000 | ||||
Interest rate (as a percent) | 2.50% | 2.50% | 2.50% | |||
2015 Term Loan Facility | ||||||
Basic and Diluted Net Income (Loss) per Share | ||||||
Debt term | 6 years | 6 years | ||||
Principal amount of debt at time of issuance | $ 350,000 | $ 350,000 | $ 350,000 |
Equity-Based Compensation - Pla
Equity-Based Compensation - Plan Information (Details) | May 21, 2015shares | Jun. 30, 2016itemshares |
Equity compensation plans | ||
Number of equity compensation plans | item | 4 | |
Equity Incentive Plan 2007 | ||
Equity compensation plans | ||
Shares authorized for issuance | 6,995,325 | |
Remaining number of shares available for future grants | 1,704,940 | |
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 Health 2013 Plan | ||
Equity compensation plans | ||
Shares authorized for issuance | 200,000 | |
Remaining number of shares available for future grants | 89,274 | |
Lumara Health 2013 Plan | Employee and Non Employee Stock Option | ||
Equity compensation plans | ||
Expiration term | 10 years | |
Inducement Grants | Employee and Non Employee Stock Option | ||
Equity compensation plans | ||
Award vesting period | 4 years | |
Inducement Grants | Employee and Non Employee Restricted Stock Units | ||
Equity compensation plans | ||
Award vesting period | 3 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 | 41,679 |
Equity-Based Compensation - Act
Equity-Based Compensation - Activity related to Plans (Details) | 6 Months Ended |
Jun. 30, 2016shares | |
Employee and Non Employee Stock Option | |
Stock Options | |
Outstanding at beginning of period (in shares) | 2,904,177 |
Granted (in shares) | 575,409 |
Exercised (in shares) | (47,937) |
Expired and/or forfeited (in shares) | (263,671) |
Outstanding at end of period (in shares) | 3,167,978 |
Employee and Non Employee Stock Option | Equity Incentive Plan 2007 | |
Stock Options | |
Outstanding at beginning of period (in shares) | 1,963,162 |
Granted (in shares) | 495,409 |
Exercised (in shares) | (47,937) |
Expired and/or forfeited (in shares) | (152,702) |
Outstanding at end of period (in shares) | 2,257,932 |
Employee and Non Employee Stock Option | Stock 2000 Plan | |
Stock Options | |
Outstanding at beginning of period (in shares) | 14,040 |
Outstanding at end of period (in shares) | 14,040 |
Employee and Non Employee Stock Option | Lumara Health 2013 Plan | |
Stock Options | |
Outstanding at beginning of period (in shares) | 96,000 |
Expired and/or forfeited (in shares) | (41,719) |
Outstanding at end of period (in shares) | 54,281 |
Employee and Non Employee Stock Option | Inducement Grants | |
Stock Options | |
Outstanding at beginning of period (in shares) | 830,975 |
Granted (in shares) | 80,000 |
Expired and/or forfeited (in shares) | (69,250) |
Outstanding at end of period (in shares) | 841,725 |
Employee and Non Employee Restricted Stock Units | |
Restricted Stock Units | |
Outstanding at beginning of year (in shares) | 654,355 |
Granted (in shares) | 693,826 |
Vested (in shares) | (247,268) |
Forfeited (in shares) | (81,775) |
Outstanding at end of year (in shares) | 1,019,138 |
Employee and Non Employee Restricted Stock Units | Equity Incentive Plan 2007 | |
Restricted Stock Units | |
Outstanding at beginning of year (in shares) | 446,330 |
Granted (in shares) | 641,826 |
Vested (in shares) | (186,521) |
Forfeited (in shares) | (68,704) |
Outstanding at end of year (in shares) | 832,931 |
Employee and Non Employee Restricted Stock Units | Lumara Health 2013 Plan | |
Restricted Stock Units | |
Outstanding at beginning of year (in shares) | 52,350 |
Vested (in shares) | (16,749) |
Forfeited (in shares) | (7,571) |
Outstanding at end of year (in shares) | 28,030 |
Employee and Non Employee Restricted Stock Units | Inducement Grants | |
Restricted Stock Units | |
Outstanding at beginning of year (in shares) | 155,675 |
Granted (in shares) | 52,000 |
Vested (in shares) | (43,998) |
Forfeited (in shares) | (5,500) |
Outstanding at end of year (in shares) | 158,177 |
Equity-Based Compensation - Exp
Equity-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Equity-based compensation expense | ||||
Total equity-based compensation expense | $ 5,178 | $ 4,016 | $ 11,341 | $ 6,684 |
Income tax effect | (1,394) | (1,558) | (3,068) | (2,593) |
After-tax effect of equity-based compensation expense | 3,784 | 2,458 | 8,273 | 4,091 |
Cost of Sales | ||||
Equity-based compensation expense | ||||
Total equity-based compensation expense | (44) | 54 | 277 | 95 |
Research and Development Expense | ||||
Equity-based compensation expense | ||||
Total equity-based compensation expense | 968 | 565 | 1,725 | 1,043 |
Selling, General and Administrative Expenses | ||||
Equity-based compensation expense | ||||
Total equity-based compensation expense | $ 4,254 | $ 3,397 | $ 9,339 | $ 5,546 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jan. 31, 2016 | |
Common stock repurchased and retired (in shares) | 511,744 | 831,744 | |||
Common stock repurchased and retired | $ 12,400 | $ 20,000 | |||
Average share price (in dollars per share) | $ 24.30 | $ 24.05 | |||
Change in Stockholders’ Equity | |||||
Decrease in total stockholders' equity | $ 16,100 | ||||
Decrease in stockholders' equity due to net loss | $ 596 | $ (33,258) | 8,123 | $ (46,162) | |
Increase in stockholders' equity from the exercise of stock options | 800 | ||||
Increase in stockholders' equity from the issuance of common stock under ESPP | 800 | ||||
Increase in stockholders' equity related to equity-based compensation expense | $ 11,300 | ||||
Maximum | |||||
Share repurchase program, authorized amount | $ 60,000 |
Commitments and Contingencies -
Commitments and Contingencies - Purchase Commitments (Details) $ in Millions | Jun. 30, 2016USD ($) |
Purchase Commitments | |
Remaining minimum purchase commitments | $ 1.8 |
Commitments and Contingencies63
Commitments and Contingencies - Legal Proceedings (Details) - Sandoz Patent Infringement Lawsuit [Member] | Feb. 05, 2016 |
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 |
Collaboration, License and Ot64
Collaboration, License and Other Strategic Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Collaborative Agreements | |||||
Cost of product sales | $ 21,937 | $ 19,679 | $ 40,236 | $ 40,705 | |
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 |
Debt - Summary (Details)
Debt - Summary (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Debt | ||
Total long-term debt | $ 989,106 | $ 991,918 |
Less: current maturities | 49,610 | 17,500 |
Long-term debt, net of current maturities | 939,496 | 974,418 |
2023 Senior Notes | ||
Debt | ||
Total long-term debt | 489,033 | 488,481 |
2015 Term Loan Facility | ||
Debt | ||
Total long-term debt | 325,120 | 332,688 |
2.5 Percent Convertible Notes | ||
Debt | ||
Total long-term debt | $ 174,953 | $ 170,749 |
Debt - 2023 Senior Notes (Detai
Debt - 2023 Senior Notes (Details) - 2023 Senior Notes $ in Millions | 6 Months Ended | |
Jun. 30, 2016USD ($) | Aug. 17, 2015USD ($) | |
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 | $ 489 | |
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 | Jun. 30, 2016 |
2015 Term Loan Facility | |||
Debt | |||
Debt term | 6 years | 6 years | |
Aggregate principal amount of debt issued | $ 350 | $ 350 | |
Maximum incremental loan capacity allowed | $ 225 | ||
Net carrying value of outstanding borrowings | 325.1 | ||
Installment payment amount | $ 4.4 | ||
Reclassification from long term debt to current portion of long-term debt | $ 32.1 | ||
Annual mandatory prepayment of debt as a percentage of excess cash flow | 50.00% | ||
Percentage of equity interests in domestic subsidiaries pledged as collateral for borrowing (as a percent) | 100.00% | ||
Percentage of voting equity interests in direct foreign subsidiaries pledged as collateral for borrowing (as a percent) | 65.00% | ||
Percentage of non-voting equity interests in direct foreign subsidiaries pledged as collateral for borrowing (as a percent) | 100.00% | ||
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% | ||
Effective interest rate | 5.65% | ||
2015 Term Loan Facility | Prime Rate | |||
Debt | |||
Margin rate | 2.75% | ||
Floor for variable rate | 2.00% | ||
2014 Term Loan Facility | |||
Debt | |||
Debt term | 5 years | ||
Unamortized debt issuance costs | $ 6.8 |
Debt - Convertible Notes (Detai
Debt - Convertible Notes (Details) | Feb. 14, 2014USD ($) | Jun. 30, 2016USD ($)$ / shares | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)item$ / shares | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) |
Liability component: | ||||||
Net carrying amount | $ 174,953,000 | $ 174,953,000 | $ 170,749,000 | |||
Total interest expense recognized | ||||||
Total interest expense | $ 18,250,000 | $ 10,205,000 | $ 36,693,000 | $ 20,572,000 | ||
Convertible 2.5% notes | ||||||
Debt | ||||||
Aggregate principal amount of debt issued | $ 200,000,000 | |||||
Net proceeds from issuance of convertible debt | 193,300,000 | |||||
Debt issuance costs | 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% | 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 | $ 1,000 | ||||
Initial conversion price of convertible notes into common stock (in dollars per share) | $ / shares | $ 27.09 | $ 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% | 7.23% | ||||
Liability component: | ||||||
Principal | $ 199,998,000 | $ 199,998,000 | ||||
Less: debt discount, net | (25,045,000) | (25,045,000) | ||||
Net carrying amount | 174,953,000 | 174,953,000 | ||||
Equity component | 38,188,000 | 38,188,000 | ||||
Debt issuance costs allocated to equity component | 1,300,000 | |||||
Debt issuance costs allocated to the liability component | $ 5,400,000 | |||||
Total interest expense recognized | ||||||
Contractual interest expense | 1,250,000 | 1,250,000 | 2,500,000 | 2,500,000 | ||
Amortization of debt issuance costs | 265,000 | 246,000 | 524,000 | 480,000 | ||
Amortization of debt discount | 1,867,000 | 1,727,000 | 3,682,000 | 3,376,000 | ||
Total interest expense | 3,382,000 | $ 3,223,000 | $ 6,706,000 | $ 6,356,000 | ||
Convertible 2.5% notes | Debt Instrument Convertible Covenant One | ||||||
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 | 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 | ||||||
Debt | ||||||
Principal amount used for debt instrument conversion ratio | 1,000 | $ 1,000 | ||||
Number of consecutive business days after any five consecutive trading day period during the note measurement period | 5 days | |||||
Number of consecutive trading days before five consecutive business days during the note measurement period | 5 days | |||||
Convertible 2.5% notes | Debt Instrument Convertible Covenant Two | 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 | ||||||
Debt | ||||||
Principal amount used for debt instrument conversion ratio | 1,000 | $ 1,000 | ||||
2.5 Percent Convertible Notes | ||||||
Debt | ||||||
Aggregate principal amount of debt issued | $ 200,000,000 | $ 200,000,000 | ||||
Interest rate (as a percent) | 2.50% | 2.50% | 2.50% |
Debt - Convertible Bond Hedge,
Debt - Convertible Bond Hedge, Warrant Transactions (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Feb. 13, 2014 | Mar. 31, 2014 | Dec. 31, 2014 | Jun. 30, 2016 | 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 | $ 39.8 | ||||||
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% | ||||||
Sale price of common stock (in dollars per share) | $ 20.07 | ||||||
Proceeds from issuance of warrants | $ 25.7 | ||||||
Convertible 2.5% notes | |||||||
Debt | |||||||
Aggregate principal amount of debt issued | $ 200 | ||||||
2.5 Percent Convertible Notes | |||||||
Debt | |||||||
Aggregate principal amount of debt issued | $ 200 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Components of restructuring expenses and reserve | ||||
Restructuring charges | $ 89 | $ 443 | $ 712 | $ 1,014 |
Accrued restructuring, beginning of period | 2,093 | 2,118 | 2,883 | 1,953 |
Employee severance, benefits and related costs | 89 | 284 | 898 | 855 |
Payments | (1,075) | (1,149) | (2,674) | (1,555) |
Accrued restructuring, end of period | $ 1,107 | $ 1,253 | $ 1,107 | $ 1,253 |