Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-36306 | |
Entity Registrant Name | Eagle Pharmaceuticals, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-8179278 | |
Entity Address, Address Line One | 50 Tice Boulevard | |
Entity Address, Address Line Two | Suite 315 | |
Entity Address, City or Town | Woodcliff Lake | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07677 | |
City Area Code | (201) | |
Local Phone Number | 326-5300 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 13,671,172 | |
Entity Central Index Key | 0000827871 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
NASDAQ Global Market | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common stock, $0.001 par value per share | |
Trading Symbol | EGRX | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 117,211 | $ 78,791 |
Accounts receivable, net | 44,812 | 66,486 |
Inventories | 7,247 | 8,304 |
Prepaid expenses and other current assets | 10,516 | 10,263 |
Total current assets | 179,786 | 163,844 |
Property and equipment, net | 2,319 | 2,397 |
Intangible assets, net | 16,213 | 18,103 |
Goodwill | 39,743 | 39,743 |
Deferred tax asset, net | 13,997 | 13,822 |
Other assets | 4,980 | 694 |
Total assets | 257,038 | 238,603 |
Current liabilities: | ||
Accounts payable | 11,232 | 9,917 |
Accrued expenses and other liabilities | 27,127 | 23,519 |
Current portion of long-term debt | 4,000 | 6,250 |
Total current liabilities | 42,359 | 39,686 |
Other long-term liabilities | 3,227 | 0 |
Long-term debt, less current portion | 35,687 | 38,155 |
Commitments and Contingencies | ||
Stockholders' equity: | ||
Preferred stock, 1,500,000 shares authorized and no shares issued or outstanding as of September 30, 2019 and December 31, 2018 | 0 | 0 |
Common stock, $0.001 par value; 50,000,000 shares authorized; 16,524,848 and 16,504,283 shares issued as of September 30, 2019 and December 31, 2018, respectively | 17 | 17 |
Additional paid in capital | 273,153 | 256,458 |
Retained earnings | 71,495 | 58,187 |
Treasury stock, at cost, 2,855,316 and 2,590,258 shares as of September 30, 2019 and December 31, 2018, respectively | (168,900) | (153,900) |
Total stockholders' equity | 175,765 | 160,762 |
Total liabilities and stockholders' equity | $ 257,038 | $ 238,603 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value per share (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 16,524,848 | 16,504,283 |
Preferred stock, shares authorized (in shares) | 1,500,000 | 1,500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Treasury stock (in shares) | 2,855,316 | 2,590,258 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue: | ||||
Total revenue | $ 41,147 | $ 51,337 | $ 147,634 | $ 157,258 |
Operating expenses: | ||||
Cost of product sales | 12,137 | 8,621 | 39,866 | 29,919 |
Cost of royalty revenue | 2,785 | 4,370 | 9,440 | 13,440 |
Research and development | 10,172 | 5,975 | 25,504 | 38,560 |
Selling, general and administrative | 18,537 | 13,878 | 53,906 | 45,033 |
Restructuring charge | 0 | 91 | 0 | 7,479 |
Asset impairment charge | 0 | 0 | 0 | 2,704 |
Change in fair value of contingent consideration | 0 | 0 | 0 | (763) |
Total operating expenses | 43,631 | 32,935 | 128,716 | 136,372 |
(Loss) Income from operations | (2,484) | 18,402 | 18,918 | 20,886 |
Interest income | 570 | 9 | 1,701 | 36 |
Interest expense | (628) | (743) | (1,979) | (2,118) |
Total other expense, net | (58) | (734) | (278) | (2,082) |
(Loss) Income before income tax benefit (provision) | (2,542) | 17,668 | 18,640 | 18,804 |
Income tax benefit (provision) | 152 | (3,628) | (5,332) | 509 |
Net (Loss) Income | $ (2,390) | $ 14,040 | $ 13,308 | $ 19,313 |
(Loss) Earnings per share attributable to common stockholders: | ||||
Basic (in usd per share) | $ (0.17) | $ 0.94 | $ 0.96 | $ 1.30 |
Diluted (in usd per share) | $ (0.17) | $ 0.91 | $ 0.94 | $ 1.25 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 13,668,091 | 15,011,159 | 13,791,071 | 14,903,945 |
Diluted (in shares) | 13,668,091 | 15,483,037 | 14,147,658 | 15,482,768 |
Product sales | ||||
Revenue: | ||||
Total revenue | $ 14,659 | $ 16,163 | $ 58,568 | $ 50,042 |
Royalty revenue | ||||
Revenue: | ||||
Total revenue | 26,488 | 35,174 | 80,066 | 107,216 |
License and other revenue | ||||
Revenue: | ||||
Total revenue | $ 0 | $ 0 | $ 9,000 | $ 0 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2017 | 16,089,000 | ||||
Beginning balance at Dec. 31, 2017 | $ 179,144 | $ 16 | $ 233,639 | $ (80,795) | $ 26,284 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation expense | $ 14,512 | 14,512 | |||
Issuance of common stock upon exercise of stock option grants (in shares) | 499,592 | 414,000 | |||
Issuance of common stock upon exercise of stock option grants | $ 8,601 | 8,601 | |||
Payment of employee withholding tax upon vesting of stock-based awards | (4,877) | (4,877) | |||
Common stock repurchases | (22,628) | (22,628) | |||
Net income | 19,313 | 19,313 | |||
Ending balance (in shares) at Sep. 30, 2018 | 16,503,000 | ||||
Ending balance at Sep. 30, 2018 | 194,065 | $ 16 | 251,875 | (103,423) | 45,597 |
Beginning balance (in shares) at Jun. 30, 2018 | 16,458,000 | ||||
Beginning balance at Jun. 30, 2018 | 185,731 | $ 16 | 245,470 | (91,314) | 31,559 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation expense | 4,472 | 4,472 | |||
Issuance of common stock upon exercise of stock option grants (in shares) | 45,000 | ||||
Issuance of common stock upon exercise of stock option grants | 1,933 | 1,933 | |||
Payment of employee withholding tax upon vesting of stock-based awards | 0 | 0 | |||
Common stock repurchases | (12,109) | (12,109) | |||
Net income | 14,040 | 14,038 | |||
Ending balance (in shares) at Sep. 30, 2018 | 16,503,000 | ||||
Ending balance at Sep. 30, 2018 | 194,065 | $ 16 | 251,875 | (103,423) | 45,597 |
Beginning balance (in shares) at Dec. 31, 2018 | 16,504,000 | ||||
Beginning balance at Dec. 31, 2018 | 160,762 | $ 17 | 256,458 | (153,900) | 58,187 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation expense | $ 16,815 | 16,815 | |||
Issuance of common stock upon exercise of stock option grants (in shares) | 10,034 | 12,000 | |||
Issuance of common stock upon exercise of stock option grants | $ 78 | 78 | |||
Payment of employee withholding tax upon vesting of stock-based awards | (198) | (198) | |||
Issuance of common stock related to vesting of restricted stock units (in shares) | 9,000 | ||||
Common stock repurchases | (15,000) | (15,000) | |||
Net income | 13,308 | 13,308 | |||
Ending balance (in shares) at Sep. 30, 2019 | 16,525,000 | ||||
Ending balance at Sep. 30, 2019 | 175,765 | $ 17 | 273,153 | (168,900) | 71,495 |
Beginning balance (in shares) at Jun. 30, 2019 | 16,522,000 | ||||
Beginning balance at Jun. 30, 2019 | 172,481 | $ 17 | 267,479 | (168,900) | 73,885 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation expense | 5,651 | 5,651 | |||
Issuance of common stock upon exercise of stock option grants (in shares) | 3,000 | ||||
Issuance of common stock upon exercise of stock option grants | 23 | 23 | |||
Net income | (2,390) | (2,390) | |||
Ending balance (in shares) at Sep. 30, 2019 | 16,525,000 | ||||
Ending balance at Sep. 30, 2019 | $ 175,765 | $ 17 | $ 273,153 | $ (168,900) | $ 71,495 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 11 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | |
Cash flows from operating activities: | |||||
Net income | $ (2,390) | $ 14,040 | $ 13,308 | $ 19,313 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Deferred income taxes | (175) | 2,040 | |||
Depreciation expense | 1,479 | 918 | |||
Amortization expense | 630 | 599 | 1,890 | 1,916 | |
Stock-based compensation expense | 16,815 | 14,512 | |||
Change in fair value of contingent consideration | 0 | 0 | 0 | (763) | |
Amortization of debt issuance costs | 282 | 282 | |||
Asset impairment charge | 0 | 0 | 0 | 2,704 | |
Non-cash restructuring charge | 0 | 5,771 | |||
Changes in operating assets and liabilities which provided (used) cash: | |||||
Accounts receivable | 21,674 | (24,640) | |||
Inventories | 1,057 | (4,525) | |||
Prepaid expenses and other current assets | (253) | (5,709) | |||
Accounts payable | 1,315 | (4,437) | |||
Accrued expenses and other liabilities | 3,608 | 7,476 | |||
Other assets and other long-term liabilities, net | (1,813) | (582) | |||
Net cash provided by operating activities | 59,187 | 14,276 | |||
Cash flows from investing activities: | |||||
Purchase of property and equipment | (647) | (52) | |||
Net cash used in investing activities | (647) | (52) | |||
Cash flows from financing activities: | |||||
Proceeds from common stock option exercises | 78 | 8,601 | |||
Payments related to employee net option exercises | 0 | (4,877) | |||
Employee withholding taxes related to stock-based awards | (198) | 0 | |||
Payment of contingent consideration | 0 | (15,001) | |||
Payment of debt | (5,000) | (3,750) | |||
Repurchases of common stock | (15,000) | (22,628) | $ (168,900) | ||
Net cash used in financing activities | (20,120) | (37,655) | |||
Net increase (decrease) in cash and cash equivalents | 38,420 | (23,431) | |||
Cash and cash equivalents at beginning of period | 78,791 | 114,657 | |||
Cash and cash equivalents at end of period | $ 117,211 | $ 91,226 | 117,211 | 91,226 | $ 117,211 |
Cash paid during the period for: | |||||
Income taxes, net | 6,587 | 1,887 | |||
Interest | 1,787 | 1,540 | |||
Right-of-use asset obtained in exchange for lease obligation - lease amendment | $ 1,700 | $ 0 |
Interim Condensed Consolidated
Interim Condensed Consolidated Financial Statements | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Condensed Condensed Financial Statements | Interim Condensed Consolidated Financial Statements The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. The condensed consolidated balance sheet at December 31, 2018 was derived from audited financial statements, but certain information and footnote disclosures normally included in the Company's annual consolidated financial statements have been condensed or omitted. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for the fair presentation of the financial information for the interim periods reported have been made. Results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results for the year ending December 31, 2019 or any period thereafter. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on February 28, 2019. Unless otherwise indicated or required by context, reference throughout to the "Company," "Eagle Pharmaceuticals," "Eagle," "we," "us" or "our" mean Eagle Pharmaceuticals, Inc., a Delaware corporation and its subsidiary, Eagle Biologics, Inc., and references to "Eagle Biologics" mean Eagle Biologics, Inc. |
Organization and Business Activ
Organization and Business Activities | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Activities | Organization and Business Activities Eagle Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on developing and commercializing injectable products, primarily in the critical care and oncology areas, mainly using the U.S. Food and Drug Administration's ("FDA's") 505(b)(2) New Drug Application ("NDA") regulatory pathway. The Company's business model is to develop proprietary innovations to FDA-approved injectable drugs, referred to as branded reference drugs, that offer favorable attributes to patients and healthcare providers. The Company has two products currently being sold in the United States under various license agreements in place with commercial partners; a ready-to-use formulation of Argatroban and rapidly infused bendamustine RTD 50ml solution (“BENDEKA”). In addition, the Company directly sells two products in the United States; Eagle's bendamustine RTD 500ml solution ("Belrapzo") and Ryanodex ® (dantrolene sodium) ("Ryanodex").The Company has a number of products currently under development and certain products may be subject to license agreements. On February 13, 2015, the Company submitted a New Drug Application ("NDA") to the FDA for BENDEKA, which was approved by the FDA on December 7, 2015. Also on February 13, 2015, the Company entered into an Exclusive License Agreement (the “BENDEKA License”) with Cephalon, Inc. (“Cephalon”), a wholly-owned subsidiary of Teva Pharmaceutical Industries Ltd. (“Teva”), for U.S. and Canadian rights to BENDEKA for treatment of patients with chronic lymphocytic leukemia (“CLL”) and patients with non-Hodgkin’s lymphoma (“NHL”). Subsequently, with the consent of the Company, Cephalon assigned to Teva Pharmaceuticals International GmbH (“TPIG”) all of Cephalon’s rights and obligations under the BENDEKA License. Accordingly, all references to “Cephalon” or to the “BENDEKA License” and the related supply agreements for BENDEKA should be read and construed as references to TPIG and to the license agreement and supply agreements for BENDEKA to which the Company and TPIG are now parties. Pursuant to the terms of the BENDEKA License, Cephalon will be responsible for all U.S. commercial activities for the product including promotion and distribution, and the Company is responsible for obtaining and maintaining all regulatory approvals and conducting post-approval clinical studies. In connection with the BENDEKA License, the Company has entered into a supply agreement with Cephalon, pursuant to which the Company is responsible for supplying product to Cephalon. During the quarter-ended September 30, 2016, the Company entered into an amendment to the BENDEKA License and supply agreements for BENDEKA. The amendment expands the geographical scope of the rights granted under the original agreement to include territories outside the U.S. and Canada. On October 30, 2018, the Company announced a repurchase program approved by the Board of Directors pursuant to which the Company may repurchase up to $150 million of its outstanding common stock, consisting of (i) up to $50 million in repurchases pursuant to an accelerated share repurchase agreement (the “ASR”), with JPMorgan Chase Bank, N.A. (“JPMorgan”), and (ii) up to $100 million in additional repurchases (collectively, the “2018 Share Repurchase Program”). Under the 2018 Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, privately-negotiated transactions, accelerated share repurchases or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. Under the 2018 Share Repurchase Program, the additional repurchases have no time limit and may be suspended or discontinued completely at any time. The specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors. The repurchases will be made using the Company's cash resources. In any period, cash used in financing activities related to shares repurchased may differ from the comparable change in stockholders' equity, reflecting timing differences between the recognition of share repurchase transactions and their settlement for cash. As of September 30, 2019, the Company has repurchased an aggregate of 2,855,316 shares of common stock for $168.9 million . On November 16, 2016, the Company entered into a stock purchase agreement with Arsia Therapeutics, LLC (“Arsia SPA”) to acquire Arsia Therapeutics, Inc., an early-stage biotechnology firm with proprietary viscosity-reducing technology and formulation know-how and subsequently renamed the subsidiary Eagle Biologics, Inc. ("Eagle Biologics"). Under the terms of the Arsia SPA, at closing the Company paid approximately $27.2 million in cash and issued 40,200 shares of Eagle common stock worth $3.0 million . The Company also agreed to pay up to $48 million in additional payments upon the completion of certain milestones, for aggregate potential payments of $78 million . As part of the agreement, Eagle Biologics founders and Massachusetts Institute of Technology professors Dr. Robert Langer and Dr. Alexander Klibanov, as well as other key members of the Eagle Biologics team, entered into consulting agreements with Eagle to develop new formulations and solve delivery challenges with large molecule products (see Note 4. Acquisitions). On February 8, 2018, the Company entered into an amendment (the “Arsia Amendment”) to the Arsia SPA. Pursuant to the Arsia SPA, the Company acquired from Arsia Therapeutics, LLC (the “Seller”) all of the outstanding capital stock of Arsia Therapeutics, Inc. (now Eagle Biologics). Pursuant to the Arsia Amendment, the Company's obligations to make four separate milestone payments pursuant to the Arsia SPA, which could have aggregated to a total of $48 million , were terminated in exchange for a single payment of $15 million to the Seller. In March 2018, the Company announced that the United States Patent and Trademark Office (“USPTO”) issued a new patent to the Company's Eagle Biologics division. Patent number 9,925,263 will expire in March 2036 and is the fourth patent issued in the Eagle Biologics family of patents. On April 16, 2018, the Company announced the FDA's acceptance of the Company's Abbreviated New Drug Application ("ANDA") filing for vasopressin injection, 1ml. This product is the generic version of Endo International plc's original Vasostrict® formulation, which is indicated to increase blood pressure in adults with vasodilatory shock (e.g., post-cardiotomy or sepsis) who remain hypotensive despite fluids and catecholamines. On May 15, 2018, the FDA granted final approval for Eagle's ready-to-dilute bendamustine hydrochloride solution in a 500ml admixture for the treatment of patients with chronic lymphocytic leukemia (“CLL”) and patients with indolent B-cell non-Hodgkin lymphoma (“NHL”) that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. On March 24, 2016, the FDA denied the Company's request for seven years of orphan drug exclusivity in the U.S., for BENDEKA. In April 2016, the Company filed a lawsuit against the FDA arguing that BENDEKA is entitled to orphan drug exclusivity as a matter of law (see Note 12. Legal Proceedings). On July 2, 2014, the FDA granted the Company orphan drug designations for BENDEKA for the treatment of CLL and indolent B-cell NHL. The designations were based on a plausible hypothesis that BENDEKA is “clinically superior” to a drug previously approved for the same indications. Generally, an orphan-designated drug is eligible for seven years of marketing exclusivity for the orphan-designated indications upon approval of the drug for those indications. On June 8, 2018, the U.S. District Court for the District of Columbia (the “Court”) issued a decision requiring the FDA to grant seven years of orphan drug exclusivity (“ODE”) in the U.S., for BENDEKA, and on July 8, 2018 the FDA granted such ODE through December 2022. In addition, on July 8, 2018, the FDA submitted a Motion to Alter or Amend the Judgement pursuant to Rule 59(e), pursuant to which the FDA requested the Court amend its decision to make clear that the decision does not affect any applications referencing TREANDA. The FDA’s motion was denied by the Court on August 1, 2018 on the grounds that FDA was seeking an inappropriate advisory opinion. Oral arguments occurred on October 17, 2019 and a decision is not expected until the Spring of 2020. On February 20, 2019, the FDA issued a decision in favor of the Company, regarding the scope of exclusivity for BENDEKA. Pursuant to the FDA’s decision, and unless the district court is reversed on appeal, no bendamustine product used to treat the same indications (including generic versions of TREANDA) may launch in the United States until December 7, 2022 unless it is clinically superior to BENDEKA. In June 2018, as part of an ongoing organizational review, the Company began a restructuring initiative to rationalize its product portfolio and focus its physical sites. These measures include the discontinuation of manufacture and distribution of Non-Alcohol Docetaxel Injection and plans to rationalize research and development operations. The Company ceased selling the product by September 30, 2018. On October 3, 2018, the Company announced that it entered into an agreement with the United States Army Medical Research Institute of Chemical Defense, the nation’s leading science and technology laboratory in the area of medical chemical countermeasures research and development, to conduct a study to evaluate the neuroprotective effects of Ryanodex. As of March 29, 2019, the Company and TPIG executed an amendment to the BENDEKA License to terminate Teva’s obligation to pay future milestones and royalties on BENDEKA sales outside of the U.S., which included an upfront cash payment of $9 million that was recorded as License and other revenue on the condensed consolidated statements of operations for the nine months ended September 30, 2019. On April 13, 2019, the Company and TPIG entered into an amendment to the BENDEKA License, amending the terms of the BENDEKA License to increase the U.S. royalty paid to the Company and re-allocate certain litigation expenses. Per the amendment, beginning on October 1, 2019, the Company’s royalty payment increased from 25% to 30% of BENDEKA net United States sales, BENDEKA’s orphan drug exclusivity has not been rescinded, withdrawn or waived by October 1, 2019 until it reaches 32% . The royalty rate will increase by one percentage point on each anniversary of October 1, 2019 until it reaches 32% and it will remain at 32% thereafter. The amendment also extends the U.S. royalty term for BENDEKA until it is no longer sold in the United States. The previous royalty term was set to expire in 2025. The extended term coincides with the bendamustine patents with expiries through 2033. Pursuant to the amendment, Eagle will continue to be responsible for the manufacture of BENDEKA for the U.S. market for so long as it is sold in the United States. Also pursuant to the amendment, the Company has agreed to assume a portion of BENDEKA-related patent litigation expenses. On May 7, 2019, the Company announced positive results of its study to evaluate the neuroprotective effects of Ryanodex secondary to nerve agent exposure, conducted with the United States Army Medical Research Institute of Chemical Defense. On August 5, 2019, the Company announced a clinical development plan to support the submission of a NDA for its fulvestrant formulation. Fulvestrant, an estrogen receptor antagonist with no agonist properties, is approved by the FDA for the treatment of advanced hormone-related breast cancers. On July 26, 2017, the Company received a Complete Response Letter from the FDA regarding its 505(b)(2) NDA for Ryanodex for the treatment of exertional heat stroke ("EHS"), in conjunction with external cooling methods. Based on a meeting with the FDA, the Company conducted an additional clinical trial in August 2018 during the Hajj pilgrimage, similar to the study conducted during the Hajj in 2015. The Company enrolled additional patients in its controlled clinical study of RYANODEX® (dantrolene sodium for injectable suspension) for the treatment of exertional heat stroke (“EHS”) patients during the 2019 Hajj pilgrimage held from August 9-14 in Saudi Arabia. The Company has recruited a total of 41 patients at the 2015, 2018 and 2019 Hajj pilgrimages. Eagle has submitted a plan to the U.S. Food and Drug Administration (“FDA”) that proposes reviewing the data collectively for all 41 patients. If FDA agrees with this plan, Eagle plans to resubmit the New Drug Application (“NDA”) for EHS. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates These financial statements are presented in U.S. dollars and are prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements including disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and accompanying notes. The Company's critical accounting policies are those that are both most important to the Company's financial condition and results of operations and require the most difficult, subjective or complex judgments on the part of management in their application, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Because of the uncertainty of factors surrounding the estimates or judgments used in the preparation of the financial statements, actual results may materially vary from these estimates. Reclassifications Certain reclassifications have been made to prior year amounts to conform with the current year presentation. None of the reclassifications were significant. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. All cash and cash equivalents are held in United States financial institutions. The carrying amount of cash and cash equivalents approximates its fair value due to its short-term nature. The Company, at times, maintains balances with financial institutions in excess of the FDIC limit. Fair Value Measurements U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: • Level 1: Quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair value of interest-bearing cash, cash equivalents, accounts receivable and accounts payable approximate fair value due to their life being short term in nature, and are classified as Level 1 for all periods presented. The fair value of debt is classified as Level 2 for the periods presented and approximates its fair value due to the variable interest rate. The fair value of the contingent consideration/accrued royalty is classified as Level 3 for the periods presented. Intangible Assets Other Intangible Assets, Net The Company capitalizes and includes in intangible assets the costs of acquired product licenses and developed technology purchased individually or identified in a business combination. Intangible assets are recorded at fair value at the time of their acquisition and stated net of accumulated amortization. The Company amortizes its definite-lived intangible assets using either the straight-line or accelerated method, based on the useful life of the asset over which it is expected to be consumed utilizing expected undiscounted future cash flows. The Company will evaluate the potential impairment of intangible assets if events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Events giving rise to impairment are an inherent risk in our industry and many factors cannot be predicted. Factors that we consider in deciding when to perform an impairment review include significant changes in our forecasted projections for the asset or asset group for reasons including, but not limited to, significant under-performance of a product in relation to expectations, significant changes or planned changes in our use of the assets, significant negative industry or economic trends, and new or competing products that enter the marketplace. The impairment test is based on a comparison of the undiscounted cash flows expected to be generated from the use of the asset group and its eventual disposition to the carrying value of the asset group. If impairment is indicated, the asset is written down by the amount by which the carrying value of the asset exceeds the related fair value of the asset with the related impairment charge recognized within the condensed consolidated statements of operations. With respect to determining an asset’s fair value and useful life, because this process involves management making certain estimates and these estimates form the basis of the determination of whether or not an impairment charge should be recorded, these estimates are considered to be critical accounting estimates. Goodwill Goodwill represents the excess of purchase price over the fair value of net assets acquired in the Eagle Biologics acquisition. Goodwill is not amortized, but is evaluated for impairment on an annual basis, in the fourth quarter, or more frequently if events or changes in circumstances indicate that the reporting unit’s goodwill is less than its carrying amount. The Company did no t identify any impairment to goodwill during the periods presented. Acquisition-Related Contingent Consideration Contingent consideration related to a business combination is recorded on the acquisition date at the estimated fair value of the contingent payments. The acquisition date fair value is measured based on the consideration expected to be transferred using probability-weighted assumptions and discounted back to present value. The discount rate used is determined at the time of the acquisition in accordance with accepted valuation methods. The fair value of the acquisition-related contingent consideration is re-measured at the estimated fair value at each reporting period with the change in fair value recognized as income or expense in the condensed consolidated statements of operations. Concentration of Major Customers and Vendors The Company is dependent on commercial partners to market and sell Argatroban and BENDEKA. The Company's customers for Argatroban and BENDEKA are its commercial and licensing partners; therefore, the Company's future revenues are highly dependent on these collaboration and distribution arrangements. Teva markets BENDEKA pursuant to the BENDEKA License . Pursuant to the agreement, Teva pays the Company a royalty based on net sales of the product and also purchases the product from the Company. A disruption in this arrangement, caused by among other things, a supply disruption, loss of exclusivity or the launch of a superior product would have a material adverse effect of the Company’s financial position, results of operations and cash flows. The total revenues and accounts receivables broken down by major customers as a percentage of the total are as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Net revenues Cephalon, Inc. (Teva) - See Revenue Recognition 85 % 74 % 78 % 75 % Other 15 % 26 % 22 % 25 % 100 % 100 % 100 % 100 % September 30, December 31, 2019 2018 Accounts receivable Cephalon, Inc. (Teva) - See Revenue Recognition 77 % 61 % Other 23 % 39 % 100 % 100 % Currently, for Argatroban, the Company uses one vendor as its sole source supplier. Because of the unique equipment and process for manufacturing, transferring manufacturing activities to an alternate supplier would be a time consuming and costly endeavor. Inventories Inventories are recorded at the lower of cost or expected net realizable value, with cost determined on a first-in first-out basis. The Company periodically reviews the composition of inventory in order to identify obsolete, slow-moving or otherwise non-saleable items. If non-saleable items are observed and there are no alternate uses for the inventory, the Company will record a write-down to net realizable value in the period that the decline in value is first recognized. Property and Equipment Property and equipment are stated at cost. Depreciation is recorded over the estimated useful lives of the assets utilizing the straight-line method. Leasehold improvements are being amortized over the shorter of their useful lives or the lease term. Research and Development Expense Costs for research and development are charged to expense as incurred and include; employee-related expenses including salaries, benefits, travel and stock-based compensation expense for research and development personnel; expenses incurred under agreements with contract research organizations, contract manufacturing organizations and service providers that assist in conducting clinical and preclinical studies; costs associated with preclinical activities and development activities, costs associated with regulatory operations; and depreciation expense for assets used in research and development activities. Costs for certain development activities, such as clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the patterns of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid expenses or accrued expenses as deemed appropriate. Recoveries of previously recognized research and development expenses from third parties are recorded as a reduction to research and development expense in the period it becomes realizable. Advertising and Marketing Advertising and marketing costs are expensed as incurred. Advertising and marketing costs were $556 and $609 for the three months ended September 30, 2019 and 2018 , respectively and $ 1,673 and $ 2,622 for the nine months ended September 30, 2019 and 2018 . Income Taxes The Company accounts for income taxes using the liability method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), Topic 740 - Income Taxes (“ASC 740”). Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and are measured by applying enacted rates and laws to taxable years in which differences are expected to be recovered or settled. Further, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that the rate changes. A valuation allowance is required when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. ASC 740 also prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return, including a decision whether to file or not file a return in a particular jurisdiction. We recognize any interest and penalties accrued related to unrecognized tax benefits as income tax expense. Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Receivables from our product sales have payment terms ranging from 30 to 75 days with select extended terms to wholesalers on initial purchases of product launch quantities. Our receivables from royalty revenue are due 45-days from the end of the quarter. Product revenue - The Company recognizes net revenue on sales to its commercial partners and to end users. In each instance, revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Revenue on sales to commercial partners relates to Argatroban and BENDEKA. Sales to our commercial partners are presented gross because the Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement and bears risk of loss while the inventory is in-transit to the commercial partner. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method to which the Company expects to be entitled. As such, revenue on sales to customers for Belrapzo, Non-Alcohol Docetaxel Injection, Ryanodex and diclofenac-misoprostol are recorded net of chargebacks, rebates, returns, prompt pay discounts, wholesaler fees and other deductions. Our products are contracted with a limited number of oncology distributors and hospital buying groups with narrow differences in ultimate realized contract prices used to estimate our chargeback and rebate reserves. The Company has a product return policy on some of its products that allows the customer to return pharmaceutical products within a specified period of time both prior to and subsequent to the product’s expiration date. The Company's estimate of the provision for returns is analyzed quarterly and is based upon many factors, including historical experience of actual returns and analysis of the level of inventory in the distribution channel, if any. The Company has terms on sales of Ryanodex by which the Company does not accept returns. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration are made using the expected value method and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. The Company believes that the estimates it has established are reasonable based upon current facts and circumstances. Applying different judgments to the same facts and circumstances could result in the estimated amounts to vary. Royalty Revenue — The Company recognizes revenue from license arrangements with its commercial partners' net sales of products. In accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the commercial partner’s products occurs. The Company's commercial partners are obligated to report their net product sales and the resulting royalty due to the Company within 25 days for BENDEKA and 60 days for Argatroban from the end of each quarter. Based on historical product sales, royalty receipts and other relevant information, the Company accrues royalty revenue each quarter and subsequently determines a true-up when it receives royalty reports from its commercial partners. Historically, these true-up adjustments have been immaterial. License and other revenue — The Company analyzes each element of its licensing agreements to determine the appropriate revenue recognition. The terms of the license agreement may include payment to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. The Company recognizes revenue from upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. The Company recognizes sales-based milestone payments as revenue upon the achievement of the cumulative sales amount specified in the contract in accordance with ASC 606-10-55-65. For those milestone payments which are contingent on the occurrence of particular future events, the Company determined that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method. As such, the Company assesses each milestone to determine the probability and substance behind achieving each milestone. Given the inherent uncertainty of the occurrence of these future events, the Company will not recognize revenue from the milestone until there is not a high probability of a reversal of revenue, which typically occurs near or upon achievement of the event. When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component as of September 30, 2019 . Collaborative licensing and development revenue — The Company recognizes revenue from reimbursements received in connection with feasibility studies and development work for third parties when its contractual services are performed, provided collectability is reasonably assured. Its principal costs under these agreements include its personnel conducting research and development, its allocated overhead, as well as the research and development performed by outside contractors or consultants. Upon termination of a collaboration agreement, any remaining non-refundable license fees received by the Company, which had been deferred, are generally recognized in full. All such recognized revenues are included in collaborative licensing and development revenue in its condensed consolidated statements of operations. The Company recognizes revenue from milestone payments received under collaboration agreements when earned, provided that the milestone event is substantive, its achievability was not reasonably assured at the inception of the agreement, the Company has no further performance obligations relating to the event, and collectability is reasonably assured. If these criteria are not met, the Company recognizes milestone payments ratably over the remaining period of its performance obligations under the collaboration agreement. Stock-Based Compensation The Company accounts for stock-based compensation using the fair value provisions of ASC 718, Compensation - Stock Compensation that requires the recognition of compensation expense, using a fair-value based method, for costs related to all stock-based payments including stock options and restricted stock. This topic requires companies to estimate the fair value of the stock-based awards on the date of grant for options issued to employees and directors and record expense over the employees' service periods, which are generally the vesting period of the equity awards. The Company accounts for stock-based compensation by measuring and recognizing compensation expense for all stock-based payments made to employees and directors based on estimated grant date fair values. The straight-line method is used to allocate compensation cost to reporting periods over each optionee's requisite service period, which is generally the vesting period. The fair value of the Company's stock-based awards to employees and directors is estimated using the Black-Scholes valuation model or a monte carlo simulation model. These models require the input of subjective assumptions, including the expected stock price volatility, the calculation of expected term, forfeitures and the fair value of the underlying common stock on the date of grant, among other inputs. The risk-free interest rate is determined with the implied yield currently available for zero-coupon U.S. government issues with a remaining term approximating the expected life of the options. Earnings Per Share Basic earnings per common share is computed using the weighted average number of shares outstanding during the period. Diluted earnings per share is computed in a manner similar to the basic earnings per share, except that the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of warrants, options, convertible debt and other such convertible instruments. Diluted earnings per share contemplate a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share. The anti-dilutive common shares equivalents outstanding at the three and nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Options 2,476,552 1,704,348 2,493,937 1,810,098 Total 2,476,552 1,704,348 2,493,937 1,810,098 The following table sets forth the computation for basic and diluted net income (loss) per share for the three and nine months ended September 30, 2019 and 2018 : Three Months Ended Nine Months Ended 2019 2018 2019 2018 Numerator Numerator for basic and diluted earnings per share-net (loss) income $ (2,390 ) $ 14,040 $ 13,308 $ 19,313 Denominator Basic weighted average common shares outstanding 13,668,091 15,011,159 13,791,071 14,903,945 Dilutive effect of stock options — 471,878 356,587 578,823 Diluted weighted average common shares outstanding 13,668,091 15,483,037 14,147,658 15,482,768 Basic net income (loss) per share Basic net income (loss) per share $ (0.17 ) $ 0.94 $ 0.96 $ 1.30 Diluted net income (loss) per share Diluted net income (loss) per share $ (0.17 ) $ 0.91 $ 0.94 $ 1.25 All potentially dilutive items were excluded from the diluted share calculation for the three months ended September 30, 2019 because their effect would have been anti-dilutive, as the Company was in a loss position. Recent Accounting Pronouncements Recent Accounting Pronouncements - Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses which requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This standard is effective for fiscal years beginning after December 15, 2019 and the Company will adopt the standard effective January 1, 2020. The Company is currently evaluating the potential impact that the adoption of ASU 2016-13 may have on the Company's financial position and results of operations. In January 2017, the FASB issued guidance to simplify the measurement of goodwill. The guidance eliminates Step 2 from the goodwill impairment test. Instead, under the amendments in this guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The guidance also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted for interim or annual goodwill impairment tests performed for testing dates after January 1, 2017. The guidance must be adopted on a prospective basis. We do not expect this guidance to have an impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirement for Fair Value Measurement (“ASU 2018-13”), which amends the disclosure requirements for fair value measurements. The amendments in ASU 2018-13 are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the potential impact that the adoption of ASU 2018-13 may have on the Company’s financial position and results of operations. Recently Adopted Accounting Pronouncements The Company adopted FASB ASU No. 2016-02,“Leases (Topic 842)”(ASU 2016-02) as of January 1, 2019 to increase transparency and comparability among organizations, which included recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Lessees are required to recognize a lease liability, which represents the discounted obligation to make future minimum lease payments, and a corresponding right-of-use asset on the balance sheet for most leases. The Company adopted ASU 2016-02 using the modified retrospective approach and did not recognized a cumulative-effect adjustment to the opening balance of Retained earnings. The Company elected a number of optional practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification and that permits lease agreements that are twelve months or less to be excluded from the balance sheet. The primary impact upon adoption was the recognition, on a discounted basis, of the Company’s minimum commitments under noncancelable operating leases as right of use assets and obligations on the condensed consolidated balance sheets, of approximately $3 million |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Eagle Biologics Acquisition Under the terms of the Arsia SPA, the Company paid approximately $27.2 million in cash and 40,200 shares of Eagle common stock worth $3.0 million at closing. The Company also agreed to pay up to $48 million in additional payments upon the completion of certain milestones, for aggregate potential payments of $78 million . As part of the agreement, Eagle Biologics founders and Massachusetts Institute of Technology professors, Dr. Robert Langer and Dr. Alexander Klibanov, as well as other key members of the Eagle Biologics team, entered into consulting agreements with the Company to develop new formulations and solve delivery challenges in large molecule products. Eagle Biologics’ platform technology enables subcutaneous administration of high-dose biologics through improved formulation. Eagle Biologics has developed early-stage partnerships with major pharmaceutical companies to apply its technology to their biosimilar molecules, create subcutaneous versions of currently-marketed intravenous products and produce high-concentration formulations of clinical candidates. The acquisition was accounted for as a business combination in accordance with ASC 805, which requires the assets acquired and liabilities assumed from Eagle Biologics to be recorded on the acquisition date at their respective fair values. Eagle Biologics’ results of operations are included in the financial statements from the date of acquisition. On February 8, 2018, the Company entered into an amendment (the “Arsia Amendment”) to the Arsia SPA. Pursuant to the Arsia Amendment, the Company's obligation to make four separate milestone payments pursuant to the Arsia SPA, which could have aggregated to a total of $48 million , were terminated in exchange for a single payment of $15 million . The following table summarizes the aggregate consideration transferred for the acquisition of Eagle Biologics: Cash consideration paid $ 27,209 Common stock issued (i) 3,046 Post-closing consideration paid to the Seller (ii) 15,000 Total consideration $ 45,255 (i) Under the Arsia SPA, the number of common shares to be issued to the Seller is equal to $2.7 million divided by the average of the closing day price per share for the 30 trading days prior to the date of closing. The average price of the common stock of 30 days prior to closing was $68.18 . Accordingly, the number of shares of common stock to be issued to the Seller was determined at 40,200 shares ( $2.7 million divided by $68.18 per share). The fair value of the common stock issued to the Seller was determined based on the closing price of the Company’s common stock on November 16, 2016. (ii) Under the Arsia SPA, the contingent consideration included four separate milestone payments which could have aggregated to a total of $48 million payable to the Seller upon achievement of certain clinical, regulatory and development milestones. In accordance with the provisions of ASC 805-30-25-5, each unit of contingent consideration is recognized at the acquisition date fair value. The acquisition date fair value of the contingent consideration was $16.1 million . Such fair values are determined based on a probabilistic model with weights assigned on the likelihood of the Company achieving the clinical, regulatory and development milestones as well as an acceleration event in the future. Each unit of contingent consideration is classified as a liability in the balance sheet and would be subsequently measured at fair value on each reporting date. Any future change in fair value would be recognized in the statement of operations. As described above, on February 8, 2018, the Company entered into the Arsia Amendment, pursuant to which the Company’s obligations to make four separate milestone payments under the Arsia SPA were terminated in exchange for a single payment of $15 million to the Seller. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following: September 30, December 31, 2019 2018 Raw material $ 2,164 $ 6,303 Work in process 4,488 1,776 Finished products 595 225 $ 7,247 $ 8,304 |
Balance Sheet Accounts
Balance Sheet Accounts | 9 Months Ended |
Sep. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Accounts | Balance Sheet Accounts Prepaid and Other Current Assets Prepaid and other current assets consist of the following: September 30, December 31, 2019 2018 Prepaid income taxes $ 6,818 $ 5,739 Prepaid FDA user fee 1,302 1,540 Prepaid insurance 412 150 Advances to commercial manufacturers 706 2,700 All other 1,278 134 Total Prepaid expenses and other current assets $ 10,516 $ 10,263 Accrued Expenses Accrued expenses consist of the following: September 30, December 31, 2019 2018 Accrued sales reserves $ 10,402 $ 5,869 Royalties payable to commercial partners 3,476 7,139 Accrued salary and other compensation 4,451 5,049 Accrued professional fees 3,617 2,408 Accrued research & development 1,757 1,245 Current portion of lease liability 1,084 — Accrued other 2,340 1,809 Total Accrued expenses $ 27,127 $ 23,519 Adoption of FASB ASU No. 2016-02, “Leases (Topic 842)” as of January 1, 2019 The Company leases its corporate office under an amended lease agreement that expires on June 30, 2025 (the "Corporate Office Lease"). The Corporate Office Lease was amended on August 8, 2019 to extend the term through such date and to increase the amount of leased office space. The Company also leases lab space under a lease agreement that expires on October 31, 2023 (the "Lab Space Lease"). The Company estimated the right of use asset and the corresponding lease liability, on a discounted basis, as of the adoption date of January 1, 2019. The future minimum lease payments under this Corporate Office Lease are approximately $4.0 million . For the Company's two operating leases (the Corporate Office Lease and Lab Space Lease), the depreciation and interest expense components are combined and recognized ratably over the remaining term of the lease as research and development and selling, general and administrative in the Company's condensed consolidated statements of operations, respectively. The Company used its estimated incremental borrowing rate to calculate the present value of the ROU assets and lease liabilities as of the date of adoption date. The implicit interest rate related to the Company’s two lease agreements was not known as of the date of adoption. Therefore, the Company calculated an incremental borrowing rate based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment . Lease related disclosures consist of the following: September 30, 2019 Right of use (ROU) asset, net included in Other assets $ 4,184 Lease liability included with Other long-term liabilities $ 3,227 Lease liability included with Accrued expenses and other liabilities $ 1,084 Q3 2019 depreciation of ROU asset $ 232 Q3 2019 related rent expense $ 286 YTD 2019 depreciation of ROU asset $ 754 YTD 2019 related rent expense $ 860 YTD operating cash flows from operating leases $ 860 YTD operating lease costs $ 860 Weighted-average remaining lease term - operating leases 5.0 years Weighted-average discount rate - operating leases 6 % As of September 30, 2019, the future minimum lease commitments for the Company's two leases were as follows: Total 2019 2020 2021 2022 2023 2024 Beyond $ 6,894 $ 287 $ 1,345 $ 1,362 $ 1,376 $ 1,291 $ 820 $ 413 As of December 31, 2018, the future minimum lease commitments for the Company's two leases were as follows: Total 2019 2020 2021 2022 2023 $ 3,661 $ 1,146 $ 864 $ 583 $ 583 $ 485 |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | Intangible Assets, Net The gross carrying amounts and net book value of the Company's intangible assets are as follows: September 30, 2019 Useful Life (In Years) Gross Carrying Amount Accumulated Amortization Net Book Value Ryanodex intangible (i) 20 $ 15,000 $ (2,229 ) $ 12,771 Developed technology 5 8,100 (4,658 ) 3,442 Total $ 23,100 $ (6,887 ) $ 16,213 December 31, 2018 Useful Life (In Years) Gross Carrying Amount Accumulated Amortization Impairment Charge Net Book Value Docetaxel product rights 10 $ 11,220 $ (1,281 ) $ (9,939 ) $ — Ryanodex intangible 20 15,000 (1,554 ) — 13,446 Developed technology 5 8,100 (3,443 ) — 4,657 Total $ 34,320 $ (6,278 ) $ (9,939 ) $ 18,103 (i) Represent payments which were made to reduce the royalties payable to a third party on Ryanodex net sales. Amortization expense was $630 and $599 for the three months ended September 30, 2019 and 2018 , respectively and $1,890 and $1,916 for the nine months ended September 30, 2019 and 2018 , respectively. Intangible Asset Impairment During the year ended December 31, 2017, the Company experienced a decline in customer contracts and saw a drop in market pricing for Non-Alcohol Docetaxel Injection. Accordingly, the Company estimated the fair value of the Company's Non-Alcohol Docetaxel Injection product and determined the carrying amount of the intangible asset was no longer fully recoverable, resulting in a pre-tax, non-cash asset impairment charge of $7.2 million during the year ended December 31, 2017. On June 30, 2018, the Company implemented a restructuring initiative based on its assessment of the current product portfolio and made a decision to discontinue manufacture and distribution of Non-Alcohol Docetaxel Injection. The Company ceased selling the product by September 30, 2018. As a result, the Company recognized a pre-tax, non-cash asset impairment charge of $2.7 million in the second quarter of 2018. Estimated Amortization Expense for Intangible Assets Based on definite-lived intangible assets recorded as of September 30, 2019 , and assuming that the underlying assets will not be impaired and that the Company will not change the expected lives of the assets, future amortization expenses are estimated as follows: Estimated Amortization Expense Year Ending December 31, 2019 (remainder) 630 2020 2,666 2021 2,622 2022 1,369 2023 1,570 Thereafter 7,356 Total estimated amortization expense $ 16,213 |
Common Stock and Stock-Based Co
Common Stock and Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Common Stock and Stock-Based Compensation | Common Stock and Stock-Based Compensation Common Stock On October 30, 2018, the Company announced a new repurchase program approved by the Board of Directors pursuant to which the Company may repurchase of up to $150 million of its outstanding common stock, consisting of (i) up to $50 million in repurchases pursuant to an accelerated share repurchase agreement (the “ASR”), with JPMorgan Chase Bank, N.A. (“JPMorgan”), and (ii) up to $100 million in additional repurchases (collectively, the “2018 Share Repurchase Program”). In connection with its approval of the 2018 Share Repurchase Program, the Board of Directors terminated the Company’s 2016 Share Repurchase Program and 2017 Share Repurchase Program in October 2018. Under the 2018 Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, privately-negotiated transactions, accelerated share repurchases or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. Under the 2018 Share Repurchase Program, the additional repurchases have no time limit and may be suspended or discontinued completely at any time. The specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors. The repurchases will be made using the Company’s cash resources. In connection with the 2018 Share Repurchase Program, on October 30, 2018, the Company entered into the ASR with JPMorgan to repurchase an aggregate of $50 million of the Company’s common stock. Under the terms of the ASR, the Company paid $50 million to JPMorgan on November 1, 2018, and received 702,988 shares, representing approximately 80% of the notional amount of the ASR, based on the closing price of $56.90 on October 29, 2018. Upon settlement of the ASR, the final number of shares repurchased were trued up based on the average of the daily volume weighted average share prices of the Company’s common stock, less a discount, during the term of the ASR. The Company received 297,146 additional shares on December 6, 2018, the termination date of the ASR, for an aggregate of 1,000,134 shares from the ASR. As of September 30, 2019, the Company had repurchased an aggregate of 2,855,316 shares of common stock for $168.9 million pursuant to its share repurchase programs, including the ASR. Stock-Based Compensation In November 2013, the Company's Board of Directors approved the 2014 Equity Incentive Plan (the "2014 Plan") which became effective on February 11, 2014. The 2014 Plan provides for the awards of incentive stock options, non-qualified stock options, restricted stock, restricted stock units and other stock-based awards. Awards generally vest equally over a period of four years from grant date. Vesting may be accelerated under a change in control of the Company or in the event of death or disability to the recipient. In the event of termination, any unvested shares or options are forfeited. During the three months ended March 31, 2018, the Company introduced a new long-term incentive program with the objective to better align the stock-based awards granted to management with the Company's focus on improving total shareholder return over the long-term. The stock-based awards granted under this long-term incentive program consist of time-based stock options, time-based restricted stock units ("RSUs") and performance-based stock units ("PSUs"). PSUs are comprised of awards that vest upon achievement of certain share price appreciation conditions. A summary of stock option, RSU and PSU activity under the 2014 Plan during the nine months ended September 30, 2019 and 2018 is presented below: Stock Options RSUs PSUs Outstanding at December 31, 2017 2,786,568 — — Granted 652,625 64,080 127,080 Options Exercised/RSUs Vested/PSUs Vested (499,592 ) — — Forfeited or expired (391,609 ) (9,861 ) (9,861 ) Outstanding at September 30, 2018 2,547,992 54,219 117,219 Outstanding at December 31, 2018 2,556,365 54,219 117,219 Granted 600,133 211,829 — Options Exercised/RSUs Vested/PSUs Vested (10,034 ) (13,555 ) — Forfeited or expired (20,890 ) (1,278 ) (1,038 ) Outstanding at September 30, 2019 3,125,574 251,215 116,181 Stock Options The fair value of stock options granted to employees, directors, and consultants were estimated using the following assumptions: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Risk-free interest rate 1.50% - 1.84% 2.72% - 2.90% 1.45% - 2.61% 2.30% - 2.94% Volatility 49.87% 43.76% 50.27 % 43.76% Expected term (in years) 5.93 years 6.08 years 5.91 years 5.50 - 6.08 years Expected dividend yield 0.0% 0.0% 0.0 % 0.0% RSUs Each vested time-based RSU represents the right of a holder to receive one share of the Company’s common stock. The fair value of each RSU granted was estimated based on the trading price of the Company’s common stock on the date of grant. PSUs The fair value of PSUs granted to employees was estimated using a monte carlo simulation model. Inputs used in the calculation include a risk-free interest rate of 2.06% , an expected volatility of 47% , contractual term of 3 years, and no expected dividend yield. The Company recognized stock-based compensation in its condensed consolidated statements of operations for the three and nine months ended September 30, 2019 and 2018 as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock options $ 4,241 $ 3,514 $ 12,636 $ 11,725 RSUs 644 176 1,895 513 PSUs 766 782 2,284 2,274 Stock-based compensation expense $ 5,651 $ 4,472 $ 16,815 $ 14,512 Selling, general and administrative $ 4,570 $ 3,641 $ 13,495 $ 11,418 Research and development 1,081 831 3,320 3,094 Stock-based compensation expense $ 5,651 $ 4,472 $ 16,815 $ 14,512 |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments Our future material contractual obligations as of September 30, 2019, reflective of the Revised Credit Agreement described in Note 15 Subsequent Event, include the following: Obligations Total 2019 2020 2021 2022 2023 2024 Beyond Operating leases (1) $ 6,894 $ 287 $ 1,345 $ 1,362 $ 1,376 $ 1,291 $ 820 $ 413 Credit facility (2) 40,000 1,000 5,000 8,000 26,000 — — — Purchase obligations (3) 24,589 24,589 — — — — — — Total obligations $ 71,483 $ 25,876 $ 6,345 $ 9,362 $ 27,376 $ 1,291 $ 820 $ 413 (1) We lease our corporate office location. On August 8, 2019, we amended the lease for our corporate office location in order to rent additional office space and extend the term of our existing lease to June 30, 2025. The Company also leases its lab space under a lease agreement that expires on October 31, 2023. Rental expense was $286 and $135 , for the three months ended September 30, 2019 and 2018 . Rental expense was $860 and $423 for the nine months ended September 30, 2019 and 2018 . The remaining future lease payments under the operating leases are $6,894 as of September 30, 2019 . (2) Refer to Note 15 Subsequent Event for details of the Revised Credit Agreement entered into as of November 8, 2019. (3) As of September 30, 2019 , the Company has purchase obligations in the amount of $24,589 which represents the contractual commitments under contract manufacturing and supply agreements with suppliers. The obligation under the supply agreement is primarily for finished product, inventory, and research and development. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt On August 8, 2017, the Company entered into an Amended and Restated Credit Agreement (the “Amended Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent (the “Agent”) and the lenders party thereto, which amended and restated the Company’s existing credit agreement, dated as of January 26, 2017. The Amended Credit Agreement provides for a 3 -year $50 million revolving credit facility and a 3 -year $100 million term loan facility (which are collectively referred to as the “Amended Credit Facility”). The Amended Credit Facility is subject to certain financial covenants. As of September 30, 2019, the Company was in compliance with all required covenants. As of September 30, 2019 , the Company has $407 of unamortized deferred debt issuance costs as part of long-term debt in its condensed consolidated balance sheets. On the date of the amendment, $50 million of the term loan facility was drawn, and none of the revolving credit facility has been drawn. Although the Company was permitted to make one other draw on the term loan facility on or before February 4, 2018, the Company elected not to draw down further on the term loan facility. The Amended Credit Facility includes a $5 million letter of credit subfacility. The Company anticipates that the draw at closing and future draws under the Amended Credit Facility, if any, will be used to finance the 2018 Share Repurchase Program and for other corporate purposes. Loans under the Amended Credit Facility bear interest, at the Company’s option, at a rate equal to either (a) the LIBOR rate, plus an applicable margin ranging from 2.25% to 3.0% per annum, based upon the total net leverage ratio (as defined in the Amended Credit Agreement), or (b) the prime lending rate, plus an applicable margin ranging from 1.25% to 2.0% per annum, based upon the total net leverage ratio. The Company is required to pay a commitment fee on the unused portion of the Amended Credit Facility at a rate ranging from 0.35% to 0.45% per annum based upon the total net leverage ratio. The Company is permitted to terminate or reduce the revolving commitments or term commitments of the lenders and to make voluntary prepayments at any time subject to break funding payments. The Company is required to make mandatory prepayments of outstanding indebtedness under the Amended Credit Agreement (a) upon receipt of proceeds from certain sales, transfers or other dispositions, casualty and other condemnation events and the incurrence of certain indebtedness other than indebtedness permitted, subject to customary reinvestment exceptions and (b) in the case that the aggregate amount of all outstanding loans and letters of credit issued under the Amended Credit Facility exceed the aggregate commitment of all lenders under the Amended Credit Facility. The Company is obligated to repay the term loan facility on the last day of each March, June, September and December in an aggregate principal amount equal to 2.5% during the term of the loan. Debt Maturities As of September 30, 2019, reflective of Revised Credit Agreement described in Note 15. Subsequent Event 2019 (remainder) $ 1,000 2020 5,000 2021 8,000 2022 26,000 Total $ 40,000 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Income tax benefit (provision) $ 152 $ (3,628 ) $ (5,332 ) $ 509 Effective tax rate (6 )% 21 % 29 % (3 )% For interim periods, we recognize an income tax (provision) benefit based on our estimated annual effective tax rate expected for the entire year plus the effects of certain discrete items occurring in the quarter. The interim annual estimated effective tax rate is based on the statutory tax rates then in effect, as adjusted for changes in estimated temporary and estimated permanent differences, and certain discrete items whose tax effect, when material, is recognized in the interim period in which they occur. The provision for income taxes was based on the applicable federal and state tax rates for those periods. The effective tax rate for the three and nine months ended September 30, 2019 reflects the impact of certain non-deductible executive compensation partially offset by credits for research and development activity. The effective tax rate for the three and nine months ended September 30, 2018 reflects tax benefits related to stock option exercises in the period as well as credits for research and development activity. Deferred income tax assets as of September 30, 2019 consist of temporary differences primarily related to stock-based compensation and research and development tax credit carryforwards, partially offset by temporary differences related to intangible assets. The Company files income tax returns in the U.S. federal jurisdiction and several states. Given that the Company has incurred tax losses since its inception, all of the Company’s tax years are effectively open to examination. The Company is currently under audit by one State tax jurisdiction. The Company has no amount recorded for any unrecognized tax benefits as of September 30, 2019 . The Company regularly evaluates its tax positions for additional unrecognized tax benefits and associated interest and penalties, if applicable. There are many factors that are considered when evaluating these tax positions including: interpretation of tax laws, recent tax litigation on a position, past audit or examination history, and subjective estimates and assumptions. The Company reflects interest and penalties attributable to income taxes, to the extent they arise, as a component of income tax provision or benefit. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings In addition to the below legal proceedings, from time to time, the Company may be a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters, or matters discussed below, will not have a material adverse effect on the Company's business nor has the Company recorded any loss in connection with these matters because the Company believes that loss is neither probable nor estimable. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. Commercial Litigation In Re: Taxotere (Docetaxel) On February 1, 2017, the Company was named as a defendant, among various other manufacturers, in several product liability suits that are consolidated in the U.S. District Court for the Eastern District of Louisiana as part of MDL 2740 (Civil Action No 2:16 md-2740). The claims are for personal injuries allegedly arising out of the use of docetaxel. In March 2017, the Company reached agreements in principle with the Plaintiffs’ Steering Committee in this matter to voluntarily dismiss the Company from all of the lawsuits in which it was named and from the master complaint. The Company is in the process of working with the other parties in this matter to have it removed from the Multidistrict litigation entirely. As part of the agreement, in the event a case is brought in the future with facts that justify the Company’s inclusion, the plaintiffs reserved the right to include the Company in such matter. The plaintiffs have filed several additional lawsuits since the parties’ agreement in principle to dismiss, and the Company is in the process of working with plaintiffs to explore the possibility of dismissing those lawsuits. Eagle v. Burwell On April 27, 2016, the Company filed an action in the U.S. District Court for the District of Columbia against the FDA and other federal defendants seeking an order requiring the FDA to recognize orphan drug exclusivity for BENDEKA for the treatment of CLL and indolent B-cell NHL. On June 8, 2018, the Court issued a decision requiring the FDA to recognize seven years of orphan drug exclusivity in the U.S. for BENDEKA, and on July 6, 2018 the FDA recognized such ODE until December 7, 2022. In addition, on July 6, 2018, the FDA submitted a Motion to Alter or Amend the Judgement Pursuant to Rule 59(e), pursuant to which the FDA requested that the Court amend its decision to make clear that the decision does not affect any applications referencing TREANDA. The FDA’s motion was denied by the Court on August 1, 2018 on the grounds that the FDA had not satisfied the standard for altering or amending the judgment. The FDA and two intervenors have appealed the Court’s final judgment to the U.S. Court of Appeals for the District of Columbia Circuit. Oral arguments occurred on October 17, 2019 and a decision is not expected until the Spring of 2020. On February 20, 2019, the FDA issued a decision in favor of the Company, regarding the scope of exclusivity for BENDEKA. Pursuant to the FDA’s decision, and unless the district court is reversed on appeal, no bendamustine product used to treat the same indications (including generic versions of TREANDA) may launch in the United States until December 7, 2022 unless it is clinically superior to BENDEKA. Eagle v. Eli Lilly On August 24, 2017, the Company filed an antitrust complaint in the United States District Court for the District of New Jersey (“New Jersey District Court”) against Eli Lilly and Company (“Lilly”). The complaint alleges that Lilly engaged in anticompetitive conduct which restrained competition by delaying and blocking the Company’s launch of a competing pemetrexed injection product (to compete with Lilly’s Alimta). Lilly accepted service and answered the complaint on October 27, 2017. Lilly also filed a motion to transfer this case to Delaware on October 27, 2017. The Company filed a motion to oppose such transfer on November 6, 2017. On July 20, 2018, the New Jersey District Court transferred the case to Delaware. On November 27, 2018, the Delaware Court stayed the case at least until conclusion of the PEMFEXY TM patent trial described below. Chiesi v. Eagle On October 3, 2018, Chiesi USA, Inc. ("Chiesi") filed a complaint against Eagle in the Superior Court of Wake County, North Carolina. The complaint alleges that Eagle has failed to provide adequate information regarding the sales of Argatroban pursuant to a License and Development Agreement between the parties. On July 17, 2019, Chiesi dismissed the actions without prejudice. Patent Litigation Eli Lilly and Company. v. Eagle Pharmaceuticals, Inc. (PEMFEXY TM (Pemetrexed)) On August 14, 2017, Lilly filed suit against the Company in the United States District Court for the Southern District of Indiana (the “Indiana Suit”). Lilly alleged patent infringement based on the filing of the Company’s 505(b)(2) NDA seeking approval to manufacture and sell the Company’s EP-5101. EP-5101, if finally approved by FDA, will be a branded alternative to Alimta®. On September 8, 2017, Eagle moved to dismiss the Indiana Suit for improper venue. On September 11, 2017, Lilly voluntarily dismissed the Indiana Suit. It then filed a complaint in the United States District Court for the District of Delaware, alleging similar patent infringement claims (the “Delaware Suit”). Eagle answered and filed various counterclaims in the Delaware Suit on October 3, 2017. Lilly answered Eagle’s counterclaims on October 24, 2017. The Court held a scheduling conference on December 11, 2017 and set trial in the Delaware Suit to begin on September 9, 2019, but later rescheduled trial to begin October 28, 2019. On May 31, 2018, Eagle filed a Motion for Judgment on the Pleadings, which the Court denied on October 26, 2018. On January 23, 2019, the Court held a Markman hearing. Trial took place from October 28, 2019 to October 31, 2019 and is scheduled to continue on December 12, 2019 through December 13, 2019. The Delaware Suit is pending. Eagle Pharmaceuticals, Inc., et al. v. Slayback Pharma Limited Liability Company; Eagle Pharmaceuticals, Inc., et al. v. Apotex Inc. and Apotex Corp.; Eagle Pharmaceuticals, Inc., et al. v. Fresenius Kabi USA, LLC; Eagle Pharmaceuticals, Inc., et al. v. Mylan Laboratories Limited; Eagle Pharmaceuticals, Inc. et al. v. Hospira, Inc. - (BENDEKA®) BENDEKA, which contains bendamustine hydrochloride, is an alkylating drug that is indicated for the treatment of patients with chronic lymphocytic leukemia, as well as for the treatment of patients with indolent B-cell non-Hodgkin's lymphoma that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. Five companies - Slayback Pharma Limited Liability Company (“Slayback”), Apotex Inc. and Apotex Corp. (“Apotex”), Fresenius Kabi USA, LLC (“Fresenius”), Mylan Laboratories Limited (“Mylan”), and Lupin - have filed Abbreviated New Drug Applications (“ANDA’s”) referencing BENDEKA® that include challenges to one or more of the BENDEKA® Orange Book-listed patents. Hospira, Inc. (“Hospira”) filed a 505(b)(2) NDA. The Company, Cephalon, Inc. and/or Teva Pharmaceuticals International GMBH (together the “Patentees”), filed separate suits against Slayback, Apotex, Fresenius, Mylan, Hospira, and Lupin in the United States District Court for the District of Delaware on August 16, 2017 (Slayback (“Slayback I”)), August 18, 2017 (Apotex), August 24, 2017 (Fresenius), December 12, 2017 (Mylan), January 19, 2018 (Slayback (“Slayback II”)), July 19, 2018 (Hospira), and July 2, 2019 (Lupin). In these Complaints, the Patentees allege infringement of the challenged patents, namely U.S. Patent Nos. 8,791,270 and 9,572,887 against Slayback (Slayback I and Slayback II), and of U.S. Patent Nos. 8,609,707, 8,791,270, 9,000,021, 9,034,908, 9,144,568, 9,265,831, 9,572,796, 9,572,797, 9,572,887, 9,579,384, 9,597,397, 9,597,398, 9,597,399 against Fresenius, Apotex, and Mylan, and of U.S. Patent Nos. 9,572,887, 10,010,533, 9,034,908, 9,144,568, 9,597,397, 9,597,398, 9,597,399, 9,000,021, 9,579,384 against Hospira, and of U.S. Patent Nos. 8,609,707, 9,000,021, 9,034,908, 9,144,568, 9,265,831, 9,572,796, 9,572,797, 9,572,887, 9,579,384, 9,597,397, 9,597,398, 9,597,399, 10,010,533, and 10,052,385 against Lupin. The parties stipulated to dismiss without prejudice U.S. Patent No. 8,791,270 as to Apotex, Fresenius and Mylan on July 24, 2018, August 2, 2018, and August 3, 2018, respectively. Slayback, Apotex, Fresenius, and Mylan answered their Complaints and some filed various counterclaims on September 29, 2017 (Slayback I), February 12, 2018 (Slayback II), November 27, 2017, September 15, 2017, and February 14, 2018, respectively. The Patentees answered the Slayback I, Slayback II, Fresenius, and Apotex counterclaims on October 20, 2017, March 5, 2018, October 6, 2017, and December 18, 2017, respectively. On October 15, 2018, the Patentees filed a suit against Fresenius and Mylan in the United States District Court for the District of Delaware, alleging patent infringement of U.S. Patent Nos. 10,010,533 and 10,052,385. The Slayback I, Slayback II, Apotex, Fresenius and Mylan cases have been consolidated for all purposes, and a bench trial in these cases began September 9, 2019 and concluded September 19, 2019. Hospira filed a motion to dismiss the case, which was fully briefed on November 16, 2018. All cases are pending. The FDA is stayed from approving Apotex’s, Fresenius’, Mylan’s, and Lupin’s ANDA’s, and Hospira’s 505(b)(2) application, until the earlier of (1) January 7, 2020, January 14, 2020, April 30, 2020, November 21, 2021, and December 20, 2020 respectively (the “30-month stay dates”); and (2) a court decision that each of the challenged patents is not infringed, invalid, or unenforceable. The 30-month stay dates may be shortened or lengthened if either party to the action fails to reasonably cooperate in expediting the action. The FDA cannot approve Slayback’s ANDA until March 2033. Eagle Pharmaceuticals, Inc. v. Slayback Pharma Limited Liability Company Slayback filed an ANDA referencing Eagle's Belrapzo. Slayback’s ANDA includes challenges to one or more of the Belrapzo Orange Book-listed patents. On September 20, 2018, the Company filed a suit against Slayback in the United States District Court for the District of Delaware, alleging patent infringement of U.S. Patent Nos. 8,609,707, 9,265,831, 9,572,796, 9,572,797 and 10,010,533. On October 10, 2018, Slayback answered the Complaint and filed various counterclaims. On October 31, 2018, the Company answered Slayback’s counterclaims. This case is currently stayed. Eagle Pharmaceuticals, Inc. v. Slayback Pharma Limited Liability Company Slayback filed a 505(b)(2) NDA referencing Eagle’s Belrapzo. Slayback’s NDA includes challenges to one or more of the Belrapzo Orange Book-listed patents. On December 11, 2018, the Company filed a suit against Slayback in the United States District Court for the District of Delaware, alleging patent infringement of U.S. Patent Nos. 9,265,831, 9,572,796, 9,572,797, and 10,010,533. On January 4, 2019, Slayback filed a motion for judgment on the pleadings. On May 9, 2019, the United States District Court for the District of Delaware granted Slayback’s motion for judgment on the pleadings. On July 23, 2019, the Company filed an appeal of this decision with the United States Court of Appeals for the Federal Circuit. That appeal is pending. Par Pharmaceutical, Inc. et al. v. Eagle Pharmaceuticals, Inc. (Vasopressin) On May 31, 2018, Par Pharmaceutical, Inc., Par Sterile Products, LLC, and Endo Par Innovation Company, LLC (together “Par”) filed suit against the Company in the United States District Court for the District of Delaware. Par alleged patent infringement based on the filing of the Company’s ANDA seeking approval to manufacture and sell the Company’s vasopressin product. The Company’s vasopressin product, if approved by FDA, will be an alternative to Vasostrict, which is indicated to increase blood pressure in adults with vasodilatory shock (e.g., post-cardiotomy or sepsis) who remain hypotensive despite fluids and catecholamines. The Company answered the complaint on August 6, 2018. The court issued a Markman ruling on July 1, 2019. Trial is scheduled to begin May 18, 2020. This suit is pending. Eagle Pharmaceuticals, Inc. et al.v. Accord (Argatroban) |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In June 2018, as part of its ongoing organizational review, the Company engaged in a restructuring initiative to rationalize its product portfolio and focus its physical sites. These measures included the discontinuation of manufacture and distribution of Non-Alcohol Docetaxel Injection and rationalization of research and development operations. A restructuring charge of $7,479 for the nine months ended September 30, 2018 was recorded to Restructuring charge on the condensed consolidated statements of operations and consisted of inventory write-downs, and certain asset impairment charges related to property and equipment. The Company had settled all liabilities related to this restructuring as of December 31, 2018. |
Related Party Transaction
Related Party Transaction | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Related Party Transaction On May 10, 2019, Hudson Executive Capital LP ("Hudson Capital") sold 100,000 shares of the Company's common stock and the Company purchased those 100,000 shares in a block trade at a price of $56.14 per share. Douglas Braunstein is the Managing Partner of Hudson Capital and a member of Eagle’s Board of Directors. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On November 8, 2019, the Company entered into the Second Amended and Restated Credit Agreement (the “Revised Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent (the “Agent”) and the lenders party thereto, which replaced the Company’s existing credit agreement, dated as of August 8, 2017 (the "Amended Credit Agreement"). The terms and amounts borrowed under the Revised Credit Agreement includes a drawn term loan of $40 million and a undrawn revolving credit facility of $110 million . The schedule of principal payments for the new term loan facility has been extended until November 8, 2022. The Company classified the current portion of long-term debt of $4 million on the condensed consolidated balance sheet as of September 30, 2019. The new term loan facility shall bear interest at the Adjusted LIBOR (equal to (a) the LIBOR for such Interest Period multiplied by (b) the Statutory Reserve Rate as established by Board of Governors of the Federal Reserve System of the United States of America) for the Interest Period in effect for such Borrowing plus the Applicable Rate as described below. The Agent and the Company may amend the Revised Credit Agreement to replace the LIBOR with a Benchmark Replacement, described below. Loans under the Revised Credit Agreement bear interest at a rate equal to either (a) the LIBOR rate, plus an applicable margin ranging from 2.25% to 3.0% per annum, based upon the total net leverage ratio (as defined in the Revised Credit Agreement), or (b) the Benchmark Replacement which is defined as the greatest of the prime lending rate, or the NYFRB Rate (the rate for a federal funds transaction) in effect on such day plus ½ of 1% or the Adjusted LIBO Rate for a one month Interest Period on such day plus 1% plus an applicable margin ranging from 1.25% to 2.0% per annum, based upon the total net leverage ratio. The Company is required to pay a commitment fee on the unused portion of the new revolving credit facility in the Revised Credit Agreement at a rate ranging from 0.35% to 0.45% per annum based upon the total net leverage ratio. . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates These financial statements are presented in U.S. dollars and are prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements including disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and accompanying notes. The Company's critical accounting policies are those that are both most important to the Company's financial condition and results of operations and require the most difficult, subjective or complex judgments on the part of management in their application, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Because of the uncertainty of factors surrounding the estimates or judgments used in the preparation of the financial statements, actual results may materially vary from these estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior year amounts to conform with the current year presentation. None of the reclassifications were significant. |
Cash and cash equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. All cash and cash equivalents are held in United States financial institutions. The carrying amount of cash and cash equivalents approximates its fair value due to its short-term nature. The Company, at times, maintains balances with financial institutions in excess of the FDIC limit. |
Fair value measurements | Fair Value Measurements U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: • Level 1: Quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair value of interest-bearing cash, cash equivalents, accounts receivable and accounts payable approximate fair value due to their life being short term in nature, and are classified as Level 1 for all periods presented. The fair value of debt is classified as Level 2 for the periods presented and approximates its fair value due to the variable interest rate. The fair value of the contingent consideration/accrued royalty is classified as Level 3 for the periods presented. |
Other intangible assets, net | Intangible Assets Other Intangible Assets, Net The Company capitalizes and includes in intangible assets the costs of acquired product licenses and developed technology purchased individually or identified in a business combination. Intangible assets are recorded at fair value at the time of their acquisition and stated net of accumulated amortization. The Company amortizes its definite-lived intangible assets using either the straight-line or accelerated method, based on the useful life of the asset over which it is expected to be consumed utilizing expected undiscounted future cash flows. The Company will evaluate the potential impairment of intangible assets if events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Events giving rise to impairment are an inherent risk in our industry and many factors cannot be predicted. Factors that we consider in deciding when to perform an impairment review include significant changes in our forecasted projections for the asset or asset group for reasons including, but not limited to, significant under-performance of a product in relation to expectations, significant changes or planned changes in our use of the assets, significant negative industry or economic trends, and new or competing products that enter the marketplace. The impairment test is based on a comparison of the undiscounted cash flows expected to be generated from the use of the asset group and its eventual disposition to the carrying value of the asset group. If impairment is indicated, the asset is written down by the amount by which the carrying value of the asset exceeds the related fair value of the asset with the related impairment charge recognized within the condensed consolidated statements of operations. With respect to determining an asset’s fair value and useful life, because this process involves management making certain estimates and these estimates form the basis of the determination of whether or not an impairment charge should be recorded, these estimates are considered to be critical accounting estimates. |
Goodwill | Goodwill |
Acquisition-Related Contingent Consideration | Acquisition-Related Contingent Consideration |
Concentration of major customers and vendors | Currently, for Argatroban, the Company uses one vendor as its sole source supplier. Because of the unique equipment and process for manufacturing, transferring manufacturing activities to an alternate supplier would be a time consuming and costly endeavor. Concentration of Major Customers and Vendors The Company is dependent on commercial partners to market and sell Argatroban and BENDEKA. The Company's customers for Argatroban and BENDEKA are its commercial and licensing partners; therefore, the Company's future revenues are highly dependent on these collaboration and distribution arrangements. |
Inventories | Inventories Inventories are recorded at the lower of cost or expected net realizable value, with cost determined on a first-in first-out basis. The Company periodically reviews the composition of inventory in order to identify obsolete, slow-moving or otherwise non-saleable items. If non-saleable items are observed and there are no alternate uses for the inventory, the Company will record a write-down to net realizable value in the period that the decline in value is first recognized. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is recorded over the estimated useful lives of the assets utilizing the straight-line method. Leasehold improvements are being amortized over the shorter of their useful lives or the lease term. |
Research and development expense | Research and Development Expense Costs for research and development are charged to expense as incurred and include; employee-related expenses including salaries, benefits, travel and stock-based compensation expense for research and development personnel; expenses incurred under agreements with contract research organizations, contract manufacturing organizations and service providers that assist in conducting clinical and preclinical studies; costs associated with preclinical activities and development activities, costs associated with regulatory operations; and depreciation expense for assets used in research and development activities. Costs for certain development activities, such as clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the patterns of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid expenses or accrued expenses as deemed appropriate. Recoveries of previously recognized research and development expenses from third parties are recorded as a reduction to research and development expense in the period it becomes realizable. |
Advertising and Marketing | Advertising and Marketing |
Income Taxes | Income Taxes The Company accounts for income taxes using the liability method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), Topic 740 - Income Taxes (“ASC 740”). Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and are measured by applying enacted rates and laws to taxable years in which differences are expected to be recovered or settled. Further, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that the rate changes. A valuation allowance is required when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. ASC 740 also prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return, including a decision whether to file or not file a return in a particular jurisdiction. We recognize any interest and penalties accrued related to unrecognized tax benefits as income tax expense. |
Revenue Recognition | Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Receivables from our product sales have payment terms ranging from 30 to 75 days with select extended terms to wholesalers on initial purchases of product launch quantities. Our receivables from royalty revenue are due 45-days from the end of the quarter. Product revenue - The Company recognizes net revenue on sales to its commercial partners and to end users. In each instance, revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract. Revenue on sales to commercial partners relates to Argatroban and BENDEKA. Sales to our commercial partners are presented gross because the Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement and bears risk of loss while the inventory is in-transit to the commercial partner. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method to which the Company expects to be entitled. As such, revenue on sales to customers for Belrapzo, Non-Alcohol Docetaxel Injection, Ryanodex and diclofenac-misoprostol are recorded net of chargebacks, rebates, returns, prompt pay discounts, wholesaler fees and other deductions. Our products are contracted with a limited number of oncology distributors and hospital buying groups with narrow differences in ultimate realized contract prices used to estimate our chargeback and rebate reserves. The Company has a product return policy on some of its products that allows the customer to return pharmaceutical products within a specified period of time both prior to and subsequent to the product’s expiration date. The Company's estimate of the provision for returns is analyzed quarterly and is based upon many factors, including historical experience of actual returns and analysis of the level of inventory in the distribution channel, if any. The Company has terms on sales of Ryanodex by which the Company does not accept returns. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration are made using the expected value method and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. The Company believes that the estimates it has established are reasonable based upon current facts and circumstances. Applying different judgments to the same facts and circumstances could result in the estimated amounts to vary. Royalty Revenue — The Company recognizes revenue from license arrangements with its commercial partners' net sales of products. In accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the commercial partner’s products occurs. The Company's commercial partners are obligated to report their net product sales and the resulting royalty due to the Company within 25 days for BENDEKA and 60 days for Argatroban from the end of each quarter. Based on historical product sales, royalty receipts and other relevant information, the Company accrues royalty revenue each quarter and subsequently determines a true-up when it receives royalty reports from its commercial partners. Historically, these true-up adjustments have been immaterial. License and other revenue — The Company analyzes each element of its licensing agreements to determine the appropriate revenue recognition. The terms of the license agreement may include payment to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. The Company recognizes revenue from upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. The Company recognizes sales-based milestone payments as revenue upon the achievement of the cumulative sales amount specified in the contract in accordance with ASC 606-10-55-65. For those milestone payments which are contingent on the occurrence of particular future events, the Company determined that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method. As such, the Company assesses each milestone to determine the probability and substance behind achieving each milestone. Given the inherent uncertainty of the occurrence of these future events, the Company will not recognize revenue from the milestone until there is not a high probability of a reversal of revenue, which typically occurs near or upon achievement of the event. When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component as of September 30, 2019 . Collaborative licensing and development revenue — The Company recognizes revenue from reimbursements received in connection with feasibility studies and development work for third parties when its contractual services are performed, provided collectability is reasonably assured. Its principal costs under these agreements include its personnel conducting research and development, its allocated overhead, as well as the research and development performed by outside contractors or consultants. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation using the fair value provisions of ASC 718, Compensation - Stock Compensation that requires the recognition of compensation expense, using a fair-value based method, for costs related to all stock-based payments including stock options and restricted stock. This topic requires companies to estimate the fair value of the stock-based awards on the date of grant for options issued to employees and directors and record expense over the employees' service periods, which are generally the vesting period of the equity awards. The Company accounts for stock-based compensation by measuring and recognizing compensation expense for all stock-based payments made to employees and directors based on estimated grant date fair values. The straight-line method is used to allocate compensation cost to reporting periods over each optionee's requisite service period, which is generally the vesting period. The fair value of the Company's stock-based awards to employees and directors is estimated using the Black-Scholes valuation model or a monte carlo simulation model. These models require the input of subjective assumptions, including the expected stock price volatility, the calculation of expected term, forfeitures and the fair value of the underlying common stock on the date of grant, among other inputs. The risk-free interest rate is determined with the implied yield currently available for zero-coupon U.S. government issues with a remaining term approximating the expected life of the options. |
Earnings per share | Earnings Per Share |
Recent accounting pronouncements | Recent Accounting Pronouncements Recent Accounting Pronouncements - Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses which requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This standard is effective for fiscal years beginning after December 15, 2019 and the Company will adopt the standard effective January 1, 2020. The Company is currently evaluating the potential impact that the adoption of ASU 2016-13 may have on the Company's financial position and results of operations. In January 2017, the FASB issued guidance to simplify the measurement of goodwill. The guidance eliminates Step 2 from the goodwill impairment test. Instead, under the amendments in this guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The guidance also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. The guidance is effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted for interim or annual goodwill impairment tests performed for testing dates after January 1, 2017. The guidance must be adopted on a prospective basis. We do not expect this guidance to have an impact on our condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirement for Fair Value Measurement (“ASU 2018-13”), which amends the disclosure requirements for fair value measurements. The amendments in ASU 2018-13 are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the potential impact that the adoption of ASU 2018-13 may have on the Company’s financial position and results of operations. Recently Adopted Accounting Pronouncements The Company adopted FASB ASU No. 2016-02,“Leases (Topic 842)”(ASU 2016-02) as of January 1, 2019 to increase transparency and comparability among organizations, which included recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Lessees are required to recognize a lease liability, which represents the discounted obligation to make future minimum lease payments, and a corresponding right-of-use asset on the balance sheet for most leases. The Company adopted ASU 2016-02 using the modified retrospective approach and did not recognized a cumulative-effect adjustment to the opening balance of Retained earnings. The Company elected a number of optional practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification and that permits lease agreements that are twelve months or less to be excluded from the balance sheet. The primary impact upon adoption was the recognition, on a discounted basis, of the Company’s minimum commitments under noncancelable operating leases as right of use assets and obligations on the condensed consolidated balance sheets, of approximately $3 million Adoption of FASB ASU No. 2016-02, “Leases (Topic 842)” as of January 1, 2019 The Company leases its corporate office under an amended lease agreement that expires on June 30, 2025 (the "Corporate Office Lease"). The Corporate Office Lease was amended on August 8, 2019 to extend the term through such date and to increase the amount of leased office space. The Company also leases lab space under a lease agreement that expires on October 31, 2023 (the "Lab Space Lease"). The Company estimated the right of use asset and the corresponding lease liability, on a discounted basis, as of the adoption date of January 1, 2019. The future minimum lease payments under this Corporate Office Lease are approximately $4.0 million . For the Company's two operating leases (the Corporate Office Lease and Lab Space Lease), the depreciation and interest expense components are combined and recognized ratably over the remaining term of the lease as research and development and selling, general and administrative in the Company's condensed consolidated statements of operations, respectively. The Company used its estimated incremental borrowing rate to calculate the present value of the ROU assets and lease liabilities as of the date of adoption date. The implicit interest rate related to the Company’s two lease agreements was not known as of the date of adoption. Therefore, the Company calculated an incremental borrowing rate based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment . |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of revenues and accounts receivables by major customers | The total revenues and accounts receivables broken down by major customers as a percentage of the total are as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Net revenues Cephalon, Inc. (Teva) - See Revenue Recognition 85 % 74 % 78 % 75 % Other 15 % 26 % 22 % 25 % 100 % 100 % 100 % 100 % September 30, December 31, 2019 2018 Accounts receivable Cephalon, Inc. (Teva) - See Revenue Recognition 77 % 61 % Other 23 % 39 % 100 % 100 % |
Schedule of dilutive and anti-dilutive common shares equivalents outstanding | The anti-dilutive common shares equivalents outstanding at the three and nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Options 2,476,552 1,704,348 2,493,937 1,810,098 Total 2,476,552 1,704,348 2,493,937 1,810,098 |
Computation for basic and diluted net income (loss) per share | The following table sets forth the computation for basic and diluted net income (loss) per share for the three and nine months ended September 30, 2019 and 2018 : Three Months Ended Nine Months Ended 2019 2018 2019 2018 Numerator Numerator for basic and diluted earnings per share-net (loss) income $ (2,390 ) $ 14,040 $ 13,308 $ 19,313 Denominator Basic weighted average common shares outstanding 13,668,091 15,011,159 13,791,071 14,903,945 Dilutive effect of stock options — 471,878 356,587 578,823 Diluted weighted average common shares outstanding 13,668,091 15,483,037 14,147,658 15,482,768 Basic net income (loss) per share Basic net income (loss) per share $ (0.17 ) $ 0.94 $ 0.96 $ 1.30 Diluted net income (loss) per share Diluted net income (loss) per share $ (0.17 ) $ 0.91 $ 0.94 $ 1.25 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of contingent consideration liability | The following table summarizes the aggregate consideration transferred for the acquisition of Eagle Biologics: Cash consideration paid $ 27,209 Common stock issued (i) 3,046 Post-closing consideration paid to the Seller (ii) 15,000 Total consideration $ 45,255 (i) Under the Arsia SPA, the number of common shares to be issued to the Seller is equal to $2.7 million divided by the average of the closing day price per share for the 30 trading days prior to the date of closing. The average price of the common stock of 30 days prior to closing was $68.18 . Accordingly, the number of shares of common stock to be issued to the Seller was determined at 40,200 shares ( $2.7 million divided by $68.18 per share). The fair value of the common stock issued to the Seller was determined based on the closing price of the Company’s common stock on November 16, 2016. (ii) Under the Arsia SPA, the contingent consideration included four separate milestone payments which could have aggregated to a total of $48 million payable to the Seller upon achievement of certain clinical, regulatory and development milestones. In accordance with the provisions of ASC 805-30-25-5, each unit of contingent consideration is recognized at the acquisition date fair value. The acquisition date fair value of the contingent consideration was $16.1 million . Such fair values are determined based on a probabilistic model with weights assigned on the likelihood of the Company achieving the clinical, regulatory and development milestones as well as an acceleration event in the future. Each unit of contingent consideration is classified as a liability in the balance sheet and would be subsequently measured at fair value on each reporting date. Any future change in fair value would be recognized in the statement of operations. As described above, on February 8, 2018, the Company entered into the Arsia Amendment, pursuant to which the Company’s obligations to make four separate milestone payments under the Arsia SPA were terminated in exchange for a single payment of $15 million to the Seller. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: September 30, December 31, 2019 2018 Raw material $ 2,164 $ 6,303 Work in process 4,488 1,776 Finished products 595 225 $ 7,247 $ 8,304 |
Balance Sheet Accounts (Tables)
Balance Sheet Accounts (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of prepaid and other current assets | Prepaid and other current assets consist of the following: September 30, December 31, 2019 2018 Prepaid income taxes $ 6,818 $ 5,739 Prepaid FDA user fee 1,302 1,540 Prepaid insurance 412 150 Advances to commercial manufacturers 706 2,700 All other 1,278 134 Total Prepaid expenses and other current assets $ 10,516 $ 10,263 |
Schedule of accrued expenses | Accrued expenses consist of the following: September 30, December 31, 2019 2018 Accrued sales reserves $ 10,402 $ 5,869 Royalties payable to commercial partners 3,476 7,139 Accrued salary and other compensation 4,451 5,049 Accrued professional fees 3,617 2,408 Accrued research & development 1,757 1,245 Current portion of lease liability 1,084 — Accrued other 2,340 1,809 Total Accrued expenses $ 27,127 $ 23,519 |
Lease related disclosures | Lease related disclosures consist of the following: September 30, 2019 Right of use (ROU) asset, net included in Other assets $ 4,184 Lease liability included with Other long-term liabilities $ 3,227 Lease liability included with Accrued expenses and other liabilities $ 1,084 Q3 2019 depreciation of ROU asset $ 232 Q3 2019 related rent expense $ 286 YTD 2019 depreciation of ROU asset $ 754 YTD 2019 related rent expense $ 860 YTD operating cash flows from operating leases $ 860 YTD operating lease costs $ 860 Weighted-average remaining lease term - operating leases 5.0 years Weighted-average discount rate - operating leases 6 % |
Future minimum lease payments | As of September 30, 2019, the future minimum lease commitments for the Company's two leases were as follows: Total 2019 2020 2021 2022 2023 2024 Beyond $ 6,894 $ 287 $ 1,345 $ 1,362 $ 1,376 $ 1,291 $ 820 $ 413 |
Future minimum lease payments | As of December 31, 2018, the future minimum lease commitments for the Company's two leases were as follows: Total 2019 2020 2021 2022 2023 $ 3,661 $ 1,146 $ 864 $ 583 $ 583 $ 485 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible asset | The gross carrying amounts and net book value of the Company's intangible assets are as follows: September 30, 2019 Useful Life (In Years) Gross Carrying Amount Accumulated Amortization Net Book Value Ryanodex intangible (i) 20 $ 15,000 $ (2,229 ) $ 12,771 Developed technology 5 8,100 (4,658 ) 3,442 Total $ 23,100 $ (6,887 ) $ 16,213 December 31, 2018 Useful Life (In Years) Gross Carrying Amount Accumulated Amortization Impairment Charge Net Book Value Docetaxel product rights 10 $ 11,220 $ (1,281 ) $ (9,939 ) $ — Ryanodex intangible 20 15,000 (1,554 ) — 13,446 Developed technology 5 8,100 (3,443 ) — 4,657 Total $ 34,320 $ (6,278 ) $ (9,939 ) $ 18,103 (i) Represent payments which were made to reduce the royalties payable to a third party on Ryanodex net sales. |
Schedule of future amortization expense of finite-lived intangible assets | Based on definite-lived intangible assets recorded as of September 30, 2019 , and assuming that the underlying assets will not be impaired and that the Company will not change the expected lives of the assets, future amortization expenses are estimated as follows: Estimated Amortization Expense Year Ending December 31, 2019 (remainder) 630 2020 2,666 2021 2,622 2022 1,369 2023 1,570 Thereafter 7,356 Total estimated amortization expense $ 16,213 |
Common Stock and Stock-Based _2
Common Stock and Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock options, RSU and PSU activity | A summary of stock option, RSU and PSU activity under the 2014 Plan during the nine months ended September 30, 2019 and 2018 is presented below: Stock Options RSUs PSUs Outstanding at December 31, 2017 2,786,568 — — Granted 652,625 64,080 127,080 Options Exercised/RSUs Vested/PSUs Vested (499,592 ) — — Forfeited or expired (391,609 ) (9,861 ) (9,861 ) Outstanding at September 30, 2018 2,547,992 54,219 117,219 Outstanding at December 31, 2018 2,556,365 54,219 117,219 Granted 600,133 211,829 — Options Exercised/RSUs Vested/PSUs Vested (10,034 ) (13,555 ) — Forfeited or expired (20,890 ) (1,278 ) (1,038 ) Outstanding at September 30, 2019 3,125,574 251,215 116,181 |
Fair value of stock options | The fair value of stock options granted to employees, directors, and consultants were estimated using the following assumptions: Three Months Ended Nine Months Ended 2019 2018 2019 2018 Risk-free interest rate 1.50% - 1.84% 2.72% - 2.90% 1.45% - 2.61% 2.30% - 2.94% Volatility 49.87% 43.76% 50.27 % 43.76% Expected term (in years) 5.93 years 6.08 years 5.91 years 5.50 - 6.08 years Expected dividend yield 0.0% 0.0% 0.0 % 0.0% |
Share-based payment arrangement, cost by plan | The Company recognized stock-based compensation in its condensed consolidated statements of operations for the three and nine months ended September 30, 2019 and 2018 as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock options $ 4,241 $ 3,514 $ 12,636 $ 11,725 RSUs 644 176 1,895 513 PSUs 766 782 2,284 2,274 Stock-based compensation expense $ 5,651 $ 4,472 $ 16,815 $ 14,512 Selling, general and administrative $ 4,570 $ 3,641 $ 13,495 $ 11,418 Research and development 1,081 831 3,320 3,094 Stock-based compensation expense $ 5,651 $ 4,472 $ 16,815 $ 14,512 |
Commitments (Tables)
Commitments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Lease Obligations and Purchase Obligations | Our future material contractual obligations as of September 30, 2019, reflective of the Revised Credit Agreement described in Note 15 Subsequent Event, include the following: Obligations Total 2019 2020 2021 2022 2023 2024 Beyond Operating leases (1) $ 6,894 $ 287 $ 1,345 $ 1,362 $ 1,376 $ 1,291 $ 820 $ 413 Credit facility (2) 40,000 1,000 5,000 8,000 26,000 — — — Purchase obligations (3) 24,589 24,589 — — — — — — Total obligations $ 71,483 $ 25,876 $ 6,345 $ 9,362 $ 27,376 $ 1,291 $ 820 $ 413 (1) We lease our corporate office location. On August 8, 2019, we amended the lease for our corporate office location in order to rent additional office space and extend the term of our existing lease to June 30, 2025. The Company also leases its lab space under a lease agreement that expires on October 31, 2023. Rental expense was $286 and $135 , for the three months ended September 30, 2019 and 2018 . Rental expense was $860 and $423 for the nine months ended September 30, 2019 and 2018 . The remaining future lease payments under the operating leases are $6,894 as of September 30, 2019 . (2) Refer to Note 15 Subsequent Event for details of the Revised Credit Agreement entered into as of November 8, 2019. (3) As of September 30, 2019 , the Company has purchase obligations in the amount of $24,589 which represents the contractual commitments under contract manufacturing and supply agreements with suppliers. The obligation under the supply agreement is primarily for finished product, inventory, and research and development. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of maturities | Debt Maturities As of September 30, 2019, reflective of Revised Credit Agreement described in Note 15. Subsequent Event 2019 (remainder) $ 1,000 2020 5,000 2021 8,000 2022 26,000 Total $ 40,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of effective income tax rate reconciliation | Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Income tax benefit (provision) $ 152 $ (3,628 ) $ (5,332 ) $ 509 Effective tax rate (6 )% 21 % 29 % (3 )% |
Organization and Business Act_2
Organization and Business Activities (Details) | Oct. 01, 2019 | Sep. 30, 2019productpatient | Dec. 06, 2018shares | Nov. 01, 2018shares | Feb. 08, 2018USD ($)milestone_payment | Nov. 16, 2016USD ($)milestone_paymentshares | Dec. 06, 2018shares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)productpatientshares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)productpatientshares | Oct. 30, 2018USD ($) |
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Number of products | product | 2 | 2 | 2 | |||||||||
Shares of common stock repurchased (in shares) | shares | 2,855,316 | |||||||||||
Value of common stock repurchased | $ 12,109,000 | $ 15,000,000 | $ 22,628,000 | $ 168,900,000 | ||||||||
Eagle Biologics | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Payments to acquire business | $ 27,209,000 | |||||||||||
Business combination equity consideration (in shares) | shares | 40,200 | |||||||||||
Business combination equity consideration | $ 3,046,000 | |||||||||||
Number of milestone payments | milestone_payment | 4 | |||||||||||
Milestone Payments | Eagle Biologics | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Business combination, contingent consideration range of outcome high | $ 48,000,000 | $ 48,000,000 | ||||||||||
Business combination consideration including contingent consideration | $ 78,000,000 | |||||||||||
Number of milestone payments | milestone_payment | 4 | |||||||||||
Contingent consideration lump sum milestone payment | $ 15,000,000 | |||||||||||
Teva Pharmaceuticals | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Proceeds from upfront payment | $ 9,000,000 | |||||||||||
Cephalon, Inc. | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Royalty revenue, percentage of net sales (in percentage) | 25.00% | |||||||||||
October 2018 Plan | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Stock repurchase program, authorized amount | $ 150,000,000 | |||||||||||
Accelerated share repurchase | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Stock repurchase program, authorized amount | 50,000,000 | |||||||||||
Shares of common stock repurchased (in shares) | shares | 297,146 | 702,988 | 1,000,134 | 2,855,316 | ||||||||
Additional shares | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Stock repurchase program, authorized amount | $ 100,000,000 | |||||||||||
Scenario | Cephalon, Inc. | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Maximum royalty revenue percentage (in percentage) | 32.00% | |||||||||||
Scenario | Cephalon, Inc. | Maximum | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Annual increase to royalty revenue percentage | 1.00% | |||||||||||
Ryanodex | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Number of patients | patient | 41 | 41 | 41 | |||||||||
Subsequent event | Cephalon, Inc. | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Royalty revenue, percentage of net sales (in percentage) | 30.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)vendor | Sep. 30, 2018USD ($) | Jan. 01, 2019USD ($) | |
Disaggregation of Revenue [Line Items] | |||||
Goodwill impairment loss | $ 0 | $ 0 | $ 0 | $ 0 | |
Advertising and marketing costs | 556,000 | $ 609,000 | 1,673,000 | $ 2,622,000 | |
Noncancelable operating lease right of use asset | $ 4,184,000 | $ 4,184,000 | |||
Argatroban and Bendeka | |||||
Disaggregation of Revenue [Line Items] | |||||
Number of vendors | vendor | 1 | ||||
Bendeka | |||||
Disaggregation of Revenue [Line Items] | |||||
Period after quarter commercial partners report net product sales | 25 days | ||||
EP-1101 | |||||
Disaggregation of Revenue [Line Items] | |||||
Period after quarter commercial partners report net product sales | 60 days | ||||
Accounting Standards Update 2016-02 | |||||
Disaggregation of Revenue [Line Items] | |||||
Noncancelable operating lease right of use asset | $ 3,000,000 | ||||
Noncancelable operating lease obligations | $ 3,000,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Revenue and Accounts Receivable By Major Customer (Details) - Customer Concentration Risk | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Net Revenues | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration | 100.00% | 100.00% | 100.00% | 100.00% | |
Net Revenues | Cephalon, Inc. | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration | 85.00% | 74.00% | 78.00% | 75.00% | |
Net Revenues | Other | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration | 15.00% | 26.00% | 22.00% | 25.00% | |
Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration | 100.00% | 100.00% | |||
Accounts Receivable | Cephalon, Inc. | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration | 77.00% | 61.00% | |||
Accounts Receivable | Other | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration | 23.00% | 39.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Anti-Dilutive Common Shares Equivalents Outstanding (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common shares equivalents outstanding (in shares) | 2,476,552 | 1,704,348 | 2,493,937 | 1,810,098 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common shares equivalents outstanding (in shares) | 2,476,552 | 1,704,348 | 2,493,937 | 1,810,098 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Basic and Diluted Net Income (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator | ||||
Numerator for basic and diluted earnings per share-net (loss) income | $ (2,390) | $ 14,040 | ||
Net income | $ (2,390) | $ 14,040 | $ 13,308 | $ 19,313 |
Denominator | ||||
Basic weighted average common shares outstanding (in shares) | 13,668,091 | 15,011,159 | 13,791,071 | 14,903,945 |
Dilutive effect of stock options (in shares) | 0 | 471,878 | 356,587 | 578,823 |
Diluted weighted average common shares outstanding (in shares) | 13,668,091 | 15,483,037 | 15,482,768 | |
Weighted Average Number of Shares Outstanding, Diluted | 13,668,091 | 15,483,037 | 14,147,658 | 15,482,768 |
Basic net income (loss) per share | ||||
Basic net income (loss) per share (in usd per share) | $ (0.17) | $ 0.94 | $ 0.96 | $ 1.30 |
Diluted net income (loss) per share | ||||
Diluted net income (loss) per share (in usd per share) | $ (0.17) | $ 0.91 | $ 0.94 | $ 1.25 |
Acquisitions - Narrative, Biol
Acquisitions - Narrative, Biologics (Details) - Eagle Biologics | Feb. 08, 2018USD ($)milestone_payment | Nov. 16, 2016USD ($)milestone_paymentshares |
Business Acquisition [Line Items] | ||
Payments to acquire business | $ 27,209,000 | |
Business combination equity consideration (in shares) | shares | 40,200 | |
Business combination equity consideration | $ 3,046,000 | |
Number of milestone payments | milestone_payment | 4 | |
Milestone Payments | ||
Business Acquisition [Line Items] | ||
Business combination, contingent consideration range of outcome high | $ 48,000,000 | $ 48,000,000 |
Business combination consideration including contingent consideration | $ 78,000,000 | |
Number of milestone payments | milestone_payment | 4 | |
Contingent consideration lump sum milestone payment | $ 15,000,000 |
Acquisitions - Schedule of Cons
Acquisitions - Schedule of Consideration Transferred, Biologics (Details) - Eagle Biologics | Feb. 08, 2018USD ($)milestone_payment | Nov. 16, 2016USD ($)milestone_payment$ / sharesshares | Nov. 16, 2016USD ($)$ / shares |
Business Acquisition [Line Items] | |||
Cash consideration paid | $ 27,209,000 | ||
Common stock issued | 3,046,000 | ||
Post-closing consideration paid to the Seller | 15,000,000 | ||
Total consideration | 45,255,000 | ||
Common shares to be issued value | $ 2,700,000 | $ 2,700,000 | |
Average share price, trading days | 30 days | ||
Business acquisition, share price (in dollars per share) | $ / shares | $ 68.18 | $ 68.18 | |
Business combination equity consideration (in shares) | shares | 40,200 | ||
Number of milestone payments | milestone_payment | 4 | ||
Milestone Payments | |||
Business Acquisition [Line Items] | |||
Number of milestone payments | milestone_payment | 4 | ||
Business combination, contingent consideration range of outcome high | $ 48,000,000 | $ 48,000,000 | $ 48,000,000 |
Contingent consideration liability | $ 16,100,000 | $ 16,100,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 2,164 | $ 6,303 |
Work in process | 4,488 | 1,776 |
Finished products | 595 | 225 |
Inventories | $ 7,247 | $ 8,304 |
Balance Sheet Accounts - Prepa
Balance Sheet Accounts - Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Prepaid income taxes | $ 6,818 | $ 5,739 |
Prepaid FDA user fee | 1,302 | 1,540 |
Prepaid insurance | 412 | 150 |
Advances to commercial manufacturers | 706 | 2,700 |
All other | 1,278 | 134 |
Total Prepaid expenses and other current assets | $ 10,516 | $ 10,263 |
Balance Sheet Accounts - Accru
Balance Sheet Accounts - Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued sales reserves | $ 10,402 | $ 5,869 |
Royalties payable to commercial partners | 3,476 | 7,139 |
Accrued salary and other compensation | 4,451 | 5,049 |
Accrued professional fees | 3,617 | 2,408 |
Accrued research & development | 1,757 | 1,245 |
Current portion of lease liability | 1,084 | 0 |
Accrued other | 2,340 | 1,809 |
Total Accrued expenses | $ 27,127 | $ 23,519 |
Balance Sheet Accounts - Lease
Balance Sheet Accounts - Lease Related Disclosures (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Balance Sheet Related Disclosures [Abstract] | ||
Right of use (ROU) asset, net included in Other assets | $ 4,184 | $ 4,184 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Q3 2019 depreciation of ROU asset | 232 | 754 |
Rent expense | 286 | 860 |
YTD 2019 depreciation of ROU asset | 232 | 754 |
YTD operating lease costs | $ 286 | 860 |
YTD operating cash flows from operating leases | $ 860 | |
Weighted-average remaining lease term - operating leases | 5 years | 5 years |
Weighted-average discount rate - operating leases | 6.00% | 6.00% |
Other long-term liabilities | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Lease liability | $ 3,227 | $ 3,227 |
Accrued expenses and other liabilities | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Lease liability | $ 1,084 | $ 1,084 |
Balance Sheet Accounts - Futur
Balance Sheet Accounts - Future Minimum Lease Payments (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)lease | Dec. 31, 2018USD ($)lease | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total | $ 6,894 | |
2019 | 287 | |
2020 | 1,345 | |
2021 | 1,362 | |
2022 | 1,376 | |
2023 | 1,291 | |
2024 | 820 | |
Beyond | $ 413 | |
Number of operating leases | lease | 2 | 2 |
Total | $ 3,661 | |
2019 | 1,146 | |
2020 | 864 | |
2021 | 583 | |
2022 | 583 | |
2023 | $ 485 | |
Corporate Office | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total | $ 4,000 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||||||
Gross Carrying Amount | $ 23,100 | $ 23,100 | $ 34,320 | ||||
Accumulated Amortization | (6,887) | (6,887) | (6,278) | ||||
Impairment Charge | (9,939) | ||||||
Net Book Value | 16,213 | 16,213 | $ 18,103 | ||||
Amortization expense | 630 | $ 599 | 1,890 | $ 1,916 | |||
Asset impairment charge | 0 | $ 0 | $ 0 | $ 2,704 | |||
Ryanodex intangible | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Useful Life (In Years) | 20 years | 20 years | |||||
Gross Carrying Amount | 15,000 | $ 15,000 | $ 15,000 | ||||
Accumulated Amortization | (2,229) | (2,229) | (1,554) | ||||
Impairment Charge | 0 | ||||||
Net Book Value | 12,771 | $ 12,771 | $ 13,446 | ||||
Developed technology | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Useful Life (In Years) | 5 years | 5 years | |||||
Gross Carrying Amount | 8,100 | $ 8,100 | $ 8,100 | ||||
Accumulated Amortization | (4,658) | (4,658) | (3,443) | ||||
Impairment Charge | 0 | ||||||
Net Book Value | $ 3,442 | $ 3,442 | $ 4,657 | ||||
Docetaxel product rights | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Useful Life (In Years) | 10 years | ||||||
Gross Carrying Amount | $ 11,220 | ||||||
Accumulated Amortization | (1,281) | ||||||
Impairment Charge | (9,939) | ||||||
Net Book Value | $ 0 | ||||||
Asset impairment charge | $ 2,700 | $ 7,200 |
Intangible Assets, Net - Sche_2
Intangible Assets, Net - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 (remainder) | $ 630 | |
2020 | 2,666 | |
2021 | 2,622 | |
2022 | 1,369 | |
2023 | 1,570 | |
Thereafter | 7,356 | |
Net Book Value | $ 16,213 | $ 18,103 |
Common Stock and Stock-Based _3
Common Stock and Stock-Based Compensation - Narrative (Details) - USD ($) | Dec. 06, 2018 | Nov. 01, 2018 | Oct. 29, 2018 | Dec. 06, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Oct. 30, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Payments to repurchase stock | $ 15,000,000 | $ 22,628,000 | $ 168,900,000 | |||||||
Shares of common stock repurchased (in shares) | 2,855,316 | |||||||||
Award vesting period | 4 years | |||||||||
Volatility (in percentage) | 49.87% | 43.76% | 50.27% | 43.76% | ||||||
Expected term (in years) | 5 years 11 months 5 days | 6 years 29 days | 5 years 10 months 28 days | |||||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||||||
PSUs | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Risk free interest rate (in percentage) | 2.06% | |||||||||
Volatility (in percentage) | 47.00% | |||||||||
Expected term (in years) | 3 years | |||||||||
Expected dividend yield | 0.00% | |||||||||
October 2018 Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock repurchase program, authorized amount | $ 150,000,000 | |||||||||
Accelerated share repurchase | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock repurchase program, authorized amount | 50,000,000 | |||||||||
Payments to repurchase stock | $ 50,000,000 | |||||||||
Shares of common stock repurchased (in shares) | 297,146 | 702,988 | 1,000,134 | 2,855,316 | ||||||
Percent of authorized shares repurchased (in percentage) | 80.00% | |||||||||
Closing price of shares acquired (in dollars per share) | $ 56.90 | |||||||||
Additional shares | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock repurchase program, authorized amount | $ 100,000,000 |
Common Stock and Stock-Based _4
Common Stock and Stock-Based Compensation - Summary of Stock Options, RSU and PSU Activity (Details) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Stock Options | ||
Outstanding beginning balance (in shares) | 2,556,365 | 2,786,568 |
Granted (in shares) | 600,133 | 652,625 |
Options Exercised (in shares) | (10,034) | (499,592) |
Forfeited or expired (in shares) | (20,890) | (391,609) |
Outstanding ending balance (in shares) | 3,125,574 | 2,547,992 |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Outstanding beginning balance (in shares) | 54,219 | 0 |
Granted (in shares) | 211,829 | 64,080 |
Vested (in shares) | (13,555) | 0 |
Forfeited or expired (in shares) | (1,278) | (9,861) |
Outstanding ending balance (in shares) | 251,215 | 54,219 |
PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Outstanding beginning balance (in shares) | 117,219 | 0 |
Granted (in shares) | 0 | 127,080 |
Vested (in shares) | 0 | 0 |
Forfeited or expired (in shares) | (1,038) | (9,861) |
Outstanding ending balance (in shares) | 116,181 | 117,219 |
Common Stock and Stock-Based _5
Common Stock and Stock-Based Compensation - Fair Value of Stock Options Granted (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest minimum rate | 1.50% | 2.72% | 1.45% | 2.30% |
Risk-free interest maximum rate | 1.84% | 2.90% | 2.61% | 2.94% |
Volatility (in percentage) | 49.87% | 43.76% | 50.27% | 43.76% |
Expected term (in years) | 5 years 11 months 5 days | 6 years 29 days | 5 years 10 months 28 days | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 5 years 6 months | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 6 years 29 days |
Common Stock and Stock-Based _6
Common Stock and Stock-Based Compensation - Schedule of Share-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 5,651 | $ 4,472 | $ 16,815 | $ 14,512 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 4,570 | 3,641 | 13,495 | 11,418 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 1,081 | 831 | 3,320 | 3,094 |
Stock options | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 4,241 | 3,514 | 12,636 | 11,725 |
RSUs | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 644 | 176 | 1,895 | 513 |
PSUs | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 766 | $ 782 | $ 2,284 | $ 2,274 |
Commitments - Future Minimum L
Commitments - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Operating lease obligations | ||||
Operating lease, total | $ 6,894 | $ 6,894 | ||
2019 | 287 | 287 | ||
2020 | 1,345 | 1,345 | ||
2021 | 1,362 | 1,362 | ||
2022 | 1,376 | 1,376 | ||
2023 | 1,291 | 1,291 | ||
2024 | 820 | 820 | ||
Beyond | 413 | 413 | ||
Credit facility | ||||
Total | 40,000 | 40,000 | ||
2019 | 1,000 | 1,000 | ||
2020 | 5,000 | 5,000 | ||
2021 | 8,000 | 8,000 | ||
2022 | 26,000 | 26,000 | ||
2023 | 0 | 0 | ||
2024 | 0 | 0 | ||
Beyond | 0 | 0 | ||
Purchase obligations | ||||
Purchase Obligation, Total | 24,589 | 24,589 | ||
2019 | 24,589 | 24,589 | ||
2020 | 0 | 0 | ||
2021 | 0 | 0 | ||
2022 | 0 | 0 | ||
2023 | 0 | 0 | ||
2024 | 0 | 0 | ||
Beyond | 0 | 0 | ||
Total obligations | ||||
Total obligations | 71,483 | 71,483 | ||
2019 | 25,876 | 25,876 | ||
2020 | 6,345 | 6,345 | ||
2021 | 9,362 | 9,362 | ||
2022 | 27,376 | 27,376 | ||
2023 | 1,291 | 1,291 | ||
2024 | 820 | 820 | ||
Beyond | 413 | 413 | ||
Rent expense | $ 286 | $ 860 | ||
Rent expense | $ 135 | $ 423 |
Debt (Details)
Debt (Details) - USD ($) | Aug. 08, 2017 | Sep. 30, 2019 |
Debt Instrument [Line Items] | ||
Unamortized deferred debt issuance cost | $ 407,000 | |
Amendment Credit Agreement | Minimum | ||
Debt Instrument [Line Items] | ||
Line of credit facility, commitment fee (in percentage) | 0.35% | |
Amendment Credit Agreement | Maximum | ||
Debt Instrument [Line Items] | ||
Line of credit facility, commitment fee (in percentage) | 0.45% | |
Amendment Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | ||
Debt Instrument [Line Items] | ||
Variable interest rate spread (in percentage) | 2.25% | |
Amendment Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | ||
Debt Instrument [Line Items] | ||
Variable interest rate spread (in percentage) | 3.00% | |
Amendment Credit Agreement | Prime Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Variable interest rate spread (in percentage) | 1.25% | |
Amendment Credit Agreement | Prime Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Variable interest rate spread (in percentage) | 2.00% | |
Revolving credit facility | Amendment Credit Agreement | ||
Debt Instrument [Line Items] | ||
Debt instrument, term | 3 years | |
Maximum borrowing capacity | $ 50,000,000 | |
Periodic payments as percent of principal (in percentage) | 2.50% | |
Line of credit | Amendment Credit Agreement | ||
Debt Instrument [Line Items] | ||
Debt instrument, term | 3 years | |
Maximum borrowing capacity | $ 100,000,000 | |
Draw on line of credit | 50,000,000 | |
Letter of Credit | Amendment Credit Agreement | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 5,000,000 |
Debt - Schedule of Debt Maturit
Debt - Schedule of Debt Maturities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
2019 (remainder) | $ 1,000 |
2020 | 5,000 |
2021 | 8,000 |
2022 | 26,000 |
Total | $ 40,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit (provision) | $ 152,000 | $ (3,628,000) | $ (5,332,000) | $ 509,000 |
Effective tax rate (in percentage) | (6.00%) | 21.00% | 29.00% | (3.00%) |
Unrecognized tax benefits | $ 0 | $ 0 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | ||||
Restructuring charge | $ 0 | $ 91 | $ 0 | $ 7,479 |
Related Party Transaction (Deta
Related Party Transaction (Details) - $ / shares | May 10, 2019 | Sep. 30, 2019 |
Related Party Transaction [Line Items] | ||
Company shares sold | 2,855,316 | |
Douglas Brunstein | ||
Related Party Transaction [Line Items] | ||
Company shares sold | 100,000 | |
Price per share (in dollars per share) | $ 56.14 |
Subsequent Event Subsequent Eve
Subsequent Event Subsequent Event (Details) - USD ($) | Nov. 08, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||
Current portion of long-term debt | $ 4,000,000 | $ 6,250,000 | |
Second amended and restated credit agreement | Line of credit | Subsequent event | |||
Subsequent Event [Line Items] | |||
Draw on line of credit | $ 40,000,000 | ||
Second amended and restated credit agreement | Revolving credit facility | Subsequent event | |||
Subsequent Event [Line Items] | |||
Maximum borrowing capacity | $ 110,000,000 | ||
Minimum | Second amended and restated credit agreement | Subsequent event | |||
Subsequent Event [Line Items] | |||
Line of credit facility, commitment fee (in percentage) | 0.35% | ||
Maximum | Second amended and restated credit agreement | Subsequent event | |||
Subsequent Event [Line Items] | |||
Line of credit facility, commitment fee (in percentage) | 0.45% | ||
London Interbank Offered Rate (LIBOR) | Minimum | Second amended and restated credit agreement | Subsequent event | |||
Subsequent Event [Line Items] | |||
Variable interest rate spread (in percentage) | 2.25% | ||
London Interbank Offered Rate (LIBOR) | Maximum | Second amended and restated credit agreement | Subsequent event | |||
Subsequent Event [Line Items] | |||
Variable interest rate spread (in percentage) | 3.00% | ||
New York Federal Reserve Bank (NYFRB) | Second amended and restated credit agreement | Subsequent event | |||
Subsequent Event [Line Items] | |||
Variable interest rate spread (in percentage) | 0.50% | ||
Adjusted London Interbank Offered Rate (LIBOR) | Second amended and restated credit agreement | Subsequent event | |||
Subsequent Event [Line Items] | |||
Variable interest rate spread (in percentage) | 1.00% | ||
Prime Rate | Minimum | Second amended and restated credit agreement | Subsequent event | |||
Subsequent Event [Line Items] | |||
Variable interest rate spread (in percentage) | 1.25% | ||
Prime Rate | Maximum | Second amended and restated credit agreement | Subsequent event | |||
Subsequent Event [Line Items] | |||
Variable interest rate spread (in percentage) | 2.00% |