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Long-Term Related Party Payable (Tables)
 12 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Schedule of Related Party Transactions
Long-term related party payable and related activity are reported at fair value and consist of the following at December 31, 2018 and 2017, respectively:
 
 
 
 
Activity during the Twelve Months Ended December 31, 2018
 
 
 
 
 
 
 
 
Changes in Fair Value of
Related Party Payable
 
 
 
 
 
 
 
 
Balance,
December 31, 2017
 
Payments to
Related Parties
 
Operating (Gain)
Expense
 
Other
Income
 
Expiration of Warrants
 
Disposal
 
Balance,
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related contingent consideration:
 
 

 
 

 
 

 
 

 
 
 
 
 
 

Warrants - Éclat Pharmaceuticals (a)
 
$
2,479

 
$
—

 
$
(312
)
 
$
—

 
$
(2,167
)
 
$
—

 
$
—

Earn-out payments - Éclat Pharmaceuticals (b)
 
67,744

 
(19,468
)
 
(22,661
)
 
—

 
—

 
—

 
25,615

Royalty agreement - FSC (c)
 
5,740

 
(645
)
 
242

 
—

 
—

 
(5,337
)
 
—

Financing-related:
 
 

 
 

 
 
 
 

 
 
 
 
 


Royalty agreement - Deerfield (d)
 
5,392

 
(1,922
)
 
—

 
(1,286
)
 
—

 
—

 
2,184

Royalty agreement - Broadfin (e)
 
2,570

 
(916
)
 
—

 
(613
)
 
—

 
—

 
1,041

Long-term liability - FSC (f)
 
15,000

 
—

 
—

 
—

 
—

 
(15,000
)
 
—

Total related party payable
 
98,925

 
$
(22,951
)
 
$
(22,731
)
 
$
(1,899
)
 
$
(2,167
)
 
$
(20,337
)
 
28,840

Less: Current portion
 
(25,007
)
 
 

 
 

 
 

 
 
 
 
 
(9,439
)
Total long-term related party payable
 
$
73,918

 
 

 
 

 
 

 
 
 
 
 
$
19,401

 
Each of the above items is associated with related parties as further described in Note 22: Related Party Transactions. 
(a)
As part of the consideration for the Company’s acquisition of Éclat Pharmaceuticals, LLC on March 13, 2012, the Company issued two warrants to a related party with a six-year term which allow for the purchase of a combined total of 3,300 ordinary shares of Avadel. One warrant was exercisable for 2,200 ordinary shares at an exercise price of $7.44 per share, and the other warrant was exercisable for 1,100 ordinary shares at an exercise price of $11.00 per share. On February 23, 2018, the related party exercised in full the warrant for 2,200 ordinary shares. On March 12, 2018, the remaining warrant for 1,100 ordinary shares expired worthless.
The following table summarizes changes to the related party payables, a recurring Level 3 measurement, for the twelve-month periods ended December 31, 2018, 2017 and 2016:
Related Party Payable:
 
Balance
 
 
 
Balance at December 31, 2015
 
$
122,693

Additions (2)
 
21,659

Payments of related party payable
 
(30,838
)
Fair value adjustments (1)
 
55,833

Balance at December 31, 2016
 
169,347

Payments of related party payable
 
(37,311
)
Fair value adjustments (1)
 
(33,111
)
Balance at December 31, 2017
 
98,925

Payments of related party payable
 
(22,951
)
Fair value adjustments (1)
 
(24,630
)
Expiration of warrants
 
(2,167
)
Disposition of the pediatrics assets
 
(20,337
)
Balance at December 31, 2018
 
$
28,840

(1) Fair value adjustments are reported as “(Gain) loss - changes in fair value of related party contingent consideration” and “Other income (expense) - changes in fair value of related party payable” in the consolidated statements of (loss) income.  
(2) Relates to the acquisition of FSC. See items (c) and (f) above.
(b)
In March 2012, the Company acquired all of the membership interests of Éclat from Breaking Stick Holdings, L.L.C. (“Breaking Stick”, formerly Éclat Holdings), an affiliate of Deerfield. Breaking Stick is majority owned by Deerfield, with a minority interest owned by certain current and former employees. As part of the consideration, the Company committed to provide quarterly earn-out payments equal to 20% of any gross profit generated by certain Éclat products. These payments will continue in perpetuity, to the extent gross profit of the related products also continue in perpetuity.
(c)
In February 2016, the Company acquired all of the membership interests of FSC from Deerfield. The consideration for this transaction in part included a commitment to pay quarterly a 15% royalty on the net sales of certain FSC products, up to $12,500 for a period not exceeding ten years. This obligation was assumed by the buyer as part of the disposition of the pediatrics products on February 16, 2018. See Note 16: Divestiture of the Pediatric Assets.
(d)
As part of a February 2013 debt financing transaction conducted with Deerfield, the Company received cash of $2,600 in exchange for entering into a royalty agreement whereby the Company shall pay quarterly a 1.75% royalty on the net sales of certain Éclat products until December 31, 2024. In connection with such debt financing transaction, the Company granted Deerfield a security interest in the product registration rights of the Eclat products.
(e)
As part of a December 2013 debt financing transaction conducted with Broadfin Healthcare Master Fund, a related party and current shareholder, the Company received cash of $2,200 in exchange for entering into a royalty agreement whereby the Company shall pay quarterly a 0.834% royalty on the net sales of certain Éclat products until December 31, 2024.
(f)
In February 2016, the Company acquired all of the membership interests of FSC from Deerfield. The consideration for this transaction in part consisted of payments totaling $1,050 annually for five years with a final payment in January 2021 of $15,000. Substantially all of FSC’s, and its subsidiaries, assets were pledged as collateral under this agreement. This obligation was assumed by the buyer as part of the disposition of the pediatrics products on February 16, 2018. See Note 16: Divestiture of the Pediatric Assets.
Schedule Of Fair Value Assumptions Of Warrant
The fair value of the warrants was estimated on a quarterly basis using a Black-Scholes option pricing model with the following assumptions as of December 31: 
 Assumptions for the Warrant Valuation:
 
2017
 
 
 
 
 
Stock price
 
$
8.20

 
Weighted average exercise price per share
 
8.63

 
Expected term (years)
 
0.25

 
Expected volatility
 
37.90
%
 
Risk-free interest rate
 
1.39
%
 
Expected dividend yield
 
—