EX-99.2 3 ex992.htm CONSOLIDATED FINANCIAL STATEMENTS

Exhibit 99.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

 

Interim Consolidated Financial Statements

Three and nine months ended September 30, 2018 and 2017

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Interim Consolidated Balance Sheets (Note 1)

(Expressed in thousands of U.S. dollars, except share amounts)

 

   September 30,
2018		  December 31,
2017
       

Assets

 

          
Current assets:          
Cash and cash equivalents  $16,751   $22,081 
Restricted cash (note 5)   2,072    2,100 
Accounts receivable, net of allowance for doubtful accounts of $101 (2017 - $125)   8,615    6,383 
Inventories (note 6)   4,898    6,427 
Prepaid expenses and other assets   1,136    961 
    33,472    37,952 
           
Property and equipment (note 7)   544    416 
Intangible assets (note 8)   27,413    27,806 
Goodwill   318    318 
Deferred income tax assets   320    320 
   $62,067   $66,812 
           

Liabilities and Stockholders’ Equity

 

          
Current liabilities:          
Accounts payable and accrued liabilities (note 9)  $8,076   $7,701 
Current portion of deferred revenue   200    207 
    8,276    7,908 
           
Long-term debt, net of unamortized debt issuance costs (note 10)   40,722    40,000 
Deferred revenue   2,644    2,502 
Other long-term liabilities   284    212 
    51,926    50,622 
           
Stockholders’ equity:          
Common stock   356,322    353,483 
   Authorized - unlimited number without par value          
   Issued and outstanding - 35,388,132 (2017 - 34,637,312) (note 11)          
Additional paid-in capital   40,229    38,443 
Deficit   (403,302)   (392,865)
Accumulated other comprehensive income   16,892    17,129 
    10,141    16,190 
   $62,067   $66,812 

 

Contingencies (note 14)

Subsequent event (note 11)

 

See accompanying notes to the interim consolidated financial statements.

 

 

 

 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Interim Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(Expressed in thousands of U.S. dollars, except share and per share amounts)

 

       
   Three months ended  Nine months ended
   September 30,
2018		  September 30,
2017		  September 30,
2018		  September 30,
2017
Revenue:            
Product and royalty revenues   $6,984   $5,970   $19,657   $16,828 
Licensing and other fees   23    51    71    146 
    7,007    6,021    19,728    16,974 
Cost of goods sold   2,135    1,488    6,398    4,845 
Gross margin   4,872    4,533    13,330    12,129 
Expenses:                    
Selling, general and administration   9,186    8,481    32,719    26,277 
Amortization (notes 7 and 8)   989    890    3,161    2,567 
    10,175    9,371    35,880    28,844 
Operating loss   (5,303)   (4,838)   (22,550)   (16,715)
                     
Other (expense) income:                    
Other expense on modification of long-term debt (note 10)   —      (29)   —      (1,451)
Gain on disposal of Canadian Operations (note 1 and 8)   —      —      18,489    —   
Interest expense   (1,686)   (1,762)   (4,416)   (3,796)
Other expense   (129)   (175)   (281)   (282)
Foreign exchange gain (loss)   52    255    (1,239)   881 
    (1,763)   (1,711)   12,553    (4,648)
Loss before income taxes   (7,066)   (6,549)   (9,997)   (21,363)
Income tax expense   (39)   (74)   (140)   (105)
Net loss  $(7,105)  $(6,623)  $(10,137)  $(21,468)
Other comprehensive loss:                    
Foreign currency translation adjustments   (3)   173    (237)   700 
Comprehensive loss  $(7,108)  $(6,450)  $(10,374)  $(20,768)
Loss per common share (note 13)                    
Basic and diluted  $(0.20)  $(0.20)  $(0.29)  $(0.66)
Weighted average common shares
outstanding (note 13)		                    
Basic   34,958,008    33,835,677    34,828,761    32,730,558 
Diluted   34,958,008    33,878,190    34,828,761    32,772,179 
                     

 

See accompanying notes to the interim consolidated financial statements.

 

 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Interim Consolidated Statements of Stockholders’ Equity

(Unaudited)

(Expressed in thousands of U.S. dollars, except number of common shares)

  

Number of

common

shares

 

Common

shares

 

Additional

paid-in capital

  Deficit 

Accumulated

other

comprehensive

income

 

Total

stockholders’

equity

Balance at December 31, 2016   31,884,420   $344,928   $35,812   $(363,054)  $16,338   $34,024 
Net loss   —      —      —      (29,811)   —      (29,811)
Issuance of common stock   2,453,051    8,487    —      —      —      8,487 
Share issue costs   —      (1,072)   —      —      —      (1,072)
Common stock issued upon exercise of options   265,495    384    —      —      —      384 
Reallocation of additional paid-in capital arising from stock- based compensation related to exercise of options   —      360    (360)   —      —      —   
Reallocation of stock-based compensation liability arising from stock-based compensation related to exercise of options   —      29    —      —      —      29 
Issuance of common shares on vesting of restricted share
units, net of tax		   34,346    367    (432)             (65)
Issuance of warrants (note 10)   —      —      1,200    —      —      1,200 
Stock-based compensation expense   —      —      2,223    —      —      2,223 
Foreign currency translation adjustments   —      —      —      —      791    791 
Balance at December 31, 2017   34,637,312    353,483    38,443    (392,865)   17,129    16,190 
Adoption of accounting standards (note 2)   —      —      —      (300)   —      (300)
                   (393,165)        15,890 
Net loss   —      —      —      (10,137)   —      (10,137)
Issuance of common stock   516,661    2,284    —      —      —      2,284 
Share issue costs   —      (96)   —      —      —      (96)
Common stock issued upon exercise of options (note 11)   219,749    258    —      —      —      258 
Reallocation of additional paid in capital arising from stock-based compensation related to exercise of options   —      226    (226)   —      —      —   
Issuance of common shares on vesting of restricted share units, net of tax (note 11)   14,410    167    (190)   —      —      (23)
Issuance of warrants (note 10)   —      —      936    —      —      936 
Stock-based compensation expense   —      —      1,266    —      —      1,266 
Foreign currency translation adjustments   —      —      —      —      (237)   (237)
Balance at September 30, 2018   35,388,132   $356,322   $40,229   $(403,302)  $16,892   $10,141 

 

See accompanying notes to the interim consolidated financial statements.

 

 

 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Interim Consolidated Statements of Cash Flows

(Unaudited)

(Expressed in thousands of U.S. dollars)

 

       
   Three months ended  Nine months ended
   September 30,
2018		  September 30,
2017		  September 30,
2018		  September 30,
2017
Operating activities:                    
Net loss   $(7,105)  $(6,623)  $(10,137)  $(21,468)
Items not affecting cash:                    
Amortization (note 7 and 8)   989    890    3,161    2,567 
Accretion of long-term debt (note 10)   346    567    429    970 
Interest paid in-kind on long-term debt (note 10)   425    366    1,249    366 
Write-down of inventory (note 6)   46    163    213    233 
Gain on disposal of Canadian Operations (note 1 and 8)   —      —      (18,489)   —   
Stock-based compensation expense (note 12)   266    311    1,526    1,641 
Unrealized foreign exchange gain (loss)   18    (445)   1,445    (1,417)
Changes in operating assets and liabilities:                    
Accounts receivable   (2,135)   (703)   (2,479)   473 
Inventories   619    70    1,380    (1,412)
Prepaid expenses and other assets   (372)   (305)   (181)   (203)
Accounts payable and accrued liabilities   (520)   492    466    (767)
Deferred revenue   (125)   (51)   (53)   (146)
Other long-term liabilities   88    (8)   73    (23)
Net cash used in operating activities   (7,460)   (5,276)   (21,397)   (19,186)
                     
Investing activities:                    
Proceeds on disposal of Canadian Operations (note 1)   192    —      18,857    —   
Purchase of property and equipment (note 7)   (15)   —      (281)   (5)
Purchase of intangible assets (note 8)   (18)   (5,206)   (4,682)   (5,219)
Net cash provided by (used in) investing activities   159    (5,206)   13,894    (5,224)
                     
Financing activities:                    
Issuance of common stock   2,284    237    2,284    7,127 
Share issue costs   (96)   (10)   (96)   (352)
Issuance of common stock upon exercise of stock options (note 11)   —      —      258    384 
Income tax withholdings on vesting of restricted share units   —      (9)   (23)   (58)
Proceeds from issuance of long-term debt   —      10,000    —      20,000 
Financing fees on issuance of long-term debt   —      (368)   (21)   (518)
Payment of deferred consideration   —      (1,670)   —      (2,815)
Net cash provided by financing activities   2,188    8,180    2,402    23,768 
                     
Decrease in cash, cash equivalents, and restricted cash during the period   (5,113)   (2,302)   (5,101)   (642)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash   (10)   161    (257)   462 
Cash, cash equivalents, and restricted cash, beginning of period   23,946    31,266    24,181    29,305 
Cash, cash equivalents, and restricted cash, end of period (note 5)  $18,823   $29,125   $18,823   $29,125 
                     
 Supplemental cash flow information:                    
Interest paid  $915   $843   $2,738   $2,479 
Net income taxes (received) paid   (1)   25    59    (328)

 

See accompanying notes to the interim consolidated financial statements.

 

 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

1.    Basis of presentation:

Correvio Pharma Corp. (the “Company” or “Correvio”) was incorporated on March 7, 2018 under the laws of the Canada Business Corporations Act as part of a court approved Plan of Arrangement (the “Arrangement”) to reorganize Cardiome Pharma Corp. (“Cardiome”). The Company’s head office is located at 1441 Creekside Drive, Vancouver, BC, V4S 4J7.

Pursuant to the Arrangement effective May 15, 2018, substantially all of the assets and liabilities of Cardiome excluding its Canadian business portfolio were transferred to Correvio and the shareholders of Cardiome received common shares, on a one-for-one basis, of Correvio. Immediately following the reorganization of Cardiome, Cipher Pharmaceuticals Inc. (“Cipher”) acquired the Canadian business portfolio of Cardiome on May 15, 2018 by way of the acquisition of all of the issued and outstanding commons shares of Cardiome for an aggregate cash consideration of C$25,500. C$24,500 was received immediately upon closing while C$1,000 will be received in increments of C$250 in each of the four successive quarters subsequent to closing, the first of which was received in August 2018. The Canadian income tax losses and other Canadian tax pools of Cardiome remained with Cardiome and were sold to Cipher. Cardiome’s management team and employees became employees of the Company and assumed the same positions they occupied in Cardiome. As a result of the Arrangement, the Company holds all of Cardiome’s pre-transaction assets and assumed liabilities, excluding the Canadian business portfolio acquired by Cipher effective May 15, 2018. In the second quarter of 2018, the Company recorded a gain of $18,489, from its disposition of all the outstanding and issued shares of Cardiome.

The consolidated financial statements for all periods presented herein include the consolidated operations of Cardiome until May 15, 2018 and the operations of the Company thereafter. As a non-recurring related party transaction between companies under common control at the time of the Arrangement, the assets and liabilities were transferred at their carrying values using the continuity-of-interests method of accounting. For accounting purposes, the Company is considered to have continued Cardiome’s pharmaceutical business that were transferred; accordingly, these consolidated financial statements include the consolidated historical operations and changes in the consolidated financial position of Cardiome to May 15, 2018 and those of the Company thereafter. The consolidated balance sheet presented herein as at December 31, 2017 is that of Cardiome and its subsidiaries. Reference in these consolidated financial statements to “the Company” refers to “Cardiome” prior to May 15, 2018.

Correvio (including its former parent Cardiome until May 15, 2018) is a specialty pharmaceutical company dedicated to offering patients and healthcare providers innovative therapeutic options that effectively, safely, and conveniently manage acute medical conditions to improve health and quality of life. Correvio strives to find innovative, differentiated medicines that provide therapeutic and economic value to patients, physicians and healthcare systems. Correvio currently has two marketed, in-hospital cardiology products, Brinavess® (vernakalant IV), for the rapid conversion of recent onset atrial fibrillation to sinus rhythm in adults, and Aggrastat® (tirofiban HCl), a reversible GP IIb/IIIa inhibitor indicated for use in patients with acute coronary syndrome, which are

 

2 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

1.    Basis of presentation (continued):

commercially available in markets outside of the United States. Correvio has licensed a European-approved antibiotic, Xydalba™ (dalbavancin), a second generation, semi-synthetic lipoglycopeptide for the treatment of acute bacterial skin and skin structure infections in adults. Correvio has also licensed Zevtera®/Mabelio® (ceftobiprole medocaril sodium), a cephalosporin antibiotic for the treatment of community-acquired and hospital-acquired pneumonia. In addition, Correvio has also licensed commercialization rights to a pre-registration drug/device combination product, Trevyent®, for the treatment of pulmonary arterial hypertension in certain regions outside the United States and commercialization rights to cardiology products Esmocard® and Esmocard Lyo® (esmolol hydrochloride), a short-acting beta-blocker used to control rapid heart rate in a number of cardiovascular indications, in certain European countries.

As of September 30, 2018, the Company had $16,751 in cash and cash equivalents, compared to $22,081 at December 31, 2017. The Company has a history of incurring operating losses and negative cash flows from operations. The Company plans to have sufficient capital to fund its current planned operations during the twelve-month period subsequent to the issuance of these interim consolidated financial statements but will not retain sufficient cash to meet its minimum liquidity requirements under its long-term debt agreement. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the interim consolidated financial statements issuance date. The accompanying financial statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

2.    Summary of significant accounting policies:

The accounting policies and methods of computation applied by the Company in these interim consolidated financial statements are the same as those applied in the Company’s annual financial statements as at and for the year ended December 31, 2017, except as described below.

On January 1, 2018, the Company adopted the new accounting standard ASC 606, Revenue from Contracts with Customers, and all the related amendments (“new revenue standard”) to all contracts using the modified retrospective method.  The Company has recognized the cumulative effect of applying the new revenue standard as an adjustment to the opening balance of deficit.  The comparative information will not be restated and will continue to be reported under the accounting standards in effect for those periods.  The Company does not expect the adoption of the new revenue standard to have a material impact to its statement of operations and comprehensive loss and to its statement of cash flows on an ongoing basis. The majority of the Company’s revenue continues to be recognized when products are shipped from its warehousing and logistics facilities.  There is expected to be no changes to the treatment of cash flows and cash will continue to be collected in line with contractual terms under the new revenue standard. The cumulative effect of the adoption of the new revenue standard on the Company’s consolidated January 1, 2018 balance sheet is summarized in the following table:

 

3 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

2.     Summary of significant accounting policies (continued):

 

          
          
    December 31, 2017      Adjustments        January 1, 2018 
                
Deferred revenue  $2,502   $300   $2,802 
Deficit  ($392,865)  ($300)  ($393,165)
                

                 

The transition adjustment arose from the Company’s treatment of an upfront payment it received from one of its distributors for the rights to distribute one of the Company’s commercialized products.  The upfront payment was previously amortized immediately upon receipt over a 10-year term.  Under the new revenue standard, the upfront payment has been deferred.

The new guidance in ASC 606 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers under a five-step model: (1) identify 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 (5) recognize revenue when or as a performance obligation is satisfied. 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 identifies performance obligations that are distinct. The Company then recognizes as revenue the amount of the transaction price when the performance obligation is satisfied. The majority of the Company’s revenue is recognized when products are shipped from its warehousing and logistics facilities. The Company accounts for shipping and handling activities that are performed after a customer has obtained control of a good as fulfillment costs rather than as separate performance obligations.

 

The Company generates revenue primarily through the sale of its commercialized products and royalties. Product revenue is recognized at a point in time. Royalty revenue is recognized in the period in which the obligation is satisfied and the corresponding sales by our corporate partner occurs.

The Company also earns licensing revenue from collaboration and license agreements from the commercial sale of approved products. Licensing revenue is recognized over time. The Company recognized licensing revenue of $23 and $71 during the three and nine months ended September 30, 2018. This revenue was included in the contract liability balance at the beginning of the period, which consist of deferred revenue from distribution arrangements where the Company has received upfront payments.

 

4 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

2.       Summary of significant accounting policies (continued):

 

The following table presents the Company’s revenues disaggregated by revenue source:

 

       
   Three months ended  Nine months ended
  

September 30,

2018

 

September 30,

2017

 

September 30,

2018

 

September 30,

2017

             
  Cardiology   $5,620   $5,706   $15,546   $16,547 
  Antibiotic    1,387    315    4,182    427 
     $7,007   $6,021   $19,728   $16,974 
                       

The following table presents the Company’s revenues disaggregated by geography:

 

       
   Three months ended  Nine months ended
  

September 30,

2018

 

September 30,

2017

 

September 30,

2018

 

September 30,

2017

             
 Europe   $3,340   $2,561   $11,349   $7,571 
 Rest of World    3,667    3,460    8,379    9,403 
     $7,007   $6,021   $19,728   $16,974 
                       

 

During the nine months ended September 30, 2018, the Company adopted Accounting Standards Update No. (“ASU”) 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”, which requires that amounts generally described as restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Aside from conforming to new cash flow presentation and restricted cash disclosure requirements, the adoption of ASU 2016-18 did not have a material impact on the Company’s interim consolidated financial statements.

During the nine months ended September 30, 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The new standard clarifies certain aspects of the statement of cash flows and aims to reduce diversity in practice regarding how certain transactions are classified in the statement of cash flows. This standard was effective January 1, 2018. The adoption of this guidance did not have a material impact on the Company's financial position and results of operations.

 

5 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

2.    Summary of significant accounting policies (continued):

During the nine months ended September 30, 2018, the Company adopted ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other Than Inventory. This new standard eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the income tax consequences from the intra-entity transfer of an asset other than inventory and associated changes to deferred taxes will be recognized when the transfer occurs. The adoption of this guidance did not have a material impact on the Company's financial position and results of operations.

 

3.     Recent accounting pronouncements:

In June 2018, the FASB issued ASU 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting”. ASU 2018-07 is intended to more closely align the accounting for employee and non-employee share-based payments. Under the new guidance, the measurement of equity-classified non-employee awards will be fixed at the grant date. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is evaluating the guidance to determine whether there will be any impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment”. ASU 2017-04 eliminates the need to determine the fair value of individual assets and liabilities of a reporting unit to measure the goodwill impairment. The goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The revised guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is evaluating the revised guidance to determine whether there will be any impact on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases”, which requires lessees to recognize all leases, including operating leases, with a term greater than 12 months on the balance sheet, for the rights and obligations created by those leases. In July 2018, the FASB issued ASU 2018-11, “Leases”, which offers a transition option where companies can elect to apply the new guidance using a modified retrospective approach at the beginning of the year of adoption rather than to the earliest comparative period presented in the financial statements. The Company will adopt the new leasing standard on January 1, 2019 using the modified retrospective approach. The Company is in the process of completing an analysis of its existing lease arrangements and is evaluating the impact this new leasing standard will have on its consolidated financial statements. The Company does not believe there will be a material impact from the adoption of this new standard.

 

 

 

6 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

4.    Financial instruments:

Financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities, and long-term debt. The fair values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities and deferred consideration approximate carrying values because of their short-term nature. The Company’s long-term debt is recorded under the effective interest method (note 10). The fair value of long-term debt approximates its carrying value because there have been no significant changes in interest rates or the creditworthiness of the Company since the debt was last amended in March 2018. The long-term debt is classified as Level 2 of the fair value hierarchy.

The Company’s financial instruments are exposed to certain financial risks, including credit risk and market risk.

(a)  Credit risk:

Credit risk is the risk of financial loss to the Company if a partner or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s cash and cash equivalents and accounts receivable. The carrying amount of the financial assets represents the maximum credit exposure.

The Company limits its exposure to credit risk on cash and cash equivalents by placing these financial instruments with high-credit quality financial institutions.

The Company is subject to credit risk related to its accounts receivable. The majority of the Company’s accounts receivable arise from product sales which are primarily due from drug distributors and hospitals. The Company monitors the creditworthiness of its customers so that it can properly assess and respond to changes in their credit profile.

(b)  Market risk:

Market risk is the risk that changes in market prices, such as foreign currency exchange rates and interest rates will affect the Company’s income or the value of the financial instruments held.

(i)    Foreign currency risk:

Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to foreign currency risk as a portion of the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, revenue, and operating expenses are denominated in other than U.S. dollars. The Company manages foreign currency risk by holding cash and cash equivalents in foreign currencies to support forecasted foreign currency cash outflows. The Company has not entered into any forward foreign exchange contracts.

 

7 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

4.    Financial instruments (continued):

(ii)   Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Financial instruments that potentially subject the Company to interest rate risk include cash and cash equivalents and long-term debt.

The Company is exposed to interest rate cash flow risk on its cash and cash equivalents as these instruments bear interest based on current market rates.

 

5.    Restricted cash:

At September 30, 2018, the Company had restricted cash relating to deposits pledged as collateral for bank guarantees for sales contracts with various hospitals and health authorities of $1,758 (December 31, 2017 - $1,863), deposits pledged as collateral for credit cards of $77 (December 31, 2017 - nil) and deposits pledged as collateral for operating lease arrangements of $237 (December 31, 2017 - $237).

The following table provides a reconciliation of cash, cash equivalents, and restricted cash that sum to the total of the amounts shown in the interim consolidated statement of cash flows:

 

   September 30,  December 31,
   2018  2017
       
Cash and cash equivalents  $16,751   $22,081 
Restricted cash   2,072    2,100 
           
Cash, cash equivalents, and restricted cash  $18,823    24,181 

 

6.    Inventories:

 

   September 30,  December 31,
   2018  2017
       
Finished goods  $2,548   $3,326 
Work in process   342    891 
Raw materials   2,008    2,210 
           
   $4,898   $6,427 

 

During the three and nine months ended September 30, 2018, the Company had a write-down of inventory of $46 and $213, respectively (three and nine months ended September 30, 2017 - $163 and $233, respectively).

 

8 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

7.       Property and equipment:

 

      Accumulated  Net book
September 30, 2018  Cost  amortization  value
          
Production equipment  $65   $36   $29 
Software   55    55    —   
Computer equipment   228    131    97 
Leasehold improvements   524    194    330 
Furniture and office equipment   230    142    88 
                
   $1,102   $558   $544 
                
                
         Accumulated    Net book 
December 31, 2017   Cost    amortization    value 
                
Production equipment  $70   $29   $41 
Software   90    58    32 
Computer equipment   152    122    30 
Leasehold improvements   399    144    255 
Furniture and office equipment   177    119    58 
                
   $888   $472   $416 

Amortization and depreciation expense for the three and nine months ended September 30, 2018 amounted to $34 and $91, respectively (three and nine months ended September 30, 2017 - $29 and $102, respectively).

 

 

9 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

8.       Intangible assets:

 

      Accumulated  Net book
September 30, 2018  Cost  amortization  value
          
Licenses  $22,497   $3,872   $18,625 
Marketing rights   15,194    7,050    8,144 
Trade name   1,086    876    210 
Patents   4,176    3,742    434 
                
   $42,953   $15,540   $27,413 
                
                
       Accumulated    Net book 
December 31, 2017   Cost    amortization    value 
                
Licenses  $19,852   $2,551   $17,301 
Marketing rights   15,830    6,531    9,299 
Trade name   1,131    466    665 
Patents   4,362    3,821    541 
                
   $41,175   $13,369   $27,806 

In May 2016, the Company announced the execution of a license agreement with Allergan plc (“Allergan”), for the rights to commercialize dalbavancin (branded DALVANCE® in the U.S. and XYDALBATM in the rest of the world) in France, the United Kingdom, Germany, Belgium, Nordic nations, other European nations and various Middle Eastern nations. As consideration for the rights and licenses granted, the Company made non-refundable payments to Allergan of $13,000, along with incurring other transaction costs during the year ended December 31, 2016. The license is being amortized over the life of the agreement of 10 years. In the second quarter of 2018, the Company made a milestone payment to Allergan of $4,537. Amortization expense related to this milestone payment for the three and nine months ended September 30, 2018 amounted to $135 and $407, respectively.  This milestone payment had been previously included as part of our commitments note, rather than being recorded as an asset and related liability at December 31, 2017. Additional non-refundable milestone payments may be due to Allergan upon the Company’s achievement of various milestones and will be recognized when the Company considers the milestone to be probable.

 

In September 2017, the Company announced the execution of a distribution and license agreement with Basilea Pharmaceutica International Ltd. (“Basilea”), for the rights to commercialize Zevtera®/Mabelio® (ceftobiprole medocaril sodium) in 34 European countries and Israel. As consideration for the rights and licenses granted, the Company made a non-refundable payment

 

10 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

8.    Intangible assets (continued):

to Basilea of CHF 5,000 ($5,200). Additional non-refundable milestone payments will be due to Basilea upon the Company’s achievement of various milestones. Milestone payments may also be due to Basilea based on achievement of pre-determined levels of annual net sales. The license is being amortized over the life of the agreement of 15 years.

As part of the Arrangement (note 1), the Company divested its Canadian business portfolio, which included $1,349 in licenses, to Cipher. A gain on disposal of this Canadian business portfolio of $18,489 was recognized in the second quarter of 2018.

Amortization and depreciation expense for the three and nine months ended September 30, 2018 amounted to $955 and $3,070, respectively (three and nine months ended September 30, 2017 - $861 and $2,465, respectively).

 

9.Accounts payable and accrued liabilities:

 

    September 30,    December 31, 
    2018    2017 
           
Trade accounts payable  $3,370   $4,007 
Employee-related accruals   2,720    2,310 
Other accrued liabilities   1,986    1,384 
           
   $8,076   $7,701 

 

10.    Long term debt:

       
    September 30,    December 31, 
    2018    2017 
           
Long-term debt, net of unamortized debt issuance costs  $40,722   $40,000 
Less: current portion   —      —   
           
Long-term debt, net of unamortized debt issuance costs  $40,722   $40,000 

 

On June 13, 2016, the Company entered into a term loan agreement with CRG-managed funds (“CRG”) for up to $30,000 consisting of three tranches bearing interest at 14% per annum. The first tranche of $20,000 was drawn at closing and was used to extinguish long-term debt from Midcap Financial LLC and for general corporate purposes. The second and third tranches were never drawn.

On May 11, 2017, the Company amended the terms of its term loan agreement (the “first amendment”). Under the terms of the amended agreement, up to $50,000 is available to the

 

11 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

10.  Long term debt (continued):

Company consisting of four tranches bearing interest at 13% per annum. The first tranche of $20,000 was drawn on June 13, 2016 when the Company entered into the original term loan agreement, and a second tranche of $10,000 was drawn on the date of this amendment. A third tranche of $10,000 was drawn on August 8, 2017. The fourth tranche was never drawn. The loan matures on March 31, 2022 and is secured by substantially all of the assets of the Company. Under the terms of the amended agreement, an interest-only period is provided such that principal repayment begins in June 2020. If certain revenue milestones are met by the Company, the interest-only period may be extended such that there is only one principal payment at maturity. The Company incurred expenses of $1,422 in the second quarter of 2017 in connection with the modification of long-term debt which is included in other expense.

Under the first amendment, interest is payable on a quarterly basis through the full term of the loan. Interest payments may be split, at the Company’s option, between 9% per annum cash interest and 4% per annum paid in-kind interest in the form of additional term loans until March 31, 2020. Subsequent to March 31, 2020, interest shall be payable entirely in cash. If certain revenue milestones are met by the Company, the period in which the Company, at its option, may split its interest payments between 9% per annum cash interest and 4% per annum paid in-kind interest in the form of additional term loans may be extended to March 31, 2022. On the maturity date, a back-end facility fee of 8% of the aggregate amount of the term loan will be payable to CRG, including the impact of any amounts accrued as paid in-kind interest. As a result, the Company is accruing the amount up to $45,390 under the effective interest method which will be the amount payable at maturity.

In consideration for the first amendment, 700,000 warrants with a strike price of $4.00 per common share were issued to CRG as of the date of the first amendment. The warrants have a term of 5 years and qualify as equity. The warrants were fair valued at $1,200 using the Black-Scholes model and are being accounted for as a discount to the long-term debt on a proportionate basis to the fair value of the entire long-term debt as of the date of the amendment. The discount is being amortized to interest expense over the life of the amended agreement under the effective interest method.

The Company is required to meet certain annual revenue covenants. If the revenue covenants are not met, the Company may exercise a cure right within 90 days of year-end by issuing additional common shares in exchange for cash or by borrowing subordinated debt in an amount equal to two times the difference between the minimum required revenue and the Company’s revenue. The cash received from the cure right would be used to repay the principal. The Company is also required to meet a minimum liquidity covenant.

On March 27, 2018, the Company entered into an agreement with CRG to amend the terms of the loan to adjust the annual revenue covenants (the “second amendment”). In consideration for this modification of long-term debt, the Company issued 800,000 warrants with a strike price of $2.50 per common share to CRG as of the date of the second amendment. The warrants have a term of 5 years and qualify as equity. The warrants were fair valued at $936 using the Black-Scholes model

 

12 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

10.  Long term debt (continued):

and are being accounted for as a discount to the long-term debt. The discount is being amortized to interest expense over the life of the amended agreement under the effective interest method.

The Company was in compliance with the amended annual revenue and minimum liquidity covenants for the years ended December 31, 2017 and 2016.

During the three and nine months ended September 30, 2018, the Company accrued in-kind interest of $425 and $1,249, respectively (three and nine months ended September 30, 2017 - $366).

 

11.  Share capital:

Issued and outstanding:

 

   Number
Common shares  of shares
    
Balance, December 31, 2017   34,637,312 
Issued through at-the market offering(i)   516,661 
Issued for cash upon exercise of options   200,000 
Issued upon exercise of options in cashless transaction   19,749 
Issued upon vesting of restricted share units, net of tax   14,410 
      
Balance, September 30, 2018   35,388,132 

 

(i)  On July 5, 2018, the Company filed a short form base shelf prospectus with the securities regulatory authorities in Canada, other than Quebec, and the United States Securities and Exchange Commission under a registration statement on Form F-10 (together, the “Base Shelf Prospectuses”). The Base Shelf Prospectuses provide for the potential offering in Canada and the United States of up to an aggregate of $250,000 of the Company’s common shares, preferred shares, debt securities, warrants, subscription receipts and units from time to time over a 25-month period.

On July 10, 2018, the Company filed a prospectus supplement pertaining to sales under an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley FBR, Inc. (“BRFBR”). Under the terms of the Sales Agreement, the Company could sell through at-the-market offerings, with BRFBR as agent, such common shares as would have an aggregate offer price of up to $30,000, subject to an aggregate maximum of $13,000 that may be offered and sold under the prospectus supplement. BRFBR, at the Company’s discretion and instruction, is required to use its commercially reasonable efforts to sell the common shares at market prices. During the three and nine months ended September 30, 2018, the Company issued 516,661 common shares for gross

 

13 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

11.  Share capital (continued):

proceeds of $2,284. Subsequent to September 30, 2018, the Company issued 800,876 common shares for gross proceeds of $2,952. As of the filing date of these interim consolidated financial statements, $7,764 remains available for issuance under this prospectus supplement.

 

12.  Share-based compensation:

(a)   Stock options:

Details of the stock option transactions for the nine months ended September 30, 2018 are summarized as follows:

 

   Number 

Weighted

average

exercise price

(CAD$)

 

Weighted

average

remaining

contractual

life (years)

 

Aggregate

intrinsic

value

(CAD$)

Outstanding as at December 31, 2017   2,892,057    5.52    3.07    69 
                     
Options granted   1,080,000    2.72           
Options exercised   (267,000)   1.66           
Options forfeited   (30,183)   7.27           
Options expired   (10,000)   1.65           
                     

Outstanding as at September 30, 2018

   3,664,874    4.99    3.20    3,998 

Exercisable as at September 30, 2018

   2,254,291    5.96    2.71    1,361 

 

The outstanding options expire at various dates ranging from November 20, 2018 to June 19, 2023.

At September 30, 2018, stock options to executive officers and directors, employees and consultants were outstanding as follows:

 

14 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

12.    Share-based compensation (continued):

 

      Options outstanding   Options exercisable 
          Weighted    Weighted         Weighted 
          average    average         average 
          remaining    exercise         exercise 
Range of         contractual    price         price 
exercise prices (CAD$)    Number    life (years)    (CAD$)    Number    (CAD$) 
                           
$2.47 to $3.25    975,000    4.48    2.48    189,574    2.48 
$3.26 to $4.03    967,500    3.43    4.00    601,513    4.00 
$4.04 to $6.26    1,144,500    2.86    5.48    893,750    5.53 
$6.27 to $12.58    577,874    1.31    9.88    569,454    9.85 
                           
     3,664,874    3.20    4.99    2,254,291    5.96 

  

 

At September 30, 2018, there was $753 (December 31, 2017 - $805) of total unrecognized compensation cost related to non-vested stock options. That cost is expected to be recognized over a weighted average period of 1.2 years (December 31, 2017 - 1.3 years).

The aggregate intrinsic value of stock options exercised during the three and nine months ended September 30, 2018 was nil and $98, respectively (three and nine months ended September 30, 2017 - $77 and $588, respectively).

The aggregate fair value of vested options during the three and nine months ended September 30, 2018 was $302 and $1,111, respectively (three and nine months ended September 30, 2017 - $501 and $1,229, respectively).

For the three months ended September 30, 2018, $255 was recorded as stock-based compensation expense with $35 being recorded as a recovery against liability and $290 being recorded against additional paid-in capital (three months ended September 30, 2017 - $210 was recorded as stock-based compensation expense with $357 being recorded as a recovery against liability and $567 being recorded against additional paid-in capital).

 

For the nine months ended September 30, 2018, $1,263 was recorded as stock-based compensation expense with $100 being recorded against liability and $1,163 being recorded against additional paid-in capital (nine months ended September 30, 2017 - $1,330 was recorded as stock-based compensation expense with $77 being recorded as a recovery against liability and $1,407 being recorded against additional paid-in capital).

 

 

15 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

12.    Share-based compensation (continued):

The weighted average fair value of stock options granted during the three and nine months ended September 30, 2018 was nil and $1.03, respectively (three and nine months ended September 30, 2017 - $1.97 and $1.53, respectively). There were no stock options granted during the three months ended September 30, 2018. The estimated fair value of the stock options granted was determined using the Black-Scholes option pricing model with the following weighted-average assumptions:

 

Three months ended September 30  2018  2017
       
Dividend yield  —  —
Expected volatility   —      61.7%
Risk-free interest rate   —      1.6%
Expected average life of the options   —      4.4 years 
Estimated forfeiture rate   —      —   
           
           
           
Nine months ended September 30   2018    2017 
           
Dividend yield   —      —   
Expected volatility   62.1%   63.7%
Risk-free interest rate   2.2%   1.2%
Expected average life of the options   4.0 years    3.8 years 
Estimated forfeiture rate   —      —   
           

 

There is no dividend yield as the Company has not paid, and does not plan to pay, dividends on its common shares. The expected volatility is based on the historical share price volatility of the Company’s daily share closing prices over a period equal to the expected life of each option grant. The risk-free interest rate is based on yields from Canadian government bond yields with a term equal to the expected term of the options being valued. The expected life of options represents the period of time that the options are expected to be outstanding based on the contractual term of the options and on historical data of option holder exercise and post-vesting employment termination behavior. Forfeitures are estimated at the time of grant and, if necessary, management revises that estimate if actual forfeitures differ and adjusts stock-based compensation expense accordingly.

 

16 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

12.  Share-based compensation (continued):

 (b) Restricted share unit plan:

Details of restricted share unit (“RSU”) transactions for the nine months ended September 30, 2018 are summarized as follows:

 

   Number 

Weighted

average

grant date

fair value

(USD$)

 

Weighted

average

remaining

contractual

life (years)

 

Aggregate

intrinsic

value

(USD$)

Outstanding as at December 31, 2017   96,956   $4.83    1.68   $147 
                     
RSUs granted   59,872    2.29         136 
RSUs vested   (95,622)   4.73         210 
RSUs forfeited   (11,834)   2.75           
Outstanding as at September 30, 2018   49,372   $2.45    2.64   $198 

At September 30, 2018, there was $77 (December 31, 2017 - $224) of total unrecognized compensation cost related to non-vested RSUs. That cost is expected to be recognized over a weighted average period of 2.5 years (December 31, 2017 - 1.7 years).

RSUs are valued at the market price of the underlying securities on the grant date and the compensation expense, based on the estimated number of awards expected to vest, is recognized on a straight-line basis over the three-year vesting period. On May 10, 2018, in connection with the closing of the Arrangement Agreement, 69,877 RSUs vested immediately and were settled in cash. Stock-based compensation expense in connection with the accelerated vesting of these RSUs of $175 was recorded in selling, general and administration expense.

For the three and nine months ended September 30, 2018, stock-based compensation expense related to RSUs of $11 and $263, respectively (three and nine months ended September 30, 2017 - $101 and $311, respectively) was recorded in selling, general and administration expense.

 

17 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

13.   Basic and diluted loss per share:

Basic and diluted loss per share for the three months ended September 30, 2018 and 2017 is calculated as set forth below:

 

Three months ended September 30  2018  2017
       
Net loss  $(7,105)  $(6,623)
Less: recovery of fair value of liability classified awards   (35)   (124)
Diluted loss available to common shareholders   (7,140)   (6,747)
           
Weighted average number of common shares for basic loss per share   34,958,008    33,835,677 
Plus: incremental shares from assumed exercise   —    42,513 
Weighted average number of common shares for diluted loss per share   34,958,008    33,878,190 
Loss per share - basic and diluted  $(0.20)  $(0.20)

 

Basic and diluted loss per share for the nine months ended September 30, 2018 and 2017 is calculated as set forth below:

       
Nine months ended September 30  2018  2017
       
Net loss  $(10,137)  $(21,468)
Less: recovery of fair value of liability classified awards   (35)   (124)
Diluted loss available to common shareholders   (10,172)   (21,592)
           
Weighted average number of common shares for basic loss per share   34,828,761    32,730,558 
Plus: incremental shares from assumed exercise   —      41,621 
Weighted average number of common shares for for diluted loss per share   34,828,761    32,772,179 
Loss per share - basic and diluted  $(0.29)  $(0.66)

 

18 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

14.     Contingencies:

(a)The Company may, from time to time, be subject to claims and legal proceedings brought against it in the normal course of business. Such matters are subject to many uncertainties. Management believes that adequate provisions have been made in the accounts where required and the ultimate resolution of such contingencies will not have a material adverse effect on the consolidated financial position of the Company.
(b)The Company entered into indemnification agreements with all officers and directors. The maximum potential amount of future payments required under these indemnification agreements is unlimited. However, the Company maintains appropriate liability insurance that limits the exposure and enables the Company to recover any future amounts paid, less any deductible amounts pursuant to the terms of the respective policies, the amounts of which are not considered material.
(c)The Company has entered into license and research agreements with third parties that include indemnification provisions that are customary in the industry. These indemnification provisions generally require the Company to compensate the other party for certain damages and costs incurred as a result of third party claims or damages arising from these transactions. In some cases, the maximum potential amount of future payments that could be required under these indemnification provisions is unlimited. These indemnification provisions may survive termination of the underlying agreement. The nature of the indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay. Historically, the Company has not made any indemnification payments under such agreements and no amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification obligations.

 

19 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

15.     Segmented information:

Revenue is earned through the sale of the Company’s commercialized products and licensing and other fees. The Company recognizes segmentation based on geography as follows:

 

          
Three months ended September 30, 2018  Europe  Rest of World  Total
          
Revenue  $3,340   $3,667   $7,007 
Cost of goods sold   1,163    972    2,135 
Gross margin   2,177    2,695    4,872 
                
                
                
Three months ended September 30, 2017   Europe    Rest of World    Total 
                
Revenue  $2,561   $3,460   $6,021 
Cost of goods sold   816    672    1,488 
Gross margin   1,745    2,788    4,533 
                
                
                
Nine months ended September 30, 2018   Europe    Rest of World    Total 
                
Revenue  $11,349   $8,379   $19,728 
Cost of goods sold   4,076    2,322    6,398 
Gross margin   7,273    6,057    13,330 
                
                
                
Nine months ended September 30, 2017   Europe    Rest of World    Total 
                
Revenue  $7,571   $9,403   $16,974 
Cost of goods sold   2,103    2,742    4,845 
Gross margin   5,468    6,661    12,129 
                

 

During the three months ended September 30, 2018 and 2017, there were three customers that individually accounted for more than 10% of total revenue. During the three months ended September 30, 2018, these three customers accounted for 20%, 17% and 16% of total revenue (three months ended September 30, 2017 - 30%, 10%, and 16%).

 

 

20 
 

 

CORREVIO PHARMA CORP.

(formerly Cardiome Pharma Corp.)

Notes to Interim Consolidated Financial Statements

(Unaudited)

(Expressed in thousands of U.S. dollars except share and per share amounts and where otherwise indicated)

 

As at September 30, 2018 and for the three and nine months ended September 30, 2018 and 2017

 

 

15.     Segmented information (continued):

During the nine months ended September 30, 2018, there were three customers that individually accounted for more than 10% of total revenue. These three customers accounted for 17%, 14% and 12% of total revenue. During the nine months ended September 30, 2017, there were two customers that individually accounted for more than 10% of total revenue. These two customers accounted for 28% and 21% of total revenue.

 

Property and equipment by geographic area were as follows:

 

       
   September 30, 2018  December 31, 2017
       
 Europe   $270   $87 
 Rest of world    274    329 
             
     $544   $416 

 

Intangible assets by geographic area were as follows:

 

       
   September 30, 2018  December 31, 2017
       
 Europe   $27,413   $27,265 
 Rest of world    —      541 
             
     $27,413   $27,806 

 

 

21