SUBSEQUENT EVENTS |
12 Months Ended |
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Dec. 31, 2019 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 19. SUBSEQUENT EVENTS Nucynta Purchase Agreement On February 6, 2020, the Company entered into an asset purchase agreement (“Nucynta Purchase Agreement”) with Assertio, pursuant to which the Company agreed to acquire from Assertio certain assets related to the Nucynta Products for an aggregate purchase price of $375,000 (the “Purchase Price”), subject to certain closing and post-closing adjustments as described in the Nucynta Purchase Agreement. In connection with the Nucynta Purchase Agreement, the Company also agreed to assume certain regulatory and supply chain contracts, liabilities and obligations related to Nucynta Products. The Nucynta Purchase Agreement contains customary representations, warranties and covenants, and indemnification provisions subject to specified limitations. From and after the closing of the Nucynta Purchase Agreement, the Company will pay royalties directly to Grünenthal GmbH at a rate of 14% of net sales of the Nucynta Products. This royalty payment obligation will replace the Company’s previous obligation to pay a royalty rate of 14% of net sales of the Nucynta Products to Grünenthal, subject to a guaranteed royalty of $34,000 when net sales are between $180,000 and $243,000.
On February 13, 2020, the Company closed the Nucynta Acquisition in accordance with the Nucynta Purchase Agreement. Upon the closing of the transactions contemplated by the Nucynta Purchase Agreement, the Nucynta Commercialization Agreement is terminated with the exception of certain provisions thereof which will survive pursuant to the terms of the Nucynta Purchase Agreement, and the Company’s royalty payment obligations to Assertio thereunder will cease. 2020 Term Loan On February 6, 2020, in connection with the execution of the Nucynta Purchase Agreement, the Company entered into a Loan Agreement with BioPharma Credit PLC, as collateral agent and lender; and BioPharma Credit Investments V (Master) LP, as lender (the “2020 Loan Agreement”). The 2020 Loan Agreement provides for a $200,000 secured term loan (the “2020 Term Loan”), the proceeds of which were used to finance a portion of the purchase price paid pursuant to the Nucynta Purchase Agreement. The 2020 Term Loan will mature on the 48-month anniversary of the closing of the Nucynta Acquisition, and is guaranteed by the Company’s material domestic subsidiaries and is also secured by substantially all of the Company’s material domestic assets. The 2020 Term Loan will bear interest at a rate based upon LIBOR (subject to a LIBOR floor of 2.0%), plus a margin of 7.5% per annum. The Company is required to repay the 2020 Term Loan by making equal quarterly payments. The 2020 Loan Agreement contains certain covenants and obligations of the parties, including, without limitation, covenants that require the Company to maintain $200,000 in annual net sales and covenants that limit the Company’s ability to incur additional indebtedness or liens, make acquisitions or other investments or dispose of assets outside the ordinary course of business. Failure to comply with these covenants would constitute an event of default under the 2020 Loan Agreement, notwithstanding the Company’s ability to meet its debt service obligations. The 2020 Loan Agreement also includes various customary remedies for the lenders following an event of default, including the acceleration of repayment of outstanding amounts under the 2020 Loan Agreement and execution upon the collateral securing obligations under the 2020 Loan Agreement. 2026 Convertible Notes On February 13, 2020, the Company issued 2.625% convertible senior notes due 2026 (the “convertible notes”), in the aggregate principal amount of $143,750, in a public offering registered under the Securities Act of 1933, as amended. The convertible notes are senior, unsecured obligations and will accrue interest at a rate of 2.625% per annum, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2020. The notes will mature on February 15, 2026, unless earlier repurchased, redeemed or converted. Before August 15, 2025, noteholders will have the right to convert their notes only upon the occurrence of certain events. From and after August 15, 2025, noteholders may convert their notes at any time at their election until the close of business on the scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The initial conversion rate is shares of common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $29.19 per share of common stock. The initial conversion price represents a premium of approximately 35% over the last reported sale of $21.62 per share of the Company’s common stock on February 10, 2020. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.SVB Term Loan On January 23, 2020, the Company paid off the outstanding principal and accrued interest on our term loan with SVB with cash on hand. |