QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Title of each class | Outstanding at October 31, 2022 | Trading Symbol | Name of each exchange on which registered | |||||||||||||||||
Page No. | |||||
September 30, | December 31, | ||||||||||
2022 | 2021 | ||||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Marketable securities | |||||||||||
Accounts receivable, net | |||||||||||
Inventories, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Long-term marketable securities | |||||||||||
Property and equipment, net | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable and accrued liabilities | $ | $ | |||||||||
Accrued product returns and rebates | |||||||||||
Contingent consideration, current portion | |||||||||||
Convertible notes, net | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Convertible notes, net | |||||||||||
Contingent consideration, long-term | |||||||||||
Operating lease liabilities, long-term | |||||||||||
Deferred income tax liabilities | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders’ equity | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive earnings (loss), net of tax | ( | ||||||||||
Retained earnings | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Net product sales | $ | $ | $ | $ | |||||||||||||||||||
Royalty revenues | |||||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Costs and expenses | |||||||||||||||||||||||
Cost of goods sold (a) | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Amortization of intangible assets | |||||||||||||||||||||||
Contingent consideration expense (gain) | ( | ||||||||||||||||||||||
Total costs and expenses | |||||||||||||||||||||||
Operating earnings (loss) | ( | ||||||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Interest and other income, net | |||||||||||||||||||||||
Total other income (expense) | ( | ( | |||||||||||||||||||||
Earnings (Loss) before income taxes | ( | ||||||||||||||||||||||
Income tax (benefit) expense | ( | ( | |||||||||||||||||||||
Net earnings | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||
Net earnings | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Unrealized loss on marketable securities, net of tax | ( | ( | ( | ( | |||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive earnings (loss) | $ | ( | $ | $ | $ |
j | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Earnings (Loss) | Retained Earnings | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
— | — | ( | — | ( | |||||||||||||||||||||||||||||||
Balance, January 1, 2022 | |||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock in connection with the Company’s equity award plans | — | — | — | ||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
Unrealized loss on marketable securities, net of tax | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance, March 31, 2022 | ( | ||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock in connection with the Company’s equity award plans | — | — | — | ||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
Unrealized loss on marketable securities, net of tax | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock in connection with the Company’s equity award plans | — | — | |||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
Unrealized loss on marketable securities, net of tax | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance, September 30, 2022 | $ | $ | $ | ( | $ | $ |
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Earnings (Loss) | Retained Earnings | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock in connection with the Company’s equity award plans | — | — | — | ||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
Unrealized loss on marketable securities, net of tax | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance, March 31, 2021 | |||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of common stock in connection with the Company’s equity award plans | — | — | — | ||||||||||||||||||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||||||||||||||
Unrealized loss on marketable securities, net of tax | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance, June 30, 2021 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Share-based compensation | — | $ | — | $ | $ | — | $ | — | $ | ||||||||||||||||||||||||||
Issuance of common stock in connection with the Company’s equity award plans | $ | — | $ | $ | — | $ | — | $ | |||||||||||||||||||||||||||
Net earnings | — | $ | — | $ | — | $ | — | $ | $ | ||||||||||||||||||||||||||
Unrealized loss on marketable securities, net of tax | — | $ | — | $ | — | $ | ( | $ | — | $ | ( | ||||||||||||||||||||||||
Balance, September 30, 2021 | $ | $ | $ | $ | $ |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
(unaudited) | |||||||||||
Cash flows from operating activities | |||||||||||
Net earnings | $ | $ | |||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Navitor investment R&D expense (see Note 5) | |||||||||||
Other income from Navitor (see Note 5) | ( | ||||||||||
Amortization of deferred financing costs and debt discount | |||||||||||
Realized gains from sales of marketable securities | ( | ( | |||||||||
Amortization of premium/discount on marketable securities | ( | ||||||||||
Change in fair value of contingent consideration | ( | ||||||||||
Other noncash adjustments, net | ( | ||||||||||
Share-based compensation expense | |||||||||||
Deferred income tax provision | ( | ( | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Inventories | ( | ( | |||||||||
Prepaid expenses and other assets | ( | ||||||||||
Accrued product returns and rebates | |||||||||||
Accounts payable and other liabilities | ( | ( | |||||||||
Contingent consideration | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities | |||||||||||
Purchases of marketable securities | ( | ( | |||||||||
Sales and maturities of marketable securities | |||||||||||
Purchase of property and equipment and deferred legal fees paid | ( | ( | |||||||||
Acquisition of USWM, net of cash acquired | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities | |||||||||||
Payment of contingent consideration | ( | ||||||||||
Proceeds from issuance of common stock | |||||||||||
Proceeds from governmental loan and grant | |||||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
Net change in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents at beginning of year | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental cash flow information | |||||||||||
Cash paid for interest on convertible notes | $ | $ | |||||||||
Cash paid for income taxes | |||||||||||
Cash paid for operating leases | |||||||||||
Noncash investing and financing activities | |||||||||||
Lease assets obtained for new operating leases | $ | $ | |||||||||
Deferred legal fees and fixed assets included in accounts payable and accrued expenses | |||||||||||
Property and equipment additions from utilization of tenant improvement allowance |
As Initially Reported | Measurement Period Adjustments (1) | As Adjusted | |||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
Cash and cash equivalents | $ | $ | — | $ | |||||||||||||
Accounts receivable | — | ||||||||||||||||
Inventories | — | ||||||||||||||||
Prepaid expenses and other current assets | — | ||||||||||||||||
Property and equipment | — | ||||||||||||||||
Intangibles | — | ||||||||||||||||
Other assets(2) | ( | ||||||||||||||||
Total fair value of assets acquired | ( | ||||||||||||||||
Accounts payable | ( | — | ( | ||||||||||||||
Accrued expenses and other current liabilities | ( | — | ( | ||||||||||||||
Current debt | ( | — | ( | ||||||||||||||
Operating lease liabilities, long-term | ( | — | ( | ||||||||||||||
Deferred income tax liabilities(2)(3) | ( | ( | |||||||||||||||
Total fair value of liabilities assumed | ( | ( | |||||||||||||||
Total identifiable net assets | |||||||||||||||||
Goodwill | ( | ||||||||||||||||
Total purchase price | $ | $ | — | $ | |||||||||||||
Cash consideration paid | $ | $ | — | $ | |||||||||||||
Fair value of contingent consideration | — | ||||||||||||||||
Total purchase price | $ | $ | — | $ |
Estimated Fair Value | Estimated Useful Life as of Closing Date (in years) | ||||||||||
Acquired developed technology and product rights | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2021 | 2021 | ||||||||||
Pro forma total revenues | $ | $ | |||||||||
Pro forma net loss | ( | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||
Net product sales | |||||||||||||||||||||||
Trokendi XR | $ | $ | $ | $ | |||||||||||||||||||
Oxtellar XR | |||||||||||||||||||||||
GOCOVRI | |||||||||||||||||||||||
Qelbree | |||||||||||||||||||||||
APOKYN | $ | $ | $ | $ | |||||||||||||||||||
Other(1) | |||||||||||||||||||||||
Total net product sales | $ | $ | $ | $ | |||||||||||||||||||
Royalty revenues | |||||||||||||||||||||||
Total revenues | $ | $ | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(unaudited) | |||||||||||
Corporate and U.S. government agency and municipal debt securities | |||||||||||
Amortized cost | $ | $ | |||||||||
Gross unrealized gains | |||||||||||
Gross unrealized losses | ( | ( | |||||||||
Total fair value | $ | $ |
September 30, 2022 | |||||
(unaudited) | |||||
Less than 1 year | $ | ||||
1 year to 2 years | |||||
2 years to 3 years | |||||
3 years to 4 years | |||||
Greater than 4 years | |||||
Total | $ |
Fair Value Measurements at September 30, 2022 (unaudited) | |||||||||||||||||||||||
Total Fair Value at September 30, 2022 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Assets: | (unaudited) | ||||||||||||||||||||||
Cash and cash equivalents | |||||||||||||||||||||||
Cash | $ | $ | $ | $ | |||||||||||||||||||
Money market funds | |||||||||||||||||||||||
Marketable securities | |||||||||||||||||||||||
Corporate and municipal debt securities | |||||||||||||||||||||||
Long term marketable securities | |||||||||||||||||||||||
Corporate and municipal debt securities | |||||||||||||||||||||||
Other noncurrent assets | |||||||||||||||||||||||
Marketable securities - restricted (SERP) | |||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Contingent consideration | $ | $ | $ | $ | |||||||||||||||||||
Total liabilities at fair value | $ | $ | $ | $ |
Fair Value Measurements at December 31, 2021 | |||||||||||||||||||||||
Total Fair Value at December 31, 2021 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash and cash equivalents | |||||||||||||||||||||||
Cash | $ | $ | $ | $ | |||||||||||||||||||
Money market funds | |||||||||||||||||||||||
Marketable securities | |||||||||||||||||||||||
Corporate and municipal debt securities | |||||||||||||||||||||||
Long term marketable securities | |||||||||||||||||||||||
Corporate and municipal debt securities | |||||||||||||||||||||||
Other noncurrent assets | |||||||||||||||||||||||
Marketable securities - restricted (SERP) | |||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Contingent consideration | $ | $ | $ | $ | |||||||||||||||||||
Total liabilities at fair value | $ | $ | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
Carrying Value | Fair Value (Level 2) | Carrying Value | Fair Value (Level 2) | ||||||||||||||||||||
2023 Notes | $ | $ | $ | $ |
USWM Acquisition | Adamas Acquisition | Total | |||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ||||||||||||||
Milestone payments | ( | ( | |||||||||||||||
Change in fair value recognized in earnings | ( | ||||||||||||||||
Balance at September 30, 2022 (unaudited) | $ | $ | $ | ||||||||||||||
Regulatory and developmental contingent consideration liabilities | $ | $ | $ | ||||||||||||||
Sales-based contingent consideration liabilities | |||||||||||||||||
Balance at September 30, 2022 (unaudited) | $ | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
Reported under the following captions in the condensed consolidated balance sheets: | (unaudited) | ||||||||||
Contingent consideration, current portion | $ | $ | |||||||||
Contingent consideration, long-term | |||||||||||
Total | $ | $ |
Balance as of December 31, 2021 | $ | ||||
Measurement period adjustments related to the acquisition of Adamas (see Note 3) | ( | ||||
Balance as of September 30, 2022 (unaudited) | $ |
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||||||||
Remaining Weighted Average Life (Years) | Carrying Amount, Gross | Accumulated Amortization | Carrying Amount, Net | Carrying Amount, Gross | Accumulated Amortization | Carrying Amount, Net | |||||||||||||||||||||||||||||||||||
Acquired in-process research and development | $ | $ | — | $ | $ | $ | — | $ | |||||||||||||||||||||||||||||||||
Intangible assets subject to amortization: | |||||||||||||||||||||||||||||||||||||||||
Acquired developed technology and product rights | ( | ( | |||||||||||||||||||||||||||||||||||||||
Capitalized patent defense costs | ( | ( | |||||||||||||||||||||||||||||||||||||||
Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(unaudited) | |||||||||||
2023 Notes | $ | $ | |||||||||
Unamortized debt discount and deferred financing costs | ( | ( | |||||||||
Total carrying value | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||
Research and development | $ | $ | $ | $ | |||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Number of Options & SARs | Weighted Average Exercise Price (per share) | Weighted Average Remaining Contractual Term (in years) | |||||||||||||||
Outstanding, December 31, 2021 | $ | ||||||||||||||||
Granted | $ | ||||||||||||||||
Exercised | ( | $ | |||||||||||||||
Forfeited | ( | $ | |||||||||||||||
Outstanding, September 30, 2022 (unaudited) | $ | ||||||||||||||||
As of December 31, 2021: | |||||||||||||||||
Vested and expected to vest | $ | ||||||||||||||||
Exercisable | $ | ||||||||||||||||
As of September 30, 2022 (unaudited): | |||||||||||||||||
Vested and expected to vest | $ | ||||||||||||||||
Exercisable | $ |
Number of RSUs | Weighted Average Grant Date Fair Value per Share | ||||||||||
Nonvested, December 31, 2021 | $ | ||||||||||
Granted | $ | ||||||||||
Vested | ( | $ | |||||||||
Nonvested, September 30, 2022 (unaudited) | $ |
Performance-Based Units | Market-Based Units | Total PSUs | |||||||||||||||||||||||||||||||||
Number of PSUs | Weighted Average Grant Date Fair Value per Share | Number of PSUs | Weighted Average Grant Date Fair Value per Share | Number of PSUs | Weighted Average Grant Date Fair Value per Share | ||||||||||||||||||||||||||||||
Nonvested, December 31, 2021 | $ | $ | $ | ||||||||||||||||||||||||||||||||
Granted | $ | $ | |||||||||||||||||||||||||||||||||
Vested | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Forfeited | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Nonvested, September 30, 2022 (unaudited) | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||
2023 Notes | |||||||||||||||||||||||
Stock options, RSUs, PSUs |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net earnings | $ | $ | $ | $ | |||||||||||||||||||
After-tax interest expense for 2023 Notes | |||||||||||||||||||||||
Numerator for dilutive earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average shares outstanding, basic | |||||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Stock options, RSUs and SARs | |||||||||||||||||||||||
Convertible notes | |||||||||||||||||||||||
Weighted average shares outstanding, diluted | |||||||||||||||||||||||
Earnings per share, basic | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share, diluted | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||
Income tax (benefit) expense | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Effective tax rate | % | % | ( | % | % |
Balance Sheet Classification | September 30, 2022 | December 31, 2021 | |||||||||||||||
(unaudited) | |||||||||||||||||
Assets | |||||||||||||||||
Operating lease assets | $ | $ | |||||||||||||||
Total lease assets | $ | $ | |||||||||||||||
Liabilities | |||||||||||||||||
Lease liabilities, current | |||||||||||||||||
Operating lease liabilities, current portion | $ | $ | |||||||||||||||
Lease liabilities, long-term | |||||||||||||||||
Operating lease liabilities, long-term | |||||||||||||||||
Total lease liabilities | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(unaudited) | |||||||||||
Raw materials | $ | $ | |||||||||
Work in process | |||||||||||
Finished goods | |||||||||||
Total | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(unaudited) | |||||||||||
Lab equipment and furniture | $ | $ | |||||||||
Leasehold improvements | |||||||||||
Software | |||||||||||
Computer equipment | |||||||||||
Construction-in-progress | |||||||||||
Less accumulated depreciation and amortization | ( | ( | |||||||||
Property and equipment, net | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(unaudited) | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued professional & marketing fees | |||||||||||
Accrued compensation | |||||||||||
Accrued product costs | |||||||||||
Accrued royalties (1) | |||||||||||
Accrued clinical trial costs (2) | |||||||||||
Operating lease liabilities, current portion (3) | |||||||||||
Other accrued expenses | |||||||||||
Total | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(unaudited) | |||||||||||
Accrued product rebates | $ | $ | |||||||||
Accrued product returns | |||||||||||
Total | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
(unaudited) | |||||||||||
Nonrecourse liability related to sale of future royalties, long-term | $ | $ | |||||||||
Other liabilities | |||||||||||
Total | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||
Interest expense | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Interest expense on nonrecourse liability related to sale of future royalties | ( | ( | ( | ( | |||||||||||||||||||
Total | $ | ( | $ | ( | $ | ( | $ | ( |
Product Candidate | Indication | Development | NDA | ||||||||
SPN-830 | Continuous treatment of motor fluctuations ("off" episodes) in PD patients | Complete Response Letter (CRL) received from FDA in October 2022 | |||||||||
SPN-820 | Treatment-resistant depression | Phase II | |||||||||
SPN-817 | Treatment-resistant seizures | Phase I | |||||||||
SPN-443 | CNS | Preclinical | |||||||||
SPN-446 | CNS | Preclinical |
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | Amount | Percent | 2022 | 2021 | Amount | Percent | ||||||||||||||||||||||||||||||||||||||||
Net product sales | |||||||||||||||||||||||||||||||||||||||||||||||
Trokendi XR | $ | 69,599 | $ | 80,935 | $ | (11,336) | (14)% | $ | 204,033 | $ | 231,531 | $ | (27,498) | (12)% | |||||||||||||||||||||||||||||||||
Oxtellar XR | 30,528 | 29,728 | 800 | 3% | 88,007 | 82,120 | 5,887 | 7% | |||||||||||||||||||||||||||||||||||||||
GOCOVRI | 27,878 | — | 27,878 | ** | 75,179 | — | 75,179 | ** | |||||||||||||||||||||||||||||||||||||||
Qelbree | 18,326 | 2,370 | 15,956 | ** | 37,708 | 2,685 | 35,023 | ** | |||||||||||||||||||||||||||||||||||||||
APOKYN | 18,261 | 24,627 | (6,366) | (26)% | 57,156 | 73,338 | (16,182) | (22)% | |||||||||||||||||||||||||||||||||||||||
Other(1) | 8,132 | 7,872 | 260 | 3% | 23,564 | 22,867 | 697 | 3% | |||||||||||||||||||||||||||||||||||||||
Total net product sales | $ | 172,724 | $ | 145,532 | $ | 27,192 | 19% | $ | 485,647 | $ | 412,541 | $ | 73,106 | 18% | |||||||||||||||||||||||||||||||||
Royalty revenues | 4,629 | 2,932 | 1,697 | 58% | 14,263 | 8,184 | 6,079 | 74% | |||||||||||||||||||||||||||||||||||||||
Total revenues | $ | 177,353 | $ | 148,464 | $ | 28,889 | 19% | $ | 499,910 | $ | 420,725 | $ | 79,185 | 19% |
Accrued Product Returns and Rebates | |||||||||||||||||||||||
Product Returns | Product Rebates | Reduction to Accounts Receivable for Sales Discounts | Total | ||||||||||||||||||||
Balance at December 31, 2021 | $ | 35,127 | $ | 97,597 | $ | 13,537 | $ | 146,261 | |||||||||||||||
Provision | |||||||||||||||||||||||
Provision for current year sales | 13,846 | 321,860 | 55,693 | 391,399 | |||||||||||||||||||
Adjustments relating to prior year sales | (3,225) | 31 | (3) | (3,197) | |||||||||||||||||||
Total provision | $ | 10,621 | $ | 321,891 | $ | 55,690 | $ | 388,202 | |||||||||||||||
Less: Actual payments/credits | (6,440) | (300,326) | (56,447) | (363,213) | |||||||||||||||||||
Balance at September 30, 2022 | $ | 39,308 | $ | 119,162 | $ | 12,780 | $ | 171,250 | |||||||||||||||
Balance at December 31, 2020 | $ | 29,603 | $ | 96,589 | $ | 11,404 | $ | 137,596 | |||||||||||||||
Provision | |||||||||||||||||||||||
Provision for current year sales | 9,945 | 275,352 | 51,472 | 336,769 | |||||||||||||||||||
Adjustments relating to prior year sales | (1,525) | 1,334 | 19 | (172) | |||||||||||||||||||
Total provision | $ | 8,420 | $ | 276,686 | $ | 51,491 | $ | 336,597 | |||||||||||||||
Less: Actual payments/credits | (4,611) | (274,639) | (51,677) | (330,927) | |||||||||||||||||||
Balance at September 30, 2021 | $ | 33,412 | $ | 98,636 | $ | 11,218 | $ | 143,266 |
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | Amount | Percent | 2022 | 2021 | Amount | Percent | ||||||||||||||||||||||||||||||||||||||||
Selling and marketing | $ | 85,704 | $ | 50,704 | $ | 35,000 | 69% | $ | 219,798 | $ | 137,531 | $ | 82,267 | 60% | |||||||||||||||||||||||||||||||||
General and administrative | 26,610 | 21,328 | 5,282 | 25% | 83,451 | 65,493 | $ | 17,958 | 27% | ||||||||||||||||||||||||||||||||||||||
Total | $ | 112,314 | $ | 72,032 | $ | 40,282 | 56% | $ | 303,249 | $ | 203,024 | $ | 100,225 | 49% |
September 30, | December 31, | Change | |||||||||||||||||||||
2022 | 2021 | Amount | Percent | ||||||||||||||||||||
Cash and cash equivalents | $ | 111,492 | $ | 203,434 | $ | (91,942) | (45)% | ||||||||||||||||
Marketable securities | 280,297 | 136,246 | 144,051 | 106% | |||||||||||||||||||
Long-term marketable securities | 131,937 | 119,166 | 12,771 | 11% | |||||||||||||||||||
Total | $ | 523,726 | $ | 458,846 | $ | 64,880 | 14% |
Nine Months Ended September 30, 2022 | Change | ||||||||||||||||
2022 | 2021 | Amount | |||||||||||||||
Net cash provided by (used in): | |||||||||||||||||
Operating activities | $ | 89,262 | $ | 78,364 | $ | 10,898 | |||||||||||
Investing activities | (167,898) | (158,043) | (9,855) | ||||||||||||||
Financing activities | (13,306) | 6,320 | (19,626) | ||||||||||||||
Net change in cash and cash equivalents | $ | (91,942) | $ | (73,359) | $ | (18,583) |
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101 | The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in Inline XBRL: (i) Cover Page, (ii) Condensed Consolidated Statements of Earnings, (iii) Condensed Consolidated Statements of Comprehensive Earnings, (iv) Condensed Consolidated Balance Sheets, (v) Condensed Consolidated Statements of Changes in Stockholders' Equity, (vi) Condensed Consolidated Statements of Cash Flows, and (vii) the Notes to Condensed Consolidated Financial Statements, tagged in summary and detail. | |||||||
104 | The cover page of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in Inline XBRL (included with the Exhibit 101 attachments). | |||||||
SUPERNUS PHARMACEUTICALS, INC. | ||||||||
DATED: November 9, 2022 | By: | /s/ Jack A. Khattar | ||||||
Jack A. Khattar President and Chief Executive Officer | ||||||||
DATED: November 9, 2022 | By: | /s/ Timothy C. Dec | ||||||
Timothy C. Dec Senior Vice President and Chief Financial Officer |
Date: November 9, 2022 | By: | /s/ Jack A. Khattar | ||||||
Jack A. Khattar President and Chief Executive Officer |
Date: November 9, 2022 | By: | /s/ Timothy C. Dec | ||||||
Timothy C. Dec | ||||||||
Senior Vice President and Chief Financial Officer |
Date: November 9, 2022 | By: | /s/ Jack A. Khattar | ||||||
Jack A. Khattar President and Chief Executive Officer |
Date: November 9, 2022 | By: | /s/ Timothy C. Dec | ||||||
Timothy C. Dec Senior Vice President and Chief Financial Officer |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Stockholders’ equity | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 130,000,000 | 130,000,000 |
Common stock shares issued (in shares) | 54,053,513 | 54,053,513 |
Common stock shares outstanding (in shares) | 53,256,094 | 53,256,094 |
Condensed Consolidated Statements of Earnings - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|||
Revenues | ||||||
Total revenues | $ 177,353 | $ 148,464 | $ 499,910 | $ 420,725 | ||
Costs and expenses | ||||||
Cost of goods sold | [1] | 25,878 | 18,085 | 64,267 | 58,067 | |
Research and development | 19,554 | 19,654 | 56,778 | 69,389 | ||
Selling, general and administrative | 112,314 | 72,032 | 303,249 | 203,024 | ||
Amortization of intangible assets | 20,644 | 6,009 | 61,932 | 17,964 | ||
Contingent consideration expense (gain) | 486 | 80 | 1,894 | (7,650) | ||
Total costs and expenses | 178,876 | 115,860 | 488,120 | 340,794 | ||
Operating earnings (loss) | (1,523) | 32,604 | 11,790 | 79,931 | ||
Other income (expense) | ||||||
Interest expense | (1,724) | (5,925) | (5,476) | (17,489) | ||
Interest and other income, net | 2,803 | 2,281 | 19,289 | 8,682 | ||
Total other income (expense) | 1,079 | (3,644) | 13,813 | (8,807) | ||
Earnings (Loss) before income taxes | (444) | 28,960 | 25,603 | 71,124 | ||
Income tax (benefit) expense | (2,193) | 7,398 | (9,627) | 20,142 | ||
Net earnings | $ 1,749 | $ 21,562 | $ 35,230 | $ 50,982 | ||
Earnings per share | ||||||
Basic (in dollars per share) | $ 0.03 | $ 0.41 | $ 0.66 | $ 0.96 | ||
Diluted (in dollars per share) | $ 0.03 | $ 0.40 | $ 0.62 | $ 0.94 | ||
Weighted average shares outstanding | ||||||
Basic (in shares) | 53,789,674 | 53,187,764 | 53,517,838 | 53,053,441 | ||
Diluted (in shares) | 55,034,838 | 54,334,794 | 61,543,121 | 54,301,461 | ||
Net product sales | ||||||
Revenues | ||||||
Total revenues | $ 172,724 | $ 145,532 | $ 485,647 | $ 412,541 | ||
Royalty revenues | ||||||
Revenues | ||||||
Total revenues | $ 4,629 | $ 2,932 | $ 14,263 | $ 8,184 | ||
|
Condensed Consolidated Statements of Comprehensive Earnings - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 1,749 | $ 21,562 | $ 35,230 | $ 50,982 |
Other comprehensive loss: | ||||
Unrealized loss on marketable securities, net of tax | (1,826) | (1,224) | (5,585) | (4,766) |
Other comprehensive loss | (1,826) | (1,224) | (5,585) | (4,766) |
Comprehensive earnings (loss) | $ (77) | $ 20,338 | $ 29,645 | $ 46,216 |
Business Organization |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Organization | Business Organization Supernus Pharmaceuticals, Inc. (the Company) is a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases. The Company's diverse neuroscience portfolio includes approved treatments for epilepsy, migraine, attention-deficit hyperactivity disorder (ADHD), hypomobility in Parkinson’s Disease (PD), cervical dystonia, chronic sialorrhea, dyskinesia in PD patients receiving levodopa-based therapy, and drug-induced extrapyramidal reactions in adult patients. The Company is developing a broad range of novel CNS product candidates including new potential treatments for hypomobility in PD, epilepsy, depression, and other CNS disorders. Commercial Products •Trokendi XR® (topiramate) is the first once-daily extended-release topiramate product indicated for the treatment of epilepsy in patients 6 years of age and older in the United States (U.S.) market. It is also indicated for the prophylaxis of migraine headache in adults and adolescents 12 years and older. •Oxtellar XR® (oxcarbazepine) is indicated as therapy for the treatment of partial onset seizures in patients 6 years of age and older. It is also the first once-daily extended-release oxcarbazepine product indicated for the treatment of epilepsy in the U.S. •Qelbree® (viloxazine extended-release capsules) is a novel non-stimulant product indicated for the treatment of ADHD in adults and pediatric patients 6 years and older. On April 2, 2021, the U.S. Food and Drug Administration (FDA) approved Qelbree for the treatment of ADHD in pediatric patients 6 to 17 years of age. In May 2021, the Company launched Qelbree for pediatric patients in the U.S. On April 29, 2022, the FDA approved Qelbree for treatment of ADHD in adult patients. The Company launched Qelbree for adult patients in May 2022. •GOCOVRI® (amantadine) extended-release capsules is the first and only FDA approved medicine indicated for the treatment of dyskinesia in patients with PD receiving levodopa-based therapy, with or without concomitant dopaminergic medications, and as an adjunctive treatment to levodopa/carbidopa with PD experiencing "off" episodes. •APOKYN® (apomorphine hydrochloride injection) is a product indicated for the acute, intermittent treatment of hypomobility, "off" episodes ("end-of-dose wearing off" and unpredictable "on/off" episodes) in patients with advanced PD. •XADAGO® (safinamide) is a once-daily product indicated as adjunctive treatment to levodopa/carbidopa in patients with PD experiencing "off" episodes. •Osmolex ER® (amantadine) extended-release is a once-daily product for the treatment of PD and drug-induced extrapyramidal reactions in adult patients. •MYOBLOC® (rimabotulinumtoxinB injection) is a product indicated for the treatment of cervical dystonia and chronic sialorrhea in adults. It is the only botulinum toxin type B available on the market. Product Candidates The Company is also developing a pipeline of novel CNS product candidates for the treatment of various CNS conditions. The Company's product candidates in clinical development include the following: •SPN-830 (apomorphine infusion device) is a late-stage drug/device combination product candidate for the continuous treatment of motor fluctuations ("off" episodes) in PD patients that are not adequately controlled with oral levodopa and one or more adjunct PD medications. In October 2022, the FDA issued a Complete Response Letter (CRL) regarding the NDA for SPN-830. Refer to Note 17, Subsequent Events. •SPN-820 (NV-5138) is a first-in-class product candidate for treatment-resistant depression, currently in Phase II development. It is an orally active small molecule that directly activates brain mechanistic target of rapamycin complex 1 (mTORC1). •SPN-817 (huperzine A) is a novel product candidate for treatment-resistant seizures, currently in Phase I development. Adamas Acquisition and Reorganization On October 10, 2021, the Company entered into an Agreement and Plan of Merger by and among the Company, Adamas Pharmaceuticals, Inc. (Adamas) and Supernus Reef, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (Purchaser) (Adamas Agreement). On November 24, 2021 (the Closing Date), the Company completed its purchase of all of the outstanding equity of Adamas, pursuant to the Adamas Agreement dated October 10, 2021, and the Purchaser was merged with and into Adamas (the Merger), with Adamas continuing as the surviving corporation in the Merger as a wholly owned subsidiary of the Company (Adamas Acquisition). On the Closing Date, Adamas owned two marketed products: GOCOVRI (amantadine) extended-release capsules, the first and only FDA approved medicine indicated for the treatment of both "off" episodes and dyskinesia in patients with PD receiving levodopa-based therapy and as an adjunctive treatment to levodopa/carbidopa in patients with PD experiencing "off" episodes; and Osmolex ER (amantadine) extended-release tablets, approved for the treatment of PD and drug-induced extrapyramidal reactions in adult patients. Adamas also owns the right to receive royalties from Allergan plc for sales of Namzaric (memantine hydrochloride extended-release and donepezil hydrochloride) in the U.S. In the first quarter of 2022 and subsequent to the Adamas Acquisition, the Company completed a reorganization of the Adamas legal entities in an effort to obtain operational, legal and other benefits that also resulted in certain state tax efficiencies. The reorganization had no effect on the condensed consolidated financial statements other than certain state tax efficiencies. (See Note 12, Income Tax (Benefit) Expense.) COVID-19 Impact The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business operations and has assessed the impact of the COVID-19 pandemic on its condensed consolidated financial statements as of September 30, 2022. Since the situation surrounding the COVID-19 pandemic remains fluid and the duration uncertain, the long-term nature and extent of the impacts of the pandemic on the Company's business operations and financial position cannot be reasonably estimated at this time.
|
Summary of Significant Accounting Policies |
9 Months Ended |
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Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (SEC) for interim financial information. As permitted under Generally Accepted Accounting Principles in the United States (U.S. GAAP), certain notes and other information have been omitted from the interim unaudited condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these condensed consolidated financial statements should be read in conjunction with the Company’s most recent Annual Report on Form 10-K, for the year ended December 31, 2021, filed with the SEC. In management’s opinion, the condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows. The results of operations for any interim period are not necessarily indicative of the Company’s future quarterly or annual results. The Company, which is primarily located in the U.S., operates in one operating segment. Consolidation The Company's condensed consolidated financial statements include the accounts of Supernus Pharmaceuticals, Inc. and its wholly owned subsidiaries. These are collectively referred to herein as "Supernus" or "the Company." All significant intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements reflect the consolidation of entities in which the Company has a controlling financial interest. In determining whether there is a controlling financial interest, the Company considers if it has a majority of the voting interests of the entity, or if the entity is a variable interest entity (VIE) and if the Company is the primary beneficiary. In determining the primary beneficiary of a VIE, the Company evaluates whether it has both: the power to direct the activities of the VIE that most significantly impact the VIE's economic performance; and the obligation to absorb losses of, or the right to receive benefits from the VIE that could potentially be significant to that VIE. The Company's judgment with respect to its level of influence or control of an entity involves the consideration of various factors, including the form of an ownership interest; representation in the entity's governance; the size of the investment; estimates of future cash flows; the ability to participate in policymaking decisions; and the rights of the other investors to participate in the decision making process, including the right to liquidate the entity, if applicable. If the Company is not the primary beneficiary of the VIE, and an ownership interest is maintained in the entity, the interest is accounted for under the equity or cost methods of accounting, as appropriate. The Company continuously assesses whether it is the primary beneficiary of a VIE as changes to existing relationships or future transactions may affect its conclusions. Use of Estimates The Company bases its estimates on: historical experience; forecasts; information received from its service providers; information from other sources, including public and proprietary sources; and other assumptions that the Company believes are reasonable under the circumstances. Actual results could differ materially from the Company’s estimates. The Company periodically evaluates the methodologies employed in making its estimates. The extent to which the COVID-19 pandemic may directly or indirectly impact our business, financial condition and results of operations is highly uncertain and subject to change. As a result, certain of our estimates and assumptions, including the provision for sales deductions, the fair values of financial instruments and the recoverability of intangible assets, require increased judgment and carry a higher degree of variability and volatility that could result in material changes to our estimates in future periods. Advertising Expense Advertising expense includes the cost of promotional materials and activities, such as television, print media, digital marketing, marketing programs and speaker programs. The cost of the Company's advertising efforts are expensed as incurred. The Company incurred approximately $52.0 million and $112.8 million in advertising expense for the three and nine months ended September 30, 2022, respectively, and approximately $22.6 million and $59.7 million for the three and nine months ended September 30, 2021, respectively. These expenses are recorded as a component of Selling, general and administrative expenses in the condensed consolidated statements of earnings. Recently Issued Accounting Pronouncements Accounting Pronouncements Adopted Accounting Standards Update (ASU) 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity - The new standard, issued in August 2020, simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible debt instruments with cash conversion and beneficial conversion features. ASU 2020-06 eliminates requirements to separately account for liability and equity components of such convertible debt instruments and eliminates the ability to use the treasury stock method for calculating diluted earnings per share for convertible instruments whose principal amount may be settled in whole or in part with equity. Instead, ASU 2020-06 requires (i) the entire amount of the security to be presented as a liability on the balance sheet and (ii) application of the “if-converted” method for calculating diluted earnings per share. This new standard also removes certain settlement conditions required for equity contracts to qualify for the derivative scope exception. The Company adopted the new guidance as of January 1, 2022 using the modified retrospective method of transition which allows for a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result, the cumulative effect of the accounting change increased the carrying amount of the convertible notes, net by $20.6 million, increased retained earnings by $40.6 million, reduced additional paid-in capital by $56.2 million, and decreased deferred tax liabilities by $5.0 million as of January 1, 2022. In addition, the Company had an increase of 6.8 million in dilutive shares included in diluted weighted average shares of common stock outstanding for the purposes of calculating diluted earnings per share under the if-converted method. ASU 2021-10, Government Assistance (Topic 832) - The new standard, issued in November 2021, requires the disclosure of information about transactions with a government that are accounted for by applying a grant or contribution model by analogy. This could include various forms of government assistance, but excludes transactions in the scope of specific U.S. GAAP, such as tax incentives accounted for under Accounting Standards Codification (ASC) 740, Income Taxes. For transactions in the scope of the new standard, information about the nature of the transaction, including significant terms and conditions, as well as the amounts and specific financial statement line items affected by the transaction are required to be disclosed. This guidance is effective for fiscal years beginning after December 15, 2021 on a prospective basis. The adoption of the new standard as of January 1, 2022 did not have a material impact to the financial statements.
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Acquisition |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition Adamas Acquisition In connection with the Adamas Acquisition (see Note 1), the Company paid the Adamas shareholders $400.8 million and transferred two non-tradable contingent value rights (CVRs). Each CVR represents the contractual right to receive a contingent payment of $0.50 per share in cash, less any applicable withholding taxes and without interest, upon the achievement of the applicable milestone (each such amount, a Milestone Payment) in accordance with the terms of a Contingent Value Rights Agreement entered into between the Company and American Stock Transfer & Trust Company, LLC, as rights agent (CVR Agreement). One Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $150 million during any consecutive 12-month period ending on or before December 31, 2024 (Milestone 2024). Another Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $225 million during any consecutive 12-month period ending on or before December 31, 2025 (Milestone 2025 and, together with Milestone 2024, the Milestones). Each Milestone may only be achieved once. In connection with the two CVRs, the Company recorded contingent consideration liabilities of $10.3 million as of the date of the acquisition, to reflect the estimated fair value of the contingent consideration. The estimated fair values of the contingent consideration liabilities were determined using Monte Carlo simulations. The fair value measurements of the contingent consideration liabilities were determined based on significant unobservable inputs and thus represent Level 3 fair value measurements. The key assumptions considered include the estimated amount and timing of projected revenues, volatility, estimated discount rates and the risk-free interest rate. In each reporting period after the acquisition, the Company will revalue the contingent consideration liabilities and will record increases or decreases in the fair value of the liabilities in its consolidated statements of earnings. Changes in fair value will result from actual milestone achievement, as well as changes to forecasts. The inputs and assumptions may not be observable in the market, but they reflect the assumptions the Company believes would be made by a market participant. The possible outcomes for the contingent consideration range from $0 to $50.9 million on an undiscounted basis. The acquisition was accounted for as a business combination under the acquisition method of accounting, in accordance with ASC 805, Business Combinations. The excess of the purchase price over the fair value of the net assets acquired was recorded as goodwill. The estimated fair values of the assets acquired and liabilities assumed, including goodwill, have been included in the Company's consolidated financial statements since the acquisition Closing Date. The Company expects to finalize its purchase price allocation within one year of the Closing Date. In addition, the Company continues to analyze and assess relevant information necessary to determine, recognize and record at fair value the assets acquired and liabilities assumed. The activities the Company is currently undertaking include review and evaluation of the tax positions, and other tax-related matters. Accordingly, the preliminary recognition and measurement of assets acquired and liabilities assumed as of the Closing Date are subject to change. The following table presents the Company's preliminary estimates of the fair value of assets acquired and liabilities assumed as of the Closing Date and subsequent measurement period adjustments recorded (dollars in thousands):
(1) Measurement period adjustments reflect changes for the nine months ended September 30, 2022 based on information related to the facts and circumstances that existed as of the Closing Date. (2) Refinement of the estimate of fair value of the right of use asset associated with the acquired Adamas headquarters lease recorded in the first quarter of 2022. Refer to Note 13, Leases. (3) Represents tax impact for the changes in fair value estimate of the right of use asset and changes made to finalize the accounting of certain state tax attributes which existed at the opening balance sheet date. Acquired Inventory The estimated fair value of the inventory was determined using the comparative sales method, which estimated the expected sales price of the product, reduced by all costs expected to be incurred to complete or dispose of the inventory, as well as a profit on the sale. Acquired Intangible Assets The acquired intangible assets include the acquired developed technology and product rights to GOCOVRI and Osmolex ER, as well as the right to receive royalties from Allergan plc for sales of Namzaric. The Company determined the estimated fair values for the acquired intangible assets as of the Closing Date using the income approach. This is a valuation technique that provides an estimate of fair value of the assets, based on the market participant's expectations of the cash flows that the assets are forecasted to generate. The cash flows were discounted at a rate commensurate with the level of risk associated with its projected cash flows. The Company believes the assumptions are representative of those a market participant would use in estimating fair value. The fair value measurements of the acquired intangible assets were determined based on significant unobservable inputs and thus represent Level 3 fair value measurement. Some of the more significant inputs and assumptions used in the intangible assets valuation includes: the estimated future cash flows from product sales, the timing and projection of costs and expenses, discount rates and tax rates. Acquired intangible assets consist of developed technology and product rights and are amortized over their estimated useful lives on a straight-line basis. The following table summarizes the preliminary purchase price allocation and the average remaining useful lives for identifiable intangible assets (dollars in thousands):
Goodwill Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. Goodwill is primarily attributable to the anticipated cost synergies, additional growth platforms, and an expanded revenue base with the addition of the assets from the Adamas Acquisition. The goodwill is not expected to be deductible for tax purposes. Acquired Deferred Income Tax Liabilities, net The deferred income tax liabilities, net relates to the difference between the financial statement carrying amount and the tax basis of acquired intangible assets and inventory, partially offset by acquired net operating loss carryforwards and other temporary differences. The acquired federal and state net operating loss carryforwards are reduced by a valuation allowance for amounts that are not expected to be realizable in the future. The reported measurement period adjustment of $1.8 million for the nine months ended September 30, 2022 consisted of a reduction to deferred tax liabilities of $3.7 million recorded in the first quarter of 2022 and an increase to deferred tax liabilities of $1.9 million recorded in the third quarter of 2022. Revenue and Net Earnings of Adamas The operations of Adamas and its subsidiaries have been included in the Company's consolidated statements of earnings for the periods subsequent to the Closing Date. Pro Forma Information The following table presents the unaudited pro forma combined financial information for each of the periods presented, as if the Adamas Acquisition had occurred on January 1, 2020 (dollars in thousands):
The unaudited pro forma combined financial information is based on historical financial information and the Company's preliminary allocation of purchase price; therefore, it is subject to subsequent adjustment upon finalization of the purchase price allocation. In order to reflect the occurrence of the acquisition on January 1, 2020, the unaudited pro forma combined financial information reflects the recognition of additional amortization expense on intangible assets and estimated additional cost of products sold related to the inventory step-up adjustment; the estimated reduction in the Company's interest income generated from marketable securities that were liquidated to fund the purchase price of the Adamas Acquisition, and the estimated tax impact of the pro forma adjustments. The unaudited pro forma combined financial information should not necessarily be considered indicative of the results that would have occurred if the acquisition had been consummated on the assumed completion date, nor are they indicative of future results.
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Disaggregated Revenues |
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Disaggregation of Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregated Revenues | Disaggregated Revenues The following table summarizes the disaggregation of revenues by product or source (dollars in thousands):
______________________________ (1) Includes net product sales of MYOBLOC, XADAGO and Osmolex ER. Trokendi XR accounted for more than 40% of the Company’s total net product sales for both the three and nine months ended September 30, 2022, and 56% of the Company's total net product sales for both the three and nine months ended September 30, 2021, respectively. Each of our three major customers, AmerisourceBergen Drug Corporation, Cardinal Health, Inc. and McKesson Corporation, individually accounted for more than 25% of our total net product sales for both the nine months ended September 30, 2022 and 2021, and collectively accounted for more than 80% and 85% of our total net product sales for the nine months ended September 30, 2022 and 2021, respectively. Royalty revenues include noncash royalty revenues. The Company recognized noncash royalty revenue of $2.5 million and $7.2 million, for the three and nine months ended September 30, 2022, respectively. The Company recognized noncash royalty revenue of $2.4 million and $6.8 million, for the three and nine months ended September 30, 2021, respectively. Refer to Note 16, Commitments and Contingencies.
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Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Marketable Securities Unrestricted available-for-sale marketable securities held by the Company are as follows (dollars in thousands):
The contractual maturities of the unrestricted available-for-sale marketable securities held by the Company are as follows, (dollars in thousands):
As of September 30, 2022, there was no impairment due to credit loss on any available-for-sale marketable securities. Investment in Navitor Development Agreement In April 2020, the Company entered into a development agreement (the Development Agreement) with Navitor Pharmaceuticals, Inc. (Navitor Inc.). The Company can terminate the Development Agreement upon 30 days' notice. Under the terms of the Development Agreement, the Company and Navitor Inc. will jointly conduct a Phase II clinical program for NV-5138 (SPN-820) for treatment-resistant depression. The Company will bear all of the Phase I and Phase II development costs incurred by either party, up to a maximum of $50 million. In addition, the Company will incur certain other research and development support costs. There are certain additional payment amounts which could be incurred by the Company. These costs are contingent upon Navitor Inc. achieving defined development milestones. The Company has an option to acquire or license NV-5138 (SPN-820), for which additional payments would be required. Equity investment In addition to entering into the Development Agreement in April 2020, the Company acquired Series D Preferred Shares of Navitor Inc. for $15 million, representing an approximately 13% ownership position in Navitor Inc. In March 2021, Navitor Inc. underwent a legal restructuring. In the restructuring, Navitor Inc. became a wholly owned subsidiary of a newly formed limited liability company, Navitor Pharmaceuticals LLC (Navitor LLC), and the outstanding shares of stock in Navitor Inc. were exchanged for units of membership in Navitor LLC having equivalent rights and preferences (Navitor Restructuring). As part of the Navitor Restructuring, the Series D Preferred Shares previously held by the Company were exchanged for Series D Preferred Units in Navitor LLC. In addition, certain assets that did not relate to NV-5138 (SPN-820) were transferred from Navitor Inc. to a newly formed entity that became a separate, wholly owned subsidiary of Navitor LLC. The Company had determined that Navitor LLC is a VIE. The Company does not consolidate this VIE because the Company lacks the power to direct the activities that most significantly impact Navitor’s economic performance. Prior to the Navitor Restructuring, the investment was accounted for under the practical expedient allowed for equity securities without readily determinable fair value, which is cost minus impairment plus any changes in observable price changes from an orderly transaction of similar investments in Navitor Inc. Following the legal restructuring and exchange of the preferred shares for member equity units of Navitor LLC, the investment was accounted for under the equity method of accounting due to the Company's ability to exert significant influence over but not control the financial and operating decisions of Navitor LLC. As a result of the change from a cost method investment to an equity method investment, the Company was required to measure its investment initially in accordance with the guidance in ASC 805. The majority of the assets and liabilities recorded in Navitor LLC's financial statements represent working capital items and cash that are being used for research and development purposes and are significantly lower than the Company's investment in Navitor LLC, which created a significant basis difference for the Company's investment in the underlying net assets. The Company determined that substantially all of the fair value of the investment was attributable to a single in-process research and development (IPR&D) asset. As a result, Navitor LLC was not considered a business as defined in ASC 805. In the first quarter of 2021, the $15 million investment, which was previously recorded in Other assets in the condensed consolidated balance sheets, was expensed and recorded in Research and development expense in the condensed consolidated statements of earnings. The Company records its share of the results of Navitor LLC, a private company, on a quarter lag as the financial information of Navitor LLC is not available on a sufficiently timely basis for the Company to apply the equity method of accounting. In December 2021, Navitor LLC sold one of its subsidiaries and distributed cash to its members in accordance with each member's share of the proceeds from the sale. The Company received $12.9 million in December 2021 from Navitor LLC in connection with this sale. As the Company's policy is to record its share of the results in its equity method investment on a quarter lag as previously indicated, the Company recorded the cash amount received in Other current liabilities in the consolidated balance sheets as of December 31, 2021. In the first quarter of 2022, the Company determined its estimated share of Navitor LLC's year-end 2021 earnings and recorded a gain of $12.9 million in Interest and other income, net in the condensed consolidated statement of earnings. The maximum exposure to losses related to Navitor LLC is approximately $50 million for Phase I and Phase II development of NV-5138 (SPN-820), and the cost of other development and formulation activities provided by the Company. Subsequent to the Development Agreement entered into in 2020, no additional equity investment has been made or financing has been provided to Navitor LLC.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments and Contingent Consideration | Fair Value of Financial Instruments The fair value of an asset or liability represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between unrelated market participants. The Company reports the fair value of assets and liabilities using a three level measurement hierarchy that prioritizes the inputs used to measure fair value. The fair value hierarchy consists of the following three levels: •Level 1—Valuations based on unadjusted quoted prices in active markets that are accessible at measurement date for identical assets. •Level 2—Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and model-based valuations in which all significant inputs are observable in the market, either directly or indirectly (e.g., interest rates; yield curves). •Level 3—Valuations using significant inputs that are unobservable in the market and inputs that reflect the Company’s own assumptions. These are based on the best information available, including the Company’s own data. The fair value of the restricted marketable securities which are classified as Level 2 financial assets are recorded in Other assets on the condensed consolidated balance sheets. There have been no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy. Financial Assets and Liabilities Recorded at Fair Value on a Recurring Basis The Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis are as follows (dollars in thousands):
Other Financial Instruments The carrying amounts of other financial instruments, including accounts receivable, accounts payable, and accrued expenses, approximate fair value due to their short-term maturities. Financial Liabilities Recorded at Carrying Value The following table sets forth the carrying value and fair value of the Company's financial liabilities that are not carried at fair value (dollars in thousands):
The fair value has been estimated based on actual trading information, and quoted prices, both provided by bond traders. As discussed in Note 2, the Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method of transition resulting in an increase in the carrying amount of the debt by $20.6 million as of the adoption date. Refer to Note 2, Summary of Significant Accounting Policies, for further discussion of the accounting standard adoption.
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Contingent Consideration |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingent Consideration Disclosure | Contingent Consideration The Company's contingent consideration liabilities are related to the USWM Acquisition (as defined below) and the Adamas Acquisition. The contingent consideration liabilities are measured at fair value on a recurring basis using either a Monte Carlo simulation or the income approach. The Company classifies its contingent consideration liabilities as Level 3 fair value measurements based on the significant unobservable inputs used to estimate fair value. These reflect the inputs and assumptions the Company believes would be made by market participants. Changes in any of those inputs together or in isolation may result in significantly lower or higher fair value measurement. USWM Contingent Consideration On June 9, 2020 (the USWM Closing Date), the Company completed its acquisition of all the outstanding equity of USWM Enterprises, LLC (USWM Enterprises) (USWM Acquisition). The USWM Acquisition included potential additional contingent consideration payments of up to $230 million comprised of the following: •Regulatory and developmental milestones - gross contingent consideration of up to $130 million contingent upon achievement of regulatory and developmental milestones. This includes a $25 million milestone due upon the FDA acceptance of the SPN-830 NDA for review, which was paid in the first quarter of 2022. This milestone payment is reported under both financing and operating activities in the condensed consolidated statements of cash flows. Of the $25 million payment, $22.9 million represents the acquisition date fair value of the contingent consideration liability and was reported under cash flows from financing activities. The remaining $2.1 million represents the excess of the acquisition date fair value and was reported under cash flows from operating activities. The remaining $105 million is comprised of amounts due upon achievement of certain FDA's regulatory approval and commercial launch of SPN-830. This includes a $50 million milestone which has a time-based mechanism for full or partial payment. As of September 30, 2022, the achievement of this milestone is remote. The remaining $55 million, which does not have a time-based mechanism for payment, relates to the FDA's approval of the SPN-830 NDA and the subsequent commercial product launch. Refer to Note 1, Business Organization and Note 17, Subsequent Events. •Sales-based milestones consist of gross contingent consideration payments of up to $100 million related to future sales performance of the acquired USWM products. Of the $100 million sales-based contingent consideration, a $35 million milestone due upon the achievement of certain U.S. net product sales of APOKYN in 2021 was not achieved. The remaining $65 million relates to the achievement of certain net product sales of the acquired USWM products in 2022 and 2023. As of September 30, 2022, the Company assessed that the remaining sales-based milestones will not be achieved based on net sales projections. The change in fair value is reported on the condensed consolidated statement of earnings in Contingent consideration expense (gain). The key assumptions considered in estimating the fair value include the estimated probability and timing of milestone achievement, such as the probability and timing of obtaining regulatory approval, discount rate, the estimated revenue volatility and the estimated amount and timing of projected revenues from the acquired USWM products. The Company recorded a $0.4 million expense and a $2.4 million expense due to the change in fair value of the contingent consideration liabilities for the USWM milestones for the three and nine months ended September 30, 2022, respectively. The change in the fair value of contingent consideration for USWM milestones was primarily driven by the increase in estimated fair value of regulatory and developmental milestones due to passage of time and the accretion to the payout amount related to the milestone achieved in the first quarter of 2022. The Company recorded a $0.1 million expense and a $7.7 million gain due to the change in fair value of the contingent consideration liabilities for the USWM milestones for the three and nine months ended September 30, 2021, respectively. In the second quarter of 2021, the Company recorded a change in fair value of $7.7 million, which was primarily due to the write-down of the sales-based contingent consideration. The Company assessed that the sales-based milestones will not be achieved based on the revised net sales projections. Adamas Contingent Consideration As discussed in Note 3, Acquisition, the Adamas Acquisition included payment of two non-tradable contingent value rights (CVRs) each of which represents the contractual right to receive a contingent payment upon the achievement of the applicable aggregate worldwide net product sales of GOCOVRI. During the measurement period, changes in the fair value of contingent consideration related to the Adamas Acquisition are recorded against goodwill if such changes are related to facts and circumstances that existed at the acquisition date. In each reporting period after the acquisition, the Company remeasures the fair value of contingent consideration liabilities and records in its consolidated statements of earnings the increases or decreases in the fair value of the liabilities. The Company recorded a $0.1 million expense and a $0.5 million gain due to the change in fair value of the contingent consideration liabilities for the three and nine months ended September 30, 2022, respectively. The change in fair value was reported on the condensed consolidated statement of earnings in Contingent consideration expense (gain). The change in estimated fair value of contingent consideration for the sales-based Adamas milestones was primarily due to changes in market data and the passage of time. The key assumptions considered in estimating the fair value of the Adamas sales-based milestones include the estimated amount and timing of projected revenues, volatility, estimated discount rates and risk-free interest rate. Refer to Note 3, Acquisition, for further discussion of significant inputs and assumptions used in the valuation of the contingent consideration for the Adamas Acquisition. The following table provides a reconciliation of the beginning and ending balances related to the contingent consideration liabilities for the USWM Acquisition and Adamas Acquisition (dollars in thousands):
The following table provides the current and long-term portions related to the contingent consideration for the USWM Acquisition and Adamas Acquisition (dollars in thousands):
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Goodwill and Intangible Assets, Net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill The following table summarizes the changes in the carrying amount of goodwill (dollars in thousands):
Intangible Assets, Net The following table sets forth the gross carrying amounts and related accumulated amortization of intangibles assets and goodwill (dollars in thousands):
Patent defense costs are deferred legal fees incurred in conjunction with defending patents for Oxtellar XR and Trokendi XR. U.S. patents covering Oxtellar XR and Trokendi XR will expire no earlier than 2027. In regards to Trokendi XR, the Company entered into settlement agreements that allow third parties to enter the market by January 1, 2023, or earlier under certain circumstances. Amortization expense for intangible assets was approximately $20.6 million and $61.9 million for the three and nine months ended September 30, 2022, respectively, and approximately $6.0 million and $18.0 million for the three and nine months ended September 30, 2021, respectively. The increase in expense is primarily due to amortization of the acquired developed technology and product rights from the Adamas Acquisition. Anticipated annual amortization expense for intangible assets is estimated at $79.8 million each in both 2023 and 2024, $75.1 million in 2025, $74.9 million in 2026, and $73.2 million in 2027.
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Convertible Senior Notes Due 2023 |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Senior Notes Due 2023 | Convertible Senior Notes Due 2023 The 0.625% Convertible Senior Notes Due 2023 (2023 Notes), which were issued in March 2018, bear interest at an annual rate of 0.625%, payable semi-annually in arrears on April 1 and October 1 of each year. The 2023 Notes will mature on April 1, 2023, unless earlier converted or repurchased by the Company. The Company may not redeem the 2023 Notes at its option before maturity. The total principal amount of 2023 Notes is $402.5 million. We have reclassified the debt from long-term to current liabilities on our Condensed Consolidated Balance Sheet, as the debt matures in less than twelve months as of September 30, 2022. The 2023 Notes were issued pursuant to an Indenture between the Company and Wilmington Trust, National Association, as trustee. The Indenture includes customary terms and covenants, including certain events of default upon which the 2023 Notes may be due and payable immediately. The Indenture does not contain any financial or operating covenants, or any restrictions on the payment of dividends, the issuance of other indebtedness, or the issuance or repurchase of securities by the Company. Noteholders may convert their 2023 Notes at their option only in the following circumstances: (1) during any calendar quarter, if the last reported sale price per share of the Company's common stock for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including the last trading day of the immediately preceding calendar quarter, exceeds 130% of the conversion price, or a price of approximately $77.13 per share on such trading day; (2) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the "measurement period") in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company's common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company's common stock, as specified in the Indenture; and (4) at any time from and including October 1, 2022, until the close of business on the second scheduled trading day immediately before the maturity date. At its election, 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, based on the applicable conversion rate. The initial conversion rate is 16.8545 shares per $1,000 principal amount of the 2023 Notes, which represents an initial conversion price of approximately $59.33 per share and is subject to adjustment as specified in the Indenture. In the event of conversion, if converted in cash, the holders would forgo all future interest payments, any unpaid accrued interest, and the possibility of further stock price appreciation. If a “make-whole fundamental change,” as defined in the Indenture occurs, then the Company will in certain circumstances increase the conversion rate for a specified period of time. If a “fundamental change,” as defined in the Indenture occurs, then noteholders may require the Company to repurchase their 2023 Notes at a cash repurchase price equal to the principal amount of the 2023 Notes to be repurchased, plus accrued and unpaid interest, if any. Contemporaneous with the issuance of the 2023 Notes, the Company also entered into separate privately negotiated convertible note hedge transactions (collectively, the Convertible Note Hedge Transactions) with each of the call spread counterparties. The Company issued 402,500 convertible note hedge options. In the event that shares or cash are deliverable to holders of the 2023 Notes upon conversion at limits defined in the Indenture, counterparties to the convertible note hedges will be required to deliver up to approximately 6.8 million shares of the Company’s common stock, or to pay cash to the Company in a similar amount as the value that the Company delivers to the holders of the 2023 Notes, based on a conversion price of $59.33 per share. Concurrently with entering into the Convertible Note Hedge Transactions, the Company also entered into separate privately negotiated warrant transactions (collectively, the Warrant Transactions) with each of the call spread counterparties. The Company issued a total of 6,783,939 warrants. The warrants entitle the holder to one share per warrant. The strike price of the Warrant Transactions will initially be $80.91 per share of the Company’s common stock, and is subject to adjustment. The Convertible Note Hedge Transactions are expected to reduce the potential dilution of the Company’s common stock upon conversion of the 2023 Notes, and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2023 Notes, as the case may be. The Warrant Transactions were intended to partially offset the cost to the Company of the purchased Convertible Note Hedge Transactions; however, the Warrant Transactions could have a dilutive effect with respect to the Company’s common stock, to the extent that the market price per share of the Company’s common stock, as measured under the terms of the Warrant Transactions, exceeds the strike price of the warrants. The liability component of the 2023 Notes consists of the following (dollars in thousands):
As discussed in Note 2, the Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method of transition resulting in an increase in the carrying amount of the debt by $20.6 million as of the adoption date. Refer to Note 2, Summary of Significant Accounting Policies, for further discussion of the accounting standard adoption. No 2023 Notes were converted as of September 30, 2022 or December 31, 2021.
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Share-Based Payments |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payments | Share-Based Payments Share-based compensation expense is as follows (dollars in thousands):
Stock Option and Stock Appreciation Rights The following table summarizes stock option and stock appreciation rights (SAR) activities:
Restricted Stock Units The following table summarizes restricted stock unit (RSU) activities:
There were no forfeited RSU awards during the nine months ended September 30, 2022. Performance Share Units The following table summarizes performance share unit (PSU) activities:
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Earnings per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per Share The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method of transition. ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share, whereas the Company previously calculated diluted earnings per share under the treasury stock method. Basic earnings per share (EPS) is calculated using the weighted average number of common shares outstanding. Diluted EPS is calculated using the weighted average number of common shares outstanding, including the dilutive effect of the Company’s stock option grants, SARs, RSUs, employee stock purchase plan (ESPP) awards, and the 2023 Notes, as determined per the if-converted method for the three and nine months ended September 30, 2022 in connection with the adoption of ASU 2020-06 and the treasury stock method for the three and nine months ended September 30, 2021. Effect of Convertible Notes and Related Convertible Note Hedges and Warrants In connection with the issuance of the 2023 Notes, the Company entered into Convertible Note Hedge and Warrant Transactions as described further in Note 9, Convertible Senior Notes Due 2023. The expected collective impact of the Convertible Note Hedge and Warrant Transactions is to reduce the potential dilution that would occur if the price of the Company's common stock was between the conversion price of $59.33 per share and the strike price of the warrants of $80.91 per share. Diluted EPS related to the 2023 Notes in the current year is calculated using the if-converted method. The number of dilutive shares is based on the initial conversion rate associated with the 2023 Notes. The Convertible Note Hedge and Warrant Transactions are excluded in the calculation of diluted EPS because inclusion would be anti-dilutive. Specifically, the denominator of the diluted EPS calculation excludes the additional shares related to the warrants because the average price of the Company's common stock was less than the strike price of the warrants of $80.91 per share. Prior to actual conversion, the Convertible Note Hedge Transactions are not considered in calculating diluted earnings per share, as their impact would be anti-dilutive. In addition to the above described effect of the 2023 Notes and the related Convertible Note Hedge and Warrant Transactions, the Company also excluded the common stock equivalents of the following outstanding stock-based awards and shares associated with the conversion of the 2023 Notes in the calculation of diluted EPS, because their inclusion would be anti-dilutive: As mentioned in Note 2, as a result of the adoption of ASU 2020-06 on January 1, 2022 the Company calculated diluted earnings per share using the if-converted method. The 6.8 million in dilutive shares associated with the conversion of the 2023 Notes are not included in diluted weighted average shares of common stock outstanding for the purposes of calculating diluted earnings per share for the three months ended September 30, 2022 because their inclusion would be anti-dilutive. The 6.8 million in dilutive shares associated with the conversion of the 2023 Notes are included in diluted weighted average shares of common stock outstanding for the purposes of calculating diluted earnings per share for the nine months ended September 30, 2022. For the three and nine months ended September 30, 2021, the Company calculated diluted earnings per share using the treasury stock method wherein the shares associated with the conversion of the 2023 Notes were excluded as the Company assumed the 2023 Notes would be settled entirely or partly in cash.The following table sets forth the computation of basic and diluted net earnings per share for the three and nine months ended September 30, 2022 under the if-converted method and for the three and nine months ended September 30, 2021 under the treasury stock method (dollars in thousands, except share and per share amounts):
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Income Tax (Benefit) Expense |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax (Benefit) Expense | Income Tax (Benefit) Expense The following table provides information regarding the Company’s income tax (benefit) expense for the three and nine months ended September 30, 2022 and 2021 (dollars in thousands):
The decrease in income tax expense for the three months ended September 30, 2022 compared to the same period in prior year was primarily due to lower earnings before income taxes. The change in effective tax rate for the three months ended September 30, 2022 compared to the same period in prior year was primarily due to larger excess tax benefits of stock-based awards in 2022. The change in income tax (benefit) expense and effective tax rate for the nine months ended September 30, 2022 compared to the same period in the prior year was primarily due to tax benefits associated with the Adamas legal entities reorganization in the first quarter of 2022.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Office Space and Fleet Vehicle Leases The Company has operating leases for its headquarters lease, certain other office space, and its fleet vehicles. With respect to the fleet vehicle leases, given the volume of individual leases involved in the overall arrangement, the Company applies a portfolio approach to effectively account for the operating lease assets and liabilities. The Company also elected to combine the lease and non-lease components for the fleet vehicles and headquarters leases. The Company's headquarters lease commenced on February 1, 2019 (the Commencement Date) and will continue until April 30, 2034, unless earlier terminated in accordance with the terms of the lease. The lease includes options to extend the lease for up to 10 years. As part of the Adamas Acquisition, the Company acquired a lease for office space. Adamas' operating lease for the office space term will continue until April 30, 2025. The lease contains an option to extend the term for one additional five-year period. During a measurement period, changes in fair value due to measurement period adjustments are recorded against goodwill. The Company recorded in the first quarter of 2022 a measurement period adjustment associated with the valuation of the acquired Adamas lease which decreased the fair value estimate of the operating lease right of use asset by $1.6 million. Refer to Note 3, Acquisition. Contract Manufacturing Lease The Company has a contract manufacturing agreement with Merz Pharma GmbH & Co. KGaA (Merz), for the manufacture and supply of rimabotulinumtoxinB finished products (Merz Agreement). The Merz Agreement will expire in July 2027 unless the Company and Merz mutually agree to extend the terms. The Merz Agreement may not be terminated for convenience. Under the terms of the agreement, the Company is required to purchase a minimum quantity of MYOBLOC finished products on an annual basis. This minimum purchase requirement represents the in-substance fixed contract consideration associated with the dedicated manufacturing facility which the Company accounts for as an embedded lease. The Company made an accounting policy election, by class of underlying asset, to not combine lease and non-lease components for the manufacturing facility. A portion of the in-substance fixed contract consideration was allocated to the lease component based on the stand-alone selling price. Accordingly, the Company classifies and accounts for the embedded lease as an operating lease. Operating lease assets and lease liabilities as reported on the condensed consolidated balance sheets are as follows (dollars in thousands):
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Composition of Other Balance Sheet Items |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition of Other Balance Sheet Items | Composition of Other Balance Sheet ItemsThe following details the composition of other balance sheet items (dollars in thousands for amounts in tables): Accounts Receivables, Net As of September 30, 2022 and December 31, 2021, the Company has recorded allowances reducing accounts receivable by approximately $12.8 million and $13.5 million, respectively. These allowances represent prompt pay discounts and contractual service fees, which were originally recorded as a reduction to revenues, representing estimated amounts not expected to be paid by our customers. The Company's customers are primarily pharmaceutical wholesalers and distributors and specialty pharmacies. Inventories, Net
Inventories as of September 30, 2022 include acquired inventory from the Adamas Acquisition. Refer to Note 3, Acquisition, for further discussion of the acquisition. Property and Equipment, Net
Depreciation and amortization expense on property and equipment was approximately $0.8 million and $2.2 million for the three and nine months ended September 30, 2022, respectively, and approximately $0.6 million and $1.9 million for the three and nine months ended September 30, 2021, respectively. The Company retired certain fully depreciated property and equipment in the nine months ended September 30, 2022. Accounts Payable and Accrued Liabilities
_______________________________ (1) Refer to Note 16, Commitments and Contingencies. (2) Includes preclinical and all clinical trial-related costs. (3) Refer to Note 13, Leases. Accrued Product Returns and Rebates
Other Liabilities
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Interest Expense |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Expense | Interest Expense The following details the composition of interest expense (dollars in thousands):
For the three and nine months ended September 30, 2022, interest expense includes noncash interest expense related to amortization of deferred financing costs of $0.5 million and $1.6 million. For the three and nine months ended September 30, 2021, interest expense includes noncash interest expense related to amortization of deferred financing costs and amortization of the debt discount on the 2023 Notes of $4.4 million and $13.0 million. As discussed in Note 2, Summary of Significant Accounting Policies, the Company adopted ASU 2020-06 on January 1, 2022. As a result, interest expense for the three and nine months ended September 30, 2022 significantly decreased compared to the three and nine months ended September 30, 2021 due to the Company no longer recording interest expense on the previously recorded discount for the embedded conversion feature on the 2023 Notes.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Product Licenses The Company has obtained exclusive licenses from third parties for proprietary rights to support the product candidates in the Company's CNS portfolio. Under these license agreements, the Company may be required to pay certain amounts upon the achievement of defined milestones. If these products are ultimately commercialized, the Company is also obligated to pay royalties to third parties, computed as a percentage of net product sales, for each respective product under a license agreement. Through the USWM Acquisition, the Company acquired licensing agreements with other pharmaceutical companies for APOKYN, XADAGO, and MYOBLOC. The Company is obligated to pay royalties to third parties, computed as a percentage of net product sales, for each of the products under the respective license agreements. The royalty expense incurred for these acquired products is recognized as Cost of goods sold in the condensed consolidated statements of earnings. Royalty Agreement In the third quarter of 2014, the Company received $30 million pursuant to a Royalty Interest Acquisition Agreement related to the purchase by HC Royalty of certain of the Company's rights under the Company's agreement with United Therapeutics related to the commercialization of Orenitram (treprostinil) Extended-Release Tablets. Full ownership of the royalty rights will revert to the Company if and when a certain cumulative payment threshold is reached (see Note 4, Note 14, and Note 15). USWM Enterprises Commitments Assumed As part of the USWM Acquisition, the Company assumed the remaining commitments of USWM Enterprises and its subsidiaries, which are discussed below. The Company assumed the annual minimum purchase requirement of MYOBLOC, amounting to an estimated €3.9 million annually, under the contract manufacturing agreement with Merz for manufacture and supply. Refer to Note 13, Leases for further discussion related to the Merz Agreement in connection with the MYOBLOC annual minimum purchase requirement. In addition, USWM Enterprises had an existing license and distribution agreement for XADAGO. This included an annual minimum promotional spend to support the marketing of XADAGO for the first five years of the agreement which will end in 2022. As of September 30, 2022, there is no remaining contractual commitment. In March 2019, MDD US Operations, LLC (formerly US WorldMeds, LLC) and its subsidiary, Solstice Neurosciences, LLC (US) (collectively, the MDD Subsidiaries) entered into a Corporate Integrity Agreement (CIA) with the Office of Inspector General of the U.S. Department of Health and Human Services. Under the CIA, the MDD Subsidiaries agreed to and paid $17.5 million to resolve U.S. Department of Justice allegations that it violated the False Claims Act and committed to the establishment and ongoing maintenance of an effective compliance program. The fine was paid by the MDD Subsidiaries prior to closing of the USWM Acquisition. As part of the USWM Acquisition, the Company assumed the obligations of the CIA and could become liable for payment of certain stipulated monetary penalties in the event of any CIA violations. In addition, the Company will continue to maintain a broad array of processes, policies and procedures necessary to comply with the CIA through March 2024. Data Breach-related Contingency On November 24, 2021, the Company announced that it was the target of a ransomware attack. The attack had no significant impact on our business and did not cause any long-term disruption to our operations. Based on its internal investigation, the Company believes the criminal ransomware groups ("criminal groups") copied certain data from the Company's systems, encrypted certain data on the Company's systems, and then deployed malware designed to impede access to the Company's systems. Thereafter the criminal groups contacted the Company and threatened to publish certain data copied from the Company's systems. Upon detection of the ransomware attack, the Company notified government authorities, engaged third-party cybersecurity experts through our outside counsel, and commenced its recovery process. The Company maintains redundant off-site data backups, which were verified to have not been compromised by the ransomware attack and were utilized to restore the data encrypted by the criminal groups. In the fourth quarter of 2021, the Company had successfully recovered the impacted files and took additional steps designed to further protect its networks and files. Furthermore, while the Company has not been the subject of any legal proceedings involving the attack, the likelihood that the Company could be the subject of claims from persons alleging they suffered damages from the incident or actions by governmental authorities is possible, but the amount of such fines, penalties or costs, if any, cannot be estimated at this time. The Company continues to monitor the situation. Claims and Litigation From time to time, the Company may be involved in various claims, litigation and legal proceedings. These matters may involve patent litigation, product liability and other product-related litigation, commercial and other matters, and government investigations, among others. On a quarterly basis, the Company reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated, the Company will accrue a liability for the estimated loss. Because of uncertainties related to claims, legal proceedings and litigation, accruals will be based on the Company's best estimates based on available information. The Company does not believe that any of these matters will have a material adverse effect on our financial position. The Company may reassess the potential liability related to these matters and may revise these estimates. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters will adversely affect the Company, its results of operations, financial condition and cash flows. NAMENDA XR/Namzaric Qui Tam Litigation On April 1, 2019, Adamas was served with a complaint filed in the United States District Court for the Northern District of California (the District Court) (Case No. 3:18-cv-03018-JCS) against it and several Allergan entities alleging violations of federal and state false claims acts (FCA) in connection with the commercialization of NAMENDA XR and Namzaric by Allergan. The lawsuit is a qui tam complaint brought by an individual, asserting rights of the federal government and various state governments. The lawsuit was originally filed in May 2018 under seal, and Adamas became aware of the lawsuit when it was served. The complaint alleges that patents held by Allergan and Adamas covering NAMENDA XR and Namzaric were procured through fraud on the United States Patent and Trademark Office and that these patents were asserted against potential generic manufacturers of NAMENDA XR and Namzaric to prevent the generic manufacturers from entering the market, thereby wrongfully excluding generic competition resulting in artificially high price being charged to government payors. Adamas' patents in question were licensed exclusively to Forest Laboratories Holdings Limited. The complaint includes a claim for damages of "potentially more than $2.5 billion dollars," treble damages and statutory penalties. To date the federal and state governments have declined to intervene in this action. This case is currently stayed pending Adamas's and Allergan's interlocutory appeal of the District Court's December 11, 2020 order denying Adamas's and Allergan's motion to dismiss the complaint. The appeal is pending in the United States Court of Appeals for the Ninth Circuit (Case No. 21-80005). Argument was held on January 10, 2022. On August 25, 2022, the Ninth Circuit sided with the defendants by reversing the District Court’s public disclosure bar rulings and remanding the case back to the District Court to decide certain issues in the first instance. On October 11, 2022, the plaintiff filed a petition for rehearing with the Ninth Circuit. The petition remains pending. No decision has been reached as of the date of this filing. The Company intends to defend itself vigorously. However, the Company can offer no assurances that it will be successful in a litigation.
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Subsequent Events |
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Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events SPN-830 Regulatory Development In December 2021, we resubmitted the NDA for SPN-830 to the FDA. In February 2022, we received a notice from the FDA that the resubmission of the NDA for SPN-830 is considered as a Standard Review, thereby was assigned a PDUFA target action date in early October 2022. In October 2022, the FDA issued a CRL regarding the NDA for SPN-830. The CRL requires additional information and analysis related to the infusion device and drug product across several areas of the NDA including, but not limited to, labeling, product quality and manufacturing, device performance and risk analysis. In addition, the FDA mentions that approval of the NDA requires inspections that could not be completed in a timely manner due to COVID-19 travel restrictions. The CRL does not request additional efficacy and safety clinical studies. The FDA has made an initial determination that the amendment to the Company’s application in response to the CRL will be subject to a Class 2, or six-month, review timeline. The Company is in the process of analyzing the CRL and determining next steps for the resubmission of the NDA. While it is too early to ascertain the full impact to our financial statements, we anticipate that we may identify indicators of impairment for the IPR&D asset that represents an estimate of the fair value of SPN-830, the product candidate, that could result from the non-approval of the NDA. The potential adjustment to the IPR&D asset that may be necessary as a result of any required interim impairment analysis may be material. Additionally, the Company also expects to assess adjustments to the fair value of the contingent consideration arrangements which includes milestones payments due upon achievement of certain FDA's regulatory approval and commercial launch of SPN-830. While we are unable to estimate the anticipated financial impact at this time, we expect potential adjustments, which may be material, will be recognized and reported within the fourth quarter of 2022. These adjustments could impact the Company’s future results of operations and financial condition. APOKYN Litigation On October 3, 2022, Sage Chemical, Inc. and TruPharma, LLC filed a lawsuit in the United States District Court for the District of Delaware (Case No. 22-cv-1302) alleging that Supernus Pharmaceuticals, Inc., Britannia Pharmaceuticals Limited, and US WorldMeds Partners, LLC violated state and federal antitrust law in connection with APOKYN. The Company is currently reviewing the details of the complaint and will respond as appropriate.
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Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (SEC) for interim financial information. As permitted under Generally Accepted Accounting Principles in the United States (U.S. GAAP), certain notes and other information have been omitted from the interim unaudited condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these condensed consolidated financial statements should be read in conjunction with the Company’s most recent Annual Report on Form 10-K, for the year ended December 31, 2021, filed with the SEC. In management’s opinion, the condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows. The results of operations for any interim period are not necessarily indicative of the Company’s future quarterly or annual results. The Company, which is primarily located in the U.S., operates in one operating segment.
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Consolidation | Consolidation The Company's condensed consolidated financial statements include the accounts of Supernus Pharmaceuticals, Inc. and its wholly owned subsidiaries. These are collectively referred to herein as "Supernus" or "the Company." All significant intercompany transactions and balances have been eliminated in consolidation. The consolidated financial statements reflect the consolidation of entities in which the Company has a controlling financial interest. In determining whether there is a controlling financial interest, the Company considers if it has a majority of the voting interests of the entity, or if the entity is a variable interest entity (VIE) and if the Company is the primary beneficiary. In determining the primary beneficiary of a VIE, the Company evaluates whether it has both: the power to direct the activities of the VIE that most significantly impact the VIE's economic performance; and the obligation to absorb losses of, or the right to receive benefits from the VIE that could potentially be significant to that VIE. The Company's judgment with respect to its level of influence or control of an entity involves the consideration of various factors, including the form of an ownership interest; representation in the entity's governance; the size of the investment; estimates of future cash flows; the ability to participate in policymaking decisions; and the rights of the other investors to participate in the decision making process, including the right to liquidate the entity, if applicable. If the Company is not the primary beneficiary of the VIE, and an ownership interest is maintained in the entity, the interest is accounted for under the equity or cost methods of accounting, as appropriate. The Company continuously assesses whether it is the primary beneficiary of a VIE as changes to existing relationships or future transactions may affect its conclusions.
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Use of Estimates | Use of Estimates The Company bases its estimates on: historical experience; forecasts; information received from its service providers; information from other sources, including public and proprietary sources; and other assumptions that the Company believes are reasonable under the circumstances. Actual results could differ materially from the Company’s estimates. The Company periodically evaluates the methodologies employed in making its estimates. The extent to which the COVID-19 pandemic may directly or indirectly impact our business, financial condition and results of operations is highly uncertain and subject to change. As a result, certain of our estimates and assumptions, including the provision for sales deductions, the fair values of financial instruments and the recoverability of intangible assets, require increased judgment and carry a higher degree of variability and volatility that could result in material changes to our estimates in future periods.
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Advertising Expense | Advertising Expense Advertising expense includes the cost of promotional materials and activities, such as television, print media, digital marketing, marketing programs and speaker programs. The cost of the Company's advertising efforts are expensed as incurred. The Company incurred approximately $52.0 million and $112.8 million in advertising expense for the three and nine months ended September 30, 2022, respectively, and approximately $22.6 million and $59.7 million for the three and nine months ended September 30, 2021, respectively. These expenses are recorded as a component of Selling, general and administrative expenses in the condensed consolidated statements of earnings.
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Accounting Pronouncements Adopted Accounting Standards Update (ASU) 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity - The new standard, issued in August 2020, simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible debt instruments with cash conversion and beneficial conversion features. ASU 2020-06 eliminates requirements to separately account for liability and equity components of such convertible debt instruments and eliminates the ability to use the treasury stock method for calculating diluted earnings per share for convertible instruments whose principal amount may be settled in whole or in part with equity. Instead, ASU 2020-06 requires (i) the entire amount of the security to be presented as a liability on the balance sheet and (ii) application of the “if-converted” method for calculating diluted earnings per share. This new standard also removes certain settlement conditions required for equity contracts to qualify for the derivative scope exception. The Company adopted the new guidance as of January 1, 2022 using the modified retrospective method of transition which allows for a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result, the cumulative effect of the accounting change increased the carrying amount of the convertible notes, net by $20.6 million, increased retained earnings by $40.6 million, reduced additional paid-in capital by $56.2 million, and decreased deferred tax liabilities by $5.0 million as of January 1, 2022. In addition, the Company had an increase of 6.8 million in dilutive shares included in diluted weighted average shares of common stock outstanding for the purposes of calculating diluted earnings per share under the if-converted method. ASU 2021-10, Government Assistance (Topic 832) - The new standard, issued in November 2021, requires the disclosure of information about transactions with a government that are accounted for by applying a grant or contribution model by analogy. This could include various forms of government assistance, but excludes transactions in the scope of specific U.S. GAAP, such as tax incentives accounted for under Accounting Standards Codification (ASC) 740, Income Taxes. For transactions in the scope of the new standard, information about the nature of the transaction, including significant terms and conditions, as well as the amounts and specific financial statement line items affected by the transaction are required to be disclosed. This guidance is effective for fiscal years beginning after December 15, 2021 on a prospective basis. The adoption of the new standard as of January 1, 2022 did not have a material impact to the financial statements.
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Acquisition (Tables) |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of recognized identified assets acquired and liabilities assumed | The following table presents the Company's preliminary estimates of the fair value of assets acquired and liabilities assumed as of the Closing Date and subsequent measurement period adjustments recorded (dollars in thousands):
(1) Measurement period adjustments reflect changes for the nine months ended September 30, 2022 based on information related to the facts and circumstances that existed as of the Closing Date. (2) Refinement of the estimate of fair value of the right of use asset associated with the acquired Adamas headquarters lease recorded in the first quarter of 2022. Refer to Note 13, Leases. (3) Represents tax impact for the changes in fair value estimate of the right of use asset and changes made to finalize the accounting of certain state tax attributes which existed at the opening balance sheet date.
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Finite-lived and indefinite-lived intangible assets acquired as part of business combination | The following table summarizes the preliminary purchase price allocation and the average remaining useful lives for identifiable intangible assets (dollars in thousands):
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Business acquisition, pro forma information | The following table presents the unaudited pro forma combined financial information for each of the periods presented, as if the Adamas Acquisition had occurred on January 1, 2020 (dollars in thousands):
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Disaggregated Revenues (Tables) |
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Disaggregation of Revenue [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of disaggregation of revenues by nature | The following table summarizes the disaggregation of revenues by product or source (dollars in thousands):
______________________________ (1) Includes net product sales of MYOBLOC, XADAGO and Osmolex ER.
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Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of unrestricted available-for-sale marketable securities | Unrestricted available-for-sale marketable securities held by the Company are as follows (dollars in thousands):
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Schedule of contractual maturities of the unrestricted available-for-sale marketable securities held | The contractual maturities of the unrestricted available-for-sale marketable securities held by the Company are as follows, (dollars in thousands):
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Fair Value of Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of the financial assets and liabilities | The Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis are as follows (dollars in thousands):
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Schedule of financial liabilities that are not carried at fair value | The following table sets forth the carrying value and fair value of the Company's financial liabilities that are not carried at fair value (dollars in thousands):
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Contingent Consideration (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of the beginning and ending balances related to the contingent consideration | The following table provides a reconciliation of the beginning and ending balances related to the contingent consideration liabilities for the USWM Acquisition and Adamas Acquisition (dollars in thousands):
The following table provides the current and long-term portions related to the contingent consideration for the USWM Acquisition and Adamas Acquisition (dollars in thousands):
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Goodwill and Intangible Assets, Net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill (dollars in thousands):
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Schedule of intangible assets and goodwill | The following table sets forth the gross carrying amounts and related accumulated amortization of intangibles assets and goodwill (dollars in thousands):
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Convertible Senior Notes Due 2023 (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of liability component of 2023 Notes | The liability component of the 2023 Notes consists of the following (dollars in thousands):
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Share-Based Payments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share-based compensation expense | Share-based compensation expense is as follows (dollars in thousands):
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Summary of stock options and SAR activities | The following table summarizes stock option and stock appreciation rights (SAR) activities:
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Summary of restricted stock units | The following table summarizes restricted stock unit (RSU) activities:
There were no forfeited RSU awards during the nine months ended September 30, 2022.
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Summary of performance stock unit | The following table summarizes performance share unit (PSU) activities:
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Earnings per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of common stock equivalents excluded in the calculation of diluted earnings per share | In addition to the above described effect of the 2023 Notes and the related Convertible Note Hedge and Warrant Transactions, the Company also excluded the common stock equivalents of the following outstanding stock-based awards and shares associated with the conversion of the 2023 Notes in the calculation of diluted EPS, because their inclusion would be anti-dilutive:
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Schedule of computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted net earnings per share for the three and nine months ended September 30, 2022 under the if-converted method and for the three and nine months ended September 30, 2021 under the treasury stock method (dollars in thousands, except share and per share amounts):
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Income Tax (Benefit) Expense (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of income tax expense at the U.S Federal statutory income tax rate to the entity's effective income tax rate | The following table provides information regarding the Company’s income tax (benefit) expense for the three and nine months ended September 30, 2022 and 2021 (dollars in thousands):
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of balance sheet information related to leases | Operating lease assets and lease liabilities as reported on the condensed consolidated balance sheets are as follows (dollars in thousands):
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Composition of Other Balance Sheet Items (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventories | Inventories, Net
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Schedule of property and equipment | Property and Equipment, Net
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Schedule of accounts payable and accrued liabilities | Accounts Payable and Accrued Liabilities
_______________________________ (1) Refer to Note 16, Commitments and Contingencies. (2) Includes preclinical and all clinical trial-related costs. (3) Refer to Note 13, Leases.
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Schedule of accrued product returns and rebates | Accrued Product Returns and Rebates
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Other liabilities | Other Liabilities
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Interest Expense (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of interest expense | The following details the composition of interest expense (dollars in thousands):
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Business Organization (Details) |
Nov. 24, 2021
marketedProduct
|
---|---|
Adamas Pharmaceuticals | |
Business Acquisition [Line Items] | |
Number of established marketed products | 2 |
Summary of Significant Accounting Policies - Basis of Presentation (Details) |
9 Months Ended |
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Sep. 30, 2022
segment
| |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Summary of Significant Accounting Policies - Advertising Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
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Accounting Policies [Abstract] | ||||
Advertising costs | $ 52.0 | $ 22.6 | $ 112.8 | $ 59.7 |
Acquisition - Components of Intangible Assets and Estimated Useful Lives (Details) - Adamas Pharmaceuticals - USD ($) $ in Thousands |
Jan. 01, 2020 |
Nov. 24, 2021 |
---|---|---|
Business Acquisition [Line Items] | ||
Intangibles | $ 450,100 | |
Acquired developed technology and product rights | ||
Business Acquisition [Line Items] | ||
Intangibles | $ 450,100 | |
Acquired developed technology and product rights | Minimum | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible asset, useful life | 3 years 1 month 6 days | |
Acquired developed technology and product rights | Maximum | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible asset, useful life | 8 years 1 month 6 days |
Acquisition - Pro Forma Information (Details) - Adamas Pharmaceuticals - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2021 |
Sep. 30, 2021 |
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Business Acquisition [Line Items] | ||
Pro forma total revenues | $ 174,360 | $ 487,904 |
Pro forma net loss | $ (10,405) | $ (30,905) |
Investments - Unrestricted Marketable Securities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Amortized cost | $ 417,576 | $ 253,301 |
Gross unrealized gains | 0 | 2,349 |
Gross unrealized losses | (5,342) | (238) |
Total fair value | $ 412,234 | $ 255,412 |
Investments - Contractual Maturities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Less than 1 year | $ 280,297 | |
1 year to 2 years | 104,346 | |
2 years to 3 years | 27,591 | |
3 years to 4 years | 0 | |
Greater than 4 years | 0 | |
Total | $ 412,234 | $ 255,412 |
Investments - Narrative (Details) - USD ($) |
1 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2021 |
Apr. 30, 2020 |
Sep. 30, 2022 |
Mar. 31, 2021 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Debt securities, available-for-sale, excluding accrued interest, allowance for credit loss, not previously recorded | $ 0 | |||
Variable Interest Entity [Line Items] | ||||
Cash distributions received | $ 12,900,000 | |||
Navitor Pharmaceuticals, Inc. | Variable Interest Entity, Not Primary Beneficiary | ||||
Variable Interest Entity [Line Items] | ||||
Agreement termination notice period | 30 days | |||
Threshold for development costs payments | $ 50,000,000 | |||
Investments | $ 15,000,000 | $ 15,000,000 | ||
VIE, qualitative or quantitative information, ownership percentage | 13.00% |
Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Jan. 01, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Accounting Standards Update 2020-06 | |||
Fair value of financial instruments | |||
Long-term debt | $ 20,600 | ||
Recurring | |||
Fair value of financial instruments | |||
Total assets at fair value | $ 524,190 | $ 459,476 | |
Recurring | Level 3 | |||
Fair value of financial instruments | |||
Total assets at fair value | $ 0 | $ 0 |
Fair Value of Financial Instruments- Financial Instruments (Details) - Level 2 - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair value of financial instruments | ||
Carrying Value | $ 401,438 | $ 379,252 |
Fair Value (Level 2) | $ 392,438 | $ 400,236 |
Goodwill and Intangible Assets, Net - Schedule of Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
Balance as of December 31, 2021 | $ 117,516 |
Goodwill, adjustments | (133) |
Balance as of September 30, 2022 (unaudited) | $ 117,383 |
Goodwill and Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 20,644 | $ 6,009 | $ 61,932 | $ 17,964 |
2023 | 79,800 | 79,800 | ||
2024 | 79,800 | 79,800 | ||
2025 | 75,100 | 75,100 | ||
2026 | 74,900 | 74,900 | ||
2027 | 73,200 | 73,200 | ||
Developed Technology Rights and Patent Defense Costs | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 20,600 | $ 6,000 | $ 61,900 | $ 18,000 |
Convertible Senior Notes Due 2023 - Summary of liability component of 2023 Notes (Details) - Convertible Debt - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
2023 Notes | $ 402,500,000 | $ 402,500,000 |
Unamortized debt discount and deferred financing costs | (1,062,000) | (23,248,000) |
Total carrying value | $ 401,438,000 | $ 379,252,000 |
Share-Based Payments - Share-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Share-based payments | ||||
Total | $ 4,985 | $ 4,027 | $ 13,307 | $ 13,874 |
Research and development | ||||
Share-based payments | ||||
Total | 825 | 615 | 2,284 | 1,909 |
Selling, general and administrative | ||||
Share-based payments | ||||
Total | $ 4,160 | $ 3,412 | $ 11,023 | $ 11,965 |
Share-Based Payments - Restricted Stock Units (Details) - RSUs |
9 Months Ended |
---|---|
Sep. 30, 2022
$ / shares
shares
| |
Number of RSUs | |
Nonvested, beginning balance (in shares) | 21,110 |
Granted (in shares) | 134,460 |
Vested (in shares) | (21,110) |
Nonvested, ending balance (in shares) | 134,460 |
Weighted Average Grant Date Fair Value per Share | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 29.61 |
Granted (in dollars per share) | $ / shares | 32.17 |
Vested (in dollars per share) | $ / shares | 29.61 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 32.17 |
Forfeited (in shares) | 0 |
Income Tax (Benefit) Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) expense | $ (2,193) | $ 7,398 | $ (9,627) | $ 20,142 |
Effective tax rate | 493.90% | 25.50% | (37.60%) | 28.30% |
Leases - Narrative (Details) $ in Thousands |
3 Months Ended | 7 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2022
USD ($)
|
Jun. 30, 2022
USD ($)
|
Nov. 24, 2021
renewalOption
|
Feb. 01, 2019 |
|
Leases [Abstract] | ||||
Optional lease renewal term (in years) | 5 years | 10 years | ||
Lessee, Operating Lease, Number Of Renewal Options | renewalOption | 1 | |||
Adamas Pharmaceuticals | ||||
Leases | ||||
Change in fair value of operating lease acquired | $ | $ 1,600 | $ (1,620) |
Leases - Leases Balance Sheet Information (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Assets | ||
Operating lease assets | $ 29,663 | $ 35,365 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets |
Lease liabilities, current | ||
Operating lease liabilities, current portion | $ 6,757 | $ 6,477 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts payable and accrued liabilities | Accounts payable and accrued liabilities |
Lease liabilities, long-term | ||
Operating lease liabilities, long-term | $ 36,028 | $ 41,298 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Operating lease liabilities, long-term | Operating lease liabilities, long-term |
Total lease liabilities | $ 42,785 | $ 47,775 |
Composition of Other Balance Sheet Items - Accounts Receivables (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Allowance for expected sales discounts and allowances | $ 12.8 | $ 13.5 |
Composition of Other Balance Sheet Items - Inventories (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 11,012 | $ 7,325 |
Work in process | 25,461 | 45,711 |
Finished goods | 46,692 | 32,923 |
Total inventories | $ 83,165 | $ 85,959 |
Composition of Other Balance Sheet Items - Property and Equipment (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Property and equipment | |||||
Property and equipment, gross | $ 28,810 | $ 28,810 | $ 33,409 | ||
Less accumulated depreciation and amortization | (12,938) | (12,938) | (16,454) | ||
Property and equipment, net | 15,872 | 15,872 | 16,955 | ||
Depreciation and amortization expense | 800 | $ 600 | 2,200 | $ 1,900 | |
Lab equipment and furniture | |||||
Property and equipment | |||||
Property and equipment, gross | 12,207 | 12,207 | 12,287 | ||
Leasehold improvements | |||||
Property and equipment | |||||
Property and equipment, gross | 14,023 | 14,023 | 14,369 | ||
Software | |||||
Property and equipment | |||||
Property and equipment, gross | 1,007 | 1,007 | 4,776 | ||
Computer equipment | |||||
Property and equipment | |||||
Property and equipment, gross | 1,282 | 1,282 | 1,944 | ||
Construction-in-progress | |||||
Property and equipment | |||||
Property and equipment, gross | $ 291 | $ 291 | $ 33 |
Composition of Other Balance Sheet Items - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 16,015 | $ 9,331 |
Accrued professional & marketing fees | 31,269 | 26,728 |
Accrued compensation | 16,748 | 28,068 |
Accrued product costs | 11,129 | 18,460 |
Accrued royalties | 11,671 | 13,821 |
Accrued clinical trial costs | 6,823 | 9,125 |
Operating lease liabilities, current portion | 6,757 | 6,477 |
Other accrued expenses | 9,890 | 5,673 |
Total | $ 110,302 | $ 117,683 |
Composition of Other Balance Sheet Items - Accrued Product Returns and Rebates (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued product rebates | $ 119,162 | $ 97,597 |
Accrued product returns | 39,308 | 35,127 |
Total | $ 158,470 | $ 132,724 |
Composition of Other Balance Sheet Items - Other Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Nonrecourse liability related to sale of future royalties, long-term | $ 0 | $ 5,977 |
Other liabilities | 10,371 | 10,403 |
Total | $ 10,371 | $ 16,380 |
Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Other Income and Expenses [Abstract] | ||||
Interest expense | $ (1,158) | $ (5,033) | $ (3,488) | $ (14,593) |
Interest expense on nonrecourse liability related to sale of future royalties | (566) | (892) | (1,988) | (2,896) |
Total | (1,724) | (5,925) | (5,476) | (17,489) |
Amortization of deferred financing costs and debt discount | $ 500 | $ 4,400 | $ 1,582 | $ 13,037 |
Commitments and Contingencies (Details) € in Millions |
1 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Apr. 01, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
|
Sep. 30, 2022
USD ($)
|
Dec. 31, 2021
EUR (€)
|
Sep. 30, 2014
USD ($)
|
|
Long-term Purchase Commitment [Line Items] | |||||
Nonrecourse liability related to sale of future royalties, long term | $ 30,000,000 | ||||
Long-term purchase commitment, amount | $ 0 | ||||
MDD Subsidiaries | |||||
Long-term Purchase Commitment [Line Items] | |||||
Payment to resolve U.S. Department of Justice allegations | $ 17,500,000 | ||||
NAMENDA XR/Namzaric Qui Tam Litigation | |||||
Long-term Purchase Commitment [Line Items] | |||||
Loss contingency, damages sought, value | $ 2,500,000,000 | ||||
USWM Enterprises | |||||
Long-term Purchase Commitment [Line Items] | |||||
Annual minimum purchase quantity requirement amount | € | € 3.9 | ||||
Commitment period | 5 years |
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