Delaware
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001-33137
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14-1902018
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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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2273 Research Boulevard, Suite 400, Rockville, Maryland
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20850
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(Address of Principal Executive Offices)
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(Zip Code)
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Date: March 10, 2011
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EMERGENT BIOSOLUTIONS INC.
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|
By:
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/s/ R. Don Elsey
R. Don Elsey
Chief Financial Officer
|
·
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2010 revenues of $286.2 million
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·
|
2010 net income of $51.7 million, or $1.63 per share, representing ninth consecutive year of profitability
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·
|
2010 cash, investments and accounts receivable balance of $210.4 million
|
·
|
2011 forecast reaffirmed: total revenues of $320 to $340 million and net income of
|
|
$35 to $45 million
|
·
|
Acquired Trubion Pharmaceuticals, Inc. for a total consideration of up to $131.6 million, including $92.9 million in upfront cash and stock and up to $38.7 million of success-based milestones, payable between October 2010 and October 2013;
|
·
|
Secured a BARDA development contract, valued at up to $107.0 million, to fund qualification, validation and licensure of Building 55 in order to manufacture BioThrax® (Anthrax Vaccine Adsorbed) at large-scale;
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·
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Secured a BARDA development contract, valued at up to $186.6 million, to fund development of our rPA vaccine candidate PreviThraxTM (Recombinant Protective Antigen Anthrax Vaccine, Purified);
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·
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Secured a NIAID development contract, valued at up to $28.7 million, to fund further development of NuThraxTM (Anthrax Vaccine Adsorbed with CPG 7909 Adjuvant), the second contract award for this vaccine candidate;
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·
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Launched Singapore operations and formed EPIC Bio, Pte. Ltd., a joint venture with Temasek Life Sciences Ventures Pte. Ltd., to develop, manufacture, and commercialize pre-pandemic influenza vaccines and therapeutics;
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·
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Obtained Fast Track designation and Orphan Drug status from FDA for ThravixaTM (Fully Human Anthrax Monoclonal Antibody);
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·
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Initiated a Phase 1 clinical study for Thravixa;
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·
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Initiated a Phase 1 clinical study for NuThrax; and
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·
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Expanded the Board of Directors with the appointment of John E. Niederhuber, M.D., former Director, The National Cancer Institute (NCI), and Marvin White, Chief Financial Officer, St. Vincent Health and former Chief Financial Officer, LillyUSA.
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·
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the continuation of deliveries of BioThrax under the current multi-year procurement contract with CDC;
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·
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additional deliveries of BioThrax under a follow-on, multi-year procurement contract with CDC, anticipated to begin deliveries in 4Q 2011;
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·
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a significant increase in contracts and grants revenue based primarily on development contracts already in place that are funding the validation and qualification of manufacturing of BioThrax in the company’s large-scale facility and the further development of our rPA vaccine candidate PreviThrax; and
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·
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collaboration and milestone revenues associated with achievement of clinical development milestones related to the company’s oncology product candidate, which is under an existing co-development agreement with Abbott, and the company’s autoimmune product candidate, which is being developed by Pfizer under a license agreement from the company.
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Emergent BioSolutions Inc. and Subsidiaries
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||||||||
Consolidated Balance Sheets
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||||||||
(in thousands, except share and per share data)
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||||||||
December 31,
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December 31,
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|||||||
2010
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2009
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|||||||
ASSETS
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$ | 169,019 | $ | 102,924 | ||||
Investments
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2,029 | - | ||||||
Accounts receivable
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39,326 | 54,872 | ||||||
Inventories
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12,722 | 13,521 | ||||||
Note receivable
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- | 10,000 | ||||||
Deferred tax assets, net
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2,638 | 1,870 | ||||||
Income tax receivable, net
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8,728 | 2,574 | ||||||
Restricted cash
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217 | 215 | ||||||
Prepaid expenses and other current assets
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8,814 | 7,838 | ||||||
Total current assets
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243,493 | 193,814 | ||||||
Property, plant and equipment, net
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152,701 | 131,834 | ||||||
In-process research and development
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51,400 | - | ||||||
Goodwill
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5,029 | - | ||||||
Assets held for sale
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12,741 | 13,960 | ||||||
Deferred tax assets, net
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33,757 | 3,894 | ||||||
Other assets
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1,198 | 1,187 | ||||||
Total assets
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$ | 500,319 | $ | 344,689 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
Current liabilities:
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||||||||
Accounts payable
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$ | 25,409 | $ | 17,159 | ||||
Accrued expenses and other current liabilities
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1,309 | 1,570 | ||||||
Accrued compensation
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23,975 | 14,926 | ||||||
Indebtedness under line of credit
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- | 15,000 | ||||||
Long-term indebtedness, current portion
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17,187 | 5,791 | ||||||
Deferred revenue, current portion
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7,839 | 255 | ||||||
Total current liabilities
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75,719 | 54,701 | ||||||
Long-term indebtedness, net of current portion
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30,239 | 44,927 | ||||||
Deferred revenue, net of current portion
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4,386 | - | ||||||
Contingent value right
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14,532 | - | ||||||
Other liabilities
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1,882 | 1,246 | ||||||
Total liabilities
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126,758 | 100,874 | ||||||
Commitments and contingencies
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- | - | ||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.001 par value; 15,000,000 shares authorized, 0 shares issued and outstanding at December 31, 2010 and 2009, respectively
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- | - | ||||||
Common stock, $0.001 par value; 100,000,000 shares authorized, 35,011,423 and 30,831,360 shares issued and outstanding at December 31, 2010 and December 31, 2009, respectively
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35 | 31 | ||||||
Additional paid-in capital
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197,689 | 120,492 | ||||||
Accumulated other comprehensive loss
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(2,110 | ) | (1,476 | ) | ||||
Retained earnings
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173,850 | 122,152 | ||||||
Total Emergent BioSolutions Inc. stockholders’ equity
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369,464 | 241,199 | ||||||
Noncontrolling interest in subsidiary
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4,097 | 2,616 | ||||||
Total stockholders’ equity
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373,561 | 243,815 | ||||||
Total liabilities and stockholders’ equity
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$ | 500,319 | $ | 344,689 |
Emergent BioSolutions Inc. and Subsidiaries
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||||||||
Consolidated Statements of Operations
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||||||||
(in thousands, except per share data)
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||||||||
Three Months Ended
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||||||||
December 31,
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||||||||
2010
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2009
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|||||||
(Unaudited)
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||||||||
Revenues:
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||||||||
Product sales
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$ | 89,390 | $ | 47,160 | ||||
Contracts and grants
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13,857 | 6,644 | ||||||
Total revenues
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103,247 | 53,804 | ||||||
Operating expenses:
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||||||||
Cost of product sales
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16,998 | 11,782 | ||||||
Research and development
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29,615 | 19,226 | ||||||
Selling, general and administrative
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21,671 | 18,671 | ||||||
Income from operations
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34,963 | 4,125 | ||||||
Other income (expense):
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||||||||
Interest income
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31 | 387 | ||||||
Interest expense
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- | 7 | ||||||
Other income (expense), net
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(12 | ) | (22 | ) | ||||
Total other income (expense)
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19 | 372 | ||||||
Income before provision for income taxes
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34,982 | 4,497 | ||||||
Provision for income taxes
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11,094 | 836 | ||||||
Net income
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23,888 | 3,661 | ||||||
Net loss attributable to noncontrolling interest
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2,359 | 573 | ||||||
Net income attributable to Emergent BioSolutions Inc.
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$ | 26,247 | $ | 4,234 | ||||
Earnings per share - basic
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$ | 0.78 | $ | 0.14 | ||||
Earnings per share - diluted
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$ | 0.76 | $ | 0.13 | ||||
Weighted-average number of shares - basic
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33,823 | 30,808 | ||||||
Weighted-average number of shares - diluted
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34,685 | 31,555 |
Emergent BioSolutions Inc. and Subsidiaries
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||||||||
Consolidated Statements of Operations
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||||||||
(in thousands, except per share data)
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||||||||
Twelve Months Ended
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||||||||
December 31,
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||||||||
2010
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2009
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|||||||
Revenues:
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||||||||
Product sales
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$ | 251,381 | $ | 217,172 | ||||
Contracts and grants
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34,790 | 17,614 | ||||||
Total revenues
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286,171 | 234,786 | ||||||
Operating expenses:
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||||||||
Cost of product sales
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47,114 | 46,262 | ||||||
Research and development
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89,295 | 74,588 | ||||||
Selling, general and administrative
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76,205 | 73,786 | ||||||
Income from operations
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73,557 | 40,150 | ||||||
Other income (expense):
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||||||||
Interest income
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832 | 1,418 | ||||||
Interest expense
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- | (7 | ) | |||||
Other income (expense), net
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(1,023 | ) | (50 | ) | ||||
Total other income (expense)
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(191 | ) | 1,361 | |||||
Income before provision for income taxes
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73,366 | 41,511 | ||||||
Provision for income taxes
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26,182 | 14,966 | ||||||
Net income
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47,184 | 26,545 | ||||||
Net loss attributable to noncontrolling interest
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4,514 | 4,599 | ||||||
Net income attributable to Emergent BioSolutions Inc.
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$ | 51,698 | $ | 31,144 | ||||
Earnings per share - basic
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$ | 1.63 | $ | 1.02 | ||||
Earnings per share - diluted
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$ | 1.59 | $ | 0.99 | ||||
Weighted-average number of shares - basic
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31,782 | 30,444 | ||||||
Weighted-average number of shares - diluted
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32,540 | 31,375 |
Emergent BioSolutions Inc. and Subsidiaries
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||||||||
Consolidated Statements of Cash Flows
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||||||||
(in thousands)
|
||||||||
Twelve Months Ended
|
||||||||
December 31,
|
||||||||
2010
|
2009
|
|||||||
Cash flows from operating activities:
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||||||||
Net income
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$ | 47,184 | $ | 26,545 | ||||
Adjustments to reconcile to net cash provided by operating activities:
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||||||||
Stock-based compensation expense
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7,063 | 5,007 | ||||||
Depreciation and amortization
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5,990 | 4,999 | ||||||
Deferred income taxes
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10,929 | 7,604 | ||||||
Non-cash development expenses from joint venture
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5,995 | 7,215 | ||||||
(Gain) Loss on disposal of property and equipment
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(38 | ) | 61 | |||||
Provision for impairment of long-lived assets
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1,218 | 7,328 | ||||||
Provision for impairment of accrued interest on note receivable
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1,032 | - | ||||||
Excess tax benefits from stock-based compensation
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(1,700 | ) | (1,852 | ) | ||||
Changes in operating assets and liabilities:
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||||||||
Accounts receivable
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19,094 | (30,017 | ) | |||||
Inventories
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799 | 6,207 | ||||||
Income taxes
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(6,154 | ) | (3,525 | ) | ||||
Prepaid expenses and other assets
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(653 | ) | (1,230 | ) | ||||
Accounts payable
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3,623 | (1,334 | ) | |||||
Accrued compensation
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6,207 | 3,546 | ||||||
Accrued expenses and other liabilities
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(223 | ) | (66 | ) | ||||
Deferred revenue
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(823 | ) | 23 | |||||
Net cash provided by operating activities
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99,543 | 30,511 | ||||||
Cash flows from investing activities:
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||||||||
Purchases of property, plant and equipment
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(22,101 | ) | (33,287 | ) | ||||
Acquisition of Trubion Pharmaceuticals, Inc., net of cash acquired
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(17,873 | ) | - | |||||
Proceed from the sale of investments
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6,518 | - | ||||||
Repayment of note receivable
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10,000 | - | ||||||
Net cash used in investing activities
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(23,456 | ) | (33,287 | ) | ||||
Cash flows from financing activities:
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||||||||
Restricted cash deposit
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(2 | ) | (7 | ) | ||||
Proceeds from borrowings on long-term indebtedness and line of credit
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15,000 | 57,183 | ||||||
Issuance of common stock subject to exercise of stock options
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7,235 | 4,464 | ||||||
Principal payments on long-term indebtedness and line of credit
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(33,291 | ) | (48,648 | ) | ||||
Excess tax benefits from stock-based compensation
|
1,700 | 1,852 | ||||||
Net cash provided by (used in) financing activities
|
(9,358 | ) | 14,844 | |||||
Effect of exchange rate changes on cash and cash equivalents
|
(634 | ) | (617 | ) | ||||
Net increase in cash and cash equivalents
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66,095 | 11,451 | ||||||
Cash and cash equivalents at beginning of period
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102,924 | 91,473 | ||||||
Cash and cash equivalents at end of period
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$ | 169,019 | $ | 102,924 |