10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-35144

Sagent Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

Delaware	98-0536317
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
1901 N. Roselle Road, Suite 700 Schaumburg, Illinois	60195
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (847) 908-1600

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

At October 31, 2013, there were 31,772,253 shares of the registrant’s common stock outstanding.

Sagent Pharmaceuticals, Inc.

Table of Contents

		Page No.
PART I –	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets at September 30, 2013 and December 31, 2012		1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and 2012		2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2013 and 2012		3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012		4
	Notes to Condensed Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		27
Item 4.	Controls and Procedures		28
PART II –	OTHER INFORMATION
Item 1.	Legal Proceedings		29
Item 1A.	Risk Factors		29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 3.	Defaults Upon Senior Securities		29
Item 4.	Mine Safety Disclosures		29
Item 5.	Other Information		29
Item 6.	Exhibits		30
	Signature		31

In this report, “Sagent,” “we,” “us” and “our” refers to Sagent Pharmaceuticals, Inc. and subsidiaries, and “Common Stock” refers to Sagent’s common stock.

Sagent Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

	September 30,			December 31,
	2013			2012
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	45,937		$	27,687
Short-term investments		110,251			36,605
Accounts receivable, net of chargebacks and other deductions		24,792			31,609
Inventories, net		48,620			47,106
Due from related party		2,981			1,440
Prepaid expenses and other current assets		7,456			2,821
Total current assets		240,037			147,268
Property, plant, and equipment, net		57,883			780
Investment in joint ventures		1,873			19,622
Goodwill		6,038			—
Intangible assets, net		3,282			4,277
Other assets		331			368
Total assets	$	309,444		$	172,315
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	23,134		$	21,813
Due to related party		2,480			7,026
Accrued profit sharing		7,824			4,246
Accrued liabilities		10,209			7,369
Current portion of deferred purchase consideration		5,812			—
Current portion of long-term debt		4,880			—
Total current liabilities		54,339			40,454
Long term liabilities:
Long-term portion of deferred purchase consideration		8,233			—
Long-term debt		14,314			—
Other long-term liabilities		1,619			6
Total liabilities		78,505			40,460
Stockholders’ equity:
Common stock—$0.01 par value, 100,000,000 authorized and 31,764,278 and 28,116,489 outstanding at September 30, 2013 and December 31, 2012, respectively		318			281
Additional paid-in capital		348,127			272,725
Accumulated other comprehensive income		111			2,500
Accumulated deficit		(117,617	)		(143,651	)
Total stockholders’ equity		230,939			131,855
Total liabilities and stockholders’ equity	$	309,444		$	172,315

See accompanying notes to condensed consolidated financial statements.

1

Sagent Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Net revenue	$	60,842		$	49,429		$	180,644		$	130,389
Cost of sales		42,255			42,208			120,381			110,900
Gross profit		18,587			7,221			60,263			19,489
Operating expenses:
Product development		6,888			4,011			15,629			12,700
Selling, general and administrative		9,083			7,169			26,030			22,089
Management reorganization		—			739			—			739
Equity in net loss (income) of joint ventures		(485	)		(940	)		118			(589	)
Total operating expenses		15,486			10,979			41,777			34,939
Termination fee		—			—			5,000			—
Gain on previously held equity interest		—			—			2,936			—
Income (loss) from operations		3,101			(3,758	)		26,422			(15,450	)
Interest income and other		44			60			94			210
Interest expense		(319	)		(52	)		(482	)		(1,515	)
Income (loss) before income taxes		2,826			(3,750	)		26,034			(16,755	)
Provision for income taxes		—			—			—			—
Net income (loss)	$	2,826		$	(3,750	)	$	26,034		$	(16,755	)
Net income (loss) per common share:
Basic	$	0.10		$	(0.13	)	$	0.92		$	(0.60	)
Diluted	$	0.10		$	(0.13	)	$	0.90		$	(0.60	)
Weighted-average of shares used to compute net income (loss) per common share:
Basic		28,745			27,977			28,349			27,943
Diluted		29,568			27,977			29,051			27,943

See accompanying notes to condensed consolidated financial statements.

2

Sagent Pharmaceuticals, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands, except per share amounts)

(Unaudited)

	Three months ended September 30,					Nine months ended September 30,
	2013		2012			2013			2012
Net income (loss)	$	2,826	$	(3,750	)	$	26,034		$	(16,755	)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		170		362			464			641
Reclassification of cumulative currency translation gain		—		—			(2,782	)		—
Unrealized (losses) gains on available for sale securities		21		15			(71	)		120
Total other comprehensive income (loss), net of tax		191		377			(2,389	)		761
Comprehensive income (loss)	$	3,017	$	(3,373	)	$	23,645		$	(15,994	)

See accompanying notes to condensed consolidated financial statements.

3

Sagent Pharmaceuticals, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Nine months ended September 30,
	2013			2012
Cash flows from operating activities
Net income (loss)	$	26,034		$	(16,755	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		4,166			5,198
Stock-based compensation		4,230			4,297
Equity in net loss (income) of joint ventures		118			(589	)
Dividends from unconsolidated joint venture		1,995			2,755
Gain on previously held equity interest		(2,936	)		—
Changes in operating assets and liabilities, net of effect of acquisition:
Accounts receivable, net		6,818			(1,733	)
Inventories		892			2,131
Prepaid expenses and other current assets		(4,435	)		(1,793	)
Due from related party		(6,261	)		1,370
Accounts payable and other accrued liabilities		1,128			(13,322	)
Net cash provided by (used in) operating activities		31,749			(18,441	)
Cash flows from investing activities
Capital expenditures		(783	)		(54	)
Acquisition of business, net of cash acquired		(7,296	)		—
Return of principal balance of restricted cash		—			23
Investments in unconsolidated joint ventures		(19	)		(517	)
Purchases of investments		(220,719	)		(144,897	)
Sale of investments		146,528			178,937
Purchase of product rights		(2,364	)		(3,026	)
Net cash (used in) provided by investing activities		(84,653	)		30,466
Cash flows from financing activities
Reduction in short-term notes payable		—			(24,867	)
Repayment of long-term debt		—			(12,273	)
Proceeds from issuance of common stock, net of issuance costs		71,158			585
Payment of deferred financing costs		(28	)		(884	)
Net cash provided by (used in) financing activities		71,130			(37,439	)
Effect of exchange rate movements on cash		24			—
Net increase (decrease) in cash and cash equivalents		18,250			(25,414	)
Cash and cash equivalents, at beginning of period		27,687			52,203
Cash and cash equivalents, at end of period	$	45,937		$	26,789

See accompanying notes to condensed consolidated financial statements.

4

Sagent Pharmaceuticals, Inc.

Notes to Condensed Consolidated Financial Statements

(in thousands, except for share and per share information)

(Unaudited)

Note 1. Basis of presentation:

Our interim condensed consolidated financial statements are unaudited. We prepared the condensed consolidated financial statements following rules for interim reporting as prescribed by the U.S. Securities and Exchange Commission (“SEC”). As permitted under those rules, we have condensed or omitted a number of footnotes or other financial information that are normally required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). It is management’s opinion that these financial statements include all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation of our financial position, operating results and cash flows. Operating results for any interim period are not necessarily indicative of future or annual results.

The condensed consolidated financial statements include Sagent as well as our wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. We account for our investment in Sagent Agila LLC (formerly Sagent Strides LLC) using the equity method of accounting, as our interest in the entity provides for joint financial and operational control.

On June 4, 2013, we acquired (the “SCP Acquisition”) the remaining 50% equity interest in Kanghong Sagent (Chengdu) Pharmaceutical Co. Ltd. (“KSCP”) from our former joint venture partner, and accordingly, the condensed consolidated financial statements as of September 30, 2013 include KSCP as a wholly-owned subsidiary. Prior to the SCP Acquisition, we accounted for our investment in KSCP using the equity method of accounting, as our interest in the entity provided for joint financial and operational control, and operating results of KSCP were reported on a one-month lag. In August 2013, we formally changed the name of this entity to Sagent (China) Pharmaceuticals Co., Ltd. (“SCP”).

You should read these statements in conjunction with our consolidated financial statements and related notes for the year ended December 31, 2012, included in our Annual Report on Form 10-K filed with the SEC on March 18, 2013.

Goodwill

Goodwill is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized, but rather tested for impairment on an annual basis and more often if circumstances require. Impairment losses are recognized whenever the implied fair value of goodwill is less than its carrying value. We test goodwill for impairment at least annually on October 1.

Property, Plant, and Equipment

Property, plant, and equipment is stated at cost, less accumulated depreciation. The cost of repairs and maintenance is expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Provisions for depreciation are computed for financial reporting purposes using the straight-line method over the estimated useful life of the related asset and for leasehold improvements over the lesser of the estimated useful life of the related asset or the term of the related lease as follows:

5

Land and land improvements	Remaining term of Chinese land use right (June 2057)
Building and improvements	5 to 40 years or remaining term of lease
Machinery, equipment, furniture, and fixtures	3 to 10 years

Property, plant and equipment that is purchased or constructed which requires a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs and associated interest costs. Construction-in-progress is transferred to specific property, plant and equipment accounts and commences depreciation when these assets are ready for their intended use. The capitalization of interest costs commences when expenditures for the asset have been made, activities that are necessary to prepare the asset for its intended use are in progress and interest cost is being incurred. The capitalization period ends when the asset is substantially complete and ready for its intended use.

Note 2. Acquisition:

On April 30, 2013, in furtherance of the SCP Acquisition, we entered into a Share Purchase Agreement with Chengdu Kanghong Pharmaceuticals (Group) Co. Ltd. (“CKT”) to acquire CKT’s 50% equity interest in SCP for $25,000, payable in installments through September 2015. The SCP Acquisition closed on June 4, 2013, following approval by the Chengdu Hi-Tech Industrial Development Zone Bureau of Investment Services. Concurrent with the closing of the SCP Acquisition, we paid $10,000 of the aggregate purchase consideration, and recorded a liability of $13,836 representing the fair value of our future payments as of the SCP Acquisition date to CKT under the terms of the Share Purchase Agreement. Concurrent with the execution of the Share Purchase Agreement, we entered into a Share Pledge Agreement with CKT pursuant to which we pledged a portion of the shares to be acquired as collateral securing our future installment payment obligations. Future installment payments are payable as follows:

	(in thousands)
2013	$	2,500
2014		3,500
2015		9,000

The SCP Acquisition was financed with cash and short term investments. The SCP Acquisition provided us with full control of the SCP manufacturing facility and will better serve our long term strategic goals, including a strategy of additional investment in product development and capacity expansion.

As a result of the SCP Acquisition, we remeasured the previously held equity interest in SCP to fair value, resulting in a gain of $2,936 reported as gain on previously held equity interest in the condensed consolidated statements of operations. The gain includes $2,782 reclassified from accumulated other comprehensive income (loss), and previously recorded as currency translation adjustments. Both the gain on previously held equity interest and the fair value of the non-controlling interest in SCP that we acquired were based on an asset approach valuation method. Acquisition related costs of $479 were recognized as product development expenses.

The acquisition date fair value transferred for the purchase of SCP is as follows:

	(in thousands)
Cash	$	10,000
Present value of remaining purchase consideration		13,836
Previously held equity interest		15,949
Gain on remeasurement of previously held equity interest in SCP		154
Total purchase consideration	$	39,939

6

The estimated fair value of identifiable assets acquired and liabilities assumed for the SCP Acquisition is shown in the table below:

	(in thousands)
Goodwill	$	6,038
Acquired tangible assets, net of assumed liabilities		33,901
Total allocation of fair value	$	39,939

The net tangible assets acquired consist primarily of cash of $2,704, inventory of $2,396, prepaid assets of $196, and property, plant and equipment of $56,654, net of assumed liabilities, primarily long term bank loans of $19,095 and accrued compensation and other liabilities of $8,954. We recorded goodwill of $6,038 due to the synergies achieved by having control over the products and manufacturing at the SCP facility.

The results of SCP are now included in the company’s consolidated financial statements from the date of acquisition.

The following unaudited pro forma financial information reflects the consolidated results of operations of Sagent as if the SCP Acquisition had closed on January 1, 2012 and January 1, 2013. The pro forma information includes acquisition and integration expenses. The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the SCP Acquisition been effected on the assumed date.

	Three months ended September 30,					Nine months ended September 30,
	2013		2012			2013		2012
Net revenues	$	60,842	$	49,429		$	180,644	$	130,389
Net income (loss)		2,826		(5,094	)		19,405		(16,979	)
Diluted income (loss) per common share		0.10		(0.18	)		0.67		(0.61	)

Note 3. Investments:

Our investments at September 30, 2013 were comprised of the following:

	Cost basis		Unrealized gains		Unrealized losses			Recorded basis		Cash and cash equivalents		Short term investments
Assets
Cash	$	30,810	$	—	$	—		$	30,810	$	30,810	$	—
Money market funds		15,127		—		—			15,127		15,127		—
Commercial paper		50,196		2		(1	)		50,197		—		50,197
Corporate bonds and notes		60,114		3		(63	)		60,054		—		60,054
	$	156,247	$	5	$	(64	)	$	156,188	$	45,937	$	110,251

Investments with continuous unrealized losses for less than twelve months and their related fair values at September 30, 2013 were as follows:

	Fair value		Unrealized losses
Commercial paper	$	34,097	$	(1	)
Corporate bonds and notes		50,571		(63	)
	$	84,668	$	(64	)

Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Because we do not currently intend to sell these investments, and it is not more likely than not that we will be required to sell our investments before recovery of their amortized cost basis, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at September 30, 2013.

7

The original cost and estimated current fair value of our fixed-income securities at September 30, 2013 are set forth below.

	Cost basis		Estimated fair value
Due in one year or less	$	66,786	$	66,782
Due between one and five years		43,524		43,469
	$	110,310	$	110,251

Note 4. Inventories:

Inventories at September 30, 2013 and December 31, 2012 were as follows:

	September 30, 2013									December 31, 2012
	Approved			Pending regulatory approval			Inventory			Approved			Pending regulatory approval		Inventory
Finished goods	$	47,498		$	1,437		$	48,935		$	46,410		$	1,437	$	47,847
Raw materials		3,935			19			3,954			1,280			—		1,280
Inventory reserve		(2,832	)		(1,437	)		(4,269	)		(2,021	)		—		(2,021	)
	$	48,601		$	19		$	48,620		$	45,669		$	1,437	$	47,106

Note 5. Property, plant and equipment

Property, plant and equipment at September 30, 2013 and December 31, 2012 were as follows:

	September 30, 2013			December 31, 2012
Land and land improvements	$	2,216		$	—
Buildings and improvements		19,578			103
Machinery, equipment, furniture and fixtures		37,496			1,764
Construction in process		306			—
		59,596			1,867
Less accumulated depreciation		(1,713	)		(1,087	)
	$	57,883		$	780

Depreciation expense was $502 and $626 for the three and nine months ending September 30, 2013, respectively. We placed $49,744 of assets related to our Chinese manufacturing facility into service in September 2013, as production of the first commercial batches from the facility occurred during the period.

Note 6. Goodwill and Intangible assets, net:

We recorded goodwill of approximately $6,038 related to the SCP Acquisition. There were no reductions of goodwill relating to impairments.

Intangible assets at September 30, 2013 and December 31, 2012 were as follows:

	September 30, 2013							December 31, 2012
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Product licensing rights	$	3,690	$	(1,935	)	$	1,755	$	3,156	$	(1,541	)	$	1,615
Product development rights		1,527		—			1,527		2,662		—			2,662
	$	5,217	$	(1,935	)	$	3,282	$	5,818	$	(1,541	)	$	4,277

8

Movements in intangible assets were due to the following:

	Product licensing rights			Product development rights
December 31, 2012	$	1,615		$	2,662
Acquisition of product rights		535			1,829
Amortization of product rights		(395	)		(2,964	)
September 30, 2013	$	1,755		$	1,527

The weighted-average period prior to the next extension or renewal for the 18 products comprising our product licensing rights intangible asset was 51 months at September 30, 2013.

We currently estimate amortization expense over each of the next five years as follows:

For the year ending:	Amortization expense
September 30, 2014	$	1,784
September 30, 2015		427
September 30, 2016		191
September 30, 2017		144
September 30, 2018		133

Note 7. Investment in Sagent Agila:

Changes in our investment in Sagent Agila during the nine months ended September 30, 2013 were as follows:

Investment in Sagent Agila at January 1, 2013	$	2,161
Equity in net income of Sagent Agila		1,707
Dividends paid		(1,995	)
Investment in Sagent Agila at September 30, 2013	$	1,873

Condensed statement of operations information of Sagent Agila is presented below.

	Three months ended September 30,				Nine months ended September 30,
Condensed statement of operations information	2013		2012		2013		2012
Net revenues	$	3,212	$	7,469	$	13,924	$	19,224
Gross profit		1,093		4,537		3,817		8,282
Net income		969		4,110		3,413		7,453

Note 8. Investment in SCP:

Changes in our investment in SCP during the nine months ended September 30, 2013 were as follows:

Investment in SCP at January 1, 2013	$	17,461
Equity in net loss of SCP		(1,825	)
Currency translation adjustment		294
Investments in SCP		19
Acquisition of remaining equity interest in SCP		(15,949	)
Investment in SCP at September 30, 2013	$	—

9

Condensed statement of operations information of SCP for the period through the closing of the SCP Acquisition.

	Three months ended September 30,					Nine months ended September 30,
Condensed statement of operations information	2013		2012			2013			2012
Net revenues	$	—	$	—		$	—		$	—
Gross profit		—		—			—			—
Net loss		—		(2,459	)		(2,805	)		(5,766	)

Note 9. Debt:

Credit facilities acquired under the SCP Acquisition

SCP had outstanding debt obligations with the Agricultural Bank of China at the time of the SCP Acquisition. SCP originally entered into two credit facilities in the amount of RMB 37,000 ($5,987) and RMB 83,000 ($13,431) in June 2011 and August 2010, respectively, each with a five year term. Both credit facilities are secured by the property, plant and equipment of SCP. Amounts outstanding under the credit facilities bear an interest rate equal to the benchmark lending interest rate published by the People’s Bank of China. During the term of the loan, the rate is subject to adjustment every three months. As of September 30, 2013, RMB 118,000 ($19,193) was outstanding under these credit facilities, at an interest rate of 6.00% per annum. As the interest rate resets on a quarterly basis, the fair value of our long-term debt approximates its carrying value. Repayment will be accelerated if the liabilities to assets ratio of our SCP subsidiary exceed 70% and 80% during the term of the RMB 37,000 and RMB 83,000 credit facilities, respectively, or if our SCP subsidiary is unable to achieve 50% of its projected revenues when it commences commercial activities.

Principal payments due on the credit facility draws as of September 30, 2013 were as follows:

For the year ending:
September 30, 2014	$	4,880
September 30, 2015		14,314

Silicon Valley Bank Loan and Security Agreement

In February 2012, we entered into a Loan and Security Agreement with Silicon Valley Bank (the “SVB Agreement”). The SVB Agreement provides for a $40,000 asset based revolving loan facility, with availability subject to a borrowing base consisting of eligible accounts receivable and inventory and the satisfaction of conditions precedent specified in the SVB Agreement. The SVB Agreement matures on February 13, 2016, at which time all outstanding amounts will become due and payable. Borrowings under the SVB Agreement may be used for general corporate purposes, including funding working capital. Amounts drawn bear an interest rate equal to, at our option, either a Eurodollar rate plus 2.50% per annum or an alternative base rate plus 1.50% per annum. We also pay a commitment fee on undrawn amounts equal to 0.30% per annum.

The SVB Agreement contains various customary affirmative and negative covenants. The negative covenants restrict our ability to, among other things, incur additional indebtedness, create or permit to exist liens, make certain investments, dividends and other payments in respect of capital stock, sell assets or otherwise dispose of our property, change our lines of business, or enter into a merger or acquisition, in each case, subject to thresholds and exceptions as set forth in the SVB Agreement. The financial covenants in the original SVB Agreement are limited to maintenance of a minimum adjusted quick ratio and a minimum free cash flow. The SVB Agreement also contains customary events of default, including non-payment of principal, interest and other fees after stated grace periods, violations of covenants, material inaccuracy of representations and warranties, certain bankruptcy and liquidation events, certain material judgments and attachment events, cross-default to other debt in excess of a specified amount and material agreements, failure to maintain certain material governmental approvals, and actual or asserted invalidity of subordination terms, guarantees and collateral, in each case, subject to grace periods, thresholds and exceptions as set forth in the SVB Agreement. Loans under the SVB Agreement are secured by a lien on substantially all of our and our principal US operating subsidiary’s assets, other than our equity interests in our joint ventures and certain other limited exceptions.

10

On September 23, 2013, we entered into a Second Loan Modification Agreement (the “Modification”) to our SVB Agreement. The Modification altered the calculation methodology of the borrowing base that is used to determine our borrowing availability and the covenant for the Adjusted Quick Ratio tested at the end of each month and eliminated the covenant to maintain a specified level of free cash flow in quarters where we maintain eligible cash balances of $30 million or greater. We did not amend the term, the maximum availability, or the interest rate applicable to the amounts drawn under the SVB Agreement. As of September 30, 2013, no borrowings were outstanding and we were in compliance with all of our covenants under the SVB Agreement.

Note 10. Accrued liabilities:

Accrued liabilities at September 30, 2013 and December 31, 2012 were as follows:

	September 30, 2013		December 31, 2012
Payroll and employee benefits	$	4,820	$	1,211
Sales and marketing		4,832		5,649
Other accrued liabilities		557		509
	$	10,209	$	7,369

Note 11. Fair value measurements:

Assets measured at fair value on a recurring basis as of September 30, 2013 consisted of the following:

	Total fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Money market funds	$	15,127	$	15,127	$	—	$	—
Corporate bonds and notes		60,054		—		60,054		—
Commercial paper		50,197		—		50,197		—
Short-term investments	$	110,251	$	—	$	110,251	$	—
Total assets	$	125,378	$	15,127	$	110,251	$	—

The fair value of our Level 2 investments is based on a combination of quoted market prices of similar securities and matrix pricing provided by third-party pricing services utilizing securities of similar quality and maturity.

Assets measured at fair value on a recurring basis as of December 31, 2012 consisted of the following:

	Total fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Money market funds	$	18,141	$	18,141	$	—	$	—
Corporate bonds and notes		13,358		—		13,358		—
Commercial paper		23,247		—		23,247		—
Short-term investments	$	36,605	$	—	$	36,605	$	—
Total assets	$	54,746	$	18,141	$	36,605	$	—

There were no transfers of assets between Level 1 and Level 2 during the periods presented.

11

Note 12. Accumulated other comprehensive income:

Accumulated other comprehensive income at September 30, 2013 and December 31, 2012 is comprised of the following:

	September 30, 2013			December 31, 2012
Currency translation adjustment, net of tax	$	170		$	2,488
Unrealized (losses) gains on available for sale securities, net of tax		(59	)		12
Total accumulated other comprehensive income	$	111		$	2,500

The following table summarizes the changes in balances of each component of accumulated other comprehensive income, net of tax as of September 30, 2013.

	Currency translation adjustment			Unrealized gains (losses) on available for sale securities			Total
Balance as of December 31, 2012	$	2,488		$	12		$	2,500
Other comprehensive income (loss) before reclassifications		464			(71	)		393
Amounts reclassified from accumulated other comprehensive income (loss)		(2,782	)		—			(2,782	)
Net current-period other comprehensive loss		(2,318	)		(71	)		(2,389	)
Balance as of September 30, 2013	$	170		$	(59	)	$	111

No amounts were reclassified out of accumulated other comprehensive income for the three months ended September 30, 2013. The table below presents the significant amounts reclassified out of each component of accumulated other comprehensive income for the nine months ended September 30, 2013.

Type of reclassification	Amount reclassified from accumulated other comprehensive income		Affected line item in the condensed consolidated statement of operations
Currency translation adjustment – reclassification of cumulative currency translation gain	$	2,782	Gain on previously held equity interest
Total reclassification for the nine months ended September 30, 2013, net of tax	$	2,782

Note 13. Earnings per share:

Basic earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Because of their anti-dilutive effect, the following common share equivalents, comprised of restricted stock and unexercised stock options, have been excluded from the calculation of diluted earnings per share for the three and nine month periods ended September 30, 2013 and 2012, respectively:

12

	Anti-dilutive shares
Three months ended September 30, 2013		923,415
Three months ended September 30, 2012		2,403,630
Nine months ended September 30, 2013		1,212,899
Nine months ended September 30, 2012		2,403,630

The table below presents the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2013 and 2012:

	Three months ended September 30,					Nine months ended September 30,
	2013		2012			2013		2012
Basic and dilutive numerator:
Net income (loss), as reported	$	2,826	$	(3,750	)	$	26,034	$	(16,755	)
Denominator:
Weighted-average common shares outstanding—basic (in thousands)		28,745		27,977			28,349		27,943
Net effect of dilutive securities:
Stock options and restricted stock		823		—			702		—
Weighted-average common shares outstanding—diluted (in thousands)		29,568		27,977			29,051		27,943
Net income (loss) per common share (basic)	$	0.10	$	(0.13	)	$	0.92	$	(0.60	)
Net income (loss) per common share (diluted)	$	0.10	$	(0.13	)	$	0.90	$	(0.60	)

On September 16, 2013, we completed a registered equity offering, issuing 3,542,470 new shares of our common stock at $21.25 per share in exchange for total consideration of $75,277. We received proceeds from the offering, net of the underwriting discount and expenses, of $70,647.

Note 14. Stock-based compensation:

We granted 4,700 and 379,874 stock options during the three and nine months ended September 30, 2013, respectively, and granted 14,522 restricted stock units and 41,702 restricted stock awards during the nine months ended September 30, 2013. We granted 124,900 and 322,770 stock options during the three and nine months ended September 30, 2012, respectively. There were 28,984 and 95,642 stock options exercised during the three and nine months ended September 30, 2013, respectively, with an aggregate intrinsic value of $489 and $1,225, respectively.

Note 15. Net revenue by product:

Net revenue by product line is as follows:

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Therapeutic class:
Anti-infective	$	24,026	$	18,173	$	65,921	$	57,314
Critical care		15,638		20,897		48,381		53,885
Oncology		21,178		10,359		66,342		19,190
	$	60,842	$	49,429	$	180,644	$	130,389

13

Note 16. Management reorganization:

In August 2012, we completed a reorganization of our executive management team in which we eliminated certain positions within the Company. Costs associated with the reorganization, primarily severance related charges, are reflected under the Management Reorganization caption in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2012.

Note 17. Related party transactions:

As of September 30, 2013 and December 31, 2012, respectively, we had a receivable of $2,981 and $1,404 from Sagent Agila LLC, which is expected to offset future profit-sharing payments. As of September 30, 2013 and December 31, 2012, respectively, we had a payable of $2,480 and $7,026 to Sagent Agila LLC, principally for the acquisition of inventory and amounts due under profit-sharing arrangements. During the three and nine months ended September 30, 2013, Sagent Agila LLC distributed $1,256 and $3,990, respectively, of profit sharing receipts to its joint venture partners. As the Sagent Agila joint venture had sufficient cumulative earnings at September 30, 2013, our share of the distribution for the nine months ended September 30, 2013 has been treated as a dividend received in the condensed consolidated statements of cash flows.

Note 18. Commitments and contingencies:

Litigation

From time to time, we are subject to claims and litigation arising in the ordinary course of business. These claims may include assertions that our products infringe existing patents and claims that the use of our products has caused personal injuries. We intend to vigorously defend any such litigation that may arise under all defenses that would be available to us.

Zoledronic Acid (Generic versions of Zometa^® and Reclast^®).

On February 20, 2013, Novartis Pharmaceuticals Corporation (“Novartis”) sued the Company and several other defendants in the United States District Court for the District of New Jersey, alleging, among other things, that sales of the Company’s (i) zoledronic acid premix bag (4mg/100ml), made by ACS Dobfar Info S.A. (“Info”), also a defendant, a generic version of Novartis’ Zometa^® ready to use bottle , would infringe U.S. Patent No. 7,932,241 (the “241 Patent”) and U.S. Patent No. 8,324,189 (the “189 Patent”) and (ii) zoledronic acid premix bag (5mg/100ml), also made by Info, a generic version of Novartis’ Reclast^® ready to use bottle, would infringe U.S. Patent No. 8,052,987 and the 241 Patent, and (iii) zoledronic acid vial (4mg/5ml), made by Actavis LLC, also a defendant, a generic version of Novartis’ Zometa^® vial, would infringe the 189 Patent. (Novartis Pharmaceuticals Corporation v. Actavis, LLC, et. al., Case No. 13-cv-1028) On March 1, 2013, the District Court denied Novartis’ request for a temporary restraining order against the Company and the other defendants, including Actavis and Info. On March 6, 2013, the Company, began selling Actavis’ zoledronic acid vial, the generic version of Zometa^®. Also, as of August 27, 2013 and October 1, 2013, the Company began selling zoledronic acid premix bags in 4mg/100ml and 5mg/100ml presentations, respectively. The Company believes it has substantial meritorious defenses to the case, and the Company has sold and will continue to sell these products. Therefore, an adverse final determination that one of the patents is valid and infringed could have an adverse effect on the Company’s business, results of operations, financial condition and cash flows.

14

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our condensed consolidated financial statements included elsewhere in this report and with our audited financial statements and the notes found in our most recent Annual Report on Form 10-K filed with the SEC on March 18, 2013. Unless otherwise noted, all dollar amounts are in thousands.

Disclosure Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “could have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth or initiatives, strategies or the expected outcome or impact of pending or threatened litigation are forward-looking statements. In addition, this report contains forward-looking statements regarding the adequacy of our current cash balances to fund our ongoing operations; our utilization of our net operating loss carryforwards; and our ability to meet our obligations under our loan facilities at the Agricultural Bank of China.

The forward-looking statements contained in this Quarterly Report on Form 10-Q are subject to a number of risks and uncertainties, and the cautionary statements set forth below, as well as elsewhere in this Quarterly Report on Form 10-Q, and those contained in Part II, Item 1A under the heading “Risk Factors” in our Quarterly Report on Form 10-Q filed with the SEC on August 6, 2013, identify important factors that could cause actual results to differ materially from those indicated by our forward-looking statements. Such factors, include, but are not limited to:

• we rely on our business partners for the manufacture of substantially all of our products, and if our business partners fail to supply us with high-quality active pharmaceutical ingredient (“API”) or finished products in the quantities we require on a timely basis, sales of our products could be delayed or prevented, and our revenues and margins could decline, which could have a material adverse effect on our business, financial condition and results of operations;

• if we or any of our business partners are unable to comply with the quality and regulatory standards applicable to pharmaceutical drug manufacturers, or if approvals of pending applications are delayed as a result of quality or regulatory compliance concerns or merely backlogs at the US Food and Drug Administration (“FDA”), we may be unable to meet the demand for our products, may lose potential revenues and our business, financial position and results of operations could be materially adversely affected;

• changes in the regulations, enforcement procedures or regulatory policies established by the FDA and other regulatory agencies are expected to increase the costs and time of development of our products and could delay or prevent sales of our products and our revenues could decline and our business, financial position and results of operations could be materially adversely affected;

• three of our products, heparin, levofloxacin in pre-mix bags, and zoledronic acid vials, each of which is supplied to us by a single vendor, represent a significant portion of our net revenues and, if the volume or pricing of any of these products declines, or we are unable to satisfy forecasted demand for any of these products, such event could have a material adverse effect on our business, financial position and results of operations;

• we participate in highly competitive markets, dominated by a few large competitors, and if we are unable to compete successfully, our revenues could decline and our business, financial condition and results of operations may be materially adversely affected;

• if we are unable to maintain our group purchasing organization and distributor relationships, our revenues could decline and our results of operations could be negatively impacted;

• we rely on a limited number of pharmaceutical wholesalers to distribute our products;

15

• we depend to a significant degree upon our key personnel, the loss of whom could adversely affect our operations;

• we may be exposed to product liability claims that could cause us to incur significant costs or cease selling some of our products;

• our products may infringe the intellectual property rights of third parties, and if so we may incur substantial liabilities and may be unable to commercialize products in a profitable manner or at all;

• if reimbursement by government-sponsored or private sector insurance programs for our current or future products is reduced or modified, our business could suffer;

• current and future decline of national and international economic conditions could adversely affect our operations;

• we are subject to risks associated with managing our international network of collaborations which include business partners and other suppliers of components, API and finished products located throughout the world;

• we may never realize the expected benefits from our manufacturing facility in China and it will require substantial capital resources to reach its manufacturing potential and be profitable; and

• we may seek to engage in strategic transactions, including the acquisition of products or businesses, that could have a variety of negative consequences, and we may not realize the intended benefits of such transactions.

We derive many of our forward-looking statements from our work in preparing, reviewing and evaluating our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, it is impossible for us to anticipate or accurately calculate the impact of all factors that could affect our actual results. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties.

We cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation and do not intend to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Introduction

We are a specialty pharmaceutical company focused on developing, manufacturing, sourcing and marketing pharmaceutical products, with a specific emphasis on injectables, which we sell primarily in the United States of America through our highly experienced sales and marketing team.

With a primary focus on generic injectable pharmaceuticals, we offer our customers a broad range of products across anti-infective, oncolytic and critical care indications in a variety of presentations, including single- and multi-dose vials, pre-filled ready-to-use syringes and premix bags. We generally seek to develop injectable products where the form or packaging of the product can be enhanced to improve delivery, product safety or end-user convenience. Our management team includes industry veterans who have previously served critical functions at other injectable pharmaceutical companies and key customer groups and have long-standing relationships with customers, regulatory agencies, and suppliers. We have rapidly established a growing and diverse product portfolio and product pipeline as a result of our innovative business model, which combines an extensive network of international development, sourcing and manufacturing collaborations with our proven and experienced U.S.-based regulatory, quality assurance, business development, project management, and sales and marketing teams. In June 2013, we acquired the remaining 50% interest in SCP from our former joint venture partner. Accordingly, SCP is now a wholly-owned subsidiary and provides us with a dedicated, state-of-the-art manufacturing facility. Prior to the SCP Acquisition, we accounted for our investments in SCP using the equity method of accounting, as our interest in the entity provided for joint financial and operational control. Operating results of SCP prior to the SCP Acquisition were reported on a one-month lag.

16

Non-GAAP Financial Measures

We report our financial results in accordance with accounting principles generally accepted in the United States (“GAAP”).

Adjusted Gross Profit

We use the non-GAAP financial measure “Adjusted Gross Profit” and corresponding ratios. We define Adjusted Gross Profit as gross profit plus our share of the gross profit earned through our Sagent Agila joint venture which is included in the Equity in net (income) loss of joint ventures line on the Condensed Consolidated Statements of Operations. We believe that Adjusted Gross Profit is relevant and useful supplemental information for our investors. Our management believes that the presentation of this non-GAAP financial measure, when considered together with our GAAP financial measures and the reconciliation to the most directly comparable GAAP financial measure, provides a more complete understanding of the factors and trends affecting Sagent than could be obtained absent these disclosures. Management uses Adjusted Gross Profit and corresponding ratios to make operating and strategic decisions and evaluate our performance. We have disclosed this non-GAAP financial measure so that our investors have the same financial data that management uses with the intention of assisting you in making comparisons to our historical operating results and analyzing our underlying performance. Our management believes that Adjusted Gross Profit provides a useful supplemental tool to consistently evaluate the profitability of our products that have profit sharing arrangements. The limitation of this measure is that it includes an item that does not have an impact on gross profit reported in accordance with GAAP. The best way that this limitation can be addressed is by using Adjusted Gross Profit in combination with our GAAP reported gross profit. Because Adjusted Gross Profit calculations may vary among other companies, the Adjusted Gross Profit figures presented below may not be comparable to similarly titled measures used by other companies. Our use of Adjusted Gross Profit is not meant to and should not be considered in isolation or as a substitute for, or superior to, any GAAP financial measure. You should carefully evaluate the following tables reconciling Adjusted Gross Profit to our GAAP reported gross profit for the periods presented (dollars in thousands).

	Three months ended September 30,										% of net revenue, three months ended September 30,
	2013		2012		$ Change			% Change			2013			2012			% Change
Adjusted Gross Profit	$	19,135	$	9,489	$	9,646			102	%		31.5	%		19.2	%		12.3	%
Sagent portion of gross profit earned by Sagent Agila joint venture		548		2,268		(1,720	)		-76	%		0.9	%		4.6	%		-3.7	%
Gross Profit	$	18,587	$	7,221	$	11,366			157	%		30.5	%		14.6	%		15.9	%

	Nine months ended September 30,										% of net revenue, nine months ended September 30,
	2013		2012		$ Change			% Change			2013			2012			% Change
Adjusted Gross Profit	$	62,172	$	23,629	$	38,543			163	%		34.4	%		18.1	%		16.3	%
Sagent portion of gross profit earned by Sagent Agila joint venture		1,909		4,140		(2,231	)		-54	%		1.1	%		3.2	%		-2.1	%
Gross Profit	$	60,263	$	19,489	$	40,774			209	%		33.4	%		14.9	%		18.5	%

EBITDA and Adjusted EBITDA

We use the non-GAAP financial measures “EBITDA” and “Adjusted EBITDA” and corresponding growth ratios. We define EBITDA as net income (loss) less interest expense, net of interest income, provision for income taxes, depreciation and amortization. We define Adjusted EBITDA as net income (loss) less interest expense, net of interest income, provision for income taxes, depreciation and amortization, stock-based compensation expense, the gain recorded on our previously held equity interest in SCP in connection with the SCP Acquisition and the equity in net loss of our SCP joint venture prior to the SCP Acquisition. We believe that EBITDA and Adjusted

17

EBITDA are relevant and useful supplemental information for our investors. Our management believes that the presentation of these non-GAAP financial measures, when considered together with our GAAP financial measures and the reconciliation to the most directly comparable GAAP financial measures, provides a more complete understanding of the factors and trends affecting Sagent than could be obtained absent these disclosures. Management uses EBITDA, Adjusted EBITDA and corresponding ratios to make operating and strategic decisions and evaluate our performance. We have disclosed these non-GAAP financial measures so that our investors have the same financial data that management uses with the intention of assisting you in making comparisons to our historical operating results and analyzing our underlying performance. Our management believes that EBITDA and Adjusted EBITDA are useful supplemental tools to evaluate the underlying operating performance of the company on an ongoing basis. The limitation of these measures is that they exclude items that have an impact on net income (loss). The best way that these limitations can be addressed is by using EBITDA and Adjusted EBITDA in combination with our GAAP reported net income (loss). Because EBITDA and Adjusted EBITDA calculations may vary among other companies, the EBITDA and Adjusted EBITDA figures presented below may not be comparable to similarly titled measures used by other companies. Our use of EBITDA and Adjusted EBITDA is not meant to and should not be considered in isolation or as a substitute for, or superior to, any GAAP financial measure. You should carefully evaluate the following tables reconciling EBITDA and Adjusted EBITDA to our GAAP reported net income (loss) for the periods presented (dollars in thousands).

	Three months ended September 30,
	2013		2012			$ Change			% Change
Adjusted EBITDA	$	6,222	$	1,004		$	5,218			520	%
Stock-based compensation expense		1,073		1,641			(568	)		-35	%
Gain on previously-held equity interest1		—		—			—			n/m
Equity in net loss of SCP joint venture		—		1,115			(1,115	)		-100	%
EBITDA	$	5,149	$	(1,752	)	$	6,901			394	%
Depreciation and amortization expense2		2,048		2,006			42			2	%
Interest expense, net		275		(8	)		283			3,538	%
Provision for income taxes		—		—			—			—
Net income (loss)	$	2,826	$	(3,750	)	$	6,576			175	%

18

	Nine months ended September 30,
	2013			2012			$ Change			% Change
Adjusted EBITDA	$	33,642		$	(3,304	)	$	36,946			1,118	%
Stock-based compensation expense		4,230			4,297			(67	)		-2	%
Gain on previously-held equity interest1		(2,936	)		—			(2,936	)		n/m
Equity in net loss of SCP joint venture		1,825			3,137			(1,312	)		-42	%
EBITDA	$	30,523		$	(10,738	)	$	41,261			384	%
Depreciation and amortization expense2		4,101			4,712			(611	)		-13	%
Interest expense, net		388			1,305			(917	)		-70	%
Provision for income taxes		—			—			—			—
Net income (loss)	$	26,034		$	(16,755	)	$	42,789			255	%

¹ As a result of the SCP Acquisition, we remeasured the previously held equity interest in SCP to fair value, resulting in a gain of $2,936 reported as gain on previously held equity interest in the condensed consolidated statements of operations. The gain includes $2,782 reclassified from accumulated other comprehensive income (loss), and previously recorded as currency translation adjustments.

² Depreciation and amortization expense excludes $22 and $22 of amortization in the three months ended September 30, 2013 and 2012, respectively, and $65 and $486 in the nine months ended September 30, 2013 and 2012, respectively, related to deferred financing fees, which is included within interest expense and other in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012.

19

Discussion and Analysis

Consolidated results of operations

The following compares our consolidated results of operations for the three months ended September 30, 2013 with those of the three months ended September 30, 2012:

	Three months ended September 30,
	2013			2012			$ change			% change
Net revenue	$	60,842		$	49,429		$	11,413			23	%
Cost of sales		42,255			42,208			47			0	%
Gross profit		18,587			7,221			11,366			157	%
Gross profit as % of net revenues		30.5	%		14.6	%
Operating expenses:
Product development		6,888			4,011			2,877			72	%
Selling, general and administrative		9,083			7,169			1,914			27	%
Management reorganization		—			739			(739	)		-100	%
Equity in net income of joint ventures		(485	)		(940	)		(455	)		-48	%
Total operating expenses		15,486			10,979			4,507			42	%
Income (loss) from operations		3,101			(3,758	)		6,859			183	%
Interest income and other		44			60			(16	)		-27	%
Interest expense		(319	)		(52	)		(267	)		513	%
Income (loss) before income taxes		2,826			(3,750	)		6,576			175	%
Provision for income taxes		—			—			—			—
Net income (loss)	$	2,826		$	(3,750	)	$	6,576			175	%
Net income (loss) per common share:
Basic	$	0.10		$	(0.13	)	$	0.23			177	%
Diluted	$	0.10		$	(0.13	)	$	0.23			177	%

Net revenue: Net revenue for the three months ended September 30, 2013 totaled $60.8 million, an increase of $11.4 million, or 23%, as compared to $49.4 million for the three months ended September 30, 2012. The launch of 23 new codes or presentations of 10 products since September 30, 2012, including zoledronic acid vials at market formation, contributed $17.5 million in revenue during the third quarter of 2013. Net revenue for products launched prior to September 30, 2012 decreased $6.4 million, or 13%, to $43.1 million in the third quarter of 2013 due primarily to lower volumes on certain products due primarily to reductions in demand driven by the abatement of market shortages and increased competitive pricing pressures.

Cost of sales: Cost of goods sold for the three months ended September 30, 2013 totaled $42.3 million, an increase of less than $0.1 million, as compared to $42.2 million for the three months ended September 30, 2012. Gross profit as a percentage of net revenues was 30.6% for the three months ended September 30, 2013 compared to 14.6% for the three months ended September 30, 2012. Adjusted Gross Profit as a percentage of net revenue was 31.5% for the three months ended September 30, 2013, and 19.2% for the three months ended September 30, 2012. The increase in both gross profit and Adjusted Gross Profit is primarily due to the introduction of higher margin products in the past twelve months, particularly zoledronic acid vials at market formation in March 2013, partially offset by $1.1 million of unabsorbed manufacturing costs at our SCP facility.

Product development: Product development expense for the three months ended September 30, 2013 totaled $6.9 million, an increase of $2.9 million, or 72%, as compared to $4.0 million for the three months ended September 30, 2012. The increase in product development expense was primarily due to increased milestone expense for projects in our pipeline and $0.6 million of costs associated with development activities at SCP, which were included as part of the equity in net income of joint ventures in 2012.

20

As of September 30, 2013, our new product pipeline included 37 products represented by 61 ANDAs which we had filed, or licensed rights to, that were under review by the FDA and four products represented by nine ANDAs that have been recently approved and were pending commercial launch, including carboplatin, the first approved product out of our SCP facility. Also, we had an additional 28 products represented by 44 ANDAs under initial development at September 30, 2013.

Selling, general and administrative: Selling, general and administrative expenses for the three months ended September 30, 2013, totaled $9.1 million, an increase of $1.9 million, or 27%, as compared to $7.2 million for the three months ended September 30, 2012. The increase in selling, general and administrative expense was primarily due to $0.9 million of costs associated with our SCP subsidiary, which were included as part of the equity in net income of joint ventures in 2012. Selling, general and administrative expense as a percentage of net revenue was 15% and 15% for the three months ended September 30, 2013 and 2012, respectively.

Management reorganization: Restructuring expenses, primarily severance related charges in connection with eliminated positions, for the three months ended September 30, 2012 totaled $0.7 million. There were no such restructuring expenses in the three months ended September 30, 2013.

Equity in net income of joint ventures: Equity in net income of joint ventures for the three months ended September 30, 2013 totaled $0.5 million, a decrease of $0.5 million, or 48%, as compared to $0.9 million for the three months ended September 30, 2012. Included in this amount are the following (in thousands of dollars).

	Three Months Ended September 30,
	2013			2012
Sagent Agila LLC – Earnings directly related to the sale of product	$	548		$	2,268
Sagent Agila LLC – Product development costs		(63	)		(213	)
Kanghong Sagent (Chengdu) Pharmaceutical Co – net loss(1)		—			(1,115	)
Equity in net income of joint ventures	$	485		$	940

⁽¹⁾  Following the acquisition in June 2013, the results of SCP are included within our consolidated financial results.

Interest expense: Interest expense for the three months ended September 30, 2013 totaled $0.3 million, an increase of $0.3 million, or 513%, as compared to $0.1 million for the three months ended September 30, 2012.

Provision for income taxes: We have generated cumulative tax losses since inception and do not believe that it is more likely than not that our net operating loss carryforwards and other deferred tax assets will be utilized. As a result, we have decided that a full valuation allowance is required against our deferred tax assets. Because none of our current net operating loss carryforwards expire before 2027, we expect that we will have a reasonable opportunity to utilize all of these loss carryforwards before they expire, but such loss carryforwards will be usable only to the extent that we generate sufficient taxable income.

Net income (loss) and diluted net earnings (loss) per common share: The net income for the three months ended September 30, 2013 of $2.8 million increased by $6.6 million, or 175%, from the $3.8 million net loss for the three months ended September 30, 2012. Diluted net earnings (loss) per common share increased by $0.23, or 177%. The increase in diluted net earnings (loss) per common share is due to the following factors:

Diluted EPS for the three months ended September 30, 2012	$	(0.13	)
Increase in earnings		0.22
Increase in diluted common shares outstanding		0.01
Diluted EPS for the three months ended September 30, 2013	$	0.10

Adjusted EBITDA: Adjusted EBITDA for the three months ended September 30, 2013 of $6.2 million increased by $5.2 million, or 520%, from $1.0 million for the three months ended September 30, 2012. The improvement in adjusted EBITDA is driven predominately by the increased cash earnings of our business in the three months ended September 30, 2013, as our gross profit increased by $11.4 million during the period, partially offset by $2.3 million of cash costs associated with the consolidation of SCP.

21

The following compares our consolidated results of operations for the nine months ended September 30, 2013 with those of the nine months ended September 30, 2012:

	Nine months ended September 30,
	2013			2012			$ change			% change
Net revenue	$	180,644		$	130,389		$	50,255			38	%
Cost of sales		120,381			110,900			9,481			9	%
Gross profit		60,263			19,489			40,774			209	%
Gross profit as % of net revenues		33.4	%		14.9	%
Operating expenses:
Product development		15,629			12,700			2,929			23	%
Selling, general and administrative		26,030			22,089			3,941			18	%
Management reorganization		—			739			(739	)		-100	%
Equity in net loss (income) of joint ventures		118			(589	)		707			120	%
Total operating expenses		41,777			34,939			6,838			20	%
Termination fee		5,000			—			5,000			n/m
Gain on previously held equity interest		2,936			—			2,936			n/m
Income (loss) from operations		26,422			(15,450	)		41,872			271	%
Interest income and other		94			210			(116	)		-55	%
Interest expense		(482	)		(1,515	)		1,033			-68	%
Income (loss) before income taxes		26,034			(16,755	)		42,789			255	%
Provision for income taxes		—			—			—			—
Net income (loss)	$	26,034		$	(16,755	)	$	42,789			255	%
Net income (loss) per common share:
Basic	$	0.92		$	(0.60	)	$	1.52			253	%
Diluted	$	0.90		$	(0.60	)	$	1.50			250	%

Net revenue: Net revenue for the nine months ended September 30, 2013 totaled $180.6 million, an increase of $50.3 million, or 38%, as compared to $130.4 million for the nine months ended September 30, 2012. The launch of 23 codes or presentations of 10 products since September 30, 2012, including zoledronic acid vials at market formation, contributed $52.1 million of the net revenue increase in the first nine months of the current year. Net revenue for products launched prior to September 30, 2012 decreased $2.1 million, or 2%, to $128.3 million in the first nine months of 2013.

Cost of sales: Cost of goods sold for the nine months ended September 30, 2013 totaled $120.4 million, an increase of $9.5 million, or 9%, as compared to $110.9 million for the nine months ended September 30, 2012. Gross profit as a percentage of net revenue was 33.4% for the nine months ended September 30, 2013 compared to 14.9% for the nine months ended September 30, 2012. Adjusted Gross Profit as a percentage of net revenue was 34.4% for the nine months ended September 30, 2013, and 18.1% for the nine months ended September 30, 2012. The increase in both gross profit and Adjusted Gross Profit is primarily due to the introduction of higher margin products in the past twelve months, particularly zoledronic acid vials at market formation in March 2013, partially offset by reductions in demand driven by the abatement of market shortages and competitive pricing pressures and $1.1 million of unabsorbed manufacturing costs at our SCP facility.

Product development: Product development expense for the nine months ended September 30, 2013 totaled $15.6 million, an increase of $2.9 million, or 23%, as compared to $12.7 million for the nine months ended September 30, 2012. The increase in product development expense was primarily due to increased milestone expense for projects in our pipeline and $0.6 million of costs associated with development activities at SCP, which were included as part of the equity in net loss (income) of joint ventures in 2012.

Selling, general and administrative: Selling, general and administrative expenses for the nine months ended September 30, 2013, totaled $26.0 million, an increase of $3.9 million, or 18%, as compared to $22.1 million for the nine months ended September 30, 2012. The increase in selling, general and administrative expense was primarily due to increases in employee-related costs and $0.9 million of costs associated with our SCP facility, which were included as part of the equity in net loss (income) of joint ventures in 2012. Selling, general and administrative expense as a percentage of net revenue was 14% and 17% for the nine months ended September 30, 2013 and 2012, respectively.

22

Equity in net loss (income) of joint ventures: Equity in net loss of joint ventures for the nine months ended September 30, 2013 totaled $0.1 million, as compared to income from joint ventures of $0.6 million for the nine months ended September 30, 2012. Included in this amount are the following (in thousands of dollars).

	Nine Months Ended September 30,
	2013			2012
Sagent Agila LLC – Earnings directly related to the sale of product	$	(1,909	)	$	(4,141	)
Sagent Agila LLC – Product development costs		202			415
Kanghong Sagent (Chengdu) Pharmaceutical Co – net loss		1,825			3,137
Equity in net loss of joint ventures	$	118		$	(589	)

Termination fee: Termination fee for 2013 represents the $5.0 million one-time termination fee received in connection with our agreement in March 2013 to terminate our Manufacturing and Supply Agreement with Actavis effective December 31, 2014.

Gain on previously held equity interest: As a result of the SCP Acquisition, our previously held equity interest was remeasured to fair value, resulting in a gain of $2.9 million reported as gain on previously held equity interest in the condensed consolidated statements of operations. The gain includes $2.8 million reclassified from accumulated other comprehensive income, and previously recorded as currency translation adjustments.

Interest expense: Interest expense for the nine months ended September 30, 2013 totaled $0.5 million, a decrease of $1.0 million, or 68%, as compared to $1.5 million for the nine months ended September 30, 2012. The decrease was principally due to $1.1 million of deferred financing costs incurred in connection with the early termination and partial extinguishment of our former senior secured revolving and term loan credit facilities in February 2012.

Provision for income taxes: We have generated cumulative tax losses since inception and do not believe that it is more likely than not that our net operating loss carryforwards and other deferred tax assets will be utilized. As a result, we have decided that a full valuation allowance is needed against our deferred tax assets. Because none of our current net operating loss carryforwards expire before 2027, we expect that we will have a reasonable opportunity to utilize all of these loss carryforwards before they expire, but such loss carryforwards will be usable only to the extent that we generate sufficient taxable income.

Net income (loss) and diluted net earnings (loss) per common share: The net income for the nine months ended September 30, 2013 of $26.0 million increased by $42.8 million, or 255%, from the $16.8 million net loss for the nine months ended September 30, 2012. Diluted net earnings (loss) per common share increased by $1.50, or 250%. The increase in diluted net earnings (loss) per common share is due to the following factors:

Diluted EPS for the nine months ended September 30, 2012	$	(0.60	)
Increase in earnings		1.47
Increase in diluted common shares outstanding		0.03
Diluted EPS for the nine months ended September 30, 2013	$	0.90

Adjusted EBITDA: Adjusted EBITDA for the nine months ended September 30, 2013 of $33.6 million increased by $36.9 million, or 1,118%, from negative $3.3 million for the nine months ended September 30, 2012. The improvement in Adjusted EBITDA is driven predominately by the increased cash earnings of the business in the nine months ended September 30, 2013, as our gross profit increased by $40.8 million during the period, partially offset by $2.3 million of cash costs associated with the consolidation of SCP.

23

Liquidity and Capital Resources

Funding Requirements

Our future capital requirements will depend on a number of factors, including the continued commercial success of our existing products, launching the 41 products that are represented by our 70 ANDAs that have been recently approved and are pending commercial launch or are pending approval by the FDA as of September 30, 2013, successfully identifying and sourcing other new product opportunities, manufacturing products at our wholly-owned Chinese manufacturing facility, and business development activity.

Based on our existing business plan, we expect that cash, cash equivalents and short-term investments of approximately $156.2 million as of September 30, 2013, together with borrowings available under our SVB revolving loan facility, will be sufficient to fund our planned operations, including the continued development of our product pipeline, the further payments required in respect of the SCP Acquisition , our obligations under the ABC Loans and potential capital expansion at our Chinese facility, for at least the next 12 months. However, we may require additional funds in the event that we change our business plan, pursue additional strategic transactions, including the acquisition of businesses or products, or encounter unexpected developments, including unforeseen competitive conditions within our product markets, changes in the regulatory environment or the loss of or negative developments affecting key relationships with suppliers, group purchasing organizations or end-user customers.

If additional funding is required, it may not be available to us on acceptable terms or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders. For example, if we raise additional funds by issuing equity securities or by selling convertible debt securities, dilution to our existing stockholders may result. To the extent our capital resources are insufficient to meet our future capital requirements, we will need to finance our future cash needs through public or private equity offerings or debt financings, which may not be available to us on terms we consider acceptable or at all.

If additional funding is not available, we may be required to terminate, significantly modify or delay the development or commercialization of new products and may not be able to achieve the manufacturing potential of our SCP facility. We may elect to raise additional funds even before we need them if we believe that the conditions for raising capital are favorable.

Cash Flows

Overview

On September 30, 2013, cash and cash equivalents on hand totaled $45.9 million. Short-term investments, generally U.S. government or investment grade corporate debt securities with a remaining term of two years or less, totaled $110.3 million. Working capital totaled $185.7 million and our current ratio (current assets to current liabilities) was approximately 4.4 to 1.0.

Sources and Uses of Cash

Operating activities: Net cash provided by operating activities was $31.7 million for the nine months ended September 30, 2013, compared with $18.4 million of cash used in operating activities for the nine months ended September 30, 2012. The increase in cash provided by operations was primarily due to the $36.9 million increase in Adjusted EBITDA and the reduction of cash used to repay accounts payables and other accrued liabilities in the nine months ended September 30, 2013.

Investing activities: Net cash used in investing activities was $84.7 million for the nine months ended September 30, 2013, compared with $30.5 million of net cash provided by investing activities in the nine months ended September 30, 2012. Cash used in investing activities during 2013 relates primarily to the investment of the proceeds from our September 2013 stock offering in short term investments, while cash provided by investing activities in 2012 relates to the net sale of short term investments of $34.0 million to repay in full all amounts due under our former term loan and senior secured revolving credit facilities in February 2012.

Financing activities: Net cash provided by financing activities was $71.1 million for the nine months ended September 30, 2013, compared to net cash used in financing activities of $37.4 million for the nine months ended September 30, 2012. Cash provided by financing activities in 2013 primarily relates to the $70.6 million net proceeds received from the issuance of 3,542,670 shares of our common stock at $21.25 per share in September 2013. Cash used in financing activities in 2012 primarily related to the repayment in full of all outstanding amounts due under our former term loan and senior secured revolving credit facilities in February 2012.

24

Asset based revolving loan facility

On February 13, 2012, we entered into a Loan and Security Agreement with Silicon Valley Bank (the “SVB Agreement”). The SVB Agreement provides for a $40.0 million asset based revolving loan facility, with availability determined by a borrowing base consisting of eligible accounts receivable and inventory and subject to certain conditions precedent specified in the SVB Agreement. The SVB Agreement matures on February 13, 2016, at which time all outstanding amounts will become due and payable. Borrowings under the SVB Agreement may be used for general corporate purposes, including funding working capital. Amounts drawn bear an interest rate equal to, at our option, either a Eurodollar rate plus 2.50% per annum or an alternative base rate plus 1.50% per annum. We also pay a commitment fee on undrawn amounts equal to 0.30% per annum. During the continuance of an event of default, at Silicon Valley Bank’s option, all obligations will bear interest at a rate per annum equal to 5.00% per annum above the otherwise applicable rate.

Loans under the SVB Agreement are secured by substantially all of our and our principal domestic operating subsidiary’s assets, other than our equity interests in our joint ventures and certain other limited exceptions.

The SVB Agreement contains various customary affirmative and negative covenants. The negative covenants restrict our ability to, among other things, incur additional indebtedness, create or permit to exist liens, make certain investments, dividends and other payments in respect of capital stock, sell assets or otherwise dispose of our property, change our lines of business, or enter into a merger or acquisition, in each case, subject to thresholds and exceptions as set forth in the SVB Agreement. The financial covenants in the original SVB Agreement are limited to maintenance of a minimum adjusted quick ratio and a minimum free cash flow. The SVB Agreement also contains customary events of default, including non-payment of principal, interest and other fees after stated grace periods, violations of covenants, material inaccuracy of representations and warranties, certain bankruptcy and liquidation events, certain material judgments and attachment events, cross-default to other debt in excess of a specified amount and material agreements, failure to maintain certain material governmental approvals, and actual or asserted invalidity of subordination terms, guarantees and collateral, in each case, subject to grace periods, thresholds and exceptions as set forth in the SVB Agreement.

In September 2013, we entered into the Second Loan Modification Agreement (the “Second Modification Agreement”) to the SVB Agreement. The Second Modification Agreement makes certain amendments to the SVB Agreement, including: modifying the calculation methodology of the borrowing base that is used to determine the Company’s borrowing availability, while maximum availability remains $40.0 million; eliminating the covenant to maintain a specified level of free cash flow in quarters where the Company maintains eligible cash balances of $30.0 million or greater and modifying the covenant for the adjusted quick ratio to be tested at the end of each month; and providing additional flexibility for the Company to make certain investments. The Second Modification Agreement did not amend the term of the SVB Agreement, the maximum availability under the SVB Agreement, or the interest rate applicable to amounts drawn under the SVB Agreement, which remain unchanged.

As of September 30, 2013, there were no borrowings outstanding under our Silicon Valley Bank revolving loan facility, and we were in compliance with all covenants under this loan agreement.

Chinese loan facilities

SCP had outstanding debt obligations with the Agricultural Bank of China Ltd. (“ABC”) at the time of the SCP Acquisition. SCP originally entered into two loan contracts with ABC for RMB 83.0 million ($13.4 million) and RMB 37.0 million ($6.0 million) in August 2010 and June 2011, respectively (the “ABC Loans”). At September 30, 2013, RMB 118.0 million ($19.2 million) of the original loan remains outstanding, and is subject to a repayment schedule, with all amounts due and payable by August 2015. Borrowings under the ABC Loans were used for the construction of the SCP facility and funding of the ongoing operations of SCP up to the date of the SCP Acquisition. Amounts outstanding under the ABC Loans bear an interest rate equal to the benchmark lending interest rate published by the People’s Bank of China. During the term of the loan, the rate is subject to adjustment every three months. The ABC Loans are secured by the property, plant and equipment of SCP. The ABC Loans contain various covenants, including covenants that restrict SCP’s ability to incur additional indebtedness, provide guarantees, pledge or incur liens on assets, enter into merger, consolidation or acquisition transactions, or transfer assets. In addition, the ABC Loans contain financial covenants that require SCP to achieve specified minimum revenue levels and to maintain a specified liability to assets ratio. As of September 30, 2013, the interest rate for the ABC Loans was 6.00%.

25

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

We have no off-balance sheet arrangements other than the contractual obligations that are discussed below and in our Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2012, included in our Annual Report on Form 10-K, filed with the SEC on March 18, 2013.

Aggregate Contractual Obligations:

The following table summarizes our long-term contractual obligations and commitments as of September 30, 2013. The actual amounts that may be required in the future to repay borrowings under the SVB Agreement and the ABC Loans may be different, as a result of borrowings under the facility and foreign exchange rates, respectively.

	Payments due by period
Contractual obligations (1)	Total		Less than one year		1-3 years		3-5 years		More than five years
Long-term debt obligations (2)	$	19,194	$	4,880	$	14,314	$	—	$	—
Operating lease obligations (3)		993		295		617		81		—
Contingent milestone payments (4)		26,184		12,947		10,341		2,896		—
SCP purchase consideration (5)		15,000		6,000		9,000		—		—
Joint venture funding requirements (6)		118		118		—		—		—
	$	61,489	$	24,240	$	34,272	$	2,977	$	—

⁽¹⁾  We had no material purchase commitments, individually or in the aggregate, under our manufacturing and supply agreements.

⁽²⁾  No amounts were drawn under the SVB revolving loan facility as of September 30, 2013. Includes amounts due under the ABC Loans assuming period-end foreign exchange rates.

⁽³⁾  Includes annual minimum lease payments related to non-cancelable operating leases.

⁽⁴⁾  Includes management’s estimate for contingent potential milestone payments and fees pursuant to strategic business agreements for the development and marketing of finished dosage form pharmaceutical products assuming all contingent milestone payments occur. Does not include contingent royalty payments, which are dependent on the introduction of new products.

⁽⁵⁾  Includes remaining purchase consideration payable under the SCP share purchase agreement.

⁽⁶⁾  Includes minimum funding requirements in connection with our Sagent Agila joint venture.

Critical Accounting Policies

We prepare our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions.

We have identified the following critical accounting policies:

• Revenue recognition;

• Inventories;

• Income taxes;

• Stock-based compensation;

• Valuation and impairment of marketable securities;

• Product development; and

• Intangible assets.

26

For a discussion of critical accounting policies affecting us, see the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” and under Note 1 to our consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on March 18, 2013.

Following the SCP Acquisition, we have identified our accounting policies for consolidations and goodwill as new critical accounting policies, as further described below.

Consolidations

The consolidated financial statements of Sagent include the assets, liabilities, and results of operations of Sagent Pharmaceuticals, Inc. and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated financial statements as of September 30, 2013 include SCP as a wholly-owned subsidiary as a result of the SCP Acquisition on June 4, 2013. Prior to the SCP Acquisition, we accounted for our investment in SCP using the equity method of accounting, as our interest in the entity provided for joint financial and operational control. Operating results of SCP prior to the SCP Acquisition were reported on a one-month lag.

We account for investments in joint ventures, including Sagent Agila LLC and, prior to the SCP Acquisition, SCP, under the equity method of accounting, as our interest in each entity provides for joint financial and operational control. Our equity in the net income (loss) of Sagent Agila LLC and, prior to the SCP Acquisition, SCP, is included in the consolidated financial statements as equity in net income (loss) of joint ventures.

Goodwill

Goodwill is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized, but rather tested for impairment on an annual basis and more often if circumstances require. Impairment losses are recognized whenever the implied fair value of goodwill is less than its carrying value. We test goodwill for impairment at least annually on October 1.

New Accounting Guidance

There are currently no new accounting pronouncements that will impact the Company.

Contingencies

See Note 18. Commitments and Contingencies, and Part II, Item 1. Legal Proceedings for a discussion of contingencies.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Our market risks relate primarily to changes in interest rates, and following the SCP Acquisition, currency rate fluctuations between the Chinese Renminbi and US dollar.

Our SVB revolving loan facility bears floating interest rates that are tied to LIBOR and an alternate base rate, and therefore, our statements of operations and our cash flows will be exposed to changes in interest rates. As we had no borrowings outstanding at September 30, 2013, there is no impact related to potential changes in the LIBOR rate on our interest expense at September 30, 2013. Our ABC Loans bear floating interest rates that are tied to the benchmark lending interest rate published by the People’s Bank of China, and therefore our statements of operations and our cash flows are exposed to changes in interest and foreign exchange rates. Based on the amounts outstanding at September 30, 2013, a one percentage point increase in the benchmark lending rate published by the People’s Bank of China would increase our ongoing interest expense by $0.2 million per year, and a 10% strengthening of the Chinese Renminbi relative to the US dollar, would increase our ongoing interest expense by $0.1 million per year. We historically have not engaged in hedging activities related to our interest rate or foreign exchange risks.

27

At September 30, 2013, we had cash and cash equivalents and short-term investments of $45.9 million and $110.3 million, respectively. Our cash and cash equivalents are held primarily in cash and money market funds, and our short-term investments are held primarily in corporate debt securities and commercial paper. We do not enter into investments for trading or speculative purposes. Due to the short-term nature of these investments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates.

We generally record sales in U.S. dollars and pay our expenses in the local currency of the legal entity that incurs the expense, either U.S. dollars or Chinese Renminbi. Substantially all of our business partners that supply us with API, product development services and finished product manufacturing are located in a number of foreign jurisdictions, and we believe those business partners generally incur their respective operating expenses in local currencies. As a result, both we and our business partners may be exposed to currency rate fluctuations and experience an effective increase in operating expenses in the event local currencies appreciate against the U.S. dollar. In this event, the cost of manufacturing product from our SCP facility may increase or such business partners may elect to stop providing us with these services or attempt to pass these increased costs back to us through increased prices for product development services, API sourcing or finished products that they supply to us. Historically we have not used derivatives to protect against adverse movements in currency rates.

We do not have any foreign currency or any other material derivative financial instruments.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures (a) were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting.

Management, together with our Chief Executive Officer and our Chief Financial Officer, evaluated the changes in our internal control over financial reporting during the quarter ended September 30, 2013. We determined that there were no changes in our internal control over financial reporting during the quarter ended September 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

28

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time we are subject to claims and litigation arising in the ordinary course of business. At this time, there are no proceedings of which management is aware that are expected to have a material adverse effect on our consolidated financial position or results of operations. We intend to vigorously defend any such litigation that may arise under all defenses that would be available to us.

Zoledronic Acid (Generic versions of Zometa^® and Reclast^®).

On February 20, 2013, Novartis Pharmaceuticals Corporation (“Novartis”) sued the Company and several other defendants in the United States District Court for the District of New Jersey, alleging, among other things, that sales of the Company’s (i) zoledronic acid premix bag (4mg/100ml), made by ACS Dobfar Info S.A. (“Info”), also a defendant, a generic version of Novartis’ Zometa^® ready to use bottle , would infringe U.S. Patent No. 7,932,241 (the “241 Patent”) and U.S. Patent No. 8,324,189 (the “189 Patent”) and (ii) zoledronic acid premix bag (5mg/100ml), also made by Info, a generic version of Novartis’ Reclast^® ready to use bottle, would infringe U.S. Patent No. 8,052,987 and the 241 Patent, and (iii) zoledronic acid vial (4mg/5ml), made by Actavis LLC, also a defendant, a generic version of Novartis’ Zometa^® vial, would infringe the 189 Patent. (Novartis Pharmaceuticals Corporation v. Actavis, LLC, et. al., Case No. 13-cv-1028) On March 1, 2013, the District Court denied Novartis’ request for a temporary restraining order against the Company and the other defendants, including Actavis and Info. On March 6, 2013, the Company, began selling Actavis’ zoledronic acid vial, the generic version of Zometa^®. Also, as of August 27, 2013 and October 1, 2013, the Company began selling zoledronic acid premix bags in 4mg/100ml and 5mg/100ml presentations, respectively. The Company believes it has substantial meritorious defenses to the case, and the Company has sold and will continue to sell these products. Therefore, an adverse final determination that one of the patents is valid and infringed could have an adverse effect on the Company’s business, results of operations, financial condition and cash flows.

Item 1A. Risk Factors.

There were no material changes during the three months ended September 30, 2013 to the risk factors previously disclosed in Part II, Item 1A under the heading “Risk Factors” in our Quarterly Report on Form 10-Q filed with the SEC on August 6, 2013.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities during the Quarter ended September 30, 2013

There are currently no share repurchase programs authorized by our Board of Directors. We made no repurchases of our common stock during the third quarter of 2013.

Recent Sales of Unregistered Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

29

Item 6. Exhibits.

Exhibit Number	Description
3.1	Certificate of Incorporation of Sagent Pharmaceuticals, Inc. (Incorporated by reference to Exhibit 3.3 in the Company’s Registration Statement on Form S-1, as amended (File Nos. 333-170979 and 333-173597)).
3.2	Bylaws of Sagent Pharmaceuticals, Inc. (Incorporated by reference to Exhibit 3.4 in the Company’s Registration Statement on Form S-1, as amended (File Nos. 333-170979 and 333-173597)).
10.1	Second Loan Modification Agreement, dated September 23, 2013, by and among Sagent Pharmaceuticals, Inc., a Delaware corporation, Sagent Pharmaceuticals, Inc., a Wyoming corporation, and Silicon Valley Bank. (Incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K filed September 24, 2013).
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
32.1*	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.1*	The following materials from Sagent’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 are formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012, (ii) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2013 and 2012, (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012, (v) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text and (vi) document and entity information.

* Filed herewith

30

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SAGENT PHARMACEUTICALS INC.

/s/ Jonathon M. Singer

Jonathon M. Singer

Executive Vice President and Chief Financial Officer

November 5, 2013

31

EX-31.1

EXHIBIT 31.1

Certifications

I, Jeffrey M. Yordon, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sagent Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 5, 2013

/s/ Jeffrey M. Yordon

Jeffrey M. Yordon

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certifications

I, Jonathon M. Singer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sagent Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 5, 2013

/s/ Jonathon M. Singer

Jonathon M. Singer

Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS OF

CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey M. Yordon, Chief Executive Officer of Sagent Pharmaceuticals, Inc. (“Sagent”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that Sagent’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in Sagent’s Quarterly Report on Form 10-Q fairly presents, in all material respects, Sagent’s financial condition and results of operations.

/s/ Jeffrey M. Yordon

Jeffrey M. Yordon

Chief Executive Officer

November 5, 2013

I, Jonathon M. Singer, Chief Financial Officer of Sagent Pharmaceuticals, Inc. (“Sagent”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that Sagent’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in Sagent’s Quarterly Report on Form 10-Q fairly presents, in all material respects, Sagent’s financial condition and results of operations.

/s/ Jonathon M. Singer

Jonathon M. Singer

Executive Vice President and Chief Financial Officer

November 5, 2013

A signed original of these written statements required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Sagent Pharmaceuticals, Inc. and will be retained by Sagent Pharmaceuticals, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Accumulated other comprehensive income

9 Months Ended

Sep. 30, 2013

Accumulated other comprehensive income

Note 12. Accumulated other comprehensive income:

Accumulated other comprehensive income at September 30, 2013 and December 31, 2012 is comprised of the following:

	September 30, 2013			December 31, 2012
Currency translation adjustment, net of tax	$	170		$	2,488
Unrealized (losses) gains on available for sale securities, net of tax		(59	)		12
Total accumulated other comprehensive income	$	111		$	2,500

The following table summarizes the changes in balances of each component of accumulated other comprehensive income, net of tax as of September 30, 2013.

	Currency translation adjustment			Unrealized gains (losses) on available for sale securities			Total
Balance as of December 31, 2012	$	2,488		$	12		$	2,500
Other comprehensive income (loss) before reclassifications		464			(71	)		393
Amounts reclassified from accumulated other comprehensive income (loss)		(2,782	)		—			(2,782	)
Net current-period other comprehensive loss		(2,318	)		(71	)		(2,389	)
Balance as of September 30, 2013	$	170		$	(59	)	$	111

No amounts were reclassified out of accumulated other comprehensive income for the three months ended September 30, 2013. The table below presents the significant amounts reclassified out of each component of accumulated other comprehensive income for the nine months ended September 30, 2013.

Type of reclassification	Amount reclassified from accumulated other comprehensive income		Affected line item in the condensed consolidated statement of operations
Currency translation adjustment – reclassification of cumulative currency translation gain	$	2,782	Gain on previously held equity interest
Total reclassification for the nine months ended September 30, 2013, net of tax	$	2,782

XML

Movements in Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified			9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Product Licensing Rights	Sep. 30, 2013 Product Development Rights
Finite-Lived Intangible Assets [Line Items]
Beginning Balance	$ 3,282	$ 4,277	$ 1,615	$ 2,662
Acquisition of product rights			535	1,829
Amortization of product rights			(395)	(2,964)
Ending Balance	$ 3,282	$ 4,277	$ 1,755	$ 1,527

XML

Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net revenue	$ 60,842	$ 49,429	$ 180,644	$ 130,389
Cost of sales	42,255	42,208	120,381	110,900
Gross profit	18,587	7,221	60,263	19,489
Operating expenses:
Product development	6,888	4,011	15,629	12,700
Selling, general and administrative	9,083	7,169	26,030	22,089
Management reorganization		739		739
Equity in net loss (income) of joint ventures	(485)	(940)	118	(589)
Total operating expenses	15,486	10,979	41,777	34,939
Termination fee			5,000
Gain on previously held equity interest			2,936
Income (loss) from operations	3,101	(3,758)	26,422	(15,450)
Interest income and other	44	60	94	210
Interest expense	(319)	(52)	(482)	(1,515)
Income (loss) before income taxes	2,826	(3,750)	26,034	(16,755)
Provision for income taxes
Net income (loss)	$ 2,826	$ (3,750)	$ 26,034	$ (16,755)
Net income (loss) per common share:
Basic	$ 0.10	$ (0.13)	$ 0.92	$ (0.60)
Diluted	$ 0.10	$ (0.13)	$ 0.90	$ (0.60)
Weighted-average of shares used to compute net income (loss) per common share:
Basic	28,745	27,977	28,349	27,943
Diluted	29,568	27,977	29,051	27,943

XML

Inventories

9 Months Ended

Sep. 30, 2013

Inventories

Note 4. Inventories:

Inventories at September 30, 2013 and December 31, 2012 were as follows:

	September 30, 2013									December 31, 2012
	Approved			Pending regulatory approval			Inventory			Approved			Pending regulatory approval		Inventory
Finished goods	$	47,498		$	1,437		$	48,935		$	46,410		$	1,437	$	47,847
Raw materials		3,935			19			3,954			1,280			—		1,280
Inventory reserve		(2,832	)		(1,437	)		(4,269	)		(2,021	)		—		(2,021	)
	$	48,601		$	19		$	48,620		$	45,669		$	1,437	$	47,106

XML

Basis of presentation (Policies)

9 Months Ended

Sep. 30, 2013

Goodwill

Goodwill

Goodwill is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized, but rather tested for impairment on an annual basis and more often if circumstances require. Impairment losses are recognized whenever the implied fair value of goodwill is less than its carrying value. We test goodwill for impairment at least annually on October 1.

Property, Plant, and Equipment

Property, Plant, and Equipment

Property, plant, and equipment is stated at cost, less accumulated depreciation. The cost of repairs and maintenance is expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Provisions for depreciation are computed for financial reporting purposes using the straight-line method over the estimated useful life of the related asset and for leasehold improvements over the lesser of the estimated useful life of the related asset or the term of the related lease as follows:

Land and land improvements	Remaining term of Chinese land use right (June 2057)
Building and improvements	5 to 40 years or remaining term of lease
Machinery, equipment, furniture, and fixtures	3 to 10 years

Property, plant and equipment that is purchased or constructed which requires a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs and associated interest costs. Construction-in-progress is transferred to specific property, plant and equipment accounts and commences depreciation when these assets are ready for their intended use. The capitalization of interest costs commences when expenditures for the asset have been made, activities that are necessary to prepare the asset for its intended use are in progress and interest cost is being incurred. The capitalization period ends when the asset is substantially complete and ready for its intended use.

XML

Earnings Per Share - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended		1 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 16, 2013 Secondary Stock Offering
Earnings Per Share [Line Items]
Common stock shares issued			3,542,470
Cash consideration for common stock exchange			$ 75,277
Net proceeds from common stock issuance	$ 71,158	$ 585	$ 70,647
Common stock price per share			$ 21.25

XML

Condensed Statement of Operations Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Sagent Agila LLC
Schedule of Equity Method Investments [Line Items]
Net revenues	$ 3,212	$ 7,469	$ 13,924	$ 19,224
Gross profit	1,093	4,537	3,817	8,282
Net (income) loss	969	4,110	3,413	7,453
SCP
Schedule of Equity Method Investments [Line Items]
Net (income) loss		$ (2,459)	$ (2,805)	$ (5,766)

XML

Earnings per share

9 Months Ended

Sep. 30, 2013

Earnings per share

Note 13. Earnings per share:

Basic earnings per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Because of their anti-dilutive effect, the following common share equivalents, comprised of restricted stock and unexercised stock options, have been excluded from the calculation of diluted earnings per share for the three and nine month periods ended September 30, 2013 and 2012, respectively:

	Anti-dilutive shares
Three months ended September 30, 2013		923,415
Three months ended September 30, 2012		2,403,630
Nine months ended September 30, 2013		1,212,899
Nine months ended September 30, 2012		2,403,630

The table below presents the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2013 and 2012:

	Three months ended September 30,					Nine months ended September 30,
	2013		2012			2013		2012
Basic and dilutive numerator:
Net income (loss), as reported	$	2,826	$	(3,750	)	$	26,034	$	(16,755	)
Denominator:
Weighted-average common shares outstanding—basic (in thousands)		28,745		27,977			28,349		27,943
Net effect of dilutive securities:
Stock options and restricted stock		823		—			702		—
Weighted-average common shares outstanding—diluted (in thousands)		29,568		27,977			29,051		27,943
Net income (loss) per common share (basic)	$	0.10	$	(0.13	)	$	0.92	$	(0.60	)
Net income (loss) per common share (diluted)	$	0.10	$	(0.13	)	$	0.90	$	(0.60	)

On September 16, 2013, we completed a registered equity offering, issuing 3,542,470 new shares of our common stock at $21.25 per share in exchange for total consideration of $75,277. We received proceeds from the offering, net of the underwriting discount and expenses, of $70,647.

XML

Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Inventory [Line Items]
Finished goods	$ 48,935	$ 47,847
Raw materials	3,954	1,280
Inventory reserve	(4,269)	(2,021)
Inventory, Net, Total	48,620	47,106
Approved
Inventory [Line Items]
Finished goods	47,498	46,410
Raw materials	3,935	1,280
Inventory reserve	(2,832)	(2,021)
Inventory, Net, Total	48,601	45,669
Pending Regulatory Approval
Inventory [Line Items]
Finished goods	1,437	1,437
Raw materials	19
Inventory reserve	(1,437)
Inventory, Net, Total	$ 19	$ 1,437

XML

Changes in Investment of Sagent Pharmaceutical Corporation Limited (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Schedule of Equity Method Investments [Line Items]
Investment at beginning of year			$ 19,622
Equity in net loss (income) of joint ventures	(485)	(940)	118	(589)
Investment at end of year	1,873		1,873
SCP
Schedule of Equity Method Investments [Line Items]
Investment at beginning of year			17,461
Equity in net loss (income) of joint ventures			(1,825)
Currency translation adjustment			294
Investments			19
Acquisition of remaining equity interest in SCP			$ (15,949)

XML

Basis of Presentation - Additional Information (Detail) (SCP)	Jun. 04, 2013
SCP
Basis of Presentation [Line Items]
Percentage of remaining equity interest acquired	50.00%

XML

Investments (Tables)

9 Months Ended

Sep. 30, 2013

Investments

Our investments at September 30, 2013 were comprised of the following:

	Cost basis		Unrealized gains		Unrealized losses			Recorded basis		Cash and cash equivalents		Short term investments
Assets
Cash	$	30,810	$	—	$	—		$	30,810	$	30,810	$	—
Money market funds		15,127		—		—			15,127		15,127		—
Commercial paper		50,196		2		(1	)		50,197		—		50,197
Corporate bonds and notes		60,114		3		(63	)		60,054		—		60,054
	$	156,247	$	5	$	(64	)	$	156,188	$	45,937	$	110,251

Investments with Continuous Unrealized Losses for Less Than Twelve Months and Related Fair Values

Investments with continuous unrealized losses for less than twelve months and their related fair values at September 30, 2013 were as follows:

	Fair value		Unrealized losses
Commercial paper	$	34,097	$	(1	)
Corporate bonds and notes		50,571		(63	)
	$	84,668	$	(64	)

Cost and Estimated Current Fair Value of Fixed-Income Securities

The original cost and estimated current fair value of our fixed-income securities at September 30, 2013 are set forth below.

	Cost basis		Estimated fair value
Due in one year or less	$	66,786	$	66,782
Due between one and five years		43,524		43,469
	$	110,310	$	110,251

XML

Acquisition (Tables)

9 Months Ended

Sep. 30, 2013

Future Payments Related to Acquisition

Future installment payments are payable as follows:

	(in thousands)
2013	$	2,500
2014		3,500
2015		9,000

Fair value of transferred

The acquisition date fair value transferred for the purchase of SCP is as follows:

	(in thousands)
Cash	$	10,000
Present value of remaining purchase consideration		13,836
Previously held equity interest		15,949
Gain on remeasurement of previously held equity interest in SCP		154
Total purchase consideration	$	39,939

Allocation of Purchase Price

The estimated fair value of identifiable assets acquired and liabilities assumed for the SCP Acquisition is shown in the table below:

	(in thousands)
Goodwill	$	6,038
Acquired tangible assets, net of assumed liabilities		33,901
Total allocation of fair value	$	39,939

Consolidated Pro Forma Operations Results in Acquisitions

The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the SCP Acquisition been effected on the assumed date.

	Three months ended September 30,					Nine months ended September 30,
	2013		2012			2013		2012
Net revenues	$	60,842	$	49,429		$	180,644	$	130,389
Net income (loss)		2,826		(5,094	)		19,405		(16,979	)
Diluted income (loss) per common share		0.10		(0.18	)		0.67		(0.61	)

XML

Investments with Continuous Unrealized Losses for Less Than Twelve Months and Related Fair Values (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Schedule of Available-for-sale Securities [Line Items]
Fair value	$ 84,668
Unrealized losses	(64)
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Fair value	34,097
Unrealized losses	(1)
Corporate bonds and notes
Schedule of Available-for-sale Securities [Line Items]
Fair value	50,571
Unrealized losses	$ (63)

XML

Fair value measurements (Tables)

9 Months Ended

Sep. 30, 2013

Summary of Assets Measured at Fair Value on Recurring Basis

Assets measured at fair value on a recurring basis as of September 30, 2013 consisted of the following:

	Total fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs  (Level 3)
Assets
Money market funds	$	15,127	$	15,127	$	—	$	—
Corporate bonds and notes		60,054		—		60,054		—
Commercial paper		50,197		—		50,197		—
Short-term investments	$	110,251	$	—	$	110,251	$	—
Total assets	$	125,378	$	15,127	$	110,251	$	—

Assets measured at fair value on a recurring basis as of December 31, 2012 consisted of the following:

	Total fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs  (Level 3)
Assets
Money market funds	$	18,141	$	18,141	$	—	$	—
Corporate bonds and notes		13,358		—		13,358		—
Commercial paper		23,247		—		23,247		—
Short-term investments	$	36,605	$	—	$	36,605	$	—
Total assets	$	54,746	$	18,141	$	36,605	$	—

XML

Acquisition - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	1 Months Ended		9 Months Ended
	Jun. 04, 2013	Apr. 30, 2013	Sep. 30, 2013
Business Acquisition [Line Items]
Gain on previously held equity interest			$ 2,936
Reclassification of cumulative currency translation gain			2,782
Goodwill			6,038
SCP
Business Acquisition [Line Items]
Percentage of remaining equity interest acquired	50.00%
Business acquisition, purchase price		25,000	39,939
Business acquisition, gross consideration paid	10,000		10,000
Business acquisition, fair value of future payment			13,836
Gain on previously held equity interest			2,936
Reclassification of cumulative currency translation gain			2,782
Business acquisition related cost			479
Cash	2,704
Inventory	2,396
Prepaid assets	196
Property, plant and equipment	56,654
Long term bank loans	19,095
Accrued compensation and other liabilities	8,954
Goodwill	$ 6,038

XML

Property Plant and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Property Plant and equipment before depreciation	$ 59,596	$ 1,867
Less accumulated depreciation	(1,713)	(1,087)
Property Plant and equipment after depreciation	57,883	780
Land and Land Improvements
Property, Plant and Equipment [Line Items]
Property Plant and equipment before depreciation	2,216
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property Plant and equipment before depreciation	19,578	103
Machinery, equipment, furniture, and fixtures
Property, Plant and Equipment [Line Items]
Property Plant and equipment before depreciation	37,496	1,764
Construction in process
Property, Plant and Equipment [Line Items]
Property Plant and equipment before depreciation	$ 306

XML

Investment (Tables)

9 Months Ended

Sep. 30, 2013

Sagent Agila LLC

Changes in Investment

Changes in our investment in Sagent Agila during the nine months ended September 30, 2013 were as follows:

Investment in Sagent Agila at January 1, 2013	$	2,161
Equity in net income of Sagent Agila		1,707
Dividends paid		(1,995	)
Investment in Sagent Agila at September 30, 2013	$	1,873

Condensed Statement of Operations Information

Condensed statement of operations information of Sagent Agila is presented below.

	Three months ended September 30,				Nine months ended September 30,
Condensed statement of operations information	2013		2012		2013		2012
Net revenues	$	3,212	$	7,469	$	13,924	$	19,224
Gross profit		1,093		4,537		3,817		8,282
Net income		969		4,110		3,413		7,453

SCP

Changes in Investment

Changes in our investment in SCP during the nine months ended September 30, 2013 were as follows:

Investment in SCP at January 1, 2013	$	17,461
Equity in net loss of SCP		(1,825	)
Currency translation adjustment		294
Investments in SCP		19
Acquisition of remaining equity interest in SCP		(15,949	)
Investment in SCP at September 30, 2013	$	—

Condensed Statement of Operations Information

Condensed statement of operations information of SCP for the period through the closing of the SCP Acquisition.

	Three months ended September 30,					Nine months ended September 30,
Condensed statement of operations information	2013		2012			2013			2012
Net revenues	$	—	$	—		$	—		$	—
Gross profit		—		—			—			—
Net loss		—		(2,459	)		(2,805	)		(5,766	)

XML

Amounts Reclassified Out of Accumulated Other Comprehensive Income (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total reclassification for the three and six months ended June 30, 2013, net of tax	$ 2,782
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Gain on previously held equity interest	$ 2,782

XML

Component of Accumulated Other Comprehensive Income (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of December 31, 2012	$ 2,500
Other comprehensive income (loss) before reclassifications	393
Amounts reclassified from accumulated other comprehensive income (loss)	(2,782)
Net current-period other comprehensive loss	(2,389)
Balance as of September 30, 2013	111
Currency translation adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of December 31, 2012	2,488
Other comprehensive income (loss) before reclassifications	464
Amounts reclassified from accumulated other comprehensive income (loss)	(2,782)
Net current-period other comprehensive loss	(2,318)
Balance as of September 30, 2013	170
Unrealized gains (losses) on available for sale securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance as of December 31, 2012	12
Other comprehensive income (loss) before reclassifications	(71)
Net current-period other comprehensive loss	(71)
Balance as of September 30, 2013	$ (59)

XML

Allocation of Purchase Price (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Jun. 04, 2013 SCP
Business Acquisition [Line Items]
Goodwill	$ 6,038	$ 6,038
Acquired tangible assets, net of assumed liabilities		33,901
Total allocation of fair value		$ 39,939

XML

Schedule of Net Amount of Risk by Product and Guarantee (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Product Information [Line Items]
Net revenue by Product Line	$ 60,842	$ 49,429	$ 180,644	$ 130,389
Anti-infective
Product Information [Line Items]
Net revenue by Product Line	24,026	18,173	65,921	57,314
Critical care
Product Information [Line Items]
Net revenue by Product Line	15,638	20,897	48,381	53,885
Oncology
Product Information [Line Items]
Net revenue by Product Line	$ 21,178	$ 10,359	$ 66,342	$ 19,190

XML

Basis of presentation (Tables)

9 Months Ended

Sep. 30, 2013

Estimated Useful Life of Assets and Leasehold Improvements

Provisions for depreciation are computed for financial reporting purposes using the straight-line method over the estimated useful life of the related asset and for leasehold improvements over the lesser of the estimated useful life of the related asset or the term of the related lease as follows:

Land and land improvements	Remaining term of Chinese land use right (June 2057)
Building and improvements	5 to 40 years or remaining term of lease
Machinery, equipment, furniture, and fixtures	3 to 10 years

XML

Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities
Net income (loss)	$ 26,034	$ (16,755)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	4,166	5,198
Stock-based compensation	4,230	4,297
Equity in net loss (income) of joint ventures	118	(589)
Dividends from unconsolidated joint venture	1,995	2,755
Gain on previously held equity interest	(2,936)
Changes in operating assets and liabilities, net of effect of acquisition:
Accounts receivable, net	6,818	(1,733)
Inventories	892	2,131
Prepaid expenses and other current assets	(4,435)	(1,793)
Due from related party	(6,261)	1,370
Accounts payable and other accrued liabilities	1,128	(13,322)
Net cash provided by (used in) operating activities	31,749	(18,441)
Cash flows from investing activities
Capital expenditures	(783)	(54)
Acquisition of business, net of cash acquired	(7,296)
Return of principal balance of restricted cash		23
Investments in unconsolidated joint ventures	(19)	(517)
Purchases of investments	(220,719)	(144,897)
Sale of investments	146,528	178,937
Purchase of product rights	(2,364)	(3,026)
Net cash (used in) provided by investing activities	(84,653)	30,466
Cash flows from financing activities
Reduction in short-term notes payable		(24,867)
Repayment of long-term debt		(12,273)
Proceeds from issuance of common stock, net of issuance costs	71,158	585
Payment of deferred financing costs	(28)	(884)
Net cash provided by (used in) financing activities	71,130	(37,439)
Effect of exchange rate movements on cash	24
Net increase (decrease) in cash and cash equivalents	18,250	(25,414)
Cash and cash equivalents, at beginning of period	27,687	52,203
Cash and cash equivalents, at end of period	$ 45,937	$ 26,789

XML

Acquisition

9 Months Ended

Sep. 30, 2013

Acquisition

Note 2. Acquisition:

On April 30, 2013, in furtherance of the SCP Acquisition, we entered into a Share Purchase Agreement with Chengdu Kanghong Pharmaceuticals (Group) Co. Ltd. (“CKT”) to acquire CKT’s 50% equity interest in SCP for $25,000, payable in installments through September 2015. The SCP Acquisition closed on June 4, 2013, following approval by the Chengdu Hi-Tech Industrial Development Zone Bureau of Investment Services. Concurrent with the closing of the SCP Acquisition, we paid $10,000 of the aggregate purchase consideration, and recorded a liability of $13,836 representing the fair value of our future payments as of the SCP Acquisition date to CKT under the terms of the Share Purchase Agreement. Concurrent with the execution of the Share Purchase Agreement, we entered into a Share Pledge Agreement with CKT pursuant to which we pledged a portion of the shares to be acquired as collateral securing our future installment payment obligations. Future installment payments are payable as follows:

	(in thousands)
2013	$	2,500
2014		3,500
2015		9,000

The SCP Acquisition was financed with cash and short term investments. The SCP Acquisition provided us with full control of the SCP manufacturing facility and will better serve our long term strategic goals, including a strategy of additional investment in product development and capacity expansion.

As a result of the SCP Acquisition, we remeasured the previously held equity interest in SCP to fair value, resulting in a gain of $2,936 reported as gain on previously held equity interest in the condensed consolidated statements of operations. The gain includes $2,782 reclassified from accumulated other comprehensive income (loss), and previously recorded as currency translation adjustments. Both the gain on previously held equity interest and the fair value of the non-controlling interest in SCP that we acquired were based on an asset approach valuation method. Acquisition related costs of $479 were recognized as product development expenses.

The acquisition date fair value transferred for the purchase of SCP is as follows:

	(in thousands)
Cash	$	10,000
Present value of remaining purchase consideration		13,836
Previously held equity interest		15,949
Gain on remeasurement of previously held equity interest in SCP		154
Total purchase consideration	$	39,939

The estimated fair value of identifiable assets acquired and liabilities assumed for the SCP Acquisition is shown in the table below:

	(in thousands)
Goodwill	$	6,038
Acquired tangible assets, net of assumed liabilities		33,901
Total allocation of fair value	$	39,939

The net tangible assets acquired consist primarily of cash of $2,704, inventory of $2,396, prepaid assets of $196, and property, plant and equipment of $56,654, net of assumed liabilities, primarily long term bank loans of $19,095 and accrued compensation and other liabilities of $8,954. We recorded goodwill of $6,038 due to the synergies achieved by having control over the products and manufacturing at the SCP facility.

The results of SCP are now included in the company’s consolidated financial statements from the date of acquisition.

The following unaudited pro forma financial information reflects the consolidated results of operations of Sagent as if the SCP Acquisition had closed on January 1, 2012 and January 1, 2013. The pro forma information includes acquisition and integration expenses. The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the SCP Acquisition been effected on the assumed date.

	Three months ended September 30,					Nine months ended September 30,
	2013		2012			2013		2012
Net revenues	$	60,842	$	49,429		$	180,644	$	130,389
Net income (loss)		2,826		(5,094	)		19,405		(16,979	)
Diluted income (loss) per common share		0.10		(0.18	)		0.67		(0.61	)

XML

Property, plant and equipment

9 Months Ended

Sep. 30, 2013

Property, plant and equipment

Note 5. Property, plant and equipment

Property, plant and equipment at September 30, 2013 and December 31, 2012 were as follows:

	September 30, 2013			December 31, 2012
Land and land improvements	$	2,216		$	—
Buildings and improvements		19,578			103
Machinery, equipment, furniture and fixtures		37,496			1,764
Construction in process		306			—
		59,596			1,867
Less accumulated depreciation		(1,713	)		(1,087	)
	$	57,883		$	780

Depreciation expense was $502 and $626 for the three and nine months ending September 30, 2013, respectively. We placed $49,744 of assets related to our Chinese manufacturing facility into service in September 2013, as production of the first commercial batches from the facility occurred during the period.

XML

Investments

9 Months Ended

Sep. 30, 2013

Investments

Note 3. Investments:

Our investments at September 30, 2013 were comprised of the following:

	Cost basis		Unrealized gains		Unrealized losses			Recorded basis		Cash and cash equivalents		Short term investments
Assets
Cash	$	30,810	$	—	$	—		$	30,810	$	30,810	$	—
Money market funds		15,127		—		—			15,127		15,127		—
Commercial paper		50,196		2		(1	)		50,197		—		50,197
Corporate bonds and notes		60,114		3		(63	)		60,054		—		60,054
	$	156,247	$	5	$	(64	)	$	156,188	$	45,937	$	110,251

Investments with continuous unrealized losses for less than twelve months and their related fair values at September 30, 2013 were as follows:

	Fair value		Unrealized losses
Commercial paper	$	34,097	$	(1	)
Corporate bonds and notes		50,571		(63	)
	$	84,668	$	(64	)

Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Because we do not currently intend to sell these investments, and it is not more likely than not that we will be required to sell our investments before recovery of their amortized cost basis, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at September 30, 2013.

The original cost and estimated current fair value of our fixed-income securities at September 30, 2013 are set forth below.

	Cost basis		Estimated fair value
Due in one year or less	$	66,786	$	66,782
Due between one and five years		43,524		43,469
	$	110,310	$	110,251

XML

Future Payments Related to Acquisition (Detail) (SCP, USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
SCP
Business Acquisition [Line Items]
2013	$ 2,500
2014	3,500
2015	$ 9,000

XML

Inventories (Tables)

9 Months Ended

Sep. 30, 2013

Inventory Valuation

Inventories at September 30, 2013 and December 31, 2012 were as follows:

	September 30, 2013									December 31, 2012
	Approved			Pending regulatory approval			Inventory			Approved			Pending regulatory approval		Inventory
Finished goods	$	47,498		$	1,437		$	48,935		$	46,410		$	1,437	$	47,847
Raw materials		3,935			19			3,954			1,280			—		1,280
Inventory reserve		(2,832	)		(1,437	)		(4,269	)		(2,021	)		—		(2,021	)
	$	48,601		$	19		$	48,620		$	45,669		$	1,437	$	47,106

XML

Debt (Tables)

9 Months Ended

Sep. 30, 2013

Principal Payments Due on Credit Facility

Principal payments due on the credit facility draws as of September 30, 2013 were as follows:

For the year ending:
September 30, 2014	$	4,880
September 30, 2015		14,314

XML

Net revenue by product (Tables)

9 Months Ended

Sep. 30, 2013

Schedule of Net Revenue by Product Category

Net revenue by product line is as follows:

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Therapeutic class:
Anti-infective	$	24,026	$	18,173	$	65,921	$	57,314
Critical care		15,638		20,897		48,381		53,885
Oncology		21,178		10,359		66,342		19,190
	$	60,842	$	49,429	$	180,644	$	130,389

XML

Related Party Transactions - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended		3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 Sagent Agila LLC	Sep. 30, 2013 Sagent Agila LLC	Dec. 31, 2012 Sagent Agila LLC
Related Party Transaction [Line Items]
Receivables from related party			$ 2,981	$ 2,981	$ 1,404
Payable for the acquisition of inventory			2,480	2,480	7,026
Distributed profit sharing receipt	$ 1,995	$ 2,755	$ 1,256	$ 3,990

XML

Changes in Investment of Sagent Agila (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Schedule of Equity Method Investments [Line Items]
Investment at beginning of year			$ 19,622
Equity in net loss (income) of joint ventures	(485)	(940)	118	(589)
Investment at end of year	1,873		1,873
Sagent Agila LLC
Schedule of Equity Method Investments [Line Items]
Investment at beginning of year			2,161
Equity in net loss (income) of joint ventures			1,707
Dividends paid			(1,995)
Investment at end of year	$ 1,873		$ 1,873

XML

Property Plant and Equipment - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013
Property, Plant, and Equipment Disclosure [Line Items]
Depreciation expense	$ 502	$ 626
CHINA
Property, Plant, and Equipment Disclosure [Line Items]
Assets related to Chinese manufacturing facility placed in service	$ 49,744	$ 49,744

XML

Investments (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
Cost basis	$ 156,247
Unrealized gains	5
Unrealized losses	(64)
Recorded basis	156,188
Cash and cash equivalents	45,937	27,687	26,789	52,203
Short term investments	110,251	36,605
Cash
Schedule of Available-for-sale Securities [Line Items]
Cost basis	30,810
Recorded basis	30,810
Cash and cash equivalents	30,810
Money market funds
Schedule of Available-for-sale Securities [Line Items]
Cost basis	15,127
Recorded basis	15,127
Cash and cash equivalents	15,127
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Cost basis	50,196
Unrealized gains	2
Unrealized losses	(1)
Recorded basis	50,197
Short term investments	50,197
Corporate bonds and notes
Schedule of Available-for-sale Securities [Line Items]
Cost basis	60,114
Unrealized gains	3
Unrealized losses	(63)
Recorded basis	60,054
Short term investments	$ 60,054

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized shares	100,000,000	100,000,000
Common stock, outstanding shares	31,764,278	28,116,489

XML

Debt

9 Months Ended

Sep. 30, 2013

Debt

Note 9. Debt:

Credit facilities acquired under the SCP Acquisition

SCP had outstanding debt obligations with the Agricultural Bank of China at the time of the SCP Acquisition. SCP originally entered into two credit facilities in the amount of RMB 37,000 ($5,987) and RMB 83,000 ($13,431) in June 2011 and August 2010, respectively, each with a five year term. Both credit facilities are secured by the property, plant and equipment of SCP. Amounts outstanding under the credit facilities bear an interest rate equal to the benchmark lending interest rate published by the People’s Bank of China. During the term of the loan, the rate is subject to adjustment every three months. As of September 30, 2013, RMB 118,000 ($19,193) was outstanding under these credit facilities, at an interest rate of 6.00% per annum. As the interest rate resets on a quarterly basis, the fair value of our long-term debt approximates its carrying value. Repayment will be accelerated if the liabilities to assets ratio of our SCP subsidiary exceed 70% and 80% during the term of the RMB 37,000 and RMB 83,000 credit facilities, respectively, or if our SCP subsidiary is unable to achieve 50% of its projected revenues when it commences commercial activities.

Principal payments due on the credit facility draws as of September 30, 2013 were as follows:

For the year ending:
September 30, 2014	$	4,880
September 30, 2015		14,314

Silicon Valley Bank Loan and Security Agreement

In February 2012, we entered into a Loan and Security Agreement with Silicon Valley Bank (the “SVB Agreement”). The SVB Agreement provides for a $40,000 asset based revolving loan facility, with availability subject to a borrowing base consisting of eligible accounts receivable and inventory and the satisfaction of conditions precedent specified in the SVB Agreement. The SVB Agreement matures on February 13, 2016, at which time all outstanding amounts will become due and payable. Borrowings under the SVB Agreement may be used for general corporate purposes, including funding working capital. Amounts drawn bear an interest rate equal to, at our option, either a Eurodollar rate plus 2.50% per annum or an alternative base rate plus 1.50% per annum. We also pay a commitment fee on undrawn amounts equal to 0.30% per annum.

The SVB Agreement contains various customary affirmative and negative covenants. The negative covenants restrict our ability to, among other things, incur additional indebtedness, create or permit to exist liens, make certain investments, dividends and other payments in respect of capital stock, sell assets or otherwise dispose of our property, change our lines of business, or enter into a merger or acquisition, in each case, subject to thresholds and exceptions as set forth in the SVB Agreement. The financial covenants in the original SVB Agreement are limited to maintenance of a minimum adjusted quick ratio and a minimum free cash flow. The SVB Agreement also contains customary events of default, including non-payment of principal, interest and other fees after stated grace periods, violations of covenants, material inaccuracy of representations and warranties, certain bankruptcy and liquidation events, certain material judgments and attachment events, cross-default to other debt in excess of a specified amount and material agreements, failure to maintain certain material governmental approvals, and actual or asserted invalidity of subordination terms, guarantees and collateral, in each case, subject to grace periods, thresholds and exceptions as set forth in the SVB Agreement. Loans under the SVB Agreement are secured by a lien on substantially all of our and our principal US operating subsidiary’s assets, other than our equity interests in our joint ventures and certain other limited exceptions.

On September 23, 2013, we entered into a Second Loan Modification Agreement (the “Modification”) to our SVB Agreement. The Modification altered the calculation methodology of the borrowing base that is used to determine our borrowing availability and the covenant for the Adjusted Quick Ratio tested at the end of each month and eliminated the covenant to maintain a specified level of free cash flow in quarters where we maintain eligible cash balances of $30 million or greater. We did not amend the term, the maximum availability, or the interest rate applicable to the amounts drawn under the SVB Agreement. As of September 30, 2013, no borrowings were outstanding and we were in compliance with all of our covenants under the SVB Agreement.

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net income (loss)	$ 2,826	$ (3,750)	$ 26,034	$ (16,755)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	170	362	464	641
Reclassification of cumulative currency translation gain			(2,782)
Unrealized (losses) gains on available for sale securities	21	15	(71)	120
Total other comprehensive income (loss), net of tax	191	377	(2,389)	761
Comprehensive income (loss)	$ 3,017	$ (3,373)	$ 23,645	$ (15,994)

XML

Debt - Additional Information (Detail)	9 Months Ended		1 Months Ended										9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013 Silicon Valley Bank Loan And Security Agreement	Feb. 29, 2012 Silicon Valley Bank Loan And Security Agreement Revolving Credit Facilities USD ($)	Feb. 29, 2012 Silicon Valley Bank Loan And Security Agreement Revolving Credit Facilities Eurodollar	Feb. 29, 2012 Silicon Valley Bank Loan And Security Agreement Revolving Credit Facilities Base Rate	Sep. 30, 2013 Silicon Valley Bank Loan And Security Agreement Minimum USD ($)	Sep. 30, 2013 Credit Facility One	Jun. 04, 2013 Credit Facility One USD ($)	Jun. 04, 2013 Credit Facility One CNY	Sep. 30, 2013 Credit Facility Two	Jun. 04, 2013 Credit Facility Two USD ($)	Jun. 04, 2013 Credit Facility Two CNY	Sep. 30, 2013 Credit Facility USD ($)	Sep. 30, 2013 Credit Facility CNY
Line of Credit Facility [Line Items]
Credit facilities assumed in a business combination								$ 5,987,000	37,000,000		$ 13,431,000	83,000,000
Period of credit facility	5 years
Outstanding credit facilities													19,193,000	118,000,000
Credit facility, interest rate													6.00%	6.00%
Debt covenant, maximum liquidity ratio that triggers acceleration of repayment							70.00%			80.00%
Debt covenant, projected revenue below which triggers acceleration of repayment	50.00%
Amount available under revolving credit facility			40,000,000
Agreement maturity date			Feb. 13, 2016
Basis Spread on Variable Rate				2.50%	1.50%
Commitment fee on undrawn amounts			0.30%
Loan and security agreement date		Sep. 23, 2013
Minimum cash requirement						$ 30,000,000

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 45,937	$ 27,687
Short-term investments	110,251	36,605
Accounts receivable, net of chargebacks and other deductions	24,792	31,609
Inventories, net	48,620	47,106
Due from related party	2,981	1,440
Prepaid expenses and other current assets	7,456	2,821
Total current assets	240,037	147,268
Property, plant, and equipment, net	57,883	780
Investment in joint ventures	1,873	19,622
Goodwill	6,038
Intangible assets, net	3,282	4,277
Other assets	331	368
Total assets	309,444	172,315
Current liabilities:
Accounts payable	23,134	21,813
Due to related party	2,480	7,026
Accrued profit sharing	7,824	4,246
Accrued liabilities	10,209	7,369
Current portion of deferred purchase consideration	5,812
Current portion of long-term debt	4,880
Total current liabilities	54,339	40,454
Long term liabilities:
Long-term portion of deferred purchase consideration	8,233
Long-term debt	14,314
Other long-term liabilities	1,619	6
Total liabilities	78,505	40,460
Stockholders' equity:
Common stock-$0.01 par value, 100,000,000 authorized and 31,764,278 and 28,116,489 outstanding at September 30, 2013 and December 31, 2012, respectively	318	281
Additional paid-in capital	348,127	272,725
Accumulated other comprehensive income	111	2,500
Accumulated deficit	(117,617)	(143,651)
Total stockholders' equity	230,939	131,855
Total liabilities and stockholders' equity	$ 309,444	$ 172,315

XML

Goodwill and Intangible assets, net - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013 Right
Finite-Lived Intangible Assets [Line Items]
Number of products	18
SCP
Finite-Lived Intangible Assets [Line Items]
Goodwill acquired	$ 6,038
Product Licensing Rights
Finite-Lived Intangible Assets [Line Items]
Weighted-average period prior to next extension or renewal of intangible asset	51 months

XML

Property, plant and equipment (Tables)

9 Months Ended

Sep. 30, 2013

Property, Plant and Equipment

Property, plant and equipment at September 30, 2013 and December 31, 2012 were as follows:

	September 30, 2013			December 31, 2012
Land and land improvements	$	2,216		$	—
Buildings and improvements		19,578			103
Machinery, equipment, furniture and fixtures		37,496			1,764
Construction in process		306			—
		59,596			1,867
Less accumulated depreciation		(1,713	)		(1,087	)
	$	57,883		$	780

XML

Commitments and contingencies

9 Months Ended

Sep. 30, 2013

Commitments and contingencies

Note 18. Commitments and contingencies:

Litigation

From time to time, we are subject to claims and litigation arising in the ordinary course of business. These claims may include assertions that our products infringe existing patents and claims that the use of our products has caused personal injuries. We intend to vigorously defend any such litigation that may arise under all defenses that would be available to us.

Zoledronic Acid (Generic versions of Zometa^® and Reclast^®).

On February 20, 2013, Novartis Pharmaceuticals Corporation (“Novartis”) sued the Company and several other defendants in the United States District Court for the District of New Jersey, alleging, among other things, that sales of the Company’s (i) zoledronic acid premix bag (4mg/100ml), made by ACS Dobfar Info S.A. (“Info”), also a defendant, a generic version of Novartis’ Zometa^® ready to use bottle , would infringe U.S. Patent No. 7,932,241 (the “241 Patent”) and U.S. Patent No. 8,324,189 (the “189 Patent”) and (ii) zoledronic acid premix bag (5mg/100ml), also made by Info, a generic version of Novartis’ Reclast^® ready to use bottle, would infringe U.S. Patent No. 8,052,987 and the 241 Patent, and (iii) zoledronic acid vial (4mg/5ml), made by Actavis LLC, also a defendant, a generic version of Novartis’ Zometa^® vial, would infringe the 189 Patent. (Novartis Pharmaceuticals Corporation v. Actavis, LLC, et. al., Case No. 13-cv-1028) On March 1, 2013, the District Court denied Novartis’ request for a temporary restraining order against the Company and the other defendants, including Actavis and Info. On March 6, 2013, the Company, began selling Actavis’ zoledronic acid vial, the generic version of Zometa^®. Also, as of August 27, 2013 and October 1, 2013, the Company began selling zoledronic acid premix bags in 4mg/100ml and 5mg/100ml presentations, respectively. The Company believes it has substantial meritorious defenses to the case, and the Company has sold and will continue to sell these products. Therefore, an adverse final determination that one of the patents is valid and infringed could have an adverse effect on the Company’s business, results of operations, financial condition and cash flows.

XML

Pro Forma Operations Results (Detail) (SCP, USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
SCP
Business Acquisition [Line Items]
Net revenues	$ 60,842	$ 49,429	$ 180,644	$ 130,389
Net income (loss)	$ 2,826	$ (5,094)	$ 19,405	$ (16,979)
Diluted income (loss) per common share	$ 0.10	$ (0.18)	$ 0.67	$ (0.61)

XML

Schedule of Estimate Amortization Expense over Each of the Next Five Years (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Finite-Lived Intangible Assets [Line Items]
For the year ending,September 30, 2014	$ 1,784
For the year ending,September 30, 2015	427
For the year ending,September 30, 2016	191
For the year ending,September 30, 2017	144
For the year ending,September 30, 2018	$ 133

XML

Anti-Dilutive Share Excluded From Calculation of Diluted Earnings Per Share (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive share excluded from the calculation of diluted earnings per share	923,415	2,403,630	1,212,899	2,403,630

XML

Estimated Useful Life of Property Plant and Equipment (Detail)	9 Months Ended
	Sep. 30, 2013
Land and Land Improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful life	Remaining term of Chinese land use right (June 2057)
Property, plant and equipment, expiration month and year	2057-06
Building and Improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful life	5 to 40 years or remaining term of lease
Building and Improvements | Minimum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful life	5 years
Building and Improvements | Maximum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful life	40 years
Machinery and Equipment | Minimum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful life	3 years
Machinery and Equipment | Maximum
Property, Plant and Equipment [Line Items]
Property, plant and equipment, estimated useful life	10 years

XML

Accumulated other comprehensive income (Tables)

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Income

Accumulated other comprehensive income at September 30, 2013 and December 31, 2012 is comprised of the following:

	September 30, 2013			December 31, 2012
Currency translation adjustment, net of tax	$	170		$	2,488
Unrealized (losses) gains on available for sale securities, net of tax		(59	)		12
Total accumulated other comprehensive income	$	111		$	2,500

The following table summarizes the changes in balances of each component of accumulated other comprehensive income, net of tax as of September 30, 2013.

	Currency translation adjustment			Unrealized gains (losses) on available for sale securities			Total
Balance as of December 31, 2012	$	2,488		$	12		$	2,500
Other comprehensive income (loss) before reclassifications		464			(71	)		393
Amounts reclassified from accumulated other comprehensive income (loss)		(2,782	)		—			(2,782	)
Net current-period other comprehensive loss		(2,318	)		(71	)		(2,389	)
Balance as of September 30, 2013	$	170		$	(59	)	$	111

Amounts Reclassified Out of Accumulated Other Comprehensive Income

The table below presents the significant amounts reclassified out of each component of accumulated other comprehensive income for the nine months ended September 30, 2013.

Type of reclassification	Amount reclassified from accumulated other comprehensive income		Affected line item in the condensed consolidated statement of operations
Currency translation adjustment – reclassification of cumulative currency translation gain	$	2,782	Gain on previously held equity interest
Total reclassification for the nine months ended September 30, 2013, net of tax	$	2,782

XML

Earnings per share (Tables)

9 Months Ended

Sep. 30, 2013

Anti-Dilutive Share Excluded from Calculation of Diluted Earnings per Share

Because of their anti-dilutive effect, the following common share equivalents, comprised of restricted stock and unexercised stock options, have been excluded from the calculation of diluted earnings per share for the three and nine month periods ended September 30, 2013 and 2012, respectively:

	Anti-dilutive shares
Three months ended September 30, 2013		923,415
Three months ended September 30, 2012		2,403,630
Nine months ended September 30, 2013		1,212,899
Nine months ended September 30, 2012		2,403,630

Schedule of Calculation of Numerator and Denominator in Earnings Per Share

The table below presents the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2013 and 2012:

	Three months ended September 30,					Nine months ended September 30,
	2013		2012			2013		2012
Basic and dilutive numerator:
Net income (loss), as reported	$	2,826	$	(3,750	)	$	26,034	$	(16,755	)
Denominator:
Weighted-average common shares outstanding—basic (in thousands)		28,745		27,977			28,349		27,943
Net effect of dilutive securities:
Stock options and restricted stock		823		—			702		—
Weighted-average common shares outstanding—diluted (in thousands)		29,568		27,977			29,051		27,943
Net income (loss) per common share (basic)	$	0.10	$	(0.13	)	$	0.92	$	(0.60	)
Net income (loss) per common share (diluted)	$	0.10	$	(0.13	)	$	0.90	$	(0.60	)

XML

Investment

9 Months Ended

Sep. 30, 2013

Sagent Agila LLC

Investment

Note 7. Investment in Sagent Agila:

Changes in our investment in Sagent Agila during the nine months ended September 30, 2013 were as follows:

Investment in Sagent Agila at January 1, 2013	$	2,161
Equity in net income of Sagent Agila		1,707
Dividends paid		(1,995	)
Investment in Sagent Agila at September 30, 2013	$	1,873

Condensed statement of operations information of Sagent Agila is presented below.

	Three months ended September 30,				Nine months ended September 30,
Condensed statement of operations information	2013		2012		2013		2012
Net revenues	$	3,212	$	7,469	$	13,924	$	19,224
Gross profit		1,093		4,537		3,817		8,282
Net income		969		4,110		3,413		7,453

SCP

Investment

Note 8. Investment in SCP:

Changes in our investment in SCP during the nine months ended September 30, 2013 were as follows:

Investment in SCP at January 1, 2013	$	17,461
Equity in net loss of SCP		(1,825	)
Currency translation adjustment		294
Investments in SCP		19
Acquisition of remaining equity interest in SCP		(15,949	)
Investment in SCP at September 30, 2013	$	—

Condensed statement of operations information of SCP for the period through the closing of the SCP Acquisition.

	Three months ended September 30,					Nine months ended September 30,
Condensed statement of operations information	2013		2012			2013			2012
Net revenues	$	—	$	—		$	—		$	—
Gross profit		—		—			—			—
Net loss		—		(2,459	)		(2,805	)		(5,766	)

XML

Accumulated Other Comprehensive Income (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Currency translation adjustment, net of tax	$ 170	$ 2,488
Unrealized (losses) gains on available for sale securities, net of tax	(59)	12
Total accumulated other comprehensive income	$ 111	$ 2,500

XML

Goodwill and Intangible assets, net (Tables)

9 Months Ended

Sep. 30, 2013

Schedule of Intangible Assets

Intangible assets at September 30, 2013 and December 31, 2012 were as follows:

	September 30, 2013							December 31, 2012
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Product licensing rights	$	3,690	$	(1,935	)	$	1,755	$	3,156	$	(1,541	)	$	1,615
Product development rights		1,527		—			1,527		2,662		—			2,662
	$	5,217	$	(1,935	)	$	3,282	$	5,818	$	(1,541	)	$	4,277

Movements in Intangible Assets

Movements in intangible assets were due to the following:

	Product licensing rights			Product development rights
December 31, 2012	$	1,615		$	2,662
Acquisition of product rights		535			1,829
Amortization of product rights		(395	)		(2,964	)
September 30, 2013	$	1,755		$	1,527

Schedule of Estimate Amortization Expense over Each of the Next Five Years

We currently estimate amortization expense over each of the next five years as follows:

For the year ending:	Amortization expense
September 30, 2014	$	1,784
September 30, 2015		427
September 30, 2016		191
September 30, 2017		144
September 30, 2018		133

XML

Purchase Consideration related to Acquisition (Detail) (SCP, USD $) In Thousands, unless otherwise specified	1 Months Ended		9 Months Ended
	Jun. 04, 2013	Apr. 30, 2013	Sep. 30, 2013
SCP
Schedule of Business Acquisitions, Purchase Price [Line Items]
Cash	$ 10,000		$ 10,000
Present value of remaining purchase consideration			13,836
Previously held equity interest			15,949
Gain on remeasurement of previously held equity interest in SCP			154
Total purchase consideration		$ 25,000	$ 39,939

XML

Fair value measurements

9 Months Ended

Sep. 30, 2013

Fair value measurements

Note 11. Fair value measurements:

Assets measured at fair value on a recurring basis as of September 30, 2013 consisted of the following:

	Total fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs  (Level 3)
Assets
Money market funds	$	15,127	$	15,127	$	—	$	—
Corporate bonds and notes		60,054		—		60,054		—
Commercial paper		50,197		—		50,197		—
Short-term investments	$	110,251	$	—	$	110,251	$	—
Total assets	$	125,378	$	15,127	$	110,251	$	—

The fair value of our Level 2 investments is based on a combination of quoted market prices of similar securities and matrix pricing provided by third-party pricing services utilizing securities of similar quality and maturity.

Assets measured at fair value on a recurring basis as of December 31, 2012 consisted of the following:

	Total fair value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs  (Level 3)
Assets
Money market funds	$	18,141	$	18,141	$	—	$	—
Corporate bonds and notes		13,358		—		13,358		—
Commercial paper		23,247		—		23,247		—
Short-term investments	$	36,605	$	—	$	36,605	$	—
Total assets	$	54,746	$	18,141	$	36,605	$	—

There were no transfers of assets between Level 1 and Level 2 during the periods presented.

XML

Goodwill and Intangible assets, net

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible assets, net

Note 6. Goodwill and Intangible assets, net:

We recorded goodwill of approximately $6,038 related to the SCP Acquisition. There were no reductions of goodwill relating to impairments.

Intangible assets at September 30, 2013 and December 31, 2012 were as follows:

	September 30, 2013							December 31, 2012
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Product licensing rights	$	3,690	$	(1,935	)	$	1,755	$	3,156	$	(1,541	)	$	1,615
Product development rights		1,527		—			1,527		2,662		—			2,662
	$	5,217	$	(1,935	)	$	3,282	$	5,818	$	(1,541	)	$	4,277

Movements in intangible assets were due to the following:

	Product licensing rights			Product development rights
December 31, 2012	$	1,615		$	2,662
Acquisition of product rights		535			1,829
Amortization of product rights		(395	)		(2,964	)
September 30, 2013	$	1,755		$	1,527

The weighted-average period prior to the next extension or renewal for the 18 products comprising our product licensing rights intangible asset was 51 months at September 30, 2013.

We currently estimate amortization expense over each of the next five years as follows:

For the year ending:	Amortization expense
September 30, 2014	$	1,784
September 30, 2015		427
September 30, 2016		191
September 30, 2017		144
September 30, 2018		133

XML

Basis of presentation

9 Months Ended

Sep. 30, 2013

Basis of presentation

Note 1. Basis of presentation:

Our interim condensed consolidated financial statements are unaudited. We prepared the condensed consolidated financial statements following rules for interim reporting as prescribed by the U.S. Securities and Exchange Commission (“SEC”). As permitted under those rules, we have condensed or omitted a number of footnotes or other financial information that are normally required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). It is management’s opinion that these financial statements include all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation of our financial position, operating results and cash flows. Operating results for any interim period are not necessarily indicative of future or annual results.

The condensed consolidated financial statements include Sagent as well as our wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. We account for our investment in Sagent Agila LLC (formerly Sagent Strides LLC) using the equity method of accounting, as our interest in the entity provides for joint financial and operational control.

On June 4, 2013, we acquired (the “SCP Acquisition”) the remaining 50% equity interest in Kanghong Sagent (Chengdu) Pharmaceutical Co. Ltd. (“KSCP”) from our former joint venture partner, and accordingly, the condensed consolidated financial statements as of September 30, 2013 include KSCP as a wholly-owned subsidiary. Prior to the SCP Acquisition, we accounted for our investment in KSCP using the equity method of accounting, as our interest in the entity provided for joint financial and operational control, and operating results of KSCP were reported on a one-month lag. In August 2013, we formally changed the name of this entity to Sagent (China) Pharmaceuticals Co., Ltd. (“SCP”).

You should read these statements in conjunction with our consolidated financial statements and related notes for the year ended December 31, 2012, included in our Annual Report on Form 10-K filed with the SEC on March 18, 2013.

Goodwill

Goodwill is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized, but rather tested for impairment on an annual basis and more often if circumstances require. Impairment losses are recognized whenever the implied fair value of goodwill is less than its carrying value. We test goodwill for impairment at least annually on October 1.

Property, Plant, and Equipment

Property, plant, and equipment is stated at cost, less accumulated depreciation. The cost of repairs and maintenance is expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Provisions for depreciation are computed for financial reporting purposes using the straight-line method over the estimated useful life of the related asset and for leasehold improvements over the lesser of the estimated useful life of the related asset or the term of the related lease as follows:

Land and land improvements	Remaining term of Chinese land use right (June 2057)
Building and improvements	5 to 40 years or remaining term of lease
Machinery, equipment, furniture, and fixtures	3 to 10 years

Property, plant and equipment that is purchased or constructed which requires a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs and associated interest costs. Construction-in-progress is transferred to specific property, plant and equipment accounts and commences depreciation when these assets are ready for their intended use. The capitalization of interest costs commences when expenditures for the asset have been made, activities that are necessary to prepare the asset for its intended use are in progress and interest cost is being incurred. The capitalization period ends when the asset is substantially complete and ready for its intended use.

XML

Schedule of Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 5,217	$ 5,818
Accumulated amortization	(1,935)	(1,541)
Intangible assets, net	3,282	4,277
Product Licensing Rights
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	3,690	3,156
Accumulated amortization	(1,935)	(1,541)
Intangible assets, net	1,755	1,615
Product Development Rights
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	1,527	2,662
Intangible assets, net	$ 1,527	$ 2,662

XML

Cost and Estimated Current Fair Value of Fixed-Income Securities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Schedule of Available-for-sale Securities [Line Items]
Due in one year or less, cost basis	$ 66,786
Due between one and five years, cost basis	43,524
Total fixed income securities, cost basis	110,310
Due in one year or less, Estimated fair value	66,782
Due between one and five years, Estimated fair value	43,469
Total fixed income securities, Estimated fair value	$ 110,251

XML

Accrued liabilities (Tables)

9 Months Ended

Sep. 30, 2013

Accrued Liabilities

Accrued liabilities at September 30, 2013 and December 31, 2012 were as follows:

	September 30, 2013		December 31, 2012
Payroll and employee benefits	$	4,820	$	1,211
Sales and marketing		4,832		5,649
Other accrued liabilities		557		509
	$	10,209	$	7,369

XML

Schedule of Calculation of Numerator and Denominator in Earnings Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Basic and dilutive numerator:
Net income (loss)	$ 2,826	$ (3,750)	$ 26,034	$ (16,755)
Denominator:
Weighted-average common shares outstanding - basic (in thousands)	28,745	27,977	28,349	27,943
Net effect of dilutive securities:
Stock options and restricted stock	823		702
Weighted-average common shares outstanding - diluted (in thousands)	29,568	27,977	29,051	27,943
Net income (loss) per common share (basic)	$ 0.10	$ (0.13)	$ 0.92	$ (0.60)
Net income (loss) per common share (diluted)	$ 0.10	$ (0.13)	$ 0.90	$ (0.60)

XML

Principal Payments Due on Credit Facility (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Line of Credit Facility [Line Items]
September 30, 2014	$ 4,880
September 30, 2015	$ 14,314

XML

Stock-based compensation

9 Months Ended

Sep. 30, 2013

Stock-based compensation

Note 14. Stock-based compensation:

We granted 4,700 and 379,874 stock options during the three and nine months ended September 30, 2013, respectively, and granted 14,522 restricted stock units and 41,702 restricted stock awards during the nine months ended September 30, 2013. We granted 124,900 and 322,770 stock options during the three and nine months ended September 30, 2012, respectively. There were 28,984 and 95,642 stock options exercised during the three and nine months ended September 30, 2013, respectively, with an aggregate intrinsic value of $489 and $1,225, respectively.

XML

Accrued liabilities

9 Months Ended

Sep. 30, 2013

Accrued liabilities

Note 10. Accrued liabilities:

Accrued liabilities at September 30, 2013 and December 31, 2012 were as follows:

	September 30, 2013		December 31, 2012
Payroll and employee benefits	$	4,820	$	1,211
Sales and marketing		4,832		5,649
Other accrued liabilities		557		509
	$	10,209	$	7,369

XML

Stock- Based Compensation - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	4,700	124,900	379,874	322,770
Stock options exercised	28,984		95,642
Stock options aggregate intrinsic value	$ 489		$ 1,225
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted			14,522
Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted			41,702

XML

Related party transactions

9 Months Ended

Sep. 30, 2013

Related party transactions

Note 17. Related party transactions:

As of September 30, 2013 and December 31, 2012, respectively, we had a receivable of $2,981 and $1,404 from Sagent Agila LLC, which is expected to offset future profit-sharing payments. As of September 30, 2013 and December 31, 2012, respectively, we had a payable of $2,480 and $7,026 to Sagent Agila LLC, principally for the acquisition of inventory and amounts due under profit-sharing arrangements. During the three and nine months ended September 30, 2013, Sagent Agila LLC distributed $1,256 and $3,990, respectively, of profit sharing receipts to its joint venture partners. As the Sagent Agila joint venture had sufficient cumulative earnings at September 30, 2013, our share of the distribution for the nine months ended September 30, 2013 has been treated as a dividend received in the condensed consolidated statements of cash flows.

XML

Net revenue by product

9 Months Ended

Sep. 30, 2013

Net revenue by product

Note 15. Net revenue by product:

Net revenue by product line is as follows:

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Therapeutic class:
Anti-infective	$	24,026	$	18,173	$	65,921	$	57,314
Critical care		15,638		20,897		48,381		53,885
Oncology		21,178		10,359		66,342		19,190
	$	60,842	$	49,429	$	180,644	$	130,389

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 31, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Trading Symbol	SGNT
Entity Registrant Name	SAGENT PHARMACEUTICALS, INC.
Entity Central Index Key	0001369786
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		31,772,253

XML

Management reorganization

9 Months Ended

Sep. 30, 2013

Management reorganization

Note 16. Management reorganization:

In August 2012, we completed a reorganization of our executive management team in which we eliminated certain positions within the Company. Costs associated with the reorganization, primarily severance related charges, are reflected under the Management Reorganization caption in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2012.

XML

Summary of Assets Measured at Fair Value on Recurring Basis (Detail) (Assets measured at fair value on a recurring basis, USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 125,378	$ 54,746
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	15,127	18,141
Corporate bonds and notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	60,054	13,358
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	50,197	23,247
Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	110,251	36,605
Quoted prices in active markets for identical assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	15,127	18,141
Quoted prices in active markets for identical assets (Level 1) | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	15,127	18,141
Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	110,251	36,605
Significant other observable inputs (Level 2) | Corporate bonds and notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	60,054	13,358
Significant other observable inputs (Level 2) | Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	50,197	23,247
Significant other observable inputs (Level 2) | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 110,251	$ 36,605

XML

Accrued Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Accrued Liabilities [Line Items]
Payroll and employee benefits	$ 4,820	$ 1,211
Sales and marketing	4,832	5,649
Other accrued liabilities	557	509
Accrued Liabilities, Total	$ 10,209	$ 7,369