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, 2015

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 30, 2015, there were 32,787,344 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, 2015 and December 31, 2014		1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2015 and 2014		2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2015 and 2014		3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014		4
	Notes to Condensed Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		32
Item 4.	Controls and Procedures		32
PART II –	OTHER INFORMATION		34
Item 1.	Legal Proceedings		34
Item 1A.	Risk Factors		34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 3.	Defaults Upon Senior Securities		35
Item 4.	Mine Safety Disclosures		35
Item 5.	Other Information		35
Item 6.	Exhibits		35
	Signature		36

In this report, “Sagent,” “we,” “us,” “our” and the “Company” refers to Sagent Pharmaceuticals, Inc. and subsidiaries, and “Common Stock” refers to Sagent’s common stock, $0.01 par value per share.

Sagent Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

	September 30, 2015			December 31, 2014
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	25,850		$	55,633
Short-term investments		20,160			18,473
Accounts receivable, net of chargebacks and other deductions		43,043			42,780
Inventories, net		76,228			61,781
Due from related party		2,664			2,156
Current deferred tax assets		9,193			12,135
Prepaid expenses and other current assets		8,436			5,560
Total current assets		185,574			198,518
Property, plant, and equipment, net		68,163			71,153
Investment in joint ventures		6,049			4,539
Goodwill		24,953			28,155
Intangible assets, net		58,200			65,575
Non-current deferred tax assets		14,466			13,173
Other assets		2,204			375
Total assets	$	359,609		$	381,488
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		36,402		$	32,710
Due to related party		11,573			8,079
Accrued profit sharing		7,245			10,684
Accrued liabilities		15,113			19,346
Current portion of deferred purchase consideration		—			8,725
Current portion of long-term debt		238			508
Notes payable		—			5,499
Total current liabilities		70,571			85,551
Long term liabilities:
Long-term debt		1,500			1,945
Deferred income taxes		12,331			15,706
Other long-term liabilities		2,388			2,534
Total liabilities		86,790			105,736
Stockholders’ equity:
Common stock—$0.01 par value, 100,000,000 authorized, and 32,786,873 and 31,976,661 outstanding at September 30, 2015 and December 31, 2014, respectively		328			320
Additional paid-in capital		365,236			352,982
Accumulated other comprehensive income (loss)		(14,625	)		(3,374	)
Accumulated deficit		(78,120	)		(74,176	)
Total stockholders’ equity		272,819			275,752
Total liabilities and stockholders’ equity	$	359,609		$	381,488

See accompanying notes to condensed consolidated financial statements.

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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,
	2015			2014			2015			2014
Net revenue	$	75,199		$	65,359		$	235,188		$	205,422
Cost of sales		50,837			46,589			170,461			143,676
Gross profit		24,362			18,770			64,727			61,746
Operating expenses:
Product development		7,923			3,677			18,658			17,734
Selling, general and administrative		11,403			10,914			35,886			31,622
Acquisition-related costs		535			872			1,856			872
Management transition costs		645			—			4,647			—
Equity in net (income) of joint ventures		(333	)		(737	)		(1,510	)		(2,476	)
Total operating expenses		20,173			14,726			59,537			47,752
Legal settlement		2,447			—			2,447			—
Income from operations		1,742			4,044			2,743			13,994
Interest income and other income (expense), net		(1,686	)		(536	)		(2,225	)		(465	)
Interest expense		(188	)		(195	)		(650	)		(641	)
Income (loss) before income taxes		(132	)		3,313			(132	)		12,888
Provision for income taxes		1,663			1,387			3,813			2,774
Net income (loss)	$	(1,795	)	$	1,926		$	(3,945	)	$	10,114
Net income (loss) per common share:
Basic	$	(0.05	)	$	0.06		$	(0.12	)	$	0.32
Diluted	$	(0.05	)	$	0.06		$	(0.12	)	$	0.31
Weighted-average of shares used to compute net income per common share:
Basic		32,747			31,895			32,321			31,861
Diluted		32,747			32,960			32,321			32,748

See accompanying notes to condensed consolidated financial statements.

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Sagent Pharmaceuticals, Inc.

Condensed Consolidated Statements of Comprehensive Income

(in thousands, except per share amounts)

(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Net income (loss)	$	(1,795	)	$	1,926		$	(3,945	)	$	10,114
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		(6,509	)		(2	)		(11,281	)		(448	)
Reclassification of unrealized losses on available for sale securities		—			49			—			49
Unrealized gains (losses) on available for sale securities		5			(101	)		30			(22	)
Total other comprehensive income (loss), net of tax		(6,504	)		(54	)		(11,251	)		(421	)
Comprehensive income (loss)	$	(8,299	)	$	1,872		$	(15,196	)	$	9,693

See accompanying notes to condensed consolidated financial statements

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Sagent Pharmaceuticals, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Nine months ended September 30,
	2015			2014
Cash flows from operating activities
Net income (loss)	$	(3,945	)	$	10,114
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		8,796			6,307
Stock-based compensation		2,845			3,657
Equity in net (income) loss of joint ventures		(1,510	)		(2,476	)
Deferred income taxes, net		457			—
Other		232			(200	)
Changes in operating assets and liabilities:
Accounts receivable, net		(760	)		(10,848	)
Inventories, net		(16,263	)		3,180
Prepaid expenses and other current assets		(2,988	)		1,887
Due from related party		(507	)		(728	)
Accounts payable and other accrued liabilities		755			8,574
Net cash provided by (used in) operating activities		(12,888	)		19,467
Cash flows from investing activities
Capital expenditures		(5,057	)		(2,875	)
Acquisition of business, net of cash acquired		(11,785	)		(3,500	)
Purchases of investments		(10,202	)		(80,998	)
Sale of investments		8,320			174,722
Purchase of product rights		(1,109	)		(2,863	)
Net cash provided by (used in) investing activities		(19,833	)		84,486
Cash flows from financing activities
Reduction in short-term borrowings		(5,189	)		—
Repayment of long-term debt		(411	)		(10,324	)
Payment of deferred financing costs		(199	)		(75	)
Proceeds from issuance of common stock, net of issuance costs		9,417			425
Net cash provided by (used in) financing activities		3,618			(9,974	)
Effect of exchange rate movements in cash		(680	)		(31	)
Net increase (decrease) in cash and cash equivalents		(29,783	)		93,948
Cash and cash equivalents, at beginning of period		55,633			42,332
Cash and cash equivalents, at end of period	$	25,850		$	136,280
Supplemental disclosure of cash flow information
Acquisition of property, plant and equipment in accounts payable		(581	)		—
Acquisition of product licensing rights not yet settled		(1,076	)		—

See accompanying notes to condensed consolidated financial statements

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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.

You should read these statements in conjunction with our consolidated financial statements and related notes for the year ended December 31, 2014, included in our most recent Annual Report on Form 10-K filed with the SEC on March 16, 2015.

Note 2. Recent Accounting Pronouncements

In May 2014, the FASB issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In July 2015, the FASB approved a one year deferral to the new revenue guidance, and are therefore required to adopt the new guidance on January 1, 2018 using one of the two prescribed retroactive methods. We are evaluating the impact of the amended revenue recognition guidance on our consolidated financial statements.

In February 2015, the FASB issued amended guidance on the model used to evaluate whether certain legal entities should be consolidated. This guidance is effective for the Company in the first quarter of 2017. Early adoption is permitted. We are currently evaluating the impact that adoption of this guidance will have on our consolidated financial statements.

In September 2015, the FASB issued guidance that eliminates the requirement to restate prior period financial statements for measurement period adjustments related to business combinations. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. In addition, separate presentation on the face of the income statement or disclosure in the notes to the financial statements is required regarding the portion of the adjustment recorded in current period earnings. We are required to adopt this guidance prospectively for measurement period adjustments that occur after the effective date. This guidance is effective for the Company in the first quarter of 2016. Early adoption is permitted. We have adopted this guidance in the current period. There was no material impact of adoption.

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Note 3. Acquisitions:

Omega Acquisition

On October 1, 2014, we, through our wholly-owned Canadian subsidiary, Sagent Acquisition Corp., entered into a Share Purchase Agreement to acquire all of the issued and outstanding shares of the capital stock of 7685947 Canada Inc., and its subsidiary, Omega Laboratories Limited (collectively, “Omega”), a privately held Canadian pharmaceutical and specialty healthcare products company for C$92,768 ($82,693), after accounting for net post-closing adjustments of C$191 ($170). In September 2015, we finalized the post-closing adjustments resulting in a reduction of total purchase consideration of C$241 ($215).

The fair value of identifiable assets acquired and liabilities assumed for the Omega acquisition is shown in the table below:

	(in thousands)
Cash	$	3
Accounts receivable, net		3,419
Inventory		14,014
Prepaid and other current assets		1,295
Property, plant and equipment		14,307
Definite-lived intangible assets		49,918
In-process research and development		7,666
Goodwill		22,842
Accounts payable		(2,410	)
Other accrued liabilities		(4,090	)
Long-term debt and notes payable		(7,095	)
Deferred income tax liabilities		(17,176	)
Total allocation of fair value	$	82,693

We recorded goodwill of $22,842 at the time of acquisition due to the synergies achieved by having control over the products and manufacturing at Omega. We reduced goodwill in September 2015 to reflect the final post-closing adjustment to total purchase consideration of $215.

The following unaudited pro forma financial information reflects the consolidated results of operations of Sagent as if the Omega acquisition had taken place on January 1, 2014. 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 transaction been effected on the assumed date.

Condensed consolidated statement of operations information	Three months ended September 30, 2014		Nine months ended September 30, 2014
Net revenues	$	72,541	$	229,292
Net income		3,050		8,526
Diluted net income per common share	$	0.09	$	0.26

Product rights acquisitions

On August 5, 2015, we entered into and closed an agreement with Mustafa Nevzat Ilac Sanayii A.S., a subsidiary of Amgen, Inc., (“MN”) to acquire the rights to three products: Methylprednsilone Sodium Succinate, Vecuronium and Pamidronate Disodium. The total fair value of consideration transferred was $3,000, consisting of cash. The product rights have been recognized in our Sagent US segment.

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The transaction was accounted for as a purchase of a business. The acquisition of these three products provides us with full control of and access to the product rights. The acquisition was financed with cash. Acquisition related costs related to this transaction were nominal. The weighted average life of these three acquired products rights is approximately 84 months.

The estimated fair value of identifiable assets acquired for these product rights is shown in the table below:

	(in thousands)
Definite-lived intangible assets	$	3,000
Total allocation of fair value	$	3,000

Note 4. Investments:

Our investments at September 30, 2015 were comprised of the following:

	Cost basis		Unrealized gains		Unrealized losses			Carrying value		Cash and cash equivalents		Short term investments
Assets
Cash	$	5,991	$	—	$	—		$	5,991	$	5,991	$	—
Money market funds		19,859		—		—			19,859		19,859		—
Corporate bonds and notes		20,170		1		(11	)		20,160		—		20,160
	$	46,020	$	1	$	(11	)	$	46,010	$	25,850	$	20,160

Investments with continuous unrealized losses for less than twelve months and their related fair values at September 30, 2015 were as follows:

	Fair value		Unrealized losses
Corporate bonds and notes	$	12,481	$	(11	)

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, 2015.

The original cost and estimated current fair value of our fixed-income securities at September 30, 2015 are set forth below.

	Cost basis		Estimated fair value
Due in one year or less	$	12,458	$	12,457
Due between one and five years		7,711		7,703
	$	20,170	$	20,160

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Note 5. Inventories:

Inventories at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015								December 31, 2014
	Approved			Pending regulatory approval		Inventory			Approved			Pending regulatory approval		Inventory
Raw materials	$	9,356		$	2,818	$	12,174		$	10,203		$	2,848	$	13,051
Work in process		653			—		653			2,012			—		2,012
Finished goods		67,411			—		67,411			49,960			—		49,960
Inventory reserve		(4,010	)		—		(4,010	)		(3,242	)		—		(3,242	)
	$	73,410		$	2,818	$	76,228		$	58,933		$	2,848	$	61,781

Note 6. Property, plant and equipment

Property, plant and equipment at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015			December 31, 2014
Land and land improvements	$	3,282		$	3,519
Buildings and improvements		25,523			26,605
Machinery, equipment, furniture and fixtures		44,212			42,124
Construction in process		5,838			6,175
		78,855			78,423
Less accumulated depreciation		(10,692	)		(7,270	)
	$	68,163		$	71,153

Depreciation expense was $1,436 and $4,166 for the three and nine months ended September 30, 2015, respectively.

Note 7. Goodwill and Intangible assets, net:

Goodwill at September 30, 2015 and December 31, 2014 was $24,953 and $28,155, respectively. There were no goodwill impairment losses for the three or nine months ended September 30, 2015 and 2014, respectively.

Movements in goodwill were due to the following:

December 31, 2014	$	28,155
Omega post-closing adjustment		(215	)
Foreign currency translation impact		(2,987	)
September 30, 2015	$	24,953

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Intangible assets at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015							December 31, 2014
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Product licensing rights	$	4,533	$	(2,900	)	$	1,633	$	4,707	$	(2,878	)	$	1,829
Product development rights		4,500		—			4,500		4,191		—			4,191
Purchased product rights and other		47,635		(4,237	)		43,398		51,245		(1,375	)		49,870
Total definite-lived intangible assets	$	56,668	$	(7,137	)	$	49,531	$	60,143	$	(4,253	)	$	55,890
In-process research and development (IPR&D)	$	8,669	$	—		$	8,669	$	9,685	$	—		$	9,685
Total intangible assets	$	65,337	$	(7,137	)	$	58,200	$	69,828	$	(4,253	)	$	65,575

Movements in intangible assets were due to the following:

	Product licensing rights			Product development rights			Purchased product rights and other			IPR&D
December 31, 2014	$	1,829		$	4,191		$	49,870		$	9,685
Purchase of product rights		100			1,568			3,000			—
Amortization of product rights		(296	)		(1,259	)		(3,178	)		—
Foreign currency movements and other		—			—			(6,294	)		(1,016	)
September 30, 2015	$	1,633		$	4,500		$	43,398		$	8,669

The weighted-average period prior to the next extension or renewal for the 22 products comprising our product licensing rights intangible asset was 55 months at September 30, 2015.

Note 8. Investment in Sagent Agila:

Changes in our investment in Sagent Agila during the nine months ended September 30, 2015 were as follows:

Investment in Sagent Agila at December 31, 2014	$	4,539
Equity in net income of Sagent Agila		1,510
Investment in Sagent Agila at September 30, 2015	$	6,049

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	2015		2014		2015		2014
Net revenues	$	2,169	$	1,516	$	6,090	$	6,249
Gross profit		665		1,473		3,020		4,992
Net income		665		1,473		3,020		4,952

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Note 9. Debt:

Credit facilities acquired in connection with the Omega acquisition

In connection with the acquisition of Omega on October 1, 2014, we assumed a series of credit facilities and mortgages with the National Bank of Canada (“NBC”) and the Business Development Bank of Canada (“BDC”), as described below.

Omega had an authorized credit facility (the “Omega operating credit facility”) in the amount of C$8,200 ($7,309) with the NBC. The Omega operating credit facility could be utilized in the form of floating-rate advances for an amount not exceeding C$7,000 ($6,239 as of the acquisition date) and advances in the form of letters of guarantee or letters of credit, within that limit for an amount not exceeding C$2,000 ($1,782 as of the acquisition date). The Omega operating credit facility could also be utilized in the form of advances to cover Omega’s currency risk for an amount not to exceed C$1,200 ($1,070 as of the acquisition date). On October 1, 2014, the Omega operating credit facility had floating-rate advances in the amount of C$1,530 ($1,364) bearing interest at the lender’s prime rate plus 0.50% (or an effective rate of 3.5%), which we assumed as part of the acquisition. As of December 31, 2014, C$3,272 ($2,824) was outstanding under the Omega operating credit facility.

In July 2014, Omega obtained a C$3,000 demand loan (the “Omega demand loan”), from the NBC bearing interest at the prime rate of the lender, plus a premium of 1.75% (effective rate 4.75%). The Omega demand loan was secured by all of the assets of Omega for C$3,000 plus an additional security interest of 20% of this amount, bearing interest at 4.75% per annum and matured in November 2014. We assumed the Omega demand loan ($2,674 as of the acquisition date) in connection with the acquisition and subsequently extended the maturity date to January 2015. The Omega operating credit facility and the Omega demand loan were secured by a first ranking security interest in the amount of C$8,250 ($7,354 as of the acquisition date) in Omega’s inventories, trade receivables and on the intellectual property of Omega, present and future. As of December 31, 2014, C$3,000 ($2,674) was outstanding under the Omega demand loan.

Omega also had C$267 ($238) outstanding on a decreasing revolving credit facility with the NBC (the “Omega decreasing revolving credit facility”) bearing interest at the prime rate of the lender, plus 1.0% (or an effective rate equal to 4.0%). The Omega decreasing revolving credit facility was secured by a first ranking security interest of C$1,000 ($891 as of the acquisition date) on the equipment, tooling and office furniture financed by the credit facility.

The Omega credit facilities were subject to certain restrictions, including the obligation to maintain certain financial ratios. As of October 1, 2014, Omega had not met certain of these financial ratios. As a result, the Omega decreasing revolving credit facility was classified as a current liability as of the acquisition date. In January 2015, we paid off all amounts outstanding under the Omega operating credit facility, the Omega demand loan and the Omega decreasing revolving credit facility with available cash on hand.

In addition to the above, Omega has five mortgage loans with the BDC (collectively the “Omega mortgages”) which we assumed in connection with the acquisition. The Omega mortgages, which require monthly installments and which are secured by specific Omega buildings and equipment, range in amount from C$70 to C$1,250 ($62 to $1,114 as of the acquisition date) and bear interest at the lender’s prime rate (5% as of the acquisition date) plus a premium ranging from 0%—1.5%. The Omega mortgages mature at various times from August 2019 through November 2036.

JPMorgan Chase Revolving Credit Loan Facility

On October 31, 2014, we entered into a credit agreement (the “Chase Agreement”) with JPMorgan Chase Bank, N.A., (“Chase”). As of September 30, 2015 and December 31, 2014, respectively, no borrowings were outstanding under the Chase Agreement and we were in compliance with all of our covenants under the Chase Agreement.

JP Morgan Chase China Fixed Assets Committed Loan Facility

On April 6, 2015, our subsidiary, Sagent (China) Pharmaceuticals, Co., Ltd. (“SCP”) entered into a fixed assets committed loan facility (“China Facility”) with JPMorgan Chase Bank (China) Company Limited, Shanghai Branch (“Chase China”). SCP may make drawings under the China Facility in an aggregate amount up to $18.0 million to finance capital expenditures relating to a production line expansion. Amounts drawn under the China Facility bear

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interest at the LIBOR rate (or Chase China’s cost of funds if the long term foreign debt quota of Chase China is not available) plus 3.25%. Amounts drawn under the China Facility will be subject to an amortization schedule. Principal payments for any amounts drawn will be repaid in accordance with that schedule, between 36-60 months. As of September 30, 2015, no borrowings were outstanding under the Chase Agreement and we were in compliance with all of our covenants under the Chase Agreement.

In connection with the China Facility, on April 6, 2015 we and our wholly-owned subsidiary, Sagent Pharmaceuticals (“Sagent Wyoming”) entered into an amendment (the “Amendment”) to the Chase Agreement as well as a guaranty (the “Guaranty”) in favor of Chase and certain of its affiliates. Under the Guaranty and Amendment, the Company and Sagent Wyoming provide Chase and its affiliates a guaranty of obligations incurred by SCP under the China Facility.

Note 10. Accrued liabilities:

Accrued liabilities at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015		December 31, 2014
Payroll and employee benefits	$	5,458	$	9,329
Sales and marketing		6,425		6,964
Taxes payable		1,201		1,040
Other accrued liabilities		2,029		2,013
	$	15,113	$	19,346

Note 11. Fair value measurements:

Assets measured at fair value on a recurring basis as of September 30, 2015 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	$	19,859	$	19,859	$	—	$	—
Corporate bonds and notes		20,160		—		20,160		—
Short-term investments	$	20,160	$	—	$	20,160	$	—
Total assets	$	40,019	$	19,859	$	20,160	$	—
Liabilities
Contingent purchase consideration	$	95	$	—	$	—	$	95

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Assets measured at fair value on a recurring basis as of December 31, 2014 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	$	13,139	$	13,139	$	—	$	—
Corporate bonds and notes		18,513		—		18,513		—
Commercial paper		—		—		—		—
Short-term investments	$	18,513	$	—	$	18,513	$	—
Total assets	$	31,652	$	13,139	$	18,513	$	—
Liabilities
Contingent purchase consideration	$	605	$	—	$	—	$	605

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. The fair value of our Level 3 contingent consideration is based upon a probability weighting approach that considered the possible outcomes based on assumptions related to the timing and probability of the product approval date.

There were no transfers of assets between Level 1, Level 2 or Level 3 during the periods presented.

We estimated the fair value of the contingent consideration to be $605 using a probability weighting approach that considered the possible outcomes based on assumptions related to the timing and probability of the Cisatracurium product approval date.

The Changes in the fair value of our contingent purchase consideration measured using significant unobservable inputs (Level 3), during the nine months ending September 30, 2015 were as follows:

Balance at January 1, 2015	$	605
Issuance of contingent purchase consideration		—
Change in fair value of contingent purchase consideration		(510	)
Payment of contingent purchase consideration		—
Balance at September 30, 2015	$	95

The change in fair value of our contingent purchase consideration was recognized within selling, general and administrative expense in the Condensed Consolidated Statement of Operations.

Note 12. Accumulated other comprehensive income (loss):

Accumulated other comprehensive income (loss) at September 30, 2015 and December 31, 2014 is comprised of the following:

	September 30, 2015			December 31, 2014
Currency translation adjustment, net of tax	$	(14,615	)	$	(3,334	)
Unrealized gains (losses) on available for sale securities, net of tax		(10	)		(40	)
Total accumulated other comprehensive income (loss)	$	(14,625	)	$	(3,374	)

There were no amounts reclassified from accumulated other comprehensive income (loss) during the nine months ended September 30, 2015.

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Note 13. Earnings per share

Basic earnings per share is calculated by dividing net income 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, 2015 and 2014, respectively:

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Anti-dilutive shares (in thousands)		2,188		435		2,188		1,124

The table below presents the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2015 and 2014:

	Three months ended September 30,					Nine months ended September 30,
	2015			2014		2015			2014
Basic and dilutive numerator:
Net income (loss), as reported	$	(1,795	)	$	1,926	$	(3,945	)	$	10,114
Denominator:
Weighted-average common shares outstanding—basic (in thousands)		32,747			31,895		32,321			31,861
Net effect of dilutive securities:
Stock options and restricted stock		—			1,065		—			887
Weighted-average common shares outstanding—diluted (in thousands)		32,747			32,960		32,321			32,748
Net income (loss) per common share (basic)	$	(0.05	)	$	0.06	$	(0.12	)	$	0.32
Net income (loss) per common share (diluted)	$	(0.05	)	$	0.06	$	(0.12	)	$	0.31

Note 14. Stock-based compensation:

The following tables set forth stock option and restricted stock activity for the nine months ended September 30, 2015:

	Number of Shares
	Stock options			Restricted stock
Outstanding at December 31, 2014		2,543,362			128,209
Granted		411,743			140,971
Exercised		(779,505	)		(40,496	)
Forfeited		(168,166	)		(48,476	)
Outstanding at September 30, 2015		2,007,434			180,208

The aggregate intrinsic value of stock options exercised during the three months ended September 30, 2015 and 2014, was $1,524 and $319, respectively. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2015 and 2014, was $9,038 and $1,522, respectively.

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Note 15. Net revenue by product:

Net revenue by therapeutic class is as follows:

	Three months ended September 30,				Nine months ended September 30,
Therapeutic class:	2015		2014		2015		2014
Anti-infective	$	31,891	$	21,370	$	96,453	$	74,896
Critical care		29,271		21,530		85,962		62,153
Oncology		14,037		22,459		52,773		68,373
	$	75,199	$	65,359	$	235,188	$	205,422

Note 16. Related party transactions:

As of September 30, 2015 and December 31, 2014, respectively, we had a receivable of $2,664 and $2,156 from Sagent Agila LLC, which is expected to offset future profit-sharing payments. As of September 30, 2015 and December 31, 2014, respectively, we had a payable of $11,573 and $8,079 to Sagent Agila LLC, principally for the acquisition of inventory and amounts due under profit-sharing arrangements.

Note 17. Income Taxes:

Our provision for income taxes for the three month ended September 30, 2015 and September 30, 2014 was $1,663 and $1,387, respectively. Our provision for income taxes for the nine months ended September 30, 2015 and September 30, 2014 was $3,813 and $2,774, respectively. As we have recorded a full valuation allowance against our Chinese deferred tax assets, we have not recorded a tax benefit for losses associated with SCP.

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 product under FDA NDA No. 203231, made by ACS Dobfar Info S.A. (“Info”), also a defendant, a generic bioequivalent version of Novartis’ Zometa ^® Ready-to-Use product, 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 product under FDA ANDA No. 202828, also made by Info, a generic version of Novartis’ Reclast ^® product, would infringe U.S. Patent No. 8,052,987 (the “987 Patent”) and the 241 Patent, and (iii) zoledronic acid product under FDA ANDA No. 202472, made by Actavis LLC, also a defendant, a generic version of Novartis’ Zometa ^® Pre Concentrate product, would infringe the 189 Patent. (In Re: Certain Consolidated Zoledronic Acid Cases; Consolidated Civil Action No. 12-03967(SDW)(SCM) [Consolidated with Civil Action Nos. 12-cv-04393, 13-cv-01028, 13-cv-02379, 13-cv-4669, 13-cv-5125, 13-cv-6835, 13-cv-7914 and 14-cv-18411]). 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. On December 3, 2014, Novartis sued the Company, alleging, among other things, that sales of the Company’s zoledronic acid product under FDA ANDA No. 091493, made by Hameln RDS GMBH, a generic version of Novartis’ Zometa ^® Pre-concentrate product, would infringe the 189 Patent. (Novartis Pharmaceuticals Corporation v. Sagent Pharmaceuticals, Inc. et. al., Case No. 2:14-cv-07556(SDW)(SCM) and together with the Consolidated Civil Action Case No. 13-cv-1028, the “Litigation”).

On October 13, 2015, the Company and Novartis agreed to settle the Litigation. Pursuant to the terms of the settlement, we will pay Novartis $5,000 in exchange for a release of claims associated with the 241, 987 and 189 Patents pertaining to the following regulatory submissions: FDA NDA No. 203231, FDA ANDA No. 202828, FDA

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ANDA No. 202472 and FDA ANDA No. 091493 (collectively the “Regulatory Submissions”), and acquire a license to sell the zoledronic acid products as approved by their Regulatory Submissions (excluding sales of product manufactured under FDA ANDA No.202472 after December 31, 2014) in the United States. The settlement is subject to confirmation by the US Federal Trade Commission. Concurrent with the Novartis settlement, we are entitled to receive $1,477 from Info and Actavis, representing their collective share of the $5,000.

We have determined that $1,683 of the settlement represents a future license to sell the zoledronic acid products. This amount has been recorded within Other assets on the Condensed Consolidated Balance Sheet as of September 30, 2015, offset by the portion of the Info reimbursement, $607, related to the license period. The remaining net settlement amount of $2,447 owed to Novartis has been recorded as Legal settlement within the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2015.

At this time, there are no other proceedings of which we are aware that are considered likely to have a material adverse effect on the consolidated financial position or results of operations.

Note 19. Management transition costs:

In March 2015, we completed a management transition following the retirement of our founder and Chief Executive Officer and resignation of our President. In June 2015, we eliminated certain positions in the US as part of the ongoing review of our business. In the third quarter of 2015, we incurred additional costs, primarily related to the onboarding of our new Chief Executive Officer. Costs associated with these matters, primarily severance related charges and costs associated with recruiting and retaining a new CEO, were all incurred in the Sagent US operating segment, and are reflected in the management transition caption in the consolidated statement of operations for the three and nine months ended September 30, 2015. Of the charges, $189 and $3,310 were paid during the three and nine months ended September 30, 2015, respectively. Total costs accrued within the Accounts Payable and Accrued liabilities captions of the balance sheet at September 30, 2015 were $307 and $958, respectively.

Note 20. Geographic and segment information

Management uses segment information to evaluate segment performance and allocate resources. Historically we have operated in a single reportable segment, the United States. Effective October 1, 2014, in connection with the Omega acquisition, we began operating in two reportable segments comprised of operations organized geographically within the United States (Sagent US segment) and Canada (Omega segment), each of which develop, source, manufacture and market generic injectable products for sale within the their respective countries. Each segment derives a significant portion of its revenues from a single class of pharmaceutical wholesale customers within that country. Management utilizes segment operating income as its measure of segment profitability.

Segment and geographic data for the three and nine months ended September 30, 2015 includes the impact of Omega. Shared costs for certain corporate functions, including but not limited to, corporate finance and legal, are included within the Sagent US segment profitability that management reviews.

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Geographic and segment data is as follows:

	Three months ended September 30,						Nine months ended September 30,
Segment revenues:	2015			2014			2015			2014
United States	$	67,648		$	65,359		$	211,623		$	205,395
Others		226			—			738			27
Sagent US segment		67,874			65,359			212,361			205,422
Canada (Omega segment)		7,325			—			22,827			—
Total net revenue	$	75,199		$	65,359		$	235,188		$	205,422
Income (loss) before income taxes
Sagent US	$	1,391		$	4,044		$	2,885		$	13,994
Canada (Omega segment)		351			—			(142	)		—
Total segment operating income		1,742			4,044			2,743			13,994
Interest income and other		(1,686	)		(536	)		(2,225	)		(465	)
Interest expense		(188	)		(195	)		(650	)		(641	)
Income (loss) before income taxes	$	(132	)	$	3,313		$	(132	)	$	12,888

	September 30,
	2015		2014
Segment assets:
United States	$	206,802	$	249,953
China		57,742		66,612
Sagent US segment		264,544		316,565
Canada (Omega segment)		95,065		—
Total assets	$	359,609	$	316,565

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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 16, 2015. 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, our product pipeline and anticipated product approvals 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; our ability to realize the expected benefits from our acquisition of Omega; our ability to realize the expected benefits from our acquisition of and investment in our China subsidiary; and the additional investments required to be made in our China subsidiary to achieve its manufacturing potential.

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 Item 1A under the heading “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC on March 16, 2015, 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 a significant portion 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 not granted or are delayed, 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 effected;

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

• two of our products, heparin and levofloxacin in premix bags, represent a significant portion of our net revenue. Each of these products is manufactured by and supplied to us by a single vendor, and, if the volume or pricing of either of these products declines, or we are unable to satisfy market demand for either 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 could be materially adversely affected;

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• if we are unable to continue to develop and commercialize new products in a timely and cost-effective manner, we may not achieve our expected revenue growth and profitability, or our business, results of operations and financial position could be adversely affected;

• if we are unable to maintain our group purchasing organizations (“GPO”) and distributor relationships, our revenues could decline and our results of operations could be adversely affected;

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

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

• if we fail to attract and retain the talent required for our business, our business could be materially harmed;

• our inability to manage our planned growth or successfully integrate newly acquired businesses could harm our business;

• 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 in such cases we may incur substantial liabilities and may be unable to commercialize products in a profitable manner or at all;

• healthcare reform legislation or other policy changes may adversely affect our business;

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

• we may need to raise additional capital in the event we change our business plan or encounter unexpected developments, which may cause dilution to our existing stockholders or restrict or limit our operations;

• we are subject to risks associated with managing our international network of business relationships, 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 achieve overall profitability;

• we may never realize the expected benefits from our acquisition of Omega and it will require substantial capital resources to maintain its manufacturing capabilities and overall profitability;

• we rely on a single vendor to manage our order to cash cycle and our distribution activities in the U.S. and the loss or disruption of service from this vendor could adversely affect our operations and financial condition;

• we are likely to incur substantial costs associated with both implementation and maintenance of our new enterprise resource planning software and other related applications, and unforeseen problems may arise with the implementation. If the new systems do not perform as originally planned, our business, financial position and results of operations could be adversely affected;

• currency fluctuations may have an adverse effect on our business; and

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• 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 injectable pharmaceutical products, which we sell primarily throughout North America through our two operating segments. Initially founded in 2006 as Sagent Holding Co., a Cayman Islands company, we reincorporated as Sagent Pharmaceuticals, Inc., a Delaware corporation, in connection with our initial public offering, on April 26, 2011.

With a primary focus on generic injectable pharmaceuticals, which provide customers a lower-cost alternative to branded products when applicable patents have expired or been declared invalid, or when the products are determined not to infringe the patents of others, 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 and ready-to-use pre-filled 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 served critical functions at other injectable pharmaceutical companies or 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. Our model combines an extensive network of international development, sourcing and manufacturing collaborations with our proven and experienced regulatory, quality assurance, business development, project management, and sales and marketing teams.

On June 4, 2013, we acquired the remaining 50% equity interest in Kanghong Sagent (Chengdu) Pharmaceutical Co. Ltd. (“KSCP”) from our former joint venture partner (the “SCP Acquisition”). In August 2013, we formally changed the name of this entity to Sagent (China) Pharmaceuticals Co., Ltd. (“SCP”). The SCP facility, which received its Establishment Inspection Report from the FDA in April 2013, and first product approval in June 2013, provides us with the ability to develop and manufacture a portion of our product portfolio. In August 2015, we announced that we are evaluating strategic alternatives to optimize the value of the SCP facility, including its potential sale.

On October 1, 2014, we, through our wholly-owned subsidiary, Sagent Acquisition Corp., a Canadian company, acquired all of the issued and outstanding shares of the capital stock of 7685947 Canada Inc., and its subsidiary, Omega Laboratories Limited (collectively, “Omega”), a privately held Canadian pharmaceutical and specialty healthcare products company. Omega represents our first international market expansion, and the facility currently provides us with the ability to manufacture products for the Canadian and other international markets.

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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 consolidated statements of operations and the impact of product-related non-cash charges arising from business combinations. 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,
	2015		2014		$ Change			% Change			2015			2014			% Change
Adjusted Gross Profit	$	24,695	$	19,507	$	5,188			27	%		32.8	%		29.8	%		3.0	%
Sagent portion of gross profit earned by Sagent Agila joint venture		333		737		(404	)		-55	%		0.4	%		1.1	%		-0.7	%
Product-related non-cash charges arising from business combinations		—		—		—			n/m			0.0	%		0.0	%		0.0	%
Gross Profit	$	24,362	$	18,770	$	5,592			30	%		32.4	%		28.7	%		3.7	%

	Nine months ended September 30,										% of net revenue, nine months ended September 30,
	2015		2014		$ Change			% Change			2015			2014			% Change
Adjusted Gross Profit	$	66,877	$	64,242	$	2,635			4	%		28.4	%		31.3	%		-2.9	%
Sagent portion of gross profit earned by Sagent Agila joint venture		1,510		2,496		(986	)		-40	%		0.6	%		1.2	%		-0.6	%
Product-related non-cash charges arising from business combinations		640		—		640			n/m			0.3	%		0.0	%		0.3	%
Gross Profit	$	64,727	$	61,746	$	2,981			5	%		27.5	%		30.1	%		-2.6	%

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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, management transition related costs, acquisition-related costs, the impact of unrealized foreign currency gains or losses, and the impact of product-related non-cash charges arising from business combinations. We believe that EBITDA and Adjusted 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,
	2015			2014		$ Change			% Change
Adjusted EBITDA	$	8,789		$	7,248	$	1,541			21	%
Stock-based compensation expense		921			1,203		(282	)		-23	%
Management transition costs		645			—		645			n/m
Acquisition-related costs		535			872		(337	)		-39	%
Unrealized foreign exchange losses2		1,560			—		1,560			n/m
Legal settlement		2,447			—		2,447			n/m
EBITDA	$	2,681		$	5,173	$	(2,492	)		-48	%
Depreciation and amortization expense1		2,655			1,773		882			50	%
Interest expense, net		158			87		71			82	%
Provision for income taxes		1,663			1,387		276			20	%
Net income (loss)	$	(1,795	)	$	1,926	$	(3,721	)		n/m

	Nine months ended September 30,
	2015			2014		$ Change			% Change
Adjusted EBITDA	$	24,058		$	23,956	$	102			0.4	%
Stock-based compensation expense		2,845			3,657		(812	)		-22	%
Management transition costs		4,647			—		4,647			n/m
Acquisition-related costs		1,856			872		984			113	%
Unrealized foreign exchange losses2		2,440			—		2,440			n/m
Product-related non-cash charges arising from business combinations		640			—		640			n/m
Legal settlement		2,447			—		2,447			n/m
EBITDA	$	9,183		$	19,427	$	(10,244	)		-53	%
Depreciation and amortization expense1		8,746			6,237		2,509			40	%
Interest expense, net		569			302		267			88	%
Provision for income taxes		3,813			2,774		1,039			37	%
Net income (loss)	$	(3,945	)	$	10,114	$	(14,059	)		n/m

¹ Amortization expense excludes $17 and $23 of amortization in the three months ended September 30, 2015 and 2014, respectively, and $50 and $70 of amortization in the nine months ended September 30, 2015 and 2014, 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, 2015 and 2014.

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² Unrealized foreign exchange losses reflect the impact of foreign currency movements on intercompany loans, primarily related to the devaluation of the Canadian dollar relative to the US dollar, and are included in Interest income and other income (expense), net, in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014.

Discussion and Analysis

Consolidated results of operations

The following compares our consolidated results of operations for the three months ended September 30, 2015 with those of the three months ended September 30, 2014:

	Three months ended September 30,
	2015			2014			$ change			% change
Net revenue	$	75,199		$	65,359		$	9,840			15	%
Cost of sales		50,837			46,589			4,248			9	%
Gross profit		24,362			18,770			5,592			30	%
Gross profit as % of net revenue		32.4	%		28.7	%		3.7	%
Operating expenses:
Product development		7,923			3,677			4,246			116	%
Selling, general and administrative		11,403			10,914			489			4	%
Acquisition-related costs		535			872			(337	)		-39	%
Management transition costs		645			—			645			n/m
Equity in net income of joint ventures		(333	)		(737	)		(404	)		-55	%
Total operating expenses		20,173			14,726			5,447			37	%
Legal settlement		2,447			—			2,447			n/m
Income from operations		1,742			4,044			(2,302	)		-57	%
Interest income and other income (expense), net		(1,686	)		(536	)		(1,150	)		215	%
Interest expense		(188	)		(195	)		(7	)		-4	%
Income (loss) before income taxes		(132	)		3,313			(3,445	)		n/m
Provision for income taxes		1,663			1,387			276			20	%
Net income (loss)	$	(1,795	)	$	1,926		$	(3,721	)		n/m
Net income (loss) per common share:
Basic	$	(0.05	)	$	0.06		$	(0.11	)		n/m
Diluted	$	(0.05	)	$	0.06		$	(0.11	)		n/m

Net revenue: Net revenue for the three months ended September 30, 2015 totaled $75.2 million, inclusive of $7.3 million of net revenue from our Omega segment, an increase of $9.8 million, or 15%, as compared to $65.4 million for the three months ended September 30, 2014. The launch of eight new codes or presentations of four products since September 30, 2014 contributed $2.7 million of the net revenue increase in the third quarter of 2015. Net revenue for products launched prior to September 30, 2014 decreased $0.5 million, or 1%, to $64.8 million in the third quarter of 2015.

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Cost of sales: Cost of goods sold for the three months ended September 30, 2015 totaled $50.8 million, inclusive of $5.0 million of cost of sales incurred in our Omega segment, an increase of $4.2 million, or 9%, as compared to $46.6 million for the three months ended September 30, 2014. Gross profit as a percentage of net revenues was 32.4% for the three months ended September 30, 2015 compared to 28.7% for the three months ended September 30, 2014. Adjusted Gross Profit as a percentage of net revenue was 32.8% for the three months ended September 30, 2015 compared to 29.8% for the three months ended September 30, 2014. The increase in gross profit as a percentage of net revenue is primarily due to improved product mix and the benefit of $0.7 million from the receipt of payment from certain manufacturing partners for the settlement of certain supply issues.

Product development: Product development expense for the three months ended September 30, 2015 totaled $7.9 million, inclusive of $0.7 million of product development costs incurred in our Omega segment, an increase of $4.2 million, or 116%, as compared to $3.7 million for the three months ended September 30, 2014. The increase in product development expense was primarily due to higher milestone expenses for products in our development pipeline in 2015.

As of September 30, 2015, our new product pipeline included 42 products represented by 68 ANDAs which we had filed, or licensed rights to, that were under review by the FDA and three products represented by eight ANDAs that have been recently approved and were pending commercial launch. We also had an additional 21 products represented by 27 ANDAs under initial development at September 30, 2015.

Selling, general and administrative: Selling, general and administrative expenses for the three months ended September 30, 2015, totaled $11.4 million, inclusive of $1.2 million of costs incurred in our Omega segment, an increase of $0.5 million, or 4%, as compared to $10.9 million for the three months ended September 30, 2014. Selling, general and administrative expense as a percentage of net revenue was 15% and 17% for the three months ended September 30, 2015 and 2014, respectively.

Acquisition-related costs: Acquisition-related costs for the three months ended September 30, 2015 totaled $0.5 million, a decrease of $0.3 million, or 39%, as compared to $0.9 million for the three months ended September 30, 2014. Acquisition-related costs in the three months ended September 30, 2014 were associated with the acquisition of Omega.

Management transition costs: Management transition costs for the three months ended September 30, 2015 totaled $0.6 million, primarily related to our transition to a new Chief Executive Officer. No management transition costs were incurred in the three months ended September 30, 2014.

Equity in net income of joint ventures: Equity in net income of joint ventures for the three months ended September 30, 2015 totaled $0.3 million, a decrease of $0.4 million as compared to $0.7 million for the three months ended September 30, 2014. The change is related to a decline in sales of Sagent Agila products during the three months ended September 30, 2015, primarily due to the ongoing manufacturing issues at Sagent Agila’s SFF facility, which has been subject to a warning letter since September 2013.

Legal settlement: Legal settlement of $2.4 million for the three months ended September 30, 2015 represents the $5.0 million settlement of our outstanding patent infringement lawsuit with Novartis Pharmaceuticals Corporation (“Novartis”), net of $1.5 million of recoveries from our manufacturing partners associated with the settlement and $1.1 million allocated to acquired product licensing rights.

Interest income and other income (expense), net: Interest income and other income (expense), net for the three months ended September 30, 2015 totaled $1.7 million of expense, as compared to $0.5 million of expense in the three months ended September 30, 2014. The increase was predominately related to $1.6 million of unrealized foreign currency losses resulting from the weakening of the Canadian dollar and Chinese Renminbi.

Interest expense: Interest expense for the three months ended September 30, 2015 and September 30, 2014 totaled $0.2 million.

Provision for income taxes: Our provision for income taxes for the three months ended September 30, 2015 was $1.7 million, an increase of $0.3 million as compared to $1.4 million in the three months ended September 30, 2014. As we have recorded a full valuation allowance against our Chinese deferred tax assets, we have not recorded a tax benefit for losses associated with SCP.

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Net income (loss) and diluted net earnings (loss) per common share: The net loss for the three months ended September 30, 2015 was $1.8 million, as compared to net income of $1.9 million for the three months ended September 30, 2014. Diluted net earnings (loss) per common share decreased by $0.11. The decrease in diluted net earnings (loss) per common share is due to the following factors:

Diluted EPS for the three months ended September 30, 2014	$	0.06
Decrease in earnings		(0.11	)
Decrease in common shares outstanding		—
Diluted EPS for the three months ended September 30, 2015	$	(0.05	)

The following compares our consolidated results of operations for the nine months ended September 30, 2015 with those of the nine months ended September 30, 2014:

	Nine months ended September 30,
	2015			2014			$ change			% change
Net revenue	$	235,188		$	205,422		$	29,766			14	%
Cost of sales		170,461			143,676			26,785			19	%
Gross profit		64,727			61,746			2,981			5	%
Gross profit as % of net revenue		27.5	%		30.1	%		-2.6	%
Operating expenses:
Product development		18,658			17,734			924			5	%
Selling, general and administrative		35,886			31,622			4,264			13	%
Acquisition-related costs		1,856			872			984			113	%
Management transition costs		4,647			—			4,647			n/m
Equity in net income of joint ventures		(1,510	)		(2,476	)		(966	)		-39	%
Total operating expenses		59,537			47,752			11,785			25	%
Legal Settlement		2,447			—			2,447			n/m
Income from operations		2,743			13,994			(11,251	)		-80	%
Interest income and other income (expense), net		(2,225	)		(465	)		(1,760	)		378	%
Interest expense		(650	)		(641	)		9			1	%
Income (loss) before income taxes		(132	)		12,888			(13,020	)		-101	%
Provision for income taxes		3,813			2,774			1,039			37	%
Net income (loss)	$	(3,945	)	$	10,114		$	(14,059	)		n/m
Net income (loss) per common share:
Basic	$	(0.12	)	$	0.32		$	(0.44	)		n/m
Diluted	$	(0.12	)	$	0.31		$	(0.43	)		n/m

Net revenue: Net revenue for the nine months ended September 30, 2015 totaled $235.2 million, inclusive of $22.8 million of net revenue from our Omega segment, an increase of $29.8 million, or 14%, as compared to $205.4 million for the nine months ended September 30, 2014. The launch of eight new codes or presentations of four products since September 30, 2014 contributed $5.1 million of the net revenue increase in the first nine months of 2015. Net revenue for products launched prior to September 30, 2014 increased $0.9 million, or less than 1%, to $206.5 million for the nine months ended September 30, 2015.

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Cost of sales: Cost of goods sold for the nine months ended September 30, 2015 totaled $170.5 million, inclusive of $17.3 million of cost of sales incurred in our Omega segment, an increase of $26.8 million, or 19%, as compared to $143.7 million for the nine months ended September 30, 2014. Gross profit as a percentage of net revenues was 27.5% for the nine months ended September 30, 2015 compared to 30.1% for the nine months ended September 30, 2014. Adjusted Gross Profit as a percentage of net revenue was 28.4% for the nine months ended September 30, 2015, and 31.3% for the nine months ended September 30, 2014. The decrease in gross profit as a percentage of net revenue is primarily due to the loss of a key oncolytic product partially offset by the benefit of $0.7 million from the receipt of payment from certain manufacturing partners for the settlement of certain supply issues.

Product development: Product development expense for the nine months ended September 30, 2015 totaled $18.7 million, inclusive of $2.3 million of product development costs in our Omega segment, an increase of $0.9 million, or 5%, as compared to $17.7 million for the nine months ended September 30, 2014. The decrease in US product development expense was primarily due to lower milestone expenses for products in our development pipeline, and a $1.0 million credit due to a settlement payment following the renegotiation of a development contract.

Selling, general and administrative: Selling, general and administrative expenses for the nine months ended September 30, 2015, totaled $35.9 million, inclusive of $3.4 million of costs in our Omega segment, an increase of $4.3 million, or 13%, as compared to $31.6 million for the nine months ended September 30, 2014. The remaining increase in selling, general and administrative expense was primarily due to increased public company costs partially offset by lower employee related costs. Selling, general and administrative expense as a percentage of net revenue was 15% for the nine months ended September 30, 2015 and 2014.

Acquisition-related costs: Acquisition-related costs for the nine months ended September 30, 2015 totaled $1.9 million, an increase of $1.0 million, or 113%, as compared to $0.9 million for the nine months ended September 30, 2014.

Management transition costs: Management transition costs for the nine months ended September 30, 2015 totaled $4.6 million. The costs are primarily severance related charges following the retirement of our founder and Chief Executive Officer and resignation of our President in March 2015, severance charges related to the elimination of certain other positions in the US in June 2015 and transition costs associated with our new Chief Executive Officer in the third quarter of 2015. No management transition costs were incurred in the nine months ended September 30, 2014.

Equity in net income of joint ventures: Equity in net income of joint ventures for the nine months ended September 30, 2015 totaled $1.5 million, a decrease of $1.0 million as compared to $2.5 million for the nine months ended September 30, 2014, related to a decrease in sales of Sagent Agila products during the nine months ended September 30, 2015.

Legal settlement: Legal settlement of $2.4 million for the nine months ended September 30, 2015 represents the $5.0 million settlement of our outstanding patent infringement lawsuit with Novartis, net of $1.5 million of recoveries from our manufacturing partners associated with the settlement and $1.1 million of acquired product licensing rights.

Interest income and other income (expense), net: Interest income and other income (expense), net for the nine months ended September 30, 2015 totaled $2.2 million of expense, as compared to $0.5 million of expense in the nine months ended September 30, 2014. The increase in expense primarily relates to unrealized foreign exchange losses on intercompany financing, primarily related to the devaluation of the Canadian dollar versus the US dollar.

Interest expense: Interest expense for the nine months ended September 30, 2015 totaled $0.7 million of expense, an increase of less than $0.1 million, or 1%, as compared to $0.6 million of expense in the nine months ended September 30, 2014.

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Provision for income taxes: Our provision for income taxes for the nine months ended September 30, 2015 was $3.8 million, an increase of $1.0 million as compared to $2.8 million in the nine months ended September 30, 2014. As we have recorded a full valuation allowance against our Chinese deferred tax assets, we have not recorded a tax benefit for losses associated with SCP.

Net income (loss) and diluted net earnings (loss) per common share: The net loss for the nine months ended September 30, 2015 was $3.9 million, as compared to net income of $10.1 million for the nine months ended September 30, 2014. Diluted net earnings (loss) per common share decreased by $0.43. The decrease in diluted net earnings (loss) per common share is due to the following factors:

Diluted EPS for the nine months ended September 30, 2014	$	0.31
Decrease in earnings		(0.43	)
Decrease in common shares outstanding		—
Diluted EPS for the nine months ended September 30, 2015	$	(0.12	)

Liquidity and Capital Resources

Our future capital requirements will depend on a number of factors, including the continued commercial success of our existing products, launching the products that have been recently approved and are pending commercial launch or are pending approval as of September 30, 2015, successfully identifying and sourcing other new product opportunities, manufacturing products at our wholly-owned Chinese manufacturing facility, capital expansion at our wholly-owned subsidiaries and further business development activity.

Based on our existing business plan, we expect that cash, cash equivalents and short-term investments, together with operating cash flows and borrowings available under our Chase revolving loan facility and our Chase China committed fixed assets facility, will be sufficient to fund our planned operations, the continued development of our product pipeline, investments in working capital, joint venture distributions and capital expansion at our Omega 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 general economic climate, changes in the regulatory environment, the loss of or negative developments affecting key relationships with suppliers, group purchasing organizations or end-user customers or other unexpected developments that may have a material effect on the cash flows or results of operations of our business.

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. Our ability to raise additional funding, if necessary, is subject to a variety of factors that we cannot predict with certainty, including our future results of operations, our relative levels of debt and equity, the volatility and overall condition of the capital markets and the market prices of our securities. Debt financing, if available, may only be available to us on less favorable terms than our existing Chase revolving loan facility, including higher interest rates or greater exposure to interest rate risk. In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders.

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 or expansion of our Omega 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, 2015, cash, cash equivalents and short term investments totaled $46.0 million. Working capital totaled $115.0 million and our current ratio (current assets to current liabilities) was approximately 2.6 to 1.0.

Sources and Uses of Cash

Operating activities: Net cash used in operating activities was $12.9 million for the nine months ended September 30, 2015, compared with net cash provided by operating activities of $19.5 million during the nine months ended September 30, 2014. The reduction in cash provided by operations was primarily due to the increase in inventory in the nine months ended September 30, 2015 and the decline in our net income.

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Investing activities: Net cash used in investing activities was $19.8 million for the nine months ended September 30, 2015, primarily related to the final installment payment for our acquisition of SCP, increased capital expenditures related to the new manufacturing line at our Omega facility and the net change in our short term investments. Net cash provided by investing activities of $84.5 million during the nine months ended September 30, 2014 primarily related to the net sale of short-term investments in anticipation of the October 1, 2014 acquisition of Omega, partially offset by increased capital expenditures and acquisition of product rights.

Financing activities: Net cash provided by financing activities was $3.6 million for the nine months ended September 30, 2015, primarily related to proceeds from stock option exercises, partially offset by the repayment of the then outstanding balance of our loans with the National Bank of Canada. Net cash used in financing activities for the nine months ended September 30, 2014 was $10.0 million, primarily related to repayment in full of the then outstanding balance of our ABC Loans.

Credit facilities

In February 2012, we repaid all of our outstanding borrowings and replaced our previous facilities with an asset based revolving loan facility with Silicon Valley Bank (“SVB”). In September 2013, we entered into a Second Loan Modification agreement with SVB, and subsequently, on October 31, 2014, we terminated our asset based revolving loan facility with SVB and replaced it with a new asset based revolving loan credit facility with JPMorgan Chase Bank, N.A. (“Chase”). In April 2015, SCP entered a fixed asset committed loan facility with JPMorgan Chase Bank (China) Company Limited, Shanghai Branch (“Chase China”).

In June 2013, SCP had two loan facilities with the Agricultural Bank of China (“ABC”) that existed prior to the SCP Acquisition. We repaid in full the amounts outstanding under these facilities in January 2014. In October 2014, Omega had a series of loan facilities that existed prior to the Omega acquisition. Refer below for a description of our facilities with Chase, Chase China, Omega’s facilities, and the SVB and ABC facilities which were terminated in 2014.

Asset based revolving credit loan facility

On October 31, 2014, we entered into a credit agreement with JPMorgan Chase Bank, N.A., (the “Chase Agreement”). The Chase Agreement provides for an $80.0 million asset based revolving credit loan facility, with availability subject to a borrowing base consisting of eligible cash, short-term investments, accounts receivable and inventory and the satisfaction of conditions precedent specified in the Chase Agreement. The Chase Agreement provides for an accordion feature, whereby we may increase the revolving commitment up to an additional $25.0 million subject to certain customary terms and conditions including pro forma compliance with a fixed charge coverage ratio (as defined in the Chase Agreement) of 1.00 to 1.00. The Chase Agreement matures on October 31, 2019, at which time all amounts outstanding will be due and payable. Borrowings under the Chase 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 2.00% per annum or an alternative base rate plus 1.00% per annum. We also incur a commitment fee on undrawn amounts equal to 0.25% per annum.

The Chase Agreement is guaranteed by us at the time of closing and is secured by a lien on substantially all of our and our principal domestic subsidiary’s assets and any future domestic subsidiary guarantors’ assets. The same assets may also be used to secure, and we may guaranty, a loan by an affiliate of JPMorgan Chase Bank, N.A. to our Chinese subsidiary for the construction of a new manufacturing line. The Chase Agreement includes customary covenants and also imposes a financial covenant requiring compliance with a minimum fixed charge coverage ratio of 1.00 to 1.00 during certain covenant testing times triggered if availability under the Chase Agreement is below the greater of 10% of the revolving commitment and $8.0 million.

Loans under the Chase Agreement are secured by a lien on substantially all of our and our principal domestic operating subsidiary’s assets.

As of September 30, 2015, there were no borrowings outstanding under our Chase revolving loan facility, and we were in compliance with all covenants under this loan agreement. Total availability under our Chase revolving loan facility was $80.0 million at September 30, 2015, which is subject to adjustment on a monthly basis under our borrowing base calculation.

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Fixed asset committed loan facility

On April 6, 2015, SCP entered into a fixed assets committed loan facility (“China Facility”) with Chase China. SCP may make drawings under the China Facility in an aggregate amount up to $18.0 million to finance capital expenditures relating to a product line expansion. Amounts drawn under the China Facility bear interest at the LIBOR rate (or Chase China’s cost of funds if the long term foreign debt quota of Chase China is not available) plus 3.25%. Amounts drawn under the China Facility will be subject to an amortization schedule. Principal payments for any amounts drawn will be repaid in accordance with that schedule, between 36-60 months.

In connection with the China Facility, on April 6, 2015 we and our wholly-owned subsidiary, Sagent Pharmaceuticals (“Sagent Wyoming”) entered into an amendment (the “Amendment”) to the Chase Agreement as well as a guaranty (the “Guaranty”) in favor of Chase and certain of its affiliates. Under the Guaranty and Amendment, the Company and Sagent Wyoming provide Chase and its affiliates a guaranty of obligations incurred by SCP under the China Facility.

SVB asset based revolving loan facility

On February 13, 2012, we entered into a Loan and Security Agreement with SVB (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 SVB’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 our borrowing availability; eliminating the covenant to maintain a specified level of free cash flow in quarters where we maintain 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 us additional flexibility 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.

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Concurrent with entering the Chase Agreement, we terminated our existing revolving credit facility with SVB and repaid certain associated fees. Included with the fees was $1.1 million of deferred costs triggered by the early termination of the agreement. This amount is included within interest expense in the condensed consolidated statement of operations in the fourth quarter of 2014. Concurrent with the repayment and termination of the agreement, all liens and security interests against our property that secured the obligations under our existing revolving credit facility were released and discharged.

Chinese loan facilities

SCP had outstanding debt obligations with ABC at the time of the SCP Acquisition. SCP originally entered into two loan contracts with ABC for RMB 83.0 million ($13.6 million) and RMB 37.0 million ($6.1 million) in August 2010 and June 2011, respectively (the “ABC Loans”). In November 2013, we repaid RMB 55.0 million ($9.0 million) of the then outstanding balance. At December 31, 2013, RMB 63.0 million ($10.3 million) of the original loan remains outstanding, and is subject to a repayment schedule, with all amounts due and payable by August 2015. 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 December 31, 2013, the interest rate for the ABC Loans was 6.00%.

On January 2, 2014, we repaid in full all outstanding amounts (RMB 63.0 million, $10.3 million) under the ABC Loans, and the loan contracts were terminated.

Omega credit facilities

In connection with the acquisition of Omega on October 1, 2014, we assumed a series of credit facilities and mortgages with the National Bank of Canada (“NBC”) and the Business Development Bank of Canada (“BDC”), as described below.

Omega has an authorized credit facility (the “Omega operating credit facility”) in the amount of C$8.2 million ($7.3 million) with the NBC. The Omega operating credit facility can be utilized in the form of floating-rate advances for an amount not exceeding C$7.0 million ($6.2 million as of the acquisition date) and advances in the form of letters of guarantee or letters of credit, within that limit for an amount not exceeding C$2.0 million ($1.8 million as of the acquisition date). The Omega operating credit facility can also be utilized in the form of advances to cover Omega’s currency risk for an amount not to exceed C$1.2 million ($1.1 million as of the acquisition date). On October 1, 2014, the Omega operating credit facility had floating-rate advances in the amount of C$1.5 million ($1.4 million) bearing interest at the lender’s prime rate plus 0.50%, (or an effective rate of 3.5%) which we assumed as part of the acquisition. As of December 31, 2014, C$3.3 million ($2.8 million) was outstanding under the Omega operating credit facility.

In July 2014, Omega obtained a C$3.0 million demand loan (the “Omega demand loan”), from the NBC bearing interest at the prime rate of the lender, plus a premium of 1.75% (effective rate 4.75%). The Omega demand loan is secured by all of the assets of Omega for C$3.0 million plus an additional security interest of 20% of this amount, bearing interest at 4.75% per annum and matured in November 2014. We assumed the Omega demand loan ($2.7 million as of the acquisition date) in connection with the acquisition and subsequently extended the maturity date to January 2015. The Omega operating credit facility and the Omega demand loan are secured by a first ranking security interest in the amount of C$8.3 million ($7.4 million as of the acquisition date) in Omega’s inventories, trade receivables and on the intellectual property of Omega, present and future. As of December 31, 2014, C$3.0 million ($2.7 million) was outstanding under the Omega demand loan.

Omega also had C$0.3 million ($0.2 million) outstanding on a decreasing revolving credit facility with the NBC (the “Omega decreasing revolving credit facility”) bearing interest at the prime rate of the lender, plus 1.0% (or an effective rate equal to 4.0%). The Omega decreasing revolving credit facility is secured by a first ranking security interest of C$1.0 million ($0.9 million as of the acquisition date) on the equipment, tooling and office furniture financed by the credit facility.

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The Omega credit facilities are subject to certain restrictions, including the obligation to maintain certain financial ratios. As of October 1, 2014, Omega had not met certain of these financial ratios. As a result, the Omega decreasing revolving credit facility was classified as a current liability as of the acquisition date. In January 2015, we paid off all amounts outstanding under the Omega operating credit facility, the Omega demand loan and the Omega decreasing revolving credit facility with available cash on hand. As a result, all amounts outstanding under these instruments are classified as current liabilities at December 31, 2014.

In addition to the above, Omega had five mortgage loans with the BDC (collectively the “Omega mortgages”) which we assumed in connection with the acquisition. The Omega mortgages, which require monthly installments and which are secured by specific Omega buildings and equipment, range in amount from C$0.1 million to C$1.3 million ($0.1 million to $1.1 million as of the acquisition date) and bear interest at the lender’s prime rate (5% as of the acquisition date) plus a premium ranging from 0%—1.5%. The Omega mortgages mature at various times from August 2019 through November 2036.

Aggregate Contractual Obligations

As of September 30, 2015, there were no material changes to the contractual obligations information provided in Item 7 entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K, filed with the SEC on March 16, 2015.

Off-Balance Sheet Arrangements

As of September 30, 2015, we were not party to any off-balance sheet arrangements, nor have we created any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating our business. With the exception of operating leases, we do not have any off-balance sheet arrangements or relationships with entities that are not consolidated into or disclosed on our financial statements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources. In addition, we do not engage in trading activities involving non-exchange traded contracts.

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;

• Intangible assets;

• Consolidations; and

• Goodwill.

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 for the year ended December 31, 2014 included in our Annual Report on Form 10-K filed with the SEC on March 16, 2015.

There have been no other material changes to the Company’s critical accounting policies and estimates since December 31, 2014.

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New Accounting Guidance

In May 2014, the FASB issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In July 2015, the FASB approved a one year deferral to the new revenue guidance, and are therefore required to adopt the new guidance on January 1, 2018 using one of the two prescribed retroactive methods. We are evaluating the impact of the amended revenue recognition guidance on our consolidated financial statements.

In February 2015, the FASB issued amended guidance on the model used to evaluate whether certain legal entities should be consolidated. This guidance is effective for the Company in the first quarter of 2017. Early adoption is permitted. We are currently evaluating the impact that adoption of this guidance will have on our consolidated financial statements.

In September 2015, the FASB issued guidance that eliminates the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. In addition, separate presentation on the face of the income statement or disclosure in the notes to the financial statements is required regarding the portion of the adjustment recorded in current period earnings. We are required to adopt this guidance prospectively for measurement period adjustments that occur after the effective date. This guidance is effective for the Company in the first quarter of 2016. Early adoption is permitted. We have adopted this guidance in the current period. There was no material impact of adoption.

Contingencies

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

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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Our market risks relate primarily to changes in interest rates and currency fluctuations between the Chinese Renminbi and the US dollar, and between the Canadian dollar and US dollar, as the assets, liabilities and transactions of our international operations are generally recorded in the local currency of each of our legal entities.

The revolving loan facility under our Chase Agreement and substantially all of Omega’s debt facilities bear floating interest rates that are tied to LIBOR or an alternate rate, and therefore, our statements of operations and our cash flows are exposed to changes in interest rates. Based on the amounts outstanding at September 30, 2015, a one percentage point increase in LIBOR would increase our ongoing interest expense by less than $0.1 million per year, and a 10% strengthening of the Canadian dollar relative to the US dollar, would increase our ongoing interest expense by less than $0.1 million per year. We historically have not engaged in hedging activities related to our interest rate or foreign exchange risks.

At September 30, 2015, we had cash and cash equivalents and short-term investments of $25.9 million and $20.2 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 and pay our expenses in the local currency of the legal entity that incurs the expense. 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

Under the supervision and with the participation of our management including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of 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.

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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, 2015. We determined that there were no changes in our internal control over financial reporting during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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. 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 product under FDA NDA No. 203231, made by ACS Dobfar Info S.A. (“Info”), also a defendant, a generic bioequivalent version of Novartis’ Zometa ^® Ready-to-Use product, 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 product under FDA ANDA No. 202828, also made by Info, a generic version of Novartis’ Reclast ^® product, would infringe U.S. Patent No. 8,052,987 (the “987 Patent”) and the 241 Patent, and (iii) zoledronic acid product under FDA ANDA No. 202472, made by Actavis LLC, also a defendant, a generic version of Novartis’ Zometa ^® Pre Concentrate product, would infringe the 189 Patent. (In Re: Certain Consolidated Zoledronic Acid Cases; Consolidated Civil Action No. 12-03967(SDW)(SCM) [Consolidated with Civil Action Nos. 12-cv-04393, 13-cv-01028, 13-cv-02379, 13-cv-4669, 13-cv-5125, 13-cv-6835, 13-cv-7914 and 14-cv-18411]). 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. On December 3, 2014, Novartis sued the Company, alleging, among other things, that sales of the Company’s zoledronic acid product under FDA ANDA No. 091493, made by Hameln RDS GMBH, a generic version of Novartis’ Zometa ^® Pre-concentrate product, would infringe the 189 Patent. (Novartis Pharmaceuticals Corporation v. Sagent Pharmaceuticals, Inc. et. al., Case No. 2:14-cv-07556(SDW)(SCM) and together with the Consolidated Civil Action Case No. 13-cv-1028, the “Litigation”).

On October 13, 2015, the Company and Novartis agreed to settle the Litigation. Pursuant to the terms of the settlement, the Company will pay Novartis $5 million in exchange for a release of claims associated with the 241, 987 and 189 Patents pertaining to the following regulatory submissions: FDA NDA No. 203231, FDA ANDA No. 202828, FDA ANDA No. 202472 and FDA ANDA No. 091493 (collectively the “Regulatory Submissions”), and acquire a license to sell the zoledronic acid products as approved by their Regulatory Submissions (excluding sales of product manufactured under FDA ANDA No. 202472 after December 31, 2014) in the United States. The settlement is subject to confirmation by the US Federal Trade Commission. Concurrent with the Novartis settlement, the Company is entitled to receive $1.5 million from Info and Actavis, representing their collective share of the $5 million.

We have determined that $1,683 of the settlement represents a future license to sell the zoledronic acid products. This amount has been recorded within Other assets on the Condensed Consolidated Balance Sheet as of September 30, 2015, offset by the portion of the Info reimbursement, $607, related to the license period. The remaining net settlement amount of $2,447 owed to Novartis has been recorded as Legal settlement within the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2015.

At this time, there are no other proceedings of which we are aware that are considered likely to have a material adverse effect on the consolidated financial position or results of operations.

Item 1A. Risk Factors.

There were no material changes during the three months ended September 30, 2015 to the risk factors previously disclosed under Item 1A entitled “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC on March 16, 2015.

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

Issuer Purchases of Equity Securities during the Quarter ended September 30, 2015

There are currently no share repurchase programs authorized by our Board of Directors. We did not repurchase any shares of our common stock during the quarter ended September 30, 2015.

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.

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)).
3.3	Certificate of Amendment to the Certificate of Incorporation (Incorporated by reference to Exhibit 3.3 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 5, 2014).
10.1*	Employment Agreement dated August 3, 2015, by and among Sagent Pharmaceuticals, Inc., and Allan Oberman.
31.1*	Certification of principal executive officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2*	Certification of principal financial officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
32.1*	Certifications 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, 2015 are formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014, (ii) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2015 and 2014, (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014, (v) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text and (vi) document and entity information.

* Filed herewith

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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 3, 2015

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EX-10.1

Exhibit 10.1

EXECUTION COPY

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of the Effective Date (as defined below), by and between Sagent Pharmaceuticals, Inc., a Delaware corporation (the “Employer” or the “Company”), and Allan Oberman, an individual (the “Executive”).

WHEREAS, the Employer and the Executive desire to enter into this Agreement to set forth the terms and conditions for the employment of the Executive with the Employer.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto agree as follows:

1. Employment Agreement. On the terms and conditions set forth in this Agreement, the Employer agrees to employ the Executive and the Executive agrees to be employed by the Employer for the Employment Period set forth in Section 2 and in the positions and with the duties set forth in Section 3. Terms used herein with initial capitalization not otherwise defined are defined in Section 26.

2. Term. The initial term of employment under this Agreement shall be for a three-year period commencing on the later of (a) September 1, 2015 or (b) the date the Executive obtains lawful immigration and work status in the United States, which date shall occur no later than November 15, 2015 (such date, the “Effective Date”, and such initial term of employment, the “Initial Term”). The term of employment shall be automatically extended for an additional consecutive 12-month period (the “Extended Term”) on the third anniversary of the Effective Date and each subsequent anniversary thereof, unless and until the Employer or Executive provides written notice to the other party in accordance with Section 14 hereof not less than 60 days before such anniversary date that such party is electing not to extend the term of employment under this Agreement (“Non-Renewal”), in which case the term of employment hereunder shall end as of the end of such Initial Term or Extended Term, as the case may be, unless sooner terminated as hereinafter set forth. Such Initial Term and all such Extended Terms are collectively referred to herein as the “Employment Period.” Anything herein to the contrary notwithstanding, if on the date of a Change in Control the remaining term of the Employment Period is less than 24 months, the Employment Period shall be automatically extended to the end of the 24 month period following such Change in Control.

3. Position and Duties. During the Employment Period, the Executive shall serve as the Chief Executive Officer and shall be nominated to be elected as a member of the Board. In such capacities, the Executive shall report directly to the Board and the Chairman of the Board and shall have the duties, responsibilities and authorities customarily associated with such position(s) in a company the size and nature of the Employer. The Executive shall devote the Executive’s reasonable best efforts and full business time to the performance of the Executive’s duties hereunder and the advancement of the business and affairs of the Employer; provided that

the Executive shall be entitled to serve as a member of the board of directors of a reasonable number of other companies, to serve on civic, charitable, educational, religious, public interest or public service boards, and to manage the Executive’s personal and family investments, in each case, to the extent such activities do not materially interfere with the performance of the Executive’s duties and responsibilities hereunder.

4. Place of Performance. During the Employment Period, the Executive shall be based primarily at the Employer’s headquarters in Schaumburg, Illinois, except for reasonable travel on the Employer’s business consistent with the Executive’s position.

5. Compensation and Benefits; Options.

(a) Base Salary. Beginning on the Effective Date and, thereafter, during the Employment Period, the Employer or a Company Affiliate shall pay to the Executive a base salary (the “Base Salary”) at the rate of no less than $750,000 per calendar year, less applicable deductions, and prorated for any partial year (including 2015). The Base Salary shall be reviewed for increase by the Employer no less frequently than annually and shall be increased in the discretion of the Employer and any such adjusted Base Salary shall constitute the “Base Salary” for purposes of this Agreement. The Base Salary shall be paid in substantially equal installments in accordance with the Employer’s regular payroll procedures. The Executive’s Base Salary may not be decreased during the Employment Period.

(b) Annual Bonus. For each calendar year ending during the Employment Period, the Executive shall be paid an annual cash performance bonus (an “Annual Bonus”), to the extent earned based on performance against objective, reasonably attainable performance criteria; provided that subjective criteria may be used to determine the Executive’s Annual Bonus to the extent the Company’s Chief Executive Officer agrees to the use of non-subjective performance measures. The performance criteria for any particular calendar year shall be determined in good faith by the Board, after consultation with the Executive, no later than sixty (60) days after the commencement of the relevant bonus period. The Executive’s annual bonus opportunity for a calendar year shall equal 100% of the Executive’s Base Salary (the “Target Bonus”) for that year if target levels of performance for that year are achieved, and shall be adjusted in accordance with the Company’s annual bonus plan applicable to senior executives generally to the extent that the applicable target performance criteria is not achieved or is exceeded, with a maximum annual bonus for a calendar year equal to 150% of the Executive’s Base Salary. The Executive’s Annual Bonus for a bonus period shall be determined by the Board in accordance with this Section 5(b) after the end of the applicable bonus period and shall be paid to the Executive when annual bonuses for that year are paid to other senior executives of the Employer generally, but in no event later than March 15 of the year following the year to which such Annual Bonus relates. In carrying out its functions under this Section 5(b), the Board shall at all times act uniformly, reasonably and in good faith.

(c) Initial Equity Grant; Annual Equity Grants. The Executive will receive a a sign-on equity award (the “Initial Grant”), prior to the public announcement of his appointment, with a grant date fair value of $2,700,000, 50% of which will be granted in the form of stock

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options (such options, the “Options”) and 50% in the form of restricted stock units; provided that, such award will be subject to forfeiture in the event the Executive does not commence employment with the Employer on the Effective Date for any reason whatsoever. The Options will have a per share exercise price equal to the fair market value of a share of common stock on the date of grant. Following the Initial Grant, the Executive will be eligible to receive annual grants of equity-based awards on the same basis and terms and conditions as other senior executives. The target grant date fair value for the equity grant in 2016 is $1,500,000 and for 2017 and beyond is $2,500,000. It is anticipated that any such awards will be comprised of 50% options and 50% restricted stock units. The Executive’s entitlement to any equity grants remains subject to approval by the Compensation Committee of the Board, in its sole discretion. All equity grants will vest ratably over the four year period commencing with the date of grant.

(d) Vacation; Benefits. During the Employment Period, the Executive shall be entitled to vacation in accordance with the Employer’s policies then in effect. In addition, the Employer or a Company Affiliate shall provide to the Executive employee benefits and perquisites on a basis that is comparable in all material respects to that provided to other executives of the Employer. Subject to the terms of this Agreement, the Employer shall have the right to change insurance carriers and to adopt, amend, terminate or modify employee benefit plans and arrangements at any time and without the consent of the Executive.

(e) Relocation. The Executive will relocate to Chicago, Illinois (or the surrounding suburbs) (“Chicago”) in 2016. Accordingly, within 60 days following January 1, 2016, the Company shall pay the Executive the amount of $150,000 to be used at the Executive’s discretion towards all relocation expenses. From the Effective Date through no later than April 1, 2016, the Company shall reimburse the Executive in accordance with Company policy for all lodging, travel and meal costs and expenses incurred.

(f) Immigration. The Company agrees to reimburse the Executive for all fees, costs, and expenses incurred in obtaining lawful immigration and work status in the United States for the duration of his stay, which reimbursement amount shall not exceed $25,000.

6. Expenses. The Executive is expected and is authorized to incur reasonable expenses in the performance of his duties hereunder. The Employer shall reimburse the Executive for all such expenses reasonably and actually incurred in accordance with policies which may be adopted from time to time by the Employer promptly upon periodic presentation by the Executive of an itemized account, including reasonable substantiation, of such expenses.

7. Confidentiality, Non-Disclosure, and Non-Competition Agreement. The Employer and the Executive acknowledge and agree that during the Executive’s employment with the Employer, the Executive will have access to and may assist in developing Company Confidential Information and will occupy a position of trust and confidence with respect to the Employer’s affairs and business and the affairs and business of the Company Affiliates. The Executive agrees that the following obligations are necessary to preserve the confidential and proprietary nature of Company Confidential Information and to protect the Employer and the Company Affiliates against harmful solicitation of employees and customers, harmful

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competition and other actions by the Executive that would result in serious adverse consequences for the Employer and the Company Affiliates:

(a) Non-Disclosure. During and after the Executive’s employment with the Employer, the Executive will not knowingly use, disclose or transfer any Company Confidential Information other than as authorized in writing by the Employer or within the scope of the Executive’s duties with the Employer as determined reasonably and in good faith by the Executive. Anything herein to the contrary notwithstanding, the provisions of this Section 7(a) shall not apply (i) when disclosure is required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with actual or apparent jurisdiction to order the Executive to disclose or make accessible any information; (ii) with respect to any other litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement; (iii) as to information that becomes generally known to the public or within the relevant trade or industry other than due to the Executive’s violation of this Section 7(a); (iv) as to information that is or becomes available to the Executive on a non-confidential basis from a source which is entitled to disclose it to the Executive; or (v) as to information that the Executive possessed prior to the commencement of employment with the Employer.

(b) Materials. The Executive will not remove any Company Confidential Information or any other property of the Employer or any Company Affiliate from the Employer’s premises or make copies of such materials except for normal and customary use in the Employer’s business as determined reasonably and in good faith by the Executive. The Employer acknowledges that the Executive, in the ordinary course of the Executive’s duties, routinely uses and stores Company Confidential Information at home and other locations. The Executive will return to the Employer all Company Confidential Information and copies thereof and all other property of the Employer or any Company Affiliate at any time upon the request of the Employer and in any event promptly after termination of Executive’s employment. The Executive agrees to attempt in good faith to identify and return to the Employer any copies of any Company Confidential Information after the Executive ceases to be employed by the Employer. Anything to the contrary notwithstanding, nothing in this Section 7 shall prevent the Executive from retaining a home computer, papers and other materials of a personal nature, including diaries, calendars and Rolodexes, information relating to his compensation or relating to reimbursement of expenses, information that he reasonably believes may be needed for tax purposes, and copies of plans, programs and agreements relating to his employment.

(c) No Solicitation or Hiring of Employees. During the Non-Compete Period, the Executive shall not solicit, entice, persuade or induce any individual who is employed by the Employer or the Company Affiliates (or who was so employed within 180 days prior to the Executive’s action) to terminate or refrain from continuing such employment or to become employed by or enter into contractual relations with any other individual or entity other than the Employer or the Company Affiliates, and the Executive shall not hire, directly or indirectly, as an employee, consultant or otherwise, any such person. Anything to the contrary notwithstanding, the Employer agrees that (i) the Executive’s responding to an unsolicited request from any former employee of the Employer for advice on employment matters; and (ii) the

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Executive’s responding to an unsolicited request for an employment reference regarding any former employee of the Employer from such former employee, or from a third party, by providing a reference setting forth his personal views about such former employee, shall not be deemed a violation of this Section 7(c). Notwithstanding the foregoing, this Section 7(c) shall not preclude the Executive from soliciting for employment or hiring any person who has been discharged by the Employer or any Company Affiliate without cause.

(d) Non-Competition.

(i) During the Non-Compete Period, the Executive shall not, directly or indirectly, (A) solicit or encourage any client or customer of the Employer or a Company Affiliate, or any person or entity who was such a client or customer within 180 days prior to Executive’s action to terminate, reduce or alter in a manner adverse to the Employer or the Company Affiliate, any existing business arrangements with the Employer or a Company Affiliate or to transfer existing business from the Employer or a Company Affiliate to any other person or entity, (B) provide services to any Competitive Business (as defined herein); provided, however, that following a Change in Control this Section 7(d)(i)(B) shall not apply to the Executive, or (C) own an interest in any Competitive Business; provided, however, that Executive may own, as a passive investor, securities of any such entity that has outstanding publicly traded securities so long as the Executive’s direct holdings in any such entity shall not in the aggregate constitute more than 5% of the voting power of such entity. For the purposes of this Agreement, “Competitive Business” means any business that derives more than 20% of its revenue from developing, manufacturing, sourcing and marketing injectable pharmaceutical products. The Executive acknowledges that this covenant has a unique, very substantial and immeasurable value to the Employer, that the Executive has sufficient assets and skills to provide a livelihood for the Executive while such covenant remains in force and that, as a result of the foregoing, in the event that the Executive breaches such covenant, monetary damages would be an insufficient remedy for the Employer and equitable enforcement of the covenant would be proper.

(ii) If the restrictions contained in Section 7(d)(i) shall be determined by any court of competent jurisdiction to be unenforceable by reason of their extending for too great a period of time or over too great a geographical area or by reason of their being too extensive in any other respect, Section 7(d)(i) shall be modified to be effective for the maximum period of time for which it may be enforceable and over the maximum geographical area as to which it may be enforceable and to the maximum extent in all other respects as to which it may be enforceable.

(e) Publicity. During the Employment Period, the Executive hereby grants to the Employer the right to use, in a reasonable and appropriate manner, the Executive’s name and likeness, without additional consideration, on, in and in connection with technical, marketing or disclosure materials, or any combination thereof, published by or for the Employer or any Company Affiliate.

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(f) Enforcement. The Executive acknowledges that in the event of any breach of this Section 7, the business interests of the Employer and the Company Affiliates will be irreparably injured, the full extent of the damages to the Employer and the Company Affiliates will be impossible to ascertain, monetary damages will not be an adequate remedy for the Employer and the Company Affiliates, and the Employer will be entitled to enforce this Agreement by a temporary, preliminary and/or permanent injunction or other equitable relief, without the necessity of posting bond or security, which the Executive expressly waives. The Executive understands that the Employer may waive some of the requirements expressed in this Agreement, but that such a waiver to be effective must be made in writing and should not in any way be deemed a waiver of the Employer’s right to enforce any other requirements or provisions of this Agreement. The Executive agrees that each of the Executive’s obligations specified in this Agreement is a separate and independent covenant and that the unenforceability of any of them shall not preclude the enforcement of any other covenants in this Agreement. The Executive further agrees that any breach of this Agreement by the Employer prior to the Date of Termination shall not release the Executive from compliance with the Executive’s obligations under this Section 7, so along as the Employer fully complies with Sections 9, 10 and 12. The Employer further agrees that any breach of this Agreement by the Executive that does not result in the Executive’s being terminated for Cause, other than a willful (as defined in the definition of “Cause”) and material breach of Sections 7(d)(i)(A) or 7(d)(i)(B) after the Date of Termination, shall not release the Employer from compliance with its obligations under this Agreement. Notwithstanding the foregoing two sentences, neither party shall be precluded from pursuing judicial remedies as a result of any such breaches.

8. Termination of Employment.

(a) Permitted Terminations. The Executive’s employment hereunder may be terminated during the Employment Period under the following circumstances:

(i) Death. The Executive’s employment hereunder shall terminate automatically upon the Executive’s death;

(ii) By the Employer. The Employer may terminate the Executive’s employment:

(A) Disability. If the Executive shall have been substantially unable to perform the Executive’s material duties hereunder by reason of illness, physical or mental disability or other similar incapacity, which inability shall continue for 180 consecutive days or 270 days in any 24-month period (a “Disability”) (provided, that until such termination, the Executive shall continue to receive the Executive’s compensation and benefits hereunder, reduced by any benefits payable to the Executive under any applicable disability insurance policy or plan); or

(B) Cause. For Cause or without Cause;

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(iii) By the Executive. The Executive may terminate the Executive’s employment for any reason (including Good Reason) or for no reason.

(b) Termination. Any termination of the Executive’s employment by the Employer or the Executive (other than because of the Executive’s death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 13 hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicates the specific termination provision in this Agreement relied upon, if any, and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated. Termination of the Executive’s employment shall take effect on the Date of Termination. The Executive agrees, in the event of any dispute under Section 8(a)(ii)(A) as to whether a Disability exists, and if requested by the Employer, to submit to a physical examination by a licensed physician selected by mutual consent of the Employer and the Executive, the cost of such examination to be paid by the Employer. The written medical opinion of such physician shall be conclusive and binding upon each of the parties hereto as to whether a Disability exists and the date when such Disability arose. This Section shall be interpreted and applied so as to comply with the provisions of the Americans with Disabilities Act and any applicable state or local laws.

9. Compensation Upon Termination.

(a) Termination by the Employer for Cause or Termination by the Executive without Good Reason. If, during the Employment Period, the Employer terminates the Executive’s employment for Cause pursuant to Section 8(a)(ii)(B) or the Executive terminates his employment without Good Reason, the Employer shall pay to the Executive the Accrued Benefits. Except as set forth herein, the Employer shall have no further obligations to the Executive under this Agreement.

(b) Termination due to Death or Disability, Termination by the Employer without Cause or Termination by the Executive with Good Reason. Subject to Section 9(c), if the Executive’s employment is terminated during the Employment Period (i) due to the Executive’s death or Disability, (ii) by the Employer for a reason other than for Cause or (iii) by the Executive with Good Reason (any termination described in clauses (i), (ii) or (ii), a “Qualifying Termination”) then (A) the Employer shall pay the Executive (I) the Accrued Benefits, (II) a pro rata portion (based on the number of days during the applicable fiscal period prior to the Date of Termination) of the Annual Bonus the Executive would have earned absent such termination, with such payment to be made at the time bonus payments are made to executives of the Company generally, and (III) a cash lump sum in an amount equal to the product of two and the sum of the Executive’s Base Salary and Target Bonus (the “Cash Severance Payment”); (B) provided the Executive elects continued welfare coverage pursuant to COBRA, the Company shall pay, during the period the Executive actually continues such coverage, but in any event not to exceed 18 months, the same percentage of the monthly premium costs for COBRA continuation coverage as it pays of the monthly premium costs for medical coverage for senior executives generally; provided that the Company may pay this amount by paying the Executive a monthly amount equal on an after-tax basis to such amount (the “Monthly Payments”); and (C) the

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Company shall reimburse the Executive for reasonable outplacement services (which shall not exceed $30,000 in the aggregate) incurred during the two-year period following the Date of Termination.

(c) Change in Control. This Section 9(c) shall apply if (i) the Executive’s employment with the Company is terminated due to a Qualifying Termination during the Employment Period in the two-year period following a Change in Control; or (ii) there is a termination of the Executive’s employment by the Employer for a reason other than for Cause or due to the Executive’s Disability prior to a Change in Control, if the termination was at the request of a third party or otherwise arose in anticipation of a Change in Control (a termination described in either clause (i) or clause (ii), a “CIC Termination”). If any such termination occurs, (A) the Executive shall receive benefits set forth in Section 9(b), except that the Cash Severance Payment shall be equal to the product of three and the sum of the Executive’s Base Salary and Target Bonus, (B) all outstanding equity-related awards held by the Executive shall immediately vest and all options, stock appreciation rights or similar awards shall remain exercisable for the full original term of the award and (C) Section 10 of this Agreement shall apply to the Executive. For the sake of clarity, Section 10 shall not apply unless the Executive’s employment with the Company and its subsidiaries is terminated in a CIC Termination.

(d) Liquidated Damages. The parties acknowledge and agree that damages which will result to the Executive for termination by the Employer of the Executive’s employment without Cause or by the Executive for Good Reason shall be extremely difficult or impossible to establish or prove, and agree that the amounts, excluding the Accrued Benefits, payable to the Executive under Section 9(b) (the “Severance Benefits”) shall constitute liquidated damages for any such termination. The Executive agrees that, except for such other payments and benefits to which the Executive may be entitled as expressly provided by the terms of this Agreement or any other applicable benefit plan, such liquidated damages shall be in lieu of all other claims that the Executive may make by reason of any such termination of his employment and that, as a condition to receiving the Severance Benefits, the Executive must execute a release of claims substantially in the form attached hereto as Exhibit A (the “Release”), which shall be delivered to the Executive for execution within 5 business days of the Date of Termination. To be eligible for Severance Benefits, the Executive must execute and deliver the Release, and such Release must become irrevocable, within 60 days of the Date of Termination. The Cash Severance Payment shall be made, and the Monthly Payments shall commence, promptly after the Release becomes irrevocable; provided that to the extent required by Code Section 409A, such payments shall be made or commence, as applicable, on the 60th day following the Date of Termination and in the case of the Monthly Payments, shall include all payments that otherwise would have been made before such date.

(e) No Offset. In the event of termination of his employment, the Executive shall be under no obligation to seek other employment and there shall be no offset against amounts due to him on account of any remuneration or benefits provided by any subsequent employment he may obtain. The Employer’s obligation to make any payment pursuant to, and otherwise to perform its obligations under, this Agreement shall not be affected by any offset, counterclaim or other right that the Employer or its affiliates may have against him for any reason.

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10. Certain Additional Payments by the Employer. This Section 10 shall apply to the Executive only if the Executive terminates employment with the Company and its subsidiaries in a CIC Termination.

(a) If the Executive’s employment with the Company and its subsidiaries terminates in a CIC Termination and if it is determined that any benefit provided to the Executive or payment or distribution by or for the account of the Employer to or for the benefit of the Executive, whether provided, paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any interest or penalties are incurred by the Executive with respect to such excise tax resulting from any action or inaction by the Employer (such excise tax, together with any such interest and penalties, collectively, the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of the Excise Tax and all other income, employment, excise and other taxes that are imposed on the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the sum of (A) the Excise Tax imposed upon the Payments and (B) the product of any deductions disallowed because of the inclusion of the Gross-up Payment in the Executive’s adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made.

(b) Subject to the provisions of Section 10(c), all determinations required to be made under this Section 10, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be used in arriving at such determination, shall be made by the Employer’s independent, certified public accounting firm or such other certified public accounting firm as may be designated by the Executive and shall be reasonably acceptable to the Employer (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Employer and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Employer. If the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting a change in the ownership or effective control (as defined for purposes of Section 280G of the Code) of the Employer, the Executive shall appoint another nationally recognized accounting firm which is reasonably acceptable to the Employer to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Employer. Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid by the Employer to the Executive within five days of the receipt of the Accounting Firm’s determination, but in any event no later than 30 days after the end of the year in which the Executive pays any tax imposed pursuant to Section 4999 of the Code. Any determination by the Accounting Firm shall be binding upon the Employer and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that additional Gross-Up Payments shall be

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required to be made to compensate the Executive for amounts of Excise Tax later determined to be due, consistent with the calculations required to be made hereunder (an “Underpayment”). If the Employer exhausts its remedies pursuant to Section 10(c) and the Executive is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Employer to or for the benefit of the Executive.

(c) The Executive shall notify the Employer in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Employer of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 10 business days after the Executive is informed in writing of such claim and shall apprise the Employer of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Employer notifies the Executive in writing prior to the expiration of such period that they desire to contest such claim, the Executive shall:

(i) give the Employer any information reasonably requested by the Employer relating to such claim;

(ii) take such action in connection with contesting such claim as the Employer shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Employer;

(iii) cooperate with the Employer in good faith effectively to contest such claim; and

(iv) permit the Employer to participate in any proceedings relating to such claim; provided, however, that the Employer shall bear and pay directly all costs and expenses (including additional interest and penalties incurred in connection with such contest) and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses.

11. Indemnification. During the Employment Period and thereafter, the Employer agrees to indemnify and hold the Executive and the Executive’s heirs and representatives harmless, to the maximum extent permitted by law, against any and all damages, costs, liabilities, losses and expenses (including reasonable attorneys’ fees) as a result of any claim or proceeding (whether civil, criminal, administrative or investigative), or any threatened claim or proceeding (whether civil, criminal, administrative or investigative), against the Executive that arises out of or relates to the Executive’s service as an officer, director or employee, as the case may be, of the Employer, or the Executive’s service in any such capacity or similar capacity with an affiliate of the Employer or other entity at the request of the Employer, both prior to and after

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the Effective Date, and to promptly advance to the Executive or the Executive’s heirs or representatives such expenses upon written request with appropriate documentation of such expense upon receipt of an undertaking by the Executive or on the Executive’s behalf to repay such amount if it shall ultimately be determined that the Executive is not entitled to be indemnified by the Employer. During the Employment Period and thereafter, the Employer also shall provide the Executive with coverage under its current directors’ and officers’ liability policy to the same extent that it provides such coverage to its other executive officers. If the Executive has any knowledge of any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, as to which the Executive may request indemnity under this provision, the Executive will give the Employer prompt written notice thereof; provided that the failure to give such notice shall not affect the Executive’s right to indemnification. The Employer shall be entitled to assume the defense of any such proceeding and the Executive will use reasonable efforts to cooperate with such defense. To the extent that the Executive in good faith determines that there is an actual or potential conflict of interest between the Employer and the Executive in connection with the defense of a proceeding, the Executive shall so notify the Employer and shall be entitled to separate representation at the Employer’s expense by counsel selected by the Executive (provided that the Employer may reasonably object to the selection of counsel within ten (10) business days after notification thereof) which counsel shall cooperate, and coordinate the defense, with the Employer’s counsel and minimize the expense of such separate representation to the extent consistent with the Executive’s separate defense. This Section 11 shall continue in effect after the termination of the Executive’s employment or the termination of this Agreement.

12. Professional Fees. The Executive will be entitled to reimbursement of reasonable legal, accounting and other professional fees incurred in connection with the negotiation of this Agreement; provided that such fees may not exceed $35,000 in 2015 and an annual amount of $25,000 during the Employment Period, starting in 2016. The Employer shall advance the Executive (and his beneficiaries) any and all costs and expenses (including without limitation attorneys’ fees and other charges of counsel) incurred by the Executive (or any of his beneficiaries) in resolving any controversy, dispute or claim arising out of or relating to this Agreement, any other agreement or arrangement between the Executive and the Employer, the Executive’s employment with the Employer, or the termination thereof; provided that the Executive shall reimburse the Employer any advances on a net after-tax basis to cover expenses incurred by the Executive for claims (a) brought by the Employer on account of the Executive’s alleged breach of Section 7 of this Agreement, breach of the Executive’s fiduciary duty of loyalty, or fraud or material misconduct, if it is judicially determined that the Employer is the prevailing party, or (b) brought by the Executive that are judicially determined to be frivolous or advanced in bad faith. Pending the resolution of any such claim, the Executive (and his beneficiaries) shall continue to receive all payments and benefits described in Section 5 of this Agreement. This Section 12 shall continue in effect after the termination of the Executive’s employment or the termination of this Agreement.

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13. Notices. All notices, demands, requests, or other communications which may be or are required to be given or made by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, or transmitted by facsimile transmission addressed as follows:

(i) If to the Employer:

Sagent Pharmaceuticals, Inc.

1901 N. Roselle Road

Suite 700

Schaumburg, IL 60195

Attn: Chairman of the Board

(ii) If to the Executive:

Address last shown on the Employer’s Records

Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice, demand, request, or communication that shall be given or made in the manner described above shall be deemed sufficiently given or made for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, confirmation of facsimile transmission or the affidavit of messenger being deemed conclusive but not exclusive evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

14. Severability. The invalidity or unenforceability of any one or more provisions of this Agreement shall not affect the validity or enforceability of the other provisions of this Agreement, which shall remain in full force and effect.

15. Effect on Other Agreements. The provisions of this Agreement shall supersede the terms of any plan, policy, agreement, award or other arrangement of the Employer (whether entered into before or after the Effective Date) to the extent application of the terms of this Agreement is more favorable to the Executive.

16. Survival. It is the express intention and agreement of the parties hereto that the provisions of Sections 7, 9, 10, 11, 12, 13, 16, 17, 18, 20, 21, 23 and 24 hereof and this Section 16 shall survive the termination of employment of the Executive. In addition, all obligations of the Employer to make payments hereunder shall survive any termination of this Agreement on the terms and conditions set forth herein.

17. Assignment. The rights and obligations of the parties to this Agreement shall not be assignable or delegable, except that (i) in the event of the Executive’s death, the personal representative or legatees or distributees of the Executive’s estate, as the case may be, shall have the right to receive any amount owing and unpaid to the Executive hereunder and (ii) the rights and obligations of the Employer hereunder shall be assignable and delegable in connection with

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any subsequent merger, consolidation, sale of all or substantially all of the assets or equity interests of the Employer or similar transaction involving the Employer or a successor corporation. The Employer shall require any successor to the Employer to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place.

18. Binding Effect. Subject to any provisions hereof restricting assignment, this Agreement shall be binding upon the parties hereto and shall inure to the benefit of the parties and their respective heirs, devisees, executors, administrators, legal representatives, successors and assigns.

19. Amendment; Waiver. This Agreement shall not be amended, altered or modified except by an instrument in writing duly executed by the party against whom enforcement is sought. Neither the waiver by either of the parties hereto of a breach of or a default under any of the provisions of this Agreement, nor the failure of either of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right or privilege hereunder, shall thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any such provisions, rights or privileges hereunder.

20. Headings. Section and subsection headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

21. Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Illinois (but not including any choice of law rule thereof that would cause the laws of another jurisdiction to apply).

22. Entire Agreement. This Agreement constitutes the entire agreement between the parties respecting the employment of the Executive, there being no representations, warranties or commitments except as set forth herein.

23. Counterparts. This Agreement may be executed in two counterparts, including by facsimile or scanned copy, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.

24. Withholding. The Employer may withhold from any benefit payment under this Agreement all federal, state, city or other taxes as shall be required pursuant to any law or governmental regulation or ruling; provided that any withholding obligation arising in connection with the exercise of a stock option or the transfer of stock or other property shall be satisfied through withholding an appropriate number of shares of stock or appropriate amount of such other property.

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25. Section 409A. The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If the Executive notifies the Employer (with specificity as to the reason therefor) that the Executive believes that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Code Section 409A and the Employer concurs with such belief or the Employer (without any obligation whatsoever to do so) independently makes such determination, the Employer shall, after consulting with the Executive, reform such provision to attempt to comply with Code Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Code Section 409A. To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Executive and the Employer of the applicable provision without violating the provisions of Code Section 409A. In no event whatsoever shall the Employer be liable for any additional tax, interest or penalty that may be imposed on the Executive by Code Section 409A or damages for failing to comply with Code Section 409A. With respect to any payment or benefit considered to be nonqualified deferred compensation under Section 409A, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” Notwithstanding anything to the contrary in this Agreement, if the Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall not be made or provided until the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Executive, and (B) the date of the Executive’s death, to the extent required under Code Section 409A. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 25 (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (A) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive, (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (C) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable

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year. For purposes of Code Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Employer. Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.

26. Definitions.

“Accrued Benefits” means (i) Base Salary through the Date of Termination; (ii) accrued and unused vacation pay; (iii) any earned but unpaid Annual Bonus; (iv) any amounts owing to the Executive for reimbursement of expenses properly incurred by the Executive prior to the Date of Termination and which are reimbursable in accordance with Section 6; and (v) any other benefits or amounts due and owing to the Executive under the terms of any plan, program or arrangement of the Employer. Amounts payable pursuant to the clauses (i) - (iii) shall be paid promptly after the Date of Termination and all other amounts will be paid in accordance with the terms of the applicable plan, program or arrangement (as modified by this Agreement).

“Board” means the Board of Directors of the Company.

“Cause” shall be limited to the following events (i) the Executive’s conviction of, or plea of nolo contendere to, a felony (other than in connection with a traffic violation) under any state or federal law; (ii) the Executive’s willful and continued failure to substantially perform his essential job functions hereunder after receipt of written notice from the Employer that specifically identifies the manner in which the Executive has substantially failed to perform his essential job functions and specifying the manner in which the Executive may substantially perform his essential job functions in the future; (iii) a material act of fraud or willful and material misconduct with respect, in each case, to the Employer, by the Executive; (iv) a willful and material breach of Section 7; or (v) a willful and material violation of a material policy of the Company. For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Employer. Anything herein to the contrary notwithstanding, the Executive shall not be terminated for “Cause” hereunder unless (A) written notice stating the basis for the termination is provided to the Executive, (B) as to clauses (ii), (iii), (iv) or (v) of this paragraph, the Executive is given 30 days to cure the neglect or conduct that is the basis of such claim (it being understood that any errors in expense reimbursement may be cured by repayment), (C) if the Executive fails to cure such neglect or conduct, the Executive has an opportunity to be heard with counsel before the full Board prior to any vote regarding the existence of Cause and (D) there is a vote of a majority of the members of the Board to terminate the Executive for Cause.

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“Change in Control” means the occurrence of one or more of the following events: (i) any “person” (as such terms is used in Sections 3(a)(9) and 13(d) of the Securities Exchange Act of 1934 as amended (the “Act”)) or “group” (as such term is used in Section 14(d)(d) of the Act) is or becomes a “beneficial owner” (as such term is used in Rule 13d-3 promulgated under the Act) of more than 30% of the Voting Stock of the Employer (excluding acquisitions pursuant to a Business Combination (as defined below) that is not considered to be a Change in Control under clause (v) below; (ii) the majority of the Board consists of individuals other than Incumbent Directors, which term means the members of the Board on the Effective Date; provided that any person becoming a director subsequent to such date whose election or nomination for election was supported by two-thirds of the directors who then comprised the Incumbent Directors shall be considered to be an Incumbent Director (excluding any person who received such support in connection with the settlement of a proxy contest); (iii) the Employer adopts any plan of liquidation providing for the distribution of all or substantially all of its assets; (iv) the Employer transfers all or substantially all of its assets or business (unless the shareholders of the Employer immediately prior to such transaction beneficially own, directly or indirectly, in substantially the same proportion as they owned the Voting Stock of the Employer, all of the Voting Stock or other ownership interests of the entity or entities, if any, that succeed to the business of the Employer); or (v) any merger, reorganization, consolidation or similar transaction (a “Business Combination”) unless, immediately after consummation of such Business Combination, (A) the shareholders of the Employer immediately prior to the Business Combination hold, directly or indirectly, more than 50% of the Voting Stock of the Employer or the Employer’s ultimate parent company if the Employer is a subsidiary of another corporation, and (B) no person or group beneficially owns more than 30% of the Voting Stock of the Employer or the ultimate parent company of the Employer if the Employer is a subsidiary of partner corporation. For purposes of this Change in Control definition, the “Employer” shall include any entity that succeeds to all or substantially all of the business of the Employer and “Voting Stock” shall mean securities of any class or classes having general voting power under ordinary circumstances, in the absence of contingencies, to elect the directors of a corporation.

“Company Affiliate” means any entity controlled by, in control of, or under common control with, the Employer.

“Company Confidential Information” means information known to the Executive to constitute trade secrets or proprietary information belonging to the Employer or other confidential financial information, operating budgets, strategic plans or research methods, personnel data, projects or plans, or non-public information regarding the terms of any existing or pending lending transaction between Employer and an existing or pending client or customer (as the phrase “client or customer” is defined in Section 7(d)(i) hereof), in each case, received by the Executive in the course of his employment by the Employer or in connection with his duties with the Employer. Notwithstanding anything to the contrary contained herein, the general skills, knowledge and experience gained during the Executive’s employment with the Employer, information publicly available or generally known within the industry or trade in which the Employer competes and information or knowledge possessed by the Executive prior to his employment by the Employer, shall not be considered Company Confidential Information.

16

“Date of Termination” means (i) if the Executive’s employment is terminated by the Executive’s death, the date of the Executive’s death; (ii) if the Executive’s employment is terminated because of the Executive’s Disability, 30 days after Notice of Termination, provided that the Executive shall not have returned to the performance of the Executive’s duties on a full-time basis during such 30-day period; or (iii) if the Executive’s employment is terminated by the Employer pursuant to Section 8(a)(ii)(B) or by the Executive pursuant to Section 8(a)(iii), the date specified in the Notice of Termination.

“Good Reason” means, unless otherwise agreed to in writing by the Executive, (i) any diminution or adverse change in the Executive’s titles; (ii) reduction in the Executive’s Base Salary or Target Bonus; ( iii) a change adverse to the Executive in the Executive’s reporting obligations and/or the Executive’s removal from the Board; (iv) a material diminution in the Executive’s authority, responsibilities or duties or material interference with the Executive’s carrying out his duties; (v) the assignment of duties inconsistent with the Executive’s position or status with the Employer as of the date hereof; (vi) a material change in geographic location to somewhere outside the Chicago metropolitan area at which Executive must provide the services under this Agreement; (vii) any other material breach of the terms of this Agreement or any other agreement that breach is not cured within ten days after the Executive’s delivery of a written notice of such breach to the Employer; (viii) any purported termination of the Executive’s employment by the Employer that is not effected in accordance with the applicable provisions of this Agreement; (ix) the failure of the Employer to obtain the assumption in writing of its obligations under this Agreement by any successor to all or substantially all of the assets of the Employer within 15 days after a merger, consolidation, sale or similar transaction or (x) the delivery of a notice of Non-Renewal by the Employer; provided, that Good Reason shall not occur unless the Executive shall have (i) given a detailed written notice to the Company of any fact or circumstance believed by the Executive to constitute Good Reason within ninety (90) days of the occurrence of such fact or circumstance, and (ii) given the Company thirty (30) days therefrom to cure such fact or circumstance.

“Non-Compete Period” means the period commencing on the Effective Date and ending twelve months after the earlier of the expiration of the Employment Period or the Executive’s Date of Termination.

17

IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement, or have caused this Agreement to be duly executed and delivered on their behalf.

SAGENT PHARMACEUTICALS, INC.
By:	/s/ Michael Logerfo
Name:	Michael Logerfo
Title:	President
EXECUTIVE
/s/ Allan Oberman
Allan Oberman

EX-31.1

EXHIBIT 31.1

Certifications

I, Allan Oberman, 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 3, 2015

/s/ Allan Oberman

Allan Oberman

Chief Executive Officer

(principal 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 3, 2015

/s/ Jonathon M. Singer

Jonathon M. Singer

Executive Vice President and Chief Financial Officer

(principal financial officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Allan Oberman, 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, 2015, 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/ Allan Oberman

Allan Oberman

Chief Executive Officer

(principal executive officer)

November 3, 2015

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, 2015, 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

(principal financial officer)

November 3, 2015

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.

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Net revenue by product (Tables)

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Schedule of Net Revenue by Therapeutic Class

Net revenue by therapeutic class is as follows:

	Three months ended September 30,				Nine months ended September 30,
Therapeutic class:	2015		2014		2015		2014
Anti-infective	$	31,891	$	21,370	$	96,453	$	74,896
Critical care		29,271		21,530		85,962		62,153
Oncology		14,037		22,459		52,773		68,373
	$	75,199	$	65,359	$	235,188	$	205,422

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Changes in Investment of Sagent Agila (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Schedule of Equity Method Investments [Line Items]
Investment at beginning of the period			$ 4,539
Equity in net income of joint ventures	$ (333)	$ (737)	(1,510)	$ (2,476)
Investment at end of the period	6,049		6,049
Sagent Agila LLC
Schedule of Equity Method Investments [Line Items]
Investment at beginning of the period			4,539
Equity in net income of joint ventures			1,510
Investment at end of the period	$ 6,049		$ 6,049

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Property, Plant and Equipment (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Property, plant and equipment before depreciation	$ 78,855	$ 78,423
Less accumulated depreciation	(10,692)	(7,270)
Property, plant and equipment after depreciation	68,163	71,153
Land and land improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment before depreciation	3,282	3,519
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment before depreciation	25,523	26,605
Machinery, equipment, furniture, and fixtures
Property, Plant and Equipment [Line Items]
Property, plant and equipment before depreciation	44,212	42,124
Construction in process
Property, Plant and Equipment [Line Items]
Property, plant and equipment before depreciation	$ 5,838	$ 6,175

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Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	Oct. 13, 2015	Sep. 30, 2015	Sep. 30, 2015
Commitments and Contingencies [Line Items]
Legal settlement reimbursement amount			$ 607
Legal settlement		$ 2,447	2,447
Zoledronic acid products
Commitments and Contingencies [Line Items]
Payment to acquire future license to sell products			$ 1,683
Subsequent Event
Commitments and Contingencies [Line Items]
Payments for patent infringement	$ 5,000
Settlement amount receivable	$ 1,477

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Condensed Statement of Operations Information (Detail) - Sagent Agila LLC - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Schedule of Equity Method Investments [Line Items]
Net revenues	$ 2,169	$ 1,516	$ 6,090	$ 6,249
Gross profit	665	1,473	3,020	4,992
Net income	$ 665	$ 1,473	$ 3,020	$ 4,952

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Cost and Estimated Current Fair Value of Fixed-Income Securities (Detail) $ in Thousands	Sep. 30, 2015 USD ($)
Investments, Debt and Equity Securities [Abstract]
Due in one year or less, cost basis	$ 12,458
Due between one and five years, cost basis	7,711
Total fixed income securities, cost basis	20,170
Due in one year or less, Estimated fair value	12,457
Due between one and five years, Estimated fair value	7,703
Total fixed income securities, Estimated fair value	$ 20,160

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Investment in Sagent Agila (Tables) - Sagent Agila LLC

9 Months Ended

Sep. 30, 2015

Changes in Investment

Changes in our investment in Sagent Agila during the nine months ended September 30, 2015 were as follows:

Investment in Sagent Agila at December 31, 2014	$	4,539
Equity in net income of Sagent Agila		1,510
Investment in Sagent Agila at September 30, 2015	$	6,049

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	2015		2014		2015		2014
Net revenues	$	2,169	$	1,516	$	6,090	$	6,249
Gross profit		665		1,473		3,020		4,992
Net income		665		1,473		3,020		4,952

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Schedule of Geographic and Segment Data (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Segment revenues
Net revenue	$ 75,199	$ 65,359	$ 235,188	$ 205,422
Income (loss) before income taxes:
Operating income (loss)	1,742	4,044	2,743	13,994
Interest income and other	(1,686)	(536)	(2,225)	(465)
Interest expense	(188)	(195)	(650)	(641)
Income (loss) before income taxes	(132)	3,313	(132)	12,888
Segment assets:
Assets	359,609	316,565	359,609	316,565	$ 381,488
Sagent US
Segment revenues
Net revenue	67,874	65,359	212,361	205,422
Income (loss) before income taxes:
Operating income (loss)	1,391	4,044	2,885	13,994
Segment assets:
Assets	264,544	316,565	264,544	316,565
Sagent US | Other
Segment revenues
Net revenue	226		738	27
Sagent US | United States
Segment revenues
Net revenue	67,648	65,359	211,623	205,395
Segment assets:
Assets	206,802	249,953	206,802	249,953
Sagent US | China
Segment assets:
Assets	57,742	$ 66,612	57,742	$ 66,612
Canada (Omega segment) | Canada
Segment revenues
Net revenue	7,325		22,827
Income (loss) before income taxes:
Operating income (loss)	351		(142)
Segment assets:
Assets	$ 95,065		$ 95,065

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Accrued Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accrued Liabilities, Current [Abstract]
Payroll and employee benefits	$ 5,458	$ 9,329
Sales and marketing	6,425	6,964
Taxes payable	1,201	1,040
Other accrued liabilities	2,029	2,013
Accrued Liabilities, Total	$ 15,113	$ 19,346

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Management Transition Costs - Additional Information (Detail) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2015 USD ($)
Restructuring Cost and Reserve [Line Items]
Payment of management transition cost	$ 189	$ 3,310
Accounts Payables
Restructuring Cost and Reserve [Line Items]
Management transition costs	307	307
Accrued Liabilities
Restructuring Cost and Reserve [Line Items]
Management transition costs	$ 958	$ 958

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Management transition costs

9 Months Ended

Sep. 30, 2015

Restructuring and Related Activities [Abstract]

Management transition costs

Note 19. Management transition costs:

In March 2015, we completed a management transition following the retirement of our founder and Chief Executive Officer and resignation of our President. In June 2015, we eliminated certain positions in the US as part of the ongoing review of our business. In the third quarter of 2015, we incurred additional costs, primarily related to the onboarding of our new Chief Executive Officer. Costs associated with these matters, primarily severance related charges and costs associated with recruiting and retaining a new CEO, were all incurred in the Sagent US operating segment, and are reflected in the management transition caption in the consolidated statement of operations for the three and nine months ended September 30, 2015. Of the charges, $189 and $3,310 were paid during the three and nine months ended September 30, 2015, respectively. Total costs accrued within the Accounts Payable and Accrued liabilities captions of the balance sheet at September 30, 2015 were $307 and $958, respectively.

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Goodwill and Intangible assets, net - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) Product_Right	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 24,953,000		$ 24,953,000		$ 28,155,000
Goodwill impairment	$ 0	$ 0	$ 0	$ 0
Number of products comprising product licensing rights intangible asset | Product_Right			22
Product Licensing Rights
Finite-Lived Intangible Assets [Line Items]
Weighted-average period prior to next extension or renewal of intangible asset			55 months

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Allocation of Purchase Price (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Aug. 05, 2015	Dec. 31, 2014	Oct. 01, 2014
Business Acquisition [Line Items]
Goodwill	$ 24,953		$ 28,155
Mustafa NevzatIlac Sanayii A S
Business Acquisition [Line Items]
Definite-lived intangible assets		$ 3,000
Total allocation of fair value		$ 3,000
Omega
Business Acquisition [Line Items]
Cash				$ 3
Accounts receivable, net				3,419
Inventory				14,014
Prepaid and other current assets				1,295
Property, plant and equipment				14,307
Definite-lived intangible assets				49,918
In-process research and development				7,666
Goodwill				22,842
Accounts payable				(2,410)
Other accrued liabilities				(4,090)
Long-term debt and notes payable				(7,095)
Deferred income tax liabilities				(17,176)
Total allocation of fair value				$ 82,693

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Earnings per share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

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, 2015 and 2014, respectively:

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Anti-dilutive shares (in thousands)		2,188		435		2,188		1,124

Schedule of Computation of Basic and Diluted 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, 2015 and 2014:

	Three months ended September 30,					Nine months ended September 30,
	2015			2014		2015			2014
Basic and dilutive numerator:
Net income (loss), as reported	$	(1,795	)	$	1,926	$	(3,945	)	$	10,114
Denominator:
Weighted-average common shares outstanding—basic (in thousands)		32,747			31,895		32,321			31,861
Net effect of dilutive securities:
Stock options and restricted stock		—			1,065		—			887
Weighted-average common shares outstanding—diluted (in thousands)		32,747			32,960		32,321			32,748
Net income (loss) per common share (basic)	$	(0.05	)	$	0.06	$	(0.12	)	$	0.32
Net income (loss) per common share (diluted)	$	(0.05	)	$	0.06	$	(0.12	)	$	0.31

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Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Definite-lived intangible assets, Gross carrying amount	$ 56,668	$ 60,143
Intangible assets, Gross carrying amount	65,337	69,828
Definite-lived intangible assets, Accumulated amortization	(7,137)	(4,253)
Definite-lived intangible assets, net	49,531	55,890
Intangible assets, net	58,200	65,575
Product Licensing Rights
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Definite-lived intangible assets, Gross carrying amount	4,533	4,707
Definite-lived intangible assets, Accumulated amortization	(2,900)	(2,878)
Definite-lived intangible assets, net	1,633	1,829
Product Development Rights
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Definite-lived intangible assets, Gross carrying amount	4,500	4,191
Definite-lived intangible assets, net	4,500	4,191
Purchased Product Rights And Other
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Definite-lived intangible assets, Gross carrying amount	47,635	51,245
Definite-lived intangible assets, Accumulated amortization	(4,237)	(1,375)
Definite-lived intangible assets, net	43,398	49,870
IPR&D
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items]
Indefinite-lived IPR&D, Intangible assets, net	$ 8,669	$ 9,685

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Schedule of Net Revenue by Therapeutic Class (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Product Information [Line Items]
Net revenue by product Line	$ 75,199	$ 65,359	$ 235,188	$ 205,422
Anti-infective
Product Information [Line Items]
Net revenue by product Line	31,891	21,370	96,453	74,896
Critical care
Product Information [Line Items]
Net revenue by product Line	29,271	21,530	85,962	62,153
Oncology
Product Information [Line Items]
Net revenue by product Line	$ 14,037	$ 22,459	$ 52,773	$ 68,373

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Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Currency translation adjustment, net of tax	$ (14,615)	$ (3,334)
Unrealized gains (losses) on available for sale securities, net of tax	(10)	(40)
Total accumulated other comprehensive income (loss)	$ (14,625)	$ (3,374)

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Inventories (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Inventory [Line Items]
Raw materials	$ 12,174	$ 13,051
Work in process	653	2,012
Finished goods	67,411	49,960
Inventory reserve	(4,010)	(3,242)
Inventory, Net, Total	76,228	61,781
Approved
Inventory [Line Items]
Raw materials	9,356	10,203
Work in process	653	2,012
Finished goods	67,411	49,960
Inventory reserve	(4,010)	(3,242)
Inventory, Net, Total	73,410	58,933
Pending Regulatory Approval
Inventory [Line Items]
Raw materials	2,818	2,848
Inventory, Net, Total	$ 2,818	$ 2,848

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Acquisitions

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Acquisitions

Note 3. Acquisitions:

Omega Acquisition

On October 1, 2014, we, through our wholly-owned Canadian subsidiary, Sagent Acquisition Corp., entered into a Share Purchase Agreement to acquire all of the issued and outstanding shares of the capital stock of 7685947 Canada Inc., and its subsidiary, Omega Laboratories Limited (collectively, “Omega”), a privately held Canadian pharmaceutical and specialty healthcare products company for C$92,768 ($82,693), after accounting for net post-closing adjustments of C$191 ($170). In September 2015, we finalized the post-closing adjustments resulting in a reduction of total purchase consideration of C$241 ($215).

The fair value of identifiable assets acquired and liabilities assumed for the Omega acquisition is shown in the table below:

	(in thousands)
Cash	$	3
Accounts receivable, net		3,419
Inventory		14,014
Prepaid and other current assets		1,295
Property, plant and equipment		14,307
Definite-lived intangible assets		49,918
In-process research and development		7,666
Goodwill		22,842
Accounts payable		(2,410	)
Other accrued liabilities		(4,090	)
Long-term debt and notes payable		(7,095	)
Deferred income tax liabilities		(17,176	)
Total allocation of fair value	$	82,693

We recorded goodwill of $22,842 at the time of acquisition due to the synergies achieved by having control over the products and manufacturing at Omega. We reduced goodwill in September 2015 to reflect the final post-closing adjustment to total purchase consideration of $215.

The following unaudited pro forma financial information reflects the consolidated results of operations of Sagent as if the Omega acquisition had taken place on January 1, 2014. 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 transaction been effected on the assumed date.

Condensed consolidated statement of operations information	Three months ended September 30, 2014		Nine months ended September 30, 2014
Net revenues	$	72,541	$	229,292
Net income		3,050		8,526
Diluted net income per common share	$	0.09	$	0.26

Product rights acquisitions

On August 5, 2015, we entered into and closed an agreement with Mustafa Nevzat Ilac Sanayii A.S., a subsidiary of Amgen, Inc., (“MN”) to acquire the rights to three products: Methylprednsilone Sodium Succinate, Vecuronium and Pamidronate Disodium. The total fair value of consideration transferred was $3,000, consisting of cash. The product rights have been recognized in our Sagent US segment.

The transaction was accounted for as a purchase of a business. The acquisition of these three products provides us with full control of and access to the product rights. The acquisition was financed with cash. Acquisition related costs related to this transaction were nominal. The weighted average life of these three acquired products rights is approximately 84 months.

The estimated fair value of identifiable assets acquired for these product rights is shown in the table below:

	(in thousands)
Definite-lived intangible assets	$	3,000
Total allocation of fair value	$	3,000

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Accumulated Other Comprehensive Income (Loss) - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2015 USD ($)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Amounts reclassified from accumulated other comprehensive income (loss)	$ 0

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Consolidated Pro Forma Operations Results in Acquisition (Detail) - Omega - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014
Business Acquisition [Line Items]
Net revenues	$ 72,541	$ 229,292
Net income	$ 3,050	$ 8,526
Diluted net income per common share	$ 0.09	$ 0.26

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Investments (Tables)

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Investments

Our investments at September 30, 2015 were comprised of the following:

	Cost basis		Unrealized gains		Unrealized losses			Carrying value		Cash and cash equivalents		Short term investments
Assets
Cash	$	5,991	$	—	$	—		$	5,991	$	5,991	$	—
Money market funds		19,859		—		—			19,859		19,859		—
Corporate bonds and notes		20,170		1		(11	)		20,160		—		20,160
	$	46,020	$	1	$	(11	)	$	46,010	$	25,850	$	20,160

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, 2015 were as follows:

	Fair value		Unrealized losses
Corporate bonds and notes	$	12,481	$	(11	)

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, 2015 are set forth below.

	Cost basis		Estimated fair value
Due in one year or less	$	12,458	$	12,457
Due between one and five years		7,711		7,703
	$	20,170	$	20,160

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2015

Omega

Fair Value of Identifiable Assets Acquired and Liabilities Assumed

The fair value of identifiable assets acquired and liabilities assumed for the Omega acquisition is shown in the table below:

	(in thousands)
Cash	$	3
Accounts receivable, net		3,419
Inventory		14,014
Prepaid and other current assets		1,295
Property, plant and equipment		14,307
Definite-lived intangible assets		49,918
In-process research and development		7,666
Goodwill		22,842
Accounts payable		(2,410	)
Other accrued liabilities		(4,090	)
Long-term debt and notes payable		(7,095	)
Deferred income tax liabilities		(17,176	)
Total allocation of fair value	$	82,693

Unaudited Pro Forma Financial Information

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

Condensed consolidated statement of operations information	Three months ended September 30, 2014		Nine months ended September 30, 2014
Net revenues	$	72,541	$	229,292
Net income		3,050		8,526
Diluted net income per common share	$	0.09	$	0.26

Mustafa NevzatIlac Sanayii A S

Fair Value of Identifiable Assets Acquired and Liabilities Assumed

The estimated fair value of identifiable assets acquired for these product rights is shown in the table below:

	(in thousands)
Definite-lived intangible assets	$	3,000
Total allocation of fair value	$	3,000

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Debt - Additional Information (Detail)	Apr. 06, 2015 USD ($)	Oct. 01, 2014 USD ($) MortgageLoan	Oct. 01, 2014 CAD	Jul. 31, 2014 CAD	Sep. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CAD	Oct. 01, 2014 CAD MortgageLoan
Omega
Line of Credit Facility [Line Items]
Amount available under credit facility		$ 7,309,000						CAD 8,200,000
Credit facility						$ 2,824,000	CAD 3,272,000
Effective interest rate		3.50%						3.50%
Number of mortgage loans | MortgageLoan		5						5
Omega | Floating Rate
Line of Credit Facility [Line Items]
Amount available under credit facility		$ 6,239,000						CAD 7,000,000
Credit facility		$ 1,364,000						CAD 1,530,000
Omega | Prime Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate		0.50%	0.50%
JPMorgan Chase Revolving Credit Loan Facility
Line of Credit Facility [Line Items]
Credit facility					$ 0	0
Mortgage Loans | Omega | Prime Rate
Line of Credit Facility [Line Items]
Interest rate		5.00%						5.00%
Minimum | Mortgage Loans | Omega
Line of Credit Facility [Line Items]
Monthly mortgages installments		$ 62,000	CAD 70,000
Minimum | Mortgage Loans | Omega | Prime Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate		0.00%	0.00%
Maximum | Mortgage Loans | Omega
Line of Credit Facility [Line Items]
Monthly mortgages installments		$ 1,114,000	CAD 1,250,000
Maximum | Mortgage Loans | Omega | Prime Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate		1.50%	1.50%
Letter of Credit | Omega
Line of Credit Facility [Line Items]
Amount available under credit facility		$ 1,782,000						CAD 2,000,000
Currency Risk | Omega
Line of Credit Facility [Line Items]
Amount available under credit facility		1,070,000						1,200,000
Revolving Credit Facility | Omega
Line of Credit Facility [Line Items]
Credit facility		$ 238,000						CAD 267,000
Effective interest rate		4.00%						4.00%
Debt collateral amount		$ 891,000						CAD 1,000,000
Revolving Credit Facility | Omega | Prime Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate		1.00%	1.00%
JP Morgan Chase China Fixed Assets Committed Loan Facility
Line of Credit Facility [Line Items]
Amount available under credit facility	$ 18,000,000
Credit facility					$ 0
JP Morgan Chase China Fixed Assets Committed Loan Facility | LIBOR
Line of Credit Facility [Line Items]
Basis spread on variable rate	3.25%
JP Morgan Chase China Fixed Assets Committed Loan Facility | Minimum
Line of Credit Facility [Line Items]
Principal payment term	36 months
JP Morgan Chase China Fixed Assets Committed Loan Facility | Maximum
Line of Credit Facility [Line Items]
Principal payment term	60 months
Demand Loan | Omega
Line of Credit Facility [Line Items]
Principal amount of demand loan		$ 2,674,000		CAD 3,000,000
Effective interest rate				4.75%
Debt collateral amount | CAD				CAD 3,000,000
Additional security interest percentage				20.00%
Interest rate per annum				4.75%
Maturity date				2014-11
Debt instrument extended maturity date		2015-01	2015-01
Demand loan outstanding balance						$ 2,674,000	CAD 3,000,000
Demand Loan | Omega | Prime Rate
Line of Credit Facility [Line Items]
Basis spread on variable rate				1.75%
Demand Loan | Operating Credit Facility | Omega
Line of Credit Facility [Line Items]
Debt collateral amount		$ 7,354,000		CAD 8,250,000

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Investments (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Cost basis	$ 46,020
Unrealized gains	1
Unrealized losses	(11)
Carrying value	46,010
Cash and cash equivalents	25,850	$ 55,633	$ 136,280	$ 42,332
Short-term investments	20,160	$ 18,473
Cash
Schedule of Available-for-sale Securities [Line Items]
Cost basis	5,991
Carrying value	5,991
Cash and cash equivalents	5,991
Money market funds
Schedule of Available-for-sale Securities [Line Items]
Cost basis	19,859
Carrying value	19,859
Cash and cash equivalents	19,859
Corporate bonds and notes
Schedule of Available-for-sale Securities [Line Items]
Cost basis	20,170
Unrealized gains	1
Unrealized losses	(11)
Carrying value	20,160
Short-term investments	$ 20,160

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Inventories (Tables)

9 Months Ended

Sep. 30, 2015

Inventory Disclosure [Abstract]

Inventory Valuation

Inventories at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015								December 31, 2014
	Approved			Pending regulatory approval		Inventory			Approved			Pending regulatory approval		Inventory
Raw materials	$	9,356		$	2,818	$	12,174		$	10,203		$	2,848	$	13,051
Work in process		653			—		653			2,012			—		2,012
Finished goods		67,411			—		67,411			49,960			—		49,960
Inventory reserve		(4,010	)		—		(4,010	)		(3,242	)		—		(3,242	)
	$	73,410		$	2,818	$	76,228		$	58,933		$	2,848	$	61,781

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Property, plant and equipment (Tables)

9 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, plant and equipment at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015			December 31, 2014
Land and land improvements	$	3,282		$	3,519
Buildings and improvements		25,523			26,605
Machinery, equipment, furniture and fixtures		44,212			42,124
Construction in process		5,838			6,175
		78,855			78,423
Less accumulated depreciation		(10,692	)		(7,270	)
	$	68,163		$	71,153

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2015

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 2. Recent Accounting Pronouncements

In May 2014, the FASB issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In July 2015, the FASB approved a one year deferral to the new revenue guidance, and are therefore required to adopt the new guidance on January 1, 2018 using one of the two prescribed retroactive methods. We are evaluating the impact of the amended revenue recognition guidance on our consolidated financial statements.

In February 2015, the FASB issued amended guidance on the model used to evaluate whether certain legal entities should be consolidated. This guidance is effective for the Company in the first quarter of 2017. Early adoption is permitted. We are currently evaluating the impact that adoption of this guidance will have on our consolidated financial statements.

In September 2015, the FASB issued guidance that eliminates the requirement to restate prior period financial statements for measurement period adjustments related to business combinations. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. In addition, separate presentation on the face of the income statement or disclosure in the notes to the financial statements is required regarding the portion of the adjustment recorded in current period earnings. We are required to adopt this guidance prospectively for measurement period adjustments that occur after the effective date. This guidance is effective for the Company in the first quarter of 2016. Early adoption is permitted. We have adopted this guidance in the current period. There was no material impact of adoption.

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Goodwill and Intangible assets, net (Tables)

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Movements in Goodwill

Movements in goodwill were due to the following:

December 31, 2014	$	28,155
Omega post-closing adjustment		(215	)
Foreign currency translation impact		(2,987	)
September 30, 2015	$	24,953

Schedule of Intangible Assets - Finite lived

Intangible assets at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015							December 31, 2014
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Product licensing rights	$	4,533	$	(2,900	)	$	1,633	$	4,707	$	(2,878	)	$	1,829
Product development rights		4,500		—			4,500		4,191		—			4,191
Purchased product rights and other		47,635		(4,237	)		43,398		51,245		(1,375	)		49,870
Total definite-lived intangible assets	$	56,668	$	(7,137	)	$	49,531	$	60,143	$	(4,253	)	$	55,890
In-process research and development (IPR&D)	$	8,669	$	—		$	8,669	$	9,685	$	—		$	9,685
Total intangible assets	$	65,337	$	(7,137	)	$	58,200	$	69,828	$	(4,253	)	$	65,575

Schedule of Intangible Assets - Indefinite Lived

Intangible assets at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015							December 31, 2014
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Product licensing rights	$	4,533	$	(2,900	)	$	1,633	$	4,707	$	(2,878	)	$	1,829
Product development rights		4,500		—			4,500		4,191		—			4,191
Purchased product rights and other		47,635		(4,237	)		43,398		51,245		(1,375	)		49,870
Total definite-lived intangible assets	$	56,668	$	(7,137	)	$	49,531	$	60,143	$	(4,253	)	$	55,890
In-process research and development (IPR&D)	$	8,669	$	—		$	8,669	$	9,685	$	—		$	9,685
Total intangible assets	$	65,337	$	(7,137	)	$	58,200	$	69,828	$	(4,253	)	$	65,575

Movements in Intangible Assets

Movements in intangible assets were due to the following:

	Product licensing rights			Product development rights			Purchased product rights and other			IPR&D
December 31, 2014	$	1,829		$	4,191		$	49,870		$	9,685
Purchase of product rights		100			1,568			3,000			—
Amortization of product rights		(296	)		(1,259	)		(3,178	)		—
Foreign currency movements and other		—			—			(6,294	)		(1,016	)
September 30, 2015	$	1,633		$	4,500		$	43,398		$	8,669

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Geographic and segment information (Tables)

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Schedule of Geographic and Segment Data

Geographic and segment data is as follows:

	Three months ended September 30,						Nine months ended September 30,
Segment revenues:	2015			2014			2015			2014
United States	$	67,648		$	65,359		$	211,623		$	205,395
Others		226			—			738			27
Sagent US segment		67,874			65,359			212,361			205,422
Canada (Omega segment)		7,325			—			22,827			—
Total net revenue	$	75,199		$	65,359		$	235,188		$	205,422
Income (loss) before income taxes
Sagent US	$	1,391		$	4,044		$	2,885		$	13,994
Canada (Omega segment)		351			—			(142	)		—
Total segment operating income		1,742			4,044			2,743			13,994
Interest income and other		(1,686	)		(536	)		(2,225	)		(465	)
Interest expense		(188	)		(195	)		(650	)		(641	)
Income (loss) before income taxes	$	(132	)	$	3,313		$	(132	)	$	12,888

	September 30,
	2015		2014
Segment assets:
United States	$	206,802	$	249,953
China		57,742		66,612
Sagent US segment		264,544		316,565
Canada (Omega segment)		95,065		—
Total assets	$	359,609	$	316,565

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Movements in Intangible Assets (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Intangible Assets Disclosure [Line Items]
Beginning Balance	$ 55,890
Ending Balance	49,531
Product Licensing Rights
Intangible Assets Disclosure [Line Items]
Beginning Balance	1,829
Purchase of product rights	100
Amortization of product rights	(296)
Ending Balance	1,633
Product Development Rights
Intangible Assets Disclosure [Line Items]
Beginning Balance	4,191
Purchase of product rights	1,568
Amortization of product rights	(1,259)
Ending Balance	4,500
Purchased Product Rights And Other
Intangible Assets Disclosure [Line Items]
Beginning Balance	49,870
Purchase of product rights	3,000
Amortization of product rights	(3,178)
Foreign currency movements and other	(6,294)
Ending Balance	43,398
IPR&D
Intangible Assets Disclosure [Line Items]
Beginning Balance	9,685
Purchase of product rights	0
Amortization of product rights	0
Foreign currency movements and other	(1,016)
Ending Balance	$ 8,669

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Geographic and Segment Information - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2015 Segment
Segment Reporting [Abstract]
Number of reportable segments	2

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 25,850	$ 55,633
Short-term investments	20,160	18,473
Accounts receivable, net of chargebacks and other deductions	43,043	42,780
Inventories, net	76,228	61,781
Due from related party	2,664	2,156
Current deferred tax assets	9,193	12,135
Prepaid expenses and other current assets	8,436	5,560
Total current assets	185,574	198,518
Property, plant, and equipment, net	68,163	71,153
Investment in joint ventures	6,049	4,539
Goodwill	24,953	28,155
Intangible assets, net	58,200	65,575
Non-current deferred tax assets	14,466	13,173
Other assets	2,204	375
Total assets	359,609	381,488
Current liabilities:
Accounts payable	36,402	32,710
Due to related party	11,573	8,079
Accrued profit sharing	7,245	10,684
Accrued liabilities	15,113	19,346
Current portion of deferred purchase consideration		8,725
Current portion of long-term debt	238	508
Notes payable		5,499
Total current liabilities	70,571	85,551
Long term liabilities:
Long-term debt	1,500	1,945
Deferred income taxes	12,331	15,706
Other long-term liabilities	2,388	2,534
Total liabilities	86,790	105,736
Stockholders' equity:
Common stock-$0.01 par value, 100,000,000 authorized, and 32,786,873 and 31,976,661 outstanding at September 30, 2015 and December 31, 2014, respectively	328	320
Additional paid-in capital	365,236	352,982
Accumulated other comprehensive income (loss)	(14,625)	(3,374)
Accumulated deficit	(78,120)	(74,176)
Total stockholders' equity	272,819	275,752
Total liabilities and stockholders' equity	$ 359,609	$ 381,488

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Investments with Continuous Unrealized Losses for Less Than Twelve Months and Related Fair Values (Detail) - Corporate bonds and notes $ in Thousands	Sep. 30, 2015 USD ($)
Schedule of Available-for-sale Securities [Line Items]
Fair value	$ 12,481
Unrealized losses	$ (11)

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities
Net income (loss)	$ (3,945)	$ 10,114
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	8,796	6,307
Stock-based compensation	2,845	3,657
Equity in net (income) loss of joint ventures	(1,510)	(2,476)
Deferred income taxes, net	457
Other	232	(200)
Changes in operating assets and liabilities:
Accounts receivable, net	(760)	(10,848)
Inventories, net	(16,263)	3,180
Prepaid expenses and other current assets	(2,988)	1,887
Due from related party	(507)	(728)
Accounts payable and other accrued liabilities	755	8,574
Net cash provided by (used in) operating activities	(12,888)	19,467
Cash flows from investing activities
Capital expenditures	(5,057)	(2,875)
Acquisition of business, net of cash acquired	(11,785)	(3,500)
Purchases of investments	(10,202)	(80,998)
Sale of investments	8,320	174,722
Purchase of product rights	(1,109)	(2,863)
Net cash provided by (used in) investing activities	(19,833)	84,486
Cash flows from financing activities
Reduction in short-term borrowings	(5,189)
Repayment of long-term debt	(411)	(10,324)
Payment of deferred financing costs	(199)	(75)
Proceeds from issuance of common stock, net of issuance costs	9,417	425
Net cash provided by (used in) financing activities	3,618	(9,974)
Effect of exchange rate movements in cash	(680)	(31)
Net increase (decrease) in cash and cash equivalents	(29,783)	93,948
Cash and cash equivalents, at beginning of period	55,633	42,332
Cash and cash equivalents, at end of period	25,850	$ 136,280
Supplemental disclosure of cash flow information
Acquisition of property, plant and equipment in accounts payable	(581)
Acquisition of product licensing rights not yet settled	$ (1,076)

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Fair Value Measurements - Additional Information (Detail) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfer of assets between Level 1 to Level 2	$ 0	$ 0
Transfer of assets between Level 2 to Level 1	0	0
Transfer of assets into (out of) Level 3	0	0
Contingent Consideration Liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of the contingent consideration	$ 95,000	$ 605,000

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Fair value measurements (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets measured at fair value on a recurring basis as of September 30, 2015 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	$	19,859	$	19,859	$	—	$	—
Corporate bonds and notes		20,160		—		20,160		—
Short-term investments	$	20,160	$	—	$	20,160	$	—
Total assets	$	40,019	$	19,859	$	20,160	$	—
Liabilities
Contingent purchase consideration	$	95	$	—	$	—	$	95

Assets measured at fair value on a recurring basis as of December 31, 2014 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	$	13,139	$	13,139	$	—	$	—
Corporate bonds and notes		18,513		—		18,513		—
Commercial paper		—		—		—		—
Short-term investments	$	18,513	$	—	$	18,513	$	—
Total assets	$	31,652	$	13,139	$	18,513	$	—
Liabilities
Contingent purchase consideration	$	605	$	—	$	—	$	605

Summary of Contingent Purchase Consideration Measured Using Significant Unobservable Inputs (Level 3)

The Changes in the fair value of our contingent purchase consideration measured using significant unobservable inputs (Level 3), during the nine months ending September 30, 2015 were as follows:

Balance at January 1, 2015	$	605
Issuance of contingent purchase consideration		—
Change in fair value of contingent purchase consideration		(510	)
Payment of contingent purchase consideration		—
Balance at September 30, 2015	$	95

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Stock Option and Restricted Stock Activity (Detail)	9 Months Ended
	Sep. 30, 2015 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance, Options Outstanding	2,543,362
Granted	411,743
Exercised	(779,505)
Forfeited	(168,166)
Ending Balance, Options Outstanding	2,007,434
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance, Outstanding	128,209
Granted	140,971
Exercised	(40,496)
Forfeited	(48,476)
Ending Balance, Outstanding	180,208

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Related party transactions

9 Months Ended

Sep. 30, 2015

Related Party Transactions [Abstract]

Related party transactions

Note 16. Related party transactions:

As of September 30, 2015 and December 31, 2014, respectively, we had a receivable of $2,664 and $2,156 from Sagent Agila LLC, which is expected to offset future profit-sharing payments. As of September 30, 2015 and December 31, 2014, respectively, we had a payable of $11,573 and $8,079 to Sagent Agila LLC, principally for the acquisition of inventory and amounts due under profit-sharing arrangements.

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Accumulated other comprehensive income (loss) (Tables)

9 Months Ended

Sep. 30, 2015

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) at September 30, 2015 and December 31, 2014 is comprised of the following:

	September 30, 2015			December 31, 2014
Currency translation adjustment, net of tax	$	(14,615	)	$	(3,334	)
Unrealized gains (losses) on available for sale securities, net of tax		(10	)		(40	)
Total accumulated other comprehensive income (loss)	$	(14,625	)	$	(3,374	)

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Commitments and contingencies

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

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 product under FDA NDA No. 203231, made by ACS Dobfar Info S.A. (“Info”), also a defendant, a generic bioequivalent version of Novartis’ Zometa ^® Ready-to-Use product, 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 product under FDA ANDA No. 202828, also made by Info, a generic version of Novartis’ Reclast ^® product, would infringe U.S. Patent No. 8,052,987 (the “987 Patent”) and the 241 Patent, and (iii) zoledronic acid product under FDA ANDA No. 202472, made by Actavis LLC, also a defendant, a generic version of Novartis’ Zometa ^® Pre Concentrate product, would infringe the 189 Patent. (In Re: Certain Consolidated Zoledronic Acid Cases; Consolidated Civil Action No. 12-03967(SDW)(SCM) [Consolidated with Civil Action Nos. 12-cv-04393, 13-cv-01028, 13-cv-02379, 13-cv-4669, 13-cv-5125, 13-cv-6835, 13-cv-7914 and 14-cv-18411]). 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. On December 3, 2014, Novartis sued the Company, alleging, among other things, that sales of the Company’s zoledronic acid product under FDA ANDA No. 091493, made by Hameln RDS GMBH, a generic version of Novartis’ Zometa ^® Pre-concentrate product, would infringe the 189 Patent. (Novartis Pharmaceuticals Corporation v. Sagent Pharmaceuticals, Inc. et. al., Case No. 2:14-cv-07556(SDW)(SCM) and together with the Consolidated Civil Action Case No. 13-cv-1028, the “Litigation”).

On October 13, 2015, the Company and Novartis agreed to settle the Litigation. Pursuant to the terms of the settlement, we will pay Novartis $5,000 in exchange for a release of claims associated with the 241, 987 and 189 Patents pertaining to the following regulatory submissions: FDA NDA No. 203231, FDA ANDA No. 202828, FDA ANDA No. 202472 and FDA ANDA No. 091493 (collectively the “Regulatory Submissions”), and acquire a license to sell the zoledronic acid products as approved by their Regulatory Submissions (excluding sales of product manufactured under FDA ANDA No.202472 after December 31, 2014) in the United States. The settlement is subject to confirmation by the US Federal Trade Commission. Concurrent with the Novartis settlement, we are entitled to receive $1,477 from Info and Actavis, representing their collective share of the $5,000.

We have determined that $1,683 of the settlement represents a future license to sell the zoledronic acid products. This amount has been recorded within Other assets on the Condensed Consolidated Balance Sheet as of September 30, 2015, offset by the portion of the Info reimbursement, $607, related to the license period. The remaining net settlement amount of $2,447 owed to Novartis has been recorded as Legal settlement within the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2015.

At this time, there are no other proceedings of which we are aware that are considered likely to have a material adverse effect on the consolidated financial position or results of operations.

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Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Due from related party	$ 2,664	$ 2,156
Due to related party	11,573	8,079
Sagent Agila LLC
Related Party Transaction [Line Items]
Due from related party	2,664	2,156
Due to related party	$ 11,573	$ 8,079

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Basis of presentation

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

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.

You should read these statements in conjunction with our consolidated financial statements and related notes for the year ended December 31, 2014, included in our most recent Annual Report on Form 10-K filed with the SEC on March 16, 2015.

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized shares	100,000,000	100,000,000
Common stock, outstanding shares	32,786,873	31,976,661

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Fair value measurements

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair value measurements

Note 11. Fair value measurements:

Assets measured at fair value on a recurring basis as of September 30, 2015 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	$	19,859	$	19,859	$	—	$	—
Corporate bonds and notes		20,160		—		20,160		—
Short-term investments	$	20,160	$	—	$	20,160	$	—
Total assets	$	40,019	$	19,859	$	20,160	$	—
Liabilities
Contingent purchase consideration	$	95	$	—	$	—	$	95

Assets measured at fair value on a recurring basis as of December 31, 2014 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	$	13,139	$	13,139	$	—	$	—
Corporate bonds and notes		18,513		—		18,513		—
Commercial paper		—		—		—		—
Short-term investments	$	18,513	$	—	$	18,513	$	—
Total assets	$	31,652	$	13,139	$	18,513	$	—
Liabilities
Contingent purchase consideration	$	605	$	—	$	—	$	605

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. The fair value of our Level 3 contingent consideration is based upon a probability weighting approach that considered the possible outcomes based on assumptions related to the timing and probability of the product approval date.

There were no transfers of assets between Level 1, Level 2 or Level 3 during the periods presented.

We estimated the fair value of the contingent consideration to be $605 using a probability weighting approach that considered the possible outcomes based on assumptions related to the timing and probability of the Cisatracurium product approval date.

The Changes in the fair value of our contingent purchase consideration measured using significant unobservable inputs (Level 3), during the nine months ending September 30, 2015 were as follows:

Balance at January 1, 2015	$	605
Issuance of contingent purchase consideration		—
Change in fair value of contingent purchase consideration		(510	)
Payment of contingent purchase consideration		—
Balance at September 30, 2015	$	95

The change in fair value of our contingent purchase consideration was recognized within selling, general and administrative expense in the Condensed Consolidated Statement of Operations.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 30, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
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		32,787,344

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Accumulated other comprehensive income (loss)

9 Months Ended

Sep. 30, 2015

Equity [Abstract]

Accumulated other comprehensive income (loss)

Note 12. Accumulated other comprehensive income (loss):

Accumulated other comprehensive income (loss) at September 30, 2015 and December 31, 2014 is comprised of the following:

	September 30, 2015			December 31, 2014
Currency translation adjustment, net of tax	$	(14,615	)	$	(3,334	)
Unrealized gains (losses) on available for sale securities, net of tax		(10	)		(40	)
Total accumulated other comprehensive income (loss)	$	(14,625	)	$	(3,374	)

There were no amounts reclassified from accumulated other comprehensive income (loss) during the nine months ended September 30, 2015.

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Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Net revenue	$ 75,199	$ 65,359	$ 235,188	$ 205,422
Cost of sales	50,837	46,589	170,461	143,676
Gross profit	24,362	18,770	64,727	61,746
Operating expenses:
Product development	7,923	3,677	18,658	17,734
Selling, general and administrative	11,403	10,914	35,886	31,622
Acquisition-related costs	535	872	1,856	872
Management transition costs	645		4,647
Equity in net (income) loss of joint ventures	(333)	(737)	(1,510)	(2,476)
Total operating expenses	20,173	14,726	59,537	47,752
Legal settlement	2,447		2,447
Income from operations	1,742	4,044	2,743	13,994
Interest income and other income (expense), net	(1,686)	(536)	(2,225)	(465)
Interest expense	(188)	(195)	(650)	(641)
Income (loss) before income taxes	(132)	3,313	(132)	12,888
Provision for income taxes	1,663	1,387	3,813	2,774
Net income (loss)	$ (1,795)	$ 1,926	$ (3,945)	$ 10,114
Net income (loss) per common share:
Basic	$ (0.05)	$ 0.06	$ (0.12)	$ 0.32
Diluted	$ (0.05)	$ 0.06	$ (0.12)	$ 0.31
Weighted-average of shares used to compute net income per common share:
Basic	32,747	31,895	32,321	31,861
Diluted	32,747	32,960	32,321	32,748

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Property, plant and equipment

9 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

Property, plant and equipment

Note 6. Property, plant and equipment

Property, plant and equipment at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015			December 31, 2014
Land and land improvements	$	3,282		$	3,519
Buildings and improvements		25,523			26,605
Machinery, equipment, furniture and fixtures		44,212			42,124
Construction in process		5,838			6,175
		78,855			78,423
Less accumulated depreciation		(10,692	)		(7,270	)
	$	68,163		$	71,153

Depreciation expense was $1,436 and $4,166 for the three and nine months ended September 30, 2015, respectively.

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Inventories

9 Months Ended

Sep. 30, 2015

Inventory Disclosure [Abstract]

Inventories

Note 5. Inventories:

Inventories at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015								December 31, 2014
	Approved			Pending regulatory approval		Inventory			Approved			Pending regulatory approval		Inventory
Raw materials	$	9,356		$	2,818	$	12,174		$	10,203		$	2,848	$	13,051
Work in process		653			—		653			2,012			—		2,012
Finished goods		67,411			—		67,411			49,960			—		49,960
Inventory reserve		(4,010	)		—		(4,010	)		(3,242	)		—		(3,242	)
	$	73,410		$	2,818	$	76,228		$	58,933		$	2,848	$	61,781

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Income Taxes

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Note 17. Income Taxes:

Our provision for income taxes for the three month ended September 30, 2015 and September 30, 2014 was $1,663 and $1,387, respectively. Our provision for income taxes for the nine months ended September 30, 2015 and September 30, 2014 was $3,813 and $2,774, respectively. As we have recorded a full valuation allowance against our Chinese deferred tax assets, we have not recorded a tax benefit for losses associated with SCP.

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Earnings per share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Earnings per share

Note 13. Earnings per share

Basic earnings per share is calculated by dividing net income 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, 2015 and 2014, respectively:

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Anti-dilutive shares (in thousands)		2,188		435		2,188		1,124

The table below presents the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2015 and 2014:

	Three months ended September 30,					Nine months ended September 30,
	2015			2014		2015			2014
Basic and dilutive numerator:
Net income (loss), as reported	$	(1,795	)	$	1,926	$	(3,945	)	$	10,114
Denominator:
Weighted-average common shares outstanding—basic (in thousands)		32,747			31,895		32,321			31,861
Net effect of dilutive securities:
Stock options and restricted stock		—			1,065		—			887
Weighted-average common shares outstanding—diluted (in thousands)		32,747			32,960		32,321			32,748
Net income (loss) per common share (basic)	$	(0.05	)	$	0.06	$	(0.12	)	$	0.32
Net income (loss) per common share (diluted)	$	(0.05	)	$	0.06	$	(0.12	)	$	0.31

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Debt

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Debt

Note 9. Debt:

Credit facilities acquired in connection with the Omega acquisition

In connection with the acquisition of Omega on October 1, 2014, we assumed a series of credit facilities and mortgages with the National Bank of Canada (“NBC”) and the Business Development Bank of Canada (“BDC”), as described below.

Omega had an authorized credit facility (the “Omega operating credit facility”) in the amount of C$8,200 ($7,309) with the NBC. The Omega operating credit facility could be utilized in the form of floating-rate advances for an amount not exceeding C$7,000 ($6,239 as of the acquisition date) and advances in the form of letters of guarantee or letters of credit, within that limit for an amount not exceeding C$2,000 ($1,782 as of the acquisition date). The Omega operating credit facility could also be utilized in the form of advances to cover Omega’s currency risk for an amount not to exceed C$1,200 ($1,070 as of the acquisition date). On October 1, 2014, the Omega operating credit facility had floating-rate advances in the amount of C$1,530 ($1,364) bearing interest at the lender’s prime rate plus 0.50% (or an effective rate of 3.5%), which we assumed as part of the acquisition. As of December 31, 2014, C$3,272 ($2,824) was outstanding under the Omega operating credit facility.

In July 2014, Omega obtained a C$3,000 demand loan (the “Omega demand loan”), from the NBC bearing interest at the prime rate of the lender, plus a premium of 1.75% (effective rate 4.75%). The Omega demand loan was secured by all of the assets of Omega for C$3,000 plus an additional security interest of 20% of this amount, bearing interest at 4.75% per annum and matured in November 2014. We assumed the Omega demand loan ($2,674 as of the acquisition date) in connection with the acquisition and subsequently extended the maturity date to January 2015. The Omega operating credit facility and the Omega demand loan were secured by a first ranking security interest in the amount of C$8,250 ($7,354 as of the acquisition date) in Omega’s inventories, trade receivables and on the intellectual property of Omega, present and future. As of December 31, 2014, C$3,000 ($2,674) was outstanding under the Omega demand loan.

Omega also had C$267 ($238) outstanding on a decreasing revolving credit facility with the NBC (the “Omega decreasing revolving credit facility”) bearing interest at the prime rate of the lender, plus 1.0% (or an effective rate equal to 4.0%). The Omega decreasing revolving credit facility was secured by a first ranking security interest of C$1,000 ($891 as of the acquisition date) on the equipment, tooling and office furniture financed by the credit facility.

The Omega credit facilities were subject to certain restrictions, including the obligation to maintain certain financial ratios. As of October 1, 2014, Omega had not met certain of these financial ratios. As a result, the Omega decreasing revolving credit facility was classified as a current liability as of the acquisition date. In January 2015, we paid off all amounts outstanding under the Omega operating credit facility, the Omega demand loan and the Omega decreasing revolving credit facility with available cash on hand.

In addition to the above, Omega has five mortgage loans with the BDC (collectively the “Omega mortgages”) which we assumed in connection with the acquisition. The Omega mortgages, which require monthly installments and which are secured by specific Omega buildings and equipment, range in amount from C$70 to C$1,250 ($62 to $1,114 as of the acquisition date) and bear interest at the lender’s prime rate (5% as of the acquisition date) plus a premium ranging from 0%—1.5%. The Omega mortgages mature at various times from August 2019 through November 2036.

JPMorgan Chase Revolving Credit Loan Facility

On October 31, 2014, we entered into a credit agreement (the “Chase Agreement”) with JPMorgan Chase Bank, N.A., (“Chase”). As of September 30, 2015 and December 31, 2014, respectively, no borrowings were outstanding under the Chase Agreement and we were in compliance with all of our covenants under the Chase Agreement.

JP Morgan Chase China Fixed Assets Committed Loan Facility

On April 6, 2015, our subsidiary, Sagent (China) Pharmaceuticals, Co., Ltd. (“SCP”) entered into a fixed assets committed loan facility (“China Facility”) with JPMorgan Chase Bank (China) Company Limited, Shanghai Branch (“Chase China”). SCP may make drawings under the China Facility in an aggregate amount up to $18.0 million to finance capital expenditures relating to a production line expansion. Amounts drawn under the China Facility bear interest at the LIBOR rate (or Chase China’s cost of funds if the long term foreign debt quota of Chase China is not available) plus 3.25%. Amounts drawn under the China Facility will be subject to an amortization schedule. Principal payments for any amounts drawn will be repaid in accordance with that schedule, between 36-60 months. As of September 30, 2015, no borrowings were outstanding under the Chase Agreement and we were in compliance with all of our covenants under the Chase Agreement.

In connection with the China Facility, on April 6, 2015 we and our wholly-owned subsidiary, Sagent Pharmaceuticals (“Sagent Wyoming”) entered into an amendment (the “Amendment”) to the Chase Agreement as well as a guaranty (the “Guaranty”) in favor of Chase and certain of its affiliates. Under the Guaranty and Amendment, the Company and Sagent Wyoming provide Chase and its affiliates a guaranty of obligations incurred by SCP under the China Facility.

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Summary of Contingent Purchase Consideration Measured Using Significant Unobservable Inputs (Level 3) (Detail) - Contingent Consideration Liability $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at January 1, 2015	$ 605
Issuance of contingent purchase consideration	0
Change in fair value of contingent purchase consideration	(510)
Payment of contingent purchase consideration	0
Balance at September 30, 2015	$ 95

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Goodwill and Intangible assets, net

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible assets, net

Note 7. Goodwill and Intangible assets, net:

Goodwill at September 30, 2015 and December 31, 2014 was $24,953 and $28,155, respectively. There were no goodwill impairment losses for the three or nine months ended September 30, 2015 and 2014, respectively.

Movements in goodwill were due to the following:

December 31, 2014	$	28,155
Omega post-closing adjustment		(215	)
Foreign currency translation impact		(2,987	)
September 30, 2015	$	24,953

Intangible assets at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015							December 31, 2014
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Product licensing rights	$	4,533	$	(2,900	)	$	1,633	$	4,707	$	(2,878	)	$	1,829
Product development rights		4,500		—			4,500		4,191		—			4,191
Purchased product rights and other		47,635		(4,237	)		43,398		51,245		(1,375	)		49,870
Total definite-lived intangible assets	$	56,668	$	(7,137	)	$	49,531	$	60,143	$	(4,253	)	$	55,890
In-process research and development (IPR&D)	$	8,669	$	—		$	8,669	$	9,685	$	—		$	9,685
Total intangible assets	$	65,337	$	(7,137	)	$	58,200	$	69,828	$	(4,253	)	$	65,575

Movements in intangible assets were due to the following:

	Product licensing rights			Product development rights			Purchased product rights and other			IPR&D
December 31, 2014	$	1,829		$	4,191		$	49,870		$	9,685
Purchase of product rights		100			1,568			3,000			—
Amortization of product rights		(296	)		(1,259	)		(3,178	)		—
Foreign currency movements and other		—			—			(6,294	)		(1,016	)
September 30, 2015	$	1,633		$	4,500		$	43,398		$	8,669

The weighted-average period prior to the next extension or renewal for the 22 products comprising our product licensing rights intangible asset was 55 months at September 30, 2015.

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Investment in Sagent Agila

9 Months Ended

Sep. 30, 2015

Sagent Agila LLC

Investment in Sagent Agila

Note 8. Investment in Sagent Agila:

Changes in our investment in Sagent Agila during the nine months ended September 30, 2015 were as follows:

Investment in Sagent Agila at December 31, 2014	$	4,539
Equity in net income of Sagent Agila		1,510
Investment in Sagent Agila at September 30, 2015	$	6,049

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	2015		2014		2015		2014
Net revenues	$	2,169	$	1,516	$	6,090	$	6,249
Gross profit		665		1,473		3,020		4,992
Net income		665		1,473		3,020		4,952

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Accrued liabilities

9 Months Ended

Sep. 30, 2015

Payables and Accruals [Abstract]

Accrued liabilities

Note 10. Accrued liabilities:

Accrued liabilities at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015		December 31, 2014
Payroll and employee benefits	$	5,458	$	9,329
Sales and marketing		6,425		6,964
Taxes payable		1,201		1,040
Other accrued liabilities		2,029		2,013
	$	15,113	$	19,346

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Schedule of Calculation of Numerator and Denominator in Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Basic and dilutive numerator:
Net income (loss), as reported	$ (1,795)	$ 1,926	$ (3,945)	$ 10,114
Denominator:
Weighted-average common shares outstanding-basic (in thousands)	32,747	31,895	32,321	31,861
Net effect of dilutive securities: Stock options and restricted stock		1,065		887
Weighted-average common shares outstanding-diluted (in thousands)	32,747	32,960	32,321	32,748
Net income (loss) per common share (basic)	$ (0.05)	$ 0.06	$ (0.12)	$ 0.32
Net income (loss) per common share (diluted)	$ (0.05)	$ 0.06	$ (0.12)	$ 0.31

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Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Intrinsic value of stock options exercised	$ 1,524	$ 319	$ 9,038	$ 1,522

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Anti-Dilutive Share Excluded from Calculation of Diluted Earnings per Share (Detail) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Earnings Per Share [Abstract]
Anti-dilutive shares	2,188	435	2,188	1,124

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Accrued liabilities (Tables)

9 Months Ended

Sep. 30, 2015

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities at September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015		December 31, 2014
Payroll and employee benefits	$	5,458	$	9,329
Sales and marketing		6,425		6,964
Taxes payable		1,201		1,040
Other accrued liabilities		2,029		2,013
	$	15,113	$	19,346

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Summary of Movements in Goodwill (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Balance at December 31, 2014	$ 28,155
Omega post-closing adjustment	(215)
Foreign currency translation impact	(2,987)
Balance at September 30, 2015	$ 24,953

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Net revenue by product

9 Months Ended

Sep. 30, 2015

Text Block [Abstract]

Net revenue by product

Note 15. Net revenue by product:

Net revenue by therapeutic class is as follows:

	Three months ended September 30,				Nine months ended September 30,
Therapeutic class:	2015		2014		2015		2014
Anti-infective	$	31,891	$	21,370	$	96,453	$	74,896
Critical care		29,271		21,530		85,962		62,153
Oncology		14,037		22,459		52,773		68,373
	$	75,199	$	65,359	$	235,188	$	205,422

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Geographic and segment information

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Geographic and segment information

Note 20. Geographic and segment information

Management uses segment information to evaluate segment performance and allocate resources. Historically we have operated in a single reportable segment, the United States. Effective October 1, 2014, in connection with the Omega acquisition, we began operating in two reportable segments comprised of operations organized geographically within the United States (Sagent US segment) and Canada (Omega segment), each of which develop, source, manufacture and market generic injectable products for sale within the their respective countries. Each segment derives a significant portion of its revenues from a single class of pharmaceutical wholesale customers within that country. Management utilizes segment operating income as its measure of segment profitability.

Segment and geographic data for the three and nine months ended September 30, 2015 includes the impact of Omega. Shared costs for certain corporate functions, including but not limited to, corporate finance and legal, are included within the Sagent US segment profitability that management reviews.

Geographic and segment data is as follows:

	Three months ended September 30,						Nine months ended September 30,
Segment revenues:	2015			2014			2015			2014
United States	$	67,648		$	65,359		$	211,623		$	205,395
Others		226			—			738			27
Sagent US segment		67,874			65,359			212,361			205,422
Canada (Omega segment)		7,325			—			22,827			—
Total net revenue	$	75,199		$	65,359		$	235,188		$	205,422
Income (loss) before income taxes
Sagent US	$	1,391		$	4,044		$	2,885		$	13,994
Canada (Omega segment)		351			—			(142	)		—
Total segment operating income		1,742			4,044			2,743			13,994
Interest income and other		(1,686	)		(536	)		(2,225	)		(465	)
Interest expense		(188	)		(195	)		(650	)		(641	)
Income (loss) before income taxes	$	(132	)	$	3,313		$	(132	)	$	12,888

	September 30,
	2015		2014
Segment assets:
United States	$	206,802	$	249,953
China		57,742		66,612
Sagent US segment		264,544		316,565
Canada (Omega segment)		95,065		—
Total assets	$	359,609	$	316,565

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Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 1,436	$ 4,166

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Acquisitions - Additional Information (Detail) CAD in Thousands, $ in Thousands				1 Months Ended		9 Months Ended
	Aug. 05, 2015 USD ($)	Oct. 01, 2014 USD ($)	Oct. 01, 2014 CAD	Sep. 30, 2015 USD ($)	Sep. 30, 2015 CAD	Sep. 30, 2015 USD ($) Product_Right	Dec. 31, 2014 USD ($)
Business Acquisition [Line Items]
Goodwill				$ 24,953		$ 24,953	$ 28,155
Post-closing adjustment						$ (215)
Mustafa NevzatIlac Sanayii A S
Business Acquisition [Line Items]
Business acquisition, purchase price	$ 3,000
Number of products rights acquired | Product_Right						3
Weighted average life of these three acquired products rights						84 months
Omega
Business Acquisition [Line Items]
Business acquisition, purchase price		$ 82,693	CAD 92,768
Post closing adjustment cost		170	CAD 191	(215)	CAD (241)
Goodwill		$ 22,842
Post-closing adjustment				$ (215)

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (1,795)	$ 1,926	$ (3,945)	$ 10,114
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	(6,509)	(2)	(11,281)	(448)
Reclassification of unrealized losses on available for sale securities		49		49
Unrealized gains (losses) on available for sale securities	5	(101)	30	(22)
Total other comprehensive income (loss), net of tax	(6,504)	(54)	(11,251)	(421)
Comprehensive income (loss)	$ (8,299)	$ 1,872	$ (15,196)	$ 9,693

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Investments

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Investments

Note 4. Investments:

Our investments at September 30, 2015 were comprised of the following:

	Cost basis		Unrealized gains		Unrealized losses			Carrying value		Cash and cash equivalents		Short term investments
Assets
Cash	$	5,991	$	—	$	—		$	5,991	$	5,991	$	—
Money market funds		19,859		—		—			19,859		19,859		—
Corporate bonds and notes		20,170		1		(11	)		20,160		—		20,160
	$	46,020	$	1	$	(11	)	$	46,010	$	25,850	$	20,160

Investments with continuous unrealized losses for less than twelve months and their related fair values at September 30, 2015 were as follows:

	Fair value		Unrealized losses
Corporate bonds and notes	$	12,481	$	(11	)

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, 2015.

The original cost and estimated current fair value of our fixed-income securities at September 30, 2015 are set forth below.

	Cost basis		Estimated fair value
Due in one year or less	$	12,458	$	12,457
Due between one and five years		7,711		7,703
	$	20,170	$	20,160

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Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Assets and liabilities measured at fair value on a recurring basis - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 40,019	$ 31,652
Contingent purchase consideration	95	605
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	19,859	13,139
Corporate bonds and notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	20,160	18,513
Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	20,160	18,513
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	19,859	13,139
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	19,859	13,139
Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	20,160	18,513
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	20,160	18,513
Significant other observable inputs (Level 2) | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	20,160	18,513
Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent purchase consideration	$ 95	$ 605

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Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Tax Disclosure [Line Items]
Provision for income taxes	$ 1,663,000	$ 1,387,000	$ 3,813,000	$ 2,774,000
SCP
Income Tax Disclosure [Line Items]
Tax benefit recorded for losses			$ 0

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Recent Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2015

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

In May 2014, the FASB issued amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In July 2015, the FASB approved a one year deferral to the new revenue guidance, and are therefore required to adopt the new guidance on January 1, 2018 using one of the two prescribed retroactive methods. We are evaluating the impact of the amended revenue recognition guidance on our consolidated financial statements.

In February 2015, the FASB issued amended guidance on the model used to evaluate whether certain legal entities should be consolidated. This guidance is effective for the Company in the first quarter of 2017. Early adoption is permitted. We are currently evaluating the impact that adoption of this guidance will have on our consolidated financial statements.

In September 2015, the FASB issued guidance that eliminates the requirement to restate prior period financial statements for measurement period adjustments related to business combinations. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. In addition, separate presentation on the face of the income statement or disclosure in the notes to the financial statements is required regarding the portion of the adjustment recorded in current period earnings. We are required to adopt this guidance prospectively for measurement period adjustments that occur after the effective date. This guidance is effective for the Company in the first quarter of 2016. Early adoption is permitted. We have adopted this guidance in the current period. There was no material impact of adoption.

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Stock-based compensation (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Option and Restricted Stock Activity

The following tables set forth stock option and restricted stock activity for the nine months ended September 30, 2015:

	Number of Shares
	Stock options			Restricted stock
Outstanding at December 31, 2014		2,543,362			128,209
Granted		411,743			140,971
Exercised		(779,505	)		(40,496	)
Forfeited		(168,166	)		(48,476	)
Outstanding at September 30, 2015		2,007,434			180,208

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Stock-based compensation

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based compensation

Note 14. Stock-based compensation:

The following tables set forth stock option and restricted stock activity for the nine months ended September 30, 2015:

	Number of Shares
	Stock options			Restricted stock
Outstanding at December 31, 2014		2,543,362			128,209
Granted		411,743			140,971
Exercised		(779,505	)		(40,496	)
Forfeited		(168,166	)		(48,476	)
Outstanding at September 30, 2015		2,007,434			180,208

The aggregate intrinsic value of stock options exercised during the three months ended September 30, 2015 and 2014, was $1,524 and $319, respectively. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2015 and 2014, was $9,038 and $1,522, respectively.