ACQUISITION-RELATED CHARGES AND PRODUCT DISCONTINUATION, NET

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ACQUISITION–RELATED CHARGES, PRODUCT DISCONTINUATION AND OTHER

Acquisition-related charges, product discontinuation and other for the years ended December 31, 2021, 2020 and 2019 are summarized below (in thousands):


	Year Ended December 31,
	2021		2020		2019
Severance-related expenses	$	26,371	$	—	$	494
Acquisition-related fees	10,963		—		4,211
Other acquisition expenses	3,566		150		194
Total acquisition-related charges	40,900		150		4,899
Flexion contingent consideration	1,174		—		—
MyoScience contingent consideration	(2,163)		5,204		16,672
Termination of Nuance agreement	3,000		—		—
Discontinuation of DepoCyt(e)	—		(188)		159
Department of Justice settlement	—		—		3,500
Total acquisition-related charges, product discontinuation and other	$	42,911	$	5,166	$	25,230

Flexion Acquisition

The Company recognized acquisition-related costs of $40.2 million, primarily severance, legal fees, third-party services and other one-time charges during the year ended December 31, 2021 related to the Flexion Acquisition. See Note 5, Acquisitions, for more information.

On November 19, 2021, as part of the purchase price consideration related to the Flexion Acquisition, the Company recorded a contingent consideration of $45.2 million, which represents the Company’s achievement of meeting regulatory and sales-based milestones. From the date of the acquisition through December 31, 2021, the Company recorded an additional $1.2 million charge due to an estimated $0.02 per CVR increase to the fair value of contingent consideration, which was included in acquisition-related charges in the consolidated statements of operations. See Note 12, Financial Instruments, for information regarding the method and key assumptions used in the fair value measurements of contingent consideration.

In conjunction with the Flexion Acquisition, the Company initiated a restructuring through a headcount reduction in the sales and administrative functions.

MyoScience Acquisition

The Company recognized acquisition-related and other charges of $0.7 million, $0.2 million and $4.9 million during the years ended December 31, 2021, 2020 and 2019, respectively, related to the MyoScience Acquisition. The 2021 charges relate to one-time termination benefits in the event of a facility closure. For more information see Note 21, Commitments and Contingencies. The 2020 charges relate to acquisition-related accounting services. The 2019 charges include $4.2 million for advisory costs, including legal, financial, accounting and tax services and $0.7 million for separation costs, asset write-downs and other restructuring charges. In addition, the Company recognized a contingent consideration credit of $2.2 million in 2021 and contingent consideration charges of $5.2 million and $16.7 million in 2020 and 2019, respectively. See Note 12, Financial Instruments, for information regarding the method and key assumptions used in the fair value measurements of contingent consideration.

In conjunction with the MyoScience Acquisition, the Company initiated a restructuring through a headcount reduction in the sales and administrative functions. In addition, the Company terminated a number of existing distributor agreements that were maintained by MyoScience.

Nuance Biotech Co. Ltd.

In June 2018, the Company entered an agreement with Nuance Biotech Co. Ltd., or Nuance, a China-based specialty pharmaceutical company, to advance the development and commercialization of EXPAREL in China. Under the terms of the agreement, the Company had granted Nuance the exclusive rights to develop and commercialize EXPAREL. In April 2021, the Company and Nuance agreed to a mutual termination of the agreement due to the lack of a viable regulatory pathway that adequately safeguards the Company’s intellectual property against the risk of a generic product. Dissolution costs of $3.0 million were included in acquisition-related charges, product discontinuation and other in the consolidated statements of operations during the year ended December 31, 2021.

DepoCyt(e) Discontinuation

In April 2018, the Company received formal notice of the termination of a Supply Agreement and a Distribution Agreement (and all related agreements as subsequently amended) from Mundipharma International Corporation Limited and Mundipharma Medical Company, respectively (collectively, “Mundipharma”). In November 2019, the Company reached a settlement with Mundipharma and made a $5.3 million payment related to the DepoCyt(e) discontinuation which had previously been accrued.

The Company recorded a gain of $0.2 million during the year ended December 31, 2020, and a charge of $0.2 million in the year ended December 31, 2019, respectively, related to the discontinuation of its DepoCyt(e) manufacturing activities in June 2017 due to persistent technical issues specific to the DepoCyt(e) manufacturing process. No costs related to the Company’s DepoCyt(e) discontinuation were recognized in the year ended December 31, 2021 as the lease of the idle DepoCyt(e) manufacturing facility expired in August 2020.

Department of Justice Inquiry Settlement

During the year ended December 31, 2019, the Company recorded a charge of $3.5 million for the settlement of a U.S. Department of Justice inquiry. Refer to Note 21, Commitments and Contingencies, for further information surrounding our legal proceedings.