Revision of Prior Period Financial Statements

6 Months Ended

Jun. 30, 2020

Accounting Changes and Error Corrections [Abstract]

Revision of Prior Period Financial Statements

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

Subsequent to the issuance of our Form 10-Q for the quarter ended March 31, 2020, management identified certain individually immaterial errors aggregating to $6.3 million related to governmental rebate accruals associated with Makena sales from 2016 through the first quarter of 2020. From 2016 through 2019, we understated our GTN adjustments for governmental rebates and the related accrual for a certain state program by $6.3 million and for the quarter ended March 31, 2020, we overstated these amounts by $1.8 million. We concluded that the errors were not material to any prior annual or interim period; however, we determined that correcting the aggregate error would be material to the current period. As a result, we have revised our historical financial statements to properly reflect GTN adjustments and the related accrual in the appropriate periods.

The effect of the corrections to our condensed consolidated balance sheet as of December 31, 2019 are as follows:

	December 31, 2019
	As reported		Adjustment		As adjusted
Accrued expenses	$	177,079	$	6,303	$	183,382
Accumulated deficit	$	(1,008,898)	$	(6,303)	$	(1,015,201)

The effect of the corrections to our condensed consolidated statements of operations for the three and six months ended June 30, 2019 are as follows (in thousands, except per share amounts):

	Three Months Ended June 30, 2019						Six Months Ended June 30, 2019
	As reported		Adj		As adjusted		As reported		Adj		As adjusted
Product sales, net	$	77,976	$	(342)	$	77,634	$	153,705	$	(658)	$	153,047
Total revenues	78,109		(342)		77,767		153,913		(658)		153,255
Net loss	$	(120,827)	$	(342)	$	(121,169)	$	(242,911)	$	(658)	$	(243,569)
Basic and diluted net loss per share	$	(3.57)	$	(0.01)	$	(3.58)	$	(7.12)	$	(0.02)	$	(7.14)

The condensed consolidated statements of other comprehensive loss for the three and six months ended June 30, 2019 have been revised to include the changes to “net loss” summarized above.

The condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2019 have been revised to include the changes to “net loss” summarized above as well as an increase of $5.1 million to the beginning “accumulated deficit” as of January 1, 2019, representing the accumulated error through that date.

The impact on our condensed consolidated statements of cash flows for the six months ended June 30, 2019, was limited to the offsetting correction between “net loss” and changes in “accounts payable and accrued expenses” presented within “net cash used in operating activities”, as summarized in the above tables.

Refer to Item 5 of this quarterly report for the impact on periods reported in the Company’s 2019 Annual Report on Form 10-K filed with the SEC on March 6, 2020 and for the impact on our condensed consolidated statement of operations for the three months ended March 31, 2020.