10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2020

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 001-36306

Eagle Pharmaceuticals, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	2834	20-8179278
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

50 Tice Boulevard, Suite 315

Woodcliff Lake, NJ 07677

(201) 326-5300

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common stock, $0.001 par value per share	EGRX	The Nasdaq Stock Market LLC

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  ☒   No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).  Yes  ☒   No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares outstanding of the registrant’s common stock as of October 29, 2020: 13,030,130 shares.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or this Quarterly Report, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “could,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “predict,” “seek,” “contemplate,” “project,” “continue,” “potential,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these identifying words. These forward-looking statements include, but are not limited to, statements about:

•the impact of the ongoing coronavirus 2019, or COVID-19, pandemic on our business and operations, results of operations and financial performance including: disruption in the sales of our marketed products; delays, interruptions or other adverse effects to clinical trials and patient enrollment; delays in regulatory review; manufacturing and supply chain interruptions; and the adverse effects on healthcare systems and disruption of the global economy overall;

•the potential benefits and commercial potential of rapidly infused bendamustine RTD, or Bendeka, Ryanodex® (dantrolene sodium), or Ryanodex, and bendamustine ready-to-dilute, or RTD, 500ml solution, or Belrapzo for approved indications and any expanded uses;

•the commercial potential of additional indications for our products;

•sales of our products in various markets worldwide, pricing for our products, level of insurance coverage and reimbursement for our products, timing regarding development and regulatory approvals for our products or for additional indications or in additional territories;

•future expansion of our commercial organization and transition to third-parties in certain jurisdictions to perform sales, marketing and distribution functions;

•the initiation, timing, progress and results of our preclinical studies and clinical trials, and our research and development program;

•our ability to obtain and maintain regulatory approval of our products and product candidates, and any related restrictions, limitations, and/or warnings in the label of an approved product;

•our plans to research, develop and commercialize our products and product candidates and our ability to successfully commercialize our products and product candidates;

•our ability to attract collaborators with development, regulatory and commercialization expertise;

•the size and growth potential of the markets for our products and product candidates, and our ability to serve those markets;

•the diversion of healthcare resources away from the conduct of clinical trials as a result of the ongoing COVID-19 pandemic, including the diversion of hospitals and doctor offices serving as locations for administration of our products, including Bendeka and hospital staff supporting the conduct of such administration;

•the interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel, quarantines or social distancing protocols imposed or recommended by federal or state governments, employers and others in connection with the ongoing COVID-19 pandemic;

•the rate and degree of market acceptance of our products ;

•our ability to significantly grow our commercial sales and marketing organization, whether alone or with potential future collaborators;

•the performance of our strategic collaborators and success of our current strategic collaborations;

•regulatory developments in the United States and foreign countries;

•the performance of our third-party suppliers and manufacturers;

•the success of competing drugs that are or become available;

•the retention of key scientific or management personnel;

•our ability to obtain additional funding for our operations;

•our ability to obtain, maintain, protect and enhance intellectual property rights and proprietary technologies and operate our business without infringing the intellectual property rights and proprietary technology of third parties;

•our ability to prevent or minimize the effects of Paragraph IV patent litigation;

•our expectations regarding anticipated future costs, operating expenses and capital requirements;

•Received formal notification from FDA granting Priority Review for the Company’s abbreviated new drug application (“ANDA”) filed for vasopressin. A trial date of January 11, 2021 has been set; and

•Held positive Type C meeting with FDA on fulvestrant (EA-114); next step is to submit formal protocol for clinical study.

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties, assumptions and other factors described under the “Risk Factors” section and elsewhere in this Quarterly Report, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements as predictions of future events. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This Quarterly Report also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.

NOTE REGARDING COMPANY REFERENCES

References to the “Company,” “Eagle Pharmaceuticals,” “Eagle,” “we,” “us” or “our” mean Eagle Pharmaceuticals, Inc., a Delaware corporation, together with its subsidiaries, references to “Eagle Biologics” mean Eagle Biologics, Inc. and references to “Eagle Research Lab” means Eagle Research Lab Limited.

NOTE REGARDING TRADEMARKS

All trademarks, trade names and service marks appearing in this Quarterly Report are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this Quarterly Report may appear without the ® or TM symbols.

TABLE OF CONTENTS

		Page
Part I - Financial Information
Item 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets (unaudited) as of September 30, 2020 and December 31, 2019	1
	Condensed Consolidated Statements of Operations (unaudited) for the three months and nine months ended September 30, 2020 and 2019	2
	Condensed Consolidated Statements of Changes in Stockholders' Equity (unaudited) for the three months and nine months ended September 30, 2020 and 2019	3
	Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2020 and 2019	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40
Part II - Other Information
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
	Signatures	47

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

EAGLE PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share amounts)

	September 30, 2020		December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	89,681	$	109,775
Accounts receivable, net	52,199		48,004
Inventories	6,586		6,566
Prepaid expenses and other current assets	15,330		15,104
Total current assets	163,796		179,449
Property and equipment, net	2,123		2,202
Intangible assets, net	13,584		15,583
Goodwill	39,743		39,743
Deferred tax asset, net	15,340		13,669
Other assets	13,575		3,908
Total assets	$	248,161	$	254,554
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	13,068	$	5,462
Accrued expenses and other liabilities	24,445		28,361
Current portion of long-term debt	8,000		5,000
Total current liabilities	45,513		38,823
Other long-term liabilities	2,844		3,000
Long-term debt, less current portion	27,017		33,557
Total liabilities	75,374		75,380
Commitments and Contingencies
Stockholders' equity:
Preferred stock, 1,500,000 shares authorized and no shares issued or outstanding as of September 30, 2020 and December 31, 2019	—		—
Common stock, $0.001 par value; 50,000,000 shares authorized; 16,624,681 and 16,537,846 shares issued as of September 30, 2020 and December 31, 2019, respectively	17		17
Additional paid in capital	296,198		278,518
Retained earnings	76,432		72,500
Treasury stock, at cost, 3,594,551 and 2,907,687 shares as of September 30, 2020 and December 31, 2019, respectively	(199,860)		(171,861)
Total stockholders' equity	172,787		179,174
Total liabilities and stockholders' equity	$	248,161	$	254,554

See accompanying notes to condensed consolidated financial statements (unaudited).

1

EAGLE PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except share and per share amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenue:
Product sales	$	17,317	$	14,659	$	49,387	$	58,568
Royalty revenue	27,611		26,488		83,499		80,066
License and other revenue	5,000		—		5,000		9,000
Total revenue	49,928		41,147		137,886		147,634
Operating expenses:
Cost of product sales	8,726		12,137		23,804		39,866
Cost of royalty revenue	3,260		2,785		9,120		9,440
Research and development	4,828		10,172		21,390		25,504
Selling, general and administrative	17,697		18,537		60,411		53,906
Total operating expenses	34,511		43,631		114,725		128,716
Income (loss) from operations	15,417		(2,484)		23,161		18,918
Interest income	46		570		542		1,701
Interest expense	(489)		(628)		(2,164)		(1,979)
Other expense	(6,049)		—		(10,249)		—
Total other expense, net	(6,492)		(58)		(11,871)		(278)
Income (loss) before income tax (provision) benefit	8,925		(2,542)		11,290		18,640
Income tax (provision) benefit	(1,866)		152		(7,358)		(5,332)
Net Income (Loss)	$	7,059	$	(2,390)	$	3,932	$	13,308
Earnings (Loss) per share attributable to common stockholders:
Basic	$	0.52	$	(0.17)	$	0.29	$	0.96
Diluted	$	0.51	$	(0.17)	$	0.28	$	0.94
Weighted average number of common shares outstanding:
Basic	13,531,372		13,668,091		13,620,981		13,791,071
Diluted	13,786,803		13,668,091		13,917,800		14,147,658

See accompanying notes to condensed consolidated financial statements (unaudited).

2

EAGLE PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

(In thousands)

	Common Stock			Additional Paid-In Capital		Treasury Stock		Retained Earnings		Total Stockholders' Equity
	Number of Shares	Amount
Balance as of June 30, 2020	16,622	$	17	$	291,434	$	(176,860)	$	69,373	$	183,964
Stock-based compensation expense	—	—		4,722		—		—		$	4,722
Issuance of common stock upon exercise of stock option grants	3	—		42		—		—		42
Payment of employee withholding tax upon vesting of stock-based awards	—	—		—		—		—		—
Issuance of common stock related to vesting of restricted stock units	—	—		—		—		—		—
Common stock repurchases	—	—		—		(23,000)		—		(23,000)
Net income	—	—		—		—		7,059		7,059
Balance as of September 30, 2020	16,625	$	17	$	296,198	$	(199,860)	$	76,432	$	172,787

	Common Stock			Additional Paid-In Capital		Treasury Stock		Retained Earnings		Total Stockholders' Equity
	Number of Shares	Amount
Balance as of June 30, 2019	16,522	$	17	$	267,479	$	(168,900)	$	73,885	$	172,481
Stock-based compensation expense	—	—		5,651		—		—		$	5,651
Issuance of common stock upon exercise of stock option grants	3	—		23		—		—		23
Net loss	—	—		—		—		(2,390)		(2,390)
Balance as of September 30, 2019	16,525	$	17	$	273,153	$	(168,900)	$	71,495	$	175,765

3

	Common Stock			Additional Paid-In Capital		Treasury Stock		Retained Earnings		Total Stockholders' Equity
	Number of Shares	Amount
Balance as of December 31, 2019	16,538	$	17	$	278,518	$	(171,861)	$	72,500	$	179,174
Stock-based compensation expense	—	—		18,435		—		—		18,435
Issuance of common stock upon exercise of stock option grants	42	—		555		—		—		555
Payment of employee withholding tax upon vesting of stock-based awards	—	—		(1,310)		—		—		(1,310)
Issuance of common stock related to vesting of restricted stock units	45	—		—		—		—		—
Common stock repurchases	—	—		—		(27,999)		—		(27,999)
Net income	—	—		—		—		3,932		3,932
Balance as of September 30, 2020	16,625	$	17	$	296,198	$	(199,860)	$	76,432	$	172,787

	Common Stock			Additional Paid-In Capital		Treasury Stock		Retained Earnings		Total Stockholders' Equity
	Number of Shares	Amount
Balance at December 31, 2018	16,504	$	17	$	256,458	$	(153,900)	$	58,187	$	160,762
Stock-based compensation expense	—	—		16,815		—		—		16,815
Issuance of common stock upon exercise of stock option grants	12	—		78		—		—		78
Payment of employee withholding tax for net option exercise	—	—		(198)		—		—		(198)
Issuance of common stock related to vesting of restricted stock units	9	—		—		—		—		—
Common stock repurchases	—	—		—		(15,000)		—		(15,000)
Net income	—	—		—		—		13,308		13,308
Balance at September 30, 2019	16,525	$	17	$	273,153	$	(168,900)	$	71,495	$	175,765

See accompanying notes to condensed consolidated financial statements (unaudited).

4

EAGLE PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

	Nine Months Ended September 30,
	2020		2019
Cash flows from operating activities:
Net income	$	3,932	$	13,308
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	(1,671)		(175)
Depreciation expense	656		725
Amortization expense of right-of-use assets	980		754
Amortization expense of intangible assets	1,999		1,890
Fair value adjustments on equity investment	7,700		—
Stock-based compensation expense	18,435		16,815
Amortization of debt issuance costs	301		282
Fair value adjustments on unsettled accelerated share repurchase agreement	2,549		—
Changes in operating assets and liabilities which provided (used) cash:
Accounts receivable	(4,195)		21,674
Inventories	(20)		1,057
Prepaid expenses and other current assets	(2,774)		(253)
Accounts payable	7,606		1,315
Accrued expenses and other liabilities	(3,916)		3,608
Other assets and other long-term liabilities, net	(1,845)		(1,813)
Net cash provided by operating activities	29,737		59,187
Cash flows from investing activities:
Purchase of equity investment security	(17,500)		—
Purchase of property and equipment	(577)		(647)
Net cash used in investing activities	(18,077)		(647)
Cash flows from financing activities:
Proceeds from common stock option exercises	555		78
Employee withholding taxes related to stock-based awards	(1,310)		(198)
Proceeds from existing revolving credit facility	110,000		—
Repayment of existing revolving credit facility	(110,000)		—
Payment of debt	(3,000)		(5,000)
Repurchases of common stock	(27,999)		(15,000)
Net cash used in financing activities	(31,754)		(20,120)
Net (decrease) increase in cash and cash equivalents	(20,094)		38,420
Cash and cash equivalents at beginning of period	109,775		78,791
Cash and cash equivalents at end of period	$	89,681	$	117,211
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Income taxes, net	$	3,036	$	6,587
Interest	1,878		1,787
Right-of-use asset obtained in exchange for lease obligation - lease amendment	842		1,700

See accompanying notes to condensed consolidated financial statements (unaudited).

5

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share amounts)

1. Interim Condensed Consolidated Financial Statements

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting quarterly information. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. The condensed consolidated balance sheet at December 31, 2019 was derived from audited financial statements, but certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements have been condensed or omitted. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for the fair presentation of the financial information for the interim periods reported have been made. Results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results for the year ending December 31, 2020 or any period thereafter. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 2, 2020.

2. Organization and Business Activities

We are an integrated pharmaceutical company focused on finding ways to help medicines do more for patients. Eagle and our collaborators have the capabilities to take a molecule from preclinical research through regulatory approval and into the marketplace, including development, manufacturing and commercialization. Our business model applies our scientific expertise, proprietary research-based insights and marketplace proficiency to identify challenging-to-treat diseases of the central nervous system or metabolic critical care therapeutic areas as well as in oncology. By focusing on patients' unmet needs, Eagle strives to provide healthcare professionals with urgently needed treatment solutions that are designed to improve patient care and outcomes and create near- and long-term value for our stakeholders, including patients and healthcare providers and our employees, marketing partners, collaborators and investors.

Our science-based business model has a proven track record with U.S. Food and Drug Administration ("FDA") approval and commercial launches of three products: Ryanodex® (dantrolene sodium) ("Ryanodex"), bendamustine ready-to-dilute ("RTD") 500ml solution ("Belrapzo"), and rapidly infused bendamustine RTD ("Bendeka"). We market our products through marketing partners and/or our internal direct sales force. Eagle markets Ryanodex and Belrapzo, and Teva Pharmaceutical Industries Ltd. ("Teva") markets Bendeka through its subsidiary Cephalon, Inc.

Reflecting further expansion of our oncology portfolio, in February 2020, we received final FDA approval for Pemfexy® (“Pemfexy”) and in July 2020, we announced that the Centers for Medicare & Medicaid Services (“CMS”) had established a unique, product-specific billing code for Pemfexy, effective on October 1, 2020. Pemfexy, our novel pemetrexed product, is a branded alternative to Alimta® for metastatic non-squamous non-small cell lung cancer and malignant pleural mesothelioma. The conversion from tentative to a final approval follows the Company’s settlement agreement reached with Eli Lilly and Company (“Lilly”) on December 13, 2019. This agreement provides for a release of all claims by the parties and allows for an initial entry of Pemfexy into the market (equivalent to approximately a three-week supply of current Alimta utilization) on February 1, 2022, and a subsequent uncapped entry on April 1, 2022.

On August 7, 2020, the Company received a Complete Response Letter for its NDA for Ryanodex for the treatment of exertional heat stroke (“EHS”); Eagle has decided that it will no longer pursue this indication.

3. Summary of Significant Accounting Policies

Significant Accounting Policies

The Company’s significant accounting policies are described in the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and the notes thereto filed with the SEC on

6

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

March 2, 2020. Since the date of those consolidated financial statements, there have been no material changes to the Company’s significant accounting policies other than as listed below.

Significant Risks and Uncertainties

In response to the ongoing COVID-19 pandemic, the Company has taken and continues to take active measures designed to address and mitigate the impact of the COVID-19 pandemic on its business, such as remote working policies, facilitating management’s periodic communication to address employee and business concerns and providing frequent updates to the Company’s Board of Directors (“Board”). The Company anticipates that the COVID-19 pandemic may also have an impact on the clinical development timelines for certain of its clinical programs, such as EA-114. The Company also anticipates that the COVID-19 pandemic may have an impact on the Company’s supply chain. The COVID-19 pandemic and associated lockdowns have resulted in a decrease in healthcare utilization broadly and specifically lead to a continuing reduction in the utilization of physician-administered oncology products including Belrapzo and Bendeka. In addition, the COVID-19 pandemic has delayed the timing of ongoing litigation, including the litigation with Par (as defined below) with respect to Vasopressin, and the Company anticipates that such delays will continue for the duration of the pandemic. The extent to which the COVID-19 pandemic will continue to impact the Company’s business, its clinical development and regulatory efforts, its supply chain and sales efforts, its corporate development objectives and the value of, and market for, its common stock will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States, and other countries, and the effectiveness of actions taken globally to contain and treat the disease. The global economic slowdown, the overall disruption of global healthcare systems and other risks and uncertainties associated with the pandemic have impacted the Company’s operations and could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects.

In addition, the Company is subject to other challenges and risks specific to its business and its ability to execute on its business plan and strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with research and development operations, including, without limitation, risks and uncertainties associated with: delays or problems in obtaining clinical supply; obtaining regulatory approval of its product candidates; loss of single source suppliers or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing additional products or product candidates; product development and the inherent uncertainty of clinical success; the challenges of protecting and enhancing its intellectual property rights; and the challenges of complying with applicable regulatory requirements. In addition, as the ongoing COVID-19 pandemic affects the Company’s business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties discussed above.

Use of Estimates

These financial statements are presented in U.S. dollars and are prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements including disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and accompanying notes. The Company’s critical accounting policies are those that are both most important to the Company’s financial condition and results of operations and require the most difficult, subjective or complex judgments on the part of management in their application, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company anticipates that the COVID-19 pandemic will continue to disrupt the Company’s supply chain and marketing and sales efforts for certain of its products, including Bendeka, although it is not currently expected that any disruption would be significant. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Because of the uncertainty of factors surrounding the estimates or judgments used in the preparation of the financial statements, actual results may materially vary from these estimates, and any such differences may be material to the Company’s financial statements.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform with the current year presentation. None of the reclassifications were significant.

7

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. All cash and cash equivalents are held in United States financial institutions. The carrying amount of cash and cash equivalents approximates its fair value due to its short-term nature.

The Company, at times, maintains balances with financial institutions in excess of the Federal Deposit Insurance Corporation (“FDIC”) limit.

Fair Value Measurements

U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

•Level 1: Quoted prices in active markets for identical assets or liabilities.

•Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The fair value of interest-bearing cash, cash equivalents, accounts receivable and accounts payable approximate fair value due to their life being short term in nature, and are classified as Level 1 for all periods presented.

Financial assets and liabilities measured and recognized at fair value are as follows:

	September 30, 2020
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	86,343	$	86,343	$	—	$	—
ASR forward contract	2,549		—		$	2,549	$	—
Investment in Tyme	9,800		9,800		$	—	$	—
Total financial assets	98,692		96,143		$	2,549	$	—
Liabilities:
Contingent consideration	$	—	$	—	$	—	$	—
Total financial liabilities	$	—	$	—	$	—	$	—

8

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

	December 31, 2019
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	105,672	$	105,672	$	—	$	—
Total financial assets	$	105,672	$	105,672	$	—	$	—
Liabilities:
Contingent consideration	$	—	$	—	$	—	$	—
Total financial liabilities	$	—	$	—	$	—	$	—

The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers in or out of Level 1, Level 2 or Level 3 during the nine months ended September 30, 2020 and 2019, respectively.

Our investment in restricted shares of common stock of Tyme Technologies, Inc. (“Tyme”) are classified as Level 1. Refer to Note 13, Collaboration with Tyme for further details.

The fair value of the forward contract associated with the accelerated share repurchase ("ASR") transaction with JPMorgan Chase Bank, National Association is classified as Level 2 for the periods presented. Refer to Note 8, Common Stock and Stock-Based Compensation for further details.

The fair value of debt is classified as Level 2 for the periods presented and approximates its fair value due to the variable interest rate.

The fair value of any contingent consideration was classified as Level 3 for the periods presented.

Intangible Assets

The Company reviews the recoverability of its finite-lived intangible assets and long-lived assets for indicators of impairments. Events or circumstances that may require an impairment assessment include negative clinical trial results, a significant decrease in the market price of the asset, or a significant adverse change in legal factors or the manner in which the asset is used. If such indicators are present, the Company assess the recoverability of affected assets by determining if the carrying value of such assets is less than the sum of the undiscounted future cash flows of the assets. If such assets are found to not be recoverable, the Company measures the amount of the impairment by comparing to the carrying value of the assets to the fair value of the assets. The Company determined that no indicators of impairment of finite-lived intangible assets or long-lived assets existed at September 30, 2020.

Goodwill

Goodwill represents the excess of purchase price over the fair value of net assets acquired in the Eagle Biologics acquisition. Goodwill is not amortized, but is evaluated for impairment on an annual basis, in the fourth quarter, or more frequently if events or changes in circumstances indicate that the reporting unit’s goodwill is less than its carrying amount. The Company did not identify any impairment to goodwill during the periods presented.

Concentration of Major Customers and Vendors

The Company is dependent on a commercial partner who markets and sells Bendeka. The Company's customer for Bendeka is its commercial and licensing partner; therefore, the Company's future revenues are highly dependent on the related exclusive license and distribution arrangement.

9

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

In March 2019, the Company entered into an agreement with Teva, or the Bendeka License Agreement, pursuant to which Teva has agreed to market Bendeka through its subsidiary, Cephalon, Inc. Pursuant to the Bendeka License Agreement, Teva pays the Company a royalty based on net sales of the product and also purchases Bendeka from the Company.

The total revenues and accounts receivables broken down by major customers as a percentage of the total are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Total revenues
Cephalon, Inc. (Teva) - See Revenue Recognition	74	%	85	%	72	%	78	%
Other	26	%	15	%	28	%	22	%
	100	%	100	%	100	%	100	%

	September 30,		December 31,
	2020		2019
Accounts receivable
Cephalon, Inc. (Teva) - See Revenue Recognition	66	%	80	%
Other	34	%	20	%
	100	%	100	%

Inventories

Inventories are recorded at the lower of cost and net realizable value, with cost determined on a first-in first-out basis. The Company periodically reviews the composition of inventory in order to identify obsolete, slow-moving or otherwise non-saleable items. If non-saleable items are observed and there are no alternate uses for the inventory, the Company will record a write-down to lower of cost and net realizable value in the period that the decline in value is first recognized.

Property and Equipment

Property and equipment are stated at cost. Depreciation is recorded over the estimated useful lives of the assets utilizing the straight-line method. Leasehold improvements are being amortized over the shorter of their useful lives or the lease term.

Research and Development Expense

Costs for research and development are charged to expense as incurred and include; employee-related expenses including salaries, benefits, travel and stock-based compensation expense for research and development personnel; expenses incurred under agreements with contract research organizations, contract manufacturing organizations and service providers that assist in conducting clinical and preclinical studies; costs associated with preclinical activities and development activities, costs associated with regulatory operations; and depreciation expense for assets used in research and development activities.

Costs for certain development activities, such as clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the patterns of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid expenses or accrued expenses as deemed appropriate. Recoveries of previously recognized research and development expenses from third parties are recorded as a reduction to research and development expense in the period it becomes realizable.

10

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

Advertising and Marketing

Advertising and marketing costs are expensed as incurred. Advertising and marketing costs were $316 and $556 for the three months ended September 30, 2020 and 2019, respectively. Advertising and marketing costs were $2,204 and $1,673 for the nine months ended September 30, 2020 and 2019, respectively.

Income Taxes

The Company accounts for income taxes using the liability method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), 740 - Income Taxes (“ASC 740”). Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and are measured by applying enacted rates and laws to taxable years in which differences are expected to be recovered or settled.  Further, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that the rate changes. A valuation allowance is required when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. ASC 740 also prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return, including a decision whether to file or not file a return in a particular jurisdiction. We recognize any interest and penalties accrued related to unrecognized tax benefits as income tax expense.

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606 - Revenue from Contracts with Customers (“ASC 606”), the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Receivables from our product sales have payment terms ranging from 30 to 75 days with select extended terms to wholesalers on initial purchases of product launch quantities. Our receivables from royalty revenue are due 45 days from the end of the quarter.

Product revenue - The Company recognizes net revenue on sales to its commercial partners and to end users. In each instance, revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract.

Revenue on sales to commercial partners relates to Argatroban and Bendeka. Sales to our commercial partners are presented gross because the Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement and bears risk of loss while the inventory is in-transit to the commercial partner.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method to which the Company expects to be entitled. As such, revenue on sales to customers for Belrapzo, Non-Alcohol Docetaxel Injection, Ryanodex and diclofenac-misoprostol are recorded net of chargebacks, rebates, returns, prompt pay discounts, wholesaler fees and other deductions. Our products are contracted with a limited number of oncology distributors and hospital buying groups with narrow differences in ultimate realized contract prices used to estimate our chargeback and rebate reserves. The Company has a product return policy on some of its products that allows the customer to return pharmaceutical products within a specified period of time both prior to and subsequent to the product’s expiration date. The Company's estimate of the provision for returns is analyzed quarterly and is based upon many factors, including historical experience of actual returns and analysis

11

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

of the level of inventory in the distribution channel, if any. The Company has terms on sales of Ryanodex by which the Company does not accept returns. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration are made using the expected value method and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. The Company believes that the estimates it has established are reasonable based upon current facts and circumstances. Applying different judgments to the same facts and circumstances could result in the estimated amounts to vary.

Royalty Revenue — The Company recognizes revenue from license arrangements with its commercial partners' net sales of products. In accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the commercial partner’s products occurs. The Company's commercial partners are obligated to report their net product sales and the resulting royalty due to the Company within 25 days for Bendeka and 60 days for Argatroban from the end of each quarter. Based on historical product sales, royalty receipts and other relevant information, the Company accrues royalty revenue each quarter and subsequently determines a true-up when it receives royalty reports from its commercial partners. Historically, these true-up adjustments have been immaterial.

License and other revenue — The Company analyzes each element of its licensing agreements to determine the appropriate revenue recognition. The terms of the license agreement may include payment to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. The Company recognizes revenue from upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

The Company recognizes sales-based milestone payments as revenue upon the achievement of the cumulative sales amount specified in the contract in accordance with ASC 606-10-55-65. For those milestone payments which are contingent on the occurrence of particular future events, the Company determined that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method. As such, the Company assesses each milestone to determine the probability and substance behind achieving each milestone. Given the inherent uncertainty of the occurrence of these future events, the Company will not recognize revenue from the milestone until there is not a high probability of a reversal of revenue, which typically occurs near or upon achievement of the event.

Collaborative licensing and development revenue — The Company recognizes revenue from reimbursements received in connection with feasibility studies and development work for third parties when its contractual services are performed, provided collectability is reasonably assured. Its principal costs under these agreements include its personnel conducting research and development, its allocated overhead, as well as the research and development performed by outside contractors or consultants.

Upon termination of a collaboration agreement, any remaining non-refundable license fees received by the Company, which had been deferred, are generally recognized in full. All such recognized revenues are included in collaborative licensing and development revenue in its condensed consolidated statements of operations. The Company recognizes revenue from milestone payments received under collaboration agreements when earned, provided that the milestone event is substantive, its achievability was not reasonably assured at the inception of the agreement, the Company has no further performance obligations relating to the event, and collectability is reasonably assured. If these criteria are not met, the Company would generally recognize milestone payments ratably over the remaining period of its performance obligations under the collaboration agreement.

12

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

Stock-Based Compensation

The Company accounts for stock-based compensation using the fair value provisions of ASC 718, Compensation - Stock Compensation that requires the recognition of compensation expense, using a fair-value based method, for costs related to all stock-based payments including stock options and restricted stock. This topic requires companies to estimate the fair value of the stock-based awards on the date of grant for options issued to employees and directors and record expense over the employees' service periods, which are generally the vesting period of the equity awards.

The Company accounts for stock-based compensation by measuring and recognizing compensation expense for all stock-based payments made to employees and directors based on estimated grant date fair values. The straight-line method is used to allocate compensation cost to reporting periods over each optionee's requisite service period, which is generally the vesting period. The fair value of the Company's stock-based awards to employees and directors is estimated using the Black-Scholes valuation model and a Monte Carlo simulation model for performance share units. These models require the input of subjective assumptions, including the expected stock price volatility, the calculation of expected term, historical forfeitures and the fair value of the underlying common stock on the date of grant, among other inputs. The risk-free interest rate is determined with the implied yield currently available for zero-coupon U.S. government issues with a remaining term approximating the expected life of the options.

Earnings Per Share

Basic earnings per common share is computed using the weighted average number of shares outstanding during the period. Diluted earnings per share is computed in a manner similar to the basic earnings per share, except that the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of warrants, options, convertible debt and other such convertible instruments. Diluted earnings per share contemplate a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share.

The anti-dilutive common shares equivalents outstanding for the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Stock options	3,156,166	2,476,552	2,905,021	2,493,937
Restricted stock units	205,891	39,047	225,177	40,133
Total	3,362,057	2,515,599	3,130,198	2,534,070

13

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

The following table sets forth the computation for basic and diluted net (loss) earnings per share for the three and nine months ended September 30, 2020 and 2019:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Numerator
Numerator for basic and diluted earnings per share-net (loss) income	$	7,059	$	(2,390)	$	3,932	$	13,308
Denominator
Basic weighted average common shares outstanding	13,531,372		13,668,091		13,620,981		13,791,071
Dilutive effect of stock awards	255,431		—		296,819		356,587
Diluted weighted average common shares outstanding	13,786,803		13,668,091		13,917,800		14,147,658
Basic net earnings (loss) per share
Basic net earnings (loss) per share	$	0.52	$	(0.17)	$	0.29	$	0.96
Diluted net earnings (loss) per share
Diluted net earnings (loss) per share	$	0.51	$	(0.17)	$	0.28	$	0.94

All potentially dilutive items were excluded from the diluted share calculation for the three months ended September 30, 2019 because their effect would have been anti-dilutive, as the Company was in a loss position.

Recent Accounting Pronouncements

Recent Accounting Pronouncements - Not Yet Adopted

In March 2020, the FASB issued Update 2020-04 Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting to provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The amendments in Update 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR, formerly known as the London Interbank Offered Rate,

or another reference rate expected to be discontinued due to reference rate reform. The new guidance provides optional expedients, including; (1) Simplify accounting analyses under current GAAP for contract modifications, such as modifications of contracts within the scope of Topic 470, Debt, that will be accounted for by prospectively adjusting the effective interest rate, as if any modification was not substantial. That is, the original contract and the new contract shall be accounted for as if they were not substantially different from one another; (2) Simplify the assessment of hedge effectiveness and allow hedging relationships affected by reference rate reform to continue; (3) Allow a one-time election to sell or transfer debt securities classified as held to maturity before January 1, 2020 that reference a rate affected by reference rate reform. The amendments are effective for all entities from the beginning of an interim period that includes the issuance date of the ASU. An entity may elect to apply the amendments prospectively through December 31, 2022. The adoption of ASU 2020-4 is not expected to have a material impact on the Company's financial position or results of operations.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses which requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This standard is effective for fiscal years beginning after December 15, 2019 and the Company adopted the standard effective January 1, 2020. The adoption of ASU 2016-13 had no material impact on the Company's financial position and results of operations.

14

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

CARES Act

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into U.S. federal law, which is aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the COVID-19 pandemic and generally supporting the U.S. economy. The CARES Act, among other things, includes provisions related to refundable payroll tax credits, deferment of the employer portion of social security payments, net operating loss carryback periods, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. Reimbursement was not sought by the Company. The CARES Act has not had, and the Company does not currently expect it to have, a material impact on the Company’s financial statements at this time.

4. Property and Equipment, net

Property and equipment consisted of the following:

	September 30, 2020		December 31, 2019		Estimated Useful Life (years)
Furniture and fixtures	$	1,476	$	1,188	7
Office equipment	1,077		1,094		3
Equipment	3,390		3,095		7
Leasehold improvements	1,155		1,144		2
	7,098		6,521
Less accumulated depreciation	(4,975)		(4,319)
Property and equipment, net	$	2,123	$	2,202

Depreciation expense related to property and equipment amounted to $196 and $241 for the three months ended September 30, 2020 and 2019, respectively, and $656 and $725 for the nine months ended September 30, 2020 and 2019, respectively.

5. Inventories

Inventories consist of the following:

	September 30,		December 31,
	2020		2019
Raw material	$	2,439	$	2,460
Work in process	4,096		3,243
Finished products	51		863
	$	6,586	$	6,566

15

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

6. Balance Sheet Accounts

Prepaid and Other Current Assets

Prepaid and other current assets consist of the following:

	September 30,		December 31,
	2020		2019
Prepaid income taxes	$	315	$	4,661
Prepaid FDA user fee and advances to clinical research organization	1,682		6,345
Prepaid insurance	440		191
Advances to commercial manufacturers	4,222		2,462
Earned milestone receivable - SymBio Pharmaceuticals Limited	5,000		—
All other	3,671		1,445
Total Prepaid expenses and other current assets	$	15,330	$	15,104

Accrued Expenses

Accrued expenses consist of the following:

	September 30,		December 31,
	2020		2019
Accrued sales reserves	$	7,122	$	8,364
Royalties payable to commercial partners	6,906		6,004
Accrued salary and other compensation	4,742		8,083
Accrued professional fees	2,114		1,926
Accrued research & development	1,123		1,686
Current portion of lease liability	1,118		1,101
Accrued other	1,320		1,197
Total Accrued expenses	$	24,445	$	28,361

Leases

The Company leases its corporate office under an amended lease agreement that expires on June 30, 2025 (the "Corporate Office Lease"). The Corporate Office Lease was amended on August 8, 2019 to extend the term through such date and to increase the amount of leased office space. The Company also leases lab space under a lease agreement that expires on October 31, 2023 (the "Lab Space Lease"). The Company estimated the right of use asset and the corresponding lease liability, on a discounted basis, as of the adoption date of January 1, 2019. The future minimum lease payments under this Corporate Office Lease are approximately $6.6 million.

For the Corporate Office Lease and Lab Space Lease, which are the Company's two operating leases, the amortization and interest expense components are combined and recognized ratably over the remaining term of the lease as research and development and selling, general and administrative in the Company's condensed consolidated statements of operations, respectively.

The Company used its estimated incremental borrowing rate to calculate the present value of the right of use ("ROU") assets and lease liabilities as of the date of adoption date. The implicit interest rate related to the Company’s two lease agreements was not known as of the date of adoption. Therefore, the Company calculated an incremental borrowing rate based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment.

16

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

Lease related disclosures consist of the following:

	September 30,			December 31,			September 30,
	2020			2019			2019
Operating ROU asset, net included in Other assets	$	3,578		$	3,716		$	4,184
Lease liability included with Other long-term liabilities	$	2,844		$	3,000		$	3,227
Lease liability included with Accrued expenses and other liabilities	$	1,118		$	1,101		$	1,084
Quarter to date ("QTD") amortization of ROU asset	$	509		n/a			$	232
Year to date ("YTD") amortization of ROU asset	$	980		n/a			$	754
Operating cash flows from operating leases	$	980		n/a			$	860
Operating lease costs	$	980		n/a			$	860
Weighted-average remaining lease term - operating leases	4.2 years			5.0 years			5.0 years
Weighted-average discount rate - operating leases	6		%	6		%	6		%

As of September 30, 2020, the future minimum lease commitments for the Company's two leases were as follows:

	Total		2020		2021		2022		2023		2024		2025		Beyond
Lease Payments	$	5,903	$	641	$	1,362	$	1,376	$	1,291	$	820	$	413	$	—
Less: Imputed Interest expense	1,941
Total Lease Liability	$	3,962

As of December 31, 2019, the future minimum lease commitments for the Company's two leases were as follows:

	Total		2020		2021		2022		2023		2024		2025
	$	6,607	$	1,345	$	1,362	$	1,376	$	1,291	$	820	$	413
Less: Imputed Interest expense	2,506
Total Lease Liability	$	4,101

17

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

7. Intangible Assets, Net

The gross carrying amounts and net book value of the Company's intangible assets are as follows:

		September 30, 2020
	Useful Life (In Years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Ryanodex intangible (i)	20	$	15,000	$	(3,239)	$	11,761
Developed technology	5	8,100		(6,277)		1,823
Total		$	23,100	$	(9,516)	$	13,584

		December 31, 2019
	Useful Life (In Years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Ryanodex intangible (i)	20	15,000		(2,454)		12,546
Developed technology	5	8,100		(5,063)		3,037
Total		$	23,100	$	(7,517)	$	15,583

(i) Represent payments made to reduce the royalties payable to a third party on Ryanodex net sales.

Amortization expense was $667 and $630 for the three months ended September 30, 2020 and 2019, respectively, and $1,999 and $1,890 for the nine months ended September 30, 2020 and 2019, respectively.

Estimated Amortization Expense for Intangible Assets

Based on definite-lived intangible assets recorded as of September 30, 2020, and assuming that the underlying assets will not be impaired and that the Company will not change the expected lives of the assets, future amortization expenses are estimated as follows:

	Estimated Amortization Expense
Year Ending December 31,
2020 (remainder)	665
2021	2,622
2022	1,369
2023	1,570
2024	1,898
Thereafter	5,460
Total estimated amortization expense	$	13,584

18

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

8. Common Stock and Stock-Based Compensation

Common Stock

Share Repurchase Program

On March 17, 2020, the Company, announced that its Board approved a new share repurchase program, or the Share Repurchase Program, providing for the repurchase of up to an aggregate of $160.0 million of the Company’s outstanding common stock. The Share Repurchase Program replaced the Company’s then existing share repurchase program, or the Previous Share Repurchase Program, which was announced on October 30, 2018 and was terminated in connection with the Board’s approval of the Share Repurchase Program. At termination, the Company had repurchased approximately $68.0 million of the Company’s outstanding common stock under the Previous Share Repurchase Program.

Under the Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, privately-negotiated transactions, accelerated share repurchases or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. The repurchases have no time limit and may be suspended or discontinued completely at any time. The specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors. The repurchases will be made using the Company’s cash resources.

On September 23, 2020, the Company's Board of Directors approved a $25.0 million accelerated share repurchase (“ASR”) transaction with JPMorgan Chase Bank, National Association (“JP Morgan”) as part of the Company’s existing $160.0 million share repurchase program. The specific number of shares to be repurchased pursuant to the ASR is based on the average of the daily volume weighted average share prices of the Company’s common stock, less a discount, during the term of the ASR program. Under the terms of the Company's agreement with JP Morgan, the Company paid $25.0 million to JP Morgan on September 24, 2020, and received 505,817 shares, representing approximately 80% of the notional amount of the ASR, based on the closing price of $39.54 on September 23, 2020. Upon settlement of the ASR, the final number of shares repurchased will be determined based on the average of the daily volume weighted average share prices of the Company’s common stock, less a discount, during the term of the ASR. The ASR will be completed in the fourth quarter of 2020. As of September 30, 2020, the Company included $5.0 million representing approximately 20% of the notional amount of the ASR in Prepaid expenses and other current assets on its condensed consolidated balance sheet. The Company determined the ASR contained a forward contract and therefore the Company recorded fair value adjustments on unsettled accelerated share repurchase agreement in the amount of $2.5 million which was a loss recorded in Other expense on our condensed consolidated statements of operations in the three months ended September 30, 2020.

As of September 30, 2020, the Company had repurchased an aggregate of 3,594,551 shares of common stock for an aggregate of $199.9 million pursuant to the Company’s share repurchase programs in effect since August 2016.

Stock-Based Compensation

In November 2013, the Company's Board of Directors approved the 2014 Equity Incentive Plan (the "2014 Plan") which became effective on February 11, 2014. The 2014 Plan provides for the awards of incentive stock options, non-qualified stock options, restricted stock, restricted stock units and other stock-based awards. Awards generally vest equally over a period of four years from grant date. Vesting may be accelerated under a change in control of the Company or in the event of death or disability to the recipient. In the event of termination, any unvested shares or options are forfeited.

During the first quarter of 2018, the Company introduced a new long-term incentive program with the objective to better align the stock-based awards granted to management with the Company's focus on improving total shareholder return over the long-term. The stock-based awards granted under this long-term incentive program consist of time-based stock options, time-based restricted stock units ("RSUs") and performance-based stock units ("PSUs"). PSUs are comprised of awards that vest upon achievement of certain share price appreciation conditions.

19

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

A summary of stock option, RSU and PSU activity under the 2014 Plan during the nine months ended September 30, 2020 and 2019 is presented below:

	Stock Options	RSUs	PSUs
Outstanding at December 31, 2018	2,556,365	54,219	117,219
Granted	600,133	211,829	—
Options Exercised/RSUs Vested/PSUs Vested	(10,034)	(13,555)	—
Forfeited or expired	(20,890)	(1,278)	(1,038)
Outstanding at September 30, 2019	3,125,574	251,215	116,181
Outstanding at December 31, 2019	3,096,161	251,215	116,181
Granted	662,700	231,450	—
Options Exercised/RSUs Vested/PSUs Vested	(41,951)	(67,970)	—
Forfeited or expired	(185,615)	(53,824)	(11,431)
Outstanding at September 30, 2020	3,531,295	360,871	104,750

Stock Options

The fair value of stock options granted to employees, directors, and consultants were estimated using the following assumptions:

	Three Months Ended September 30,		Nine Months Ended   September 30,
	2020	2019	2020	2019
Risk-free interest rate	0.37% - 0.41%	1.50% - 1.84%	0.37% - 1.65%	1.45% - 2.61%
Volatility	55.42%	49.87%	54.98%	50.27%
Expected term (in years)	6.07 years	5.93 years	6.03 years	5.91 years
Expected dividend yield	0.0%	0.0%	0.0%	0.00%

RSUs

Each vested time-based RSU represents the right of a holder to receive one share of the Company’s common stock. The fair value of each RSU granted was estimated based on the trading price of the Company’s common stock on the date of grant.

PSUs

The fair value of PSUs granted to employees was estimated using a Monte Carlo simulation model. Inputs used in the calculation include a risk-free interest rate of 2.06%, an expected volatility of 47%, contractual term of 3 years, and no expected dividend yield.

20

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

The Company recognized stock-based compensation in its condensed consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019 as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Stock options	$	3,685	$	4,241	$	12,831	$	12,636
RSUs	928		644		4,115		1,895
PSUs	109		766		1,489		2,284
Stock-based compensation expense	$	4,722	$	5,651	$	18,435	$	16,815
Selling, general and administrative	$	5,236	$	4,570	$	16,365	$	13,495
Research and development	(514)		1,081		2,070		3,320
Stock-based compensation expense	$	4,722	$	5,651	$	18,435	$	16,815

9. Commitments

The Company's future material contractual obligations as of September 30, 2020, included the following:

Obligations	Total		2020		2021		2022		2023		2024		2025		Beyond
Operating leases (1)	$	5,903	$	641	$	1,362	$	1,376	$	1,291	$	820	$	413	$	—
Credit facility (2)	36,000		2,000		8,000		26,000		—		—		—		—
Purchase obligations (3)	32,944		32,944		—		—		—		—		—		—
Total obligations	$	74,847	$	35,585	$	9,362	$	27,376	$	1,291	$	820	$	413	$	—

(1) The Company leases its corporate office location. The term of its existing lease expires on June 30, 2025. The Company also leases its lab space under a lease agreement that expires on October 31, 2023. Rental expense for the operating leases was $276 and $286, for the three months ended September 30, 2020 and 2019, respectively. Rental expense for these two operating leases was $910 and $860 for the nine months ended September 30, 2020 and 2019, respectively. The remaining future lease payments under the operating leases are $5,903 as of September 30, 2020.

(2) Refer to Note 10, “Debt” for further information regarding the Revised Credit Agreement.

(3) As of September 30, 2020, the Company had purchase obligations in the amount of $32,944 which represents the contractual commitments under contract manufacturing and supply agreements with suppliers. The obligation under the supply agreement is primarily for finished product, inventory, and research and development.

10. Debt

On November 8, 2019, the Company entered into the Second Amended and Restated Credit Agreement (the “Revised Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent (the “Agent”) and the lenders party thereto, which replaced the Company’s existing credit agreement, dated as of August 8, 2017. The terms and amounts borrowed under the Revised Credit Agreement includes a drawn term loan of $40.0 million and an undrawn revolving credit facility of $110.0 million. The schedule of principal payments for the new term loan facility was extended to November 8, 2022.

As of September 30, 2020, the terms and amounts borrowed under the Revised Credit Agreement included a drawn term loan of $40.0 million. The Company obtained revolving loans under the revolving credit facility during the three months ended March 31, 2020 in the amount of $110.0 million. The Company repaid the full $110.0 million borrowed from the revolving credit facility during the three months ended June 30, 2020. The Company classified the current portion of long-term debt of $8.0

21

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

million on the consolidated balance sheet as of September 30, 2020. Per the terms of the Revised Credit Agreement, the Company is limited in its ability to pay dividends. As of September 30, 2020, the Company was in compliance with each of the senior secured net leverage ratio; total net leverage ratio; and fixed charge coverage ratio covenants.

The term loan facility bears interest at the Adjusted LIBOR (equal to (a) the LIBOR for such Interest Period multiplied by (b) the Statutory Reserve Rate as established by Board of Governors of the Federal Reserve System of the United States of America) for the interest period in effect for such borrowing plus the applicable rate as described below. The Agent and the Company may amend the Revised Credit Agreement to replace the LIBOR with a Benchmark Replacement, described below.

Loans under the Revised Credit Agreement bear interest at a rate equal to either (a) the LIBOR rate, plus an applicable margin ranging from 2.25% to 3.0% per annum, based upon the total net leverage ratio (as defined in the Revised Credit Agreement), or (b) the Benchmark Replacement which is defined as the greatest of the prime lending rate, or the NYFRB Rate (the rate for a federal funds transaction) in effect on such day plus ½ of 1% or the Adjusted LIBOR for a one month Interest Period on such day plus 1% plus an applicable margin ranging from 1.25% to 2.0% per annum, based upon the total net leverage ratio. 

The Company is required to pay a commitment fee on the unused portion of the new revolving credit facility in the Revised Credit Agreement at a rate ranging from 0.35% to 0.45% per annum based upon the total net leverage ratio. The Company is obligated to repay a contractually agreed portion of the term loan on the last day of each March, June, September and December in accordance with the Revised Credit Agreement.

As of September 30, 2020, the Company had $1.0 million of unamortized deferred debt issuance costs as part of long-term debt in its condensed consolidated balance sheets.

Debt Maturities	As of September 30, 2020
2020 (remainder)	$	2,000
2021	8,000
2022	26,000
Total	$	36,000

11. Income Taxes

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Income tax (provision) benefit	$	(1,866)		$	152		$	(7,358)		$	(5,332)
Effective tax rate	21		%	6		%	65		%	26		%

For interim periods, we recognize an income tax (provision) benefit based on our estimated annual effective tax rate expected for the entire year plus the effects of certain discrete items occurring in the quarter. The interim annual estimated effective tax rate is based on the statutory tax rates then in effect, as adjusted for changes in estimated permanent differences, and certain discrete items whose tax effect, when material, is recognized in the interim period in which they occur.

22

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

The provision for income taxes was based on the applicable federal and state tax rates for those periods. The effective tax rate for the three and nine months ended September 30, 2020 reflects the impact of a valuation allowance established and adjusted for the fair value adjustments on the Company’s investment in Tyme, certain non-deductible executive compensation, non-deductible nature of the fair value adjustment of the unsettled ASR agreement, changes in state filing positions partially offset by credits for research and development activity. The Company reviews the realizability of its deferred tax assets on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset are considered, along with any other positive or negative evidence. Since future financial results, including the fair value adjustment on the Company’s investment in Tyme may differ from previous estimates, periodic adjustments to the Company’s valuation allowances may be necessary.

Deferred income tax assets as of September 30, 2020 consisted of temporary differences primarily related to stock-based compensation and research and development tax credit carryforwards, partially offset by temporary differences related to intangible assets.

The Company files income tax returns in the U.S. federal jurisdiction and several states. Given that the Company has incurred tax losses in most years since its inception, all of the Company’s tax years are effectively open to examination. The Company is currently under audit by three State tax jurisdictions. The Company had no amount recorded for any unrecognized tax benefits as of September 30, 2020. The Company regularly evaluates its tax positions for additional unrecognized tax benefits and associated interest and penalties, if applicable. There are many factors that are considered when evaluating these tax positions including: interpretation of tax laws, recent tax litigation on a position, past audit or examination history, and subjective estimates and assumptions. The Company reflects interest and penalties attributable to income taxes, to the extent they arise, as a component of income tax provision or benefit.

12. Legal Proceedings

In addition to the below legal proceedings, from time to time, the Company may be a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters, or matters discussed below, will not have a material adverse effect on the Company's business nor has the Company recorded any loss in connection with these matters because the Company believes that loss is neither probable nor estimable. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

Commercial Litigation

In Re: Taxotere (Docetaxel)

On February 1, 2017, the Company was named as a defendant, among various other manufacturers, in several product liability suits that are consolidated in the U.S. District Court for the Eastern District of Louisiana as part of MDL 2740 (Civil Action No 2:16 md-2740), or the Multidistrict Litigation. The claims are for personal injuries allegedly arising out of the use of docetaxel.

In March 2017, the Company reached agreements in principle with the Plaintiffs’ Steering Committee in this matter to voluntarily dismiss the Company from all of the lawsuits in which it was named and from the master complaint. The Company is in the process of working with the other parties in this matter to have it removed from the Multidistrict litigation entirely.  As part of the agreement, in the event a case is brought in the future with facts that justify the Company’s inclusion, the plaintiffs reserved the right to include the Company in such matter.  The plaintiffs have filed several additional lawsuits since the parties’ agreement in principle to dismiss, and the Company is in the process of working with plaintiffs to explore the possibility of dismissing those lawsuits.  

Eagle v. Burwell

On April 27, 2016, the Company filed an action in the U.S. District Court for the District of Columbia (the “District Court”) against the FDA and other federal defendants seeking an order requiring the FDA to recognize orphan drug exclusivity for Bendeka for the treatment of CLL and indolent B-cell NHL. On June 8, 2018, the District Court issued a decision requiring the

23

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

FDA to recognize seven years of orphan drug exclusivity in the U.S. for Bendeka, and on July 6, 2018 the FDA recognized such ODE until December 7, 2022. In addition, on July 6, 2018, the FDA submitted a Motion to Alter or Amend the Judgement Pursuant to Rule 59(e), pursuant to which the FDA requested that the District Court amend its decision to make clear that the decision does not affect any applications referencing TREANDA. The FDA’s motion was denied by the District Court on August 1, 2018 on the grounds that the FDA had not satisfied the standard for altering or amending the judgment. The FDA and two intervenors appealed the District Court’s final judgment to the U.S. Court of Appeals for the District of Columbia Circuit (the “Court of Appeals”). Oral arguments occurred on October 17, 2019, and on March 13, 2020 a panel of the Court of Appeals affirmed the District Court’s decision.

FDA filed a petition for rehearing en banc on May 27, 2020, which was denied on August 17, 2020. Previously, on February 20, 2019, the FDA issued a decision in favor of the Company, regarding the scope of orphan drug exclusivity for Bendeka. Pursuant to the FDA’s decision, no bendamustine product used to treat the same indications (including generic versions of TREANDA) may launch in the United States until December 7, 2022 unless it is clinically superior to Bendeka.

Eagle v. Eli Lilly

On August 24, 2017, the Company filed an antitrust complaint in the United States District Court for the District of New Jersey (“New Jersey District Court”) against Eli Lilly and Company (“Lilly”).  The complaint alleges that Lilly engaged in anticompetitive conduct which restrained competition by delaying and blocking the Company’s launch of a competing pemetrexed injection product (to compete with Lilly’s Alimta). Lilly accepted service and answered the complaint on October 27, 2017. Lilly also filed a motion to transfer this case to Delaware on October 27, 2017. The Company filed a motion to oppose such transfer on November 6, 2017. On July 20, 2018, the New Jersey District Court transferred the case to Delaware. On November 27, 2018, the Delaware Court stayed the case at least until conclusion of the PemfexyTM patent trial described below. On December 16, 2019, the Delaware Court entered the Company and Lilly’s stipulation dismissing this case with prejudice.

Cipla v. Eagle

On April 16, 2020, Cipla Limited (“Cipla”) filed a request for arbitration against Eagle with the London Court of International Arbitration. The request alleges that Eagle’s refusal to take delivery of several batches of Argatroban finished drug product constitutes a breach of the Company and Cipla’s December 14, 2012 supply agreement. Eagle believes that allegations in the demand for arbitration are without merit and intends to vigorously defend itself in the arbitration, which is currently scheduled for June 2021.

Patent Litigation

Eli Lilly and Company v. Eagle Pharmaceuticals, Inc. (PemfexyTM (Pemetrexed))

On August 14, 2017, Lilly filed suit against the Company in the United States District Court for the Southern District of Indiana (the “Indiana Suit”).  Lilly alleged patent infringement based on the filing of the Company’s 505(b)(2) NDA seeking approval to manufacture and sell the Company’s EP-5101.  EP-5101, if finally approved by FDA, will be a branded alternative to Alimta®.

On September 8, 2017, Eagle moved to dismiss the Indiana Suit for improper venue. On September 11, 2017, Lilly voluntarily dismissed the Indiana Suit. It then filed a complaint in the United States District Court for the District of Delaware, alleging similar patent infringement claims (the “Delaware Suit”). Eagle answered and filed various counterclaims in the Delaware Suit on October 3, 2017. Lilly answered Eagle’s counterclaims on October 24, 2017. On May 31, 2018, Eagle filed a Motion for Judgment on the Pleadings, which the Court denied on October 26, 2018. On January 23, 2019, the Court held a Markman hearing. Trial took place from October 28, 2019 to October 31, 2019 and continued on December 12, 2019 through December 13, 2019. On December 13, 2019, the Company and Lilly settled this litigation. The settlement agreement provides for a release of all claims by the parties and allows for an initial entry of Pemfexy into the market (equivalent to approximately a three week supply of current Alimta utilization) on February 1, 2022 and a subsequent uncapped entry on April 1, 2022. On December 16, 2019, the District Court entered the Company and Lilly’s stipulation dismissing this case with prejudice.

24

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

Eagle Pharmaceuticals, Inc., et al. v. Slayback Pharma Limited Liability Company; Eagle Pharmaceuticals, Inc., et al. v. Apotex Inc. and Apotex Corp.; Eagle Pharmaceuticals, Inc., et al. v. Fresenius Kabi USA, LLC; Eagle Pharmaceuticals, Inc., et al. v. Mylan Laboratories Limited; Eagle Pharmaceuticals, Inc. et al. v. Hospira, Inc; Eagle Pharmaceuticals, Inc. et al. v. Lupin, Ltd. and Lupin Pharmaceuticals, Inc.; Eagle Pharmaceuticals, Inc. et al v. Aurobindo Pharma, Ltd, Aurobindo Pharma USA, Inc., and Eugia Pharma Specialities Ltd - (Bendeka)

Bendeka, which contains bendamustine hydrochloride, is an alkylating drug that is indicated for the treatment of patients with chronic lymphocytic leukemia, as well as for the treatment of patients with indolent B-cell non-Hodgkin's lymphoma that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. Slayback Pharma Limited Liability Company (“Slayback”), Apotex Inc. and Apotex Corp. (“Apotex”), Fresenius Kabi USA, LLC (“Fresenius”), Mylan Laboratories Limited (“Mylan”), Lupin, Ltd. and Lupin Pharmaceuticals, Inc. (“Lupin”), and Aurobindo Pharma, Ltd, Aurobindo Pharma USA, Inc., and Eugia Pharma Specialities Ltd (“Aurobindo”) have filed Abbreviated New Drug Applications (“ANDA’s”) referencing Bendeka® that include challenges to one or more of the Bendeka® Orange Book-listed patents. Hospira, Inc. (“Hospira”) filed a 505(b)(2) NDA.

The Company, Cephalon, Inc. and/or Teva Pharmaceuticals International GMBH (together the “Patentees”), filed separate suits against Slayback, Apotex, Fresenius, Mylan, Hospira, Lupin, and Aurobindo in the United States District Court for the District of Delaware on August 16, 2017 (Slayback (“Slayback I”)), August 18, 2017 (Apotex), August 24, 2017 (Fresenius), December 12, 2017 (Mylan), January 19, 2018 (Slayback (“Slayback II”)), July 19, 2018 (Hospira), and July 2, 2019 (Lupin). In these Complaints, the Patentees allege infringement of the challenged patents, namely U.S. Patent Nos. 8,791,270 and 9,572,887 against Slayback (Slayback I and Slayback II), and of U.S. Patent Nos. 8,609,707, 8,791,270, 9,000,021, 9,034,908, 9,144,568, 9,265,831, 9,572,796, 9,572,797, 9,572,887, 9,579,384, 9,597,397, 9,597,398, 9,597,399 against Fresenius, Apotex, and Mylan, and of U.S. Patent Nos. 9,572,887, 10,010,533, 9,034,908, 9,144,568, 9,597,397, 9,597,398, 9,597,399, 9,000,021, 9,579,384 against Hospira, and of U.S. Patent Nos. 8,609,707, 9,000,021, 9,034,908, 9,144,568, 9,265,831, 9,572,796, 9,572,797, 9,572,887, 9,579,384, 9,597,397, 9,597,398, 9,597,399, 10,010,533, and 10,052,385 against Lupin. Patentees filed suit against Aurobindo on May 11, 2020. The parties stipulated to dismiss without prejudice U.S. Patent No. 8,791,270 as to Apotex, Fresenius and Mylan on July 24, 2018, August 2, 2018, and August 3, 2018, respectively. Slayback, Apotex, Fresenius, and Mylan answered their Complaints and some filed various counterclaims on September 29, 2017 (Slayback I), February 12, 2018 (Slayback II), November 27, 2017, September 15, 2017, and February 14, 2018, respectively. The Patentees answered the Slayback I, Slayback II, Fresenius, and Apotex counterclaims on October 20, 2017, March 5, 2018, October 6, 2017, and December 18, 2017, respectively. On October 15, 2018, the Patentees filed a suit against Fresenius and Mylan in the United States District Court for the District of Delaware, alleging patent infringement of U.S. Patent Nos. 10,010,533 and 10,052,385. The Slayback I, Slayback II, Apotex, Fresenius and Mylan cases have been consolidated for all purposes (the “Consolidated Bendeka Litigation”), and a bench trial in these cases was held September 9-19, 2019. On April 27, 2020, the district court held that the asserted patents are valid and infringed by Slayback, Apotex, Fresenius and Mylan. On July 6, 2020, the district court entered a final judgment reflecting this decision, stating that pursuant to 35 U.S.C. § 271(e)(4)(A), the FDA shall not approve Apotex’s, Fresenius’s, Mylan’s, or Slayback’s ANDA products on a date which is earlier than January 28, 2031, and enjoining Apotex, Fresenius, Mylan, and Slayback from commercially manufacturing, using, offering to sell, or selling within the US or importing into the US, their ANDA products before that date. On August 4, 2020, Apotex, Fresenius, and Mylan appealed this final judgment, and briefing is pending. Hospira filed a motion to dismiss, which was fully briefed on November 16, 2018. On December 16, 2019, the United States District Court for the District of Delaware denied Hospira’s motion to dismiss with respect to U.S. Patent No. 9,572,887 and granted that motion with respect to the remaining patents. Trial is set for November 15, 2021. The case remains pending.

The FDA is stayed from approving Hospira’s 505(b)(2) application until the earlier of (1) December 20, 2020 (the “30-month stay date”); and (2) a court decision that the ‘887 patent is not infringed, invalid, or unenforceable. The 30-month stay dates may be shortened or lengthened if either party to the action fails to reasonably cooperate in expediting the action.

Eagle Pharmaceuticals, Inc. v. Slayback Pharma Limited Liability Company

Slayback filed an ANDA referencing Eagle's Belrapzo NDA. Slayback’s ANDA includes challenges to one or more of the Belrapzo Orange Book-listed patents. On September 20, 2018, the Company filed a suit against Slayback in the United States District Court for the District of Delaware, alleging patent infringement of U.S. Patent Nos. 8,609,707, 9,265,831, 9,572,796, 9,572,797 and 10,010,533. On October 10, 2018, Slayback answered the Complaint and filed various counterclaims. On

25

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

October 31, 2018, the Company answered Slayback’s counterclaims. Pursuant to a stipulation between the parties, Slayback is bound by any final judgment entered in the Consolidated Bendeka Litigation. This case is currently stayed.

Eagle Pharmaceuticals, Inc. v. Slayback Pharma Limited Liability Company

Slayback filed a 505(b)(2) NDA referencing Eagle’s Belrapzo NDA. Slayback’s NDA includes challenges to one or more of the Belrapzo Orange Book-listed patents. On December 11, 2018, the Company filed a suit against Slayback in the United States District Court for the District of Delaware, alleging patent infringement of U.S. Patent Nos. 9,265,831, 9,572,796, 9,572,797, and 10,010,533. On January 4, 2019, Slayback filed a motion for judgment on the pleadings. On May 9, 2019, the United States District Court for the District of Delaware granted Slayback’s motion for judgment on the pleadings. On July 23, 2019, the Company filed an appeal of this decision with the United States Court of Appeals for the Federal Circuit. On May 8, 2020, the Federal Circuit upheld the district court’s decision.

Par Pharmaceutical, Inc. et al. v. Eagle Pharmaceuticals, Inc. (Vasopressin)

On May 31, 2018, Par Pharmaceutical, Inc., Par Sterile Products, LLC, and Endo Par Innovation Company, LLC (together, “Par”) filed suit against the Company in the United States District Court for the District of Delaware. Par alleged patent infringement based on the filing of the Company’s ANDA seeking approval to manufacture and sell the Company’s vasopressin product. The Company’s vasopressin product, if approved by FDA, will be an alternative to Vasostrict, which is indicated to increase blood pressure in adults with vasodilatory shock (e.g., post-cardiotomy or sepsis) who remain hypotensive despite fluids and catecholamines. The Company answered the complaint on August 6, 2018, and filed an amended answer and counterclaims on October 30, 2019. The court issued a Markman ruling on July 1, 2019. On December 20, 2019, Par dismissed with prejudice claims of three of the patents asserted against Eagle, and the Court entered an Order reflecting that dismissal on December 27, 2019. Mediation took place on March 3, 2020. On April 17, 2020, the Company submitted a letter requesting leave to file a motion for summary judgment of non-infringement. Par’s responsive letter was submitted on May 8, 2020. On May 18, 2020, the court said it would hear non-infringement arguments at trial and not through summary judgment. Due to the COVID-19 pandemic, the trial, which was scheduled to begin May 18, 2020, has been rescheduled to begin on January 11, 2021. The 30-month stay of FDA approval expired on October 17, 2020. This suit is pending.

Eagle Pharmaceuticals, Inc. et al. v. Accord (Argatroban)

On March 27, 2019, the Company and Chiesi filed suit against Accord Healthcare, Inc. (“Accord”) in the United States District Court for the District of New Jersey (the “New Jersey suit”) and in the United States District Court for the Middle District of North Carolina (the “North Carolina suit”) (together “the suits”). The suits alleged patent infringement based on Accord’s 505(b)(2) NDA seeking approval to manufacture and sell Accord’s proposed argatroban product. On May 21, 2019, the Company and Chiesi voluntarily dismissed the North Carolina suit. On July 10, 2019, Accord moved for judgment on the pleadings in the New Jersey suit. On June 30, 2020, the district court held a settlement conference. On October 7, 2020, the Magistrate Judge held a status conference. On October 8, 2020, Accord withdrew its July 10, 2019 motion for judgment on the pleadings. The New Jersey suit is currently pending.

13. Collaboration with Tyme

On January 7, 2020, Tyme and the Company announced a strategic collaboration to advance SM-88, an oral product candidate for the treatment of patients with cancer. SM-88 is an investigational agent in two Phase II studies, one for pancreatic cancer and another for prostate cancer.

Under the terms of the related agreements, Tyme is entitled to receive up to a total $40.0 million as follows:

(a) an initial $20.0 million upfront payment. In return, we received 10 million restricted shares of Tyme’s common stock at $2.00 per share. The Company is contractually restricted from selling its investment in Tyme for up to three years; and

(b) a second potential $20.0 million milestone payment upon the earlier of  (i) the successful completion of a pivotal trial in pancreatic cancer or (ii) FDA approval of SM-88 in any cancer indication within the United States. Upon

26

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(In thousands, except share and per share amounts)

(Unaudited)

occurrence of such milestone event, this payment would be split into a $10.0 million one-time milestone cash payment and a $10.0 million additional investment in Tyme's preferred stock. The preferred shares will be convertible into common stock with a conversion price at a 15% premium to the then-prevailing common stock market price per share.

Under the terms of a related co-promotion agreement, we would be responsible for 25% of the promotional sales effort of SM-88 and would receive 15% royalty on the net revenues of SM-88 in the United States. Tyme is be responsible for clinical development, regulatory approval, commercial strategy, marketing, reimbursement and manufacturing of SM-88. Tyme retains the remaining 85% of net U.S. revenues and reserves the right to repurchase our U.S. co-promotion right for $200.0 million.

Under the terms of the agreement, the initial $20.0 million paid to Tyme, was accounted for as a $17.5 million readily determinable fair value equity investment based on the closing price per share of Tyme's common stock on January 7, 2020. The remainder was treated as an upfront collaboration payment of $2.5 million that was recorded as selling, general and administrative expense in the first quarter of 2020. The investment in Tyme represents approximately 9% of the total shares outstanding of Tyme's common stock.

As of September 30, 2020, the Company included its investment in Tyme in Other Assets (non-current) on its condensed consolidated balance sheet. For the three months ended September 30, 2020, the fair value adjustments for the equity investment was a loss of $3.5 million and for the nine months ended September 30, 2020, the fair value adjustments for the equity investment was a loss of $7.7 million which was recorded in other income (expense) on our condensed consolidated statements of operations.

27

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

The following information should be read in conjunction with our unaudited consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, or the Quarterly Report, and the audited financial information and the notes thereto included in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or the SEC, on March 2, 2020, or the Annual Report. This discussion and analysis contains forward-looking statements that involve significant risks and uncertainties. Our actual results, performance or experience could differ materially from what is indicated by any forward-looking statement due to various important factors, risks and uncertainties, including, but not limited to, those set forth under “Risk Factors” included elsewhere in this Quarterly Report. Such factors may be amplified by the COVID-19 pandemic and its current or its potential impact on our business and the global economy. Unless otherwise indicated or required by context, references throughout to “Eagle,” the “Company,” “we,” “our,” or “us” refer to financial information and transactions of Eagle Pharmaceuticals, Inc.

Overview

We are an integrated pharmaceutical company focused on finding ways to help medicines do more for patients. Along with our collaborators, we have the capabilities to take a molecule from preclinical research through regulatory approval and into the marketplace, including development, manufacturing and commercialization of our products and product candidates. Our business model applies our scientific expertise, proprietary research-based insights and marketplace proficiency to identify challenging-to-treat diseases of the central nervous system or metabolic critical care therapeutic areas as well as in oncology. By focusing on patients’ unmet needs, we strive to provide healthcare professionals with urgently needed treatment solutions that are designed to improve patient care and outcomes and create near- and long-term value for our stakeholders, including patients and healthcare providers and our employees, marketing partners, collaborators and stockholders.

Our science-based business model has a proven track record with the U.S. Food and Drug Administration, or FDA, approval and commercial launches of three products: Ryanodex, Belrapzo and Bendeka. We market our products through marketing partners and/or our internal direct sales force. We market Ryanodex and Belrapzo, and Teva markets Bendeka through its subsidiary, Cephalon, Inc. Reflecting further expansion of our oncology portfolio, in February 2020, we received final FDA approval for Pemfexy, a branded alternative to Alimta for metastatic non-squamous non-small cell lung cancer and malignant pleural mesothelioma. We expect to launch Pemfexy in early 2022.

With 10 pipeline projects underway and the potential for up to five or more product launches over the next several years, we believe we have many growth opportunities ahead. We believe that each of our pipeline projects currently has the potential to enter the market as a first-in-class, first-to-file or best-in-class product. In particular, we are applying our expertise to conduct novel research regarding the potential for Ryanodex to address conditions including Alzheimer’s disease, traumatic brain injury/concussion, nerve agent exposure and acute radiation syndrome. In addition, our clinical development program includes a strategic partnership with Tyme for SM-88, a product candidate for the treatment of patients with pancreatic or other advanced cancers, as well as investigations of compounds such as EA-114 and our Fulvestrant product candidate for patients with HR-positive advanced breast cancer. Other products in development include Vasopressin, our first-to-file Abbreviated New Drug Application, or ANDA, that references Endo International plc’s Vasostrict indicated to increase blood pressure in adults with vasodilatory shock who remain hypotensive despite fluids and catecholamines; and EA-111, a new chemical entity and next-generation ryanodine receptor antagonist, in an intramuscular formulation that that would allow for easier and more rapid administration in emergency situations (military and civilian).

Recent Developments

Executive Officer Transitions

Chief Medical Officer

As of July 31, 2020, Adrian J. Hepner, M.D., Ph.D. resigned as our Executive Vice President and Chief Medical Officer. On July 31, 2020, we entered into a consulting agreement with Dr. Hepner, or the Consulting Agreement. Pursuant to the Consulting Agreement, Dr. Hepner will provide consulting services to us until July 31, 2021, unless earlier terminated, or the Consulting Period. In consideration of Dr. Hepner’s provision of consulting services, we have agreed to pay Dr. Hepner (i) a weekly retainer of $8,000 for 20 hours of services each week for the first six months of the Consulting Period and (ii) a weekly retainer of $4,000 for 10 hours of services each week for the remaining six months of the Consulting Period. We will also continue to pay the employer portion of Dr. Hepner’s COBRA medical continuation benefits until January 31, 2022.

On October 29, 2020, Judith Ng-Cashin, M.D. was appointed as our Chief Medical Officer.

28

Chief Financial Officer

As of October 29, 2020, Pete Meyers ceased to serve as our Chief Financial Officer. In connection with his departure, Mr. Meyers will receive the severance compensation provided for under our previously disclosed Amended and Restated Severance Benefit Plan and Mr. Meyers’ participation agreement thereunder, for a non-change in control covered termination.

On October 29, 2020, Brian Cahill was appointed as our Chief Financial Officer. Mr. Cahill has served as our Vice President of Finance since January 2018 and previously served as our Corporate Controller from October 2016 to December 2017. Information regarding any material compensatory arrangement between us and Mr. Cahill in connection with his appointment as Chief Financial Officer, or any grant or award to Mr. Cahill under any such arrangement, has not been finalized. We will disclose such information, when it becomes available, in a filing with the SEC.

Change in Independent Registered Public Accounting Firm

On September 25, 2020, the Audit Committee of the Board approved the engagement of Ernst & Young, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020, and dismissed BDO USA, LLP, as our current independent registered public accounting firm.

Complete Response Letter for NDA for Ryanodex

On August 7, 2020, we received a Complete Response Letter for its NDA for Ryanodex for the treatment of exertional heat stroke, or EHS; we decided that we will no longer pursue this indication in order to direct our resources to other product candidates.

Pemfexy Billing Code

On July 9, 2020, we announced that the Centers for Medicare & Medicaid Services, or CMS, had established a unique, product-specific billing code for Pemfexy. The new Healthcare Common Procedure Coding System, or J-code, will become effective on October 1, 2020.

We expect that the new HCPCS code will provide coding clarity to outpatient facilities and physicians who administer Pemfexy, facilitating access for patients and reimbursement from Medicare, Medicaid and commercial insurance.

New Share Repurchase Program

On March 17, 2020, we announced that our Board approved a new share repurchase program, or the Share Repurchase Program, providing for the repurchase of up to an aggregate of $160.0 million of our outstanding common stock. The Share Repurchase Program replaces our existing share repurchase program, or the Previous Share Repurchase Program, which was announced on October 30, 2018 and was terminated in connection with the Board’s approval of the Share Repurchase Program. At termination, we had repurchased approximately $68.0 million of our outstanding common stock under the Previous Share Repurchase Program.

Under the Share Repurchase Program, we are authorized to repurchase shares through open market purchases, privately-negotiated transactions, accelerated share repurchases or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. The repurchases have no time limit and may be suspended or discontinued completely at any time. The specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors. The repurchases will be made using our cash resources.

On September 23, 2020, the Board approved a $25.0 million accelerated share repurchase, or ASR, transaction with JPMorgan Chase Bank, National Association, or JP Morgan, as part of the Share Repurchase Program. The specific number of shares to be repurchased pursuant to the ASR is based on the average of the daily volume weighted average share prices of the Company’s common stock, less a discount, during the term of the ASR program. Under the terms of the Company’s agreement with JP Morgan, the Company paid $25.0 million to JP Morgan on September 24, 2020, and received 505,817 shares, representing approximately 80% of the notional amount of the ASR, based on the closing price of $39.54 on September 23, 2020. Upon settlement of the ASR, the final number of shares repurchased will be determined based on the average of the daily volume weighted average share prices of the Company’s common stock, less a discount, during the term of the accelerated share repurchase program. The Company expects the ASR to be completed in the fourth quarter of 2020.

As of September 30, 2020, we have repurchased an aggregate of 3,594,511 shares of common stock for an aggregate of $199.9 million pursuant to our share repurchase programs in effect since August 2016.

COVID-19 Business Update

In response to the ongoing COVID-19 pandemic, we have taken and continue to take active measures designed to address and mitigate the impact of the COVID-19 pandemic on its business, such as remote working policies, facilitating management’s

29

daily communication to address employee and business concerns and providing frequent updates to the Board. We anticipate that the COVID-19 pandemic may have an impact on the clinical development timeline for EA-114. We anticipate that the COVID-19 pandemic will continue to delay our supply chain and marketing and sales efforts for certain of its products, including Bendeka, although it is not currently expected that any disruption would be material. The COVID-19 pandemic and associated lockdowns have resulted in a decrease in healthcare utilization broadly and specifically lead to a continuing reduction in the utilization of physician-administered oncology products including Belrapzo and Bendeka. In addition, the COVID-19 pandemic has delayed the timing of ongoing litigation, including the litigation with Par Pharmaceutical, Inc. and its affiliated entities with respect to Vasopressin, and we anticipate that such delays will continue for the duration of the pandemic. While we have experienced variable financial impacts to date, the ongoing COVID-19 pandemic, including the global economic slowdown, government measures taken in response thereto, the overall disruption of global healthcare systems and other risks and uncertainties associated with the pandemic, could materially adversely affect our business, financial condition, results of operations and growth prospects. We continue to closely monitor the COVID-19 pandemic as we evaluate and evolve our business plans and response strategy. The impact of the COVID-19 pandemic on our business and financial condition is more fully described below in Trends and Uncertainties.

Financial Operations Overview

Revenue

Our revenue consists of product sales, royalty revenue and license and other revenue.

Product Sales. Through September 30, 2020, we have recognized revenues from product sales of Bendeka, Argatroban, Ryanodex and Belrapzo. Sales of Bendeka were made to our commercial partner, Teva, while Argatroban was sold directly to our commercial partners, Chiesi and Sandoz AG, or Sandoz. Sales to our commercial partners are typically made at little or no profit for resale. Ryanodex and Belrapzo were sold directly to wholesalers, hospitals and surgery centers through a third-party logistics partner.

We typically enter into agreements with group purchasing organizations acting on behalf of their hospital members, in connection with the hospitals’ purchases of our direct commercial products. Based on these agreements, most of our hospital customers have contracted prices for products and volume-based rebates on product purchases. These amounts are estimated and recorded at the time of sale. In the case of discounted pricing, we typically pay a chargeback, representing the difference between the price invoiced to the wholesaler and the customer contract price.

Royalty Revenue. We recognize revenue from royalties based on a percentage of Teva’s net sales of Bendeka and Sandoz’s and Chiesi’s gross profits of Argatroban, both net of discounts, returns and allowances incurred by our commercial partners. Royalty revenue is recognized as earned in accordance with contract terms when it can be reasonably estimated and collectability is reasonably assured.

License and Other Revenue. Our revenues may either be in the form of the recognition of deferred revenues upon milestone achievement for which cash has already been received or recognition of revenue upon milestone achievement the payment for which is reasonably assured to be received in the future.

The primary factors that determine our revenues derived from Bendeka are:

•the level of orders submitted by our commercial partner, Teva;

•the rate at which Teva can convert the current market to Bendeka;

•the level of institutional demand for Bendeka;

•unit sales prices charged by Teva, net of any sales reserves; and

•the level of orders submitted by wholesalers, hospitals and surgery centers.

The primary factors that may determine our revenues derived from Argatroban are:

•the level of orders submitted by our commercial partners, Sandoz and Chiesi;

•the level of institutional demand for Argatroban; and

•unit sales prices charged by Sandoz and Chiesi, net of any sales reserves.

The primary factors that may determine our revenues derived from Ryanodex, Belrapzo and our future products are:

•the effectiveness of our sales force;

•the level of orders submitted by wholesalers, hospitals and surgery centers;

•the level of institutional demand for our products; and

•unit sales prices, net of any sales reserves.

30

Cost of Revenues

Cost of revenue consists of the costs associated with producing our products for our commercial partners. In particular, our cost of revenue includes production costs of our products paid to a contract manufacturing organization coupled with shipping and customs charges, cost of royalty and the amortization of intangible assets. Cost of revenue may also include the effects of product recalls, if applicable.

Research and Development

Costs for research and development are charged to expenses as incurred and include: employee-related expenses including salaries, benefits, travel and stock-based compensation expense for research and development personnel; expenses incurred under agreements with contract research organizations, contract manufacturing organizations and service providers that assist in conducting clinical and preclinical studies; costs associated with preclinical activities and development activities; costs associated with regulatory operations; and depreciation expense for assets used in research and development activities.

Costs for certain development activities, such as clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the patterns of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid expenses or accrued expenses as deemed appropriate. Recoveries of previously recognized research and development expenses from third parties are recorded as a reduction to research and development expense in the period it becomes realizable.

Selling, General and Administrative

Selling, general and administrative costs consist of employee-related costs including salaries, benefits and other related costs, stock-based compensation for executive, finance, sales and operations personnel. Selling, general and administrative expenses also include facility and related costs, professional fees for legal, consulting, tax and accounting services, insurance, selling, marketing, market research, advisory board and key opinion leaders, depreciation and general corporate expenses.

Income Taxes

We account for income taxes using the liability method in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 740, “Income Taxes,” or ASC 740.  Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and are measured by applying enacted rates and laws to taxable years in which differences are expected to be recovered or settled.  Further, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that the rate changes.  A valuation allowance is required when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. ASC 740 also prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that it has taken or expects to take on a tax return, including a decision whether to file or not file a return in a particular jurisdiction.  We recognize any interest and penalties accrued related to unrecognized tax benefits as income tax expense.

The provision for income taxes was based on the applicable federal and state tax rates for those periods. The effective tax rate for the three and nine months ended September 30, 2020 reflects the impact of a valuation allowance established and adjusted for the fair value adjustments on the Company’s investment in Tyme, certain non-deductible executive compensation, changes in state filing positions partially offset by credits for research and development activity. The effective tax rate for the three months ended September 30, 2019 reflects the impact of certain non-deductible executive compensation partially offset by credits for research and development activity.

31

Results of Operations

Comparison of Three Months Ended September 30, 2020 and 2019

Revenues

	Three Months Ended September 30,				Increase
	2020		2019
	(in thousands)
Product sales	$	17,317	$	14,659	$	2,658
Royalty revenue	27,611		26,488		1,123
License and other revenue	5,000		—		5,000
Total revenue	$	49,928	$	41,147	$	8,781

Our product sales increased $2.7 million in the three months ended September 30, 2020 as compared to the three months ended September 30, 2019. The increase was attributable to an increase of $5.4 million in product sales of Belrapzo coupled with an increase of $1.5 million in product sales of Ryanodex partially offset with a decrease of $4.3 million in product sales of Bendeka primarily due to unit volume. In addition, the impact of the COVID-19 pandemic and associated lockdowns have resulted in a decrease in healthcare utilization broadly and specifically lead to a reduction in the utilization of physician-administered oncology products including Bendeka.

Our royalty revenue increased $1.1 million in the three months ended September 30, 2020 as compared to the three months ended September 30, 2019 primarily as a result of an increase in royalty revenue from our share of Teva's Bendeka sales.

The Company earned a $5.0 million milestone in the three months ended September 30, 2020 when its marketing partner, SymBio Pharmaceuticals Limited, received regulatory approval for TREAKISYM ready-to-dilute (250 ml) liquid bendamustine formulation from the Pharmaceuticals and Medical Devices Agency in Japan.

Cost of Revenue

	Three Months Ended September 30,				(Decrease) / Increase
	2020		2019
	(in thousands)
Cost of product sales	$	8,726	$	12,137	$	(3,411)
Cost of royalty revenue	3,260		2,785		475
Total cost of revenue	$	11,986	$	14,922	$	(2,936)

Our cost of product sales decreased $3.4 million in the three months ended September 30, 2020 as compared to the three months ended September 30, 2019. This was primarily the result of a decrease of $4.8 million in Bendeka cost of revenue resulting from lower product unit sales, partially offset by an increase of a $1.2 million of cost of revenue resulting from higher product unit sales of Belrapzo.

Our cost of royalty revenue increased $0.5 million in the three months ended September 30, 2020 as compared to the three months ended September 30, 2019, primarily as a result of declining gross margin related to the royalty revenue for Bendeka.

32

Research and Development

The table below details the Company’s research and development expenses by significant project for the periods presented.

	Three Months Ended September 30,				Decrease
	2020		2019
	(in thousands)
Fulvestrant “EGL-5385-C-1701”	$	474	$	967	$	(493)
Vasopressin	1,298		2,319		(1,021)
Ryanodex EHS “EP-4104”	114		2,044		(1,930)
All other projects	1,078		1,163		(85)
Salary and other personnel related	1,864		3,679		(1,815)
Research and development	$	4,828	$	10,172	$	(5,344)

Our research and development expenses decreased $5.3 million in the three months ended September 30, 2020 as compared to the three months ended September 30, 2019. The decrease primarily resulted from lower spending for Ryanodex (EHS indication), Vasopressin, and EGL-5385-C-1701 coupled with lower stock compensation expense allocated to the research and development function related to the departure of the chief medical officer.

Selling, General and Administrative

	Three Months Ended September 30,				Decrease
	2020		2019
	(in thousands)
Selling, general and administrative	$	17,697	$	18,537	$	(840)

Our selling, general and administrative expenses decreased $0.8 million for the three months ended September 30, 2020 as compared to the three months ended September 30, 2019. This decrease is primarily related to decreased travel, entertainment, and trade show expenses as a result of minimizing travel due to the impact of the COVID-19 pandemic.

Other Income (Expense), net

	Three Months Ended September 30,				(Decrease) / Increase
	2020		2019
	(in thousands)
Interest income	$	46	$	570	$	(524)
Interest expense	(489)		(628)		(139)
Other expense	(6,049)		—		6,049
Total other income (expense), net	$	(6,492)	$	(58)	$	6,434

Our interest income decreased $0.5 million for the three months ended September 30, 2020 as compared to the three months ended September 30, 2019. This decrease is primarily due to lower interest rates associated with money market funds as compared to the three months ended September 30, 2019.

Our interest expense decreased $0.1 million for the three months ended September 30, 2020 as compared to the three months ended September 30, 2019. This decrease is primarily due to lower borrowings from the revolving credit facility during the 2020 quarter.

Our other expense increased $6.0 million for the three months ended September 30, 2020 as compared to the three months ended September 30, 2019. This increase is related to fair value adjustments on the Company’s equity investment in Tyme in the amount of $3.5 million and the related fair value adjustments related to the final settlement of the $25.0 million ASR

33

transaction with JPMorgan as part of the Company’s Share Repurchase Program. The Company determined the ASR contained a forward contract and therefore the Company recorded fair value adjustments on unsettled accelerated share repurchase agreement in the amount of $2.5 million in the three months ended September 30, 2020.

Income Tax Provision

	Three Months Ended September 30,
	2020			2019
	(in thousands)
(Provision) / benefit for income taxes	$	(1,866)		$	152
Effective tax rate	21		%	6		%

Our provision for income taxes was based on the applicable federal and state tax rates for those periods. The effective tax rate for the three months ended September 30, 2020 reflects the impact of a valuation allowance established and adjusted for the fair value adjustments on the Company’s investment in Tyme, certain non-deductible executive compensation, non-deductible nature of the fair value adjustment the unsettled ASR agreement and changes in state filing positions partially offset by credits for research and development activity. The effective tax rate for the three months ended September 30, 2019 reflects the impact of certain non-deductible executive compensation partially offset by credits for research and development activity.

Comparison of Nine Months Ended September 30, 2020 and 2019

Revenues

	Nine Months Ended September 30,				(Decrease) / Increase
	2020		2019
	(in thousands)
Product sales	$	49,387	$	58,568	$	(9,181)
Royalty revenue	83,499		80,066		3,433
License and other revenue	5,000		9,000		(4,000)
Total revenue	$	137,886	$	147,634	$	(9,748)

Our product sales decreased $9.2 million in the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019 primarily driven by decreases in product sales of Bendeka of $15.5 million coupled with decreases in Belrapzo’s product sales of $4.6 million primarily due to volume decreases. In addition, the COVID-19 pandemic and associated lockdowns have resulted in a decrease in healthcare utilization broadly and specifically lead to a reduction in the utilization of physician-administered oncology products including Belrapzo and Bendeka. The decreased sales were partially offset by increases in product sales of Ryanodex of $10.8 million due to higher volume.

Our royalty revenue increased $3.4 million in the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019 as a result of higher royalties on Teva's sales of Bendeka of $1.7 million, which were partially offset by lower royalties on sales of Argatroban of $0.9 million.

Our license and other revenue decreased $4.0 million in the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019. The decrease was due to the non-recurrence of an upfront cash payment of $9.0 million upon execution of an amendment to the Bendeka License Agreement, dated March 29, 2019 to terminate Teva’s obligation to pay future milestones and royalties on Bendeka sales outside of the U.S. The decrease was partially offset by a $5.0 million milestone earned in the three months ended September 30, 2020 from SymBio for regulatory approval of TREAKISYM ready-to-dilute (250 ml) liquid bendamustine formulation from the Pharmaceuticals and Medical Devices Agency in Japan.

34

Cost of Revenue

	Nine Months Ended September 30,				Decrease
	2020		2019
	(in thousands)
Cost of product sales	$	23,804	$	39,866	$	(16,062)
Cost of royalty revenue	9,120		9,440		(320)
Total cost of revenue	$	32,924	$	49,306	$	(16,382)

Our cost of product sales decreased $16.1 million in the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019, primarily as a result of decreased product sales of Belrapzo and Bendeka, partially offset by increased product sales of Ryanodex.

Our cost of royalty revenue decreased $0.3 million in the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019, primarily as a result of a decrease in royalty revenue on Teva’s sales of Bendeka.

Research and Development

	Nine Months Ended September 30,				Increase / (Decrease)
	2020		2019
	(in thousands)
Fulvestrant “EGL-5385-C-1701”	$	4,633	$	1,650	$	2,983
Vasopressin	2,440		6,906		(4,466)
Ryanodex EHS “EP-4104”	1,985		3,403		(1,418)
All other projects	2,490		2,947		(457)
Salary and other personnel related	9,842		10,598		(756)
Research and development	$	21,390	$	25,504	$	(4,114)

Our research and development expenses decreased $4.1 million in the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019, primarily from a decrease in clinical study project spending for vasopressin and Ryanodex for EHS indication, and employee-related costs, primarily stock compensation expense. This decrease was partially offset by increased spend related to the Company's EGL-5385-C-1701 (the Company’s fulvestrant formulation) initiative.

Selling, General and Administrative

	Nine Months Ended September 30,				Increase
	2020		2019
	(in thousands)
Selling, general and administrative	$	60,411	$	53,906	$	6,505

Our selling, general and administrative expenses increased $6.5 million in the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019. This increase is primarily related to $2.5 million of costs related to the collaboration with Tyme, coupled with an increase in consulting costs of $0.7 million, increased stock compensation expense of $2.9 million, other administrative expenses of $0.9 million, and is partially offset by a decrease in external legal fees related to ongoing litigation matters of $0.5 million.

35

Other Income (Expense)

	Nine Months Ended September 30,				(Decrease) / Increase
	2020		2019
	(in thousands)
Interest income	$	542	$	1,701	$	(1,159)
Interest expense	(2,164)		(1,979)		185
Other expense	(10,249)		—		10,249
Total other expense, net	$	(11,871)	$	(278)	$	11,593

Our interest income decreased $1.2 million in the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019. This decrease is primarily due to lower interest rates associated with money market funds as compared to the nine months ended September 30, 2019.

Our interest expense increased $0.2 million in the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019. This increase is primarily due to primarily due to additional borrowings from the revolving credit facility during the 2020 year to date period.

Our other expense increased $10.2 million for the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019. This increase is related to fair value adjustments on equity investment in Tyme in the amount of $7.7 million and the related fair value adjustments related to the final settlement of the $25.0 million ASR transaction with JPMorgan as part of the Company’s Share Repurchase Program. The Company determined the ASR contained a forward contract and therefore the Company recorded fair value adjustments on unsettled accelerated share repurchase agreement in the amount of $2.5 million in the nine months ended September 30, 2020

Income Tax Provision

	Nine Months Ended September 30,
	2020			2019
	(in thousands)
Provision for income taxes	$	(7,358)		$	(5,332)
Effective tax rate	65		%	29		%

Our provision for income taxes was based on the applicable federal and state tax rates for those periods. The effective tax rate for the nine months ended September 30, 2020 reflects the impact of a valuation allowance established and adjusted for the fair value adjustments on the Company’s investment in Tyme, certain non-deductible executive compensation, non-deductible nature of the fair value adjustment the unsettled ASR agreement and changes in state filing positions partially offset by credits for research and development activity. The effective tax rate for the nine months ended September 30, 2019 reflects the impact of certain non-deductible executive compensation partially offset by credits for research and development activity.

Liquidity and Capital Resources

Our primary uses of cash are to fund working capital requirements, product development costs and operating expenses. Cash and cash equivalents were $89.7 million and $117.2 million as of September 30, 2020 and September 30, 2019, respectively.

For the nine months ended September 30, 2020, we generated a net income of $3.9 million. As of September 30, 2020, our working capital surplus was $118.3 million. For the nine months ended September 30, 2019, we realized net income of $13.3 million.

We believe that future cash flows from operations will be sufficient to fund our currently anticipated working capital requirements for at least the next 12 months.

The COVID-19 pandemic has disrupted and continues to disrupt the U.S. healthcare system, global economies and global capital markets. There are significant uncertainties surrounding the full extent and duration of the impact of the COVID-19 pandemic on our business and operations. We have experienced variable financial impacts to date, as a result of the COVID-19 pandemic and the ongoing pandemic could have a material adverse impact on our financial condition and results of operations

36

in the future, including our ability to obtain financing when and if needed. The impact of COVID-19 on our business and financial condition is more fully described below in Trends and Uncertainties.

Operating Activities:

Net cash provided by operating activities for the nine months ended September 30, 2020 was $29.7 million. Net income for the period was $3.9 million enhanced by the net of non-cash adjustments of approximately $30.5 million from deferred income taxes, depreciation, amortization expense of right-of-use assets, amortization expense of intangible assets, fair value adjustments on equity investment, stock-based compensation expense, amortization of debt issuance costs and fair value adjustment on unsettled accelerated share repurchase agreement. Net changes in working capital increased cash from operating activities by approximately $4.7 million, due to changes in working capital accounts. The total amount of accounts receivable at September 30, 2020 was approximately $52.2 million, which included $18.6 million related to product sales and $28.2 million related to royalty revenue. Receivables from our product sales have payment terms ranging from 30 to 75 days with select extended terms to wholesalers on initial purchases of product launch quantities. Our receivables from royalty revenue are due 45-days from the end of the quarter.

Investing Activities:

Net cash used by investing activities for the nine months ended September 30, 2020 was $18.1 million, as a result of $17.5 million of investment to purchase 10 million restricted shares of Tyme’s common stock and spent $0.6 million for purchases of property and equipment.

Financing Activities:

Net cash used by financing activities for the nine months ended September 30, 2020 was $31.8 million, as a result of $3.0 million of principal payments for debt required by the Company’s Second Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto, or the Revised Credit Agreement, $28.0 million in payments related to the repurchases of our common stock, $1.3 million of payments associated with employee withholding tax upon vesting of stock-based awards, partially offset by $0.5 million of proceeds from common stock exercises of employee stock options.

Trends and Uncertainties

Impact of the COVID-19 Pandemic

The COVID-19 pandemic has resulted in authorities implementing aggressive actions. Government authorities in the United States have recommended or imposed various social distancing, quarantine, and isolation measures on large portions of the population, and similar measures have also been taken in many other countries around the world. Both the COVID-19 pandemic and the containment and mitigation efforts related to the pandemic have had a serious adverse impact on the U.S. economy and the economies of other countries around the world, the severity and duration of which are uncertain. The extent of and timing for such lifting of government restrictions remains uncertain as the COVID-19 pandemic continues to evolve. There is no guarantee that prior or new restrictions will not be reinstated in response to the continued spread of COVID-19.

During the nine months ended September 30, 2020, we have experienced a variable impact on our business and financial condition due to the COVID-19 pandemic, which impacts include a decrease in revenue from sales of Belrapzo resulting, in part, from a decrease in inventory stocking and utilization rates, as well as a decrease in research and development expenses partially resulting from preclinical program delays. We also incurred an insignificant amount of incremental administrative costs related to the COVID-19 pandemic. The COVID-19 pandemic, including containment and mitigation measures, has impacted, and is expected to continue to impact, our business and operations in a number of ways, including:

•Day-to-Day Operations: Since mid-March 2020, our employees, including customer-facing employees, have been working remotely. The duration and extent of these restrictions are uncertain. We have developed plans to resume in-person work practices as we determine it to be safe to do so and pending relevant health authority guidance. We expect to incur additional expenses in 2020 related to the impact of the COVID-19 pandemic on our operations, including procurement of personal protective equipment for our employees and updates to our facilities to align with safety protocols.

•Manufacturing and Supply Chain: We are working closely with our commercial partners and third-party manufacturers to mitigate potential disruptions as a result of the COVID-19 pandemic by continuing to monitor the supply and availability of Bendeka, Ryanodex and Belrapzo for the patients who rely on these products. We anticipate that the COVID-19 pandemic will continue to delay our supply chain and marketing and sales efforts for certain of our

37

products, including Bendeka, although it is not currently expected that any disruption would be material. If the COVID-19 pandemic continues to persist for an extended period of time and impacts essential distribution systems such as FedEx and postal delivery, we could experience future disruptions to our supply chain and operations, and associated delays in the manufacturing and our clinical supply, which would adversely impact our development activities.

•Marketing and Sale of Products: In addition to the impact on our product revenues resulting in a decrease in sales from Belrapzo, driven, in part, by the COVID-19 pandemic, we have also observed a reduction in the number of Bendeka patients visiting infusion centers, hospitals and clinics for intravenous administration of Bendeka due to interruptions in healthcare services, and the patients’ inability to visit administration sites as well as desire to avoid contact with infected individuals. In addition, our sales and marketing teams have been working remotely and our virtual initiatives with respect to marketing and supporting the sale and administration of our products have not been as effective as our in-person sales and marketing activities.

•Liquidity and Capital Resources: We believe that future cash flows from operations will be sufficient to fund our currently anticipated working capital requirements for the next 12 months. While the COVID-19 pandemic has not had, and we do not expect it to have, a material adverse effect on our liquidity, the situation continues to rapidly evolve and has already resulted in a significant disruption of global financial markets. If the disruption persists or deepens, we could experience an inability to access additional capital when and if needed. If we are unable to obtain funding, we could be forced to delay, reduce or eliminate distribution of our commercialized products, product portfolio expansion or some or all of our research and development programs, which would adversely affect our business prospects. We expect to use be able to obtain any future funding under the terms of the Revised Credit Agreement, for general corporate purposes and any strategic acquisitions.

•Regulatory Activities: We may experience further delays in the timing of NDA review and/or our interactions with FDA due to, for example, absenteeism by governmental employees, inability to conduct planned physical inspections related to regulatory approval, or the diversion of FDA’s efforts and attention to approval of other therapeutics or other activities related to the COVID-19 pandemic, which could further delay approval decisions with respect to regulatory submissions or obtain new product approvals.

•Clinical Development Timelines: The clinical trial timelines for certain of our product candidates, including EA-114 (our fulvestrant product candidate), have been delayed given difficulties with limited patient enrollment resulting from the impact of the COVID-19 pandemic, and we expect that our clinical trial timelines will continue to be impacted for the duration of the pandemic.

There are significant uncertainties surrounding the extent and duration of the impact of the COVID-19 pandemic on our business and operations. We continue to evaluate the impact of the COVID-19 pandemic on our operating results and financial condition. The COVID-19 pandemic has had a variable impact our results of operations during the nine months ended September 30, 2020 and, it could have a material adverse impact on our financial condition and results of operations in the future.

Contractual Obligations

Other than as set forth below, there have been no material changes to our contractual and commercial obligations during the nine months ended September 30, 2020, as compared to the obligations disclosed in our Annual Report.

Our future material contractual obligations included the following as of September 30, 2020 (in thousands):

Obligations	Total		2020		2021		2022		2023		2024		2025		Beyond
Operating leases (1)	$	5,903	$	641	$	1,362	$	1,376	$	1,291	$	820	$	413	$	—
Credit facility (2)	36,000		2,000		8,000		26,000		—		—		—		—
Purchase obligations (3)	32,944		32,944		—		—		—		—		—		—
Total obligations	$	74,847	$	35,585	$	9,362	$	27,376	$	1,291	$	820	$	413	$	—

(1) We lease our corporate office location. On August 8, 2019, we amended the lease for our corporate office location in order to rent additional office space and extend the term of our existing lease to June 30, 2025. The Company also leases its lab space under a lease agreement that expires on October 31, 2023.

(2) Refer to Note 10 Debt for details of the Revised Credit Agreement.

(3) As of September 30, 2020, the Company has purchase obligations in the amount of $32.9 million which represents the contractual commitments under contract manufacturing and supply agreements with suppliers. The obligation under the supply agreement is primarily for finished product, inventory, and research and development.

38

Recent Accounting Pronouncements

Recent Accounting Pronouncements - Not Yet Adopted

In March 2020, the FASB issued Update 2020-04 Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting to provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The amendments in Update 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR, formerly known as the London Interbank Offered Rate, or another reference rate expected to be discontinued due to reference rate reform. The new guidance provides optional expedients, including; (1) Simplify accounting analyses under current GAAP for contract modifications, such as modifications of contracts within the scope of Topic 470, Debt, that will be accounted for by prospectively adjusting the effective interest rate, as if any modification was not substantial. That is, the original contract and the new contract shall be accounted for as if they were not substantially different from one another; (2) Simplify the assessment of hedge effectiveness and allow hedging relationships affected by reference rate reform to continue; (3) Allow a one-time election to sell or transfer debt securities classified as held to maturity before January 1, 2020 that reference a rate affected by reference rate reform. The amendments are effective for all entities from the beginning of an interim period that includes the issuance date of the ASU. An entity may elect to apply the amendments prospectively through December 31, 2022. The adoption of ASU 2020-4 is not expected to have a material impact on the Company's financial position or results of operations.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses which requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This standard is effective for fiscal years beginning after December 15, 2019 and the Company adopted the standard effective January 1, 2020. The adoption of ASU 2016-13 had no material impact on the Company's financial position and results of operations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Impact of Inflation

While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe the effects of inflation, if any, on our results of operations and financial condition have been immaterial.

39

Item 3. Quantitative and Qualitative Disclosures About Market Risk

During the nine months ended September 30, 2020, there were no material changes to our market risk disclosures as set forth in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report, except as discussed below.

We are monitoring the ongoing impacts of the COVID-19 pandemic on our business. While the full extent of the economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact on the global financial markets may reduce our ability to access capital, which could negatively impact our long-term liquidity.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the “Exchange Act”, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information 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. Management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on their evaluation at September 30, 2020, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended September 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

40

PART II-OTHER INFORMATION

Item 1. Legal Proceedings

The disclosures under Note 12. Legal Proceedings in the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report are incorporated into this Part II, Item 1 by reference.

Item 1A. Risk Factors

An investment in our securities involves a high degree of risk. Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. Except for the updated risk factors set forth immediately below, our risk factors have not changed materially from those described in “Part I, Item 1A. Risk Factors” of our Annual Report or in the “Risk Factors” section of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.

The COVID-19 pandemic could adversely impact our business, including the marketing, sale and commercialization of our products, our supply chain, our clinical trials, our liquidity and access to capital markets and our business development activities.

The COVID-19 pandemic has resulted in authorities implementing aggressive actions, and they may from time to time take additional actions, to reduce the spread of the disease, including limiting non-essential gatherings of people, ceasing all non-essential travel, ordering certain businesses and government agencies to cease non-essential operations at physical locations and issuing “shelter-in-place” orders which direct individuals to shelter at their places of residence (subject to limited exceptions). In addition, in mid-March 2020, we implemented work-from-home policies which are still in place for the majority of our employees. Our work-from-home policies may negatively impact productivity or disrupt our business, the magnitude of which will continue to depend, in part, on the length of this continued remote working arrangement and other limitations on our ability to conduct our business in the ordinary course. We expect to work from home in the near future and will closely follow the guidance from federal and state authorities, including the Centers for Disease Control and Prevention and the New Jersey Department of Health, in deciding when to transition back to working in our offices. The effects of government actions and our policies and those of third parties to reduce the spread and ameliorate the impact of COVID-19 may negatively impact productivity and our ability to market and sell our products, cause disruptions to our supply chain and ongoing and future clinical trials and impair our ability to execute our business development strategy. These and other disruptions in our operations and the global economy could negatively impact our business, operating results and financial condition.

The marketing, sale and commercialization of our products have been adversely impacted and may continue to be adversely impacted by COVID-19 and actions taken to slow its spread and ameliorate its impact. We saw a variable impact on our product revenues in 2020 due to the COVID-19 pandemic and also experienced variable impacts on our business and financial condition as a result of the pandemic. We are expecting the impact on our near-term financial results to continue for the duration of the pandemic. Other parts of our business have been, and continue to be, impacted by the outbreak. For example, patients have postponed and we expect will continue to postpone visits to healthcare provider facilities, certain healthcare providers have temporarily closed their offices or are restricting patient visits, healthcare provider employees may become generally unavailable and there could be disruptions in the operations of payors, distributors, logistics providers and other third parties that are necessary for our products to be prescribed, reimbursed and administered to patients. For example, we have continued to observe a reduction in the number of Bendeka patients visiting infusion centers, hospitals and clinics for intravenous administration of Bendeka due to interruptions in healthcare services, and the patients’ inability to visit administration sites and desire to avoid contact with infected individuals. In addition, our sales and marketing teams have been working remotely and our virtual initiatives with respect to marketing and supporting the sale and administration of our products have not been as effective as our in-person sales and marketing activities. We cannot predict when we will be able to resume in-person sales and marketing activities.

Quarantines, shelter-in-place, safer-at-home and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could continue to occur, related to COVID-19 or other infectious diseases could impact personnel at third-party manufacturing facilities upon which we rely, or the availability or cost of materials, which could disrupt the supply chain for our products. In particular, some of our suppliers of certain materials used in the production of our drug products are located in regions that continue to be subject to COVID-19-related actions and policies that limit the conduct of normal business operations. To the extent our suppliers and service providers are unable to comply with their obligations under our agreements with them or they are otherwise unable to deliver or are delayed in delivering goods

41

and services to us due to the COVID-19 pandemic, our ability to continue meeting commercial demand for our products in the United States or advancing development of our product candidates may become impaired. At this time, we consider our inventories on hand to be sufficient to meet our commercial requirements.

In addition, our clinical trials have been affected by COVID-19. Clinical site initiation and patient enrollment has been delayed due to prioritization of hospital resources toward COVID-19. Current or potential patients in our ongoing or planned clinical trials have chosen to not enroll, not participate in follow-up clinical visits or drop out of the trial as a precaution against contracting COVID-19. Further, some patients may not be able to comply with clinical trial protocols if quarantines continue to impede patient movement or interrupt healthcare services. Some clinical sites in the United States have slowed or stopped further enrollment of new patients in clinical trials, denied access to site monitors or otherwise curtailed certain operations. For example, the clinical trial timelines for certain of our product candidates, including EA-114 (our fulvestrant product candidate), have been delayed given difficulties with patient enrollment resulting from the COVID-19 pandemic, and we expect that clinical trial timelines will continue to be delayed for the duration of the pandemic.. Similarly, our ability to recruit and retain principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19, has been and may continue to be adversely impacted. These events could delay our clinical trials, increase the cost of completing our clinical trials and negatively impact the integrity, reliability or robustness of the data from our clinical trials.

The spread of COVID-19 and actions taken to reduce its spread and ameliorate its impact may also materially affect us economically. As a result of the COVID-19 pandemic and actions taken to slow its spread and ameliorate its impact, the global credit and financial markets have experienced extreme volatility and disruptions, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. If the equity and credit markets deteriorate, it may make any additional debt or equity financing more difficult, more costly or more dilutive. While the potential economic impact brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, there could continue to be a significant disruption of global financial markets, reducing our ability to access capital, which could negatively affect our liquidity and financial position or our business development activities.

The COVID-19 pandemic continues to rapidly evolve. The extent to which COVID-19 continues to impact the marketing, sale and commercialization of our products, our supply chain, our clinical trials, our access to capital and our business development activities, depends on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the pandemic, the duration of the pandemic and the efforts by governments and business to contain it, business closures or business disruptions, any re-opening plans, additional closures and spikes or surges in COVID-19 infection, and the impact on the economy and capital markets.

Current and future legislation and regulations may increase the difficulty and cost for us to commercialize our product candidates and affect the prices we may obtain for our products.

The United States and some foreign jurisdictions are considering, or have enacted, a number of legislative and regulatory proposals to change the health care system in ways that could affect our ability to sell our products and our product candidates profitably, once they are approved for sale. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in health care systems with the stated goals of containing health care costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

By way of example, in March 2010, the ACA was passed, which significantly changed health care financing by both governmental and private insurers. There have been judicial and Congressional challenges to certain aspects of the ACA, as well as recent efforts by the U.S. Presidential administration to repeal or replace certain aspects of the ACA.. Since January 2017, the U.S. President has signed two Executive Orders and other directives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the ACA. While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation of certain taxes under the ACA have been signed into law. For example, the Tax Cuts and Jobs Act of 2017, or Tax Act, included a provision which repealed, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”. Additionally, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the PPACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminates the health insurer tax. The Bipartisan Budget Act of 2018, or the BBA, among other things, amended the ACA, effective January 1, 2019, to increase from 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”. In December 2018, CMS published a new final rule permitting further collections and payments to and from certain ACA qualified health plans and health insurance issuers under the ACA risk adjustment program in response to the outcome of federal district court litigation regarding the method CMS uses to determine this risk

42

adjustment. On April 27, 2020, the U.S. Supreme Court reversed a federal circuit decision that previously upheld Congress' denial of $12 billion in "risk corridor" funding. On December 14, 2018, a Texas U.S. District Court Judge ruled that ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act. On December 18, 2019, the U.S. Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the PPACA are invalid as well. On March 2, 2020, the U.S. Supreme Court announced that it would review this case. It is unclear how this decision, future decisions, subsequent appeals, and other efforts to repeal and replace ACA will impact ACA and our business. We cannot predict how future federal or state legislative or administrative changes relating to healthcare reform will affect our business.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend proposals for spending reductions to Congress. The Joint Select Committee on Deficit Reduction did not achieve its targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, triggering the legislation's automatic reductions to several government programs. These reductions include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments, will remain in effect through 2030 unless additional Congressional action is taken. The CARES Act, suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2020, and extended the sequester reductions by one year, through 2030. Additionally, in January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Further, under the Drug Supply Chain Security Act signed into law on November 27, 2013, certain drug manufacturers will be subject to product identification, tracing and verification requirements, among others, that are designed to improve the detection and removal of counterfeit, stolen, contaminated or otherwise potentially harmful drugs from the U.S. drug supply chain. These requirements will be phased in over several years and compliance with this law will likely increase the costs of the manufacture and distribution of drug products, which could have an adverse effect on our financial condition.

Additionally, there has been increasing legislative and enforcement interest in the United States with respect to drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed and adopted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. For example, the current U.S. Presidential administration’s budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs. Further, the U.S. Presidential administration previously released a “Blueprint”, or plan, to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase drug manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs of drug products paid by consumers. The Department of Health and Human Services, or HHS, has solicited feedback on some of these measures and has implemented others under its existing authority. For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning on January 1, 2020. The final rule codified a CMS policy change that was effective January 1, 2019. In a proposed rule issued by CMS on June 17, 2020, CMS proposed to establish a broader definition for a “line extension” drug such that the line extension of the initial brand name listed drug would not need to be an oral solid dosage form. This proposed rule, if finalized, may impact the rebate amounts associated with our products and negatively affect the commercial success of our products. Additionally, on August 3, 2020, CMS proposed changes to the Medicare Physician Fee Schedule for Calendar Year 2021 that, if finalized, also may adversely impact the coverage and reimbursement of our products. Under the proposed changes, CMS is proposing to assign certain 505(b)(2) drug products to existing multiple source drug codes because, according to CMS, some drug products approved under the 505(b)(2) pathway share similar labeling and uses with generic drugs that are assigned to multiple source drug codes. CMS noted that this change is consistent with efforts to “curb drug prices” and encourages competition among products that are described by one billing code and share similar labeling. On July 24, 2020, the current U.S. Presidential administration announced four executive orders related to prescription drug pricing that attempt to implement several of the administration’s proposals, including a policy that would tie Medicare Part B drug prices to international drug prices, the details of which were released on September 13, 2020 and also expanded the policy to cover certain Part D drugs; one that directs HHS to finalize the Canadian drug importation proposed rule previously issued by HHS and makes other changes allowing for personal importation of drugs from Canada; one that directs HHS to finalize the rulemaking process on modifying the anti-kickback law safe harbors for discounts for plans, pharmacies, and pharmaceutical benefit managers; and one that reduces costs of insulin and epipens to patients of federally qualified health centers. The FDA also recently released a final rule, effective November 30, 2020, implementing a portion of the importation executive order providing guidance for states to build and submit importation plans for drugs from Canada. While some of these and other proposed measures may require additional authorization to become effective, Congress and the current U.S. Presidential administration have each indicated that it will continue to seek new

43

legislative and/or administrative measures to control drug costs. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. The full impact of these laws, as well as other new laws and reform measures that may be proposed and adopted in the future remains uncertain, but may result in additional reductions in Medicare and other health care funding, or higher production costs which could have a material adverse effect on our customers and, accordingly, our financial operations.

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

Issuer Purchases of Equity Securities

Share Repurchase Program

On March 17, 2020, we announced that our Board approved a new share repurchase program, or the Share Repurchase Program, providing for the repurchase of up to an aggregate of $160.0 million of the Company’s outstanding common stock. The Share Repurchase Program replaces the Previous Share Repurchase Program, which was announced on October 30, 2018 and was terminated in connection with the Board’s approval of the Share Repurchase Program. At termination, we had repurchased approximately $68.0 million of our outstanding common stock under the Previous Share Repurchase Program.

Under the Share Repurchase Program, we are authorized to repurchase shares through open market purchases, privately-negotiated transactions, accelerated share repurchases or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The repurchases have no time limit and may be suspended or discontinued completely at any time. The specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors. The repurchases will be made using our cash resources.

On September 23, 2020, our Board approved a $25.0 million ASR transaction with JPMorgan as part of our Share Repurchase Program. The specific number of shares to be repurchased pursuant to the ASR is based on the average of the daily volume weighted average share prices of our common stock, less a discount, during the term of the ASR program. Under the terms of our agreement with JP Morgan, we paid $25.0 million to JP Morgan on September 24, 2020, and received 505,817 shares, representing approximately 80% of the notional amount of the ASR, based on the closing price of $39.54 on September 23, 2020. Upon settlement of the ASR, the final number of shares repurchased will be determined based on the average of the daily volume weighted average share prices of our common stock, less a discount, during the term of the accelerated share repurchase program. We expect the ASR to be completed in the fourth quarter of 2020. The Company determined the ASR contained a forward contract and therefore the Company recorded fair value adjustments on unsettled accelerated share repurchase agreement in the three months ended September 30, 2020.

We made the following purchases of our equity securities during the period covered by this Quarterly Report on Form 10-Q.

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs
					(dollars in thousands)
July 1, 2020 to July 31, 2020	—	N/A		—	154,998
August 1, 2020 to August 31, 2020	75,000	$	40.00	75,000	151,998
September 1, 2020 to September 30, 2020	505,817	$	39.54	505,817	131,998
Total	580,817			580,817

44

(1) All shares repurchased by us during the three months ended September 30, 2020 were repurchased pursuant to the Share Repurchase Program, described above.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6.    Exhibits

45

EXHIBIT INDEX

Exhibit Number		Description of Exhibit
3.1		Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-1/A, SEC File No. 333-192984, filed January 28, 2014)
3.2		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 to the Registrant’s Registration Statement on Form S-1/A, SEC File No. 333-192984, filed January 28, 2014)
10.1	(1) †+	Consulting Agreement between the Registrant and Adrian J. Hepner, M.D., Ph.D. dated July 31, 2020
31.1	(1)	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	(1)	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	**	Certification of Principal Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101).

(1) Filed herewith.

†Management contract or compensatory plan or arrangement.

+ Certain portions of the exhibit (indicated by asterisks) have been omitted because they are not material and would likely cause competitive harm to the Registrant if publicly disclosed.

**The certifications attached as Exhibit 32.1 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the SEC and are not to be incorporated by reference into any filing of Eagle Pharmaceuticals, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date hereof), irrespective of any general incorporation language contained in such filing.

46

SIGNATURES

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

	EAGLE PHARMACEUTICALS, INC.
DATED: November 2, 2020	By:	/s/ Scott Tarriff
		Scott Tarriff
		(On behalf of the Registrant and as Chief Executive Officer as Principal Executive Officer)
DATED: November 2, 2020	By:	/s/ Brian J. Cahill
		Brian J. Cahill
		Chief Financial Officer (Principal Accounting Officer and Principal Financial Officer)

47

EX-10.1

Exhibit 10.1

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKLEY CAUSE COMPETITIVE HARM TO EAGLE PHARMACEUTICALS, INC. IF PUBLICLY DISCLOSED.

July 31, 2020

Dr. Adrian Hepner

[***]

Dear Adrian:

This letter agreement (this “Agreement”) sets forth the terms and conditions whereby you agree to provide certain services (as described on Schedule 1) to Eagle Pharmaceuticals, Inc., a Delaware Corporation, with offices located at 50 Tice Boulevard, Suite 315, Woodcliff Lake, New Jersey 07677 (the “Company”).

1.Services

a.The Company hereby engages you, and you hereby accept such engagement, as an independent contractor to provide certain services to the Company on the terms and conditions set forth in this Agreement.

b.You shall provide to the Company the services set forth on Schedule 1 (the “Services”).

c.The Company shall not control the manner or means by which you perform the Services, including but not limited to the time and place you perform the Services.

d.To the extent you perform any Services on the Company's premises or using the Company's equipment, you shall comply with all applicable policies of the Company relating to business and office conduct, health and safety and use of the Company's facilities, supplies, information technology, equipment, networks and other resources.

Updated 12-14/2018

1.Term

1.Term

The term of this Agreement shall commence on August 1, 2020 and shall continue until July 31, 2021, unless earlier terminated in accordance with section 10 (the “Termination”). Any extension of the term will be subject to mutual written agreement between the parties.

1.Compensation and Expenses

a.As full compensation for the Services and the rights granted to the Company in this Agreement, the Company shall pay you $8,000 per week for the first semester of the Term and $4,000 per week for the second semester (the “Fees”). It is anticipated that you will work 20 hours per week during the first semester and 10 hours per week during the second. The Fees will be paid to you bi-weekly. You acknowledge that you will receive an IRS Form 1099-MISC from the Company, and that you shall be solely responsible for all federal, state and local taxes, as set out in section 4.2.

b.In addition to the Fees, Company shall continue to pay the employer portion of your COBRA medical continuation benefits for eighteen months.

c.The Company agrees to reimburse you all reasonable and documented travel and other costs or expenses incurred or paid by you in connection with the performance of the Services in accordance with the general reimbursement policy of the Company then in effect, and in each case that have been approved in writing by David Pernock. The Company shall pay all undisputed Fees within 15 days after the Company's receipt of an invoice submitted by you.

2.Relationship of the Parties

a.You are an independent contractor of the Company, and this Agreement shall not be construed to create any association, partnership, joint venture, employee or agency relationship between you and the Company for any purpose. You have no authority (and shall not hold yourself out as having authority) to bind the Company and you shall not make any agreements or representations on the Company's behalf without the Company's prior written consent.

b.Without limiting section 4.1, the Company will not be responsible for withholding or paying any income, payroll, Social Security or other federal, state or local taxes, and , except as otherwise specified herein, making any insurance contributions, including unemployment or disability, or obtaining worker's compensation insurance on your behalf.

3.Intellectual Property Rights

a.The Company is and shall be, the sole and exclusive owner of all right, title and interest throughout the world in and to all the results and proceeds of the Services performed under this Agreement, including but not limited to any deliverables set out on Schedule 1 (collectively, the “Deliverables”), including all patents, copyrights, trademarks, trade secrets and other intellectual property rights (collectively “Intellectual Property Rights”) therein. You agree that the Deliverables are hereby deemed a "work made for hire" as defined in 17 U.S.C. § 101 for the Company. If, for any reason, any of the Deliverables do not constitute a "work made for hire," you hereby irrevocably assign to the Company, in each case without additional consideration, all right, title and interest throughout the world in and to the Deliverables, including all Intellectual Property Rights therein.

b.Any assignment of copyrights under this Agreement includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as "moral rights" (collectively, “Moral Rights”). You hereby irrevocably waive, to the extent permitted by applicable law, any and all claims you may now or hereafter have in any jurisdiction to any Moral Rights with respect to the Deliverables.

2

c.You shall make full and prompt disclosure to the Company of any inventions or processes, as such terms are defined in 35 U.S.C. § 100 (the “Patent Act”), made or conceived by you alone or with others during the Term, whether or not such inventions or processes are patentable or protected as trade secrets and whether or not such inventions or processes are made or conceived during normal working hours or on the premises of the Company. You shall not disclose to any third party the nature or details of any such inventions or processes without the prior written consent of the Company.

d.Upon the request of the Company, you shall promptly take such further actions, including execution and delivery of all appropriate instruments of conveyance, as may be necessary to assist the Company to prosecute, register, perfect, record or enforce its rights in any Deliverables. In the event the Company is unable, after reasonable effort, to obtain your signature on any such documents, you hereby irrevocably designate and appoint the Company as your agent and attorney-in-fact, to act for and on your behalf solely to execute and file any such application or other document and do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights or other intellectual property protected related to the Deliverables with the same legal force and effect as if you had executed them. You agree that this power of attorney is coupled with an interest.

e.Notwithstanding section 5.1, to the extent that any of your pre-existing materials identified in Schedule 1 are contained in the Deliverables, you retain ownership of such pre-existing materials and hereby grant to the Company an irrevocable, worldwide, unlimited, royalty-free license to use, publish, reproduce, display, distribute copies of, and prepare derivative works based upon, such pre-existing materials and derivative works thereof. The Company may assign, transfer and sublicense such rights to others without your approval.

f.Except for such pre-existing materials, you have no right or license to use, publish, reproduce, prepare derivative works based upon, distribute, perform, or display any Deliverables. You have no right or license to use the Company's trademarks, service marks, trade names, trade names, logos, symbols or brand names.

g.You shall require each of your employees and contractors to execute written agreements securing for the Company the rights provided for in this section 5 prior to such employee or contractor providing any Services under this Agreement.

4.Confidentiality

a.You acknowledge that you will have access to information that is treated as confidential and proprietary by the Company, including, without limitation, the existence and terms of this Agreement, trade secrets, technology, and information pertaining to business operations and strategies, customers, pricing, marketing, finances, sourcing, personnel, or operations of the Company, its affiliates or their suppliers or customers, in each case whether spoken, written, printed, electronic or in any other form or medium (collectively, the “Confidential Information”). Any Confidential Information that you develop in connection with the Services, including but not limited to any Deliverables, shall be subject to the terms and conditions of this section. You agree to treat all Confidential Information as strictly confidential, not to disclose Confidential Information or permit it to be disclosed, in whole or part, to any third party without the prior written consent of the Company in each instance, and not to use any Confidential Information for any purpose except as required in the performance of the Services. You shall notify the Company immediately in the event you become aware of any loss or disclosure of any Confidential Information.

b.Confidential Information shall not include information that:

3

i.is or becomes generally available to the public other than through your breach of this Agreement; or

ii.is communicated to you by a third party that had no confidentiality obligations with respect to such information.

c.Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation or order. You agree to provide written notice of any such order to an authorized officer of the Company within three (3) business days of receiving such order, but in any event sufficiently in advance of making any disclosure to permit the Company to contest the order or seek confidentiality protections, as determined in the Company's sole discretion.

5.Representations and Warranties

a.You represent and warrant to the Company that:

i.you have the right to enter into this Agreement, to grant the rights granted herein and to perform fully all of your obligations in this Agreement;

ii.your entering into this Agreement with the Company and your performance of the Services do not and will not conflict with or result in any breach or default under any other agreement to which you are subject;

iii.you have the required skill, experience and qualifications to perform the Services, you shall perform the Services in a professional and workmanlike manner in accordance with generally recognized industry standards for similar services and you shall devote sufficient resources to ensure that the Services are performed in a timely and reliable manner;

iv.you shall perform the Services in compliance with all applicable federal, state and local laws and regulations;

v.you have not been: (i) debarred under subsections (a) or (b) of Section 306 of the Federal Food, Drug and Cosmetic Act, as amended, 21 U.S.C. Section 335a(a) and (b) (the “FD&C Act”), (ii) excluded, debarred, suspended or otherwise ineligible to participate in federal health care programs or in federal procurement or non-procurement programs (as that term is defined in 42 U.S.C. 1320a-7b(f)) or convicted of a criminal offense related to the provision of health care items or services, but has not yet been debarred. Moreover, if you are subsequently so debarred or excluded, you agree to immediately notify Company of such debarment or exclusion as provided in Section 14.2 herein, and this Agreement shall terminate as of the date of such debarment or exclusion.

i.You do not and will not use in any capacity the services of any person debarred under the FD&C Act in connection with its performance of this Agreement. You shall select and shall have full and complete control of and responsibility for all actions of your agents, affiliates, officers, directors, employees and permitted subcontractors, if any, (collectively, “Your Agents”) and none of Your Agents shall be, or shall be deemed to be, the agents, affiliates, officers, directors, employees or subcontractors of Company for any purpose whatsoever by virtue of thisAgreement. Company shall have no duty, liability or responsibility of any kind, to or for your acts or omissions or those of Your Agents. You hereby acknowledge and agree that you shall cause

4

each of Your Agents who participate in rendering the Services provided hereunder to comply with the terms of this Agreement.

i.the Company will receive good and valid title to all Deliverables, free and clear of all encumbrances and liens of any kind;

ii.all Deliverables are and shall be your original work (except for material in the public domain or provided by the Company) and, to the best of your knowledge, do not and will not violate or infringe upon the intellectual property right or any other right whatsoever of any person, firm, corporation or other entity.

iii.You will disclose this relationship with Eagle, as established by this Agreement, to all people and entities to whom you owe such disclosure. You will also obtain any required permissions. With regard to any formulary committee on which you sit, this disclosure obligation shall continue for two years after the termination of this Agreement.

b.The Company hereby represents and warrants to you that:

i.it has the full right, power and authority to enter into this Agreement and to perform its obligations hereunder; and

ii.the execution of this Agreement by its representative whose signature is set forth at the end hereof has been duly authorized by all necessary corporate action.

6.Indemnification

a.Company shall defend, indemnify and hold you harmless against all losses, damages, liabilities, deficiencies, actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind (including reasonable attorneys' fees) arising out of or resulting from any losses you may incur as a result of providing the Service hereunder:

7.Intentionally Left Blank

1.Termination

a.The Company or you may terminate this Agreement without cause and upon 15 days' written notice. In the event of termination pursuant to this section 10.1, the Company shall pay you for fees earned for any Services completed up to and including the date of such termination.

b.The Company may terminate this Agreement, effective immediately upon written notice to you, in the event that you materially breach this Agreement, and such breach is incapable of cure, or with respect to a material breach capable of cure, you do not cure such breach within ten (10) days after receipt of written notice of such breach.

c.Upon expiration or termination of this Agreement for any reason, or at any other time upon the Company's written request, you shall within five (5) days after such expiration or termination:

i.deliver to the Company all Deliverables (whether complete or incomplete) and all hardware, software, tools, equipment or other materials provided for your use by the Company;

ii.deliver to the Company all tangible documents and materials (and any copies) containing, reflecting, incorporating or based on the Confidential Information;

iii.permanently erase all of the Confidential Information from your computer systems; and

iv.certify in writing to the Company that you have complied with the requirements of this section.

d.The terms and conditions of this section and section 4, section 5, section 6, section 7, section 8, section 10.3, section 12, section 13 and section 14 shall survive the expiration or termination of this Agreement.

5

2.Other Business Activities

You may be engaged or employed in any other business, trade, profession or other activity which does not place you in a conflict of interest with the Company.

1.Non-Solicitation

Each party agrees that during the Term of this Agreement and for a period of six months following the termination or expiration of this Agreement, it shall not make any solicitation to employ the other party's personnel without written consent of the other party to be given or withheld in its sole discretion. For the purposes of this section 12, a general advertisement or notice of a job listing or opening or other similar general publication of a job search or availability to fill employment positions, including on the internet, shall not be construed as a solicitation or inducement, and the hiring of any such employee or independent contractor who freely responds thereto shall not be a breach of this section 12.

1.Assignment

You shall not assign any rights, or delegate or subcontract any obligations, under this Agreement without the Company's prior written consent. Any assignment in violation of the foregoing shall be deemed null and void. The Company may freely assign its rights and obligations under this Agreement at any time. Subject to the limits on assignment stated above, this Agreement will inure to the benefit of, be binding on, and be enforceable against each of the parties hereto and their respective successors and assigns.

1.Miscellaneous

a.The compensation paid hereunder has been established through good faith and arms-length bargaining and represents the fair market value of the services rendered. No amount paid or reimbursed hereunder is intended to be, nor shall it be construed as, an offer or payment made, whether directly or indirectly, to induce the referral of patients, the purchase, lease or order of any item or service, or the recommending or arranging for the purchase, lease or order of any item or service.

b.You shall not export, directly or indirectly, any technical data acquired from the Company, or any products utilizing any such data, to any country in violation of any applicable export laws or regulations.

c.All notices, requests, consents, claims, demands, waivers and other communications hereunder (each, a “Notice”) shall be in writing and addressed to the parties at the addresses set forth on the first page of this Agreement (or to such other address that may be designated by the receiving party from time to time in accordance with this section). All Notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees pre-paid), facsimile or e-mail of a PDF document (with confirmation of transmission) or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in this Agreement, a Notice is effective only if (a) the receiving party has received the Notice and (b) the party giving the Notice has complied with the requirements of this section.

d.This Agreement, together with any other documents incorporated herein by reference, including, and related exhibits and schedules, constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.

e.This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto, and any of the terms thereof may be waived, only by a written document signed by each party to this Agreement or, in the case of waiver, by the party or parties waiving compliance.

f.This Agreement shall be governed by and construed in accordance with the internal laws of the State of New Jersey without giving effect to any choice or conflict of law provision or rule. Each party irrevocably submits to the

6

exclusive jurisdiction and venue of the federal and state courts located in the State of New Jersey in any legal suit, action or proceeding arising out of or based upon this Agreement or the Services provided hereunder.

g.If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

h.This Agreement may be executed in multiple counterparts and by facsimile signature, each of which shall be deemed an original and all of which together shall constitute one instrument.

2.You acknowledge and agree that (i) eagle may have an obligation to report certain details relating to this agreement, including, without limitation, the fee paid to you by eagle under the federal sunshine act and similar state laws and that (ii) eagle will report such details in its sole discretion.

Very truly yours,

EAGLE PHARMACEUTICALS, INC.

By: /s/ Pete Meyers

Name: Pete Meyers

Title: Chief Financial Officer of Eagle Pharmaceuticals, Inc.

ACCEPTED AND AGREED:

By: /s/ Adrian Hepner

Name: Adrian Hepner

Date: July 31, 2020

7

SCHEDULE 1

1. SERVICES:

1. SERVICES:

Fulvestrant.

Assistance with the meeting request

[***]

Briefing package assistance

Vasopressin

[***]

Nerve Agent

SPA request

Other

UPenn transition

North shore transition

[***]

EA 111 assistance with interpretation of mid August data

Transition relationship with military

2. EQUIPMENT, TOOLS OR MATERIALS PROVIDED BY COMPANY: Company-issued laptop computer and smartphone.

3. PAYMENT SCHEDULE: Upon completion and in accordance with Section 3 above.

4. DELIVERABLES: Consulting services as described in Section 1 above.

2

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Scott Tarriff, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Eagle 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 2, 2020

/s/ Scott Tarriff

Scott Tarriff

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Brian J. Cahill, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Eagle 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 2, 2020

/s/ Brian J. Cahill

Brian J. Cahill

Chief Financial Officer

(Principal Accounting and Financial Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Scott Tarriff, Chief Executive Officer of Eagle Pharmaceuticals, Inc. (the “Company”), and Brian J. Cahill, Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:

1.The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2020, (the “Quarterly Report”), to which this Certification is attached as Exhibit 32.1, fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act, and

2.The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

In Witness Whereof, the undersigned have set their hands hereto as of the 2th day of November 2020.

By:	/s/ Scott Tarriff
	Scott Tarriff
	Chief Executive Officer (Principal Executive Officer)
By:	/s/ Brian J. Cahill
	Brian J. Cahill
	Chief Financial Officer (Principal Financial and Accounting Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Eagle Pharmaceuticals, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2020	Oct. 29, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-36306
Entity Registrant Name	Eagle Pharmaceuticals, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-8179278
Entity Address, Address Line One	50 Tice Boulevard
Entity Address, Address Line Two	Suite 315
Entity Address, City or Town	Woodcliff Lake
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07677
City Area Code	(201)
Local Phone Number	326-5300
Title of 12(b) Security	Common stock, $0.001 par value per share
Trading Symbol	EGRX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		13,030,130
Entity Central Index Key	0000827871
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 89,681	$ 109,775
Accounts receivable, net	52,199	48,004
Inventories	6,586	6,566
Prepaid expenses and other current assets	15,330	15,104
Total current assets	163,796	179,449
Property and equipment, net	2,123	2,202
Intangible assets, net	13,584	15,583
Goodwill	39,743	39,743
Deferred tax asset, net	15,340	13,669
Other assets	13,575	3,908
Total assets	248,161	254,554
Current liabilities:
Accounts payable	13,068	5,462
Accrued expenses and other liabilities	24,445	28,361
Current portion of long-term debt	8,000	5,000
Total current liabilities	45,513	38,823
Other long-term liabilities	2,844	3,000
Long-term debt, less current portion	27,017	33,557
Total liabilities	75,374	75,380
Commitments and Contingencies
Stockholders' equity:
Preferred stock, 1,500,000 shares authorized and no shares issued or outstanding as of September 30, 2020 and December 31, 2019	0	0
Common stock, $0.001 par value; 50,000,000 shares authorized; 16,624,681 and 16,537,846 shares issued as of September 30, 2020 and December 31, 2019, respectively	17	17
Additional paid in capital	296,198	278,518
Retained earnings	76,432	72,500
Treasury stock, at cost, 3,594,551 and 2,907,687 shares as of September 30, 2020 and December 31, 2019, respectively	(199,860)	(171,861)
Total stockholders' equity	172,787	179,174
Total liabilities and stockholders' equity	$ 248,161	$ 254,554

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Preferred stock, shares authorized (in shares)	1,500,000	1,500,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value per share (in usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	16,624,681	16,537,846
Treasury stock (in shares)	3,594,551	2,907,687

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue:
Total revenue	$ 49,928	$ 41,147	$ 137,886	$ 147,634
Operating expenses:
Cost of product sales	8,726	12,137	23,804	39,866
Cost of royalty revenue	3,260	2,785	9,120	9,440
Research and development	4,828	10,172	21,390	25,504
Selling, general and administrative	17,697	18,537	60,411	53,906
Total operating expenses	34,511	43,631	114,725	128,716
Income (loss) from operations	15,417	(2,484)	23,161	18,918
Interest income	46	570	542	1,701
Interest expense	(489)	(628)	(2,164)	(1,979)
Other expense	(6,049)	0	(10,249)	0
Total other expense, net	(6,492)	(58)	(11,871)	(278)
Income (loss) before income tax (provision) benefit	8,925	(2,542)	11,290	18,640
Income tax (provision) benefit	(1,866)	152	(7,358)	(5,332)
Net Income (Loss)	$ 7,059	$ (2,390)	$ 3,932	$ 13,308
Earnings (Loss) per share attributable to common stockholders:
Basic (in usd per share)	$ 0.52	$ (0.17)	$ 0.29	$ 0.96
Diluted (in usd per share)	$ 0.51	$ (0.17)	$ 0.28	$ 0.94
Weighted average number of common shares outstanding:
Basic (in shares)	13,531,372	13,668,091	13,620,981	13,791,071
Diluted (in shares)	13,786,803	13,668,091	13,917,800	14,147,658
Product sales
Revenue:
Total revenue	$ 17,317	$ 14,659	$ 49,387	$ 58,568
Royalty revenue
Revenue:
Total revenue	27,611	26,488	83,499	80,066
License and other revenue
Revenue:
Total revenue	$ 5,000	$ 0	$ 5,000	$ 9,000

XML

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings
Beginning balance (in shares) at Dec. 31, 2018		16,504,000
Beginning balance at Dec. 31, 2018	$ 160,762	$ 17	$ 256,458	$ (153,900)	$ 58,187
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	$ 16,815		16,815
Issuance of common stock upon exercise of stock option grants (in shares)	10,034	12,000
Issuance of common stock upon exercise of stock option grants	$ 78		78
Payment of employee withholding tax upon vesting of stock-based awards	(198)		(198)
Issuance of common stock related to vesting of restricted stock units (in shares)		9,000
Common stock repurchases	(15,000)			(15,000)
Net income (loss)	13,308				13,308
Ending balance (in shares) at Sep. 30, 2019		16,525,000
Ending balance at Sep. 30, 2019	175,765	$ 17	273,153	(168,900)	71,495
Beginning balance (in shares) at Jun. 30, 2019		16,522,000
Beginning balance at Jun. 30, 2019	172,481	$ 17	267,479	(168,900)	73,885
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	5,651		5,651
Issuance of common stock upon exercise of stock option grants (in shares)		3,000
Issuance of common stock upon exercise of stock option grants	23		23
Net income (loss)	(2,390)				(2,390)
Ending balance (in shares) at Sep. 30, 2019		16,525,000
Ending balance at Sep. 30, 2019	175,765	$ 17	273,153	(168,900)	71,495
Beginning balance (in shares) at Dec. 31, 2019		16,538,000
Beginning balance at Dec. 31, 2019	179,174	$ 17	278,518	(171,861)	72,500
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	$ 18,435		18,435
Issuance of common stock upon exercise of stock option grants (in shares)	41,951	42,000
Issuance of common stock upon exercise of stock option grants	$ 555		555
Payment of employee withholding tax upon vesting of stock-based awards	(1,310)		(1,310)
Issuance of common stock related to vesting of restricted stock units (in shares)		45,000
Common stock repurchases	(27,999)			(27,999)
Net income (loss)	3,932				3,932
Ending balance (in shares) at Sep. 30, 2020		16,625,000
Ending balance at Sep. 30, 2020	172,787	$ 17	296,198	(199,860)	76,432
Beginning balance (in shares) at Jun. 30, 2020		16,622,000
Beginning balance at Jun. 30, 2020	183,964	$ 17	291,434	(176,860)	69,373
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	4,722		4,722
Issuance of common stock upon exercise of stock option grants (in shares)		3,000
Issuance of common stock upon exercise of stock option grants	42		42
Common stock repurchases	(23,000)			(23,000)
Net income (loss)	7,059				7,059
Ending balance (in shares) at Sep. 30, 2020		16,625,000
Ending balance at Sep. 30, 2020	$ 172,787	$ 17	$ 296,198	$ (199,860)	$ 76,432

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net income	$ 3,932	$ 13,308
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	(1,671)	(175)
Depreciation expense	656	725
Amortization expense of right-of-use assets	980	754
Amortization expense of intangible assets	1,999	1,890
Fair value adjustments on equity investment	7,700	0
Stock-based compensation expense	18,435	16,815
Amortization of debt issuance costs	301	282
Fair value adjustments on unsettled accelerated share repurchase agreement	2,549	0
Changes in operating assets and liabilities which provided (used) cash:
Accounts receivable	(4,195)	21,674
Inventories	(20)	1,057
Prepaid expenses and other current assets	(2,774)	(253)
Accounts payable	7,606	1,315
Accrued expenses and other liabilities	(3,916)	3,608
Other assets and other long-term liabilities, net	(1,845)	(1,813)
Net cash provided by operating activities	29,737	59,187
Cash flows from investing activities:
Purchase of equity investment security	(17,500)	0
Purchase of property and equipment	(577)	(647)
Net cash used in investing activities	(18,077)	(647)
Cash flows from financing activities:
Proceeds from common stock option exercises	555	78
Employee withholding taxes related to stock-based awards	(1,310)	(198)
Proceeds from existing revolving credit facility	110,000	0
Repayment of existing revolving credit facility	(110,000)	0
Payment of debt	(3,000)	(5,000)
Repurchases of common stock	(27,999)	(15,000)
Net cash used in financing activities	(31,754)	(20,120)
Net (decrease) increase in cash and cash equivalents	(20,094)	38,420
Cash and cash equivalents at beginning of period	109,775	78,791
Cash and cash equivalents at end of period	89,681	117,211
Cash paid during the period for:
Income taxes, net	3,036	6,587
Interest	1,878	1,787
Right-of-use asset obtained in exchange for lease obligation - lease amendment	$ 842	$ 1,700

XML

Interim Condensed Consolidated Financial Statements	9 Months Ended
	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interim Condensed Condensed Financial Statements	Interim Condensed Consolidated Financial StatementsThe accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting quarterly information. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. The condensed consolidated balance sheet at December 31, 2019 was derived from audited financial statements, but certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements have been condensed or omitted. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for the fair presentation of the financial information for the interim periods reported have been made. Results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results for the year ending December 31, 2020 or any period thereafter. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 2, 2020.

XML

Organization and Business Activities

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business Activities

Organization and Business Activities

We are an integrated pharmaceutical company focused on finding ways to help medicines do more for patients. Eagle and our collaborators have the capabilities to take a molecule from preclinical research through regulatory approval and into the marketplace, including development, manufacturing and commercialization. Our business model applies our scientific expertise, proprietary research-based insights and marketplace proficiency to identify challenging-to-treat diseases of the central nervous system or metabolic critical care therapeutic areas as well as in oncology. By focusing on patients' unmet needs, Eagle strives to provide healthcare professionals with urgently needed treatment solutions that are designed to improve patient care and outcomes and create near- and long-term value for our stakeholders, including patients and healthcare providers and our employees, marketing partners, collaborators and investors.

Our science-based business model has a proven track record with U.S. Food and Drug Administration ("FDA") approval and commercial launches of three products: Ryanodex® (dantrolene sodium) ("Ryanodex"), bendamustine ready-to-dilute ("RTD") 500ml solution ("Belrapzo"), and rapidly infused bendamustine RTD ("Bendeka"). We market our products through marketing partners and/or our internal direct sales force. Eagle markets Ryanodex and Belrapzo, and Teva Pharmaceutical Industries Ltd. ("Teva") markets Bendeka through its subsidiary Cephalon, Inc.

Reflecting further expansion of our oncology portfolio, in February 2020, we received final FDA approval for Pemfexy® (“Pemfexy”) and in July 2020, we announced that the Centers for Medicare & Medicaid Services (“CMS”) had established a unique, product-specific billing code for Pemfexy, effective on October 1, 2020. Pemfexy, our novel pemetrexed product, is a branded alternative to Alimta® for metastatic non-squamous non-small cell lung cancer and malignant pleural mesothelioma. The conversion from tentative to a final approval follows the Company’s settlement agreement reached with Eli Lilly and Company (“Lilly”) on December 13, 2019. This agreement provides for a release of all claims by the parties and allows for an initial entry of Pemfexy into the market (equivalent to approximately a three-week supply of current Alimta utilization) on February 1, 2022, and a subsequent uncapped entry on April 1, 2022.

On August 7, 2020, the Company received a Complete Response Letter for its NDA for Ryanodex for the treatment of exertional heat stroke (“EHS”); Eagle has decided that it will no longer pursue this indication.

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Significant Accounting Policies

The Company’s significant accounting policies are described in the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and the notes thereto filed with the SEC on

March 2, 2020. Since the date of those consolidated financial statements, there have been no material changes to the Company’s significant accounting policies other than as listed below.

Significant Risks and Uncertainties

In response to the ongoing COVID-19 pandemic, the Company has taken and continues to take active measures designed to address and mitigate the impact of the COVID-19 pandemic on its business, such as remote working policies, facilitating management’s periodic communication to address employee and business concerns and providing frequent updates to the Company’s Board of Directors (“Board”). The Company anticipates that the COVID-19 pandemic may also have an impact on the clinical development timelines for certain of its clinical programs, such as EA-114. The Company also anticipates that the COVID-19 pandemic may have an impact on the Company’s supply chain. The COVID-19 pandemic and associated lockdowns have resulted in a decrease in healthcare utilization broadly and specifically lead to a continuing reduction in the utilization of physician-administered oncology products including Belrapzo and Bendeka. In addition, the COVID-19 pandemic has delayed the timing of ongoing litigation, including the litigation with Par (as defined below) with respect to Vasopressin, and the Company anticipates that such delays will continue for the duration of the pandemic. The extent to which the COVID-19 pandemic will continue to impact the Company’s business, its clinical development and regulatory efforts, its supply chain and sales efforts, its corporate development objectives and the value of, and market for, its common stock will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States, and other countries, and the effectiveness of actions taken globally to contain and treat the disease. The global economic slowdown, the overall disruption of global healthcare systems and other risks and uncertainties associated with the pandemic have impacted the Company’s operations and could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects.

In addition, the Company is subject to other challenges and risks specific to its business and its ability to execute on its business plan and strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with research and development operations, including, without limitation, risks and uncertainties associated with: delays or problems in obtaining clinical supply; obtaining regulatory approval of its product candidates; loss of single source suppliers or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing additional products or product candidates; product development and the inherent uncertainty of clinical success; the challenges of protecting and enhancing its intellectual property rights; and the challenges of complying with applicable regulatory requirements. In addition, as the ongoing COVID-19 pandemic affects the Company’s business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties discussed above.

Use of Estimates

These financial statements are presented in U.S. dollars and are prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements including disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and accompanying notes. The Company’s critical accounting policies are those that are both most important to the Company’s financial condition and results of operations and require the most difficult, subjective or complex judgments on the part of management in their application, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company anticipates that the COVID-19 pandemic will continue to disrupt the Company’s supply chain and marketing and sales efforts for certain of its products, including Bendeka, although it is not currently expected that any disruption would be significant. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Because of the uncertainty of factors surrounding the estimates or judgments used in the preparation of the financial statements, actual results may materially vary from these estimates, and any such differences may be material to the Company’s financial statements.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform with the current year presentation. None of the reclassifications were significant.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. All cash and cash equivalents are held in United States financial institutions. The carrying amount of cash and cash equivalents approximates its fair value due to its short-term nature.

The Company, at times, maintains balances with financial institutions in excess of the Federal Deposit Insurance Corporation (“FDIC”) limit.

Fair Value Measurements

U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

•Level 1: Quoted prices in active markets for identical assets or liabilities.

•Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The fair value of interest-bearing cash, cash equivalents, accounts receivable and accounts payable approximate fair value due to their life being short term in nature, and are classified as Level 1 for all periods presented.

Financial assets and liabilities measured and recognized at fair value are as follows:

	September 30, 2020
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	86,343	$	86,343	$	—	$	—
ASR forward contract	2,549		—		$	2,549	$	—
Investment in Tyme	9,800		9,800		$	—	$	—
Total financial assets	98,692		96,143		$	2,549	$	—
Liabilities:
Contingent consideration	$	—	$	—	$	—	$	—
Total financial liabilities	$	—	$	—	$	—	$	—

	December 31, 2019
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	105,672	$	105,672	$	—	$	—
Total financial assets	$	105,672	$	105,672	$	—	$	—
Liabilities:
Contingent consideration	$	—	$	—	$	—	$	—
Total financial liabilities	$	—	$	—	$	—	$	—

The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers in or out of Level 1, Level 2 or Level 3 during the nine months ended September 30, 2020 and 2019, respectively.

Our investment in restricted shares of common stock of Tyme Technologies, Inc. (“Tyme”) are classified as Level 1. Refer to Note 13, Collaboration with Tyme for further details.

The fair value of the forward contract associated with the accelerated share repurchase ("ASR") transaction with JPMorgan Chase Bank, National Association is classified as Level 2 for the periods presented. Refer to Note 8, Common Stock and Stock-Based Compensation for further details.

The fair value of debt is classified as Level 2 for the periods presented and approximates its fair value due to the variable interest rate.

The fair value of any contingent consideration was classified as Level 3 for the periods presented.

Intangible Assets

The Company reviews the recoverability of its finite-lived intangible assets and long-lived assets for indicators of impairments. Events or circumstances that may require an impairment assessment include negative clinical trial results, a significant decrease in the market price of the asset, or a significant adverse change in legal factors or the manner in which the asset is used. If such indicators are present, the Company assess the recoverability of affected assets by determining if the carrying value of such assets is less than the sum of the undiscounted future cash flows of the assets. If such assets are found to not be recoverable, the Company measures the amount of the impairment by comparing to the carrying value of the assets to the fair value of the assets. The Company determined that no indicators of impairment of finite-lived intangible assets or long-lived assets existed at September 30, 2020.

Goodwill

Goodwill represents the excess of purchase price over the fair value of net assets acquired in the Eagle Biologics acquisition. Goodwill is not amortized, but is evaluated for impairment on an annual basis, in the fourth quarter, or more frequently if events or changes in circumstances indicate that the reporting unit’s goodwill is less than its carrying amount. The Company did not identify any impairment to goodwill during the periods presented.

Concentration of Major Customers and Vendors

The Company is dependent on a commercial partner who markets and sells Bendeka. The Company's customer for Bendeka is its commercial and licensing partner; therefore, the Company's future revenues are highly dependent on the related exclusive license and distribution arrangement.

In March 2019, the Company entered into an agreement with Teva, or the Bendeka License Agreement, pursuant to which Teva has agreed to market Bendeka through its subsidiary, Cephalon, Inc. Pursuant to the Bendeka License Agreement, Teva pays the Company a royalty based on net sales of the product and also purchases Bendeka from the Company.

The total revenues and accounts receivables broken down by major customers as a percentage of the total are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Total revenues
Cephalon, Inc. (Teva) - See Revenue Recognition	74	%	85	%	72	%	78	%
Other	26	%	15	%	28	%	22	%
	100	%	100	%	100	%	100	%

	September 30,		December 31,
	2020		2019
Accounts receivable
Cephalon, Inc. (Teva) - See Revenue Recognition	66	%	80	%
Other	34	%	20	%
	100	%	100	%

Inventories

Inventories are recorded at the lower of cost and net realizable value, with cost determined on a first-in first-out basis. The Company periodically reviews the composition of inventory in order to identify obsolete, slow-moving or otherwise non-saleable items. If non-saleable items are observed and there are no alternate uses for the inventory, the Company will record a write-down to lower of cost and net realizable value in the period that the decline in value is first recognized.

Property and Equipment

Property and equipment are stated at cost. Depreciation is recorded over the estimated useful lives of the assets utilizing the straight-line method. Leasehold improvements are being amortized over the shorter of their useful lives or the lease term.

Research and Development Expense

Costs for research and development are charged to expense as incurred and include; employee-related expenses including salaries, benefits, travel and stock-based compensation expense for research and development personnel; expenses incurred under agreements with contract research organizations, contract manufacturing organizations and service providers that assist in conducting clinical and preclinical studies; costs associated with preclinical activities and development activities, costs associated with regulatory operations; and depreciation expense for assets used in research and development activities.

Costs for certain development activities, such as clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the patterns of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid expenses or accrued expenses as deemed appropriate. Recoveries of previously recognized research and development expenses from third parties are recorded as a reduction to research and development expense in the period it becomes realizable.

Advertising and Marketing

Advertising and marketing costs are expensed as incurred. Advertising and marketing costs were $316 and $556 for the three months ended September 30, 2020 and 2019, respectively. Advertising and marketing costs were $2,204 and $1,673 for the nine months ended September 30, 2020 and 2019, respectively.

Income Taxes

The Company accounts for income taxes using the liability method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), 740 - Income Taxes (“ASC 740”). Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and are measured by applying enacted rates and laws to taxable years in which differences are expected to be recovered or settled.  Further, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that the rate changes. A valuation allowance is required when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. ASC 740 also prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return, including a decision whether to file or not file a return in a particular jurisdiction. We recognize any interest and penalties accrued related to unrecognized tax benefits as income tax expense.

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606 - Revenue from Contracts with Customers (“ASC 606”), the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Receivables from our product sales have payment terms ranging from 30 to 75 days with select extended terms to wholesalers on initial purchases of product launch quantities. Our receivables from royalty revenue are due 45 days from the end of the quarter.

Product revenue - The Company recognizes net revenue on sales to its commercial partners and to end users. In each instance, revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract.

Revenue on sales to commercial partners relates to Argatroban and Bendeka. Sales to our commercial partners are presented gross because the Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement and bears risk of loss while the inventory is in-transit to the commercial partner.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method to which the Company expects to be entitled. As such, revenue on sales to customers for Belrapzo, Non-Alcohol Docetaxel Injection, Ryanodex and diclofenac-misoprostol are recorded net of chargebacks, rebates, returns, prompt pay discounts, wholesaler fees and other deductions. Our products are contracted with a limited number of oncology distributors and hospital buying groups with narrow differences in ultimate realized contract prices used to estimate our chargeback and rebate reserves. The Company has a product return policy on some of its products that allows the customer to return pharmaceutical products within a specified period of time both prior to and subsequent to the product’s expiration date. The Company's estimate of the provision for returns is analyzed quarterly and is based upon many factors, including historical experience of actual returns and analysis

of the level of inventory in the distribution channel, if any. The Company has terms on sales of Ryanodex by which the Company does not accept returns. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration are made using the expected value method and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. The Company believes that the estimates it has established are reasonable based upon current facts and circumstances. Applying different judgments to the same facts and circumstances could result in the estimated amounts to vary.

Royalty Revenue — The Company recognizes revenue from license arrangements with its commercial partners' net sales of products. In accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the commercial partner’s products occurs. The Company's commercial partners are obligated to report their net product sales and the resulting royalty due to the Company within 25 days for Bendeka and 60 days for Argatroban from the end of each quarter. Based on historical product sales, royalty receipts and other relevant information, the Company accrues royalty revenue each quarter and subsequently determines a true-up when it receives royalty reports from its commercial partners. Historically, these true-up adjustments have been immaterial.

License and other revenue — The Company analyzes each element of its licensing agreements to determine the appropriate revenue recognition. The terms of the license agreement may include payment to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. The Company recognizes revenue from upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

The Company recognizes sales-based milestone payments as revenue upon the achievement of the cumulative sales amount specified in the contract in accordance with ASC 606-10-55-65. For those milestone payments which are contingent on the occurrence of particular future events, the Company determined that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method. As such, the Company assesses each milestone to determine the probability and substance behind achieving each milestone. Given the inherent uncertainty of the occurrence of these future events, the Company will not recognize revenue from the milestone until there is not a high probability of a reversal of revenue, which typically occurs near or upon achievement of the event.

Collaborative licensing and development revenue — The Company recognizes revenue from reimbursements received in connection with feasibility studies and development work for third parties when its contractual services are performed, provided collectability is reasonably assured. Its principal costs under these agreements include its personnel conducting research and development, its allocated overhead, as well as the research and development performed by outside contractors or consultants.

Upon termination of a collaboration agreement, any remaining non-refundable license fees received by the Company, which had been deferred, are generally recognized in full. All such recognized revenues are included in collaborative licensing and development revenue in its condensed consolidated statements of operations. The Company recognizes revenue from milestone payments received under collaboration agreements when earned, provided that the milestone event is substantive, its achievability was not reasonably assured at the inception of the agreement, the Company has no further performance obligations relating to the event, and collectability is reasonably assured. If these criteria are not met, the Company would generally recognize milestone payments ratably over the remaining period of its performance obligations under the collaboration agreement.

Stock-Based Compensation

The Company accounts for stock-based compensation using the fair value provisions of ASC 718, Compensation - Stock Compensation that requires the recognition of compensation expense, using a fair-value based method, for costs related to all stock-based payments including stock options and restricted stock. This topic requires companies to estimate the fair value of the stock-based awards on the date of grant for options issued to employees and directors and record expense over the employees' service periods, which are generally the vesting period of the equity awards.

The Company accounts for stock-based compensation by measuring and recognizing compensation expense for all stock-based payments made to employees and directors based on estimated grant date fair values. The straight-line method is used to allocate compensation cost to reporting periods over each optionee's requisite service period, which is generally the vesting period. The fair value of the Company's stock-based awards to employees and directors is estimated using the Black-Scholes valuation model and a Monte Carlo simulation model for performance share units. These models require the input of subjective assumptions, including the expected stock price volatility, the calculation of expected term, historical forfeitures and the fair value of the underlying common stock on the date of grant, among other inputs. The risk-free interest rate is determined with the implied yield currently available for zero-coupon U.S. government issues with a remaining term approximating the expected life of the options.

Earnings Per Share

Basic earnings per common share is computed using the weighted average number of shares outstanding during the period. Diluted earnings per share is computed in a manner similar to the basic earnings per share, except that the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of warrants, options, convertible debt and other such convertible instruments. Diluted earnings per share contemplate a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share.

The anti-dilutive common shares equivalents outstanding for the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Stock options	3,156,166	2,476,552	2,905,021	2,493,937
Restricted stock units	205,891	39,047	225,177	40,133
Total	3,362,057	2,515,599	3,130,198	2,534,070

The following table sets forth the computation for basic and diluted net (loss) earnings per share for the three and nine months ended September 30, 2020 and 2019:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Numerator
Numerator for basic and diluted earnings per share-net (loss) income	$	7,059	$	(2,390)	$	3,932	$	13,308
Denominator
Basic weighted average common shares outstanding	13,531,372		13,668,091		13,620,981		13,791,071
Dilutive effect of stock awards	255,431		—		296,819		356,587
Diluted weighted average common shares outstanding	13,786,803		13,668,091		13,917,800		14,147,658
Basic net earnings (loss) per share
Basic net earnings (loss) per share	$	0.52	$	(0.17)	$	0.29	$	0.96
Diluted net earnings (loss) per share
Diluted net earnings (loss) per share	$	0.51	$	(0.17)	$	0.28	$	0.94

All potentially dilutive items were excluded from the diluted share calculation for the three months ended September 30, 2019 because their effect would have been anti-dilutive, as the Company was in a loss position.

Recent Accounting Pronouncements

Recent Accounting Pronouncements - Not Yet Adopted

In March 2020, the FASB issued Update 2020-04 Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting to provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The amendments in Update 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR, formerly known as the London Interbank Offered Rate,

or another reference rate expected to be discontinued due to reference rate reform. The new guidance provides optional expedients, including; (1) Simplify accounting analyses under current GAAP for contract modifications, such as modifications of contracts within the scope of Topic 470, Debt, that will be accounted for by prospectively adjusting the effective interest rate, as if any modification was not substantial. That is, the original contract and the new contract shall be accounted for as if they were not substantially different from one another; (2) Simplify the assessment of hedge effectiveness and allow hedging relationships affected by reference rate reform to continue; (3) Allow a one-time election to sell or transfer debt securities classified as held to maturity before January 1, 2020 that reference a rate affected by reference rate reform. The amendments are effective for all entities from the beginning of an interim period that includes the issuance date of the ASU. An entity may elect to apply the amendments prospectively through December 31, 2022. The adoption of ASU 2020-4 is not expected to have a material impact on the Company's financial position or results of operations.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses which requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This standard is effective for fiscal years beginning after December 15, 2019 and the Company adopted the standard effective January 1, 2020. The adoption of ASU 2016-13 had no material impact on the Company's financial position and results of operations.

CARES Act

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into U.S. federal law, which is aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the COVID-19 pandemic and generally supporting the U.S. economy. The CARES Act, among other things, includes provisions related to refundable payroll tax credits, deferment of the employer portion of social security payments, net operating loss carryback periods, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. Reimbursement was not sought by the Company. The CARES Act has not had, and the Company does not currently expect it to have, a material impact on the Company’s financial statements at this time.

XML

Property and Equipment, net

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and Equipment, net

Property and equipment consisted of the following:

	September 30, 2020		December 31, 2019		Estimated Useful Life (years)
Furniture and fixtures	$	1,476	$	1,188	7
Office equipment	1,077		1,094		3
Equipment	3,390		3,095		7
Leasehold improvements	1,155		1,144		2
	7,098		6,521
Less accumulated depreciation	(4,975)		(4,319)
Property and equipment, net	$	2,123	$	2,202

Depreciation expense related to property and equipment amounted to $196 and $241 for the three months ended September 30, 2020 and 2019, respectively, and $656 and $725 for the nine months ended September 30, 2020 and 2019, respectively.

XML

Inventories

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consist of the following:

	September 30,		December 31,
	2020		2019
Raw material	$	2,439	$	2,460
Work in process	4,096		3,243
Finished products	51		863
	$	6,586	$	6,566

XML

Balance Sheet Accounts

9 Months Ended

Sep. 30, 2020

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Accounts

Balance Sheet Accounts

Prepaid and Other Current Assets

Prepaid and other current assets consist of the following:

	September 30,		December 31,
	2020		2019
Prepaid income taxes	$	315	$	4,661
Prepaid FDA user fee and advances to clinical research organization	1,682		6,345
Prepaid insurance	440		191
Advances to commercial manufacturers	4,222		2,462
Earned milestone receivable - SymBio Pharmaceuticals Limited	5,000		—
All other	3,671		1,445
Total Prepaid expenses and other current assets	$	15,330	$	15,104

Accrued Expenses

Accrued expenses consist of the following:

	September 30,		December 31,
	2020		2019
Accrued sales reserves	$	7,122	$	8,364
Royalties payable to commercial partners	6,906		6,004
Accrued salary and other compensation	4,742		8,083
Accrued professional fees	2,114		1,926
Accrued research & development	1,123		1,686
Current portion of lease liability	1,118		1,101
Accrued other	1,320		1,197
Total Accrued expenses	$	24,445	$	28,361

Leases

The Company leases its corporate office under an amended lease agreement that expires on June 30, 2025 (the "Corporate Office Lease"). The Corporate Office Lease was amended on August 8, 2019 to extend the term through such date and to increase the amount of leased office space. The Company also leases lab space under a lease agreement that expires on October 31, 2023 (the "Lab Space Lease"). The Company estimated the right of use asset and the corresponding lease liability, on a discounted basis, as of the adoption date of January 1, 2019. The future minimum lease payments under this Corporate Office Lease are approximately $6.6 million.

For the Corporate Office Lease and Lab Space Lease, which are the Company's two operating leases, the amortization and interest expense components are combined and recognized ratably over the remaining term of the lease as research and development and selling, general and administrative in the Company's condensed consolidated statements of operations, respectively.

The Company used its estimated incremental borrowing rate to calculate the present value of the right of use ("ROU") assets and lease liabilities as of the date of adoption date. The implicit interest rate related to the Company’s two lease agreements was not known as of the date of adoption. Therefore, the Company calculated an incremental borrowing rate based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment.

Lease related disclosures consist of the following:

	September 30,			December 31,			September 30,
	2020			2019			2019
Operating ROU asset, net included in Other assets	$	3,578		$	3,716		$	4,184
Lease liability included with Other long-term liabilities	$	2,844		$	3,000		$	3,227
Lease liability included with Accrued expenses and other liabilities	$	1,118		$	1,101		$	1,084
Quarter to date ("QTD") amortization of ROU asset	$	509		n/a			$	232
Year to date ("YTD") amortization of ROU asset	$	980		n/a			$	754
Operating cash flows from operating leases	$	980		n/a			$	860
Operating lease costs	$	980		n/a			$	860
Weighted-average remaining lease term - operating leases	4.2 years			5.0 years			5.0 years
Weighted-average discount rate - operating leases	6		%	6		%	6		%

As of September 30, 2020, the future minimum lease commitments for the Company's two leases were as follows:

	Total		2020		2021		2022		2023		2024		2025		Beyond
Lease Payments	$	5,903	$	641	$	1,362	$	1,376	$	1,291	$	820	$	413	$	—
Less: Imputed Interest expense	1,941
Total Lease Liability	$	3,962

As of December 31, 2019, the future minimum lease commitments for the Company's two leases were as follows:

	Total		2020		2021		2022		2023		2024		2025
	$	6,607	$	1,345	$	1,362	$	1,376	$	1,291	$	820	$	413
Less: Imputed Interest expense	2,506
Total Lease Liability	$	4,101

XML

Intangible Assets, Net

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets, Net

Intangible Assets, Net

The gross carrying amounts and net book value of the Company's intangible assets are as follows:

		September 30, 2020
	Useful Life (In Years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Ryanodex intangible (i)	20	$	15,000	$	(3,239)	$	11,761
Developed technology	5	8,100		(6,277)		1,823
Total		$	23,100	$	(9,516)	$	13,584

		December 31, 2019
	Useful Life (In Years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Ryanodex intangible (i)	20	15,000		(2,454)		12,546
Developed technology	5	8,100		(5,063)		3,037
Total		$	23,100	$	(7,517)	$	15,583

(i) Represent payments made to reduce the royalties payable to a third party on Ryanodex net sales.

Amortization expense was $667 and $630 for the three months ended September 30, 2020 and 2019, respectively, and $1,999 and $1,890 for the nine months ended September 30, 2020 and 2019, respectively.

Estimated Amortization Expense for Intangible Assets

Based on definite-lived intangible assets recorded as of September 30, 2020, and assuming that the underlying assets will not be impaired and that the Company will not change the expected lives of the assets, future amortization expenses are estimated as follows:

	Estimated Amortization Expense
Year Ending December 31,
2020 (remainder)	665
2021	2,622
2022	1,369
2023	1,570
2024	1,898
Thereafter	5,460
Total estimated amortization expense	$	13,584

XML

Common Stock and Stock-Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Common Stock and Stock-Based Compensation

Common Stock and Stock-Based Compensation

Common Stock

Share Repurchase Program

On March 17, 2020, the Company, announced that its Board approved a new share repurchase program, or the Share Repurchase Program, providing for the repurchase of up to an aggregate of $160.0 million of the Company’s outstanding common stock. The Share Repurchase Program replaced the Company’s then existing share repurchase program, or the Previous Share Repurchase Program, which was announced on October 30, 2018 and was terminated in connection with the Board’s approval of the Share Repurchase Program. At termination, the Company had repurchased approximately $68.0 million of the Company’s outstanding common stock under the Previous Share Repurchase Program.

Under the Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, privately-negotiated transactions, accelerated share repurchases or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. The repurchases have no time limit and may be suspended or discontinued completely at any time. The specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors. The repurchases will be made using the Company’s cash resources.

On September 23, 2020, the Company's Board of Directors approved a $25.0 million accelerated share repurchase (“ASR”) transaction with JPMorgan Chase Bank, National Association (“JP Morgan”) as part of the Company’s existing $160.0 million share repurchase program. The specific number of shares to be repurchased pursuant to the ASR is based on the average of the daily volume weighted average share prices of the Company’s common stock, less a discount, during the term of the ASR program. Under the terms of the Company's agreement with JP Morgan, the Company paid $25.0 million to JP Morgan on September 24, 2020, and received 505,817 shares, representing approximately 80% of the notional amount of the ASR, based on the closing price of $39.54 on September 23, 2020. Upon settlement of the ASR, the final number of shares repurchased will be determined based on the average of the daily volume weighted average share prices of the Company’s common stock, less a discount, during the term of the ASR. The ASR will be completed in the fourth quarter of 2020. As of September 30, 2020, the Company included $5.0 million representing approximately 20% of the notional amount of the ASR in Prepaid expenses and other current assets on its condensed consolidated balance sheet. The Company determined the ASR contained a forward contract and therefore the Company recorded fair value adjustments on unsettled accelerated share repurchase agreement in the amount of $2.5 million which was a loss recorded in Other expense on our condensed consolidated statements of operations in the three months ended September 30, 2020.

As of September 30, 2020, the Company had repurchased an aggregate of 3,594,551 shares of common stock for an aggregate of $199.9 million pursuant to the Company’s share repurchase programs in effect since August 2016.

Stock-Based Compensation

In November 2013, the Company's Board of Directors approved the 2014 Equity Incentive Plan (the "2014 Plan") which became effective on February 11, 2014. The 2014 Plan provides for the awards of incentive stock options, non-qualified stock options, restricted stock, restricted stock units and other stock-based awards. Awards generally vest equally over a period of four years from grant date. Vesting may be accelerated under a change in control of the Company or in the event of death or disability to the recipient. In the event of termination, any unvested shares or options are forfeited.

During the first quarter of 2018, the Company introduced a new long-term incentive program with the objective to better align the stock-based awards granted to management with the Company's focus on improving total shareholder return over the long-term. The stock-based awards granted under this long-term incentive program consist of time-based stock options, time-based restricted stock units ("RSUs") and performance-based stock units ("PSUs"). PSUs are comprised of awards that vest upon achievement of certain share price appreciation conditions.

A summary of stock option, RSU and PSU activity under the 2014 Plan during the nine months ended September 30, 2020 and 2019 is presented below:

	Stock Options	RSUs	PSUs
Outstanding at December 31, 2018	2,556,365	54,219	117,219
Granted	600,133	211,829	—
Options Exercised/RSUs Vested/PSUs Vested	(10,034)	(13,555)	—
Forfeited or expired	(20,890)	(1,278)	(1,038)
Outstanding at September 30, 2019	3,125,574	251,215	116,181
Outstanding at December 31, 2019	3,096,161	251,215	116,181
Granted	662,700	231,450	—
Options Exercised/RSUs Vested/PSUs Vested	(41,951)	(67,970)	—
Forfeited or expired	(185,615)	(53,824)	(11,431)
Outstanding at September 30, 2020	3,531,295	360,871	104,750

Stock Options

The fair value of stock options granted to employees, directors, and consultants were estimated using the following assumptions:

	Three Months Ended September 30,		Nine Months Ended   September 30,
	2020	2019	2020	2019
Risk-free interest rate	0.37% - 0.41%	1.50% - 1.84%	0.37% - 1.65%	1.45% - 2.61%
Volatility	55.42%	49.87%	54.98%	50.27%
Expected term (in years)	6.07 years	5.93 years	6.03 years	5.91 years
Expected dividend yield	0.0%	0.0%	0.0%	0.00%

RSUs

Each vested time-based RSU represents the right of a holder to receive one share of the Company’s common stock. The fair value of each RSU granted was estimated based on the trading price of the Company’s common stock on the date of grant.

PSUs

The fair value of PSUs granted to employees was estimated using a Monte Carlo simulation model. Inputs used in the calculation include a risk-free interest rate of 2.06%, an expected volatility of 47%, contractual term of 3 years, and no expected dividend yield.

The Company recognized stock-based compensation in its condensed consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019 as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Stock options	$	3,685	$	4,241	$	12,831	$	12,636
RSUs	928		644		4,115		1,895
PSUs	109		766		1,489		2,284
Stock-based compensation expense	$	4,722	$	5,651	$	18,435	$	16,815
Selling, general and administrative	$	5,236	$	4,570	$	16,365	$	13,495
Research and development	(514)		1,081		2,070		3,320
Stock-based compensation expense	$	4,722	$	5,651	$	18,435	$	16,815

XML

Commitments

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments

Commitments

The Company's future material contractual obligations as of September 30, 2020, included the following:

Obligations	Total		2020		2021		2022		2023		2024		2025		Beyond
Operating leases (1)	$	5,903	$	641	$	1,362	$	1,376	$	1,291	$	820	$	413	$	—
Credit facility (2)	36,000		2,000		8,000		26,000		—		—		—		—
Purchase obligations (3)	32,944		32,944		—		—		—		—		—		—
Total obligations	$	74,847	$	35,585	$	9,362	$	27,376	$	1,291	$	820	$	413	$	—

(1) The Company leases its corporate office location. The term of its existing lease expires on June 30, 2025. The Company also leases its lab space under a lease agreement that expires on October 31, 2023. Rental expense for the operating leases was $276 and $286, for the three months ended September 30, 2020 and 2019, respectively. Rental expense for these two operating leases was $910 and $860 for the nine months ended September 30, 2020 and 2019, respectively. The remaining future lease payments under the operating leases are $5,903 as of September 30, 2020.

(2) Refer to Note 10, “Debt” for further information regarding the Revised Credit Agreement.

(3) As of September 30, 2020, the Company had purchase obligations in the amount of $32,944 which represents the contractual commitments under contract manufacturing and supply agreements with suppliers. The obligation under the supply agreement is primarily for finished product, inventory, and research and development.

XML

Debt

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Debt

Debt

On November 8, 2019, the Company entered into the Second Amended and Restated Credit Agreement (the “Revised Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent (the “Agent”) and the lenders party thereto, which replaced the Company’s existing credit agreement, dated as of August 8, 2017. The terms and amounts borrowed under the Revised Credit Agreement includes a drawn term loan of $40.0 million and an undrawn revolving credit facility of $110.0 million. The schedule of principal payments for the new term loan facility was extended to November 8, 2022.

As of September 30, 2020, the terms and amounts borrowed under the Revised Credit Agreement included a drawn term loan of $40.0 million. The Company obtained revolving loans under the revolving credit facility during the three months ended March 31, 2020 in the amount of $110.0 million. The Company repaid the full $110.0 million borrowed from the revolving credit facility during the three months ended June 30, 2020. The Company classified the current portion of long-term debt of $8.0

million on the consolidated balance sheet as of September 30, 2020. Per the terms of the Revised Credit Agreement, the Company is limited in its ability to pay dividends. As of September 30, 2020, the Company was in compliance with each of the senior secured net leverage ratio; total net leverage ratio; and fixed charge coverage ratio covenants.

The term loan facility bears interest at the Adjusted LIBOR (equal to (a) the LIBOR for such Interest Period multiplied by (b) the Statutory Reserve Rate as established by Board of Governors of the Federal Reserve System of the United States of America) for the interest period in effect for such borrowing plus the applicable rate as described below. The Agent and the Company may amend the Revised Credit Agreement to replace the LIBOR with a Benchmark Replacement, described below.

Loans under the Revised Credit Agreement bear interest at a rate equal to either (a) the LIBOR rate, plus an applicable margin ranging from 2.25% to 3.0% per annum, based upon the total net leverage ratio (as defined in the Revised Credit Agreement), or (b) the Benchmark Replacement which is defined as the greatest of the prime lending rate, or the NYFRB Rate (the rate for a federal funds transaction) in effect on such day plus ½ of 1% or the Adjusted LIBOR for a one month Interest Period on such day plus 1% plus an applicable margin ranging from 1.25% to 2.0% per annum, based upon the total net leverage ratio. 

The Company is required to pay a commitment fee on the unused portion of the new revolving credit facility in the Revised Credit Agreement at a rate ranging from 0.35% to 0.45% per annum based upon the total net leverage ratio. The Company is obligated to repay a contractually agreed portion of the term loan on the last day of each March, June, September and December in accordance with the Revised Credit Agreement.

As of September 30, 2020, the Company had $1.0 million of unamortized deferred debt issuance costs as part of long-term debt in its condensed consolidated balance sheets.

Debt Maturities	As of September 30, 2020
2020 (remainder)	$	2,000
2021	8,000
2022	26,000
Total	$	36,000

XML

Income Taxes

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Income tax (provision) benefit	$	(1,866)		$	152		$	(7,358)		$	(5,332)
Effective tax rate	21		%	6		%	65		%	26		%

For interim periods, we recognize an income tax (provision) benefit based on our estimated annual effective tax rate expected for the entire year plus the effects of certain discrete items occurring in the quarter. The interim annual estimated effective tax rate is based on the statutory tax rates then in effect, as adjusted for changes in estimated permanent differences, and certain discrete items whose tax effect, when material, is recognized in the interim period in which they occur.

The provision for income taxes was based on the applicable federal and state tax rates for those periods. The effective tax rate for the three and nine months ended September 30, 2020 reflects the impact of a valuation allowance established and adjusted for the fair value adjustments on the Company’s investment in Tyme, certain non-deductible executive compensation, non-deductible nature of the fair value adjustment of the unsettled ASR agreement, changes in state filing positions partially offset by credits for research and development activity. The Company reviews the realizability of its deferred tax assets on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset are considered, along with any other positive or negative evidence. Since future financial results, including the fair value adjustment on the Company’s investment in Tyme may differ from previous estimates, periodic adjustments to the Company’s valuation allowances may be necessary.

Deferred income tax assets as of September 30, 2020 consisted of temporary differences primarily related to stock-based compensation and research and development tax credit carryforwards, partially offset by temporary differences related to intangible assets.

The Company files income tax returns in the U.S. federal jurisdiction and several states. Given that the Company has incurred tax losses in most years since its inception, all of the Company’s tax years are effectively open to examination. The Company is currently under audit by three State tax jurisdictions. The Company had no amount recorded for any unrecognized tax benefits as of September 30, 2020. The Company regularly evaluates its tax positions for additional unrecognized tax benefits and associated interest and penalties, if applicable. There are many factors that are considered when evaluating these tax positions including: interpretation of tax laws, recent tax litigation on a position, past audit or examination history, and subjective estimates and assumptions. The Company reflects interest and penalties attributable to income taxes, to the extent they arise, as a component of income tax provision or benefit.

XML

Legal Proceedings

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings

Legal Proceedings

In addition to the below legal proceedings, from time to time, the Company may be a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters, or matters discussed below, will not have a material adverse effect on the Company's business nor has the Company recorded any loss in connection with these matters because the Company believes that loss is neither probable nor estimable. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

Commercial Litigation

In Re: Taxotere (Docetaxel)

On February 1, 2017, the Company was named as a defendant, among various other manufacturers, in several product liability suits that are consolidated in the U.S. District Court for the Eastern District of Louisiana as part of MDL 2740 (Civil Action No 2:16 md-2740), or the Multidistrict Litigation. The claims are for personal injuries allegedly arising out of the use of docetaxel.

In March 2017, the Company reached agreements in principle with the Plaintiffs’ Steering Committee in this matter to voluntarily dismiss the Company from all of the lawsuits in which it was named and from the master complaint. The Company is in the process of working with the other parties in this matter to have it removed from the Multidistrict litigation entirely.  As part of the agreement, in the event a case is brought in the future with facts that justify the Company’s inclusion, the plaintiffs reserved the right to include the Company in such matter.  The plaintiffs have filed several additional lawsuits since the parties’ agreement in principle to dismiss, and the Company is in the process of working with plaintiffs to explore the possibility of dismissing those lawsuits.  

Eagle v. Burwell

On April 27, 2016, the Company filed an action in the U.S. District Court for the District of Columbia (the “District Court”) against the FDA and other federal defendants seeking an order requiring the FDA to recognize orphan drug exclusivity for Bendeka for the treatment of CLL and indolent B-cell NHL. On June 8, 2018, the District Court issued a decision requiring the

FDA to recognize seven years of orphan drug exclusivity in the U.S. for Bendeka, and on July 6, 2018 the FDA recognized such ODE until December 7, 2022. In addition, on July 6, 2018, the FDA submitted a Motion to Alter or Amend the Judgement Pursuant to Rule 59(e), pursuant to which the FDA requested that the District Court amend its decision to make clear that the decision does not affect any applications referencing TREANDA. The FDA’s motion was denied by the District Court on August 1, 2018 on the grounds that the FDA had not satisfied the standard for altering or amending the judgment. The FDA and two intervenors appealed the District Court’s final judgment to the U.S. Court of Appeals for the District of Columbia Circuit (the “Court of Appeals”). Oral arguments occurred on October 17, 2019, and on March 13, 2020 a panel of the Court of Appeals affirmed the District Court’s decision.

FDA filed a petition for rehearing en banc on May 27, 2020, which was denied on August 17, 2020. Previously, on February 20, 2019, the FDA issued a decision in favor of the Company, regarding the scope of orphan drug exclusivity for Bendeka. Pursuant to the FDA’s decision, no bendamustine product used to treat the same indications (including generic versions of TREANDA) may launch in the United States until December 7, 2022 unless it is clinically superior to Bendeka.

Eagle v. Eli Lilly

On August 24, 2017, the Company filed an antitrust complaint in the United States District Court for the District of New Jersey (“New Jersey District Court”) against Eli Lilly and Company (“Lilly”).  The complaint alleges that Lilly engaged in anticompetitive conduct which restrained competition by delaying and blocking the Company’s launch of a competing pemetrexed injection product (to compete with Lilly’s Alimta). Lilly accepted service and answered the complaint on October 27, 2017. Lilly also filed a motion to transfer this case to Delaware on October 27, 2017. The Company filed a motion to oppose such transfer on November 6, 2017. On July 20, 2018, the New Jersey District Court transferred the case to Delaware. On November 27, 2018, the Delaware Court stayed the case at least until conclusion of the PemfexyTM patent trial described below. On December 16, 2019, the Delaware Court entered the Company and Lilly’s stipulation dismissing this case with prejudice.

Cipla v. Eagle

On April 16, 2020, Cipla Limited (“Cipla”) filed a request for arbitration against Eagle with the London Court of International Arbitration. The request alleges that Eagle’s refusal to take delivery of several batches of Argatroban finished drug product constitutes a breach of the Company and Cipla’s December 14, 2012 supply agreement. Eagle believes that allegations in the demand for arbitration are without merit and intends to vigorously defend itself in the arbitration, which is currently scheduled for June 2021.

Patent Litigation

Eli Lilly and Company v. Eagle Pharmaceuticals, Inc. (PemfexyTM (Pemetrexed))

On August 14, 2017, Lilly filed suit against the Company in the United States District Court for the Southern District of Indiana (the “Indiana Suit”).  Lilly alleged patent infringement based on the filing of the Company’s 505(b)(2) NDA seeking approval to manufacture and sell the Company’s EP-5101.  EP-5101, if finally approved by FDA, will be a branded alternative to Alimta®.

On September 8, 2017, Eagle moved to dismiss the Indiana Suit for improper venue. On September 11, 2017, Lilly voluntarily dismissed the Indiana Suit. It then filed a complaint in the United States District Court for the District of Delaware, alleging similar patent infringement claims (the “Delaware Suit”). Eagle answered and filed various counterclaims in the Delaware Suit on October 3, 2017. Lilly answered Eagle’s counterclaims on October 24, 2017. On May 31, 2018, Eagle filed a Motion for Judgment on the Pleadings, which the Court denied on October 26, 2018. On January 23, 2019, the Court held a Markman hearing. Trial took place from October 28, 2019 to October 31, 2019 and continued on December 12, 2019 through December 13, 2019. On December 13, 2019, the Company and Lilly settled this litigation. The settlement agreement provides for a release of all claims by the parties and allows for an initial entry of Pemfexy into the market (equivalent to approximately a three week supply of current Alimta utilization) on February 1, 2022 and a subsequent uncapped entry on April 1, 2022. On December 16, 2019, the District Court entered the Company and Lilly’s stipulation dismissing this case with prejudice.

Eagle Pharmaceuticals, Inc., et al. v. Slayback Pharma Limited Liability Company; Eagle Pharmaceuticals, Inc., et al. v. Apotex Inc. and Apotex Corp.; Eagle Pharmaceuticals, Inc., et al. v. Fresenius Kabi USA, LLC; Eagle Pharmaceuticals, Inc., et al. v. Mylan Laboratories Limited; Eagle Pharmaceuticals, Inc. et al. v. Hospira, Inc; Eagle Pharmaceuticals, Inc. et al. v. Lupin, Ltd. and Lupin Pharmaceuticals, Inc.; Eagle Pharmaceuticals, Inc. et al v. Aurobindo Pharma, Ltd, Aurobindo Pharma USA, Inc., and Eugia Pharma Specialities Ltd - (Bendeka)

Bendeka, which contains bendamustine hydrochloride, is an alkylating drug that is indicated for the treatment of patients with chronic lymphocytic leukemia, as well as for the treatment of patients with indolent B-cell non-Hodgkin's lymphoma that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. Slayback Pharma Limited Liability Company (“Slayback”), Apotex Inc. and Apotex Corp. (“Apotex”), Fresenius Kabi USA, LLC (“Fresenius”), Mylan Laboratories Limited (“Mylan”), Lupin, Ltd. and Lupin Pharmaceuticals, Inc. (“Lupin”), and Aurobindo Pharma, Ltd, Aurobindo Pharma USA, Inc., and Eugia Pharma Specialities Ltd (“Aurobindo”) have filed Abbreviated New Drug Applications (“ANDA’s”) referencing Bendeka® that include challenges to one or more of the Bendeka® Orange Book-listed patents. Hospira, Inc. (“Hospira”) filed a 505(b)(2) NDA.

The Company, Cephalon, Inc. and/or Teva Pharmaceuticals International GMBH (together the “Patentees”), filed separate suits against Slayback, Apotex, Fresenius, Mylan, Hospira, Lupin, and Aurobindo in the United States District Court for the District of Delaware on August 16, 2017 (Slayback (“Slayback I”)), August 18, 2017 (Apotex), August 24, 2017 (Fresenius), December 12, 2017 (Mylan), January 19, 2018 (Slayback (“Slayback II”)), July 19, 2018 (Hospira), and July 2, 2019 (Lupin). In these Complaints, the Patentees allege infringement of the challenged patents, namely U.S. Patent Nos. 8,791,270 and 9,572,887 against Slayback (Slayback I and Slayback II), and of U.S. Patent Nos. 8,609,707, 8,791,270, 9,000,021, 9,034,908, 9,144,568, 9,265,831, 9,572,796, 9,572,797, 9,572,887, 9,579,384, 9,597,397, 9,597,398, 9,597,399 against Fresenius, Apotex, and Mylan, and of U.S. Patent Nos. 9,572,887, 10,010,533, 9,034,908, 9,144,568, 9,597,397, 9,597,398, 9,597,399, 9,000,021, 9,579,384 against Hospira, and of U.S. Patent Nos. 8,609,707, 9,000,021, 9,034,908, 9,144,568, 9,265,831, 9,572,796, 9,572,797, 9,572,887, 9,579,384, 9,597,397, 9,597,398, 9,597,399, 10,010,533, and 10,052,385 against Lupin. Patentees filed suit against Aurobindo on May 11, 2020. The parties stipulated to dismiss without prejudice U.S. Patent No. 8,791,270 as to Apotex, Fresenius and Mylan on July 24, 2018, August 2, 2018, and August 3, 2018, respectively. Slayback, Apotex, Fresenius, and Mylan answered their Complaints and some filed various counterclaims on September 29, 2017 (Slayback I), February 12, 2018 (Slayback II), November 27, 2017, September 15, 2017, and February 14, 2018, respectively. The Patentees answered the Slayback I, Slayback II, Fresenius, and Apotex counterclaims on October 20, 2017, March 5, 2018, October 6, 2017, and December 18, 2017, respectively. On October 15, 2018, the Patentees filed a suit against Fresenius and Mylan in the United States District Court for the District of Delaware, alleging patent infringement of U.S. Patent Nos. 10,010,533 and 10,052,385. The Slayback I, Slayback II, Apotex, Fresenius and Mylan cases have been consolidated for all purposes (the “Consolidated Bendeka Litigation”), and a bench trial in these cases was held September 9-19, 2019. On April 27, 2020, the district court held that the asserted patents are valid and infringed by Slayback, Apotex, Fresenius and Mylan. On July 6, 2020, the district court entered a final judgment reflecting this decision, stating that pursuant to 35 U.S.C. § 271(e)(4)(A), the FDA shall not approve Apotex’s, Fresenius’s, Mylan’s, or Slayback’s ANDA products on a date which is earlier than January 28, 2031, and enjoining Apotex, Fresenius, Mylan, and Slayback from commercially manufacturing, using, offering to sell, or selling within the US or importing into the US, their ANDA products before that date. On August 4, 2020, Apotex, Fresenius, and Mylan appealed this final judgment, and briefing is pending. Hospira filed a motion to dismiss, which was fully briefed on November 16, 2018. On December 16, 2019, the United States District Court for the District of Delaware denied Hospira’s motion to dismiss with respect to U.S. Patent No. 9,572,887 and granted that motion with respect to the remaining patents. Trial is set for November 15, 2021. The case remains pending.

The FDA is stayed from approving Hospira’s 505(b)(2) application until the earlier of (1) December 20, 2020 (the “30-month stay date”); and (2) a court decision that the ‘887 patent is not infringed, invalid, or unenforceable. The 30-month stay dates may be shortened or lengthened if either party to the action fails to reasonably cooperate in expediting the action.

Eagle Pharmaceuticals, Inc. v. Slayback Pharma Limited Liability Company

Slayback filed an ANDA referencing Eagle's Belrapzo NDA. Slayback’s ANDA includes challenges to one or more of the Belrapzo Orange Book-listed patents. On September 20, 2018, the Company filed a suit against Slayback in the United States District Court for the District of Delaware, alleging patent infringement of U.S. Patent Nos. 8,609,707, 9,265,831, 9,572,796, 9,572,797 and 10,010,533. On October 10, 2018, Slayback answered the Complaint and filed various counterclaims. On

October 31, 2018, the Company answered Slayback’s counterclaims. Pursuant to a stipulation between the parties, Slayback is bound by any final judgment entered in the Consolidated Bendeka Litigation. This case is currently stayed.

Eagle Pharmaceuticals, Inc. v. Slayback Pharma Limited Liability Company

Slayback filed a 505(b)(2) NDA referencing Eagle’s Belrapzo NDA. Slayback’s NDA includes challenges to one or more of the Belrapzo Orange Book-listed patents. On December 11, 2018, the Company filed a suit against Slayback in the United States District Court for the District of Delaware, alleging patent infringement of U.S. Patent Nos. 9,265,831, 9,572,796, 9,572,797, and 10,010,533. On January 4, 2019, Slayback filed a motion for judgment on the pleadings. On May 9, 2019, the United States District Court for the District of Delaware granted Slayback’s motion for judgment on the pleadings. On July 23, 2019, the Company filed an appeal of this decision with the United States Court of Appeals for the Federal Circuit. On May 8, 2020, the Federal Circuit upheld the district court’s decision.

Par Pharmaceutical, Inc. et al. v. Eagle Pharmaceuticals, Inc. (Vasopressin)

On May 31, 2018, Par Pharmaceutical, Inc., Par Sterile Products, LLC, and Endo Par Innovation Company, LLC (together, “Par”) filed suit against the Company in the United States District Court for the District of Delaware. Par alleged patent infringement based on the filing of the Company’s ANDA seeking approval to manufacture and sell the Company’s vasopressin product. The Company’s vasopressin product, if approved by FDA, will be an alternative to Vasostrict, which is indicated to increase blood pressure in adults with vasodilatory shock (e.g., post-cardiotomy or sepsis) who remain hypotensive despite fluids and catecholamines. The Company answered the complaint on August 6, 2018, and filed an amended answer and counterclaims on October 30, 2019. The court issued a Markman ruling on July 1, 2019. On December 20, 2019, Par dismissed with prejudice claims of three of the patents asserted against Eagle, and the Court entered an Order reflecting that dismissal on December 27, 2019. Mediation took place on March 3, 2020. On April 17, 2020, the Company submitted a letter requesting leave to file a motion for summary judgment of non-infringement. Par’s responsive letter was submitted on May 8, 2020. On May 18, 2020, the court said it would hear non-infringement arguments at trial and not through summary judgment. Due to the COVID-19 pandemic, the trial, which was scheduled to begin May 18, 2020, has been rescheduled to begin on January 11, 2021. The 30-month stay of FDA approval expired on October 17, 2020. This suit is pending.

Eagle Pharmaceuticals, Inc. et al. v. Accord (Argatroban)

On March 27, 2019, the Company and Chiesi filed suit against Accord Healthcare, Inc. (“Accord”) in the United States District Court for the District of New Jersey (the “New Jersey suit”) and in the United States District Court for the Middle District of North Carolina (the “North Carolina suit”) (together “the suits”). The suits alleged patent infringement based on Accord’s 505(b)(2) NDA seeking approval to manufacture and sell Accord’s proposed argatroban product. On May 21, 2019, the Company and Chiesi voluntarily dismissed the North Carolina suit. On July 10, 2019, Accord moved for judgment on the pleadings in the New Jersey suit. On June 30, 2020, the district court held a settlement conference. On October 7, 2020, the Magistrate Judge held a status conference. On October 8, 2020, Accord withdrew its July 10, 2019 motion for judgment on the pleadings. The New Jersey suit is currently pending.

XML

Collaboration with Tyme (Notes)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaboration with Tyme

Collaboration with Tyme

On January 7, 2020, Tyme and the Company announced a strategic collaboration to advance SM-88, an oral product candidate for the treatment of patients with cancer. SM-88 is an investigational agent in two Phase II studies, one for pancreatic cancer and another for prostate cancer.

Under the terms of the related agreements, Tyme is entitled to receive up to a total $40.0 million as follows:

(a) an initial $20.0 million upfront payment. In return, we received 10 million restricted shares of Tyme’s common stock at $2.00 per share. The Company is contractually restricted from selling its investment in Tyme for up to three years; and

(b) a second potential $20.0 million milestone payment upon the earlier of  (i) the successful completion of a pivotal trial in pancreatic cancer or (ii) FDA approval of SM-88 in any cancer indication within the United States. Upon

occurrence of such milestone event, this payment would be split into a $10.0 million one-time milestone cash payment and a $10.0 million additional investment in Tyme's preferred stock. The preferred shares will be convertible into common stock with a conversion price at a 15% premium to the then-prevailing common stock market price per share.

Under the terms of a related co-promotion agreement, we would be responsible for 25% of the promotional sales effort of SM-88 and would receive 15% royalty on the net revenues of SM-88 in the United States. Tyme is be responsible for clinical development, regulatory approval, commercial strategy, marketing, reimbursement and manufacturing of SM-88. Tyme retains the remaining 85% of net U.S. revenues and reserves the right to repurchase our U.S. co-promotion right for $200.0 million.

Under the terms of the agreement, the initial $20.0 million paid to Tyme, was accounted for as a $17.5 million readily determinable fair value equity investment based on the closing price per share of Tyme's common stock on January 7, 2020. The remainder was treated as an upfront collaboration payment of $2.5 million that was recorded as selling, general and administrative expense in the first quarter of 2020. The investment in Tyme represents approximately 9% of the total shares outstanding of Tyme's common stock.

As of September 30, 2020, the Company included its investment in Tyme in Other Assets (non-current) on its condensed consolidated balance sheet. For the three months ended September 30, 2020, the fair value adjustments for the equity investment was a loss of $3.5 million and for the nine months ended September 30, 2020, the fair value adjustments for the equity investment was a loss of $7.7 million which was recorded in other income (expense) on our condensed consolidated statements of operations.

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

These financial statements are presented in U.S. dollars and are prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements including disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and accompanying notes. The Company’s critical accounting policies are those that are both most important to the Company’s financial condition and results of operations and require the most difficult, subjective or complex judgments on the part of management in their application, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company anticipates that the COVID-19 pandemic will continue to disrupt the Company’s supply chain and marketing and sales efforts for certain of its products, including Bendeka, although it is not currently expected that any disruption would be significant. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Because of the uncertainty of factors surrounding the estimates or judgments used in the preparation of the financial statements, actual results may materially vary from these estimates, and any such differences may be material to the Company’s financial statements.

Reclassifications

Reclassifications

Certain reclassifications have been made to prior year amounts to conform with the current year presentation. None of the reclassifications were significant.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. All cash and cash equivalents are held in United States financial institutions. The carrying amount of cash and cash equivalents approximates its fair value due to its short-term nature.

The Company, at times, maintains balances with financial institutions in excess of the Federal Deposit Insurance Corporation (“FDIC”) limit.

Fair Value Measurements

Fair Value Measurements

U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

•Level 1: Quoted prices in active markets for identical assets or liabilities.

•Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The fair value of interest-bearing cash, cash equivalents, accounts receivable and accounts payable approximate fair value due to their life being short term in nature, and are classified as Level 1 for all periods presented.

The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers in or out of Level 1, Level 2 or Level 3 during the nine months ended September 30, 2020 and 2019, respectively.

Our investment in restricted shares of common stock of Tyme Technologies, Inc. (“Tyme”) are classified as Level 1. Refer to Note 13, Collaboration with Tyme for further details.

The fair value of the forward contract associated with the accelerated share repurchase ("ASR") transaction with JPMorgan Chase Bank, National Association is classified as Level 2 for the periods presented. Refer to Note 8, Common Stock and Stock-Based Compensation for further details.

The fair value of debt is classified as Level 2 for the periods presented and approximates its fair value due to the variable interest rate.

The fair value of any contingent consideration was classified as Level 3 for the periods presented.

Intangible Assets

Intangible Assets The Company reviews the recoverability of its finite-lived intangible assets and long-lived assets for indicators of impairments. Events or circumstances that may require an impairment assessment include negative clinical trial results, a significant decrease in the market price of the asset, or a significant adverse change in legal factors or the manner in which the asset is used. If such indicators are present, the Company assess the recoverability of affected assets by determining if the carrying value of such assets is less than the sum of the undiscounted future cash flows of the assets. If such assets are found to not be recoverable, the Company measures the amount of the impairment by comparing to the carrying value of the assets to the fair value of the assets. The Company determined that no indicators of impairment of finite-lived intangible assets or long-lived assets existed at September 30, 2020.

Goodwill

GoodwillGoodwill represents the excess of purchase price over the fair value of net assets acquired in the Eagle Biologics acquisition. Goodwill is not amortized, but is evaluated for impairment on an annual basis, in the fourth quarter, or more frequently if events or changes in circumstances indicate that the reporting unit’s goodwill is less than its carrying amount.

Concentration of Major Customers and Vendors

Concentration of Major Customers and Vendors

The Company is dependent on a commercial partner who markets and sells Bendeka. The Company's customer for Bendeka is its commercial and licensing partner; therefore, the Company's future revenues are highly dependent on the related exclusive license and distribution arrangement.

Inventories

Inventories

Inventories are recorded at the lower of cost and net realizable value, with cost determined on a first-in first-out basis. The Company periodically reviews the composition of inventory in order to identify obsolete, slow-moving or otherwise non-saleable items. If non-saleable items are observed and there are no alternate uses for the inventory, the Company will record a write-down to lower of cost and net realizable value in the period that the decline in value is first recognized.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost. Depreciation is recorded over the estimated useful lives of the assets utilizing the straight-line method. Leasehold improvements are being amortized over the shorter of their useful lives or the lease term.

Research and Development Expense

Research and Development Expense

Costs for research and development are charged to expense as incurred and include; employee-related expenses including salaries, benefits, travel and stock-based compensation expense for research and development personnel; expenses incurred under agreements with contract research organizations, contract manufacturing organizations and service providers that assist in conducting clinical and preclinical studies; costs associated with preclinical activities and development activities, costs associated with regulatory operations; and depreciation expense for assets used in research and development activities.

Costs for certain development activities, such as clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the patterns of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid expenses or accrued expenses as deemed appropriate. Recoveries of previously recognized research and development expenses from third parties are recorded as a reduction to research and development expense in the period it becomes realizable.

Advertising and Marketing

Advertising and MarketingAdvertising and marketing costs are expensed as incurred.

Income Taxes

Income Taxes

The Company accounts for income taxes using the liability method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), 740 - Income Taxes (“ASC 740”). Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and are measured by applying enacted rates and laws to taxable years in which differences are expected to be recovered or settled.  Further, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that the rate changes. A valuation allowance is required when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. ASC 740 also prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return, including a decision whether to file or not file a return in a particular jurisdiction. We recognize any interest and penalties accrued related to unrecognized tax benefits as income tax expense.

Revenue Recognition

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606 - Revenue from Contracts with Customers (“ASC 606”), the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Receivables from our product sales have payment terms ranging from 30 to 75 days with select extended terms to wholesalers on initial purchases of product launch quantities. Our receivables from royalty revenue are due 45 days from the end of the quarter.

Product revenue - The Company recognizes net revenue on sales to its commercial partners and to end users. In each instance, revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract.

Revenue on sales to commercial partners relates to Argatroban and Bendeka. Sales to our commercial partners are presented gross because the Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement and bears risk of loss while the inventory is in-transit to the commercial partner.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method to which the Company expects to be entitled. As such, revenue on sales to customers for Belrapzo, Non-Alcohol Docetaxel Injection, Ryanodex and diclofenac-misoprostol are recorded net of chargebacks, rebates, returns, prompt pay discounts, wholesaler fees and other deductions. Our products are contracted with a limited number of oncology distributors and hospital buying groups with narrow differences in ultimate realized contract prices used to estimate our chargeback and rebate reserves. The Company has a product return policy on some of its products that allows the customer to return pharmaceutical products within a specified period of time both prior to and subsequent to the product’s expiration date. The Company's estimate of the provision for returns is analyzed quarterly and is based upon many factors, including historical experience of actual returns and analysis

of the level of inventory in the distribution channel, if any. The Company has terms on sales of Ryanodex by which the Company does not accept returns. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration are made using the expected value method and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. The Company believes that the estimates it has established are reasonable based upon current facts and circumstances. Applying different judgments to the same facts and circumstances could result in the estimated amounts to vary.

Royalty Revenue — The Company recognizes revenue from license arrangements with its commercial partners' net sales of products. In accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the commercial partner’s products occurs. The Company's commercial partners are obligated to report their net product sales and the resulting royalty due to the Company within 25 days for Bendeka and 60 days for Argatroban from the end of each quarter. Based on historical product sales, royalty receipts and other relevant information, the Company accrues royalty revenue each quarter and subsequently determines a true-up when it receives royalty reports from its commercial partners. Historically, these true-up adjustments have been immaterial.

License and other revenue — The Company analyzes each element of its licensing agreements to determine the appropriate revenue recognition. The terms of the license agreement may include payment to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. The Company recognizes revenue from upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

The Company recognizes sales-based milestone payments as revenue upon the achievement of the cumulative sales amount specified in the contract in accordance with ASC 606-10-55-65. For those milestone payments which are contingent on the occurrence of particular future events, the Company determined that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method. As such, the Company assesses each milestone to determine the probability and substance behind achieving each milestone. Given the inherent uncertainty of the occurrence of these future events, the Company will not recognize revenue from the milestone until there is not a high probability of a reversal of revenue, which typically occurs near or upon achievement of the event.

Collaborative licensing and development revenue — The Company recognizes revenue from reimbursements received in connection with feasibility studies and development work for third parties when its contractual services are performed, provided collectability is reasonably assured. Its principal costs under these agreements include its personnel conducting research and development, its allocated overhead, as well as the research and development performed by outside contractors or consultants.

Upon termination of a collaboration agreement, any remaining non-refundable license fees received by the Company, which had been deferred, are generally recognized in full. All such recognized revenues are included in collaborative licensing and development revenue in its condensed consolidated statements of operations. The Company recognizes revenue from milestone payments received under collaboration agreements when earned, provided that the milestone event is substantive, its achievability was not reasonably assured at the inception of the agreement, the Company has no further performance obligations relating to the event, and collectability is reasonably assured. If these criteria are not met, the Company would generally recognize milestone payments ratably over the remaining period of its performance obligations under the collaboration agreement.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for stock-based compensation using the fair value provisions of ASC 718, Compensation - Stock Compensation that requires the recognition of compensation expense, using a fair-value based method, for costs related to all stock-based payments including stock options and restricted stock. This topic requires companies to estimate the fair value of the stock-based awards on the date of grant for options issued to employees and directors and record expense over the employees' service periods, which are generally the vesting period of the equity awards.

The Company accounts for stock-based compensation by measuring and recognizing compensation expense for all stock-based payments made to employees and directors based on estimated grant date fair values. The straight-line method is used to allocate compensation cost to reporting periods over each optionee's requisite service period, which is generally the vesting period. The fair value of the Company's stock-based awards to employees and directors is estimated using the Black-Scholes valuation model and a Monte Carlo simulation model for performance share units. These models require the input of subjective assumptions, including the expected stock price volatility, the calculation of expected term, historical forfeitures and the fair value of the underlying common stock on the date of grant, among other inputs. The risk-free interest rate is determined with the implied yield currently available for zero-coupon U.S. government issues with a remaining term approximating the expected life of the options.

Earnings Per Share

Earnings Per Share Basic earnings per common share is computed using the weighted average number of shares outstanding during the period. Diluted earnings per share is computed in a manner similar to the basic earnings per share, except that the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of warrants, options, convertible debt and other such convertible instruments. Diluted earnings per share contemplate a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Recent Accounting Pronouncements - Not Yet Adopted

In March 2020, the FASB issued Update 2020-04 Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting to provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The amendments in Update 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR, formerly known as the London Interbank Offered Rate,

or another reference rate expected to be discontinued due to reference rate reform. The new guidance provides optional expedients, including; (1) Simplify accounting analyses under current GAAP for contract modifications, such as modifications of contracts within the scope of Topic 470, Debt, that will be accounted for by prospectively adjusting the effective interest rate, as if any modification was not substantial. That is, the original contract and the new contract shall be accounted for as if they were not substantially different from one another; (2) Simplify the assessment of hedge effectiveness and allow hedging relationships affected by reference rate reform to continue; (3) Allow a one-time election to sell or transfer debt securities classified as held to maturity before January 1, 2020 that reference a rate affected by reference rate reform. The amendments are effective for all entities from the beginning of an interim period that includes the issuance date of the ASU. An entity may elect to apply the amendments prospectively through December 31, 2022. The adoption of ASU 2020-4 is not expected to have a material impact on the Company's financial position or results of operations.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses which requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This standard is effective for fiscal years beginning after December 15, 2019 and the Company adopted the standard effective January 1, 2020. The adoption of ASU 2016-13 had no material impact on the Company's financial position and results of operations.

CARES Act

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into U.S. federal law, which is aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the COVID-19 pandemic and generally supporting the U.S. economy. The CARES Act, among other things, includes provisions related to refundable payroll tax credits, deferment of the employer portion of social security payments, net operating loss carryback periods, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. Reimbursement was not sought by the Company. The CARES Act has not had, and the Company does not currently expect it to have, a material impact on the Company’s financial statements at this time.

Leases

The Company leases its corporate office under an amended lease agreement that expires on June 30, 2025 (the "Corporate Office Lease"). The Corporate Office Lease was amended on August 8, 2019 to extend the term through such date and to increase the amount of leased office space. The Company also leases lab space under a lease agreement that expires on October 31, 2023 (the "Lab Space Lease"). The Company estimated the right of use asset and the corresponding lease liability, on a discounted basis, as of the adoption date of January 1, 2019. The future minimum lease payments under this Corporate Office Lease are approximately $6.6 million.

For the Corporate Office Lease and Lab Space Lease, which are the Company's two operating leases, the amortization and interest expense components are combined and recognized ratably over the remaining term of the lease as research and development and selling, general and administrative in the Company's condensed consolidated statements of operations, respectively.

The Company used its estimated incremental borrowing rate to calculate the present value of the right of use ("ROU") assets and lease liabilities as of the date of adoption date. The implicit interest rate related to the Company’s two lease agreements was not known as of the date of adoption. Therefore, the Company calculated an incremental borrowing rate based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment.

XML

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Schedule of financial assets and liabilities measured and recognized at fair value

Financial assets and liabilities measured and recognized at fair value are as follows:

	September 30, 2020
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	86,343	$	86,343	$	—	$	—
ASR forward contract	2,549		—		$	2,549	$	—
Investment in Tyme	9,800		9,800		$	—	$	—
Total financial assets	98,692		96,143		$	2,549	$	—
Liabilities:
Contingent consideration	$	—	$	—	$	—	$	—
Total financial liabilities	$	—	$	—	$	—	$	—

	December 31, 2019
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	105,672	$	105,672	$	—	$	—
Total financial assets	$	105,672	$	105,672	$	—	$	—
Liabilities:
Contingent consideration	$	—	$	—	$	—	$	—
Total financial liabilities	$	—	$	—	$	—	$	—

Schedule of revenues and accounts receivables by major customers

The total revenues and accounts receivables broken down by major customers as a percentage of the total are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Total revenues
Cephalon, Inc. (Teva) - See Revenue Recognition	74	%	85	%	72	%	78	%
Other	26	%	15	%	28	%	22	%
	100	%	100	%	100	%	100	%

	September 30,		December 31,
	2020		2019
Accounts receivable
Cephalon, Inc. (Teva) - See Revenue Recognition	66	%	80	%
Other	34	%	20	%
	100	%	100	%

Schedule of dilutive and anti-dilutive common shares equivalents outstanding

The anti-dilutive common shares equivalents outstanding for the three and nine months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Stock options	3,156,166	2,476,552	2,905,021	2,493,937
Restricted stock units	205,891	39,047	225,177	40,133
Total	3,362,057	2,515,599	3,130,198	2,534,070

Computation for basic and diluted net (loss) earnings per share

The following table sets forth the computation for basic and diluted net (loss) earnings per share for the three and nine months ended September 30, 2020 and 2019:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Numerator
Numerator for basic and diluted earnings per share-net (loss) income	$	7,059	$	(2,390)	$	3,932	$	13,308
Denominator
Basic weighted average common shares outstanding	13,531,372		13,668,091		13,620,981		13,791,071
Dilutive effect of stock awards	255,431		—		296,819		356,587
Diluted weighted average common shares outstanding	13,786,803		13,668,091		13,917,800		14,147,658
Basic net earnings (loss) per share
Basic net earnings (loss) per share	$	0.52	$	(0.17)	$	0.29	$	0.96
Diluted net earnings (loss) per share
Diluted net earnings (loss) per share	$	0.51	$	(0.17)	$	0.28	$	0.94

XML

Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of property and equipment, net

Property and equipment consisted of the following:

	September 30, 2020		December 31, 2019		Estimated Useful Life (years)
Furniture and fixtures	$	1,476	$	1,188	7
Office equipment	1,077		1,094		3
Equipment	3,390		3,095		7
Leasehold improvements	1,155		1,144		2
	7,098		6,521
Less accumulated depreciation	(4,975)		(4,319)
Property and equipment, net	$	2,123	$	2,202

XML

Inventories (Tables)

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Schedule of inventories

Inventories consist of the following:

	September 30,		December 31,
	2020		2019
Raw material	$	2,439	$	2,460
Work in process	4,096		3,243
Finished products	51		863
	$	6,586	$	6,566

XML

Balance Sheet Accounts (Tables)

9 Months Ended

Sep. 30, 2020

Balance Sheet Related Disclosures [Abstract]

Schedule of prepaid and other current assets

Prepaid and other current assets consist of the following:

	September 30,		December 31,
	2020		2019
Prepaid income taxes	$	315	$	4,661
Prepaid FDA user fee and advances to clinical research organization	1,682		6,345
Prepaid insurance	440		191
Advances to commercial manufacturers	4,222		2,462
Earned milestone receivable - SymBio Pharmaceuticals Limited	5,000		—
All other	3,671		1,445
Total Prepaid expenses and other current assets	$	15,330	$	15,104

Schedule of accrued expenses

Accrued expenses consist of the following:

	September 30,		December 31,
	2020		2019
Accrued sales reserves	$	7,122	$	8,364
Royalties payable to commercial partners	6,906		6,004
Accrued salary and other compensation	4,742		8,083
Accrued professional fees	2,114		1,926
Accrued research & development	1,123		1,686
Current portion of lease liability	1,118		1,101
Accrued other	1,320		1,197
Total Accrued expenses	$	24,445	$	28,361

Lease related disclosures

Lease related disclosures consist of the following:

	September 30,			December 31,			September 30,
	2020			2019			2019
Operating ROU asset, net included in Other assets	$	3,578		$	3,716		$	4,184
Lease liability included with Other long-term liabilities	$	2,844		$	3,000		$	3,227
Lease liability included with Accrued expenses and other liabilities	$	1,118		$	1,101		$	1,084
Quarter to date ("QTD") amortization of ROU asset	$	509		n/a			$	232
Year to date ("YTD") amortization of ROU asset	$	980		n/a			$	754
Operating cash flows from operating leases	$	980		n/a			$	860
Operating lease costs	$	980		n/a			$	860
Weighted-average remaining lease term - operating leases	4.2 years			5.0 years			5.0 years
Weighted-average discount rate - operating leases	6		%	6		%	6		%

Future minimum lease payments

As of September 30, 2020, the future minimum lease commitments for the Company's two leases were as follows:

	Total		2020		2021		2022		2023		2024		2025		Beyond
Lease Payments	$	5,903	$	641	$	1,362	$	1,376	$	1,291	$	820	$	413	$	—
Less: Imputed Interest expense	1,941
Total Lease Liability	$	3,962

As of December 31, 2019, the future minimum lease commitments for the Company's two leases were as follows:

	Total		2020		2021		2022		2023		2024		2025
	$	6,607	$	1,345	$	1,362	$	1,376	$	1,291	$	820	$	413
Less: Imputed Interest expense	2,506
Total Lease Liability	$	4,101

XML

Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible asset

The gross carrying amounts and net book value of the Company's intangible assets are as follows:

		September 30, 2020
	Useful Life (In Years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Ryanodex intangible (i)	20	$	15,000	$	(3,239)	$	11,761
Developed technology	5	8,100		(6,277)		1,823
Total		$	23,100	$	(9,516)	$	13,584

		December 31, 2019
	Useful Life (In Years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Ryanodex intangible (i)	20	15,000		(2,454)		12,546
Developed technology	5	8,100		(5,063)		3,037
Total		$	23,100	$	(7,517)	$	15,583

(i) Represent payments made to reduce the royalties payable to a third party on Ryanodex net sales.

Schedule of future amortization expense of finite-lived intangible assets

Based on definite-lived intangible assets recorded as of September 30, 2020, and assuming that the underlying assets will not be impaired and that the Company will not change the expected lives of the assets, future amortization expenses are estimated as follows:

	Estimated Amortization Expense
Year Ending December 31,
2020 (remainder)	665
2021	2,622
2022	1,369
2023	1,570
2024	1,898
Thereafter	5,460
Total estimated amortization expense	$	13,584

XML

Common Stock and Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Summary of stock options, RSU and PSU activity

A summary of stock option, RSU and PSU activity under the 2014 Plan during the nine months ended September 30, 2020 and 2019 is presented below:

	Stock Options	RSUs	PSUs
Outstanding at December 31, 2018	2,556,365	54,219	117,219
Granted	600,133	211,829	—
Options Exercised/RSUs Vested/PSUs Vested	(10,034)	(13,555)	—
Forfeited or expired	(20,890)	(1,278)	(1,038)
Outstanding at September 30, 2019	3,125,574	251,215	116,181
Outstanding at December 31, 2019	3,096,161	251,215	116,181
Granted	662,700	231,450	—
Options Exercised/RSUs Vested/PSUs Vested	(41,951)	(67,970)	—
Forfeited or expired	(185,615)	(53,824)	(11,431)
Outstanding at September 30, 2020	3,531,295	360,871	104,750

Fair value of stock options

The fair value of stock options granted to employees, directors, and consultants were estimated using the following assumptions:

	Three Months Ended September 30,		Nine Months Ended   September 30,
	2020	2019	2020	2019
Risk-free interest rate	0.37% - 0.41%	1.50% - 1.84%	0.37% - 1.65%	1.45% - 2.61%
Volatility	55.42%	49.87%	54.98%	50.27%
Expected term (in years)	6.07 years	5.93 years	6.03 years	5.91 years
Expected dividend yield	0.0%	0.0%	0.0%	0.00%

Share-based payment arrangement, cost by plan

The Company recognized stock-based compensation in its condensed consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019 as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Stock options	$	3,685	$	4,241	$	12,831	$	12,636
RSUs	928		644		4,115		1,895
PSUs	109		766		1,489		2,284
Stock-based compensation expense	$	4,722	$	5,651	$	18,435	$	16,815
Selling, general and administrative	$	5,236	$	4,570	$	16,365	$	13,495
Research and development	(514)		1,081		2,070		3,320
Stock-based compensation expense	$	4,722	$	5,651	$	18,435	$	16,815

XML

Commitments (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of operating lease obligations and purchase obligations

future material contractual obligations as of September 30, 2020, included the following:

Obligations	Total		2020		2021		2022		2023		2024		2025		Beyond
Operating leases (1)	$	5,903	$	641	$	1,362	$	1,376	$	1,291	$	820	$	413	$	—
Credit facility (2)	36,000		2,000		8,000		26,000		—		—		—		—
Purchase obligations (3)	32,944		32,944		—		—		—		—		—		—
Total obligations	$	74,847	$	35,585	$	9,362	$	27,376	$	1,291	$	820	$	413	$	—

(1) The Company leases its corporate office location. The term of its existing lease expires on June 30, 2025. The Company also leases its lab space under a lease agreement that expires on October 31, 2023. Rental expense for the operating leases was $276 and $286, for the three months ended September 30, 2020 and 2019, respectively. Rental expense for these two operating leases was $910 and $860 for the nine months ended September 30, 2020 and 2019, respectively. The remaining future lease payments under the operating leases are $5,903 as of September 30, 2020.

(2) Refer to Note 10, “Debt” for further information regarding the Revised Credit Agreement.

(3) As of September 30, 2020, the Company had purchase obligations in the amount of $32,944 which represents the contractual commitments under contract manufacturing and supply agreements with suppliers. The obligation under the supply agreement is primarily for finished product, inventory, and research and development.

XML

Debt (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of debt maturities

Debt Maturities	As of September 30, 2020
2020 (remainder)	$	2,000
2021	8,000
2022	26,000
Total	$	36,000

XML

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Schedule of effective income tax rate reconciliation

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Income tax (provision) benefit	$	(1,866)		$	152		$	(7,358)		$	(5,332)
Effective tax rate	21		%	6		%	65		%	26		%

XML

Organization and Business Activities (Details)	9 Months Ended
	Sep. 30, 2020 product
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of products commercially launched	3

XML

Summary of Significant Accounting Policies - Schedule of Financial Assets and Liabilities Measured and Recognized at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Assets:
Money market funds	$ 86,343	$ 105,672
ASR forward contract	2,549
Investment in Tyme	9,800
Total financial assets	98,692	105,672
Liabilities:
Contingent consideration	0	0
Total financial liabilities	0	0
Level 1
Assets:
Money market funds	86,343	105,672
ASR forward contract	0
Investment in Tyme	9,800
Total financial assets	96,143	105,672
Liabilities:
Contingent consideration	0	0
Total financial liabilities	0	0
Level 2
Assets:
Money market funds	0	0
ASR forward contract	2,549
Investment in Tyme	0
Total financial assets	2,549	0
Liabilities:
Contingent consideration	0	0
Total financial liabilities	0	0
Level 3
Assets:
Money market funds	0	0
ASR forward contract	0
Investment in Tyme	0
Total financial assets	0	0
Liabilities:
Contingent consideration	0	0
Total financial liabilities	$ 0	$ 0

XML

Summary of Significant Accounting Policies - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Goodwill impairment loss	$ 0	$ 0	$ 0	$ 0
Advertising and marketing costs	$ 316,000	$ 556,000	$ 2,204,000	$ 1,673,000
Revenue, performance obligation, description of payment terms			Receivables from our product sales have payment terms ranging from 30 to 75 days with select extended terms to wholesalers on initial purchases of product launch quantities. Our receivables from royalty revenue are due 45 days from the end of the quarter.
Bendeka
Disaggregation of Revenue [Line Items]
Period after quarter commercial partners report net product sales			25 days
EP-1101
Disaggregation of Revenue [Line Items]
Period after quarter commercial partners report net product sales			60 days

XML

Summary of Significant Accounting Policies - Revenue and Accounts Receivable By Major Customer (Details) - Customer Concentration Risk	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Net Revenues
Concentration Risk [Line Items]
Percentage of concentration	100.00%	100.00%	100.00%	100.00%
Net Revenues | Cephalon, Inc.
Concentration Risk [Line Items]
Percentage of concentration	74.00%	85.00%	72.00%	78.00%
Net Revenues | Other
Concentration Risk [Line Items]
Percentage of concentration	26.00%	15.00%	28.00%	22.00%
Accounts Receivable
Concentration Risk [Line Items]
Percentage of concentration			100.00%		100.00%
Accounts Receivable | Cephalon, Inc.
Concentration Risk [Line Items]
Percentage of concentration			66.00%		80.00%
Accounts Receivable | Other
Concentration Risk [Line Items]
Percentage of concentration			34.00%		20.00%

XML

Summary of Significant Accounting Policies - Anti-Dilutive Common Shares Equivalents Outstanding (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive common shares equivalents outstanding (in shares)	3,362,057	2,515,599	3,130,198	2,534,070
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive common shares equivalents outstanding (in shares)	3,156,166	2,476,552	2,905,021	2,493,937
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive common shares equivalents outstanding (in shares)	205,891	39,047	225,177	40,133

XML

Summary of Significant Accounting Policies - Schedule of Basic and Diluted Net (Loss) Earnings (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Numerator
Numerator for basic and diluted earnings per share-net (loss) income	$ 7,059	$ (2,390)	$ 3,932	$ 13,308
Denominator
Basic weighted average common shares outstanding (in shares)	13,531,372	13,668,091	13,620,981	13,791,071
Dilutive effect of stock options (in shares)	255,431	0	296,819	356,587
Diluted weighted average common shares outstanding (in shares)	13,786,803	13,668,091	13,917,800	14,147,658
Basic net earnings (loss) per share
Basic net (loss) earnings per share (in usd per share)	$ 0.52	$ (0.17)	$ 0.29	$ 0.96
Diluted net earnings (loss) per share
Diluted net (loss) earnings per share (in usd per share)	$ 0.51	$ (0.17)	$ 0.28	$ 0.94

XML

Property and Equipment, net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 7,098		$ 7,098		$ 6,521
Less accumulated depreciation	(4,975)		(4,975)		(4,319)
Property and equipment, net	2,123		2,123		2,202
Depreciation expense	196	$ 241	656	$ 725
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	1,476		$ 1,476		1,188
Estimated Useful Life (years)			7 years
Office equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	1,077		$ 1,077		1,094
Estimated Useful Life (years)			3 years
Equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	3,390		$ 3,390		3,095
Estimated Useful Life (years)			7 years
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 1,155		$ 1,155		$ 1,144
Estimated Useful Life (years)			2 years

XML

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw material	$ 2,439	$ 2,460
Work in process	4,096	3,243
Finished products	51	863
Inventories	$ 6,586	$ 6,566

XML

Balance Sheet Accounts - Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Balance Sheet Related Disclosures [Abstract]
Prepaid income taxes	$ 315	$ 4,661
Prepaid FDA user fee and advances to clinical research organization	1,682	6,345
Prepaid insurance	440	191
Advances to commercial manufacturers	4,222	2,462
Earned milestone receivable - SymBio Pharmaceuticals Limited	5,000	0
All other	3,671	1,445
Total Prepaid expenses and other current assets	$ 15,330	$ 15,104

XML

Balance Sheet Accounts - Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019
Balance Sheet Related Disclosures [Abstract]
Accrued sales reserves	$ 7,122	$ 8,364
Royalties payable to commercial partners	6,906	6,004
Accrued salary and other compensation	4,742	8,083
Accrued professional fees	2,114	1,926
Accrued research & development	1,123	1,686
Current portion of lease liability	1,118	1,101	$ 1,084
Accrued other	1,320	1,197
Total Accrued expenses	$ 24,445	$ 28,361

XML

Balance Sheet Accounts - Lease Related Disclosures (Details) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2020 USD ($)	Mar. 31, 2020 lease	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) lease	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Balance Sheet Related Disclosures [Abstract]
Future minimum lease payments	$ 5,903			$ 5,903		$ 6,607
Number of operating leases | lease		2		2
Operating ROU asset, net included in Other assets	3,578		$ 4,184	$ 3,578	$ 4,184	3,716
Lease liability included with Other long-term liabilities	2,844		3,227	2,844	3,227	3,000
Lease liability included with Accrued expenses and other liabilities	1,118		1,084	1,118	1,084	$ 1,101
Amortization expense of right-of-use assets	$ 509		$ 232	980	754
Cash flows from operating leases				980	860
Operating lease costs				$ 980	$ 860
Weighted-average remaining lease term - operating leases	4 years 2 months 12 days		5 years	4 years 2 months 12 days	5 years	5 years
Weighted-average discount rate - operating leases	6.00%		6.00%	6.00%	6.00%	6.00%
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssets		us-gaap:OtherAssets	us-gaap:OtherAssets	us-gaap:OtherAssets	us-gaap:OtherAssets
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesNoncurrent		us-gaap:OtherLiabilitiesNoncurrent	us-gaap:OtherLiabilitiesNoncurrent	us-gaap:OtherLiabilitiesNoncurrent	us-gaap:OtherLiabilitiesNoncurrent
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesCurrent		us-gaap:OtherLiabilitiesCurrent	us-gaap:OtherLiabilitiesCurrent	us-gaap:OtherLiabilitiesCurrent	us-gaap:OtherLiabilitiesCurrent

XML

Balance Sheet Accounts - Future Minimum Lease Payments (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2020 lease	Sep. 30, 2020 USD ($) lease	Dec. 31, 2019 USD ($)
Balance Sheet Related Disclosures [Abstract]
Number of operating leases | lease	2	2
Operating lease obligations
Remainder of fiscal year		$ 641
Year one		1,362	$ 1,345
Year two		1,376	1,362
Year three		1,291	1,376
Year four		820	1,291
Year five		413	820
After year five		0	413
Total		5,903	6,607
Less: Imputed Interest expense		1,941	2,506
Total Lease Liability		$ 3,962	$ 4,101

XML

Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 23,100		$ 23,100		$ 23,100
Accumulated Amortization	(9,516)		(9,516)		(7,517)
Net Book Value	13,584		13,584		$ 15,583
Amortization expense of intangible assets	667	$ 630	$ 1,999	$ 1,890
Ryanodex intangible
Finite-Lived Intangible Assets [Line Items]
Useful Life (In Years)			20 years		20 years
Gross Carrying Amount	15,000		$ 15,000		$ 15,000
Accumulated Amortization	(3,239)		(3,239)		(2,454)
Net Book Value	11,761		$ 11,761		$ 12,546
Developed technology
Finite-Lived Intangible Assets [Line Items]
Useful Life (In Years)			5 years		5 years
Gross Carrying Amount	8,100		$ 8,100		$ 8,100
Accumulated Amortization	(6,277)		(6,277)		(5,063)
Net Book Value	$ 1,823		$ 1,823		$ 3,037

XML

Intangible Assets, Net - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
2020 (remainder)	$ 665
2021	2,622
2022	1,369
2023	1,570
2024	1,898
Thereafter	5,460
Net Book Value	$ 13,584	$ 15,583

XML

Common Stock and Stock-Based Compensation - Narrative (Details)		3 Months Ended		9 Months Ended		17 Months Ended	50 Months Ended
	Sep. 24, 2020 USD ($) $ / shares shares	Sep. 30, 2020 USD ($)	Sep. 30, 2019	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Mar. 17, 2020 USD ($)	Sep. 30, 2020 USD ($) shares	Sep. 23, 2020 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Payments to repurchase stock				$ 27,999,000	$ 15,000,000
Fair value adjustments on unsettled accelerated share repurchase agreement				$ 2,549,000	$ 0
Award vesting period				4 years
Volatility		55.42%	49.87%	54.98%	50.27%
Expected term		6 years 25 days	5 years 11 months 4 days	6 years 10 days	5 years 10 months 28 days
Expected dividend yield		0.00%	0.00%	0.00%	0.00%
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate				2.06%
Volatility				47.00%
Expected term				3 years
Expected dividend yield				0.00%
Share Repurchase Programs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Payments to repurchase stock							$ 199,900,000
Shares of common stock repurchased (in shares) | shares							3,594,551
March 2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock repurchase program, authorized amount						$ 160,000,000.0
Accelerated share repurchases, authorized amount								$ 25,000,000.0
Accelerated share repurchases, payment	$ 25,000,000.0
Accelerated share repurchases, shares received (in shares) | shares	505,817
Accelerated share repurchases, shares received, percentage of notional amount	0.80
Accelerated share repurchases, initial price paid per share (in usd per share) | $ / shares	$ 39.54
Fair value adjustments on unsettled accelerated share repurchase agreement		$ 2,500,000
March 2020 Plan | Prepaid Expenses and Other Current Assets
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Accelerated share repurchases, payment		$ 5,000,000.0		$ 5,000,000.0			$ 5,000,000.0
Accelerated share repurchases, shares received, percentage of notional amount		0.20		0.20			0.20
October 2018 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Payments to repurchase stock						$ 68,000,000.0

XML

Common Stock and Stock-Based Compensation - Summary of Stock Options, RSU and PSU Activity (Details) - shares	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Stock Options
Outstanding beginning balance (in shares)	3,096,161	2,556,365
Granted (in shares)	662,700	600,133
Options Exercised (in shares)	(41,951)	(10,034)
Forfeited or expired (in shares)	(185,615)	(20,890)
Outstanding ending balance (in shares)	3,531,295	3,125,574
RSUs
RSUs and PSUs
Outstanding beginning balance (in shares)	251,215	54,219
Granted (in shares)	231,450	211,829
Vested (in shares)	(67,970)	(13,555)
Forfeited or expired (in shares)	(53,824)	(1,278)
Outstanding ending balance (in shares)	360,871	251,215
PSUs
RSUs and PSUs
Outstanding beginning balance (in shares)	116,181	117,219
Granted (in shares)	0	0
Vested (in shares)	0	0
Forfeited or expired (in shares)	(11,431)	(1,038)
Outstanding ending balance (in shares)	104,750	116,181

XML

Common Stock and Stock-Based Compensation - Fair Value of Stock Options Granted (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Payment Arrangement [Abstract]
Risk-free interest minimum rate	0.37%	1.50%	0.37%	1.45%
Risk-free interest maximum rate	0.41%	1.84%	1.65%	2.61%
Volatility	55.42%	49.87%	54.98%	50.27%
Expected term (in years)	6 years 25 days	5 years 11 months 4 days	6 years 10 days	5 years 10 months 28 days
Expected dividend yield	0.00%	0.00%	0.00%	0.00%

XML

Common Stock and Stock-Based Compensation - Schedule of Share-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 4,722	$ 5,651	$ 18,435	$ 16,815
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	5,236	4,570	16,365	13,495
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	(514)	1,081	2,070	3,320
Stock options
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	3,685	4,241	12,831	12,636
RSUs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	928	644	4,115	1,895
PSUs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 109	$ 766	$ 1,489	$ 2,284

XML

Commitments (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) lease	Sep. 30, 2019 USD ($) lease	Dec. 31, 2019 USD ($)
Operating lease obligations
Total	$ 5,903		$ 5,903		$ 6,607
2020	641		641
Year one	1,362		1,362		1,345
2022	1,376		1,376		1,362
2023	1,291		1,291		1,376
2024	820		820		1,291
2025	413		413		820
Beyond	0		0		$ 413
Credit facility
Total	36,000		36,000
2020	2,000		2,000
2021	8,000		8,000
2022	26,000		26,000
2023	0		0
2024	0		0
2025	0		0
Beyond	0		0
Purchase obligations
Total	32,944		32,944
2020	32,944		32,944
2021	0		0
2022	0		0
2023	0		0
2024	0		0
2025	0		0
Beyond	0		0
Total obligations
Total	74,847		74,847
2020	35,585		35,585
2021	9,362		9,362
2022	27,376		27,376
2023	1,291		1,291
2024	820		820
2025	413		413
Beyond	0		0
Operating lease, expense	$ 276	$ 286	$ 910	$ 860
Lessee, operating lease, number of contracts | lease			2	2

XML

Debt - Narrative (Details) - USD ($)	Jun. 30, 2020	Nov. 08, 2019	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Current portion of long-term debt			$ 8,000,000		$ 5,000,000
Unamortized deferred debt issuance cost			$ 1,000,000.0
Revised Credit Agreement | Minimum
Debt Instrument [Line Items]
Line of credit facility, commitment fee		0.35%
Revised Credit Agreement | Maximum
Debt Instrument [Line Items]
Line of credit facility, commitment fee		0.45%
Revised Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Variable interest rate spread		2.25%
Revised Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument [Line Items]
Variable interest rate spread		3.00%
Revised Credit Agreement | New York Federal Reserve Bank (NYFRB)
Debt Instrument [Line Items]
Variable interest rate spread		0.50%
Revised Credit Agreement | Adjusted London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Variable interest rate spread		1.00%
Revised Credit Agreement | Prime Rate | Minimum
Debt Instrument [Line Items]
Variable interest rate spread		1.25%
Revised Credit Agreement | Prime Rate | Maximum
Debt Instrument [Line Items]
Variable interest rate spread		2.00%
Line of credit | Revised Credit Agreement
Debt Instrument [Line Items]
Draw on line of credit	$ 40,000,000.0	$ 40,000,000.0
Revolving credit facility | Revised Credit Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 110,000,000.0		$ 110,000,000.0

XML

Debt - Schedule of Debt Maturities (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Credit facility
2020 (remainder)	$ 2,000
2021	8,000
2022	26,000
Total	$ 36,000

XML

Income Taxes (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) jurisdiction	Sep. 30, 2019 USD ($)
Income Tax Disclosure [Abstract]
Income tax (provision) benefit	$ (1,866,000)	$ 152,000	$ (7,358,000)	$ (5,332,000)
Effective tax rate	21.00%	6.00%	65.00%	26.00%
Number of tax jurisdictions currently auditing the company | jurisdiction			3
Unrecognized tax benefits	$ 0		$ 0

XML

Collaboration with Tyme (Details) - USD ($)		3 Months Ended	9 Months Ended
	Jan. 07, 2020	Sep. 30, 2020	Sep. 30, 2020	Sep. 30, 2019
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Fair value loss			$ 7,700,000	$ 0
Collaborative Arrangement | Tyme
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total value	$ 40,000,000.0
Upfront payment	$ 20,000,000.0
Number of shares receivable (in shares)	10,000,000
Shares receivable (in usd per share)	$ 2.00
Term	3 years
Second milestone payment due	$ 20,000,000.0
Second milestone payment in cash payment due	10,000,000.0
Second milestone payment in investment due	$ 10,000,000.0
Second milestone payment, premium on investment prevailing market price	15.00%
Co-promotion agreement, percentage of promotional sales effort responsible for	25.00%
Co-promotion agreement, percentage of net revenue receivable	15.00%
Co-promotion agreement, percentage of net revenue receivable due to collaborator	85.00%
Co-promotion agreement, right to repurchase, amount	$ 200,000,000.0
Value of shares received	17,500,000
Upfront collaboration payment	$ 2,500,000
Percentage of shares received of collaborator	9.00%
Fair value loss		$ 3,500,000	$ 7,700,000