Acquisition of Molecular Insight Pharmaceuticals, Inc

3 Months Ended

Mar. 31, 2014

Acquisition of Molecular Insight Pharmaceuticals, Inc [Abstract]

Acquisition of Molecular Insight Pharmaceuticals, Inc

2.  Acquisition of Molecular Insight Pharmaceuticals, Inc.

We acquired Molecular Insight in early 2013, and include its operations since the acquisition in our Consolidated Financial Statements. The acquisition consideration included 4,566,210 shares (500,000 of which were placed in an escrow expiring in April 2014) of Progenics common stock in a private transaction not taxable to Progenics. (The closing NASDAQ market price of Progenics' freely transferable common shares on the acquisition date was $2.83 per share.) Under the acquisition agreement, Progenics also agreed to pay to the stockholders potential milestones, in cash or Progenics stock at Progenics' option, of up to $23 million contingent upon achieving specified commercialization events and up to $70 million contingent upon achieving specified sales targets relating to all MIP products. Of the 500,000 placed in escrow, 93,847 shares have been returned to Progenics through March 31, 2014 pursuant to financial adjustment provisions of the agreement. An additional 19,770 shares were returned in April 2014, when the escrow terminated.

We account for our purchase of Molecular Insight using the acquisition method of accounting. The difference between the estimated fair value of the acquisition consideration paid of $27,165, and fair value of the identifiable net assets of $19,463, represents potential future economic benefits arising from combining Progenics and MIP, and has been recorded as goodwill of $7,702 on the acquisition date.

During the first quarter of 2013, we incurred $750 in transaction costs related to the acquisition, consisting primarily of legal, accounting and valuation-related expenses, and reduced additional paid-in capital by $45 for acquisition-related equity issuance costs. The transaction costs were recorded in general and administrative expenses in the accompanying consolidated statements of operations. During the first quarters of 2014 and 2013, Molecular's business contributed $1,012 and $329 of revenues and $439 and $3,175 of net loss, respectively.