Description

12 Months Ended

Sep. 30, 2012

Description and Summary of Significant Accounting Policies and Select Balance Sheet Information [Abstract]

Description

1. Description

SurModics, Inc. and subsidiaries (the “Company”) is a leading provider of surface modification and in vitro diagnostic technologies to the healthcare industry. The Company derives its revenue from three primary sources: (1) royalties and license fees from licensing its patented drug delivery and surface modification technologies and in vitro diagnostic formats to customers; (2) the sale of reagent chemicals to licensees and the sale of stabilization products, antigens, substrates and surface coatings to the diagnostic and biomedical research markets; and (3) research and development fees generated on customer projects.

Basis of Presentation

The consolidated financial statements include all accounts and wholly-owned subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.”) (“GAAP”). All significant inter-company transactions have been eliminated.

Certain items in the consolidated financial statements for the years ended September 30, 2011 and 2010, and assets and liabilities as of September 30, 2011, have been reclassified to conform to the current period presentation. As discussed in Note 3, the results of operations, assets and liabilities of SurModics Pharmaceuticals, Inc. (“SurModics Pharmaceuticals”) have been accounted for as discontinued operations for all periods presented. Accordingly, the results of operations, cash flows, assets and liabilities of SurModics Pharmaceuticals for prior periods have been reclassified to discontinued operations. In addition, footnote disclosures have also been modified to conform to the current period presentation as appropriate. All information in the following notes to the consolidated financial statements includes only results from continuing operations (excluding SurModics Pharmaceuticals) for all periods presented, unless otherwise noted.

Changes to Consolidated Statements of Operations

Beginning with the first quarter of fiscal 2012, the Company changed the format of the consolidated statements of operations for reporting cost of revenue associated with research and development revenue. The change in format combines customer research and development expenses with other research and development expenses into the research and development expense category. Previously the research and development revenue exceeded ten percent of total revenue and, as such, Regulation S-X Rule 5-03 required presentation of an associated cost of revenue. With the presentation of the Pharmaceuticals segment as discontinued operations, the research and development revenue no longer exceeds ten percent of total revenue and, as such, there is no requirement to disclose a corresponding cost. All prior periods have been reclassified to present results following this new format.

Subsequent Events

In October 2012, the Company was informed that one of its strategic investments, OctoPlus N.V. (“OctoPlus”), had received a tender offer from Dr. Reddy’s Laboratories Ltd. (“Dr. Reddy’s”) to purchase all issued and outstanding ordinary shares of OctoPlus at an offer price of €0.52 per share. The Company expects to record a gain of approximately $0.1 million on the sale of this investment in the second quarter of fiscal 2013 pending final completion of the tender offer.

In November 2012, the Company was informed that one of its strategic investments, Vessix Vascular, Inc. (“Vessix”), was purchased by Boston Scientific Corporation. The Company expects to record a gain of approximately $1.2 million on the sale of this investment in the first quarter of fiscal 2013 with total potential proceeds of $5.5 million over time depending on achievement of future milestones during the period 2013 to 2017.