Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 17, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 0-26301 | ||
Entity Registrant Name | United Therapeutics Corporation | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 52-1984749 | ||
Entity Address, Address Line One | 1040 Spring Street, | ||
Entity Address, City or Town | Silver Spring, | ||
Entity Address, State or Province | MD | ||
Entity Address, Postal Zip Code | 20910 | ||
City Area Code | (301) | ||
Local Phone Number | 608-9292 | ||
Security 12b Title | Common Stock, par value $.01 per share | ||
Trading Symbol | UTHR | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7,912,099,590 | ||
Entity Common Stock, Shares Outstanding | 45,132,102 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for the registrant’s 2022 annual meeting of shareholders scheduled to be held on June 27, 2022, are incorporated by reference in Part III of this Form 10-K. | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001082554 | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Firm ID | 42 |
Auditor Location | Tysons, Virginia |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 894.8 | $ 738.7 |
Marketable investments | 1,035.9 | 1,096.3 |
Accounts receivable, no allowance for 2021 and 2020 | 198.7 | 157.4 |
Inventories, net | 93.8 | 86.5 |
Other current assets | 100.4 | 88.3 |
Total current assets | 2,323.6 | 2,167.2 |
Marketable investments | 1,649.9 | 1,149.6 |
Goodwill and other intangible assets, net | 44.6 | 158.1 |
Property, plant, and equipment, net | 780.9 | 731.6 |
Deferred tax assets, net | 261.9 | 238.6 |
Other non-current assets | 108.2 | 169.9 |
Total assets | 5,169.1 | 4,615 |
Current liabilities: | ||
Accounts payable and accrued expenses | 174.6 | 187 |
Share tracking awards plan | 102.4 | 96.8 |
Other current liabilities | 28.4 | 39.5 |
Total current liabilities | 305.4 | 323.3 |
Line of credit | 800 | 800 |
Other non-current liabilities | 104.8 | 96.5 |
Total liabilities | 1,210.2 | 1,219.8 |
Commitments and contingencies—Note 12 | ||
Stockholders’ equity: | ||
Preferred stock, par value $.01, 10,000,000 shares authorized, no shares issued | 0 | 0 |
Common stock, par value $.01, 245,000,000 shares authorized, 71,727,021 and 71,126,314 shares issued, and 45,107,805 and 44,507,098 shares outstanding at December 31, 2021 and 2020, respectively | 0.7 | 0.7 |
Additional paid-in capital | 2,245.4 | 2,148.7 |
Accumulated other comprehensive loss | (23) | (14.2) |
Treasury stock, 26,619,216 shares at December 31, 2021 and 2020 | (2,579.2) | (2,579.2) |
Retained earnings | 4,315 | 3,839.2 |
Total stockholders’ equity | 3,958.9 | 3,395.2 |
Total liabilities and stockholders’ equity | $ 5,169.1 | $ 4,615 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Accounts receivable, allowance (in dollars) | $ 0 | $ 0 |
Stockholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 245,000,000 | 245,000,000 |
Common stock, shares issued (in shares) | 71,727,021 | 71,126,314 |
Common stock, shares outstanding (in shares) | 45,107,805 | 44,507,098 |
Treasury stock, shares (in shares) | 26,619,216 | 26,619,216 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | |||
Total revenues | $ 1,685,500,000 | $ 1,483,300,000 | $ 1,448,800,000 |
Revenue from contract with customer, product and service | Product [Member] | Product [Member] | Product [Member] |
Operating expenses: | |||
Cost of product sales | $ 122,500,000 | $ 108,100,000 | $ 117,600,000 |
Cost, product and service | Product [Member] | Product [Member] | Product [Member] |
Research and development | $ 540,100,000 | $ 357,700,000 | $ 1,182,600,000 |
Selling, general, and administrative | 467,000,000 | 423,900,000 | 336,200,000 |
Total operating expenses | 1,129,600,000 | 889,700,000 | 1,636,400,000 |
Operating income (loss) | 555,900,000 | 593,600,000 | (187,600,000) |
Interest income | 16,700,000 | 28,600,000 | 44,200,000 |
Interest expense | (18,600,000) | (23,500,000) | (44,200,000) |
Other income, net | 42,200,000 | 49,300,000 | 22,600,000 |
Impairments of investments in privately-held companies | (2,300,000) | (9,100,000) | 0 |
Total other income, net | 38,000,000 | 45,300,000 | 22,600,000 |
Income (loss) before income taxes | 593,900,000 | 638,900,000 | (165,000,000) |
Income tax (expense) benefit | (118,100,000) | (124,100,000) | 60,500,000 |
Net income (loss) | $ 475,800,000 | $ 514,800,000 | $ (104,500,000) |
Net income (loss) per common share: | |||
Basic (in dollars per share) | $ 10.60 | $ 11.65 | $ (2.39) |
Diluted (in dollars per share) | $ 10.06 | $ 11.54 | $ (2.39) |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 44.9 | 44.2 | 43.8 |
Diluted (in shares) | 47.3 | 44.6 | 43.8 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Comprehensive income: | |||
Net income (loss) | $ 475.8 | $ 514.8 | $ (104.5) |
Defined benefit pension plan: | |||
Actuarial gain (loss) arising during period, net of tax | 5.6 | (8) | (10.6) |
Amortization of actuarial gain and prior service cost included in net periodic pension cost and settlement, net of tax | 0.6 | 1.3 | (1.7) |
Total defined benefit pension plan, net of tax | 6.2 | (6.7) | (12.3) |
Unrealized (loss) gain on available-for-sale securities, net of tax | (15) | 6.7 | 6 |
Other comprehensive (loss) income, net of tax | (8.8) | 0 | (6.3) |
Comprehensive income (loss) | $ 467 | $ 514.8 | $ (110.8) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Treasury Stock | Retained Earnings | Cumulative effect of accounting change | Cumulative effect of accounting changeRetained Earnings | |
Beginning balance (in shares) at Dec. 31, 2018 | 70,200,000 | ||||||||
Beginning balance at Dec. 31, 2018 | $ 2,788.6 | $ 0.7 | $ 1,940.2 | $ (7.9) | $ (2,579.2) | $ 3,434.8 | $ (5.1) | $ (5.1) | |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | (104.5) | (104.5) | |||||||
Unrealized gains (losses) on available-for-sale securities | 6 | 6 | |||||||
Defined benefit pension plan | (12.3) | (12.3) | |||||||
Shares issued under employee stock purchase plan | 4.1 | 4.1 | |||||||
Common stock issued for RSUs vested (in shares) | 100,000 | ||||||||
RSUs withheld for taxes | $ (2.1) | (2.1) | |||||||
Exercise of stock options (in shares) | 191,508 | 200,000 | |||||||
Exercise of stock options | $ 9.9 | 9.9 | |||||||
Share-based compensation | 85.1 | 85.1 | |||||||
Reclassifications from temporary equity to permanent equity | [1] | 10.8 | 10.8 | ||||||
Deconsolidation of variable interest entity | (0.1) | (0.1) | |||||||
Ending balance (in shares) at Dec. 31, 2019 | 70,500,000 | ||||||||
Ending balance at Dec. 31, 2019 | 2,780.4 | $ 0.7 | 2,047.9 | (14.2) | (2,579.2) | 3,325.2 | $ (0.8) | $ (0.8) | |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | 514.8 | 514.8 | |||||||
Unrealized gains (losses) on available-for-sale securities | 6.7 | 6.7 | |||||||
Defined benefit pension plan | (6.7) | (6.7) | |||||||
Shares issued under employee stock purchase plan (in shares) | 100,000 | ||||||||
Shares issued under employee stock purchase plan | 4.7 | 4.7 | |||||||
Common stock issued for RSUs vested (in shares) | 100,000 | ||||||||
RSUs withheld for taxes | $ (3.7) | (3.7) | |||||||
Exercise of stock options (in shares) | 466,731 | 400,000 | |||||||
Exercise of stock options | $ 33.8 | 33.8 | |||||||
Share-based compensation | 66 | 66 | |||||||
Ending balance (in shares) at Dec. 31, 2020 | 71,100,000 | ||||||||
Ending balance at Dec. 31, 2020 | 3,395.2 | $ 0.7 | 2,148.7 | (14.2) | (2,579.2) | 3,839.2 | |||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | 475.8 | 475.8 | |||||||
Unrealized gains (losses) on available-for-sale securities | (15) | (15) | |||||||
Defined benefit pension plan | 6.2 | 6.2 | |||||||
Shares issued under employee stock purchase plan (in shares) | 100,000 | ||||||||
Shares issued under employee stock purchase plan | 5.6 | 5.6 | |||||||
Common stock issued for RSUs vested (in shares) | 100,000 | ||||||||
RSUs withheld for taxes | $ (10.8) | (10.8) | |||||||
Exercise of stock options (in shares) | 405,536 | 400,000 | |||||||
Exercise of stock options | $ 50 | 50 | |||||||
Share-based compensation | 51.9 | 51.9 | |||||||
Ending balance (in shares) at Dec. 31, 2021 | 71,700,000 | ||||||||
Ending balance at Dec. 31, 2021 | $ 3,958.9 | $ 0.7 | $ 2,245.4 | $ (23) | $ (2,579.2) | $ 4,315 | |||
[1] | Pursuant to a license agreement with Toray Industries Inc. ( Toray ), we issued 200,000 shares of our common stock (which have since split into 400,000 shares) to Toray in 2007, and provided Toray the right to require us to repurchase the shares at a price of $27.21 per share (the Put Right ), which resulted in classification of such shares within temporary equity. During 2019, we terminated our license agreement with Toray and the Put Right also terminated. As a result, upon the termination of the license agreement, we reclassified $10.8 million from temporary equity to additional paid-in capital. |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Millions | 12 Months Ended | |
Dec. 31, 2019USD ($)$ / sharesshares | ||
Reclassifications of temporary to permanent equity | $ | $ 10.8 | [1] |
Temporary equity common stock subject to repurchase | ||
Common stock issued (in shares) | 200,000 | |
Common stock issued split (in shares) | 400,000 | |
Repurchase price (in dollars per share) | $ / shares | $ 27.21 | |
[1] | Pursuant to a license agreement with Toray Industries Inc. ( Toray ), we issued 200,000 shares of our common stock (which have since split into 400,000 shares) to Toray in 2007, and provided Toray the right to require us to repurchase the shares at a price of $27.21 per share (the Put Right ), which resulted in classification of such shares within temporary equity. During 2019, we terminated our license agreement with Toray and the Put Right also terminated. As a result, upon the termination of the license agreement, we reclassified $10.8 million from temporary equity to additional paid-in capital. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 475,800,000 | $ 514,800,000 | $ (104,500,000) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 49,900,000 | 49,900,000 | 45,900,000 |
Share-based compensation expense | 138,500,000 | 163,800,000 | 45,400,000 |
Impairments of investments in privately-held companies | 2,300,000 | 9,100,000 | 0 |
Impairments of property, plant, and equipment | 19,200,000 | 5,400,000 | 17,200,000 |
Intangible asset impairment charges | 113,400,000 | 0 | 0 |
Realized gain on sale of equity securities | (92,600,000) | (3,400,000) | (2,600,000) |
Other | 65,900,000 | (47,000,000) | (29,700,000) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (41,300,000) | (6,000,000) | 24,400,000 |
Inventories | (7,500,000) | 10,300,000 | 12,900,000 |
Accounts payable and accrued expenses | (12,500,000) | 38,600,000 | (16,300,000) |
Other assets and liabilities | (112,900,000) | 20,200,000 | (199,300,000) |
Net cash provided by (used in) operating activities | 598,200,000 | 755,700,000 | (206,600,000) |
Cash flows from investing activities: | |||
Purchases of property, plant, and equipment | (120,800,000) | (59,300,000) | (83,700,000) |
Proceeds from sale of property, plant, and equipment | 0 | 2,400,000 | 0 |
Sales/maturities of held-to-maturity investments | 0 | 0 | 39,700,000 |
Purchases of available-for-sale debt securities | (1,895,300,000) | (2,308,800,000) | (1,271,500,000) |
Maturities of available-for-sale debt securities | 1,370,100,000 | 1,523,400,000 | 799,200,000 |
Sales of available-for-sale debt securities | 47,600,000 | 76,500,000 | 180,900,000 |
Sales of investments in equity securities | 111,500,000 | 27,300,000 | 20,500,000 |
Purchases of investments in privately-held companies | 0 | 0 | (8,000,000) |
Decrease in cash due to deconsolidation of variable interest entity | 0 | 0 | (12,500,000) |
Net cash used in investing activities | (486,900,000) | (738,500,000) | (335,400,000) |
Cash flows from financing activities: | |||
Proceeds from line of credit | 0 | 0 | 800,000,000 |
Repayment of line of credit | 0 | (50,000,000) | (200,000,000) |
Payments of debt issuance costs | 0 | (1,700,000) | (700,000) |
Proceeds from the exercise of stock options | 50,000,000 | 33,800,000 | 9,900,000 |
Proceeds from the issuance of stock under employee stock purchase plan | 5,600,000 | 4,700,000 | 4,100,000 |
Restricted stock units withheld for taxes | (10,800,000) | (3,700,000) | (2,100,000) |
Net cash provided by (used in) financing activities | 44,800,000 | (16,900,000) | 611,200,000 |
Net increase in cash and cash equivalents | 156,100,000 | 300,000 | 69,200,000 |
Cash and cash equivalents, beginning of year | 738,700,000 | 738,400,000 | 669,200,000 |
Cash and cash equivalents, end of year | 894,800,000 | 738,700,000 | 738,400,000 |
Supplemental cash flow information: | |||
Cash paid for interest | 16,200,000 | 20,700,000 | 41,000,000 |
Cash paid for income taxes | 153,300,000 | 92,800,000 | 120,200,000 |
Non-cash investing and financing activities: | |||
Non-cash additions to property, plant, and equipment | $ 3,700,000 | $ 3,500,000 | $ 54,500,000 |
Organization and Business Descr
Organization and Business Description | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Description | Organization and Business Description United Therapeutics Corporation is a biotechnology company focused on the development and commercialization of innovative products to address the unmet medical needs of patients with chronic and life-threatening conditions. On September 30, 2021, we converted to a Delaware public benefit corporation, with the express public benefit purpose to provide a brighter future for patients through (a) the development of novel pharmaceutical therapies; and (b) technologies that expand the availability of transplantable organs . We have approval from the U.S. Food and Drug Administration ( FDA ) to market the following therapies: Tyvaso ® (treprostinil) Inhalation Solution ( Tyvaso ), Remodulin ® (treprostinil) Injection ( Remodulin ), Orenitram ® (treprostinil) Extended-Release Tablets ( Orenitram ), Unituxin ® (dinutuximab) Injection ( Unituxin ), and Adcirca ® (tadalafil) Tablets ( Adcirca ). We also derive revenues outside the United States from sales of Tyvaso, Remodulin, and Unituxin. As used in these notes to our consolidated financial statements, unless the context otherwise requires, the terms “ we ”, “ us ”, “ our ”, and similar terms refer to United Therapeutics Corporation and its consolidated subsidiaries. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements of United Therapeutics Corporation and its consolidated subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States ( GAAP ). All intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. In the operating activities section of our consolidated statements of cash flows, we reclassified a portion of the prior period amount within other assets and liabilities to the line item realized gain on sale of equity securities to conform with the current period presentation. Use of Estimates The preparation of our consolidated financial statements in accordance with GAAP requires our management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of our consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates on assumptions regarding historical experience, currently available information, and anticipated developments that we believe are reasonable and appropriate. However, because the use of estimates involves an inherent degree of uncertainty, actual results could differ from those estimates. Estimates are used for, but not limited to, revenue recognition, share-based compensation, determining the fair value of assets acquired and liabilities assumed in business combinations, marketable investments, fair value measurements (including those related to contingent consideration), inventory reserves, investments in privately-held companies, income taxes, goodwill and other intangible assets, and obligations related to our Supplemental Executive Retirement Plan. Fair Value Measurements Fair value is a market-based measurement, not an entity-specific measurement. The objective of a fair value measurement is to estimate the price to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Such transactions to sell an asset or transfer a liability are assumed to occur in the principal market for that asset or liability, or in the absence of the principal market, the most advantageous market for the asset or liability. Assets and liabilities subject to fair value measurement disclosures are required to be classified according to a three-level fair value hierarchy with respect to the inputs (or assumptions) used to determine fair value. The level in which an asset or liability is disclosed within the fair value hierarchy is based on the lowest level input that is significant to the related fair value measurement in its entirety. The guidance under the fair value measurement framework applies to other existing accounting guidance in the Financial Accounting Standards Board ( FASB ) codification that requires or permits fair value measurements. Refer to related disclosures in Note 5— Fair Value Measurements. Cash Equivalents Cash equivalents consist of highly liquid investments with maturities of three months or less from the date of acquisition. Marketable Investments Our marketable investments are primarily debt securities that we classify as available-for-sale. If we have both the positive intent and the ability to hold the securities until maturity, the securities are classified as held-to-maturity. We determine the appropriate classification of the securities at the time they are acquired and evaluate the appropriateness of such classifications at each balance sheet date. Available-for-sale debt securities are recorded at fair value, with the portion of the unrealized gains and losses that are not credit-related included as a component of accumulated other comprehensive income (loss) in stockholders’ equity, until realized. Held-to-maturity debt securities are recorded at amortized cost, adjusted for the amortization of discounts or premiums. Related discounts and premiums are amortized over the term of these securities as an adjustment to the yield using the effective interest method. Marketable investments are classified as either current or non-current assets in our consolidated balance sheets based on their contractual maturity dates. We monitor our available-for-sale investments for impairment quarterly or more frequently if circumstances warrant. In the event that the carrying value of a debt security exceeds its fair value, we evaluate whether any impairment is a result of credit loss or other factors. For investments in an unrealized loss position, we determine whether a credit loss exists by considering information about the collectibility of the instrument, current market conditions, the investment issuer’s financial condition and business outlook, and reasonable and supportable forecasts of economic conditions. An allowance for credit losses would be recorded in our consolidated statements of operations in the event the decline in the investment’s fair value was a result of credit loss, and unrealized losses not related to credit losses would be recorded in other comprehensive income (loss) . Our marketable investments also include investments in publicly-traded companies. The equity securities we own in these companies are recorded at fair value. Changes in the fair value of publicly-traded equity securities are recorded in our consolidated statements of operations within other income, net . Inventories Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value and consist of the following, net of reserves (in millions): As of December 31, 2021 2020 Raw materials $ 17.6 $ 18.4 Work-in-progress 31.9 29.5 Finished goods 44.3 38.6 Total inventories $ 93.8 $ 86.5 Goodwill and Other Intangible Assets The carrying amount of goodwill is not amortized but is subject to annual impairment testing. We conduct our impairment testing of goodwill annually during the fourth quarter, or more frequently if impairment indicators exist. Initially, we evaluate various pertinent qualitative factors to assess whether it is more likely than not that the fair value of a reporting unit to which goodwill has been assigned is less than its carrying value. Such qualitative factors can include, among others: (1) industry and market conditions; (2) present and anticipated sales and cost factors; and (3) overall financial performance. If we conclude based on our qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then measure the fair value of the reporting unit and compare its fair value to its carrying value (Step 1 of the goodwill impairment test). Following adoption of ASU 2017-04 on January 1, 2020, we are no longer required to perform Step 2 of the goodwill impairment test. The impairment charge is limited to the amount of goodwill allocated to the reporting unit, thus, the new standard eliminates the requirement to calculate a goodwill impairment charge using Step 2. We performed a qualitative assessment for our goodwill impairment testing for 2021 and 2020. During the years ended December 31, 2021 and 2020, our evaluation of goodwill did not result in any impairment losses. During the year ended December 31, 2019, we wrote off $3.5 million of goodwill related to the deconsolidation of a variable interest entity, as discussed in Note 4— Investments — Variable Interest Entities — Deconsolidation of a Variable Interest Entity. Indefinite-lived intangible assets are not amortized but are evaluated annually or more frequently for impairment if impairment indicators exist. Our indefinite-lived intangible assets include purchased in-process research and development ( IPR&D ) assets, which were measured at their estimated fair values as of their acquisition dates. During the year ended December 31, 2021, we recognized IPR&D impairment charges of $113.4 million related to our decision to discontinue the U.S. development of Trevyent ® and our decision to discontinue our research and development efforts related to biomechanical lungs, described in footnotes 1 and 2, respectively, to the Goodwill table below. There were no impairment losses related to indefinite-lived intangible assets during the year ended December 31, 2020. During the year ended December 31, 2019, we recognized an impairment charge of $8.8 million related to an IPR&D asset associated with our terminated license agreement with a variable interest entity, as discussed in Note 4— Investments — Variable Interest Entities — Deconsolidation of a Variable Interest Entity. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. Impairment losses are measured and recognized to the extent the carrying value of such assets exceeds their fair value. We recorded no impairment losses during the years ended December 31, 2021, 2020, and 2019 related to intangible assets subject to amortization. Goodwill and other intangible assets comprise the following (in millions): As of December 31, 2021 As of December 31, 2020 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Goodwill $ 28.0 $ — $ 28.0 $ 28.0 $ — $ 28.0 Other intangible assets: Technology, patents, and trade names 6.7 (5.6) 1.1 6.7 (5.5) 1.2 In-process research and development (1)(2) 15.5 — 15.5 128.9 — 128.9 Total $ 50.2 $ (5.6) $ 44.6 $ 163.6 $ (5.5) $ 158.1 (1) In March 2021, we decided to discontinue the U.S. development of Trevyent due to written comments provided by the FDA in February 2021. The FDA provided these written comments following a meeting between us and the FDA to discuss our planned resubmission of our NDA for Trevyent in light of a complete response letter issued by the FDA in April 2020. We determined this decision to be a potential indicator of impairment of our IPR&D asset related to Trevyent, which had a carrying value of $107.3 million as of December 31, 2020. Based on our decision to discontinue the U.S. development of Trevyent, we fully impaired the IPR&D asset related to Trevyent during 2021. The $107.3 million impairment charge was recorded within research and development in our consolidated statements of operations. (2) In January 2021, we decided to discontinue our research and development efforts related to biomechanical lungs. As a result of the decision, we fully impaired the IPR&D asset related to these efforts, which had a carrying value of $6.1 million, during 2021. The impairment charge was recorded within research and development in our consolidated statements of operations. Related amortization expense for the years ended December 31, 2021, 2020, and 2019, was $0.1 million, $0.2 million, and $0.2 million, respectively. As of December 31, 2021, aggregate amortization expense related to definite-lived intangible assets for each of the five succeeding years and thereafter is estimated at less than $1.0 million per year. Property, Plant, and Equipment Property, plant, and equipment is recorded at cost and depreciated over its estimated useful life using the straight-line method. The estimated useful lives of property, plant, and equipment by major category are as follows: Land improvements 15 Years Buildings 25-39 Years Building improvements 10-39 Years Furniture, equipment, and vehicles 3-25 Years Leasehold improvements Remaining lease term, or the estimated useful life of the improvement, whichever is shorter Property, plant, and equipment ( PP&E ) consists of the following (in millions): As of December 31, 2021 2020 Land and land improvements $ 132.6 $ 74.9 Buildings, building improvements, and leasehold improvements 612.7 593.6 Buildings under construction 55.1 47.4 Furniture, equipment, and vehicles 322.9 325.0 Subtotal 1,123.3 1,040.9 Less—accumulated depreciation (342.4) (309.3) Property, plant, and equipment, net $ 780.9 $ 731.6 Depreciation expense for the years ended December 31, 2021, 2020, and 2019, was $49.8 million, $49.7 million, and $45.7 million, respectively. Buildings under construction consists of direct costs related to our construction projects. In 2019, we completed construction of a new cell culture and purification facility. During 2021, we decided to repurpose this facility to produce autologous cells that we intend to use to cellularize lung scaffolds for clinical studies. The decision to repurpose this facility was an indicator of impairment of the facility which we evaluated during 2021. Based on our impairment assessment, we recorded an $11.6 million impairment charge on equipment that was disposed of when we repurposed this facility during 2021. For the year ended December 31, 2021, we recorded $19.2 million of PP&E impairment charges in the aggregate, of which $16.7 million was recorded within research and development in our consolidated statements of operations and $2.5 million was recorded within selling, general, and administrative in our consolidated statements of operations. For the year ended December 31, 2020, we recorded a $5.4 million PP&E impairment charge, which was recorded within selling, general, and administrative in our consolidated statements of operations. In October 2021, we acquired a 141,960 square foot commercial building located in Silver Spring, Maryland for future expansion. The total purchase price was $50.9 million, inclusive of taxes, closing costs, and other related expenses, the majority of which was capitalized as land and land improvements based on our intended use of the property. Investments in Privately-Held Companies We measure our non-controlling equity investments in privately-held companies using the measurement alternative because the fair values of these investments are not readily determinable. Under this alternative, the investments are measured at cost, less any impairment, adjusted for any observable price changes. We monitor these investments individually for any observable price changes or impairment indicators. We adjust the measurement of these investments for observable price changes in orderly transactions for the identical or a similar investment of the same issuer. We consider relevant transactions, including any potential funding opportunities, which occur on or before the balance sheet date in evaluating whether any observable price changes have occurred. When a relevant transaction is identified, a careful review of the attendant rights and obligations, such as voting rights, liquidation preferences, and protective provisions, is necessary to evaluate whether such transaction is deemed to be a similar or identical investment. When a transaction is identified as similar or identical to our investment, we assess the fair value of our investment using various inputs, such as the discount rate, time to a liquidation event, and volatility, in a valuation model or analysis. We include our investments in privately-held companies within other non-current assets in our consolidated balance sheets. These investments are subject to a periodic impairment review and if impaired, the investment is measured and recorded at fair value in accordance with FASB Accounting Standards Codification ( ASC ) 820, Fair Value Measurements . At each reporting date, we review these investments individually for impairment by evaluating whether events or circumstances have occurred that may have a significant adverse effect on the fair value of the investments. If such events or circumstances have occurred, we will estimate the fair value of the investment. In such cases, we determine the estimated fair value of the investment using unobservable inputs including assumptions by the company’s management. Treasury Stock Repurchased treasury stock is recorded at cost, including commissions and fees. The cost of treasury shares sold or reissued is determined using the first-in, first-out method. Related gains and losses on sales of treasury stock are recognized as adjustments to stockholders’ equity. Revenue Recognition We determine revenue recognition for our contractual arrangements with customers based on the following five steps: (1) identify each contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to our performance obligations in the contract; and (5) recognize revenue when (or as) we satisfy the relevant performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. Revenues are generated from the sale of our five commercially approved products: Tyvaso, Remodulin, Orenitram, Unituxin, and Adcirca. We recognize revenue when we transfer control of our product to our distributors, which is generally when the product is shipped or delivered to the distributor. Future revenue from delivery of our products will be based on purchase orders provided to us by our distributors. See Note 13— Segment Information , for information on revenues disaggregated by commercial product, geographic area, and customer. Gross-to-Net Deductions As is customary in the pharmaceutical industry, our product sales are recorded net of various forms of gross-to-net deductions. These deductions vary the consideration to which we are entitled in exchange for the sale of our products to our distributors, and include reserves for: (1) rebates and chargebacks; (2) prompt payment discounts; (3) allowance for sales returns; and (4) distributor fees and other allowances. We estimate these reserves in the same period that we recognize revenue for product sales to distributors. The net product sales amount recognized represents the amount we believe will not be subject to a significant future reversal of revenue. Estimating gross-to-net deductions involves the use of significant assumptions and judgments, as well as information obtained from external sources. For our rebate and chargeback liabilities, in particular, the time lag experienced in the payment of the rebate or chargeback may result in revisions of these accruals in future periods. However, based on our significant history and experience estimating these accruals and our development of these accruals based on the expected value method, we do not believe there will be significant changes to our estimates recorded during the period of sale. We recognized an aggregate $2.1 million increase in our net product sales for the year ended December 31, 2021, an aggregate $0.5 million increase in our net product sales for the year ended December 31, 2020, and an aggregate $2.3 million decrease in our net product sales for the year ended December 31, 2019, related to revenue recognized from product sales in prior periods. Rebates and chargebacks . Allowances for rebates include mandated discounts due to our participation in various government health care programs, contracted rebates to certain domestic distributors, and contracted discounts with commercial payers. We estimate our rebate liability on a product-by-product basis, considering actual revenue, contractual discount rates, expected utilization under each contract, and historical payment experience. We also consider changes in our product pricing and information regarding changes in program regulations and guidelines. Our chargebacks represent contractual discounts payable to distributors for the difference between the invoice price paid to us by the distributor for a particular product and the contracted price that the distributor’s customer pays for that product. We estimate our chargeback liability on a product-by-product basis, primarily considering historical payment experience. Although we accrue a liability for rebates and chargebacks in the same period the product is sold, third-party reporting and payment of the rebate or chargeback amount occur on a time lag, with the majority of rebates and chargebacks paid within six months from date of sale. Our liability for rebates and chargebacks is included in accounts payable and accrued expenses in our consolidated balance sheets. At December 31, 2021 and 2020, our accrued rebates and chargebacks were $67.8 million and $65.3 million, respectively. In addition, during the years ended December 31, 2021, 2020, and 2019, we recognized $218.6 million, $195.9 million, and $178.7 million, respectively, in revenue deductions associated with rebates and chargebacks. Prompt payment discounts . We offer prompt pay discounts to many of our distributors, typically for payments made within 30 days. Prompt pay discounts are estimated in the period of sale based on our experience with sales to eligible distributors. Our domestic distributors have routinely taken advantage of these discounts and we expect them to continue to do so. Prompt pay discounts are recorded as a deduction to the accounts receivable balance presented in our consolidated balance sheets. Product returns . The sales terms for Adcirca and Unituxin include return rights that extend throughout the distribution channel. For Adcirca, we recognize an allowance for returns as customers have the right to return expired product for up to 12 months after the product’s expiration date (generally 24 to 36 months after the initial sale). Returned product is destroyed. Regulatory exclusivity for Adcirca expired in May 2018, and generic versions of Adcirca became available for purchase beginning in the third quarter of 2018. Due to the availability of the generic versions, we have experienced a significant decline in Adcirca demand, which could result in inventory held by distributors and other downstream customers expiring unsold. Our allowance for product returns for Adcirca as of December 31, 2021 and 2020 is $6.3 million and $12.5 million, respectively. We record our allowance for product returns in other current and non-current liabilities in our consolidated balance sheets. We developed our returns liability as of December 31, 2021 and 2020, based on our estimate of the amount of Adcirca inventory in the downstream channel and the amount of that inventory that we expect will not be sold by distributors and other downstream customers. The estimates were developed using reports from our distributors and other third-party data, including estimates of Adcirca dispenses and the historical impact of generic entrants on other branded products that we deemed comparable to Adcirca. During the year ended December 31, 2021, we recognized a decrease of $3.9 million in revenue reductions associated with our allowance for product returns. During the year ended December 31, 2020, we recognized no change in revenue deductions associated with our allowance for product returns. During the year ended December 31, 2019, we recognized a decrease of $6.2 million in revenue deductions associated with our allowance for product returns. For Unituxin, we ship product with expiration dates that are generally nine Distributor fees and other allowances . Distributor fees include distribution and other service fees paid to certain distributors. These fees are based on contractual amounts or rates applied to purchases of our product or units of service provided in a given period. Our liability for distributor fees is included in accounts payable and accrued expenses in our consolidated balance sheets. Trade Receivables We invoice and receive payment from our customers after we recognize revenue, resulting in receivables from our customers that are presented as accounts receivable in our consolidated balance sheets. Accounts receivable consist of short-term amounts due from our distributors (generally 30 to 90 days) and are stated at the amount we expect to collect. We establish an allowance for doubtful accounts, if deemed necessary, based on our assessment of the collectability of specific distributor accounts. We did not recognize any impairment losses for accounts receivable for each of the years ended December 31, 2021 and 2020. Changes in accounts receivable are primarily due to the timing and magnitude of orders of our products, the timing of when control of our products is transferred to our distributors, and the timing of cash collections. Adcirca Adcirca is manufactured for us by Lilly and distributed through its pharmaceutical wholesaler network on our behalf. Specifically, Lilly handles all of the administrative functions associated with the sale of Adcirca on our behalf, including the receipt and processing of customer purchase orders, shipment to customers, and invoicing and collection of customer payments. We recognize sales of Adcirca on a gross basis (net of reserves for gross-to-net deductions) based on our determination that we are acting as a principal due to our control of the product prior to its transfer to our customers. Our control is evidenced by our substantive ownership of product inventory, the fact that we bear all inventory risks, our primary responsibility for the acceptability of the product to our customers, and our ability to influence net product sales through our contracting decisions with commercial payers and participation in governmental-funded programs. Research and Development Research and development costs are expensed as incurred except for payments made in advance of services to be provided to us. Related expenses consist of internal labor and overhead, costs to acquire pharmaceutical products and product rights for development, materials used in clinical trials, amounts paid to third parties for services, and materials related to drug development and clinical trials. As part of our business strategy, we may in-license the rights to develop and commercialize product candidates. For each in-license transaction, we evaluate whether we have acquired processes or activities along with inputs that would be sufficient to constitute a “business” as defined under GAAP. As defined under GAAP, a “business” consists of inputs and processes applied to those inputs that have the ability to create outputs. Although businesses usually have outputs, outputs are not required for an integrated set of activities to qualify as a business. When we determine that we have not acquired sufficient processes or activities to constitute a business, any up-front payments, as well as pre-commercial milestone payments, are immediately expensed as acquired IPR&D in the period in which they are incurred. Milestone payments made to third parties subsequent to regulatory approval are capitalized as intangible assets and amortized over the estimated remaining useful life of the related product. We recognize the following costs, among others, as research and development expense in the period related costs are incurred: • costs associated with in-house or contracted manufacturing activities prior to receiving FDA approval for such facilities, or for major unproven changes to our manufacturing processes; • costs incurred in-licensing the rights to technologies in the research and development stage that have no alternative future use; and • up-front payments made in connection with arrangements to obtain license and distribution rights to pharmaceutical product candidates prior to regulatory approval, absent any alternative future use. Share-Based Compensation Generally, the fair value of a stock option grant is measured on its grant date and related compensation expense is recognized ratably over the requisite service period. We issue new shares of our common stock upon the exercise of stock options. Additionally, certain executives sometimes have stock options with performance conditions that have vesting rights tied to achievement of specific targeted criteria. Share-based compensation expense for all awards is recorded ratably over their vesting period, depending on the specific terms of the award and achievement of the specified performance conditions. Forfeitures are recognized as they occur. Refer to Note 8— Share-Based Compensation . We measure the fair value of restricted stock units using the stock price on the date of grant and related compensation expense is recognized ratably over the vesting period. Each restricted stock unit entitles the holder to receive one share of our common stock upon vesting. We issue new shares of our common stock upon the vesting of restricted stock units. Awards under our share tracking awards plans require cash settlement upon exercise and are classified as a liability. Accordingly, the fair value of related cash-settled awards is re-measured at each reporting date until awards are exercised or are otherwise no longer outstanding. Related changes in the fair value of outstanding cash-settled awards at each financial reporting date are recognized as adjustments to share-based compensation expense. We measure the fair value of stock to be purchased through our employee stock purchase plan at the beginning of an offering period, or grant date, and recognize related compensation expense ratably over the requisite service period (the offering period). We issue new shares of our common stock upon the end of each offering period, or exercise date. Income Taxes We account for income taxes in accordance with the asset and liability method. Under this method, we determine deferred tax assets and liabilities based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect for years in which the temporary differences are expected to reverse. We apply a valuation allowance against any net deferred tax asset if, based on the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. We recognize the benefit of an uncertain tax position that has been taken or that we expect to take on income tax returns only if such tax position is more likely than not to be sustained. We recognize the benefit in an amount equal to the largest amount that we determine has a greater than 50 percent likelihood of being realized upon settlement. The ultimate resolution of uncertain tax positions could result in amounts different from those recognized in our consolidated financial statements. We have elected to account for the tax on Global Intangible Low-Taxed Income, enacted as part of the Tax Cuts and Jobs Act, as a component of tax expense in the period in which the tax is incurred. Earnings per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period, plus the potential dilutive effect of other securities if such securities were converted or exercised. During periods in which we incur net losses, both basic and diluted loss per share are calculated by dividing the net loss by the weighted average shares outstanding. Potentially dilutive securities are excluded from the calculation because their effect would be anti-dilutive. Concentration of Credit Risk Financial instruments that are exposed to credit risk consist of cash, money market funds, certificates of deposit, marketable debt securities, and trade receivables. We maintain our cash and money market funds with financial institutions that are federally insured. While balances deposited in these institutions often exceed Federal Deposit Insurance Corporation limits, we have not experienced any losses on related accounts to date. Furthermore, we limit our risk exposure by maintaining funds in financial institutions that we believe are creditworthy and financially sound. Our investments in marketable debt securities have been issued by corporate entities and government-sponsored enterprises with high credit ratings. We mitigate investment risks by investing in highly-rated securities with relatively short maturities that we believe do not subject us to undue investment or credit risk. In addition, our investment policy does not provide for investments in complex or structured financial instruments. At any given time, our trade receivables are concentrated among a small number of principal customers. If any of these financial institutions, issuers, or customers fail to perform their obligations under the terms |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 12 Months Ended |
Dec. 31, 2021 | |
Recently Issued Accounting Standards | |
Accounting Standards Adopted and Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Accounting Standards Adopted In December 2019, the Financial Accounting Standards Board ( FASB ) issued Accounting Standards Update ( ASU ) No. 2019-12, Simplifying the Accounting for Income Taxes ( ASU 2019-12 ), which simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, Income Taxes, and also improves consistency of application by clarifying and amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. We adopted the new standard on January 1, 2021, with no material impact on our financial statements. In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments–Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)–Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) ( ASU 2020-01 ), which addresses the accounting for the transition into and out of the equity method and measuring certain purchased options and forward contracts to acquire investments. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020. We adopted the new standard on January 1, 2021, with no material impact on our financial statements. Accounting Standards Not Yet Adopted In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ( ASU 2020-04 ), which provides optional expedients and exceptions to lessen the burden of accounting for contract modifications and hedging relationships that reference LIBOR or other reference rates that could be discontinued due to reference rate reform. ASU 2020-04 became effective immediately and may be applied through December 31, 2022. This guidance is applicable to our credit agreement, which references LIBOR. Refer to Note 7— Debt for more information on our credit agreement. The adoption of, and future elections under, this guidance are not expected to have a material impact on our consolidated financial statements as the guidance will ease, if warranted, the requirements for accounting for the future effects of the rate reform. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2021 | |
Investments [Abstract] | |
Investments | Investments Marketable Investments Available-for-Sale Debt Securities Available-for-sale debt securities are recorded at fair value, with the portion of the unrealized gains and losses that are not credit-related included as a component of accumulated other comprehensive loss in stockholders’ equity, until realized. Available-for-sale debt securities consisted of the following (in millions): As of December 31, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government and agency securities $ 2,178.9 $ 2.0 $ (7.3) $ 2,173.6 Corporate debt securities 482.5 0.6 (2.0) 481.1 Total $ 2,661.4 $ 2.6 $ (9.3) $ 2,654.7 Reported under the following captions in our consolidated balance sheets: Cash and cash equivalents $ 39.3 Current marketable investments 965.5 Non-current marketable investments 1,649.9 Total $ 2,654.7 As of December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government and agency securities $ 1,902.4 $ 9.8 $ (0.1) $ 1,912.1 Corporate debt securities 331.2 3.2 — 334.4 Total $ 2,233.6 $ 13.0 $ (0.1) $ 2,246.5 Reported under the following captions in our consolidated balance sheets: Cash and cash equivalents $ 79.0 Current marketable investments 1,017.9 Non-current marketable investments 1,149.6 Total $ 2,246.5 The following table summarizes the contractual maturities of available-for-sale debt securities (in millions). Actual maturities may differ from contractual maturities because the issuers of certain of these debt securities have the right to call the securities or prepay their obligations under the securities with or without penalties. As of December 31, 2021 Amortized Cost Fair Value Due within one year $ 1,003.8 $ 1,004.8 Due in one to three years 1,657.6 1,649.9 Total $ 2,661.4 $ 2,654.7 Investments in Equity Securities with Readily Determinable Fair Values We held investments in equity securities with readily determinable fair values of $70.4 million and $78.4 million as of December 31, 2021 and 2020, respectively, which are included in current marketable investments in our consolidated balance sheets. One of the privately-held companies in which we invested became publicly traded in 2020 and another one became publicly traded in 2021. As a result, our investments in the equity securities of these companies are now recorded at fair value and included within current marketable investments in our consolidated balance sheets rather than measured as described below under Investments in Privately-Held Companies . Changes in the fair value of publicly-traded equity securities are recorded in our consolidated statements of operations within other income, net . Refer to Note 5— Fair Value Measurements . During the years ended December 31, 2021, 2020, and 2019, we received $111.5 million, $27.3 million, and $20.5 million, respectively, in cash from the sale of these equity securities. During 2021, we sold our investments in two publicly-traded companies and realized a gain of $92.6 million. During 2020 and 2019, we sold our investment in one publicly-traded company and realized a gain of $3.4 million and $2.6 million, respectively. The gains were recorded within other income, net in our consolidated statements of operations for the years ended December 31, 2021, 2020, and 2019. Investments in Privately-Held Companies As of December 31, 2021 and 2020, we maintained non-controlling equity investments in privately-held companies of $31.1 million and $84.8 million, respectively, in the aggregate. We made payments of $8.0 million for investments in privately-held companies during the year ended December 31, 2019. No such payments were made during the years ended December 31, 2021 and 2020. When an observable price transaction occurs that is identified as similar or identical to our investment, we perform a valuation analysis to assess the fair value of our investment using various inputs, such as the discount rate, time to a liquidation event, and price volatility of peer company stocks. We adjust the fair value of our investment based on the valuation analysis and recognize the gain or loss in the period in which the observable price change occurred. During the years ended December 31, 2021, 2020, and 2019, we recorded an aggregate increase of zero, $25.5 million, and $1.2 million, respectively, in the value of our investments. These gains were recorded within other income, net in our consolidated statements of operations. During 2021, we observed an indicator of impairment for our investments in two of the private companies in which we invested, which caused us to recognize aggregate impairment charges of $2.3 million. During the years ended December 31, 2020 and 2019, we recorded $9.1 million and zero, respectively, of impairment charges related to our investments in privately-held companies. These impairment charges were recorded within impairments of investments in privately-held companies in our consolidated statements of operations. Cumulative impairments and downward fair value adjustments on non-controlling equity investments in privately-held companies and cumulative upward fair value adjustments in privately-held companies were $4.1 million and $1.9 million, respectively, as of December 31, 2021. Variable Interest Entities We evaluate ou r interests in variable interest entities ( VIEs ) and will consolidate any VIE in which we have a controlling financial interest and are deemed to be the primary beneficiary. A controlling financial interest has both of the following characteristics: (1) the power to direct the activities of the VIE that most significantly impact its economic performance; and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could be significant to the VIE. If both of the characteristics are met, we are considered to be the primary beneficiary and therefore will consolidate that VIE into our consolidated finan cial statements. Unconsolidated Variable Interest Entity In November 2019, we entered into a supply agreement with an affiliate of DEKA Research & Development Corporation ( DEKA ) to manufacture and supply the Remunity ® Pump to us. Under the terms of the supply agreement, we reimburse all of the affiliate’s costs to manufacture and supply the Remunity Pump. We determined that the affiliate is a VIE as we are currently the only customer of the affiliate and the affiliate currently relies on our reimbursement of its costs to sustain its operations. We have determined we are not the primary beneficiary of the affiliate as we do not have the power to direct or control its significant activities related to the manufacturing of medical devices. Accordingly, we have not consolidated the affiliate’s results of operations and financial position with ours. As of December 31, 2021 and 2020, our consolidated balance sheets included $10.6 million and $11.7 million of assets, respectively, related to the supply agreement. As of December 31, 2021 and 2020, our consolidated balance sheets included a $2.0 million and $24.0 million liability, respectively, for our obligation to reimburse costs related to the supply agreement. While the terms of the supply agreement expose us to various future risks of loss given our responsibility to reimburse all costs incurred by the affiliate to manufacture and supply the Remunity Pump, we believe that our maximum exposure to loss as of December 31, 2021 as a result of our involvement with the affiliate is $10.6 million, the amount of assets related to the supply agreement noted above. Consolidation of a Variable Interest Entity In August 2019, we entered into an operating agreement and trust agreement related to the contribution of an asset to a newly created trust of which we are the beneficiary. The trust was created for legal and administrative purposes and is not expected to make future purchases. As the operator of the asset, we are required to incur all future expenses related to the operation and maintenance of the asset. Accordingly, the trust is deemed a VIE because it relies on our capital to sustain future operating expenses. We are deemed the primary beneficiary of the VIE because we are the sole provider of financial support and can unilaterally remove the trustee without cause. Accordingly, we consolidate the VIE’s balance sheet and results of operations. As of December 31, 2021, our consolidated balance sheets included a $49.3 million asset due to the consolidation of this VIE included within property, plant, and equipment, net . Upon consolidating the VIE, which was not deemed a business as defined in ASC 805, Business Combinations , no gain or loss was recognized. This VIE has no recourse against our assets and general credit, and the VIE assets cannot be used to settle the VIE liabilities. Our total risk of loss is the $49.3 million asset we contributed, as noted above. Deconsolidation of a Variable Interest Entity In April 2017, we made a $7.5 million minority equity investment in a privately-held company. In addition to our investment, we entered into an exclusive license, development, and commercialization agreement (the License Agreement ) with this company. The License Agreement entitled us to control rights sufficient to require us to regard the company as a VIE and to consolidate the company’s balance sheet and results of operations as the primary beneficiary of this company. In June 2019, we elected to terminate the License Agreement. The termination of the License Agreement caused us to impair an associated IPR&D asset during 2019 and recognize an impairment charge of $8.8 million, which is included within research and development in our consolidated statements of operations. Upon effectiveness of the termination of the License Agreement in 2019, we no longer have the power to direct the entity’s activities. Consequently, we deconsolidated the entity in 2019. Our deconsolidation of the entity’s balance sheet, which included $3.5 million of goodwill and $8.4 million of temporary equity, resulted in a net deconsolidation loss of $2.0 million. We have no further obligations to fund the entity. In 2021, we recognized an impairment charge equal to the entire value of our equity investment in this privately-held company of $1.3 million and recorded the impairment charge within impairments of investments in privately-held companies in our consolidated statements of operations. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and liabilities subject to fair value measurements are required to be disclosed within a fair value hierarchy. The fair value hierarchy ranks the quality and reliability of inputs used to determine fair value. Accordingly, assets and liabilities carried at, or permitted to be carried at, fair value are classified within the fair value hierarchy in one of the following categories based on the lowest level input that is significant in measuring fair value: Level 1—Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities. Level 2—Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models such as interest rates and yield curves that can be corroborated by observable market data. Level 3—Fair value is determined by using inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgment. We account for certain assets and liabilities at fair value and classify these assets and liabilities within the fair value hierarchy. Our other current assets and other current liabilities have fair values that approximate their carrying values. Assets and liabilities subject to fair value measurements are as follows (in millions): As of December 31, 2021 Level 1 Level 2 Level 3 Balance Assets Money market funds (1) $ 516.7 $ — $ — $ 516.7 U.S. government and agency securities (2) — 2,173.6 — 2,173.6 Corporate debt securities (2) — 481.1 — 481.1 Equity securities (3) 70.4 — — 70.4 Contingent consideration (4) — — 1.2 1.2 Total assets $ 587.1 $ 2,654.7 $ 1.2 $ 3,243.0 Liabilities Contingent consideration (5) — — 20.8 20.8 Total liabilities $ — $ — $ 20.8 $ 20.8 As of December 31, 2020 Level 1 Level 2 Level 3 Balance Assets Money market funds (1) $ 323.1 $ — $ — $ 323.1 U.S. government and agency securities (2) — 1,912.1 — 1,912.1 Corporate debt securities (2) — 334.4 — 334.4 Equity securities (3) 78.4 — — 78.4 Contingent consideration (4) — — 4.1 4.1 Total assets $ 401.5 $ 2,246.5 $ 4.1 $ 2,652.1 Liabilities Contingent consideration (5) — — 17.1 17.1 Total liabilities $ — $ — $ 17.1 $ 17.1 (1) Included in cash and cash equivalents in our consolidated balance sheets. (2) Included in cash and cash equivalents and current and non-current marketable investments in our consolidated balance sheets. Refer to Note 4— Investments — Marketable Investments—Available-for-Sale Debt Securities for further information. The fair value of these securities is principally measured or corroborated by trade data for identical securities for which related trading activity is not sufficiently frequent to be considered a Level 1 input or comparable securities that are more actively traded. (3) Included in current marketable investments in our consolidated balance sheets. The fair value of these securities is based on quoted market prices for identical instruments in active markets. During the years ended December 31, 2021 and 2020, we recognized $50.8 million and $25.1 million of net unrealized and realized gains, respectively, on these securities. We recorded these gains and losses in our consolidated statements of operations within other income, net . Refer to Note 4 —Investments — Marketable Investments—Investments in Equity Securities with Readily Determinable Fair Values . (4) Included in other non-current assets in our consolidated balance sheet as of December 31, 2021 and in other currents assets and other non-current assets in our consolidated balance sheet as of December 31, 2020. We estimated the fair value of contingent consideration using a Monte Carlo simulation. The Monte Carlo simulation incorporates Level 3 inputs including price volatility of peer company stocks and the probability of completing certain milestones during a specified period of time. The fair value of our contingent consideration assets decreased by $2.9 million from December 31, 2020 to December 31, 2021. The loss was recorded within other income, net in our consolidated statements of operations. (5) Included in other non-current liabilities in our consolidated balance sheets. The fair value of our contingent consideration obligations has been estimated using probability-weighted discounted cash flow models ( DCFs ). The DCFs incorporate Level 3 inputs including estimated discount rates that we believe that market participants would consider relevant in pricing and the projected timing and amount of cash flows, which are estimated and developed, in part, based on the requirements specific to each acquisition agreement. The fair value of our contingent consideration liabilities increased by $3.7 million from December 31, 2020 to December 31, 2021. The loss was recorded within research and development in our consolidated statements of operations. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value because of their short maturities. The fair values of our marketable investments and contingent consideration are reported above within the fair value hierarchy. Refer to Note 4— Investments . The carrying value of our debt is a reasonable estimate of the fair value of the outstanding debt based on the variable interest rate of the debt. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following by major categories (in millions): As of December 31, 2021 2020 Accounts payable $ 3.8 $ 4.1 Accrued expenses: Sales-related (royalties, rebates, and fees) 85.3 84.5 Payroll-related 53.6 47.9 Research and development-related 19.0 27.8 Other 12.9 22.7 Total accrued expenses $ 170.8 $ 182.9 Total accounts payable and accrued expenses $ 174.6 $ 187.0 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Agreement In June 2018, we entered into a credit agreement (the Credit Agreement ) with Wells Fargo Bank, National Association ( Wells Fargo ), as administrative agent and a swingline lender, and various other lender parties, providing for: (1) an unsecured revolving credit facility of up to $1.0 billion; and (2) a second unsecured revolving credit facility of up to $500.0 million (which facilities may, at our request, be increased by up to $300.0 million in the aggregate subject to obtaining commitments from existing or new lenders for such increase and other conditions). In December 2020, we extended the maturity date of the Credit Agreement by one year, to December 2025. At our option, amounts borrowed under the Credit Agreement bear interest at either the LIBOR rate or a fluctuating base rate, in each case, plus an applicable margin determined on a quarterly basis based in our consolidated ratio of total indebtedness to earnings before interest, taxes, depreciation, and amortization (as calculated in accordance with the Credit Agreement). To date, we have elected to calculate interest on the outstanding balance at LIBOR plus an applicable margin. As of December 31, 2021 and 2020, our outstanding aggregate principal balance under the Credit Agreement was $800.0 million, all of which was classified as a non-current liability because we do not intend to repay any portion of this amount within one year. The Credit Agreement contains customary events of default and customary affirmative and negative covenants. As of December 31, 2021, we were in compliance with these covenants. Lung Biotechnology PBC is our only subsidiary that guarantees our obligations under the Credit Agreement though, from time to time, one or more of our other subsidiaries may be required to guarantee our obligations. In connection with the Credit Agreement, we capitalized debt issuance costs, which are being amortized to interest expense over the contractual term of the Credit Agreement. As of December 31, 2021, $2.4 million was recorded in other current assets and $6.9 million in other non-current assets in our consolidated balance sheets. The interest expense reported in our consolidated statements of operations for each of the years ended December 31, 2021, 2020, and 2019, related to our borrowings under the Credit Agreement. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation As of December 31, 2021, we have two shareholder-approved equity incentive plans: the United Therapeutics Corporation Amended and Restated Equity Incentive Plan (the 1999 Plan ) and the United Therapeutics Corporation Amended and Restated 2015 Stock Incentive Plan (as amended to date, the 2015 Plan ). The 2015 Plan provides for the issuance of up to 11,000,000 shares of our common stock pursuant to awards granted under the 2015 Plan, which includes the 1,000,000 shares added pursuant to an amendment and restatement of the 2015 Plan approved by our shareholders in June 2021. No further awards will be granted under the 1999 Plan. We also have one equity incentive plan, the United Therapeutics Corporation 2019 Inducement Stock Incentive Plan (the 2019 Inducement Plan ), that has not been approved by our shareholders, as permitted by the Nasdaq Stock Market rules. The 2019 Inducement Plan was approved by our Board of Directors in February 2019 and provides for the issuance of up to 99,000 shares of our common stock under awards granted to newly-hired employees. Currently, we grant equity-based awards to employees and members of our Board of Directors in the form of stock options and restricted stock units ( RSUs ) under the 2015 Plan, and we grant RSUs to newly-hired employees under the 2019 Inducement Plan. Refer to the sections entitled Stock Options and RSUs below. We previously issued awards under the United Therapeutics Corporation Share Tracking Awards Plan ( 2008 STAP ) and the United Therapeutics Corporation 2011 Share Tracking Awards Plan ( 2011 STAP ). We refer to the 2008 STAP and the 2011 STAP collectively as the STAP and awards outstanding under either of these plans as STAP awards . Refer to the section entitled Share Tracking Awards Plans below. We discontinued the issuance of STAP awards in June 2015. In 2012, our shareholders approved the United Therapeutics Corporation Employee Stock Purchase Plan ( ESPP ), which is structured to comply with Section 423 of the Internal Revenue Code. Refer to the section entitled Employee Stock Purchase Plan below. The following table reflects the components of share-based compensation expense recognized in our consolidated statements of operations (in millions): Year Ended December 31, 2021 2020 2019 Stock options $ 25.4 $ 44.0 $ 70.5 RSUs 24.7 20.5 13.3 STAP awards 86.6 97.8 (39.7) Employee stock purchase plan 1.8 1.5 1.3 Total share-based compensation expense before tax $ 138.5 $ 163.8 $ 45.4 Share-based compensation capitalized as part of inventory $ 1.0 $ 1.0 $ 0.7 Stock Options We estimate the fair value of stock options using the Black-Scholes-Merton valuation model, which requires us to make certain assumptions that can materially impact the estimation of fair value and related compensation expense. The assumptions used to estimate fair value include the price of our common stock, the expected volatility of our common stock, the risk-free interest rate, the expected term of stock option awards, and the expected dividend yield. In March 2017 and March 2018, we issued stock options with performance conditions to certain executives with vesting conditions tied to the achievement of specified performance criteria, which had target performance levels that span from one A description of the key inputs, requiring estimates, used in determining the fair value of stock options are provided below: Expected term —The expected term reflects the estimated time period we expect an award to remain outstanding. For the years ended December 31, 2021, 2020, and 2019, we used the simplified approach to develop this input for our stock options as we do not have sufficient historical data related to stock option exercises. Under the simplified approach, the expected term reflects the weighted average midpoint between the vesting date and the expiration date of the awards. For the expected term input related to our STAP awards, refer to the Share Tracking Awards Plans section below. Expected volatility —Volatility is a measure of the amount the price of our common stock has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. We use historical volatility based on weekly price observations of our common stock during the period immediately preceding an award that is equal to its expected term up to a maximum period of five years. We believe that the volatility in the price of our common stock over the preceding five years generally provides a reliable projection of future long-term volatility. Risk-free interest rate —The risk-free interest rate is the average interest rate consistent with the yield available on a U.S. Treasury note with a term equal to the expected term of an award. Expected dividend yield —We do not pay cash dividends on our common stock and do not expect to do so in the future. Therefore, the dividend yield is zero. The following weighted average assumptions were used in estimating the fair value of stock options granted to employees during the twelve months ended December 31, 2021, 2020, and 2019: Year Ended December 31, 2021 2020 2019 Expected term of awards (in years) 5.7 5.6 5.8 Expected volatility 32.5 % 33.4 % 33.8 % Risk-free interest rate 1.0 % 0.5 % 2.4 % Expected dividend yield 0.0 % 0.0 % 0.0 % A summary of the activity and status of stock options under our equity incentive plans is presented below: Number of Options Weighted Average Exercise Price Weighted Average Remaining Aggregate Intrinsic Value (in millions) Outstanding at January 1, 2021 7,680,194 $ 126.27 Granted 43,653 177.33 Exercised (405,536) 123.47 Forfeited (333) 146.03 Outstanding at December 31, 2021 7,317,978 $ 126.73 4.6 $ 653.9 Exercisable at December 31, 2021 5,592,698 $ 125.92 4.4 $ 504.2 Unvested at December 31, 2021 1,725,280 $ 129.34 5.3 $ 149.7 The weighted average fair value of a stock option granted during each of the years in the three-year period ended December 31, 2021, was $56.69, $34.56, and $39.63, respectively. The total fair value of stock options that vested for each of the years in the three-year period ended December 31, 2021, was $50.4 million, $73.5 million, and $37.4 million, respectively. Total share-based compensation expense related to stock options is recorded as follows (in millions): Year Ended December 31, 2021 2020 2019 Cost of product sales $ 0.1 $ 0.5 $ 0.8 Research and development 0.5 2.0 3.7 Selling, general, and administrative 24.8 41.5 66.0 Share-based compensation expense before taxes 25.4 44.0 70.5 Related income tax benefit (0.8) (3.1) (16.0) Share-based compensation expense, net of taxes $ 24.6 $ 40.9 $ 54.5 As of December 31, 2021, unrecognized compensation cost relating to stock options was $25.7 million. Unvested outstanding stock options as of December 31, 2021 had a weighted average remaining vesting period of 1.2 years. Stock option exercise data is summarized below (dollars in millions): Year Ended December 31, 2021 2020 2019 Number of options exercised 405,536 466,731 191,508 Cash received from options exercised $ 50.0 $ 33.8 $ 9.9 Total intrinsic value of options exercised $ 26.6 $ 22.9 $ 11.5 Tax benefits realized from options exercised (1) $ 5.3 $ 5.4 $ 2.6 (1) We recognize these tax benefits in our consolidated statements of operations within income tax (expense) benefit. RSUs In June 2016, we began issuing RSUs to our non-employee directors. In October 2017, we also began issuing RSUs to our employees. Each RSU entitles the recipient to one share of our common stock upon vesting. We measure the fair value of RSUs using the stock price on the date of grant. Share-based compensation expense for the RSUs is recorded ratably over their vesting period. A summary of the activity with respect to, and status of, RSUs during year ended December 31, 2021 is presented below: Number of RSUs Weighted Average Grant Date Fair Value Unvested at January 1, 2021 440,528 $ 102.40 Granted 188,378 166.19 Vested (210,676) 106.23 Forfeited/canceled (27,691) 121.33 Unvested at December 31, 2021 390,539 $ 129.76 Total share-based compensation expense relating to RSUs is recorded as follows (in millions): Year Ended December 31, 2021 2020 2019 Cost of product sales $ 2.1 $ 1.6 $ 1.0 Research and development 8.2 7.0 4.4 Selling, general, and administrative 14.4 11.9 7.9 Share-based compensation expense before taxes 24.7 20.5 13.3 Related income tax benefit (5.9) (4.8) (3.0) Share-based compensation expense, net of taxes $ 18.8 $ 15.7 $ 10.3 As of December 31, 2021, unrecognized compensation cost related to the grant of RSUs was $31.5 million. Unvested outstanding RSUs as of December 31, 2021 had a weighted average remaining vesting period of 1.8 years. Share Tracking Awards Plans STAP awards convey the right to receive in cash an amount equal to the appreciation of our common stock, which is measured as the increase in the closing price of our common stock between the dates of grant and exercise. STAP awards expire on the ten The aggregate STAP liability balance was $102.4 million and $96.8 million at December 31, 2021 and 2020, respectively, all of which was classified as a current liability in our consolidated balance sheets. Estimating the fair value of STAP awards requires the use of certain inputs that can materially impact the determination of fair value and the amount of compensation expense (benefit) we recognize. Inputs used in estimating fair value include the price of our common stock, the expected volatility of the price of our common stock, the risk-free interest rate, the expected term of STAP awards, and the expected dividend yield. The fair value of the STAP awards is measured at the end of each financial reporting period because the awards are settled in cash. Refer to the descriptions of these key inputs, requiring estimates, used in determining the fair value of the awards in the Stock Options section above. A description of the expected term input for STAP awards is provided below: Expected term —The expected term reflects the estimated time period we expect an award to remain outstanding. We use the weighted average midpoint of the remaining contractual term to calculate the expected term of outstanding STAP awards. The table below includes the weighted-average assumptions used to measure the fair value of the outstanding STAP awards: As of December 31, 2021 2020 2019 Expected term of awards (in years) 1.3 1.7 2.0 Expected volatility 30.0 % 34.8 % 29.1 % Risk-free interest rate 0.4 % 0.1 % 1.6 % Expected dividend yield 0.0 % 0.0 % 0.0 % The closing price of our common stock was $216.08, $151.79, and $88.08 on December 31, 2021, 2020, and 2019, respectively. A summary of the activity and status of STAP awards during the year ended December 31, 2021 is presented below: Number of Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in millions) Outstanding at January 1, 2021 2,121,860 $ 118.48 Granted — — Exercised (1,027,738) 112.72 Forfeited (562) 145.30 Outstanding at December 31, 2021 1,093,560 $ 123.89 2.5 $ 100.8 Exercisable at December 31, 2021 1,083,560 $ 124.55 2.6 $ 99.2 Unvested at December 31, 2021 10,000 $ 52.57 0.9 $ 1.6 Share-based compensation expense (benefit) recognized in connection with STAP awards is as follows (in millions): Year Ended December 31, 2021 2020 2019 Cost of product sales $ 3.5 $ 4.9 $ (1.7) Research and development 15.0 19.9 (8.2) Selling, general, and administrative 68.1 73.0 (29.8) Share-based compensation expense (benefit) before taxes 86.6 97.8 (39.7) Related income tax (benefit) expense (14.7) (19.3) 9.0 Share-based compensation expense (benefit), net of taxes $ 71.9 $ 78.5 $ (30.7) Cash paid to settle STAP exercises during the years ended December 31, 2021, 2020, and 2019 was $81.1 million, $26.1 million, and $7.6 million, respectively. Employee Stock Purchase Plan In June 2012, our shareholders approved the ESPP, which is structured to comply with Section 423 of the Internal Revenue Code. The ESPP provides eligible employees with the right to purchase shares of our common stock at a discount through elective accumulated payroll deductions at the end of each offering period. Offering periods, which began in 2012, occur in consecutive six-month periods commencing on September 5th and March 5th of each year. Eligible employees may contribute up to 15 percent of their base salary, subject to certain annual limitations as defined in the ESPP. The purchase price of the shares is equal to the lower of 85 percent of the closing price of our common stock on either the first or last trading day of a given offering period. In addition, the ESPP provides that no eligible employee may purchase more than 4,000 shares during any offering period. The ESPP has a 20-year term and limits the aggregate number of shares that can be issued under the ESPP to 3.0 million. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Earnings Per Common Share Basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period, adjusted for the potential dilutive effect of our outstanding stock options, RSUs, and shares issuable under the ESPP, as if they were vested and exercised. The components of basic and diluted earnings (loss) per common share comprised the following (in millions, except per share amounts): Year Ended December 31, 2021 2020 2019 Numerator: Net income (loss) $ 475.8 $ 514.8 $ (104.5) Denominator: Weighted average outstanding shares — basic 44.9 44.2 43.8 Effect of dilutive securities (1) : Stock options, RSUs, and employee stock purchase plan 2.4 0.4 — Weighted average shares — diluted (2) 47.3 44.6 43.8 Net income (loss) per common share: Basic $ 10.60 $ 11.65 $ (2.39) Diluted $ 10.06 $ 11.54 $ (2.39) Stock options and RSUs excluded from calculation (2) 0.1 6.6 7.2 (1) Calculated using the treasury stock method. (2) The common shares underlying certain stock options and RSUs have been excluded from the computation of diluted earnings per share because their impact would be anti-dilutive. For the year ended December 31, 2019, we had a net loss, and as such, all outstanding stock options, RSUs, and shares issuable under the ESPP were excluded from our calculation of diluted earnings per share. Accumulated Other Comprehensive Loss The following table includes changes in accumulated other comprehensive loss by component, net of tax (in millions): Defined Benefit Pension Plan (1) Foreign Currency Translation Losses Unrealized Gains and (Losses) on Available-for-Sale Securities Total Balance, January 1, 2021 $ (6.7) $ (17.9) $ 10.4 $ (14.2) Other comprehensive (loss) income before reclassifications 5.6 — (15.0) (9.4) Amounts reclassified from accumulated other comprehensive loss 0.6 — — 0.6 Net current-period other comprehensive (loss) income 6.2 — (15.0) (8.8) Balance, December 31, 2021 $ (0.5) $ (17.9) $ (4.6) $ (23.0) Defined Benefit Pension Plan (1) Foreign Currency Translation Losses Unrealized Gains and (Losses) on Available-for-Sale Securities Total Balance, January 1, 2020 $ — $ (17.9) $ 3.7 $ (14.2) Other comprehensive (loss) income before reclassifications (8.0) — 6.7 (1.3) Amounts reclassified from accumulated other comprehensive loss 1.3 — — 1.3 Net current-period other comprehensive (loss) income (6.7) — 6.7 — Balance, December 31, 2020 $ (6.7) $ (17.9) $ 10.4 $ (14.2) (1) Refer to Note 11— Employee Benefit Plans — Supplemental Executive Retirement Plan |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Components of income tax expense (benefit) consist of the following (in millions): Year Ended December 31, 2021 2020 2019 Current: Federal $ 112.3 $ 114.6 $ 63.1 State 24.6 20.0 9.4 Total current 136.9 134.6 72.5 Deferred Federal (10.1) 1.6 (120.1) State (8.7) (12.1) (12.9) Total deferred (18.8) (10.5) (133.0) Total income tax expense (benefit) $ 118.1 $ 124.1 $ (60.5) Presented below is a reconciliation of income tax expense (benefit) computed at the statutory federal tax rate of 21 percent in 2021, 2020, and 2019 to income tax expense (benefit) as reported (in millions): Year Ended December 31, 2021 2020 2019 Federal taxes at the statutory rate $ 124.7 $ 134.2 $ (34.7) Change in valuation allowance (18.7) (3.1) (5.7) State taxes, net of federal benefit 14.6 7.0 (3.1) Nondeductible compensation 11.8 11.5 6.3 General business credits (11.5) (24.0) (21.3) Deduction for foreign-derived intangible income (2.8) (2.2) (3.3) Uncertain tax positions (1.0) 4.8 (0.3) Other 1.0 (4.1) (1.6) Foreign income adjustment — — 5.1 Deconsolidation of VIE — — (1.9) Total income tax expense (benefit) $ 118.1 $ 124.1 $ (60.5) Effective tax rate 20 % 19 % 37 % As of December 31, 2021 2020 Deferred tax assets: Intangible assets $ 186.1 $ 176.0 Share-based compensation 73.4 73.1 Reserves and accrued liabilities 18.3 18.8 SERP 10.9 10.9 NOLs 8.3 9.7 Basis differences in investments 1.4 7.4 Other 5.0 5.6 Total deferred tax assets 303.4 301.5 Less: Valuation allowance (11.5) (35.5) Total net deferred tax assets 291.9 266.0 Deferred tax liabilities: Plant and equipment principally due to differences in depreciation (28.2) (26.1) Other (1.8) (1.3) Total deferred tax liabilities (30.0) (27.4) Total deferred tax assets, net $ 261.9 $ 238.6 At December 31, 2021, we had gross federal, foreign, and state net operating loss carryforwards of zero, $4.3 million, and $131.3 million, respectively, which either expire at various dates beginning in 2030 or have no expiration date. We expect that a significant amount of these carryforwards will expire unused, so we have established valuation allowances for the related deferred tax assets. We are subject to federal and state taxation in the United States and various foreign jurisdictions. We are no longer subject to income tax examinations by the Internal Revenue Service and all other major jurisdictions for tax years prior to 2013. As of December 31, 2021 and 2020, we had $3.6 million and $4.5 million of unrecognized tax benefits, excluding interest and penalties, that would impact our effective tax rate if recognized . The total amount of unrecognized tax benefits relating to our tax positions is subject to change based on future events including, but not limited to, the settlements of ongoing tax audits and assessments and the expiration of applicable statutes of limitations. Given the uncertainty of potential adjustments from examination, it is reasonably possible that the balance of unrecognized tax benefits could change significantly over the next 12 months. However, due to the number of years remaining that are subject to examination, we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefit s . The following table represents a reconciliation of the total unrecognized tax benefit liability, excluding interest and penalties, for the years ended December 31, 2021, 2020, and 2019 (in millions): Year Ended December 31, 2021 2020 2019 Unrecognized tax benefits, beginning of the period $ 4.5 $ — $ 0.5 Gross decreases related to prior period tax positions (0.1) — (0.5) Gross increases related to prior period tax positions — 3.8 — Gross increases related to current period tax positions 0.7 0.7 — Gross decreases as a result of settlements during the current period (1.5) — — Unrecognized tax benefits, end of the period $ 3.6 $ 4.5 $ — We record interest and penalties related to uncertain tax positions as a component of income tax expense. As of December 31, 2021 and 2020, our liability for unrecognized tax benefits included approximately $0.3 million and $0.4 million, respectively, for the accrual of interest and penalties. As of December 31, 2021 and 2020, we recorded approximately $0.1 million benefit and $0.3 million expense, respectively, for the accrual of interest and penalties in our consolidated statement of operations. As of December 31, 2021 and 2020, we had a total liability for unrecognized tax benefits, including related interest and penalties, of approximately $3.9 million and $4.9 million, respectively. As of December 31, 2019, we did not have any unrecognized tax benefits. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Supplemental Executive Retirement Plan We maintain the United Therapeutics Corporation Supplemental Executive Retirement Plan ( SERP ) to provide retirement benefits to certain senior members of our management team. Participants who retire at age 60 or older are eligible to receive either monthly payments or a lump sum payment based on an average of their total gross base salary over the last 36 months of active employment, subject to certain adjustments. Related benefit payments commence on the first day of the six Because we do not fund the SERP, we recognize a liability equal to the projected benefit obligation as measured at the end of each fiscal year. A reconciliation of the beginning and ending balances of the projected benefit obligation is presented below (in millions): Year Ended December 31, 2021 2020 Projected benefit obligation at the beginning of the year $ 68.6 $ 56.1 Service cost 3.4 2.8 Interest cost 0.9 1.3 Benefits paid — — Net actuarial (gain) loss (5.8) 8.4 Projected benefit obligation at the end of the year $ 67.1 $ 68.6 Amount included in Other current liabilities (1) $ 18.2 $ 19.1 Amount included in Other non-current liabilities $ 48.9 $ 49.5 (1) This amount represents the benefit obligation due to participants who are eligible to retire and whose benefit payments could commence within one year of the respective balance sheet date. The following weighted average assumptions were used to measure the SERP obligation: Year Ended December 31, 2021 2020 Discount rate 2.05 % 1.49 % Salary increases 4.00 % 4.00 % Lump-sum interest rate 2.75 % 2.25 % The increases in the discount rate and lump-sum interest rate for the year ended December 31, 2021, as compared to the same period in 2020, resulted in a decrease in the projected benefit obligation of $1.3 million and $4.0 million, respectively, at December 31, 2021. The components of net periodic pension cost recognized in our consolidated statements of operations consisted of the following (in millions): Year Ended December 31, 2021 2020 2019 Service cost $ 3.4 $ 2.8 $ 2.2 Interest cost 0.9 1.3 1.4 Amortization of prior service cost 0.7 1.3 1.5 Amortization of net actuarial gain — — (2.2) Settlement — — (1.9) Total $ 5.0 $ 5.4 $ 1.0 The service cost component is reported within operating expenses and the other components are reported in other income, net in our consolidated statements of operations. Amounts related to the SERP that have been recognized in other comprehensive (loss) income are as follows (in millions): Year Ended December 31, 2021 2020 2019 Net actuarial gain (loss) $ 5.8 $ (8.4) $ (12.9) Prior service cost 0.7 1.3 1.5 Settlement — — (1.9) Total recognized in other comprehensive (loss) income 6.5 (7.1) (13.3) Tax (expense) benefit (0.3) 0.4 1.0 Total, net of tax $ 6.2 $ (6.7) $ (12.3) The table below presents amounts related to the SERP included in accumulated other comprehensive loss that have not yet been recognized as a component of net periodic pension cost in our consolidated statements of operations (in millions): Year Ended December 31, 2021 2020 2019 Net actuarial (gain) loss $ (2.0) $ 3.8 $ (4.5) Prior service cost 1.3 2.0 3.3 Total included in accumulated other comprehensive loss (0.7) 5.8 (1.2) Tax expense 1.2 0.9 1.2 Total, net of tax $ 0.5 $ 6.7 $ — The accumulated benefit obligation, a measure that does not consider future increases in participants’ salaries, was $59.1 million and $58.7 million at December 31, 2021 and 2020, respectively. Future estimated benefit payments, based on current assumptions, including election of lump-sum distributions and expected future service, are as follows (in millions): Year Ended December 31, 2022 $ 18.2 2023 6.3 2024 16.5 2025 6.8 2026 — Thereafter 38.9 Total $ 86.7 Employee Retirement Plan We maintain a Section 401(k) Salary Reduction Plan which is open to all eligible full-time employees. Under the 401(k) Plan, eligible employees can make pre-tax or after-tax contributions up to statutory limits. Currently, we make discretionary matching contributions to the 401(k) Plan equal to 40 percent of a participant’s elected salary deferral. Matching contributions vest immediately for participants who have been employed for three-years; otherwise, matching contributions vest annually, in one-third increments over a three-year period until the three-year employment requirement has been met. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases We lease facilities and equipment under operating lease arrangements that have terms expiring at various dates through 2031. Certain lease arrangements include renewal options and escalation clauses. In addition, various lease agreements to which we are party require that we comply with certain customary covenants throughout the term of these leases. If we are unable to comply with these covenants and cannot reach a satisfactory resolution in the event of noncompliance, these agreements could terminate. Future minimum lease payments under non-cancelable operating leases as of December 31, 2021, are as follows (in millions): Year Ending December 31, 2022 $ 3.1 2023 2.7 2024 2.4 2025 1.7 2026 1.8 Thereafter 7.2 Total $ 18.9 Total operating lease expense was $3.6 million, $3.5 million, and $4.9 million for the years ended December 31, 2021, 2020, and 2019, respectively. The amounts recorded in operating lease expense include short-term leases, which are immaterial. In August 2021, we entered into a commercial supply agreement ( Supply Agreement ) with MannKind Corporation ( MannKind ), which was later amended in October 2021. Pursuant to the Supply Agreement, MannKind is responsible for manufacturing and supplying Tyvaso DPI to us on a cost-plus basis. Unless earlier terminated, the initial term of the Supply Agreement continues until December 31, 2031 and will thereafter be renewed automatically for additional, successive two-year terms unless either party provides notice of non-renewal. We determined that the Supply Agreement contains certain lease components and have elected the expedient to combine lease and non-lease components as a single lease component. All payment obligations are variable in nature and costs of $9.6 million were incurred during the year ended December 31, 2021. Milestone Payments and Royalty Obligations We are party to certain license agreements pursuant to which we have in-licensed or acquired intellectual property rights covering our commercial and/or development-stage products. Generally, these agreements require that we make milestone payments in cash upon the achievement of certain product development and commercialization goals and payments of royalties upon commercial sales. The following table outlines our financial obligations under certain of these agreements: Counterparty Relevant Product Our Financial Obligation Supernus Pharmaceuticals, Inc. Orenitram Single-digit royalty on net product sales of Orenitram, through the second quarter of 2026 Lilly Adcirca Ten percent royalty on net sales, plus milestone payments of $325,000 for each $1,000,000 in net product sales The Scripps Research Institute Unituxin One percent royalty on net product sales of Unituxin DEKA Research & Development Corp. Remunity Pump Product fees and single-digit royalty on net product sales of the Remunity Pump and on net sales of Remodulin for use with the system; reimbursement of DEKA’s development and manufacturing costs MannKind Corporation Tyvaso DPI Low double-digit royalty on net product sales of Tyvaso DPI and up to $50.0 million in developmental milestone payments (all of which have already been paid) Arena Ralinepag Low double-digit, tiered royalty on net product sales of ralinepag (any route of administration); a one-time payment of $250.0 million upon FDA approval of an inhaled formulation of ralinepag to treat PAH; and a one-time payment of $150.0 million upon approval in certain non-U.S. jurisdictions of an oral version of ralinepag to treat any indication |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We operate as one operating segment with a focus on the development and commercialization of products to address the unmet needs of patients with chronic and life-threatening conditions. Our Chief Executive Officer, as our chief operating decision maker, manages and allocates resources to the operations of our company on a consolidated basis. This enables our Chief Executive Officer to assess our overall level of available resources and determine how best to deploy these resources across functions, therapeutic areas, and research and development projects in line with our long-term company-wide strategic goals. Net product sales, cost of product sales, and gross profit for each of our commercial products were as follows (in millions): Year Ended December 31, 2021 Tyvaso (1) Remodulin (1) Orenitram Unituxin Adcirca Total Net product sales $ 607.5 $ 513.7 $ 306.1 $ 202.3 $ 55.9 $ 1,685.5 Cost of product sales 26.8 37.9 19.7 14.2 23.9 122.5 Gross profit $ 580.7 $ 475.8 $ 286.4 $ 188.1 $ 32.0 $ 1,563.0 Year Ended December 31, 2020 Net product sales $ 483.3 $ 516.7 $ 293.1 $ 122.9 $ 67.3 $ 1,483.3 Cost of product sales 24.5 23.2 18.7 12.6 29.1 108.1 Gross profit $ 458.8 $ 493.5 $ 274.4 $ 110.3 $ 38.2 $ 1,375.2 Year Ended December 31, 2019 Net product sales $ 415.6 $ 587.0 $ 225.3 $ 113.7 $ 107.2 $ 1,448.8 Cost of product sales 19.6 21.1 15.0 15.7 46.2 117.6 Gross profit $ 396.0 $ 565.9 $ 210.3 $ 98.0 $ 61.0 $ 1,331.2 (1) Net product sales and cost of product sales include sales of delivery devices for the respective product, including, with respect to Remodulin, the Remunity Pump. Geographic revenues are determined based on the country in which our customers (distributors) are located. Total revenues from external customers by geographic area are as follows (in millions): Year Ended December 31, 2021 2020 2019 United States $ 1,564.2 $ 1,412.1 $ 1,323.2 Rest-of-World 121.3 71.2 125.6 Total $ 1,685.5 $ 1,483.3 $ 1,448.8 We recorded revenue from three distributors in the United States that exceeded ten percent of total revenues. Revenue from these three distributors as a percentage of total revenues is as follows: Year Ended December 31, 2021 2020 2019 Distributor 1 50 % 55 % 54 % Distributor 2 29 % 28 % 22 % Distributor 3 11 % 8 % 8 % Long-lived assets (property, plant, and equipment) located by geographic area are as follows (in millions): Year Ended December 31, 2021 2020 2019 United States $ 768.1 $ 717.3 $ 723.1 Rest-of-World 12.8 14.3 15.4 Total $ 780.9 $ 731.6 $ 738.5 |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation Sandoz Antitrust Litigation On April 16, 2019, Sandoz Inc. ( Sandoz ) and its marketing partner RareGen, LLC (now known as Liquidia PAH, LLC, a subsidiary of Liquidia Corporation) ( RareGen ), filed a complaint in the U.S. District Court for the District of New Jersey against us and Smiths Medical ASD, Inc. ( Smiths Medical ), alleging that we and Smiths Medical engaged in anticompetitive conduct in connection with plaintiffs’ efforts to launch their generic version of Remodulin. In particular, the complaint alleges that we and Smiths Medical unlawfully impeded competition by entering into an agreement to produce CADD-MS ® 3 cartridges specifically for the delivery of subcutaneous Remodulin, without making these cartridges available for the delivery of Sandoz’s generic version of Remodulin. The parties completed expedited discovery in anticipation of a motion filed by the plaintiffs on October 4, 2019, seeking preliminary injunctive relief. We and Smiths Medical filed a motion to dismiss the complaint, and we filed our opposition to plaintiffs’ motion for a preliminary injunction on October 25, 2019. On January 29, 2020, the court issued a decision denying the request for preliminary injunction sought by Sandoz and RareGen. According to the court, “[Sandoz and RareGen] have not met their burden of demonstrating a reasonable probability of eventual success in the litigation.” The court also denied our and Smiths Medical’s motion to dismiss the entire action. Plaintiffs declined to appeal the court’s denial of their motion for preliminary injunction. On March 30, 2020, the plaintiffs filed an amended complaint to add a count alleging that we breached our earlier patent settlement agreement with Sandoz by refusing to grant Sandoz access to cartridges. The parties have substantially completed discovery, and Sandoz and United Therapeutics have briefed motions for summary judgment on a variety of issues. We are waiting for the court’s decision on these motions, and no trial date has been set. We do not anticipate a trial before mid-2022 at the earliest. Smiths Medical was dismissed from the case on November 13, 2020, based on a settlement resolving the disputes between the plaintiffs and Smiths Medical. As part of this settlement, Smiths Medical paid the plaintiffs $4.25 million, disclosed and made available to the plaintiffs certain specifications and other information related to the MS-3 cartridges, and granted to the plaintiffs a non-exclusive, royalty-free license in the United States to Smiths Medical’s patents and copyrights associated with the MS-3 cartridges and certain other information related to the MS-3 pumps and cartridges. We believe that plaintiffs’ claims are meritless and intend to vigorously defend the litigation. However, due to the uncertainty inherent in any litigation, we cannot guarantee that an adverse outcome will not result. Any litigation of this nature could involve substantial cost, and an adverse outcome could result in substantial monetary damages and/or injunctive relief adverse to our business. We currently are not able to reasonably estimate a range of potential losses due to the early stage of the litigation and the inherent unpredictability of any outcome at trial. Litigation with Liquidia Technologies, Inc. On March 30, 2020, Liquidia Technologies, Inc. ( Liquidia ) filed two petitions for inter partes review ( IPR ) with the Patent Trial and Appeal Board ( PTAB ) of the U.S. Patent and Trademark Office ( USPTO ). In its petitions, Liquidia seeks to invalidate U.S. Patent Nos. 9,604,901 (the ’901 patent ) and 9,593,066 (the ’066 patent ), both of which relate to a method of making treprostinil, the active pharmaceutical ingredient in Tyvaso, Tyvaso DPI, Remodulin, and Orenitram. These patents were issued in March 2017 and are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations publication, also known as the Orange Book, for Tyvaso, Remodulin, and Orenitram. In July 2020, we filed preliminary responses to the petitions. On October 13, 2020, the PTAB declined to institute IPR proceedings on the ’066 patent because Liquidia failed to establish a reasonable likelihood of prevailing on any claim relating to the ’066 patent. Also on October 13, 2020, the PTAB instituted IPR proceedings on the ’901 patent. We received a final written decision from the PTAB on October 8, 2021. The final written decision found that Liquidia had proven the invalidity of seven of the claims of the ‘901 patent, but failed to prove the invalidity of two other claims. Each party has the right to appeal this decision, and no cancelation of claims takes effect until resolution of any appeals. The PTAB is currently addressing post-decision issues, and the time for appeal has not yet commenced. In January 2020, Liquidia submitted an NDA to the FDA for approval of Yutrepia, a dry powder inhalation formulation of treprostinil, to treat PAH. This NDA was submitted under the 505(b)(2) regulatory pathway with Tyvaso as the reference listed drug. In November 2021, the FDA granted tentative approval for Liquidia’s NDA. In April 2020, we received a Paragraph IV Certification Notice Letter ( Notice Letter ) from Liquidia, stating that it intends to market Yutrepia before the expiration of all patents listed in the Orange Book for Tyvaso. The Notice Letter states that Liquidia’s NDA for Yutrepia contains a Paragraph IV certification alleging that these patents are not valid, not enforceable, and/or will not be infringed by the commercial manufacture, use or sale of Yutrepia. On June 4, 2020, we filed a lawsuit in the U.S. District Court for the District of Delaware against Liquidia for infringement of the ’901 patent and the ’066 patent, both of which expire in December 2028. We filed our lawsuit within 45 days of receipt of notice from Liquidia of its NDA filing. As a result, under the Hatch-Waxman Act, the FDA is precluded by regulation from approving Liquidia’s NDA for up to 30 months or until the resolution of the litigation, whichever occurs first. On July 16, 2020, Liquidia filed an answer to our complaint that included counterclaims alleging, among other things, that the patents at issue in the litigation are not valid and will not be infringed by the commercial manufacture, use or sale of Yutrepia. On July 21, 2020, the USPTO issued a new patent to us related to Tyvaso. The new patent, U.S. Patent No. 10,716,793 (the ’793 patent ), expires May 14, 2027, and is listed in the Orange Book for Tyvaso. On July 22, 2020, we filed an amended complaint against Liquidia to include a claim for infringement of the ’793 patent. The ’793 patent relates to a method of administering treprostinil via inhalation and includes claims covering the dosing regimen used to administer Tyvaso. On August 5, 2020, Liquidia filed an answer to our amended complaint that repeated its defenses and counterclaims and added new defenses and counterclaims related to the ’793 patent. On August 26, 2020, we filed a motion to dismiss Liquidia’s invalidity defenses with respect to the ’793 patent based on assignor estoppel. The court denied our motion, finding that it is too early in the case to conclusively resolve the issue given the fact-intensive inquiry that is necessary. We can continue to assert an assignor estoppel defense and raise it for resolution later in the case, whether at trial or in a dispositive pre-trial motion. On December 28, 2021, we filed a stipulation that the ’901 patent is not infringed by Liquidia based on the court’s claim construction ruling. That stipulation is subject to our right to appeal the court’s claim construction at the appropriate time. On January 7, 2022, Liquidia filed a motion for summary judgment arguing that the ’901 and ’066 patents are invalid based on collateral estoppel in view of an earlier decision invalidating a related patent, U.S. Patent No. 8,497,393. The parties are currently briefing that motion, and no hearing date has been set. The case is set for trial commencing on March 28, 2022. On January 7, 2021, Liquidia filed another petition for IPR with the PTAB. In its petition, Liquidia seeks to invalidate the ’793 patent. On August 11, 2021, the PTAB issued a decision instituting review. The parties are currently submitting evidence and argument according to the case schedule, and the PTAB’s deadline to issue a final written decision regarding the ’793 patent will be in August 2022. Any appeals of the PTAB’s final written decision would delay any final outcome. On June 4, 2021, we filed a motion in the District of Delaware patent case to file an amended complaint adding trade secret misappropriation claims against Liquidia and a former Liquidia employee, Dr. Robert Roscigno. The court denied the motion based on a finding that adding the additional claims would impact the case schedule. Thus, we filed those claims as a separate case against Liquidia and Robert Roscigno in North Carolina state court. Liquidia and Roscigno removed those claims to the U.S. District Court for the Middle District of North Carolina. The parties are currently briefing whether the case should be litigated in state or federal court. We plan to vigorously enforce our intellectual property rights related to Tyvaso. MSP Recovery Litigation On July 27, 2020, MSP Recovery Claims, Series LLC; MSPA Claims 1, LLC; and Series PMPI, a designated series of MAO-MSO Recovery II, LLC ( Plaintiffs ) filed a “Class Action Complaint” (the Complaint ) against Caring Voices Coalition, Inc. ( CVC ) and us in the U.S. District Court for the District of Massachusetts. The Complaint alleges that we violated the federal Racketeer Influenced and Corrupt Organizations act and various state laws by coordinating with CVC when making donations to a pulmonary arterial hypertension fund so that those donations would go towards copayment obligations for Medicare patients taking drugs manufactured and marketed by us. Plaintiffs claim to have received assignments from various Medicare Advantage health plans and other insurance entities that allow them to bring this lawsuit on behalf of those entities to recover allegedly inflated amounts they paid for our drugs. On April 6, 2021, the court granted our motion to transfer the case to the U.S. District Court for the Southern District of Florida. Two members of the putative class, Humana Inc. and UnitedHealthcare Insurance Company, have informed us that they may bring claims directly against us to recover alleged overpayments. On October 15, 2021, we filed a motion for judgment on the pleadings, seeking to dismiss plaintiffs’ claims in this litigation. On that same day, plaintiffs filed an amended complaint (the Amended Complaint ) that includes state antitrust claims based on alleged facts similar to those raised by Sandoz and RareGen in the matter described above. The Amended Complaint added MSP Recovery Claims Series 44, LLC as a plaintiff and Smiths Medical ASD and CVC as defendants. As a result of the Amended Complaint, the court ruled that our motion for judgment on the pleadings was moot. On December 15, 2021, we filed a motion to dismiss all of Plaintiffs’ claims in the Amended Complaint, including the new antitrust claims. The motion to dismiss remains pending. The court has set a case schedule with trial commencing in June 2024. We intend to vigorously defend against this lawsuit. Patent Litigation with ANI Pharmaceuticals, Inc. In February 2021, we received a Paragraph IV certification notice letter from ANI indicating that ANI submitted an abbreviated new drug application ( ANDA ) to the FDA to market a generic version of Orenitram before the expiration of the following patents: U.S. Patent No. Expiration Date 8,252,839 May 2024 9,050,311 May 2024 9,278,901 May 2024 7,544,713 July 2024 7,417,070 July 2026 8,497,393 December 2028 9,604,901 December 2028 9,592,066 December 2028 8,747,897 October 2029 8,410,169 February 2030 8,349,892 January 2031 ANI’s notice letter states that the ANDA contains a Paragraph IV certification alleging that these patents are not valid, not enforceable, and/or will not be infringed by the commercial manufacture, use or sale of the proposed product described in ANI’s ANDA submission. We responded to the ANI notice letter by filing a lawsuit against ANI on April 1, 2021 in the U.S. District Court for the District of Delaware alleging infringement of each of the patents noted above. Under the Hatch-Waxman Act, the FDA is automatically precluded from approving ANI’s ANDA for up to 30 months from receipt of ANI’s notice letter or until the entry by a U.S. District Court of a final judgment that is adverse to us on all patents that form the basis of the stay, whichever occurs first. The court has set a schedule for the case with trial set to start on May 8, 2023, and the parties are currently engaged in discovery and addressing claim construction. We previously settled litigation with Actavis Laboratories FL, Inc. ( Actavis ) related to its ANDA submitted to the FDA to market a generic version of Orenitram. Under our settlement agreement, Actavis is permitted to market its generic version of Orenitram in June 2027. If ANI is successful in the pending litigation, it could potentially accelerate Actavis’ launch date. We do not know whether Actavis obtained and, if so, retained, 180 days of exclusivity from other generic competition based on its first-to-file status. We intend to vigorously enforce our intellectual property rights relating to Orenitram. 340B Program Litigation We participate in the Public Health Service’s 340B drug pricing program (the 340B program ), through which we sell our products at discounted prices to covered entities, including through pharmacies that have contracts with such covered entities ( 340B contract pharmacies ). Increasing use of 340B contract pharmacies, coupled with a lack of oversight and transparency, has resulted in increased risks of 340B statutory violations related to the diversion of 340B-purchased drugs to individuals who are not patients of the 340B covered entity, and to prohibited “duplicate discounts” when 340B-purchased drugs are also billed to Medicaid. On November 13, 2020, we notified the U.S. Health Resources and Services Administration ( HRSA ) that we would begin implementing narrowly-tailored 340B contract pharmacy policies with the goal of stemming abuses of the 340B program without upsetting the status quo or creating hardship for covered entities or their patients. At around the same time, a number of other manufacturers also announced their own policies aimed at stemming 340B program abuses. On December 30, 2020, the U.S. Department of Health and Human Services ( HHS ) General Counsel issued a non-binding Advisory Opinion (the Advisory Opinion ) concluding that, among other things, pharmaceutical manufacturers are obligated to sell their drugs at the 340B discounted price to an unlimited number of 340B contract pharmacies. On May 17, 2021, HRSA sent a letter to us stating that our 340B contract pharmacy policies violated the 340B statute. HRSA also sent materially similar letters to five other pharmaceutical manufacturers. We responded to that letter by clarifying our policies and requesting additional information from HRSA. To date, HRSA has not responded. The federal government’s pronouncements regarding the use of 340B contract pharmacies have triggered a variety of litigation. In one of those cases, the court concluded that the Advisory Opinion was “legally flawed,” and in response HHS withdrew the Advisory Opinion. Notwithstanding the withdrawal of the Advisory Opinion, HRSA has made clear that it is not withdrawing its May 17, 2021 letter to us and the threat of enforcement action. On June 23, 2021, we commenced litigation against HRSA and HHS in the U.S. District Court for the District of Columbia seeking to vindicate the lawfulness of our 340B program contract pharmacy policies. Despite the litigation, on September 22, 2021, HRSA sent to us, along with the other manufacturers challenging HRSA’s 340B interpretation, letters stating that HRSA is referring “this issue to the HHS Office of the Inspector General ( OIG )” for potential enforcement action. We have not received any communication from the OIG regarding our 340B contract pharmacy policy. Meanwhile, the parties submitted and fully briefed cross-motions for summary judgment, and the court heard oral argument on those motions, and also similar motions in a related case involving Novartis, on October 12, 2021. On November 5, 2021, the court granted our motion for summary judgment in part, and issued a decision holding that the HRSA letters threatening enforcement action “contain legal reasoning that rests upon an erroneous reading of Section 340B.” The court explained that “[t]he statute’s plain language, purpose, and structure do not prohibit drug manufacturers from attaching any conditions to the sales of covered drugs through contract pharmacies. Nor do they permit all conditions. Accordingly, any future enforcement action must rest on a new statutory provision, a new legislative rule, or a well-developed legal theory that Section 340B precludes the specific conditions at issue here.” HRSA and HSS appealed to the U.S. Court of Appeals for the District of Columbia Circuit on December 28, 2021, and the appeal is pending. Litigation involving other manufacturers is also moving forward in parallel with our case, and decisions issued in those cases have reached different conclusions regarding HRSA’s and HHS’s interpretation of the 340B statute. We intend to vigorously defend our 340B program contract pharmacy policies. |
Arena License Agreement
Arena License Agreement | 12 Months Ended |
Dec. 31, 2021 | |
Arena License Agreement | |
Arena License Agreement | Arena License Agreement On November 15, 2018, we entered into an exclusive license agreement with Arena related to ralinepag, a next-generation, oral, selective, and potent prostacyclin receptor agonist being developed for treatment of PAH. On January 24, 2019, in connection with the closing of the transactions contemplated by the license agreement: (1) Arena granted to us perpetual, irrevocable, and exclusive rights throughout the universe to develop, manufacture, and commercialize ralinepag; (2) Arena transferred to us certain other assets related to ralinepag, including, among others, related domain names and trademarks, permits, certain contracts, inventory, regulatory documentation, Investigational New Drug ( IND ) Application No. 109021 (related to ralinepag), and nonclinical, preclinical, and clinical trial data; (3) we assumed certain limited liabilities from Arena, including, among others, all obligations arising after the closing under the assumed contracts and the IND described above; and (4) we paid Arena an upfront payment of $800.0 million, which was expensed as acquired in-process research and development and included within research and development expenses in our consolidated statements of operations in the first quarter of 2019. We will also pay Arena: (1) a one-time payment of $250.0 million for the first, if any, marketing approval we receive in the United States for an inhaled version of ralinepag to treat PAH; (2) a one-time payment of $150.0 million for the first, if any, marketing approval we receive in any of Japan, France, Italy, the United Kingdom, Spain, or Germany for an oral version of ralinepag to treat any indication; and (3) low double-digit, tiered royalties on net sales of any pharmaceutical product containing ralinepag as an active ingredient, subject to certain adjustments for third-party license payments. On December 28, 2020, we entered into an agreement to acquire a rare pediatric disease priority review voucher for $105.0 million. On January 21, 2021, we closed the transaction and expensed the $105.0 million within research and development in our consolidated statements of operations for the year ended December 31, 2021. We redeemed the voucher in connection with our submission of the NDA for Tyvaso DPI in April 2021. |
Priority Review Voucher
Priority Review Voucher | 12 Months Ended |
Dec. 31, 2021 | |
Research and Development [Abstract] | |
Priority Review Voucher | Arena License Agreement On November 15, 2018, we entered into an exclusive license agreement with Arena related to ralinepag, a next-generation, oral, selective, and potent prostacyclin receptor agonist being developed for treatment of PAH. On January 24, 2019, in connection with the closing of the transactions contemplated by the license agreement: (1) Arena granted to us perpetual, irrevocable, and exclusive rights throughout the universe to develop, manufacture, and commercialize ralinepag; (2) Arena transferred to us certain other assets related to ralinepag, including, among others, related domain names and trademarks, permits, certain contracts, inventory, regulatory documentation, Investigational New Drug ( IND ) Application No. 109021 (related to ralinepag), and nonclinical, preclinical, and clinical trial data; (3) we assumed certain limited liabilities from Arena, including, among others, all obligations arising after the closing under the assumed contracts and the IND described above; and (4) we paid Arena an upfront payment of $800.0 million, which was expensed as acquired in-process research and development and included within research and development expenses in our consolidated statements of operations in the first quarter of 2019. We will also pay Arena: (1) a one-time payment of $250.0 million for the first, if any, marketing approval we receive in the United States for an inhaled version of ralinepag to treat PAH; (2) a one-time payment of $150.0 million for the first, if any, marketing approval we receive in any of Japan, France, Italy, the United Kingdom, Spain, or Germany for an oral version of ralinepag to treat any indication; and (3) low double-digit, tiered royalties on net sales of any pharmaceutical product containing ralinepag as an active ingredient, subject to certain adjustments for third-party license payments. On December 28, 2020, we entered into an agreement to acquire a rare pediatric disease priority review voucher for $105.0 million. On January 21, 2021, we closed the transaction and expensed the $105.0 million within research and development in our consolidated statements of operations for the year ended December 31, 2021. We redeemed the voucher in connection with our submission of the NDA for Tyvaso DPI in April 2021. |
Schedule II-Valuation and Quali
Schedule II-Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II-Valuation and Qualifying Accounts | Schedule II—Valuation and Qualifying Accounts Valuation Allowance on Deferred Tax Assets Balance at Beginning of Year Additions Charged to Expense Other Additions Deductions Balance at End of Year Year Ended December 31, 2021 (1) $ 35.5 $ 4.4 $ — $ (28.4) $ 11.5 Year Ended December 31, 2020 (2) $ 36.6 $ — $ 3.0 $ (4.1) $ 35.5 Year Ended December 31, 2019 (3) $ 42.6 $ 1.9 $ 0.9 $ (8.8) $ 36.6 (1) Deductions relate to changes in capital investments and our investment in a foreign entity. (2) Other Additions relate to changes in our investment in a foreign entity. Deductions relate primarily to changes in capital investments and state net operating losses. (3) Other Additions relate to changes in our investment in a foreign entity. Deductions relate to changes in capital investments and the acquisition of a foreign entity. Inventory Reserves Balance at Beginning of Year Additions Charged to Expense Deductions Balance at End of Year Year Ended December 31, 2021 $ 16.8 $ 10.0 $ (11.1) $ 15.7 Year Ended December 31, 2020 $ 20.9 $ 7.7 $ (11.8) $ 16.8 Year Ended December 31, 2019 $ 26.0 $ 8.4 $ (13.5) $ 20.9 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements of United Therapeutics Corporation and its consolidated subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States ( GAAP ). All intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. In the operating activities section of our consolidated statements of cash flows, we reclassified a portion of the prior period amount within other assets and liabilities to the line item realized gain on sale of equity securities to conform with the current period presentation. |
Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements of United Therapeutics Corporation and its consolidated subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States ( GAAP ). All intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. In the operating activities section of our consolidated statements of cash flows, we reclassified a portion of the prior period amount within other assets and liabilities to the line item realized gain on sale of equity securities to conform with the current period presentation. |
Use of Estimates | Use of Estimates The preparation of our consolidated financial statements in accordance with GAAP requires our management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of our consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates on assumptions regarding historical experience, currently available information, and anticipated developments that we believe are reasonable and appropriate. However, because the use of estimates involves an inherent degree of uncertainty, actual results could differ from those estimates. Estimates are used for, but not limited to, revenue recognition, share-based compensation, determining the fair value of assets acquired and liabilities assumed in business combinations, marketable investments, fair value measurements (including those related to contingent consideration), inventory reserves, investments in privately-held companies, income taxes, goodwill and other intangible assets, and obligations related to our Supplemental Executive Retirement Plan. |
Fair Value Measurements | Fair Value Measurements Fair value is a market-based measurement, not an entity-specific measurement. The objective of a fair value measurement is to estimate the price to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Such transactions to sell an asset or transfer a liability are assumed to occur in the principal market for that asset or liability, or in the absence of the principal market, the most advantageous market for the asset or liability. Assets and liabilities subject to fair value measurement disclosures are required to be classified according to a three-level fair value hierarchy with respect to the inputs (or assumptions) used to determine fair value. The level in which an asset or liability is disclosed within the fair value hierarchy is based on the lowest level input that is significant to the related fair value measurement in its entirety. The guidance under the fair value measurement framework applies to other existing accounting guidance in the Financial Accounting Standards Board ( FASB ) codification that requires or permits fair value measurements. Refer to related disclosures in Note 5— Fair Value Measurements. |
Cash Equivalents | Cash EquivalentsCash equivalents consist of highly liquid investments with maturities of three months or less from the date of acquisition. |
Marketable Investments | Marketable Investments Our marketable investments are primarily debt securities that we classify as available-for-sale. If we have both the positive intent and the ability to hold the securities until maturity, the securities are classified as held-to-maturity. We determine the appropriate classification of the securities at the time they are acquired and evaluate the appropriateness of such classifications at each balance sheet date. Available-for-sale debt securities are recorded at fair value, with the portion of the unrealized gains and losses that are not credit-related included as a component of accumulated other comprehensive income (loss) in stockholders’ equity, until realized. Held-to-maturity debt securities are recorded at amortized cost, adjusted for the amortization of discounts or premiums. Related discounts and premiums are amortized over the term of these securities as an adjustment to the yield using the effective interest method. Marketable investments are classified as either current or non-current assets in our consolidated balance sheets based on their contractual maturity dates. We monitor our available-for-sale investments for impairment quarterly or more frequently if circumstances warrant. In the event that the carrying value of a debt security exceeds its fair value, we evaluate whether any impairment is a result of credit loss or other factors. For investments in an unrealized loss position, we determine whether a credit loss exists by considering information about the collectibility of the instrument, current market conditions, the investment issuer’s financial condition and business outlook, and reasonable and supportable forecasts of economic conditions. An allowance for credit losses would be recorded in our consolidated statements of operations in the event the decline in the investment’s fair value was a result of credit loss, and unrealized losses not related to credit losses would be recorded in other comprehensive income (loss) . Our marketable investments also include investments in publicly-traded companies. The equity securities we own in these companies are recorded at fair value. Changes in the fair value of publicly-traded equity securities are recorded in our consolidated statements of operations within other income, net |
Inventories | Inventories Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value and consist of the following, net of reserves (in millions): As of December 31, 2021 2020 Raw materials $ 17.6 $ 18.4 Work-in-progress 31.9 29.5 Finished goods 44.3 38.6 Total inventories $ 93.8 $ 86.5 |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The carrying amount of goodwill is not amortized but is subject to annual impairment testing. We conduct our impairment testing of goodwill annually during the fourth quarter, or more frequently if impairment indicators exist. Initially, we evaluate various pertinent qualitative factors to assess whether it is more likely than not that the fair value of a reporting unit to which goodwill has been assigned is less than its carrying value. Such qualitative factors can include, among others: (1) industry and market conditions; (2) present and anticipated sales and cost factors; and (3) overall financial performance. If we conclude based on our qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then measure the fair value of the reporting unit and compare its fair value to its carrying value (Step 1 of the goodwill impairment test). Following adoption of ASU 2017-04 on January 1, 2020, we are no longer required to perform Step 2 of the goodwill impairment test. The impairment charge is limited to the amount of goodwill allocated to the reporting unit, thus, the new standard eliminates the requirement to calculate a goodwill impairment charge using Step 2. We performed a qualitative assessment for our goodwill impairment testing for 2021 and 2020. During the years ended December 31, 2021 and 2020, our evaluation of goodwill did not result in any impairment losses. During the year ended December 31, 2019, we wrote off $3.5 million of goodwill related to the deconsolidation of a variable interest entity, as discussed in Note 4— Investments — Variable Interest Entities — Deconsolidation of a Variable Interest Entity. Indefinite-lived intangible assets are not amortized but are evaluated annually or more frequently for impairment if impairment indicators exist. Our indefinite-lived intangible assets include purchased in-process research and development ( IPR&D ) assets, which were measured at their estimated fair values as of their acquisition dates. During the year ended December 31, 2021, we recognized IPR&D impairment charges of $113.4 million related to our decision to discontinue the U.S. development of Trevyent ® and our decision to discontinue our research and development efforts related to biomechanical lungs, described in footnotes 1 and 2, respectively, to the Goodwill table below. There were no impairment losses related to indefinite-lived intangible assets during the year ended December 31, 2020. During the year ended December 31, 2019, we recognized an impairment charge of $8.8 million related to an IPR&D asset associated with our terminated license agreement with a variable interest entity, as discussed in Note 4— Investments — Variable Interest Entities — Deconsolidation of a Variable Interest Entity. |
Property, Plant and Equipment | Property, Plant, and Equipment Property, plant, and equipment is recorded at cost and depreciated over its estimated useful life using the straight-line method. The estimated useful lives of property, plant, and equipment by major category are as follows: Land improvements 15 Years Buildings 25-39 Years Building improvements 10-39 Years Furniture, equipment, and vehicles 3-25 Years Leasehold improvements Remaining lease term, or the estimated useful life of the improvement, whichever is shorter Property, plant, and equipment ( PP&E ) consists of the following (in millions): As of December 31, 2021 2020 Land and land improvements $ 132.6 $ 74.9 Buildings, building improvements, and leasehold improvements 612.7 593.6 Buildings under construction 55.1 47.4 Furniture, equipment, and vehicles 322.9 325.0 Subtotal 1,123.3 1,040.9 Less—accumulated depreciation (342.4) (309.3) Property, plant, and equipment, net $ 780.9 $ 731.6 Depreciation expense for the years ended December 31, 2021, 2020, and 2019, was $49.8 million, $49.7 million, and $45.7 million, respectively. Buildings under construction consists of direct costs related to our construction projects. |
Investments in Privately-Held Companies | Investments in Privately-Held Companies We measure our non-controlling equity investments in privately-held companies using the measurement alternative because the fair values of these investments are not readily determinable. Under this alternative, the investments are measured at cost, less any impairment, adjusted for any observable price changes. We monitor these investments individually for any observable price changes or impairment indicators. We adjust the measurement of these investments for observable price changes in orderly transactions for the identical or a similar investment of the same issuer. We consider relevant transactions, including any potential funding opportunities, which occur on or before the balance sheet date in evaluating whether any observable price changes have occurred. When a relevant transaction is identified, a careful review of the attendant rights and obligations, such as voting rights, liquidation preferences, and protective provisions, is necessary to evaluate whether such transaction is deemed to be a similar or identical investment. When a transaction is identified as similar or identical to our investment, we assess the fair value of our investment using various inputs, such as the discount rate, time to a liquidation event, and volatility, in a valuation model or analysis. We include our investments in privately-held companies within other non-current assets in our consolidated balance sheets. These investments are subject to a periodic impairment review and if impaired, the investment is measured and recorded at fair value in accordance with FASB Accounting Standards Codification ( ASC ) 820, Fair Value Measurements |
Treasury Stock | Treasury Stock Repurchased treasury stock is recorded at cost, including commissions and fees. The cost of treasury shares sold or reissued is determined using the first-in, first-out method. Related gains and losses on sales of treasury stock are recognized as adjustments to stockholders’ equity. |
Revenue Recognition | Revenue Recognition We determine revenue recognition for our contractual arrangements with customers based on the following five steps: (1) identify each contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to our performance obligations in the contract; and (5) recognize revenue when (or as) we satisfy the relevant performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. Revenues are generated from the sale of our five commercially approved products: Tyvaso, Remodulin, Orenitram, Unituxin, and Adcirca. We recognize revenue when we transfer control of our product to our distributors, which is generally when the product is shipped or delivered to the distributor. Future revenue from delivery of our products will be based on purchase orders provided to us by our distributors. See Note 13— Segment Information , for information on revenues disaggregated by commercial product, geographic area, and customer. Gross-to-Net Deductions As is customary in the pharmaceutical industry, our product sales are recorded net of various forms of gross-to-net deductions. These deductions vary the consideration to which we are entitled in exchange for the sale of our products to our distributors, and include reserves for: (1) rebates and chargebacks; (2) prompt payment discounts; (3) allowance for sales returns; and (4) distributor fees and other allowances. We estimate these reserves in the same period that we recognize revenue for product sales to distributors. The net product sales amount recognized represents the amount we believe will not be subject to a significant future reversal of revenue. Estimating gross-to-net deductions involves the use of significant assumptions and judgments, as well as information obtained from external sources. For our rebate and chargeback liabilities, in particular, the time lag experienced in the payment of the rebate or chargeback may result in revisions of these accruals in future periods. However, based on our significant history and experience estimating these accruals and our development of these accruals based on the expected value method, we do not believe there will be significant changes to our estimates recorded during the period of sale. We recognized an aggregate $2.1 million increase in our net product sales for the year ended December 31, 2021, an aggregate $0.5 million increase in our net product sales for the year ended December 31, 2020, and an aggregate $2.3 million decrease in our net product sales for the year ended December 31, 2019, related to revenue recognized from product sales in prior periods. Rebates and chargebacks . Allowances for rebates include mandated discounts due to our participation in various government health care programs, contracted rebates to certain domestic distributors, and contracted discounts with commercial payers. We estimate our rebate liability on a product-by-product basis, considering actual revenue, contractual discount rates, expected utilization under each contract, and historical payment experience. We also consider changes in our product pricing and information regarding changes in program regulations and guidelines. Our chargebacks represent contractual discounts payable to distributors for the difference between the invoice price paid to us by the distributor for a particular product and the contracted price that the distributor’s customer pays for that product. We estimate our chargeback liability on a product-by-product basis, primarily considering historical payment experience. Although we accrue a liability for rebates and chargebacks in the same period the product is sold, third-party reporting and payment of the rebate or chargeback amount occur on a time lag, with the majority of rebates and chargebacks paid within six months from date of sale. Our liability for rebates and chargebacks is included in accounts payable and accrued expenses in our consolidated balance sheets. At December 31, 2021 and 2020, our accrued rebates and chargebacks were $67.8 million and $65.3 million, respectively. In addition, during the years ended December 31, 2021, 2020, and 2019, we recognized $218.6 million, $195.9 million, and $178.7 million, respectively, in revenue deductions associated with rebates and chargebacks. Prompt payment discounts . We offer prompt pay discounts to many of our distributors, typically for payments made within 30 days. Prompt pay discounts are estimated in the period of sale based on our experience with sales to eligible distributors. Our domestic distributors have routinely taken advantage of these discounts and we expect them to continue to do so. Prompt pay discounts are recorded as a deduction to the accounts receivable balance presented in our consolidated balance sheets. Product returns . The sales terms for Adcirca and Unituxin include return rights that extend throughout the distribution channel. For Adcirca, we recognize an allowance for returns as customers have the right to return expired product for up to 12 months after the product’s expiration date (generally 24 to 36 months after the initial sale). Returned product is destroyed. Regulatory exclusivity for Adcirca expired in May 2018, and generic versions of Adcirca became available for purchase beginning in the third quarter of 2018. Due to the availability of the generic versions, we have experienced a significant decline in Adcirca demand, which could result in inventory held by distributors and other downstream customers expiring unsold. Our allowance for product returns for Adcirca as of December 31, 2021 and 2020 is $6.3 million and $12.5 million, respectively. We record our allowance for product returns in other current and non-current liabilities in our consolidated balance sheets. We developed our returns liability as of December 31, 2021 and 2020, based on our estimate of the amount of Adcirca inventory in the downstream channel and the amount of that inventory that we expect will not be sold by distributors and other downstream customers. The estimates were developed using reports from our distributors and other third-party data, including estimates of Adcirca dispenses and the historical impact of generic entrants on other branded products that we deemed comparable to Adcirca. During the year ended December 31, 2021, we recognized a decrease of $3.9 million in revenue reductions associated with our allowance for product returns. During the year ended December 31, 2020, we recognized no change in revenue deductions associated with our allowance for product returns. During the year ended December 31, 2019, we recognized a decrease of $6.2 million in revenue deductions associated with our allowance for product returns. For Unituxin, we ship product with expiration dates that are generally nine Distributor fees and other allowances . Distributor fees include distribution and other service fees paid to certain distributors. These fees are based on contractual amounts or rates applied to purchases of our product or units of service provided in a given period. Our liability for distributor fees is included in accounts payable and accrued expenses in our consolidated balance sheets. Trade Receivables We invoice and receive payment from our customers after we recognize revenue, resulting in receivables from our customers that are presented as accounts receivable in our consolidated balance sheets. Accounts receivable consist of short-term amounts due from our distributors (generally 30 to 90 days) and are stated at the amount we expect to collect. We establish an allowance for doubtful accounts, if deemed necessary, based on our assessment of the collectability of specific distributor accounts. We did not recognize any impairment losses for accounts receivable for each of the years ended December 31, 2021 and 2020. Changes in accounts receivable are primarily due to the timing and magnitude of orders of our products, the timing of when control of our products is transferred to our distributors, and the timing of cash collections. Adcirca Adcirca is manufactured for us by Lilly and distributed through its pharmaceutical wholesaler network on our behalf. Specifically, Lilly handles all of the administrative functions associated with the sale of Adcirca on our behalf, including the receipt and processing of customer purchase orders, shipment to customers, and invoicing and collection of customer payments. We recognize sales of Adcirca on a gross basis (net of reserves for gross-to-net deductions) based on our determination that we are acting as a principal due to our control of the product prior to its transfer to our customers. Our control is evidenced by our substantive ownership of product inventory, the fact that we bear all inventory risks, our primary responsibility for the acceptability of the product to our customers, and our ability to influence net product sales through our contracting decisions with commercial payers and participation in governmental-funded programs. |
Research and Development | Research and Development Research and development costs are expensed as incurred except for payments made in advance of services to be provided to us. Related expenses consist of internal labor and overhead, costs to acquire pharmaceutical products and product rights for development, materials used in clinical trials, amounts paid to third parties for services, and materials related to drug development and clinical trials. As part of our business strategy, we may in-license the rights to develop and commercialize product candidates. For each in-license transaction, we evaluate whether we have acquired processes or activities along with inputs that would be sufficient to constitute a “business” as defined under GAAP. As defined under GAAP, a “business” consists of inputs and processes applied to those inputs that have the ability to create outputs. Although businesses usually have outputs, outputs are not required for an integrated set of activities to qualify as a business. When we determine that we have not acquired sufficient processes or activities to constitute a business, any up-front payments, as well as pre-commercial milestone payments, are immediately expensed as acquired IPR&D in the period in which they are incurred. Milestone payments made to third parties subsequent to regulatory approval are capitalized as intangible assets and amortized over the estimated remaining useful life of the related product. We recognize the following costs, among others, as research and development expense in the period related costs are incurred: • costs associated with in-house or contracted manufacturing activities prior to receiving FDA approval for such facilities, or for major unproven changes to our manufacturing processes; • costs incurred in-licensing the rights to technologies in the research and development stage that have no alternative future use; and • up-front payments made in connection with arrangements to obtain license and distribution rights to pharmaceutical product candidates prior to regulatory approval, absent any alternative future use. |
Share-Based Compensation | Share-Based Compensation Generally, the fair value of a stock option grant is measured on its grant date and related compensation expense is recognized ratably over the requisite service period. We issue new shares of our common stock upon the exercise of stock options. Additionally, certain executives sometimes have stock options with performance conditions that have vesting rights tied to achievement of specific targeted criteria. Share-based compensation expense for all awards is recorded ratably over their vesting period, depending on the specific terms of the award and achievement of the specified performance conditions. Forfeitures are recognized as they occur. Refer to Note 8— Share-Based Compensation . We measure the fair value of restricted stock units using the stock price on the date of grant and related compensation expense is recognized ratably over the vesting period. Each restricted stock unit entitles the holder to receive one share of our common stock upon vesting. We issue new shares of our common stock upon the vesting of restricted stock units. Awards under our share tracking awards plans require cash settlement upon exercise and are classified as a liability. Accordingly, the fair value of related cash-settled awards is re-measured at each reporting date until awards are exercised or are otherwise no longer outstanding. Related changes in the fair value of outstanding cash-settled awards at each financial reporting date are recognized as adjustments to share-based compensation expense. |
Income Taxes | Income Taxes We account for income taxes in accordance with the asset and liability method. Under this method, we determine deferred tax assets and liabilities based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect for years in which the temporary differences are expected to reverse. We apply a valuation allowance against any net deferred tax asset if, based on the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. We recognize the benefit of an uncertain tax position that has been taken or that we expect to take on income tax returns only if such tax position is more likely than not to be sustained. We recognize the benefit in an amount equal to the largest amount that we determine has a greater than 50 percent likelihood of being realized upon settlement. The ultimate resolution of uncertain tax positions could result in amounts different from those recognized in our consolidated financial statements. We have elected to account for the tax on Global Intangible Low-Taxed Income, enacted as part of the Tax Cuts and Jobs Act, as a component of tax expense in the period in which the tax is incurred. |
Earnings per Share | Earnings per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period, plus the potential dilutive effect of other securities if such securities were converted or exercised. During periods in which we incur net losses, both basic and diluted loss per share are calculated by dividing the net loss by the weighted average shares outstanding. Potentially dilutive securities are excluded from the calculation because their effect would be anti-dilutive. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that are exposed to credit risk consist of cash, money market funds, certificates of deposit, marketable debt securities, and trade receivables. We maintain our cash and money market funds with financial institutions that are federally insured. While balances deposited in these institutions often exceed Federal Deposit Insurance Corporation limits, we have not experienced any losses on related accounts to date. Furthermore, we limit our risk exposure by maintaining funds in financial institutions that we believe are creditworthy and financially sound. Our investments in marketable debt securities have been issued by corporate entities and government-sponsored enterprises with high credit ratings. We mitigate investment risks by investing in highly-rated securities with relatively short maturities that we believe do not subject us to undue investment or credit risk. In addition, our investment policy does not provide for investments in complex or structured financial instruments. At any given time, our trade receivables are concentrated among a small number of principal customers. If any of these financial institutions, issuers, or customers fail to perform their obligations under the terms of these financial instruments, our maximum exposure to potential losses would be equal to amounts reported in our consolidated balance sheets. |
Accounting Standards Adopted and Accounting Standards Not Yet Adopted | Accounting Standards Adopted In December 2019, the Financial Accounting Standards Board ( FASB ) issued Accounting Standards Update ( ASU ) No. 2019-12, Simplifying the Accounting for Income Taxes ( ASU 2019-12 ), which simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, Income Taxes, and also improves consistency of application by clarifying and amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. We adopted the new standard on January 1, 2021, with no material impact on our financial statements. In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments–Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)–Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) ( ASU 2020-01 ), which addresses the accounting for the transition into and out of the equity method and measuring certain purchased options and forward contracts to acquire investments. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020. We adopted the new standard on January 1, 2021, with no material impact on our financial statements. Accounting Standards Not Yet Adopted In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ( ASU 2020-04 ), which provides optional expedients and exceptions to lessen the burden of accounting for contract modifications and hedging relationships that reference LIBOR or other reference rates that could be discontinued due to reference rate reform. ASU 2020-04 became effective immediately and may be applied through December 31, 2022. This guidance is applicable to our credit agreement, which references LIBOR. Refer to Note 7— Debt for more information on our credit agreement. The adoption of, and future elections under, this guidance are not expected to have a material impact on our consolidated financial statements as the guidance will ease, if warranted, the requirements for accounting for the future effects of the rate reform. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of inventories, net of reserves | Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value and consist of the following, net of reserves (in millions): As of December 31, 2021 2020 Raw materials $ 17.6 $ 18.4 Work-in-progress 31.9 29.5 Finished goods 44.3 38.6 Total inventories $ 93.8 $ 86.5 |
Schedule of goodwill and other intangible assets | Goodwill and other intangible assets comprise the following (in millions): As of December 31, 2021 As of December 31, 2020 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Goodwill $ 28.0 $ — $ 28.0 $ 28.0 $ — $ 28.0 Other intangible assets: Technology, patents, and trade names 6.7 (5.6) 1.1 6.7 (5.5) 1.2 In-process research and development (1)(2) 15.5 — 15.5 128.9 — 128.9 Total $ 50.2 $ (5.6) $ 44.6 $ 163.6 $ (5.5) $ 158.1 (1) In March 2021, we decided to discontinue the U.S. development of Trevyent due to written comments provided by the FDA in February 2021. The FDA provided these written comments following a meeting between us and the FDA to discuss our planned resubmission of our NDA for Trevyent in light of a complete response letter issued by the FDA in April 2020. We determined this decision to be a potential indicator of impairment of our IPR&D asset related to Trevyent, which had a carrying value of $107.3 million as of December 31, 2020. Based on our decision to discontinue the U.S. development of Trevyent, we fully impaired the IPR&D asset related to Trevyent during 2021. The $107.3 million impairment charge was recorded within research and development in our consolidated statements of operations. (2) In January 2021, we decided to discontinue our research and development efforts related to biomechanical lungs. As a result of the decision, we fully impaired the IPR&D asset related to these efforts, which had a carrying value of $6.1 million, during 2021. The impairment charge was recorded within research and development in our consolidated statements of operations. |
Schedule of property, plant and equipment and the estimated useful lives | The estimated useful lives of property, plant, and equipment by major category are as follows: Land improvements 15 Years Buildings 25-39 Years Building improvements 10-39 Years Furniture, equipment, and vehicles 3-25 Years Leasehold improvements Remaining lease term, or the estimated useful life of the improvement, whichever is shorter Property, plant, and equipment ( PP&E ) consists of the following (in millions): As of December 31, 2021 2020 Land and land improvements $ 132.6 $ 74.9 Buildings, building improvements, and leasehold improvements 612.7 593.6 Buildings under construction 55.1 47.4 Furniture, equipment, and vehicles 322.9 325.0 Subtotal 1,123.3 1,040.9 Less—accumulated depreciation (342.4) (309.3) Property, plant, and equipment, net $ 780.9 $ 731.6 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments [Abstract] | |
Schedule of available-for-sale debt securities | Available-for-Sale Debt Securities Available-for-sale debt securities are recorded at fair value, with the portion of the unrealized gains and losses that are not credit-related included as a component of accumulated other comprehensive loss in stockholders’ equity, until realized. Available-for-sale debt securities consisted of the following (in millions): As of December 31, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government and agency securities $ 2,178.9 $ 2.0 $ (7.3) $ 2,173.6 Corporate debt securities 482.5 0.6 (2.0) 481.1 Total $ 2,661.4 $ 2.6 $ (9.3) $ 2,654.7 Reported under the following captions in our consolidated balance sheets: Cash and cash equivalents $ 39.3 Current marketable investments 965.5 Non-current marketable investments 1,649.9 Total $ 2,654.7 As of December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government and agency securities $ 1,902.4 $ 9.8 $ (0.1) $ 1,912.1 Corporate debt securities 331.2 3.2 — 334.4 Total $ 2,233.6 $ 13.0 $ (0.1) $ 2,246.5 Reported under the following captions in our consolidated balance sheets: Cash and cash equivalents $ 79.0 Current marketable investments 1,017.9 Non-current marketable investments 1,149.6 Total $ 2,246.5 |
Summary of the contractual maturities | The following table summarizes the contractual maturities of available-for-sale debt securities (in millions). Actual maturities may differ from contractual maturities because the issuers of certain of these debt securities have the right to call the securities or prepay their obligations under the securities with or without penalties. As of December 31, 2021 Amortized Cost Fair Value Due within one year $ 1,003.8 $ 1,004.8 Due in one to three years 1,657.6 1,649.9 Total $ 2,661.4 $ 2,654.7 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities subject to fair value measurements | Assets and liabilities subject to fair value measurements are as follows (in millions): As of December 31, 2021 Level 1 Level 2 Level 3 Balance Assets Money market funds (1) $ 516.7 $ — $ — $ 516.7 U.S. government and agency securities (2) — 2,173.6 — 2,173.6 Corporate debt securities (2) — 481.1 — 481.1 Equity securities (3) 70.4 — — 70.4 Contingent consideration (4) — — 1.2 1.2 Total assets $ 587.1 $ 2,654.7 $ 1.2 $ 3,243.0 Liabilities Contingent consideration (5) — — 20.8 20.8 Total liabilities $ — $ — $ 20.8 $ 20.8 As of December 31, 2020 Level 1 Level 2 Level 3 Balance Assets Money market funds (1) $ 323.1 $ — $ — $ 323.1 U.S. government and agency securities (2) — 1,912.1 — 1,912.1 Corporate debt securities (2) — 334.4 — 334.4 Equity securities (3) 78.4 — — 78.4 Contingent consideration (4) — — 4.1 4.1 Total assets $ 401.5 $ 2,246.5 $ 4.1 $ 2,652.1 Liabilities Contingent consideration (5) — — 17.1 17.1 Total liabilities $ — $ — $ 17.1 $ 17.1 (1) Included in cash and cash equivalents in our consolidated balance sheets. (2) Included in cash and cash equivalents and current and non-current marketable investments in our consolidated balance sheets. Refer to Note 4— Investments — Marketable Investments—Available-for-Sale Debt Securities for further information. The fair value of these securities is principally measured or corroborated by trade data for identical securities for which related trading activity is not sufficiently frequent to be considered a Level 1 input or comparable securities that are more actively traded. (3) Included in current marketable investments in our consolidated balance sheets. The fair value of these securities is based on quoted market prices for identical instruments in active markets. During the years ended December 31, 2021 and 2020, we recognized $50.8 million and $25.1 million of net unrealized and realized gains, respectively, on these securities. We recorded these gains and losses in our consolidated statements of operations within other income, net . Refer to Note 4 —Investments — Marketable Investments—Investments in Equity Securities with Readily Determinable Fair Values . (4) Included in other non-current assets in our consolidated balance sheet as of December 31, 2021 and in other currents assets and other non-current assets in our consolidated balance sheet as of December 31, 2020. We estimated the fair value of contingent consideration using a Monte Carlo simulation. The Monte Carlo simulation incorporates Level 3 inputs including price volatility of peer company stocks and the probability of completing certain milestones during a specified period of time. The fair value of our contingent consideration assets decreased by $2.9 million from December 31, 2020 to December 31, 2021. The loss was recorded within other income, net in our consolidated statements of operations. (5) Included in other non-current liabilities in our consolidated balance sheets. The fair value of our contingent consideration obligations has been estimated using probability-weighted discounted cash flow models ( DCFs ). The DCFs incorporate Level 3 inputs including estimated discount rates that we believe that market participants would consider relevant in pricing and the projected timing and amount of cash flows, which are estimated and developed, in part, based on the requirements specific to each acquisition agreement. The fair value of our contingent consideration liabilities increased by $3.7 million from December 31, 2020 to December 31, 2021. The loss was recorded within research and development in our consolidated statements of operations. |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consist of the following by major categories (in millions): As of December 31, 2021 2020 Accounts payable $ 3.8 $ 4.1 Accrued expenses: Sales-related (royalties, rebates, and fees) 85.3 84.5 Payroll-related 53.6 47.9 Research and development-related 19.0 27.8 Other 12.9 22.7 Total accrued expenses $ 170.8 $ 182.9 Total accounts payable and accrued expenses $ 174.6 $ 187.0 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of components of share-based compensation expense (benefit) recognized | The following table reflects the components of share-based compensation expense recognized in our consolidated statements of operations (in millions): Year Ended December 31, 2021 2020 2019 Stock options $ 25.4 $ 44.0 $ 70.5 RSUs 24.7 20.5 13.3 STAP awards 86.6 97.8 (39.7) Employee stock purchase plan 1.8 1.5 1.3 Total share-based compensation expense before tax $ 138.5 $ 163.8 $ 45.4 Share-based compensation capitalized as part of inventory $ 1.0 $ 1.0 $ 0.7 |
Summary of weighted-average assumptions to measure the fair value of stock options | The following weighted average assumptions were used in estimating the fair value of stock options granted to employees during the twelve months ended December 31, 2021, 2020, and 2019: Year Ended December 31, 2021 2020 2019 Expected term of awards (in years) 5.7 5.6 5.8 Expected volatility 32.5 % 33.4 % 33.8 % Risk-free interest rate 1.0 % 0.5 % 2.4 % Expected dividend yield 0.0 % 0.0 % 0.0 % The table below includes the weighted-average assumptions used to measure the fair value of the outstanding STAP awards: As of December 31, 2021 2020 2019 Expected term of awards (in years) 1.3 1.7 2.0 Expected volatility 30.0 % 34.8 % 29.1 % Risk-free interest rate 0.4 % 0.1 % 1.6 % Expected dividend yield 0.0 % 0.0 % 0.0 % |
Schedule of activity and status of stock options | A summary of the activity and status of stock options under our equity incentive plans is presented below: Number of Options Weighted Average Exercise Price Weighted Average Remaining Aggregate Intrinsic Value (in millions) Outstanding at January 1, 2021 7,680,194 $ 126.27 Granted 43,653 177.33 Exercised (405,536) 123.47 Forfeited (333) 146.03 Outstanding at December 31, 2021 7,317,978 $ 126.73 4.6 $ 653.9 Exercisable at December 31, 2021 5,592,698 $ 125.92 4.4 $ 504.2 Unvested at December 31, 2021 1,725,280 $ 129.34 5.3 $ 149.7 |
Schedule of share-based compensation expense (benefit) recognized | Total share-based compensation expense related to stock options is recorded as follows (in millions): Year Ended December 31, 2021 2020 2019 Cost of product sales $ 0.1 $ 0.5 $ 0.8 Research and development 0.5 2.0 3.7 Selling, general, and administrative 24.8 41.5 66.0 Share-based compensation expense before taxes 25.4 44.0 70.5 Related income tax benefit (0.8) (3.1) (16.0) Share-based compensation expense, net of taxes $ 24.6 $ 40.9 $ 54.5 Total share-based compensation expense relating to RSUs is recorded as follows (in millions): Year Ended December 31, 2021 2020 2019 Cost of product sales $ 2.1 $ 1.6 $ 1.0 Research and development 8.2 7.0 4.4 Selling, general, and administrative 14.4 11.9 7.9 Share-based compensation expense before taxes 24.7 20.5 13.3 Related income tax benefit (5.9) (4.8) (3.0) Share-based compensation expense, net of taxes $ 18.8 $ 15.7 $ 10.3 Share-based compensation expense (benefit) recognized in connection with STAP awards is as follows (in millions): Year Ended December 31, 2021 2020 2019 Cost of product sales $ 3.5 $ 4.9 $ (1.7) Research and development 15.0 19.9 (8.2) Selling, general, and administrative 68.1 73.0 (29.8) Share-based compensation expense (benefit) before taxes 86.6 97.8 (39.7) Related income tax (benefit) expense (14.7) (19.3) 9.0 Share-based compensation expense (benefit), net of taxes $ 71.9 $ 78.5 $ (30.7) |
Summary of stock option exercise data | Stock option exercise data is summarized below (dollars in millions): Year Ended December 31, 2021 2020 2019 Number of options exercised 405,536 466,731 191,508 Cash received from options exercised $ 50.0 $ 33.8 $ 9.9 Total intrinsic value of options exercised $ 26.6 $ 22.9 $ 11.5 Tax benefits realized from options exercised (1) $ 5.3 $ 5.4 $ 2.6 (1) We recognize these tax benefits in our consolidated statements of operations within income tax (expense) benefit. |
Schedule of restricted stock units activity | A summary of the activity with respect to, and status of, RSUs during year ended December 31, 2021 is presented below: Number of RSUs Weighted Average Grant Date Fair Value Unvested at January 1, 2021 440,528 $ 102.40 Granted 188,378 166.19 Vested (210,676) 106.23 Forfeited/canceled (27,691) 121.33 Unvested at December 31, 2021 390,539 $ 129.76 |
Summary of the activity and status of STAP awards | A summary of the activity and status of STAP awards during the year ended December 31, 2021 is presented below: Number of Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in millions) Outstanding at January 1, 2021 2,121,860 $ 118.48 Granted — — Exercised (1,027,738) 112.72 Forfeited (562) 145.30 Outstanding at December 31, 2021 1,093,560 $ 123.89 2.5 $ 100.8 Exercisable at December 31, 2021 1,083,560 $ 124.55 2.6 $ 99.2 Unvested at December 31, 2021 10,000 $ 52.57 0.9 $ 1.6 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of components of basic and diluted earnings (loss) per common share | The components of basic and diluted earnings (loss) per common share comprised the following (in millions, except per share amounts): Year Ended December 31, 2021 2020 2019 Numerator: Net income (loss) $ 475.8 $ 514.8 $ (104.5) Denominator: Weighted average outstanding shares — basic 44.9 44.2 43.8 Effect of dilutive securities (1) : Stock options, RSUs, and employee stock purchase plan 2.4 0.4 — Weighted average shares — diluted (2) 47.3 44.6 43.8 Net income (loss) per common share: Basic $ 10.60 $ 11.65 $ (2.39) Diluted $ 10.06 $ 11.54 $ (2.39) Stock options and RSUs excluded from calculation (2) 0.1 6.6 7.2 (1) Calculated using the treasury stock method. (2) The common shares underlying certain stock options and RSUs have been excluded from the computation of diluted earnings per share because their impact would be anti-dilutive. For the year ended December 31, 2019, we had a net loss, and as such, all outstanding stock options, RSUs, and shares issuable under the ESPP were excluded from our calculation of diluted earnings per share. |
Schedule of changes in accumulated other comprehensive loss by component, net of tax | The following table includes changes in accumulated other comprehensive loss by component, net of tax (in millions): Defined Benefit Pension Plan (1) Foreign Currency Translation Losses Unrealized Gains and (Losses) on Available-for-Sale Securities Total Balance, January 1, 2021 $ (6.7) $ (17.9) $ 10.4 $ (14.2) Other comprehensive (loss) income before reclassifications 5.6 — (15.0) (9.4) Amounts reclassified from accumulated other comprehensive loss 0.6 — — 0.6 Net current-period other comprehensive (loss) income 6.2 — (15.0) (8.8) Balance, December 31, 2021 $ (0.5) $ (17.9) $ (4.6) $ (23.0) Defined Benefit Pension Plan (1) Foreign Currency Translation Losses Unrealized Gains and (Losses) on Available-for-Sale Securities Total Balance, January 1, 2020 $ — $ (17.9) $ 3.7 $ (14.2) Other comprehensive (loss) income before reclassifications (8.0) — 6.7 (1.3) Amounts reclassified from accumulated other comprehensive loss 1.3 — — 1.3 Net current-period other comprehensive (loss) income (6.7) — 6.7 — Balance, December 31, 2020 $ (6.7) $ (17.9) $ 10.4 $ (14.2) (1) Refer to Note 11— Employee Benefit Plans — Supplemental Executive Retirement Plan |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax (benefit) expense | Components of income tax expense (benefit) consist of the following (in millions): Year Ended December 31, 2021 2020 2019 Current: Federal $ 112.3 $ 114.6 $ 63.1 State 24.6 20.0 9.4 Total current 136.9 134.6 72.5 Deferred Federal (10.1) 1.6 (120.1) State (8.7) (12.1) (12.9) Total deferred (18.8) (10.5) (133.0) Total income tax expense (benefit) $ 118.1 $ 124.1 $ (60.5) |
Schedule of reconciliation of income tax expense computed at the statutory federal tax rate to income tax expense | Presented below is a reconciliation of income tax expense (benefit) computed at the statutory federal tax rate of 21 percent in 2021, 2020, and 2019 to income tax expense (benefit) as reported (in millions): Year Ended December 31, 2021 2020 2019 Federal taxes at the statutory rate $ 124.7 $ 134.2 $ (34.7) Change in valuation allowance (18.7) (3.1) (5.7) State taxes, net of federal benefit 14.6 7.0 (3.1) Nondeductible compensation 11.8 11.5 6.3 General business credits (11.5) (24.0) (21.3) Deduction for foreign-derived intangible income (2.8) (2.2) (3.3) Uncertain tax positions (1.0) 4.8 (0.3) Other 1.0 (4.1) (1.6) Foreign income adjustment — — 5.1 Deconsolidation of VIE — — (1.9) Total income tax expense (benefit) $ 118.1 $ 124.1 $ (60.5) Effective tax rate 20 % 19 % 37 % |
Schedule of components of net deferred tax assets | As of December 31, 2021 2020 Deferred tax assets: Intangible assets $ 186.1 $ 176.0 Share-based compensation 73.4 73.1 Reserves and accrued liabilities 18.3 18.8 SERP 10.9 10.9 NOLs 8.3 9.7 Basis differences in investments 1.4 7.4 Other 5.0 5.6 Total deferred tax assets 303.4 301.5 Less: Valuation allowance (11.5) (35.5) Total net deferred tax assets 291.9 266.0 Deferred tax liabilities: Plant and equipment principally due to differences in depreciation (28.2) (26.1) Other (1.8) (1.3) Total deferred tax liabilities (30.0) (27.4) Total deferred tax assets, net $ 261.9 $ 238.6 |
Schedule of unrecognized tax benefit liability, excluding interest and penalties | The following table represents a reconciliation of the total unrecognized tax benefit liability, excluding interest and penalties, for the years ended December 31, 2021, 2020, and 2019 (in millions): Year Ended December 31, 2021 2020 2019 Unrecognized tax benefits, beginning of the period $ 4.5 $ — $ 0.5 Gross decreases related to prior period tax positions (0.1) — (0.5) Gross increases related to prior period tax positions — 3.8 — Gross increases related to current period tax positions 0.7 0.7 — Gross decreases as a result of settlements during the current period (1.5) — — Unrecognized tax benefits, end of the period $ 3.6 $ 4.5 $ — |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Schedule of reconciliation of the beginning and ending balances of the projected benefit obligation | A reconciliation of the beginning and ending balances of the projected benefit obligation is presented below (in millions): Year Ended December 31, 2021 2020 Projected benefit obligation at the beginning of the year $ 68.6 $ 56.1 Service cost 3.4 2.8 Interest cost 0.9 1.3 Benefits paid — — Net actuarial (gain) loss (5.8) 8.4 Projected benefit obligation at the end of the year $ 67.1 $ 68.6 Amount included in Other current liabilities (1) $ 18.2 $ 19.1 Amount included in Other non-current liabilities $ 48.9 $ 49.5 (1) This amount represents the benefit obligation due to participants who are eligible to retire and whose benefit payments could commence within one year of the respective balance sheet date. |
Schedule of weighted-average assumptions used to measure the SERP obligation | The following weighted average assumptions were used to measure the SERP obligation: Year Ended December 31, 2021 2020 Discount rate 2.05 % 1.49 % Salary increases 4.00 % 4.00 % Lump-sum interest rate 2.75 % 2.25 % |
Schedule of components of net periodic pension cost recognized | The components of net periodic pension cost recognized in our consolidated statements of operations consisted of the following (in millions): Year Ended December 31, 2021 2020 2019 Service cost $ 3.4 $ 2.8 $ 2.2 Interest cost 0.9 1.3 1.4 Amortization of prior service cost 0.7 1.3 1.5 Amortization of net actuarial gain — — (2.2) Settlement — — (1.9) Total $ 5.0 $ 5.4 $ 1.0 |
Schedule of amounts recognized in other comprehensive (loss) income | Amounts related to the SERP that have been recognized in other comprehensive (loss) income are as follows (in millions): Year Ended December 31, 2021 2020 2019 Net actuarial gain (loss) $ 5.8 $ (8.4) $ (12.9) Prior service cost 0.7 1.3 1.5 Settlement — — (1.9) Total recognized in other comprehensive (loss) income 6.5 (7.1) (13.3) Tax (expense) benefit (0.3) 0.4 1.0 Total, net of tax $ 6.2 $ (6.7) $ (12.3) |
Schedule of amounts included in accumulated other comprehensive loss | The table below presents amounts related to the SERP included in accumulated other comprehensive loss that have not yet been recognized as a component of net periodic pension cost in our consolidated statements of operations (in millions): Year Ended December 31, 2021 2020 2019 Net actuarial (gain) loss $ (2.0) $ 3.8 $ (4.5) Prior service cost 1.3 2.0 3.3 Total included in accumulated other comprehensive loss (0.7) 5.8 (1.2) Tax expense 1.2 0.9 1.2 Total, net of tax $ 0.5 $ 6.7 $ — |
Schedule of future estimated benefit payments, based on current assumptions | Future estimated benefit payments, based on current assumptions, including election of lump-sum distributions and expected future service, are as follows (in millions): Year Ended December 31, 2022 $ 18.2 2023 6.3 2024 16.5 2025 6.8 2026 — Thereafter 38.9 Total $ 86.7 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under non-cancelable operating leases | Future minimum lease payments under non-cancelable operating leases as of December 31, 2021, are as follows (in millions): Year Ending December 31, 2022 $ 3.1 2023 2.7 2024 2.4 2025 1.7 2026 1.8 Thereafter 7.2 Total $ 18.9 |
Schedule of financial obligation under various agreements | The following table outlines our financial obligations under certain of these agreements: Counterparty Relevant Product Our Financial Obligation Supernus Pharmaceuticals, Inc. Orenitram Single-digit royalty on net product sales of Orenitram, through the second quarter of 2026 Lilly Adcirca Ten percent royalty on net sales, plus milestone payments of $325,000 for each $1,000,000 in net product sales The Scripps Research Institute Unituxin One percent royalty on net product sales of Unituxin DEKA Research & Development Corp. Remunity Pump Product fees and single-digit royalty on net product sales of the Remunity Pump and on net sales of Remodulin for use with the system; reimbursement of DEKA’s development and manufacturing costs MannKind Corporation Tyvaso DPI Low double-digit royalty on net product sales of Tyvaso DPI and up to $50.0 million in developmental milestone payments (all of which have already been paid) Arena Ralinepag Low double-digit, tiered royalty on net product sales of ralinepag (any route of administration); a one-time payment of $250.0 million upon FDA approval of an inhaled formulation of ralinepag to treat PAH; and a one-time payment of $150.0 million upon approval in certain non-U.S. jurisdictions of an oral version of ralinepag to treat any indication |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of net product sales, cost of product sales and gross profit for each commercial product | Net product sales, cost of product sales, and gross profit for each of our commercial products were as follows (in millions): Year Ended December 31, 2021 Tyvaso (1) Remodulin (1) Orenitram Unituxin Adcirca Total Net product sales $ 607.5 $ 513.7 $ 306.1 $ 202.3 $ 55.9 $ 1,685.5 Cost of product sales 26.8 37.9 19.7 14.2 23.9 122.5 Gross profit $ 580.7 $ 475.8 $ 286.4 $ 188.1 $ 32.0 $ 1,563.0 Year Ended December 31, 2020 Net product sales $ 483.3 $ 516.7 $ 293.1 $ 122.9 $ 67.3 $ 1,483.3 Cost of product sales 24.5 23.2 18.7 12.6 29.1 108.1 Gross profit $ 458.8 $ 493.5 $ 274.4 $ 110.3 $ 38.2 $ 1,375.2 Year Ended December 31, 2019 Net product sales $ 415.6 $ 587.0 $ 225.3 $ 113.7 $ 107.2 $ 1,448.8 Cost of product sales 19.6 21.1 15.0 15.7 46.2 117.6 Gross profit $ 396.0 $ 565.9 $ 210.3 $ 98.0 $ 61.0 $ 1,331.2 (1) Net product sales and cost of product sales include sales of delivery devices for the respective product, including, with respect to Remodulin, the Remunity Pump. |
Schedule of net revenues from external customers by geographic area | Geographic revenues are determined based on the country in which our customers (distributors) are located. Total revenues from external customers by geographic area are as follows (in millions): Year Ended December 31, 2021 2020 2019 United States $ 1,564.2 $ 1,412.1 $ 1,323.2 Rest-of-World 121.3 71.2 125.6 Total $ 1,685.5 $ 1,483.3 $ 1,448.8 |
Schedule of concentration of risk disclosure | We recorded revenue from three distributors in the United States that exceeded ten percent of total revenues. Revenue from these three distributors as a percentage of total revenues is as follows: Year Ended December 31, 2021 2020 2019 Distributor 1 50 % 55 % 54 % Distributor 2 29 % 28 % 22 % Distributor 3 11 % 8 % 8 % |
Schedule of long-lived assets (property, plant and equipment) located by geographic area | Long-lived assets (property, plant, and equipment) located by geographic area are as follows (in millions): Year Ended December 31, 2021 2020 2019 United States $ 768.1 $ 717.3 $ 723.1 Rest-of-World 12.8 14.3 15.4 Total $ 780.9 $ 731.6 $ 738.5 |
Litigation (Tables)
Litigation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of patent expiration | n February 2021, we received a Paragraph IV certification notice letter from ANI indicating that ANI submitted an abbreviated new drug application ( ANDA ) to the FDA to market a generic version of Orenitram before the expiration of the following patents: U.S. Patent No. Expiration Date 8,252,839 May 2024 9,050,311 May 2024 9,278,901 May 2024 7,544,713 July 2024 7,417,070 July 2026 8,497,393 December 2028 9,604,901 December 2028 9,592,066 December 2028 8,747,897 October 2029 8,410,169 February 2030 8,349,892 January 2031 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Inventories | ||
Raw materials | $ 17.6 | $ 18.4 |
Work-in-progress | 31.9 | 29.5 |
Finished goods | 44.3 | 38.6 |
Total inventories | $ 93.8 | $ 86.5 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Goodwill and Other Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets [Line Items] | |||
Impairment loss for goodwill | $ 0 | $ 0 | |
Intangible asset impairment charges | 113,400,000 | 0 | $ 0 |
Finite-lived intangible asset impairment | 0 | 0 | 0 |
Amortization expense | 100,000 | $ 200,000 | 200,000 |
Amortization relating to other intangible assets | |||
2021 | 1,000,000 | ||
2022 | 1,000,000 | ||
2023 | 1,000,000 | ||
2024 | 1,000,000 | ||
2025 | 1,000,000 | ||
Thereafter | 1,000,000 | ||
In-process research and development | |||
Goodwill and Intangible Assets [Line Items] | |||
Intangible asset impairment charges | $ 113,400,000 | ||
In-process research and development | Research and development | |||
Goodwill and Intangible Assets [Line Items] | |||
Intangible asset impairment charges | 8,800,000 | ||
Variable Interest Entity | Privately-held Companies | |||
Goodwill and Intangible Assets [Line Items] | |||
Goodwill written off | $ 3,500,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Goodwill and Other Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Goodwill, gross | $ 28,000,000 | $ 28,000,000 | |
Goodwill, net | 28,000,000 | 28,000,000 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Finite-lived intangible assets, accumulated amortization | (5,600,000) | (5,500,000) | |
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible asset impairment charges | 113,400,000 | 0 | $ 0 |
Intangible Assets, Net (Including Goodwill) [Abstract] | |||
Total goodwill and other intangible assets, gross | 50,200,000 | 163,600,000 | |
Finite-lived intangible assets, accumulated amortization | (5,600,000) | (5,500,000) | |
Intangible Assets, Net (Including Goodwill) | 44,600,000 | 158,100,000 | |
In-process research and development | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets (excluding goodwill) | 15,500,000 | 128,900,000 | |
Intangible asset impairment charges | 113,400,000 | ||
In-process research and development | Trevyent | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets (excluding goodwill) | 107,300,000 | ||
Intangible asset impairment charges | 107,300,000 | ||
In-process research and development | Biomechanical Lungs | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible asset impairment charges | 6,100,000 | ||
Technology, patents, and trade names | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Finite-lived intangible assets, gross | 6,700,000 | 6,700,000 | |
Finite-lived intangible assets, accumulated amortization | (5,600,000) | (5,500,000) | |
Finite-lived intangible assets, net | 1,100,000 | 1,200,000 | |
Intangible Assets, Net (Including Goodwill) [Abstract] | |||
Finite-lived intangible assets, accumulated amortization | $ (5,600,000) | $ (5,500,000) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2021USD ($)ft² | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Property, Plant and Equipment | ||||
Property, plant and equipment, gross | $ 1,123.3 | $ 1,040.9 | ||
Less—accumulated depreciation | (342.4) | (309.3) | ||
Property, plant, and equipment, net | 780.9 | 731.6 | $ 738.5 | |
Depreciation expense | 49.8 | 49.7 | 45.7 | |
Tangible asset impairment charges | 19.2 | 5.4 | $ 17.2 | |
Silver Spring, Maryland | ||||
Property, Plant and Equipment | ||||
Area of real estate property | ft² | 141,960 | |||
Property, plant and equipment, additions | $ 50.9 | |||
Research and development | ||||
Property, Plant and Equipment | ||||
Tangible asset impairment charges | 16.7 | |||
Selling, general, and administrative | ||||
Property, Plant and Equipment | ||||
Tangible asset impairment charges | $ 2.5 | 5.4 | ||
Land improvements | ||||
Property, Plant and Equipment | ||||
Estimated useful life | 15 years | |||
Land and land improvements | ||||
Property, Plant and Equipment | ||||
Property, plant and equipment, gross | $ 132.6 | 74.9 | ||
Buildings, building improvements, and leasehold improvements | ||||
Property, Plant and Equipment | ||||
Property, plant and equipment, gross | $ 612.7 | 593.6 | ||
Buildings | Minimum | ||||
Property, Plant and Equipment | ||||
Estimated useful life | 25 years | |||
Buildings | Maximum | ||||
Property, Plant and Equipment | ||||
Estimated useful life | 39 years | |||
Building improvements | Minimum | ||||
Property, Plant and Equipment | ||||
Estimated useful life | 10 years | |||
Building improvements | Maximum | ||||
Property, Plant and Equipment | ||||
Estimated useful life | 39 years | |||
Buildings under construction | ||||
Property, Plant and Equipment | ||||
Property, plant and equipment, gross | $ 55.1 | 47.4 | ||
Furniture, equipment, and vehicles | ||||
Property, Plant and Equipment | ||||
Property, plant and equipment, gross | $ 322.9 | $ 325 | ||
Furniture, equipment, and vehicles | Minimum | ||||
Property, Plant and Equipment | ||||
Estimated useful life | 3 years | |||
Furniture, equipment, and vehicles | Maximum | ||||
Property, Plant and Equipment | ||||
Estimated useful life | 25 years | |||
Facility and Equipment | ||||
Property, Plant and Equipment | ||||
Impairment of long-lived assets to be disposed of | $ 11.6 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Revenue Recognition (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)product | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Disaggregation of Revenue | |||
Number of disclosed commercially approved products | product | 5 | ||
Increase in net product sales | $ 2,100,000 | $ 500,000 | |
Decrease in net product sales | $ 2,300,000 | ||
Maximum payment period for rebates and chargebacks | 6 months | ||
Accrued rebates and chargebacks | $ 67,800,000 | 65,300,000 | |
Revenue deductions, rebates and chargebacks | $ 218,600,000 | 195,900,000 | 178,700,000 |
Maximum payment period for prompt pay discounts to distributors | 30 days | ||
Expiration period for right to return product | 12 months | ||
Allowance for product returns | 0 | ||
Decrease in allowance for product returns | $ 3,900,000 | $ 6,200,000 | |
Adcirca | |||
Disaggregation of Revenue | |||
Allowance for product returns | $ 6,300,000 | $ 12,500,000 | |
Minimum | |||
Disaggregation of Revenue | |||
Expiration period of products from the initial sale date | 24 months | ||
Period of accounts receivable from customers | 30 days | ||
Minimum | Unituxin | |||
Disaggregation of Revenue | |||
Expiration period of products from the initial sale date | 9 months | ||
Maximum | |||
Disaggregation of Revenue | |||
Expiration period of products from the initial sale date | 36 months | ||
Period of accounts receivable from customers | 90 days | ||
Maximum | Unituxin | |||
Disaggregation of Revenue | |||
Expiration period of products from the initial sale date | 14 months |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Share-Based Compensation (Details) | Dec. 31, 2021shares |
RSUs | |
Share-Based Compensation | |
Number of shares of common stock entitled for each unit upon vesting (in shares) | 1 |
Investments - Available-for-Sal
Investments - Available-for-Sale Debt Securities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Marketable investments classified as available-for-sale debt securities: | ||
Amortized Cost | $ 2,661.4 | $ 2,233.6 |
Gross Unrealized Gains | 2.6 | 13 |
Gross Unrealized Losses | (9.3) | (0.1) |
Fair Value | 2,654.7 | 2,246.5 |
Cash and cash equivalents | ||
Marketable investments classified as available-for-sale debt securities: | ||
Fair Value | 39.3 | 79 |
Current marketable investments | ||
Marketable investments classified as available-for-sale debt securities: | ||
Fair Value | 965.5 | 1,017.9 |
Non-current marketable investments | ||
Marketable investments classified as available-for-sale debt securities: | ||
Fair Value | 1,649.9 | 1,149.6 |
U.S. government and agency securities | ||
Marketable investments classified as available-for-sale debt securities: | ||
Amortized Cost | 2,178.9 | 1,902.4 |
Gross Unrealized Gains | 2 | 9.8 |
Gross Unrealized Losses | (7.3) | (0.1) |
Fair Value | 2,173.6 | 1,912.1 |
Corporate debt securities | ||
Marketable investments classified as available-for-sale debt securities: | ||
Amortized Cost | 482.5 | 331.2 |
Gross Unrealized Gains | 0.6 | 3.2 |
Gross Unrealized Losses | (2) | 0 |
Fair Value | $ 481.1 | $ 334.4 |
Investments - Contractual Matur
Investments - Contractual Maturities of Available-for-Sale Marketable Investments (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Amortized Cost | ||
Due within one year | $ 1,003.8 | |
Due in one to three years | 1,657.6 | |
Amortized Cost | 2,661.4 | $ 2,233.6 |
Fair Value | ||
Due within one year | 1,004.8 | |
Due in one to three years | 1,649.9 | |
Total | $ 2,654.7 | $ 2,246.5 |
Investments - Investments in Eq
Investments - Investments in Equity Securities with Readily Determinable Fair Values (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Investments [Abstract] | |||
Investments in equity securities with readily determinable fair value | $ 70.4 | $ 78.4 | |
Sales of investments in equity securities | 111.5 | 27.3 | $ 20.5 |
Realized gain on sale of equity securities | $ 92.6 | $ 3.4 | $ 2.6 |
Investments - Investments in Pr
Investments - Investments in Privately-Held Companies (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)investment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Investments in Privately-Held Companies and Investments in Equity Securities with Readily Determinable Fair Values | |||
Investments in privately-held companies | $ 70,400,000 | $ 78,400,000 | |
Payments to acquire long-term investments | 0 | 0 | $ 8,000,000 |
Impairments of investments in privately-held companies | 2,300,000 | 9,100,000 | 0 |
Privately-held Companies | |||
Investments in Privately-Held Companies and Investments in Equity Securities with Readily Determinable Fair Values | |||
Investments in privately-held companies | 31,100,000 | 84,800,000 | |
Payments to acquire long-term investments | 0 | 0 | 8,000,000 |
Increase in value of investment, annual amount | $ 0 | $ 25,500,000 | $ 1,200,000 |
Number of impaired investments | investment | 2 | ||
Decrease in value of investment, cumulative amount | $ 4,100,000 | ||
Increase in value of investment, cumulative amount | $ 1,900,000 |
Investments - Variable Interest
Investments - Variable Interest Entity (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Variable Interest Entity | ||||
Assets | $ 5,169,100,000 | $ 4,615,000,000 | ||
Liabilities | 1,210,200,000 | 1,219,800,000 | ||
Gain (loss) on consolidation of variable interest entity | 0 | |||
Impairments of investments in privately-held companies | 2,300,000 | 9,100,000 | $ 0 | |
Variable Interest Entity, Not Primary Beneficiary | ||||
Variable Interest Entity | ||||
Assets | 10,600,000 | 11,700,000 | ||
Liabilities | 2,000,000 | $ 24,000,000 | ||
Maximum exposure to loss | 10,600,000 | |||
Variable Interest Entity | Property, Plant and Equipment | ||||
Variable Interest Entity | ||||
Assets | 49,300,000 | |||
Privately-held Companies | Variable Interest Entity | ||||
Variable Interest Entity | ||||
Investment purchased during the period | $ 7,500,000 | |||
Impairment charge on research and development | 8,800,000 | |||
Goodwill on deconsolidation | 3,500,000 | |||
Temporary equity derecognized | 8,400,000 | |||
Net loss on deconsolidating | $ 2,000,000 | |||
Impairments of investments in privately-held companies | $ 1,300,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Other Current Assets and Other Noncurrent Assets | ||
Assets | ||
Decrease in fair value of contingent consideration asset | $ 2.9 | |
Other Noncurrent Liabilities | ||
Liabilities | ||
Increase in fair value of contingent consideration liability | 3.7 | |
Equity securities | Other income (expense), net | ||
Assets | ||
Net unrealized and realized gains on securities | 50.8 | $ 25.1 |
Recurring fair value measurements | Level 1 | ||
Assets | ||
Total assets | 587.1 | 401.5 |
Liabilities | ||
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Recurring fair value measurements | Level 1 | Money market funds | ||
Assets | ||
Total assets | 516.7 | 323.1 |
Recurring fair value measurements | Level 1 | U.S. government and agency securities | ||
Assets | ||
Total assets | 0 | 0 |
Recurring fair value measurements | Level 1 | Corporate debt securities | ||
Assets | ||
Total assets | 0 | 0 |
Recurring fair value measurements | Level 1 | Equity securities | ||
Assets | ||
Total assets | 70.4 | 78.4 |
Recurring fair value measurements | Level 1 | Contingent consideration | ||
Assets | ||
Total assets | 0 | 0 |
Recurring fair value measurements | Level 2 | ||
Assets | ||
Total assets | 2,654.7 | 2,246.5 |
Liabilities | ||
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Recurring fair value measurements | Level 2 | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Recurring fair value measurements | Level 2 | U.S. government and agency securities | ||
Assets | ||
Total assets | 2,173.6 | 1,912.1 |
Recurring fair value measurements | Level 2 | Corporate debt securities | ||
Assets | ||
Total assets | 481.1 | 334.4 |
Recurring fair value measurements | Level 2 | Equity securities | ||
Assets | ||
Total assets | 0 | 0 |
Recurring fair value measurements | Level 2 | Contingent consideration | ||
Assets | ||
Total assets | 0 | 0 |
Recurring fair value measurements | Level 3 | ||
Assets | ||
Total assets | 1.2 | 4.1 |
Liabilities | ||
Contingent consideration | 20.8 | 17.1 |
Total liabilities | 20.8 | 17.1 |
Recurring fair value measurements | Level 3 | Money market funds | ||
Assets | ||
Total assets | 0 | 0 |
Recurring fair value measurements | Level 3 | U.S. government and agency securities | ||
Assets | ||
Total assets | 0 | 0 |
Recurring fair value measurements | Level 3 | Corporate debt securities | ||
Assets | ||
Total assets | 0 | 0 |
Recurring fair value measurements | Level 3 | Equity securities | ||
Assets | ||
Total assets | 0 | 0 |
Recurring fair value measurements | Level 3 | Contingent consideration | ||
Assets | ||
Total assets | 1.2 | 4.1 |
Recurring fair value measurements | Balance | ||
Assets | ||
Total assets | 3,243 | 2,652.1 |
Liabilities | ||
Contingent consideration | 20.8 | 17.1 |
Total liabilities | 20.8 | 17.1 |
Recurring fair value measurements | Balance | Money market funds | ||
Assets | ||
Total assets | 516.7 | 323.1 |
Recurring fair value measurements | Balance | U.S. government and agency securities | ||
Assets | ||
Total assets | 2,173.6 | 1,912.1 |
Recurring fair value measurements | Balance | Corporate debt securities | ||
Assets | ||
Total assets | 481.1 | 334.4 |
Recurring fair value measurements | Balance | Equity securities | ||
Assets | ||
Total assets | 70.4 | 78.4 |
Recurring fair value measurements | Balance | Contingent consideration | ||
Assets | ||
Total assets | $ 1.2 | $ 4.1 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts payable | ||
Accounts payable | $ 3.8 | $ 4.1 |
Accrued expenses: | ||
Sales-related (royalties, rebates, and fees) | 85.3 | 84.5 |
Payroll-related | 53.6 | 47.9 |
Research and development-related | 19 | 27.8 |
Other | 12.9 | 22.7 |
Total accrued expenses | 170.8 | 182.9 |
Total accounts payable and accrued expenses | $ 174.6 | $ 187 |
Debt (Details)
Debt (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | Jun. 30, 2018 | |
2018 Credit Agreement | |||
Debt | |||
Outstanding balance | $ 800,000,000 | $ 800,000,000 | |
2018 Credit Agreement | Other current assets | |||
Debt | |||
Debt issuance costs capitalized | 2,400,000 | ||
2018 Credit Agreement | Other non-current assets | |||
Debt | |||
Debt issuance costs capitalized | $ 6,900,000 | ||
First unsecured revolving credit facility | |||
Debt | |||
Borrowing capacity | $ 1,000,000,000 | ||
Second unsecured revolving credit facility | |||
Debt | |||
Borrowing capacity | 500,000,000 | ||
Increase in borrowing capacity | $ 300,000,000 | ||
Term of maturity date extension | 1 year |
Share-Based Compensation - Gene
Share-Based Compensation - General (Details) | 1 Months Ended | 12 Months Ended |
Feb. 28, 2019shares | Dec. 31, 2021planshares | |
Share-Based Compensation | ||
Number of equity incentive plans | plan | 2 | |
2015 Plan | ||
Share-Based Compensation | ||
Maximum number of shares authorized to be issued | 11,000,000 | |
Additional number of shares authorized to be issued | 1,000,000 | |
2019 Inducement Plan | Newly-hired employees | ||
Share-Based Compensation | ||
Number of equity incentive plans | plan | 1 | |
Granted (in shares) | 99,000 |
Share-Based Compensation - Allo
Share-Based Compensation - Allocation of Compensation Expense (Benefit) by Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-Based Compensation | |||
Share-based compensation expense (benefit) before taxes | $ 138.5 | $ 163.8 | $ 45.4 |
Share-based compensation capitalized as part of inventory | 1 | 1 | 0.7 |
Stock options | |||
Share-Based Compensation | |||
Share-based compensation expense (benefit) before taxes | 25.4 | 44 | 70.5 |
RSUs | |||
Share-Based Compensation | |||
Share-based compensation expense (benefit) before taxes | 24.7 | 20.5 | 13.3 |
STAP awards | |||
Share-Based Compensation | |||
Share-based compensation expense (benefit) before taxes | 86.6 | 97.8 | (39.7) |
Employee stock purchase plan | |||
Share-Based Compensation | |||
Share-based compensation expense (benefit) before taxes | $ 1.8 | $ 1.5 | $ 1.3 |
Share-Based Compensation - Assu
Share-Based Compensation - Assumptions For Stock Options (Details) - Stock options | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-Based Compensation | ||||
Expected volatility maximum period | 5 years | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Method and assumptions on valuation of stock options | ||||
Expected term of awards (in years) | 5 years 8 months 12 days | 5 years 7 months 6 days | 5 years 9 months 18 days | |
Expected volatility | 32.50% | 33.40% | 33.80% | |
Risk-free interest rate | 1.00% | 0.50% | 2.40% | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Minimum | ||||
Share-Based Compensation | ||||
Share-based awards, vesting period | 1 year | |||
Maximum | ||||
Share-Based Compensation | ||||
Share-based awards, vesting period | 3 years |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock and Status (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Options | |||
Exercised (in shares) | (405,536) | (466,731) | (191,508) |
Stock options | |||
Number of Options | |||
Outstanding at beginning of year (in shares) | 7,680,194 | ||
Granted (in shares) | 43,653 | ||
Exercised (in shares) | (405,536) | ||
Forfeited/canceled (in shares) | (333) | ||
Outstanding at the end of year (in shares) | 7,317,978 | 7,680,194 | |
Exercisable at the end of year (in shares) | 5,592,698 | ||
Unvested at the end of year (in shares) | 1,725,280 | ||
Weighted Average Exercise Price | |||
Outstanding at beginning of year (in dollars per share) | $ 126.27 | ||
Granted (in dollars per share) | 177.33 | ||
Exercised (in dollars per share) | 123.47 | ||
Forfeited (in dollars per share) | 146.03 | ||
Outstanding at the end of year (in dollars per share) | 126.73 | $ 126.27 | |
Exercisable at the end of year (in dollars per share) | 125.92 | ||
Unvested at the end of year (in dollars per share) | $ 129.34 | ||
Weighted Average Remaining Contractual Term (in Years) | |||
Outstanding at the end of year (in Years) | 4 years 7 months 6 days | ||
Exercisable at the end of year (in Years) | 4 years 4 months 24 days | ||
Unvested at the end of year (in Years) | 5 years 3 months 18 days | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of year | $ 653.9 | ||
Exercisable at the end of year | 504.2 | ||
Unvested at the end of year | $ 149.7 | ||
Weighted average grant date fair value of stock options (in dollars per share) | $ 56.69 | $ 34.56 | $ 39.63 |
Total grant date fair value of employee stock options that vested | $ 50.4 | $ 73.5 | $ 37.4 |
Share-Based Compensation - Shar
Share-Based Compensation - Share-Based Compensation Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based compensation expense | |||
Share-based compensation expense before taxes | $ 138.5 | $ 163.8 | $ 45.4 |
Stock options | |||
Share-based compensation expense | |||
Share-based compensation expense before taxes | 25.4 | 44 | 70.5 |
Related income tax benefit | (0.8) | (3.1) | (16) |
Share-based compensation expense (benefit), net of taxes | 24.6 | 40.9 | 54.5 |
Unrecognized compensation cost | $ 25.7 | ||
Weighted average remaining vesting period (in years) | 1 year 2 months 12 days | ||
Cost of product sales | Stock options | |||
Share-based compensation expense | |||
Share-based compensation expense before taxes | $ 0.1 | 0.5 | 0.8 |
Research and development | Stock options | |||
Share-based compensation expense | |||
Share-based compensation expense before taxes | 0.5 | 2 | 3.7 |
Selling, general, and administrative | Stock options | |||
Share-based compensation expense | |||
Share-based compensation expense before taxes | $ 24.8 | $ 41.5 | $ 66 |
Share-Based Compensation - St_2
Share-Based Compensation - Stock Options Exercise Data (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |||
Number of options exercised (in shares) | 405,536 | 466,731 | 191,508 |
Cash received from options exercised | $ 50 | $ 33.8 | $ 9.9 |
Total intrinsic value of options exercised | 26.6 | 22.9 | 11.5 |
Tax benefits realized from options exercised | $ 5.3 | $ 5.4 | $ 2.6 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Options Activity and Status (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of RSUs | |||
Granted (in shares) | 0 | ||
Weighted Average Grant Date Fair Value | |||
Share-based compensation expense before taxes | $ 138.5 | $ 163.8 | $ 45.4 |
RSUs | |||
Share-Based Compensation | |||
Number of shares of common stock entitled for each unit upon vesting (in shares) | 1 | ||
Number of RSUs | |||
Unvested at beginning of year (in shares) | 440,528 | ||
Granted (in shares) | 188,378 | ||
Vested (in shares) | (210,676) | ||
Forfeited/cancelled (in shares) | (27,691) | ||
Unvested at the end of year (in shares) | 390,539 | 440,528 | |
Weighted Average Grant Date Fair Value | |||
Unvested at beginning of year (in dollars per share) | $ 102.40 | ||
Granted (in dollars per share) | 166.19 | ||
Vested (in dollars per share) | 106.23 | ||
Forfeited/cancelled (in dollars per share) | 121.33 | ||
Unvested at the end of year (in dollars per share) | $ 129.76 | $ 102.40 | |
Share-based compensation expense before taxes | $ 24.7 | $ 20.5 | 13.3 |
Related income tax benefit | (5.9) | (4.8) | (3) |
Share-based compensation expense (benefit), net of taxes | 18.8 | 15.7 | 10.3 |
Unrecognized compensation cost | $ 31.5 | ||
Weighted average remaining vesting period (in years) | 1 year 9 months 18 days | ||
RSUs | Cost of product sales | |||
Weighted Average Grant Date Fair Value | |||
Share-based compensation expense before taxes | $ 2.1 | 1.6 | 1 |
RSUs | Research and development | |||
Weighted Average Grant Date Fair Value | |||
Share-based compensation expense before taxes | 8.2 | 7 | 4.4 |
RSUs | Selling, general, and administrative | |||
Weighted Average Grant Date Fair Value | |||
Share-based compensation expense before taxes | $ 14.4 | $ 11.9 | $ 7.9 |
Share-Based Compensation - STAP
Share-Based Compensation - STAP awards (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based awards activity | |||
Granted (in shares) | 0 | ||
Share-based Payment Arrangement, Tranche One | |||
Awards granted | |||
Share-based awards, vesting rights percentage | 25.00% | ||
Share-based Payment Arrangement, Tranche Two | |||
Awards granted | |||
Share-based awards, vesting rights percentage | 25.00% | ||
Share-based Payment Arrangement, Tranche Three | |||
Awards granted | |||
Share-based awards, vesting rights percentage | 25.00% | ||
Share-based Payment Arrangement, Tranche Four | |||
Awards granted | |||
Share-based awards, vesting rights percentage | 25.00% | ||
STAP awards | |||
Awards granted | |||
Grant expiration period from the grant date | 10 years | ||
Share-based awards, vesting period | 4 years | ||
Aggregate STAP liability | $ 102.4 | $ 96.8 | |
Weighted-average assumptions used to measure the fair value of the outstanding STAP awards: | |||
Expected term of awards (in years) | 1 year 3 months 18 days | 1 year 8 months 12 days | 2 years |
Expected volatility | 30.00% | 34.80% | 29.10% |
Risk-free interest rate (as a percent) | 0.40% | 0.10% | 1.60% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Closing price of common stock (in dollars per share) | $ 216.08 | $ 151.79 | $ 88.08 |
Share-based awards activity | |||
Outstanding at beginning of year (in shares) | 2,121,860 | ||
Exercised (in shares) | (1,027,738) | ||
Forfeited/cancelled (in shares) | (562) | ||
Outstanding at end of year (in shares) | 1,093,560 | 2,121,860 | |
Exercisable at end of year | 1,083,560 | ||
Unvested at end of year | 10,000 | ||
Share awards, Weighted-Average Exercise Price | |||
Outstanding at beginning of year | $ 118.48 | ||
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 112.72 | ||
Forfeited (in dollars per share) | 145.30 | ||
Outstanding at end of year | 123.89 | $ 118.48 | |
Exercisable at end of year | 124.55 | ||
Unvested at end of year | $ 52.57 | ||
Share awards, Weighted Average Remaining Contractual Term (in Years) | |||
Outstanding at end of year | 2 years 6 months | ||
Exercisable at end of year | 2 years 7 months 6 days | ||
Unvested at end of year | 10 months 24 days | ||
Share awards, Aggregate Intrinsic Value | |||
Outstanding at end of year | $ 100.8 | ||
Exercisable at end of year | 99.2 | ||
Unvested at end of year | $ 1.6 |
Share-Based Compensation - Sh_2
Share-Based Compensation - Share Tracking Awards Plans - Benefit recognized (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share based compensation (benefit) expense recognized in connection with the STAP | |||
Share-based compensation expense (benefit) before taxes | $ 138.5 | $ 163.8 | $ 45.4 |
STAP awards | |||
Share based compensation (benefit) expense recognized in connection with the STAP | |||
Share-based compensation expense (benefit) before taxes | 86.6 | 97.8 | (39.7) |
Related income tax (benefit) expense | (14.7) | (19.3) | 9 |
Share-based compensation expense (benefit), net of taxes | 71.9 | 78.5 | (30.7) |
Cash payments on awards exercised during the period | 81.1 | 26.1 | 7.6 |
Cost of product sales | STAP awards | |||
Share based compensation (benefit) expense recognized in connection with the STAP | |||
Share-based compensation expense (benefit) before taxes | 3.5 | 4.9 | (1.7) |
Research and development | STAP awards | |||
Share based compensation (benefit) expense recognized in connection with the STAP | |||
Share-based compensation expense (benefit) before taxes | 15 | 19.9 | (8.2) |
Selling, general, and administrative | STAP awards | |||
Share based compensation (benefit) expense recognized in connection with the STAP | |||
Share-based compensation expense (benefit) before taxes | $ 68.1 | $ 73 | $ (29.8) |
Share-Based Compensation - Empl
Share-Based Compensation - Employee Stock Purchase Plan (Details) - Employee stock purchase plan | 1 Months Ended |
Jun. 30, 2012shares | |
Share-based compensation expense | |
Offering period (in months) | 6 months |
Maximum percentage of compensation employees may contribute for ESPP (in percentage) | 15.00% |
Percentage of the lower of the fair market value of common stock on the first or last trading day of a given offering period (in percentage) | 85.00% |
Maximum number of shares each eligible employees may purchase in any given offering period (in shares) | 4,000 |
Term of ESPP (in years) | 20 years |
Maximum number of shares authorized to be issued (in shares) | 3,000,000 |
Stockholders' Equity - Earnings
Stockholders' Equity - Earnings (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | |||
Net income (loss) | $ 475.8 | $ 514.8 | $ (104.5) |
Denominator: | |||
Weighted average outstanding shares - basic (in shares) | 44.9 | 44.2 | 43.8 |
Effect of dilutive securities: | |||
Stock options, restricted stock units and employee stock purchase plan (in shares) | 2.4 | 0.4 | 0 |
Weighted average shares - diluted (in shares) | 47.3 | 44.6 | 43.8 |
Net income (loss) per common share: | |||
Basic (in dollars per share) | $ 10.60 | $ 11.65 | $ (2.39) |
Diluted (in dollars per share) | $ 10.06 | $ 11.54 | $ (2.39) |
Stock options, restricted stock units, shares issuable under the ESPP and warrants excluded from calculation (in shares) | 0.1 | 6.6 | 7.2 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in accumulated other comprehensive loss, net of tax | |||
Beginning balance | $ 3,395.2 | $ 2,780.4 | $ 2,788.6 |
Other comprehensive (loss) income before reclassifications | (9.4) | ||
Amounts reclassified from accumulated other comprehensive loss | 0.6 | ||
Other comprehensive (loss) income, net of tax | (8.8) | 0 | (6.3) |
Ending balance | 3,958.9 | 3,395.2 | 2,780.4 |
Accumulated Other Comprehensive Loss | |||
Changes in accumulated other comprehensive loss, net of tax | |||
Beginning balance | (14.2) | (14.2) | (7.9) |
Other comprehensive (loss) income before reclassifications | (1.3) | ||
Amounts reclassified from accumulated other comprehensive loss | 1.3 | ||
Other comprehensive (loss) income, net of tax | 0 | ||
Ending balance | (23) | (14.2) | (14.2) |
Defined Benefit Pension Plan | |||
Changes in accumulated other comprehensive loss, net of tax | |||
Beginning balance | (6.7) | 0 | |
Other comprehensive (loss) income before reclassifications | 5.6 | (8) | |
Amounts reclassified from accumulated other comprehensive loss | 0.6 | 1.3 | |
Other comprehensive (loss) income, net of tax | 6.2 | (6.7) | |
Ending balance | (0.5) | (6.7) | 0 |
Foreign Currency Translation Losses | |||
Changes in accumulated other comprehensive loss, net of tax | |||
Beginning balance | (17.9) | (17.9) | |
Other comprehensive (loss) income, net of tax | 0 | 0 | |
Ending balance | (17.9) | (17.9) | (17.9) |
Unrealized Gains and (Losses) on Available-for-Sale Securities | |||
Changes in accumulated other comprehensive loss, net of tax | |||
Beginning balance | 10.4 | 3.7 | |
Other comprehensive (loss) income before reclassifications | (15) | 6.7 | |
Other comprehensive (loss) income, net of tax | (15) | 6.7 | |
Ending balance | $ (4.6) | $ 10.4 | $ 3.7 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax (Benefit) Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
Federal | $ 112.3 | $ 114.6 | $ 63.1 |
State | 24.6 | 20 | 9.4 |
Total current | 136.9 | 134.6 | 72.5 |
Deferred | |||
Federal | (10.1) | 1.6 | (120.1) |
State | (8.7) | (12.1) | (12.9) |
Total deferred | (18.8) | (10.5) | (133) |
Total income tax expense (benefit) | $ 118.1 | $ 124.1 | $ (60.5) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of income taxes | |||
Federal taxes at the statutory rate | $ 124.7 | $ 134.2 | $ (34.7) |
Change in valuation allowance | (18.7) | (3.1) | (5.7) |
State taxes, net of federal benefit | 14.6 | 7 | (3.1) |
Nondeductible compensation | 11.8 | 11.5 | 6.3 |
General business credits | (11.5) | (24) | (21.3) |
Deduction for foreign-derived intangible income | (2.8) | (2.2) | (3.3) |
Uncertain tax positions | (1) | 4.8 | (0.3) |
Other | 1 | (4.1) | (1.6) |
Foreign income adjustment | 0 | 0 | 5.1 |
Deconsolidation of VIE | 0 | 0 | (1.9) |
Total income tax expense (benefit) | $ 118.1 | $ 124.1 | $ (60.5) |
Effective tax rate | 20.00% | 19.00% | 37.00% |
Income Taxes - Components of Ne
Income Taxes - Components of Net Deferred Tax Asset (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Intangible assets | $ 186.1 | $ 176 |
Share-based compensation | 73.4 | 73.1 |
Reserves and accrued liabilities | 18.3 | 18.8 |
SERP | 10.9 | 10.9 |
NOLs | 8.3 | 9.7 |
Basis differences in investments | 1.4 | 7.4 |
Other | 5 | 5.6 |
Total deferred tax assets | 303.4 | 301.5 |
Less: Valuation allowance | (11.5) | (35.5) |
Total net deferred tax assets | 291.9 | 266 |
Deferred tax liabilities: | ||
Plant and equipment principally due to differences in depreciation | (28.2) | (26.1) |
Other | (1.8) | (1.3) |
Total deferred tax liabilities | (30) | (27.4) |
Total deferred tax assets, net | $ 261.9 | $ 238.6 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Tax Credit Carryforward [Line Items] | ||||
Unrecognized tax benefits | $ 3,600,000 | $ 4,500,000 | $ 0 | $ 500,000 |
Unrecognized tax benefits, accrual of interest and penalties | 300,000 | 400,000 | ||
Unrecognized tax benefits, expense for interest and penalties | (100,000) | 300,000 | ||
Unrecognized Tax Benefits, Including Interest and Penalties | 3,900,000 | $ 4,900,000 | $ 0 | |
Federal | ||||
Tax Credit Carryforward [Line Items] | ||||
Operating loss carryforwards | 0 | |||
Foreign | ||||
Tax Credit Carryforward [Line Items] | ||||
Operating loss carryforwards | 4,300,000 | |||
State | ||||
Tax Credit Carryforward [Line Items] | ||||
Operating loss carryforwards | $ 131,300,000 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of beginning and ending balances of unrecognized tax benefits | |||
Unrecognized tax benefits, beginning of the period | $ 4.5 | $ 0 | $ 0.5 |
Gross decreases related to prior period tax positions | (0.1) | 0 | (0.5) |
Gross increases related to prior period tax positions | 0 | 3.8 | 0 |
Gross increases related to current period tax positions | 0.7 | 0.7 | 0 |
Gross decreases as a result of settlements during the current period | (1.5) | 0 | 0 |
Unrecognized tax benefits, end of the period | $ 3.6 | $ 4.5 | $ 0 |
Employee Benefit Plans - SERP -
Employee Benefit Plans - SERP - General (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |||
Eligibility age | 60 years | ||
Number of months of salary taken as gross base for receipt of monthly payments | 36 months | ||
Vesting period of plan, when participants begin receiving payments | 6 months | ||
Reconciliation of beginning and ending balances of the projected benefit obligation | |||
Projected benefit obligation, beginning of the year | $ 68.6 | $ 56.1 | |
Service cost | 3.4 | 2.8 | $ 2.2 |
Interest cost | 0.9 | 1.3 | 1.4 |
Benefits paid | 0 | 0 | |
Net actuarial (gain) loss | (5.8) | 8.4 | |
Projected benefit obligation, end of the year | 67.1 | 68.6 | $ 56.1 |
Amount included in Other current liabilities | 18.2 | 19.1 | |
Amount included in Other non-current liabilities | $ 48.9 | $ 49.5 | |
Period for benefit payments to retire eligible participants | 1 year |
Employee Benefit Plans - SERP_2
Employee Benefit Plans - SERP - Weighted-Average Assumptions (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted-average assumptions used to measure SERP obligation: | ||
Discount Rate (as a percent) | 2.05% | 1.49% |
Salary Increases (as a percent) | 4.00% | 4.00% |
Lump-sum distribution rate (as a percent) | 2.75% | 2.25% |
Increase in the projected benefit obligation, discount rate | $ 1.3 | |
Increase in the projected benefit obligation, lump sum interest rate | $ 4 |
Employee Benefit Plans - SERP_3
Employee Benefit Plans - SERP - Components of Net Periodic Pension Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Components of net periodic pension cost | |||
Service cost | $ 3.4 | $ 2.8 | $ 2.2 |
Interest cost | 0.9 | 1.3 | 1.4 |
Amortization of prior service cost | 0.7 | 1.3 | 1.5 |
Amortization of net actuarial gain | 0 | 0 | (2.2) |
Settlement | 0 | 0 | (1.9) |
Total | $ 5 | $ 5.4 | $ 1 |
Employee Benefit Plans - SERP_4
Employee Benefit Plans - SERP - Other (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Amounts relating to the SERP that have been recognized in other comprehensive (loss) income | |||
Net actuarial gain (loss) | $ 5.8 | $ (8.4) | $ (12.9) |
Prior service cost | 0.7 | 1.3 | 1.5 |
Settlement | 0 | 0 | (1.9) |
Total recognized in other comprehensive (loss) income | 6.5 | (7.1) | (13.3) |
Tax (expense) benefit | (0.3) | 0.4 | 1 |
Total, net of tax | 6.2 | (6.7) | (12.3) |
Accumulated other comprehensive loss that have not yet been recognized as a component of net periodic pension cost | |||
Net actuarial (gain) loss | (2) | 3.8 | (4.5) |
Prior service cost | 1.3 | 2 | 3.3 |
Total included in accumulated other comprehensive loss | (0.7) | 5.8 | (1.2) |
Tax expense | 1.2 | 0.9 | 1.2 |
Total, net of tax | $ 0.5 | $ 6.7 | $ 0 |
Employee Benefit Plans - Future
Employee Benefit Plans - Future estimated benefit payments (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Retirement Benefits [Abstract] | ||
Accumulated benefit obligation | $ 59.1 | $ 58.7 |
Future estimated benefit payments | ||
2022 | 18.2 | |
2023 | 6.3 | |
2024 | 16.5 | |
2025 | 6.8 | |
2026 | 0 | |
Thereafter | 38.9 | |
Total | $ 86.7 |
Employee Benefit Plans - Employ
Employee Benefit Plans - Employee Retirement Plan (Details) | 12 Months Ended |
Dec. 31, 2021$ / item | |
Retirement Benefits [Abstract] | |
Employer's matching contribution, percentage of participant's elected salary deferral | 40.00% |
Period of service for vesting of matching contributions | 3 years |
Annual increments for vesting in employer's matching contribution | 0.33 |
Period over which the matching contribution vest annually | 3 years |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Future minimum lease payments under non-cancelable operating leases | |||
2022 | $ 3.1 | ||
2023 | 2.7 | ||
2024 | 2.4 | ||
2025 | 1.7 | ||
2026 | 1.8 | ||
Thereafter | 7.2 | ||
Total | 18.9 | ||
Total rent expense | $ 3.6 | $ 3.5 | $ 4.9 |
MannKind Corporation | |||
Future minimum lease payments under non-cancelable operating leases | |||
Supply agreements, renewal term | 2 years | ||
Variable lease, cost | $ 9.6 |
Commitments and Contingencies_2
Commitments and Contingencies - Milestone Payments and Royalty Obligations (Details) - USD ($) $ in Thousands | Jan. 24, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2023 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Net product sales | $ 1,685,500 | $ 1,483,300 | $ 1,448,800 | ||
Adcirca | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Net product sales | 55,900 | 67,300 | 107,200 | ||
Unituxin | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Net product sales | $ 202,300 | $ 122,900 | $ 113,700 | ||
Lilly | Adcirca | Forecast | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Royalty as a percentage of net sales | 10.00% | ||||
Royalty expenses | $ 325 | ||||
Net product sales | $ 1,000 | ||||
The Scripps Research Institute | Unituxin | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Royalty as a percentage of net sales | 1.00% | ||||
MannKind Corporation | Tyvaso DPI | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Maximum potential milestone payment to be made | $ 50,000 | ||||
Arena | Marketing approval in the United States | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Milestone payment to be made upon marketing approval | $ 250,000 | ||||
Arena | Marketing approval in any of Japan, France, Italy, the United Kingdom, Spain or Germany | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Milestone payment to be made upon marketing approval | $ 150,000 | ||||
Arena | Ralinepag | Marketing approval in the United States | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Milestone payment to be made upon marketing approval | 250,000 | ||||
Arena | Ralinepag | Marketing approval in any of Japan, France, Italy, the United Kingdom, Spain or Germany | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |||||
Milestone payment to be made upon marketing approval | $ 150,000 |
Segment Information - General (
Segment Information - General (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Net product sales, cost of product sales and gross profit by product | |||
Number of operating segments | segment | 1 | ||
Net product sales | $ 1,685.5 | $ 1,483.3 | $ 1,448.8 |
Cost of product sales | 122.5 | 108.1 | 117.6 |
Gross profit | $ 1,563 | $ 1,375.2 | $ 1,331.2 |
Revenue from contract with customer, product and service | Product [Member] | Product [Member] | Product [Member] |
Cost, product and service | Product [Member] | Product [Member] | Product [Member] |
Tyvaso | |||
Net product sales, cost of product sales and gross profit by product | |||
Net product sales | $ 607.5 | $ 483.3 | $ 415.6 |
Cost of product sales | 26.8 | 24.5 | 19.6 |
Gross profit | 580.7 | 458.8 | 396 |
Remodulin | |||
Net product sales, cost of product sales and gross profit by product | |||
Net product sales | 513.7 | 516.7 | 587 |
Cost of product sales | 37.9 | 23.2 | 21.1 |
Gross profit | 475.8 | 493.5 | 565.9 |
Orenitram | |||
Net product sales, cost of product sales and gross profit by product | |||
Net product sales | 306.1 | 293.1 | 225.3 |
Cost of product sales | 19.7 | 18.7 | 15 |
Gross profit | 286.4 | 274.4 | 210.3 |
Unituxin | |||
Net product sales, cost of product sales and gross profit by product | |||
Net product sales | 202.3 | 122.9 | 113.7 |
Cost of product sales | 14.2 | 12.6 | 15.7 |
Gross profit | 188.1 | 110.3 | 98 |
Adcirca | |||
Net product sales, cost of product sales and gross profit by product | |||
Net product sales | 55.9 | 67.3 | 107.2 |
Cost of product sales | 23.9 | 29.1 | 46.2 |
Gross profit | $ 32 | $ 38.2 | $ 61 |
Segment Information - Geographi
Segment Information - Geographic Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues from external customers by geographic area | |||
Total revenues | $ 1,685.5 | $ 1,483.3 | $ 1,448.8 |
Property, plant, and equipment, net | 780.9 | 731.6 | 738.5 |
United States | |||
Revenues from external customers by geographic area | |||
Total revenues | 1,564.2 | 1,412.1 | 1,323.2 |
Property, plant, and equipment, net | 768.1 | 717.3 | 723.1 |
Rest-of-World | |||
Revenues from external customers by geographic area | |||
Total revenues | 121.3 | 71.2 | 125.6 |
Property, plant, and equipment, net | $ 12.8 | $ 14.3 | $ 15.4 |
Segment Information - Concentra
Segment Information - Concentration Risk (Details) - Revenue from Contract with Customer Benchmark - Customer concentration | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Distributor 1 | |||
Segment Information | |||
Concentration risk, percentage | 50.00% | 55.00% | 54.00% |
Distributor 2 | |||
Segment Information | |||
Concentration risk, percentage | 29.00% | 28.00% | 22.00% |
Distributor 3 | |||
Segment Information | |||
Concentration risk, percentage | 11.00% | 8.00% | 8.00% |
Litigation (Details)
Litigation (Details) $ in Thousands | Oct. 08, 2021claim | May 17, 2021manufacturer | Apr. 06, 2021member | Apr. 01, 2021 | Nov. 13, 2020USD ($) | Jun. 04, 2020 | Mar. 30, 2020petition |
Sandoz Inc. | Smiths Medical ASD, Inc. | |||||||
Litigation | |||||||
Payment for litigation settlement | $ | $ 4,250 | ||||||
Liquidia Technologies Inc. | |||||||
Litigation | |||||||
Number of petitions | petition | 2 | ||||||
Number of claims with proven invalidity | 7 | ||||||
Number of claims without proven invalidity | 2 | ||||||
Time period to file a preliminary response to the petitions | 45 days | ||||||
Maximum period for which the FDA is automatically precluded from approving ANDA | 30 months | ||||||
MSP Recovery Claims, Series LLC | |||||||
Litigation | |||||||
Number of members of the putative class that may bring claims to recover alleged overpayments | member | 2 | ||||||
ANI Pharmaceuticals, Inc. | |||||||
Litigation | |||||||
Maximum period for which the FDA is automatically precluded from approving ANDA | 30 months | ||||||
340B Program | |||||||
Litigation | |||||||
Number of other manufacturers sent letters by the HRSA | manufacturer | 5 |
Arena License Agreement (Detail
Arena License Agreement (Details) $ in Millions | Jan. 24, 2019USD ($) |
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |
Upfront payment | $ 800 |
Marketing approval in the United States | Arena | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |
Milestone payment to be made upon marketing approval | 250 |
Marketing approval in any of Japan, France, Italy, the United Kingdom, Spain or Germany | Arena | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions | |
Milestone payment to be made upon marketing approval | $ 150 |
Research and Development (Detai
Research and Development (Details) - USD ($) $ in Millions | Dec. 28, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Research and development | $ 540.1 | $ 357.7 | $ 1,182.6 | |
Rare Pediatric Disease Priority Review Voucher | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Research and development agreement, value | $ 105 | |||
Research and development | $ 105 |
Schedule II-Valuation and Qua_2
Schedule II-Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Valuation Allowance on Deferred Tax Assets | |||
Change in valuation and qualifying accounts | |||
Balance at Beginning of Year | $ 35.5 | $ 36.6 | $ 42.6 |
Additions Charged to Expense | 4.4 | 0 | 1.9 |
Other Additions | 0 | 3 | 0.9 |
Deductions | (28.4) | (4.1) | (8.8) |
Balance at End of Year | 11.5 | 35.5 | 36.6 |
Inventory Reserves | |||
Change in valuation and qualifying accounts | |||
Balance at Beginning of Year | 16.8 | 20.9 | 26 |
Additions Charged to Expense | 10 | 7.7 | 8.4 |
Deductions | (11.1) | (11.8) | (13.5) |
Balance at End of Year | $ 15.7 | $ 16.8 | $ 20.9 |