Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 05, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MEDICINES CO /DE | |
Entity Central Index Key | 1,113,481 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 73,862,176 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 118,708 | $ 151,359 |
Short-term investment | 13,089 | 0 |
Accounts receivable, net of allowances of approximately $7.1 million at December 31, 2017 | 0 | 3,496 |
Inventory, net | 866 | 5,559 |
Prepaid expenses and other current assets | 54,266 | 11,688 |
Current assets held for sale | 320 | 391,202 |
Total current assets | 187,249 | 563,304 |
Fixed assets, net | 10,091 | 17,254 |
Goodwill | 200,571 | 200,571 |
Restricted cash | 5,410 | 5,541 |
Contingent purchase price from sale of businesses | 325,806 | 80,700 |
Other assets | 4,610 | 5,613 |
Total assets | 733,737 | 872,983 |
Current liabilities: | ||
Accounts payable | 7,529 | 10,244 |
Accrued expenses | 50,984 | 95,197 |
Current portion of contingent purchase price | 0 | 4,995 |
Other current liabilities | 122 | 4,476 |
Current liabilities held for sale | 19,122 | 60,580 |
Total current liabilities | 77,757 | 175,492 |
Contingent purchase price | 0 | 14,655 |
Convertible senior notes | 669,724 | 649,198 |
Other liabilities | 12,820 | 8,724 |
Total liabilities | 760,301 | 848,069 |
Stockholders’ equity: | ||
Preferred stock, $1.00 par value per share, 5,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value per share, 187,500,000 authorized; 76,877,965 issued and 73,864,822 outstanding at September 30, 2018 and 76,191,958 issued and 73,178,815 outstanding at December 31, 2017 | 76 | 76 |
Additional paid-in capital | 1,406,229 | 1,377,393 |
Treasury stock, at cost; 3,013,143 and 3,013,143 shares at September 30, 2018 and December 31, 2017, respectively | (90,016) | (90,016) |
Accumulated deficit | (1,338,248) | (1,257,356) |
Accumulated other comprehensive loss | (4,605) | (5,183) |
Total stockholders’ (deficit) equity | (26,564) | 24,914 |
Total liabilities and stockholders’ (deficit) equity | $ 733,737 | $ 872,983 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Allowances for accounts receivable | $ 0 | $ 7.1 |
Stockholders’ equity: | ||
Preferred stock, par value (USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 187,500,000 | 187,500,000 |
Common stock, shares, issued (in shares) | 76,877,965 | 76,191,958 |
Common stock, shares outstanding (in shares) | 73,864,822 | 73,178,815 |
Treasury stock, shares (in shares) | 3,013,143 | 3,013,143 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Net revenues | $ (3,300) | $ 7,868 | $ 6,138 | $ 36,194 |
Operating expenses: | ||||
Cost of revenues | 890 | 4,287 | 6,558 | 26,755 |
Asset impairment charges | 5,073 | 0 | 5,073 | 329,097 |
Research and development | 32,736 | 33,077 | 103,396 | 82,770 |
Selling, general and administrative | 6,826 | 33,765 | 56,790 | 102,581 |
Total operating expenses | 45,525 | 71,129 | 171,817 | 541,203 |
Loss from operations | (48,825) | (63,261) | (165,679) | (505,009) |
Co-promotion and license income | 271 | 769 | 753 | 2,283 |
Loss on short-term investment | (7,953) | 0 | (41,416) | 0 |
Interest expense | (12,313) | (11,810) | (36,498) | (36,753) |
Other income | 1,119 | 448 | 4,541 | 1,592 |
Loss from continuing operations before income taxes | (67,701) | (73,854) | (238,299) | (537,887) |
Benefit from income taxes | 16,066 | 66,636 | 47,375 | 89,608 |
Loss from continuing operations | (51,635) | (7,218) | (190,924) | (448,279) |
(Loss) income from discontinued operations, net of tax | (3,999) | (22,957) | 110,242 | (81,834) |
Net Loss | $ (55,634) | $ (30,175) | $ (80,682) | $ (530,113) |
Basic (loss) earnings per common share: | ||||
Loss from continuing operations (USD per share) | $ (0.70) | $ (0.10) | $ (2.60) | $ (6.25) |
(Loss) earnings from discontinued operations (USD per share) | (0.05) | (0.32) | 1.50 | (1.14) |
Basic loss per share (USD per share) | (0.75) | (0.42) | (1.10) | (7.39) |
Diluted (loss) earnings per common share: | ||||
Loss from continuing operations (USD per share) | (0.70) | (0.10) | (2.60) | (6.25) |
(Loss) earnings from discontinued operations (USD per share) | (0.05) | (0.32) | 1.50 | (1.14) |
Diluted loss per share (USD per share) | $ (0.75) | $ (0.42) | $ (1.10) | $ (7.39) |
Weighted average number of common shares outstanding: | ||||
Basic (shares) | 73,544 | 72,286 | 73,564 | 71,763 |
Diluted (shares) | 73,544 | 72,286 | 73,564 | 71,763 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (55,634) | $ (30,175) | $ (80,682) | $ (530,113) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | (11) | 487 | (605) | 527 |
Unrealized gain on available for sale securities | 0 | 10 | 0 | 3 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 1,183 | 0 |
Other comprehensive (loss) income | (11) | 497 | 578 | 530 |
Comprehensive loss | $ (55,645) | $ (29,678) | $ (80,104) | $ (529,583) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Cash flows from operating activities: | |||
Net loss | $ (80,682) | $ (530,113) | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Depreciation and amortization | 1,977 | 17,674 | |
Asset impairment charges | 5,073 | 329,097 | |
Amortization of debt discount | 20,526 | 20,325 | |
Unrealized foreign currency transaction losses, net | (111) | 1,276 | |
Stock compensation expense | 13,244 | 24,078 | |
Gain on sale of business | (168,955) | 0 | |
(Gain) loss on sale of assets | (7,026) | 72 | |
Loss on short-term investments | 41,416 | 0 | |
Deferred tax benefit | 0 | (89,992) | |
Reserve for excess or obsolete inventory | (392) | 1,797 | |
Changes in contingent purchase price | (258) | (11,788) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 6,195 | 14,476 | |
Inventory, net | 2,202 | 1,976 | |
Prepaid expenses and other assets | 5,549 | 5,886 | |
Accounts payable | (2,681) | (16,898) | |
Accrued expenses | (58,774) | (5,245) | |
Other current liabilities | (4,317) | (11,707) | |
Payments on contingent purchase price | (59) | (52,499) | |
Other liabilities | 4,305 | (3,189) | |
Net cash used in operating activities | (222,768) | (304,774) | |
Cash flows from investing activities: | |||
Proceeds from sale of assets | 9,900 | 0 | |
Purchases of fixed assets | (7) | (4,525) | |
Purchases of available for sale securities | 0 | (131,560) | |
Proceeds from maturities and sales of available for sale securities | 0 | 89,344 | |
Proceeds from sale of business | 166,383 | 0 | |
Net cash provided by (used in) investing activities | 176,276 | (46,741) | |
Cash flows from financing activities: | |||
Proceeds from issuances of common stock, net | 15,595 | 40,708 | |
Payments on contingent purchase price | (511) | (10,119) | |
Repayments of convertible senior notes | 0 | (55,000) | |
Purchase of shares of non-controlling interest | 0 | (167) | |
Net cash provided by (used in) financing activities | 15,084 | (24,578) | |
Effect of exchange rate changes on cash | (1,374) | 1,008 | |
Decrease in cash, cash equivalents and restricted cash | (32,782) | (375,085) | |
Cash, cash equivalents and restricted cash at beginning of period | 156,900 | 546,867 | |
Cash, cash equivalents and restricted cash at end of period | [1] | 124,118 | 171,782 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 21,069 | 22,561 | |
Non-cash investing and financing activities | |||
Issuance of common stock upon conversion of convertible notes | 0 | 32,018 | |
Receipt of common stock upon settlement of 2017 Note hedge | 0 | 40,015 | |
Issuance of common stock upon the exercise of the 2017 Warrants | 0 | 887 | |
Reconciliation of cash, cash equivalents and restricted cash | |||
Total cash, cash equivalents and restricted cash at end of period | $ 156,900 | $ 546,867 | |
[1] | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheet: Nine Months Ended September 30, 2018 2017Reconciliation of cash, cash equivalents and restricted cash Cash and cash equivalents$118,708 166,734Restricted cash5,410 5,048Total cash, cash equivalents and restricted cash at end of period$124,118 $171,782 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business The Medicines Company (the Company) is a biopharmaceutical company driven by its purpose to solve major medical, societal and economic challenges in healthcare. The Company has a singular and relentless focus on one of the greatest global healthcare challenges and burdens - that presented by atherosclerotic cardiovascular disease (ASCVD), which remains the number one cause of death in the United States and worldwide. The Company takes on that challenge by developing inclisiran, the investigational RNA interference therapeutic, that specifically inhibits production of PCSK9, a key protein that controls LDL-cholesterol (LDL-C) levels. The Company believes inclisiran is uniquely suited to make a significant difference reducing risk in ASCVD. The Company has the right to develop, manufacture and commercialize inclisiran under its collaboration agreement with Alnylam Pharmaceuticals, Inc. (Alnylam). On November 3, 2015, the Company announced that it was in the process of evaluating its operations with a goal of unlocking and maximizing stockholder value. In particular, the Company stated its intention was to explore strategies for optimizing the Company’s capital structure and liquidity position and to narrow the Company’s operational focus by strategically separating non-core businesses and products in order to generate non-dilutive cash and reduce associated cash burn and capital requirements. As a result of the Company’s decision to narrow its operational focus, the Company executed on several strategic transactions, including the 2016 divestitures of its hemostasis portfolio consisting of PreveLeak, Raplixa and Recothrom (the Hemostasis Business) to wholly owned subsidiaries of Mallinckrodt plc (Mallinckrodt) and its non-core cardiovascular assets consisting of Kengreal, Cleviprex and rights to Argatroban for Injection (the Non-Core ACC Products) to Chiesi USA, Inc. and its parent company Chiesi Farmaceutici S.p.A. (Chiesi). On January 5, 2018, the Company completed the sale of its infectious disease business, consisting of the products Vabomere, Orbactiv and Minocin IV and line extensions thereof, and substantially all of the assets related thereto, other than certain pre-clinical assets, to Melinta Therapeutics, Inc. (Melinta) pursuant to a purchase and sale agreement dated November 28, 2017 between the Company and Melinta. At the completion of the sale, the Company received approximately $166.4 million and 3,313,702 shares of Melinta common stock having a readily determinable fair value at September 30, 2018 of $13.1 million . In addition, the Company is entitled to receive (i) a cash payment payable 12 months following the closing of the transaction equal to $25.0 million ; (ii) a cash payment payable 18 months following the closing of the transaction equal to $25.0 million ; and (iii) tiered royalty payments of 5% to 25% on worldwide net sales of (a) Vabomere and (b) Orbactiv and Minocin IV, collectively. As a result of the transaction, the Company accounted for the assets and liabilities of the infectious disease business that were sold as held for sale at December 31, 2017. Further, the financial results of the infectious disease business were reclassified to discontinued operations for all periods presented in the accompanying condensed consolidated financial statements. See Note 15 “Discontinued Operations” for further details. In addition, in August 2018, the Company divested its rights to branded Angiomax in the United States to Sandoz Inc. (Sandoz) for approximately $9.9 million and, in October 2018, the Company divested its rights to certain pre-clinical infectious disease assets not acquired by Melinta to Qpex Biopharma, Inc. (Qpex), a new company formed by a syndicate of venture firms, for approximately $2.7 million in upfront consideration and up to $29 million upon the achievement of certain milestones related to the pre-clinical assets. In addition, Qpex assumed potential milestone payments due under the Company’s agreement with Rempex Pharmaceuticals, Inc. (Rempex) related to the development of the pre-clinical assets . As a result of these transactions and the Company’s restructuring plans, the Company is now focused solely on the development of inclisiran as a transformative treatment for ASCVD. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Significant Accounting Policies,” in the notes to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (the 2017 Form 10-K). Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting solely of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations, comprehensive loss , and cash flows for the periods presented. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has no unconsolidated subsidiaries. The Company’s results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected from the Company for the entire fiscal year or any other quarter of the fiscal year ending December 31, 2018 . These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the 2017 Form 10-K. Going Concern Due to the divesture of the Company’s rights to branded Angiomax in the United States to Sandoz during the three months ended September 30, 2018, the Company is no longer generating revenues from product sales. Prior to such divestiture, the Company’s revenues generated from product sales had been declining significantly since 2014 due to the introduction of generic competition against Angiomax and the divestiture of certain of the Company’s non-core products. The Company has incurred net losses and negative cash flows from operations since 2014 and has an accumulated deficit of $1,338.2 million as of September 30, 2018. The Company expects to incur significant expenses and operating losses for the foreseeable future as it continues to develop, seek regulatory approval for and commercially launch inclisiran. The Company believes that its existing cash and cash equivalents and short term investments of approximately $131.8 million as of September 30, 2018, together with the future payments expected to be received from Melinta due to the sale of the infectious disease business, will not be sufficient to satisfy the Company’s anticipated operating and other funding requirements for the next twelve months from November 8, 2018 (the date of filing this Form 10-Q). Because the Company expects to continue to incur negative cash flows from operations, the Company will need to raise additional funds by selling additional equity or debt securities or seeking additional financing through other arrangements in order to meet the Company’s anticipated operating and other funding requirements for the next twelve months. There can be no assurances that public or private financings or other financing arrangements will be available in amounts or on terms acceptable to the Company, if at all. The Company’s ability to obtain additional equity or debt financing may be limited by market conditions. If the Company were unable to obtain additional financing, it may be required to delay, reduce the scope of, or eliminate one or more of its planned research, development or commercialization activities. Due to these uncertainties, there is substantial doubt about the Company’s ability to continue as a going concern. The unaudited condensed consolidated financial statements as of September 30, 2018 have been prepared under the assumption that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of the uncertainty discussed above. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, expenses and accumulated other comprehensive loss that are reported in the condensed consolidated financial statements and accompanying disclosures. Actual results may be different. Revenue Recognition On January 1, 2018, the Company adopted the Financial Accounting Standards Board (FASB)’s new accounting standard that amends prior guidance for the recognition of revenue from contracts with customers to transfer goods and services by using the modified-retrospective method applied to those contracts that were not completed as of January 1, 2018. The results for the reporting period beginning on January 1, 2018, are presented in accordance with the new standard, although comparative information has not been restated and continues to be reported under the accounting standards and policies in effect for those periods as described in Note 2, “Significant Accounting Policies,” in the notes to the audited consolidated financial statements included in the 2017 Form 10-K. Upon adoption, the Company recorded a net increase of $0.2 million to accumulated deficit on its condensed consolidated balance sheet due to the cumulative impact of adopting the new standard, with the impact due to the acceleration of deferred revenue offset by the recognition of the related product costs that were previously classified within prepaid expenses and other current assets on the Company’s consolidated balance sheets. The adoption of this new standard had an immaterial impact on the Company’s reported total revenues as compared to what reported amounts would have been under the prior standard, and the impact of adoption in future periods is expected to be immaterial. The Company’s accounting policies under the new standard were applied prospectively and are noted below. In August 2018, the Company divested its rights to branded Angiomax in the United States to Sandoz, which had been selling an authorized generic of Angiomax (bivalirudin) as of July 2, 2015 pursuant to a supply and distribution agreement with the Company. As a result of the transaction, the Company no longer markets any products. Prior to such divestiture, the Company distributed branded Angiomax in the United States through a sole source distribution model with Integrated Commercialization Solutions (ICS). ICS then primarily sold branded Angiomax to a limited number of national medical and pharmaceutical wholesalers with distribution centers located throughout the United States. The Company’s agreement with ICS provided that ICS would be the Company’s exclusive distributor of branded Angiomax in the United States. Under the terms of this fee-for-service agreement, ICS placed orders with the Company for sufficient quantities to maintain an appropriate level of inventory based on the Company’s customers’ historical purchase volumes. ICS assumed all credit and inventory risks, was subject to the Company’s standard return policy and had sole responsibility for determining the prices at which it sold these products, subject to specified limitations in the agreement. The agreement terminates on February 28, 2019 and will automatically renew for additional one -year periods unless either party gives notice at least 90 days prior to the automatic extension. Either party may terminate the agreement at any time and for any reason upon 180 days’ prior written notice to the other party. Revenue is recognized upon transfer of control of a product to the customer, generally upon delivery, based on an amount that reflects the consideration the Company expects to be entitled to, which includes estimates of variable consideration that result from rebates, wholesaler chargebacks, discounts, fee-for-service charges and returns. The Company records allowances for chargebacks and other discounts or accruals for product returns, rebates and fee-for-service charges at the time of sale, and reports revenue net of such amounts. In determining these amounts, the Company estimates hospital demand, buying patterns by hospitals and group purchasing organizations from wholesalers and the levels of inventory held by wholesalers and by ICS. Making these determinations involves estimating whether trends in past wholesaler and hospital buying patterns will predict future product sales. The Company receives data periodically from ICS and wholesalers on inventory levels and levels of hospital purchases and the Company considers this data in determining the amounts of these allowances and accruals. Such amounts were not material to the Company’s condensed consolidated statement of operations for the three and nine months ended September 30, 2018 . As discussed above, given the Company has divested its rights to branded Angiomax in the United States, the Company revised its estimates and recognized a $3.3 million charge during the three and nine months ended September 30, 2018 . Prior to the divestiture to Sandoz of the Company’s rights to branded Angiomax in the United States in August 2018, the consideration the Company expected to be entitled to in connection with a sale of bivalirudin to Sandoz included a variable amount based on Sandoz’s gross margin, as defined in the agreement, of bivalirudin sold by Sandoz to its customers. As this amount was highly susceptible to factors outside of the Company’s control, the Company had not recognized this variable amount. As a result of the divestiture, the Company no longer has the right to this variable consideration. The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation when those activities are performed after control of the product has been transferred to the customer. Amounts billed to customers for shipping and handling are included as part of the transaction price and recognized as revenue when control of underlying products is transferred to the customer. The related shipping and freight charges incurred by the Company are included in the cost of goods sold. Sales taxes and other similar taxes that the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company’s payment terms vary by the type and location of its customer and the products or services offered. Payment terms differ by jurisdiction and customer but payment is generally required in a term ranging from 45 to 120 days from date of shipment or satisfaction of the performance obligation. Contingencies The Company may be, from time to time, a party to various disputes and claims arising from normal business activities. The Company continually assesses litigation to determine if an unfavorable outcome would lead to a probable loss or reasonably possible loss which could be estimated. In accordance with the guidance of the FASB on accounting for loss contingencies, the Company accrues for all contingencies at the earliest date at which the Company deems it probable that a liability has been incurred and the amount of such liability can be reasonably estimated. If the estimate of a probable loss is a range and no amount within the range is more likely than another, the Company accrues the minimum of the range. In the cases where the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the litigation, including an estimable range, if possible. Research and Development Research and development costs are expensed as incurred. Clinical study costs are accrued over the service periods specified in the contracts and adjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred. Payments for a product license prior to regulatory approval of the product and payments for milestones achieved prior to regulatory approval of the product are expensed in the period incurred as research and development. Milestone payments that do not represent payments of contingent purchase price from business combinations that are made in connection with regulatory approvals are capitalized and amortized to cost of revenue over the remaining useful life of the asset. Prior to the Company’s divestiture of its pre-clinical infectious disease assets to Qpex, the Company performed research and development under a cost-reimbursable contract with the Biomedical Advanced Research and Development Authority of the U.S. Department of Health and Human Services in which the Company was reimbursed for direct costs incurred plus allowable indirect costs. The Company recognized the reimbursements under research contracts when a contract was executed, the contract price was fixed or determinable, delivery of services or products had occurred, and collection of the contract price was reasonably assured. The reimbursements were classified as an offset to research and development expenses. Payments received in advance of work performed were deferred. The Company recorded reductions of research and development expenses of $0.2 million and $0.5 million for the three months ended September 30, 2018 and 2017 , respectively, and $0.9 million and $1.1 million for the nine months ended September 30, 2018 and 2017 , respectively, in the accompanying condensed consolidated statements of operations. Contingent Purchase Price From Sale of Business The Company has contingent assets for certain specified calendar year net sales milestones as part of the sale of the Hemostasis Business to Mallinckrodt and the Non-Core ACC Products to Chiesi, which in each case are reflected as contingent purchase price from sale of businesses on the accompanying condensed consolidated balance sheets. The Company also has contingent assets for royalties associated with the sale of the infectious disease business to Melinta, which is reflected as contingent purchase price from sale of business on the accompanying condensed consolidated balance sheets. The Company will recognize any increases in the carrying amount or impairments of the contingent purchase price if and when the milestones or royalties are achieved or determined that the carrying value exceeds its fair value. The Company noted no indicators of impairment on the carrying amount of the contingent assets. In addition, the Company determined that the fair values of these contingent payments to be received from Mallinckrodt, Chiesi and Melinta, respectively, are not readily determinable at September 30, 2018, as the estimated future net sales of each of the respective products are determined by the future actions of such parties. Recent Accounting Pronouncements In January 2016 the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU No. 2016-01). ASU No. 2016-01 amends certain aspects of accounting and disclosure requirements of financial instruments, including the requirement that equity investments with readily determinable fair values be measured at fair value with changes in fair value recognized in a company’s results of operations. The new standard does not apply to investments accounted for under the equity method of accounting or those that result in consolidation of the investee. Equity investments that do not have readily determinable fair values may be measured at fair value or at cost minus impairment adjusted for changes in observable prices. A financial liability that is measured at fair value in accordance with the fair value option is required to be presented separately in other comprehensive income for the portion of the total change in the fair value resulting from changes in the instrument-specific credit risk. In addition, a valuation allowance should be evaluated on deferred tax assets related to available-for-sale debt securities in combination with other deferred tax assets. On January 1, 2018, the Company adopted this guidance and there was no impact on the Company’s condensed consolidated balance sheet as the Company did not have equity investments as of December 31, 2017. The impact that this new standard has on the Company’s condensed consolidated statements of operations after adoption will depend on the changes in fair values of equity securities in the Company’s portfolio in the future. See Note 6 “Cash and Cash Equivalents and Investments” for further details. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (ASU No. 2016-02). ASU No. 2016-02 will require organizations that lease assets with lease terms of more than 12 months to recognize assets and liabilities for the rights and obligations created by those leases on their balance sheets. The ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU No. 2016-02 will be effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company anticipates that most of its operating leases will result in the recognition of right of use assets and the corresponding lease liabilities on its consolidated balance sheet, however it does not expect the adoption of this standard to have a material impact on the consolidated statements of operations. The actual impact will depend on the Company's lease portfolio at the time of adoption. The Company continues to assess all implications of the standard and related financial disclosures. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. This guidance clarifies how certain cash receipts and payments should be presented in the statement of cash flows. On January 1, 2018, the Company adopted this standard, which did not have a material impact on the consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. This amends the guidance in ASC 230, including providing additional guidance related to transfers between cash and restricted cash and how entities present, in their statement of cash flows, the cash receipts and cash payments that directly affect the restricted cash accounts. On January 1, 2018, the Company adopted this standard and began classifying restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts on its consolidated statements of cash flows on a retrospective basis to all periods presented. For the nine months ended September 30, 2018 and 2017 , $5.4 million and $5.0 million of restricted cash were classified with cash and cash equivalents on the Company’s accompanying condensed consolidated statements of cash flows. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. On January 1, 2018, the Company adopted this standard prospectively. The Company applied this guidance to divestitures during the current year and concluded that the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment”, which eliminates Step 2 from the goodwill impairment test. Under the revised test, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU is effective for any interim or annual impairment tests for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company will early adopt this guidance for its 2018 annual goodwill impairment test and does not believe that this guidance will have an impact on the consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement”, which modifies disclosure requirements on fair value measurements. This ASU is effective for public companies for fiscals years and interim periods within those fiscal years beginning after December 15, 2019, with early adoption permitted. The Company expects to adopt this guidance when effective and is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. |
Stock Compensation Expense
Stock Compensation Expense | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation Expense | Stock Compensation Expense The Company recorded stock compensation expense of approximately $4.2 million and $7.9 million for the three months ended September 30, 2018 and 2017 , respectively, and $13.2 million and $24.1 million for the nine months ended September 30, 2018 and 2017 , respectively. As of September 30, 2018 , there was approximately $52.2 million of total unrecognized compensation costs related to non-vested share-based employee compensation arrangements granted under the Company’s equity compensation plans. The Company expects to recognize those costs, exclusive of $31.9 million related to performance goals discussed below, over a weighted average period of 1.9 years. During the nine months ended September 30, 2018, the Company granted 3,417,600 stock options to certain of its employees, which will vest upon the achievement of specified performance goals. Stock compensation expense during the performance period is estimated using the most probable outcome of the performance goals, and adjusted as the expected outcome changes and is recognized ratably over the applicable vesting period. The Company will not begin recognizing expenses of $31.9 million related to these awards until certain performance conditions are probable of being met as defined under GAAP. During the nine months ended September 30, 2018 and 2017 , the Company issued a total of 753,452 and 1,754,744 , respectively, of shares of its common stock upon the exercise of stock options, grants of restricted stock, and purchases under the Company’s 2010 employee stock purchase plan (ESPP). Cash received from the exercise of stock options and purchases through the ESPP during the nine months ended September 30, 2018 and 2017 was $15.6 million and $40.7 million , respectively, and is included within the financing activities section of the accompanying condensed consolidated statements of cash flows. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic loss per share is computed by dividing consolidated net income (loss) by the weighted average number of shares of common stock outstanding during the period, excluding unvested restricted common shares. The potentially dilutive effect of the Company’s stock options, unvested restricted common stock, stock purchase warrants, and convertible senior notes due 2017 (which matured on June 1, 2017) and 2022 on earnings per share is computed under the treasury stock method. In addition, the Company analyzes the potential dilutive effect of the convertible senior notes due 2023 on earnings per share under the “if converted” method, in which it is assumed that the outstanding security converts into common stock at the beginning of the period. For periods of income from continuing operations when the effects are not anti-dilutive, diluted earnings per share is computed by dividing consolidated net income by the weighted average number of shares outstanding and the impact of all potential dilutive common shares, consisting primarily of stock options, unvested restricted common stock, shares issuable upon conversion of convertible senior notes due 2017, 2022 and 2023 and stock purchase warrants. For periods of loss from continuing operations, diluted loss per share is calculated similar to basic loss per share as the effect of including all potentially dilutive common share equivalents is anti-dilutive. Due to the periods of loss from continuing operations, the calculation of diluted loss per share for the three and nine months ended September 30, 2018 excluded 9,866,498 and 9,322,645 , of potentially dilutive stock options, warrants, restricted common shares, and shares issuable upon conversion of the 2022 and 2023 Notes as their inclusion would have an anti-dilutive effect. The calculation of diluted loss per share for the three and nine months ended September 30, 2017 excluded 10,703,826 and 13,312,289 , respectively, of potentially dilutive stock options, stock purchase warrants, restricted common shares, and shares issuable upon conversion of the 2017, 2022 and 2023 Notes as their inclusion would have an anti-dilutive effect. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended September 30, 2018 and 2017, the Company recorded a benefit from income taxes of $16.1 million and $66.6 million , respectively. The worldwide effective income tax rates for the Company for the three months ended September 30, 2018 and 2017 was 23.7% and 90.2% , respectively. For the nine months ended September 30, 2018 and 2017 , the Company recorded a benefit from income taxes of $47.4 million and $89.6 million , respectively. The worldwide effective income tax rates for the Company for the nine months ended September 30, 2018 and 2017 was 19.9% and 16.7% , respectively. For the three and nine months ended September 30, 2018 , the Company’s benefit from income taxes is primarily attributable to the utilization of current period losses against a discrete provision for income taxes of $55.2 million from the sale of the Company’s infectious disease business. For further details regarding the sale of the infectious disease business see Note 15, “Discontinued Operations.” The Company considers all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is needed to reduce its deferred tax assets to the amount that is more likely than not to be realized. The Company placed significant weight on the fact that the Company expects to be in a cumulative net book loss for the three-year period ending December 31, 2018 in recording valuation allowances on substantial portions of its deferred tax assets as of September 30, 2018 . On July 1, 2018, New Jersey enacted comprehensive changes to its corporate income tax law. Among other items, for tax years beginning on or after January 1, 2018, through December 31, 2019, a surtax of 2.5% is imposed on corporate business taxpayers with New Jersey-apportioned entire net income greater than $1 million. The Company anticipates this law will increase the income tax benefit from continuing operations and increase the income tax provision for discontinued operations by approximately $3.6 million , respectively, in the current year and is not expected to have a material impact on the consolidated income tax provision for year ending December 31, 2019. The Company will continue to evaluate its ability to realize its deferred tax assets on a periodic basis and will adjust such amounts in light of changing facts and circumstances including, but not limited to, future projections of taxable income, tax legislation, rulings by relevant tax authorities, the progress of ongoing tax audits and the regulatory approval of products currently under development. Any additional changes to the valuation allowance recorded on deferred tax assets in the future would impact the Company’s income taxes. On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was enacted which significantly reforms the Internal Revenue Code of 1986, as amended. The TCJA, among other things, reduces the U.S. federal corporate tax rate from 35% to 21%, repeals the corporate alternative minimum tax (AMT), imposes additional limitations on the deductibility of interest, allows for the expensing of capital expenditures, and puts into effect the migration from a worldwide system of taxation to a territorial system. As a result of this legislation, the Company remeasured its deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, the Company is still analyzing certain aspects of the TCJA and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of the Company’s deferred tax balances was $126.5 million which was offset fully by the provisional amount recorded related to the reversal of previously established valuation allowances against these deferred tax balances. The TCJA also permits any remaining AMT tax attribute carryforwards to be used to offset future taxable income and/or be refundable over the next several years. As a result, the Company recognized a provisional benefit of $4.9 million during the year ended December 31, 2017 related to the reversal of a previously established valuation allowance against its AMT tax attribute carryforwards and the related refundable amount has been classified in other assets in the accompanying consolidated balance sheet. During the nine months ended September 30, 2018, the Company reduced its estimated AMT credit to be realized by $0.3 million to reflect the impact of sequestration as required by the Balanced Budget and Emergency Deficit Control Act of 1985, as amended. In addition, based on its preliminary analysis, the Company does not believe that it has offshore earnings that would be subject to the mandatory transition tax. While the Company has completed its provisional analysis of the income tax effects of the TCJA and recorded a reasonable estimate of such effects, the amounts recorded related to the TCJA may differ, possibly materially, due to, among other things, further refinement of the Company’s calculations, changes in interpretations and assumptions that the Company has made, additional guidance that may be issued by the U.S. Government, and actions and related accounting policy decisions the Company may take as a result of the TCJA. The Company will complete its analysis over a one-year measurement period ending no later than December 22, 2018, and any adjustments during this measurement period will be included in loss from continuing operations as an adjustment to income tax expense/benefit in the reporting period when such adjustments are determined. |
Cash and Cash Equivalents and I
Cash and Cash Equivalents and Investments | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash and Cash Equivalents and Investments | Cash and Cash Equivalents and Investments The Company considers all highly liquid investments purchased with original maturities at the date of purchase of three months or less to be cash equivalents. At September 30, 2018 and December 31, 2017 , the Company had cash and cash equivalents of $118.7 million and $151.4 million , respectively, which consisted of cash of $106.5 million and $139.3 million , and money market funds with original maturities of less than three months of $12.2 million and $12.1 million at September 30, 2018 and December 31, 2017 , respectively. As of September 30, 2018 , the Company’s common stock investment in Melinta had a readily determinable fair value of $13.1 million . During the three and nine months ended September 30, 2018 , the Company recognized a loss of $8.0 million and $41.4 million , respectively, all of which was unrealized, in the accompanying condensed consolidated statements of operations, relating to the Company’s investment in Melinta. Restricted Cash The Company had restricted cash of $5.4 million and $5.5 million at September 30, 2018 and December 31, 2017 , respectively which included $5.0 million and $4.1 million , respectively, reserved for outstanding letters of credit associated with foreign taxes. The balance at September 30, 2018 also includes $0.4 million reserved for other U.S. operating expenses. These funds are invested in certificates of deposit. The balance at December 31, 2017 includes $1.0 million reserved for outstanding letters of credit associated with the Company’s lease for the office space in Parsippany, New Jersey. The letter of credit for the Company’s lease for the office space in Parsippany, New Jersey permits draws by the landlord to cure defaults by the Company. This letter of credit has since expired. In addition, as a result of the acquisition of Targanta Therapeutics Corporation (Targanta) in 2009, the Company had restricted cash of $0.2 million at December 31, 2017 , in the form of a guaranteed investment certificate collateralizing an available credit facility, which was settled by September 30, 2018 . The Company also had restricted cash of $0.3 million at December 31, 2017 related to certain foreign tender requirements. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company applies a fair value framework in order to measure and disclose its financial assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities. The Company’s Level 1 assets consist of money market investments. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Fair values are determined by utilizing quoted prices for similar assets and liabilities in active markets or other market observable inputs such as interest rates and yield curves. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s Level 3 liabilities consist of the contingent purchase prices associated with the Company’s business combinations. The fair value of certain development or regulatory milestone based contingent purchase prices was determined in a discounted cash flow framework by probability weighting the future contractual payment with management's assessment of the likelihood of achieving these milestones and present valuing them using a risk-adjusted discount rate. Financial assets and liabilities measured at fair value on a recurring basis Financial assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Except for the Company’s Level 2 liabilities which are discussed in Note 9 , “Convertible Senior Notes,” the following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2018 and December 31, 2017 , by level, within the fair value hierarchy: As of September 30, 2018 As of December 31, 2017 Assets and Liabilities Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of September 30, 2018 Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of December 31, 2017 (in thousands) Assets: Cash equivalents $ 12,237 $ — $ — $ 12,237 $ 12,100 $ — $ — $ 12,100 Short-term investment 13,089 — — 13,089 — — — — Total assets at fair value $ 25,326 $ — $ — $ 25,326 $ 12,100 $ — $ — $ 12,100 Liabilities: Contingent purchase price $ — $ — $ 18,822 $ 18,822 $ — $ — $ 19,650 $ 19,650 Total liabilities at fair value $ — $ — $ 18,822 $ 18,822 $ — $ — $ 19,650 $ 19,650 Level 3 disclosures The Company measures contingent purchase price at fair value based on significant inputs not observable in the market, which causes it to be classified as a Level 3 measurement within the fair value hierarchy. The valuation of contingent purchase price uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assesses these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained. Changes in the fair value of contingent purchase price related to updated assumptions and estimates are recognized within selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. The contingent purchase price may change significantly as additional data is obtained, impacting the Company’s assumptions regarding probabilities of successful achievement of related milestones used to estimate the fair value of the liability. In evaluating this information, considerable judgment is required to interpret the market data used to develop the assumptions and estimates. The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange. Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts, and such changes could materially impact the Company’s results of operations in future periods. The following table provides quantitative information associated with the fair value measurements of the Company’s Level 3 liabilities: Fair Value as of Valuation Technique Unobservable Input Range (Weighted Average) (in thousands) Rempex: Contingent purchase price: Event-based milestones $ 18,822 Probability-adjusted discounted cash flow Probabilities of successes 18% - 75% (46%) Period in which milestones are expected to be achieved 2018 - 2024 Discount rate 5.0% - 7.3% Fair Value as of Valuation Technique Unobservable Input Range (Weighted Average) (in thousands) Rempex: Contingent purchase price: Event-based milestones $ 19,650 Probability-adjusted discounted cash flow Probabilities of successes 18% - 90% (71%) Period in which milestones are expected to be achieved 2018 - 2024 Discount rate 4.8% - 7.5% The fair value of the contingent purchase price represents the fair value of the Company’s liability for all potential payments under the Company’s acquisition agreement for Rempex. There were no changes to the potential future payments under the Company’s acquisition agreement. As of September 30, 2018 the remaining potential future payments to the former equity holders of Rempex was $68.7 million which excludes future payments on products included in the sale of the Company’s infectious disease business. The remaining potential future payments under the Company’s acquisition agreements do not include payments of $175.8 million (which includes $86.3 million to the former equity holders of Incline and Annovation and $89.5 million to other third parties) related to the Ionsys product, which was discontinued and withdrawn in the United States in June 2017 and which has also been discontinued in Europe, and the MDCO-700 development program, which the Company discontinued in August 2017. The significant unobservable inputs used in the fair value measurement of the Company’s contingent purchase prices are the probabilities of successful achievement of development and regulatory milestones that would trigger payments under the Rempex agreement, probabilities as to the periods in which the milestones are expected to be achieved and discount rates. Significant changes in any of the probabilities of success or periods in which milestones will be achieved would result in a significantly higher or lower fair value measurement. The changes in fair value of the Company’s Level 3 contingent purchase price during the three and nine months ended September 30, 2018 and 2017 were as follows: Three Months Ended Nine Months Ended 2018 2017 2018 2017 (in thousands) (in thousands) Balance at beginning of period $ 18,825 $ 20,300 $ 19,650 $ 31,832 Payments (3 ) — (570 ) — Fair value adjustments to contingent purchase prices included in net loss — (1,600 ) (258 ) (13,132 ) Balance at end of period $ 18,822 $ 18,700 $ 18,822 $ 18,700 For the three and nine months ended September 30, 2018 and 2017 , changes in the carrying value of the contingent purchase price obligations resulted from changes in the fair value of the contingent consideration due to either the passage of time, changes in discount rates, changes in probabilities of success, or milestone payments. The contingent purchase price was presented as “Current liabilities held for sale” at September 30, 2018 , see Note 16 “Subsequent Events” for further details. No other changes in valuation techniques or inputs occurred during the three and nine months ended September 30, 2018 and 2017 . |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory The major classes of inventory were as follows: September 30, December 31, (in thousands) Raw materials $ 866 $ 1,389 Work-in-progress — 3,608 Finished goods — 562 Total $ 866 $ 5,559 The Company reviews inventory, including inventory purchase commitments, for slow moving or obsolete amounts based on expected product sales volume and provides reserves against the carrying amount of inventory as appropriate. If annual volume is less than expected, the Company may be required to make additional allowances for excess or obsolete inventory in the future. |
Convertible Senior Notes
Convertible Senior Notes | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes Convertible Senior Notes Due 2023 In June 2016, the Company issued, at par value, $402.5 million aggregate principal amount of 2.75% convertible senior notes due 2023 (the 2023 Notes). The 2023 Notes bear cash interest at a rate of 2.75% per year, payable semi-annually on January 15 and July 15 of each year, beginning on January 15, 2017. The 2023 Notes will mature on July 15, 2023. The net proceeds to the Company from the offering were $390.8 million after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by the Company. The 2023 Notes are governed by an indenture (the 2023 Notes Indenture) with Wells Fargo Bank, National Association, a national banking association, as trustee (the 2023 Notes Trustee). The 2023 Notes are senior unsecured obligations of the Company and will rank senior in right of payment to the Company’s future indebtedness that is expressly subordinated in right of payment to the 2023 Notes; equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness and other liabilities (including trade payables) incurred by the Company’s subsidiaries. Holders may convert their 2023 Notes at their option at any time prior to the close of business on the business day immediately preceding April 15, 2023 only under the following circumstances: • during any calendar quarter commencing on or after September 30, 2016 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the 2023 Notes Indenture) per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; • during any period after the Company has issued notice of redemption until the close of business on the scheduled trading day immediately preceding the relevant redemption date; or • upon the occurrence of specified corporate events. On or after April 15, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2023 Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination thereof, at the Company’s option, based upon a daily conversion value calculated on a proportionate basis for each trading day in a 50 trading day observation period (as more fully described in the 2023 Notes Indenture). The conversion rate for the 2023 Notes was initially, and remains, 20.4198 shares of the Company’s common stock per $1,000 principal amount of the 2023 Notes, which is equivalent to an initial conversion price of approximately $48.97 per share of the Company’s common stock. The Company may not redeem the 2023 Notes prior to July 15, 2020. The Company may redeem for cash all or any portion of the 2023 Notes, at its option, on or after July 15, 2020 if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect on the last trading day of, and for at least 19 other trading days (whether or not consecutive) during, any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the 2023 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No redemption date may be designated that falls on or after the 52 nd scheduled trading date prior to maturity. No sinking fund is provided for the 2023 Notes, which means that the Company is not required to redeem or retire the 2023 Notes periodically. If the Company undergoes a fundamental change (as defined in the 2023 Notes Indenture), subject to certain conditions, holders of the 2023 Notes may require the Company to repurchase for cash all or part of their 2023 Notes at a repurchase price equal to 100% of the principal amount of the 2023 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The 2023 Notes Indenture governing the 2023 Notes contains customary events of default with respect to the 2023 Notes, including that upon certain events of default (including the Company’s failure to make any payment of principal or interest on the 2023 Notes when due and payable) occurring and continuing, the 2023 Notes Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding 2023 Notes by notice to the Company and the 2023 Notes Trustee, may, and the 2023 Notes Trustee at the request of such holders (subject to the provisions of the 2023 Notes Indenture) shall, declare 100% of the principal of and accrued and unpaid interest, if any, on all the 2023 Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, involving the Company or a significant subsidiary, 100% of the principal of and accrued and unpaid interest on the 2023 Notes will automatically become due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately. In accounting for the issuance of the 2023 Notes, the Company separated the 2023 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2023 Notes as a whole. The excess of the principal amount of the liability component over its carrying amount, referred to as the debt discount, is amortized to interest expense over the seven -year term of the 2023 Notes. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The equity component related to the 2023 Notes is $101.0 million and is recorded in additional paid-in capital on the accompanying condensed consolidated balance sheet. In accounting for the transaction costs related to the issuance of the 2023 Notes, the Company allocated the total costs incurred to the liability and equity components of the 2023 Notes based on their relative values. Transaction costs attributable to the liability component are amortized to interest expense over the seven -year term of the 2023 Notes, and transaction costs attributable to the equity component are netted with the equity components in stockholders’ equity. Additionally, the Company initially recorded a net deferred tax liability of $33.5 million in connection with the 2023 Notes. The 2023 Notes consist of the following: Liability component September 30, 2018 December 31, 2017 (in thousands) Principal $ 402,500 $ 402,500 Less: Debt discount, net (1) (80,408 ) (90,552 ) Net carrying amount $ 322,092 $ 311,948 _______________________________________ (1) Included in the accompanying condensed consolidated balance sheets within convertible senior notes (due 2023) and amortized to interest expense over the remaining life of the 2023 Notes using the effective interest rate method. The fair value of the 2023 Notes was approximately $371.6 million as of September 30, 2018 . The Company estimates the fair value of its 2023 Notes utilizing market quotations for debt that have quoted prices in active markets. Since the 2023 Notes do not trade on a daily basis in an active market, the fair value estimates are based on market observable inputs based on borrowing rates currently available for debt with similar terms and average maturities, which are classified as Level 2 measurements within the fair value hierarchy. See Note 7 , “Fair Value Measurements,” for definitions of hierarchy levels. As of September 30, 2018 , the remaining contractual life of the 2023 Notes is approximately 4.8 years. The following table sets forth total interest expense recognized related to the 2023 Notes: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (in thousands) (in thousands) Contractual interest expense $ 2,768 $ 2,767 $ 8,302 $ 8,293 Amortization of debt discount 3,461 3,205 10,143 9,384 Total $ 6,229 $ 5,972 $ 18,445 $ 17,677 Effective interest rate of the liability component 7.5 % 7.5 % 7.5 % 7.5 % Capped call transactions In June 2016, the Company entered into capped call transactions with certain counterparties of the 2023 Notes or their respective affiliates or other financial institutions. The Company used approximately $33.9 million of the net proceeds from the offering to pay the cost of the capped call transactions, which is included as a net reduction to additional paid-in capital on the accompanying condensed consolidated balance sheet. The capped call transactions are expected to reduce the potential dilution with respect to shares of the Company’s common stock upon any conversion of the 2023 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2023 Notes, as the case may be, if the market price of the Company’s common stock is then greater than the strike price of the capped call transactions. Such reduction of potential dilution or offset of cash payments is subject to a cap based on the cap price of the capped call transactions. The cap price of the capped calls is currently $64.68 . For any conversions of the 2023 Notes prior to the close of business on the 52 nd scheduled trading day immediately preceding the stated maturity date of the 2023 Notes, including without limitation upon an acquisition of the Company or similar business combination, a corresponding portion of the capped calls will be terminated. Upon such termination, the portion of the capped calls being terminated will be settled at fair value (subject to certain limitations), as determined by the counterparties to the capped calls and no payments will be due from the Company to such counterparties. The capped calls expire on the earlier of (i) the last day on which any Convertible Securities remain outstanding and (ii) the second “Scheduled Trading Day” (as defined in the 2023 Notes Indenture) immediately preceding the “Maturity Date” (as defined in the 2023 Notes Indenture). Convertible Senior Notes Due 2022 The 2022 Notes bear cash interest at a rate of 2.5% per year, payable semi-annually on January 15 and July 15 of each year, beginning on July 15, 2015. The 2022 Notes will mature on January 15, 2022. The net proceeds to the Company from the offering were $387.2 million after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by the Company. The 2022 Notes are governed by an indenture (the 2022 Notes Indenture) with Wells Fargo Bank, National Association, a national banking association, as trustee (the 2022 Notes Trustee). The 2022 Notes are senior unsecured obligations of the Company and will rank senior in right of payment to the Company’s future indebtedness that is expressly subordinated in right of payment to the 2022 Notes; equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness and other liabilities (including trade payables) incurred by the Company’s subsidiaries. Holders may convert their 2022 Notes at their option at any time prior to the close of business on the business day immediately preceding October 15, 2021 only under the following circumstances: • during any calendar quarter commencing on or after March 31, 2015 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the 2022 Notes Indenture) per $1,000 principal amount of 2022 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; • during any period after the Company has issued notice of redemption until the close of business on the scheduled trading day immediately preceding the relevant redemption date; or • upon the occurrence of specified corporate events. On or after October 15, 2021, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2022 Notes at any time, regardless of the circumstances described above. Upon conversion, the Company will pay cash up to the aggregate principal amount of the 2022 Notes to be converted and deliver shares of its common stock in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of 2022 Notes being converted, subject to a daily share cap. The conversion rate for the 2022 Notes was initially, and remains, 29.8806 shares of the Company’s common stock per $1,000 principal amount of the 2022 Notes, which is equivalent to an initial conversion price of approximately $33.47 per share of the Company’s common stock. The Company may not redeem the 2022 Notes prior to January 15, 2019. The Company may redeem for cash all or any portion of the 2022 Notes, at its option, on or after January 15, 2019 if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect on the last trading day of, and for at least 19 other trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the 2022 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2022 Notes, which means that the Company is not required to redeem or retire the 2022 Notes periodically. If the Company undergoes a “fundamental change” (as defined in the Indenture governing the 2022 Notes Indenture), subject to certain conditions, holders of the 2022 Notes may require the Company to repurchase for cash all or part of their 2022 Notes at a repurchase price equal to 100% of the principal amount of the 2022 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The 2022 Notes Indenture contains customary events of default with respect to the 2022 Notes, including that upon certain events of default (including the Company’s failure to make any payment of principal or interest on the 2022 Notes when due and payable) occurring and continuing, the 2022 Notes Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding 2022 Notes by notice to the Company and the 2022 Notes Trustee, may, and the 2022 Notes Trustee at the request of such holders (subject to the provisions of the 2022 Notes Indenture) shall, declare 100% of the principal of and accrued and unpaid interest, if any, on all the 2022 Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, involving the Company or a significant subsidiary, 100% of the principal of and accrued and unpaid interest on the 2022 Notes will automatically become due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately. In accounting for the issuance of the 2022 Notes, the Company separated the 2022 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2022 Notes as a whole. The excess of the principal amount of the liability component over its carrying amount, referred to as the debt discount, is amortized to interest expense over the seven -year term of the 2022 Notes. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The equity component related to the 2022 Notes was $88.9 million and was recorded in additional paid-in capital on the accompanying condensed consolidated balance sheets. In accounting for the transaction costs related to the issuance of the 2022 Notes, the Company allocated the total costs incurred to the liability and equity components of the 2022 Notes based on their relative values. Transaction costs attributable to the liability component are amortized to interest expense over the seven -year term of the 2022 Notes, and transaction costs attributable to the equity component are netted with the equity components in stockholders’ equity. Additionally, the Company initially recorded a net deferred tax liability of $31.8 million in connection with the 2022 Notes. The 2022 Notes consist of the following: Liability component September 30, 2018 December 31, 2017 (in thousands) Principal $ 399,997 $ 399,997 Less: Debt discount, net (1) (52,365 ) (62,747 ) Net carrying amount $ 347,632 $ 337,250 _______________________________________ (1) Included in the accompanying condensed consolidated balance sheets within convertible senior notes (due 2022) and amortized to interest expense over the remaining life of the 2022 Notes using the effective interest rate method. The fair value of the 2022 Notes was approximately $436.5 million as of September 30, 2018 . The Company estimates the fair value of its 2022 Notes utilizing market quotations for debt that have quoted prices in active markets. Since the 2022 Notes do not trade on a daily basis in an active market, the fair value estimates are based on market observable inputs based on borrowing rates currently available for debt with similar terms and average maturities, which are classified as Level 2 measurements within the fair value hierarchy. See Note 7 , “Fair Value Measurements,” for definitions of hierarchy levels. As of September 30, 2018 , the remaining contractual life of the 2022 Notes is approximately 3.3 years. The following table sets forth total interest expense recognized related to the 2022 Notes: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (in thousands) (in thousands) Contractual interest expense $ 2,500 $ 2,500 $ 7,500 $ 7,500 Amortization of debt discount 3,535 3,298 10,383 9,690 Total $ 6,035 $ 5,798 $ 17,883 $ 17,190 Effective interest rate of the liability component 6.5 % 6.5 % 6.5 % 6.5 % Convertible Senior Notes Due 2017 In June 2012, the Company issued, at par value, $275.0 million aggregate principal amount of 1.375% convertible senior notes due June 1, 2017 (the 2017 Notes). The 2017 Notes bore cash interest at a rate of 1.375% per year, payable semi-annually on June 1 and December 1 of each year, beginning on December 1, 2012. The 2017 Notes matured on June 1, 2017. The net proceeds to the Company from the offering were $266.2 million after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by the Company. In June 2016, the Company used approximately $323.2 million of the net proceeds of the 2023 Notes to repurchase $220.0 million in aggregate principal amount of the 2017 Notes in privately negotiated transactions effected through the initial purchasers of the 2017 Notes. As part of the repurchase of the 2017 Notes, the Company settled a proportionate amount of outstanding bond hedges and warrants related to the 2017 Notes for a net cash receipt of $12.6 million . In connection with the maturity of the 2017 Notes, the holders converted substantially all of the outstanding principal amount of the 2017 Notes, the Company paid cash to the converting 2017 Note holders equal to $55.4 million in respect of principal, interest and fractional shares on the 2017 Notes, and delivered 819,901 shares of the Company’s common stock. The following table sets forth total interest expense recognized related to the 2017 Notes: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (in thousands) (in thousands) Contractual interest expense $ — $ — $ — $ 315 Amortization of debt discount — — — 1,251 Total $ — $ — $ — $ 1,566 Effective interest rate of the liability component — % — % — % 6.02 % |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following tables provide a reconciliation of the components of accumulated other comprehensive loss , net of tax, attributable to The Medicines Company for the three and nine months ended September 30, 2018 and 2017 : Three Months Ended September 30, 2018 2017 Foreign currency translation adjustment Unrealized loss on available for sale securities Total Foreign currency translation adjustment Unrealized loss on available for sale securities Total (in thousands) Balance at beginning of period $ (4,594 ) $ — $ (4,594 ) $ (5,439 ) $ (7 ) $ (5,446 ) Other comprehensive (loss) income (11 ) — (11 ) 487 10 497 Total other comprehensive (loss) income (11 ) — (11 ) 487 10 497 Balance at end of period $ (4,605 ) $ — $ (4,605 ) $ (4,952 ) $ 3 $ (4,949 ) Nine Months Ended September 30, 2018 2017 Foreign currency translation adjustment Unrealized loss on available for sale securities Total Foreign currency translation adjustment Unrealized loss on available for sale securities Total (in thousands) Balance at beginning of period $ (5,183 ) $ — $ (5,183 ) $ (5,479 ) $ — $ (5,479 ) Other comprehensive (loss) income before reclassifications (605 ) — (605 ) 527 3 530 Amounts reclassified from accumulated other comprehensive loss (1) 1,183 — 1,183 — — — Total other comprehensive income (loss) 578 — 578 527 3 530 Balance at end of period $ (4,605 ) $ — $ (4,605 ) $ (4,952 ) $ 3 $ (4,949 ) (1) See Note 15, “Discontinued Operations,” for a discussion of this reclassification of foreign currency translation adjustment. |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information The Company manages its business and operations as one segment and is focused on inclisiran as a transformative treatment for ASCVD. The Company allocates resources and assesses financial performance on a consolidated basis. Revenues reported below are derived primarily from sales of Angiomax in the United States. The geographic segment information provided below is classified based on the major geographic regions in which the Company operates. Long-lived assets are comprised of the Company’s noncurrent assets. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 ($ in thousands) Net revenues: United States $ (3,213 ) 97.3 % $ 6,456 82.0 % $ 5,628 91.7 % $ 31,426 86.8 % Europe (88 ) 2.7 % 1,208 15.4 % 234 3.8 % 4,355 12.0 % Rest of world 1 — % 204 2.6 % 276 4.5 % 413 1.2 % Total net revenues $ (3,300 ) 100 % $ 7,868 100 % $ 6,138 100.0 % $ 36,194 100.0 % September 30, 2018 December 31, 2017 ($ in thousands) Long-lived assets: United States $ 540,866 99.0 % $ 308,843 99.7 % Europe 5,622 1.0 % 836 0.3 % Total long-lived assets $ 546,488 100.0 % $ 309,679 100.0 % |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company may be, from time to time, a party to various disputes and claims arising from normal business activities. The Company accrues for loss contingencies when available information indicates that it is probable that a liability has been incurred and the amount of such loss can be reasonably estimated. In the cases where the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the litigation, including an estimable range, if possible. The Company is currently party to the legal proceedings described in Part II, Item 1, Legal Proceedings, of this Quarterly Report on Form 10-Q, which include patent litigation matters and litigation related to a license agreement. The Company has assessed such legal proceedings and recorded a loss contingency of $5.2 million during the nine months ended September 30, 2018 as a result of settlement of the Biogen matter discussed therein. For all other matters the Company does not believe that it is probable that a liability has been incurred or that the amount of any potential liability can be reasonably estimated. As a result, the Company did not record a loss contingency related to any of these legal proceedings. Particularly with respect to the litigation related to a license agreement, the Company is presently unable to predict the outcome of such lawsuit or to reasonably estimate the possible loss, or range of potential losses, if any, related to such lawsuit. While it is not possible to determine the outcome of the matters described in Part II, Item 1, Legal Proceedings, of this Quarterly Report on Form 10-Q, the Company believes that the resolution of all such matters could have a material adverse effect on its financial condition or results of operations and cash flows. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring The Company announced its intention to commence a series of workforce reductions, independent of the divestiture of the Company’s infectious disease business (the Workforce Reductions), to improve efficiencies and better align its costs and structure. As a result of the Workforce Reductions and the infectious disease business divestiture, the Company reduced its personnel to less than 60 full time employees. Upon signing release agreements, affected employees received the Company’s severance package, including reduction payments and fully paid health care coverage and outplacement services for six months to a year. The impacted employees were eligible to receive severance payments in specified amounts, health benefits and outplacement services. For the three months ended September 30, 2018, there were no material restructuring charges. For the nine months ended September 30, 2018, the Company recorded $0.6 million , $3.6 million and $8.6 million in cost of revenue, research and development and selling, general and administrative expenses, respectively, in the accompanying condensed consolidated statement of operations based on responsibilities of the impacted employees. The following table sets forth details regarding the activities described above during the nine months ended September 30, 2018 : Balance as of January 1, 2018 Expenses, Net Cash Noncash Balance as of September 30, 2018 (in thousands) 2018 Restructuring Plan: $ — $ 12,753 $ (8,223 ) $ (1,956 ) $ 2,574 On June 1, 2017, the Company voluntarily discontinued and withdrew Ionsys from the market in the United States and ceased related commercialization activities, effective June 19, 2017, with the New Drug Application for Ionsys remaining open until the third quarter 2018. Concurrent with this market withdrawal, the Company commenced implementation of a workforce reduction, which resulted in the reduction of 57 employees, representing approximately 15% of the Company’s workforce. The Company recorded a pre-tax charge of approximately $276.9 million associated with the discontinuation and market withdrawal of Ionsys in the United States market, of which $268.1 million was a non-cash impairment charge (including a write-off of inventory), $5.8 million relates to cash severance and $3.0 million relates to other exit costs. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Arrangements Involving the Company’s Executive Officers In January 2018, Christopher Cox, the Company’s executive vice president and chief corporate development officer, rejoined the law firm Cadwalader, Wickersham & Taft LLP (Cadwalader) as a partner. Mr. Cox remains employed with the Company and continues to lead certain company functions and initiatives, including corporate strategy, business development and investor relations. Stephen Rodin, the Company’s executive vice president, general counsel and secretary, has been, and will continue to be, responsible for the retention and management of outside counsel. Since 2015, the Company has retained Cadwalader as corporate and transactional legal counsel. The Company and Cadwalader have agreed on certain procedures to address potential conflicts that may arise out of Mr. Cox’s dual roles. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations Sale of Infectious Disease Business On January 5, 2018, the Company completed the sale of its infectious disease business, consisting of the products Vabomere, Orbactiv and Minocin IV and line extensions thereof, and substantially all of the assets related thereto, other than certain pre-clinical assets, to Melinta. At the completion of the sale, the Company received approximately $166.4 million and 3,313,702 shares of Melinta common stock having a market value, based on Melinta's closing share price on January 5, 2018, of approximately $54.5 million . The Company’s common stock investment in Melinta was recorded as a short-term investment with a readily determinable fair value at September 30, 2018 of $13.1 million on the accompanying condensed consolidated balance sheet. See Note 6 “Cash, Cash Equivalents and Investments” for further details. In addition, the Company is entitled to receive a cash payment payable 12 months following the closing of the transaction equal to $25.0 million and a cash payment payable 18 months following the closing of the transaction equal to $25.0 million . On January 5, 2018 the fair value of such payments was approximately $45.9 million , of which $23.3 million was originally recorded in prepaid expenses and other current assets and $22.6 million was originally recorded in other assets on the condensed consolidated balance sheet. Such fair value was estimated using a discounted cash flow model and was classified as a Level 3 fair value measurement due to the use of significant unobservable inputs. See Note 7, “Fair Value Measurements,” for definitions of hierarchy levels. The excess of the cash payments payable to the Company over the initial fair value is amortized to interest income over the 12 and 18 month periods using the effective interest rate method. As of September 30, 2018 , the carrying amounts of these assets of $48.7 million approximate their fair value due to the short term nature of the payments. The Company is also entitled to tiered royalty payments of 5% to 25% on worldwide net sales of (a) Vabomere and (b) Orbactiv and Minocin IV, collectively. On January 5, 2018, the fair value of these contingent payments to be received from Melinta was $246.2 million and was recorded as contingent purchase price from sale of businesses in the accompanying condensed consolidated balance sheet. Substantially all of the fair value was estimated using Monte Carlo simulation models to compute contractual payments which were present valued using a risk-adjusted discount rate. The Company classified this as a Level 3 fair value measurement due to the use of these significant unobservable inputs. See Note 7, “Fair Value Measurements,” for definitions of hierarchy levels. As a result of the transaction, the Company accounted for the assets and liabilities of the infectious disease business that were sold as held for sale at December 31, 2017. Financial results of the infectious disease business are presented as “Income (loss) from discontinued operations, net of tax” on the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017 . Assets and liabilities of the infectious disease business to be disposed of are presented as “Current assets held for sale,” and “Current liabilities held for sale,” on the accompanying condensed consolidated balance sheet as of December 31, 2017. The following table presents key financial results of the infectious disease business included in “Income (loss) from discontinued operations, net of tax” for the three and nine months ended September 30, 2018 and 2017 . Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) Net product revenues $ — $ 9,003 $ (107 ) $ 23,635 Operating expenses: Cost of revenue — 5,314 197 12,681 Research and development 24 12,761 534 34,566 Selling, general and administrative (80 ) 13,433 2,997 57,400 Total operating expenses (56 ) 31,508 3,728 104,647 Loss from operations 56 (22,505 ) (3,835 ) (81,012 ) Gain from sale of business — — 168,955 — Other income (expense), net (52 ) (452 ) 358 (820 ) Income (loss) from discontinued operations before income taxes 4 (22,957 ) 165,478 (81,832 ) Provision for (benefit from) income taxes 4,003 — 55,236 2 Income (loss) from discontinued operations, net of tax $ (3,999 ) $ (22,957 ) $ 110,242 $ (81,834 ) Cumulative translation adjustment (CTA) gains or losses of foreign subsidiaries related to divested businesses are reclassified into income once the liquidation of the respective foreign subsidiaries is substantially complete. At the completion of the sale of the infectious disease business, the Company reclassified $1.2 million of CTA gains from accumulated comprehensive loss to the Company’s results of discontinued operations. This amount was included in gain from sale of business for the nine months ended September 30, 2018. Disposition related costs during the nine months ended September 30, 2018 of approximately $11.9 million for advisory, legal and regulatory fees incurred in connection with the sale of the infectious disease business were recorded in the gain from the sale of the business. The following table presents the major classes of assets and liabilities at December 31, 2017 related to the infectious disease business which were reclassified as held for sale: December 31, 2017 (In thousands) Assets: Accounts receivable, net $ 9,595 Inventory 41,412 Other receivables 2,740 Intangibles, net 282,398 Goodwill 55,057 Total assets held for sale $ 391,202 Liabilities: Accounts payable $ 1,127 Accrued expenses 22,945 Contingent purchase price 35,785 Deferred revenue 723 Total liabilities held for sale $ 60,580 Depreciation and amortization was ceased upon determination that the held for sale criteria were met in the fourth quarter of 2017. The significant cash flow items from discontinued operations for the nine months ended September 30, 2018 and 2017 were as follows: Nine months ended September 30, 2018 2017 (In thousands) Amortization from discontinued operations $ — $ 7,071 Changes in contingent purchase price — 3,543 Gain on sale of business (168,955 ) — Reserve for excess or obsolete inventory — (435 ) Proceeds from sale of business 166,383 — Payments on contingent purchase price — (62,618 ) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 2, 2018, the Company sold to Qpex certain pre-clinical infectious disease assets not acquired by Melinta for approximately $2.7 million in upfront consideration and up to $29 million upon the achievement of certain milestones related to the pre-clinical assets. The related assets and liabilities sold to Qpex are presented as “Current assets held for sale” and “Current liabilities held for sale” on the accompanying consolidated balance sheets as of September 30, 2018. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting solely of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations, comprehensive loss , and cash flows for the periods presented. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has no unconsolidated subsidiaries. The Company’s results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected from the Company for the entire fiscal year or any other quarter of the fiscal year ending December 31, 2018 . These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the 2017 Form 10-K. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, expenses and accumulated other comprehensive loss that are reported in the condensed consolidated financial statements and accompanying disclosures. Actual results may be different. |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted the Financial Accounting Standards Board (FASB)’s new accounting standard that amends prior guidance for the recognition of revenue from contracts with customers to transfer goods and services by using the modified-retrospective method applied to those contracts that were not completed as of January 1, 2018. The results for the reporting period beginning on January 1, 2018, are presented in accordance with the new standard, although comparative information has not been restated and continues to be reported under the accounting standards and policies in effect for those periods as described in Note 2, “Significant Accounting Policies,” in the notes to the audited consolidated financial statements included in the 2017 Form 10-K. Upon adoption, the Company recorded a net increase of $0.2 million to accumulated deficit on its condensed consolidated balance sheet due to the cumulative impact of adopting the new standard, with the impact due to the acceleration of deferred revenue offset by the recognition of the related product costs that were previously classified within prepaid expenses and other current assets on the Company’s consolidated balance sheets. The adoption of this new standard had an immaterial impact on the Company’s reported total revenues as compared to what reported amounts would have been under the prior standard, and the impact of adoption in future periods is expected to be immaterial. The Company’s accounting policies under the new standard were applied prospectively and are noted below. Revenue is recognized upon transfer of control of a product to the customer, generally upon delivery, based on an amount that reflects the consideration the Company expects to be entitled to, which includes estimates of variable consideration that result from rebates, wholesaler chargebacks, discounts, fee-for-service charges and returns. The Company records allowances for chargebacks and other discounts or accruals for product returns, rebates and fee-for-service charges at the time of sale, and reports revenue net of such amounts. In determining these amounts, the Company estimates hospital demand, buying patterns by hospitals and group purchasing organizations from wholesalers and the levels of inventory held by wholesalers and by ICS. Making these determinations involves estimating whether trends in past wholesaler and hospital buying patterns will predict future product sales. The Company receives data periodically from ICS and wholesalers on inventory levels and levels of hospital purchases and the Company considers this data in determining the amounts of these allowances and accruals. Such amounts were not material to the Company’s condensed consolidated statement of operations for the three and nine months ended September 30, 2018 . As discussed above, given the Company has divested its rights to branded Angiomax in the United States, the Company revised its estimates and recognized a $3.3 million charge during the three and nine months ended September 30, 2018 . Prior to the divestiture to Sandoz of the Company’s rights to branded Angiomax in the United States in August 2018, the consideration the Company expected to be entitled to in connection with a sale of bivalirudin to Sandoz included a variable amount based on Sandoz’s gross margin, as defined in the agreement, of bivalirudin sold by Sandoz to its customers. As this amount was highly susceptible to factors outside of the Company’s control, the Company had not recognized this variable amount. As a result of the divestiture, the Company no longer has the right to this variable consideration. The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation when those activities are performed after control of the product has been transferred to the customer. Amounts billed to customers for shipping and handling are included as part of the transaction price and recognized as revenue when control of underlying products is transferred to the customer. The related shipping and freight charges incurred by the Company are included in the cost of goods sold. Sales taxes and other similar taxes that the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company’s payment terms vary by the type and location of its customer and the products or services offered. Payment terms differ by jurisdiction and customer but payment is generally required in a term ranging from 45 to 120 days from date of shipment or satisfaction of the performance obligation. |
Contingencies | Contingencies The Company may be, from time to time, a party to various disputes and claims arising from normal business activities. The Company continually assesses litigation to determine if an unfavorable outcome would lead to a probable loss or reasonably possible loss which could be estimated. In accordance with the guidance of the FASB on accounting for loss contingencies, the Company accrues for all contingencies at the earliest date at which the Company deems it probable that a liability has been incurred and the amount of such liability can be reasonably estimated. If the estimate of a probable loss is a range and no amount within the range is more likely than another, the Company accrues the minimum of the range. In the cases where the Company believes that a reasonably possible loss exists, the Company discloses the facts and circumstances of the litigation, including an estimable range, if possible. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Clinical study costs are accrued over the service periods specified in the contracts and adjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred. Payments for a product license prior to regulatory approval of the product and payments for milestones achieved prior to regulatory approval of the product are expensed in the period incurred as research and development. Milestone payments that do not represent payments of contingent purchase price from business combinations that are made in connection with regulatory approvals are capitalized and amortized to cost of revenue over the remaining useful life of the asset. Prior to the Company’s divestiture of its pre-clinical infectious disease assets to Qpex, the Company performed research and development under a cost-reimbursable contract with the Biomedical Advanced Research and Development Authority of the U.S. Department of Health and Human Services in which the Company was reimbursed for direct costs incurred plus allowable indirect costs. The Company recognized the reimbursements under research contracts when a contract was executed, the contract price was fixed or determinable, delivery of services or products had occurred, and collection of the contract price was reasonably assured. The reimbursements were classified as an offset to research and development expenses. Payments received in advance of work performed were deferred. |
Contingent Purchase Price From Sale of Business | Contingent Purchase Price From Sale of Business The Company has contingent assets for certain specified calendar year net sales milestones as part of the sale of the Hemostasis Business to Mallinckrodt and the Non-Core ACC Products to Chiesi, which in each case are reflected as contingent purchase price from sale of businesses on the accompanying condensed consolidated balance sheets. The Company also has contingent assets for royalties associated with the sale of the infectious disease business to Melinta, which is reflected as contingent purchase price from sale of business on the accompanying condensed consolidated balance sheets. The Company will recognize any increases in the carrying amount or impairments of the contingent purchase price if and when the milestones or royalties are achieved or determined that the carrying value exceeds its fair value. The Company noted no indicators of impairment on the carrying amount of the contingent assets. In addition, the Company determined that the fair values of these contingent payments to be received from Mallinckrodt, Chiesi and Melinta, respectively, are not readily determinable at September 30, 2018, as the estimated future net sales of each of the respective products are determined by the future actions of such parties. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2016 the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU No. 2016-01). ASU No. 2016-01 amends certain aspects of accounting and disclosure requirements of financial instruments, including the requirement that equity investments with readily determinable fair values be measured at fair value with changes in fair value recognized in a company’s results of operations. The new standard does not apply to investments accounted for under the equity method of accounting or those that result in consolidation of the investee. Equity investments that do not have readily determinable fair values may be measured at fair value or at cost minus impairment adjusted for changes in observable prices. A financial liability that is measured at fair value in accordance with the fair value option is required to be presented separately in other comprehensive income for the portion of the total change in the fair value resulting from changes in the instrument-specific credit risk. In addition, a valuation allowance should be evaluated on deferred tax assets related to available-for-sale debt securities in combination with other deferred tax assets. On January 1, 2018, the Company adopted this guidance and there was no impact on the Company’s condensed consolidated balance sheet as the Company did not have equity investments as of December 31, 2017. The impact that this new standard has on the Company’s condensed consolidated statements of operations after adoption will depend on the changes in fair values of equity securities in the Company’s portfolio in the future. See Note 6 “Cash and Cash Equivalents and Investments” for further details. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (ASU No. 2016-02). ASU No. 2016-02 will require organizations that lease assets with lease terms of more than 12 months to recognize assets and liabilities for the rights and obligations created by those leases on their balance sheets. The ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU No. 2016-02 will be effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company anticipates that most of its operating leases will result in the recognition of right of use assets and the corresponding lease liabilities on its consolidated balance sheet, however it does not expect the adoption of this standard to have a material impact on the consolidated statements of operations. The actual impact will depend on the Company's lease portfolio at the time of adoption. The Company continues to assess all implications of the standard and related financial disclosures. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. This guidance clarifies how certain cash receipts and payments should be presented in the statement of cash flows. On January 1, 2018, the Company adopted this standard, which did not have a material impact on the consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. This amends the guidance in ASC 230, including providing additional guidance related to transfers between cash and restricted cash and how entities present, in their statement of cash flows, the cash receipts and cash payments that directly affect the restricted cash accounts. On January 1, 2018, the Company adopted this standard and began classifying restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts on its consolidated statements of cash flows on a retrospective basis to all periods presented. For the nine months ended September 30, 2018 and 2017 , $5.4 million and $5.0 million of restricted cash were classified with cash and cash equivalents on the Company’s accompanying condensed consolidated statements of cash flows. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. On January 1, 2018, the Company adopted this standard prospectively. The Company applied this guidance to divestitures during the current year and concluded that the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment”, which eliminates Step 2 from the goodwill impairment test. Under the revised test, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU is effective for any interim or annual impairment tests for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company will early adopt this guidance for its 2018 annual goodwill impairment test and does not believe that this guidance will have an impact on the consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement”, which modifies disclosure requirements on fair value measurements. This ASU is effective for public companies for fiscals years and interim periods within those fiscal years beginning after December 15, 2019, with early adoption permitted. The Company expects to adopt this guidance when effective and is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. |
Earnings (Loss) Per Share | Basic loss per share is computed by dividing consolidated net income (loss) by the weighted average number of shares of common stock outstanding during the period, excluding unvested restricted common shares. The potentially dilutive effect of the Company’s stock options, unvested restricted common stock, stock purchase warrants, and convertible senior notes due 2017 (which matured on June 1, 2017) and 2022 on earnings per share is computed under the treasury stock method. In addition, the Company analyzes the potential dilutive effect of the convertible senior notes due 2023 on earnings per share under the “if converted” method, in which it is assumed that the outstanding security converts into common stock at the beginning of the period. For periods of income from continuing operations when the effects are not anti-dilutive, diluted earnings per share is computed by dividing consolidated net income by the weighted average number of shares outstanding and the impact of all potential dilutive common shares, consisting primarily of stock options, unvested restricted common stock, shares issuable upon conversion of convertible senior notes due 2017, 2022 and 2023 and stock purchase warrants. For periods of loss from continuing operations, diluted loss per share is calculated similar to basic loss per share as the effect of including all potentially dilutive common share equivalents is anti-dilutive. |
Fair Value Measurements | The Company applies a fair value framework in order to measure and disclose its financial assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities. The Company’s Level 1 assets consist of money market investments. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Fair values are determined by utilizing quoted prices for similar assets and liabilities in active markets or other market observable inputs such as interest rates and yield curves. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s Level 3 liabilities consist of the contingent purchase prices associated with the Company’s business combinations. The fair value of certain development or regulatory milestone based contingent purchase prices was determined in a discounted cash flow framework by probability weighting the future contractual payment with management's assessment of the likelihood of achieving these milestones and present valuing them using a risk-adjusted discount rate. |
Segment and Geographic Information | The Company manages its business and operations as one segment and is focused on inclisiran as a transformative treatment for ASCVD. The Company allocates resources and assesses financial performance on a consolidated basis. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Except for the Company’s Level 2 liabilities which are discussed in Note 9 , “Convertible Senior Notes,” the following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2018 and December 31, 2017 , by level, within the fair value hierarchy: As of September 30, 2018 As of December 31, 2017 Assets and Liabilities Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of September 30, 2018 Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of December 31, 2017 (in thousands) Assets: Cash equivalents $ 12,237 $ — $ — $ 12,237 $ 12,100 $ — $ — $ 12,100 Short-term investment 13,089 — — 13,089 — — — — Total assets at fair value $ 25,326 $ — $ — $ 25,326 $ 12,100 $ — $ — $ 12,100 Liabilities: Contingent purchase price $ — $ — $ 18,822 $ 18,822 $ — $ — $ 19,650 $ 19,650 Total liabilities at fair value $ — $ — $ 18,822 $ 18,822 $ — $ — $ 19,650 $ 19,650 |
Fair Value Inputs, Quantitative Information | The following table provides quantitative information associated with the fair value measurements of the Company’s Level 3 liabilities: Fair Value as of Valuation Technique Unobservable Input Range (Weighted Average) (in thousands) Rempex: Contingent purchase price: Event-based milestones $ 18,822 Probability-adjusted discounted cash flow Probabilities of successes 18% - 75% (46%) Period in which milestones are expected to be achieved 2018 - 2024 Discount rate 5.0% - 7.3% Fair Value as of Valuation Technique Unobservable Input Range (Weighted Average) (in thousands) Rempex: Contingent purchase price: Event-based milestones $ 19,650 Probability-adjusted discounted cash flow Probabilities of successes 18% - 90% (71%) Period in which milestones are expected to be achieved 2018 - 2024 Discount rate 4.8% - 7.5% |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The changes in fair value of the Company’s Level 3 contingent purchase price during the three and nine months ended September 30, 2018 and 2017 were as follows: Three Months Ended Nine Months Ended 2018 2017 2018 2017 (in thousands) (in thousands) Balance at beginning of period $ 18,825 $ 20,300 $ 19,650 $ 31,832 Payments (3 ) — (570 ) — Fair value adjustments to contingent purchase prices included in net loss — (1,600 ) (258 ) (13,132 ) Balance at end of period $ 18,822 $ 18,700 $ 18,822 $ 18,700 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The major classes of inventory were as follows: September 30, December 31, (in thousands) Raw materials $ 866 $ 1,389 Work-in-progress — 3,608 Finished goods — 562 Total $ 866 $ 5,559 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The 2023 Notes consist of the following: Liability component September 30, 2018 December 31, 2017 (in thousands) Principal $ 402,500 $ 402,500 Less: Debt discount, net (1) (80,408 ) (90,552 ) Net carrying amount $ 322,092 $ 311,948 _______________________________________ (1) Included in the accompanying condensed consolidated balance sheets within convertible senior notes (due 2023) and amortized to interest expense over the remaining life of the 2023 Notes using the effective interest rate method. The 2022 Notes consist of the following: Liability component September 30, 2018 December 31, 2017 (in thousands) Principal $ 399,997 $ 399,997 Less: Debt discount, net (1) (52,365 ) (62,747 ) Net carrying amount $ 347,632 $ 337,250 _______________________________________ (1) Included in the accompanying condensed consolidated balance sheets within convertible senior notes (due 2022) and amortized to interest expense over the remaining life of the 2022 Notes using the effective interest rate method. |
Schedule of Interest Expense | The following table sets forth total interest expense recognized related to the 2022 Notes: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (in thousands) (in thousands) Contractual interest expense $ 2,500 $ 2,500 $ 7,500 $ 7,500 Amortization of debt discount 3,535 3,298 10,383 9,690 Total $ 6,035 $ 5,798 $ 17,883 $ 17,190 Effective interest rate of the liability component 6.5 % 6.5 % 6.5 % 6.5 % The following table sets forth total interest expense recognized related to the 2023 Notes: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (in thousands) (in thousands) Contractual interest expense $ 2,768 $ 2,767 $ 8,302 $ 8,293 Amortization of debt discount 3,461 3,205 10,143 9,384 Total $ 6,229 $ 5,972 $ 18,445 $ 17,677 Effective interest rate of the liability component 7.5 % 7.5 % 7.5 % 7.5 % The following table sets forth total interest expense recognized related to the 2017 Notes: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (in thousands) (in thousands) Contractual interest expense $ — $ — $ — $ 315 Amortization of debt discount — — — 1,251 Total $ — $ — $ — $ 1,566 Effective interest rate of the liability component — % — % — % 6.02 % |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The following tables provide a reconciliation of the components of accumulated other comprehensive loss , net of tax, attributable to The Medicines Company for the three and nine months ended September 30, 2018 and 2017 : Three Months Ended September 30, 2018 2017 Foreign currency translation adjustment Unrealized loss on available for sale securities Total Foreign currency translation adjustment Unrealized loss on available for sale securities Total (in thousands) Balance at beginning of period $ (4,594 ) $ — $ (4,594 ) $ (5,439 ) $ (7 ) $ (5,446 ) Other comprehensive (loss) income (11 ) — (11 ) 487 10 497 Total other comprehensive (loss) income (11 ) — (11 ) 487 10 497 Balance at end of period $ (4,605 ) $ — $ (4,605 ) $ (4,952 ) $ 3 $ (4,949 ) Nine Months Ended September 30, 2018 2017 Foreign currency translation adjustment Unrealized loss on available for sale securities Total Foreign currency translation adjustment Unrealized loss on available for sale securities Total (in thousands) Balance at beginning of period $ (5,183 ) $ — $ (5,183 ) $ (5,479 ) $ — $ (5,479 ) Other comprehensive (loss) income before reclassifications (605 ) — (605 ) 527 3 530 Amounts reclassified from accumulated other comprehensive loss (1) 1,183 — 1,183 — — — Total other comprehensive income (loss) 578 — 578 527 3 530 Balance at end of period $ (4,605 ) $ — $ (4,605 ) $ (4,952 ) $ 3 $ (4,949 ) (1) See Note 15, “Discontinued Operations,” for a discussion of this reclassification of foreign currency translation adjustment. |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The geographic segment information provided below is classified based on the major geographic regions in which the Company operates. Long-lived assets are comprised of the Company’s noncurrent assets. Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 ($ in thousands) Net revenues: United States $ (3,213 ) 97.3 % $ 6,456 82.0 % $ 5,628 91.7 % $ 31,426 86.8 % Europe (88 ) 2.7 % 1,208 15.4 % 234 3.8 % 4,355 12.0 % Rest of world 1 — % 204 2.6 % 276 4.5 % 413 1.2 % Total net revenues $ (3,300 ) 100 % $ 7,868 100 % $ 6,138 100.0 % $ 36,194 100.0 % |
Reconciliation of Assets from Segment to Consolidated | September 30, 2018 December 31, 2017 ($ in thousands) Long-lived assets: United States $ 540,866 99.0 % $ 308,843 99.7 % Europe 5,622 1.0 % 836 0.3 % Total long-lived assets $ 546,488 100.0 % $ 309,679 100.0 % |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activity | The following table sets forth details regarding the activities described above during the nine months ended September 30, 2018 : Balance as of January 1, 2018 Expenses, Net Cash Noncash Balance as of September 30, 2018 (in thousands) 2018 Restructuring Plan: $ — $ 12,753 $ (8,223 ) $ (1,956 ) $ 2,574 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | The significant cash flow items from discontinued operations for the nine months ended September 30, 2018 and 2017 were as follows: Nine months ended September 30, 2018 2017 (In thousands) Amortization from discontinued operations $ — $ 7,071 Changes in contingent purchase price — 3,543 Gain on sale of business (168,955 ) — Reserve for excess or obsolete inventory — (435 ) Proceeds from sale of business 166,383 — Payments on contingent purchase price — (62,618 ) The following table presents the major classes of assets and liabilities at December 31, 2017 related to the infectious disease business which were reclassified as held for sale: December 31, 2017 (In thousands) Assets: Accounts receivable, net $ 9,595 Inventory 41,412 Other receivables 2,740 Intangibles, net 282,398 Goodwill 55,057 Total assets held for sale $ 391,202 Liabilities: Accounts payable $ 1,127 Accrued expenses 22,945 Contingent purchase price 35,785 Deferred revenue 723 Total liabilities held for sale $ 60,580 The following table presents key financial results of the infectious disease business included in “Income (loss) from discontinued operations, net of tax” for the three and nine months ended September 30, 2018 and 2017 . Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (In thousands) Net product revenues $ — $ 9,003 $ (107 ) $ 23,635 Operating expenses: Cost of revenue — 5,314 197 12,681 Research and development 24 12,761 534 34,566 Selling, general and administrative (80 ) 13,433 2,997 57,400 Total operating expenses (56 ) 31,508 3,728 104,647 Loss from operations 56 (22,505 ) (3,835 ) (81,012 ) Gain from sale of business — — 168,955 — Other income (expense), net (52 ) (452 ) 358 (820 ) Income (loss) from discontinued operations before income taxes 4 (22,957 ) 165,478 (81,832 ) Provision for (benefit from) income taxes 4,003 — 55,236 2 Income (loss) from discontinued operations, net of tax $ (3,999 ) $ (22,957 ) $ 110,242 $ (81,834 ) |
Nature of Business (Details)
Nature of Business (Details) - USD ($) | Oct. 02, 2018 | Jan. 05, 2018 | Oct. 31, 2018 | Aug. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Short-term investment | $ 13,089,000 | $ 0 | |||||
Proceeds from sale of business | 166,383,000 | $ 0 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Infectious Disease Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Total sale price | $ 166,400,000 | ||||||
Consideration received (in shares) | 3,313,702 | ||||||
Consideration received, market value | $ 54,500,000 | ||||||
Receivable due in 12 months | 25,000,000 | ||||||
Receivable due in 18 months | $ 25,000,000 | ||||||
Proceeds from sale of business | 166,383,000 | $ 0 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Infectious Disease Business | Minimum | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Tiered royalty payments, percent of net sales | 5.00% | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Infectious Disease Business | Maximum | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Tiered royalty payments, percent of net sales | 25.00% | ||||||
Sandoz Inc | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Angiomax | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from sale of business | $ 9,900,000 | ||||||
Subsequent Event | Opex Biopharma, Inc. | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Infectious Disease Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Upfront consideration received | $ 2,700,000 | $ 2,700,000 | |||||
Contingent consideration | $ 29,000,000 | $ 29,000,000 | |||||
Melinta | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Short-term investment | $ 13,100,000 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||||||
Accumulated deficit | $ (1,338,248) | $ (1,338,248) | $ (1,257,356) | |||
Cash, cash equivalents and short-term investments | 131,800 | 131,800 | ||||
Charge to revenue | (3,300) | $ 7,868 | 6,138 | $ 36,194 | ||
Restricted cash | 5,410 | 5,048 | 5,410 | 5,048 | $ 5,541 | |
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||
Debt Instrument [Line Items] | ||||||
Accumulated deficit | $ (200) | |||||
Accounting Standards Update 2016-18 | ||||||
Debt Instrument [Line Items] | ||||||
Restricted cash | 5,000 | 5,000 | ||||
U.S. government agencies | ||||||
Debt Instrument [Line Items] | ||||||
Reduction of research and development expenses | 200 | $ 500 | $ 900 | $ 1,100 | ||
Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Payment term | 45 days | |||||
Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Payment term | 120 days | |||||
Integrated Commercialization Solutions, Inc | ||||||
Debt Instrument [Line Items] | ||||||
Distribution agreement, renewal term | 1 year | |||||
Distribution agreement, notice period for renewal | 90 days | |||||
Distribution agreement, notice period for termination | 180 days | |||||
Angiomax | ||||||
Debt Instrument [Line Items] | ||||||
Charge to revenue | $ (3,300) | $ (3,300) |
Stock Compensation Expense (Det
Stock Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Recorded share-based compensation expense | $ 4.2 | $ 7.9 | $ 13.2 | $ 24.1 |
Total unrecognized compensation costs related to non-vested share-based compensation | 52.2 | $ 52.2 | ||
Period for recognition | 1 year 10 months 20 days | |||
Stock options granted (in shares) | 3,417,600 | |||
Unrecognized compensation expense | $ 31.9 | $ 31.9 | ||
Common stock issued during period for exercise of stock options, restricted stock grants, and purchases under ESPP (shares) | 753,452 | 1,754,744 | ||
Cash received from exercise of stock options and purchases through the ESPP | $ 15.6 | $ 40.7 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Antidilutive shares excluded from computation of diluted loss per share (in shares) | 9,866,498 | 10,703,826 | 9,322,645 | 13,312,289 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | ||||||
(Benefit) provision for income taxes | $ 16,066 | $ 66,636 | $ 47,375 | $ 89,608 | ||
Effective income tax rate | 23.70% | 90.20% | 19.90% | 16.70% | ||
Discrete tax provision | $ 55,200 | $ 55,200 | ||||
Income tax provision, remeasurement of deferred taxes | $ 126,500 | |||||
Income tax provision, adjustment to AMT credit | $ 300 | |||||
Alternative Minimum Tax Credit | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Provisional income tax benefit | $ 4,900 | |||||
New Jersey Division of Taxation | Scenario, Forecast | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Increase in income tax benefit from continuing operations | $ 3,600 | |||||
Increase in income tax provision for discontinued operations | $ 3,600 |
Cash and Cash Equivalents and_2
Cash and Cash Equivalents and Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Cash and Cash Equivalents [Line Items] | |||||
Cash and cash equivalents | $ 118,708 | $ 166,734 | $ 118,708 | $ 166,734 | $ 151,359 |
Cash | 106,500 | 106,500 | 139,300 | ||
Readily determinable fair value of common stock investment | 13,089 | 13,089 | 0 | ||
Loss on investment | (7,953) | 0 | (41,416) | 0 | |
Restricted Cash | |||||
Restricted cash | 5,410 | $ 5,048 | 5,410 | $ 5,048 | 5,541 |
Restricted cash reserved for outstanding letters of credit associated with foreign taxes | 5,000 | 5,000 | 4,100 | ||
Restricted cash reserved for other U.S. operating expenses | 400 | 400 | |||
Restricted cash reserved for outstanding letters of credit associated with leased office space | 1,000 | ||||
Restricted cash in the form of a guaranteed investment certificate collateralizing an available credit facility | 200 | ||||
Restricted cash related to certain foreign tender requirements | 300 | ||||
Money market funds | |||||
Cash and Cash Equivalents [Line Items] | |||||
Money market funds with original maturities of less than three months | 12,200 | 12,200 | $ 12,100 | ||
Melinta | |||||
Cash and Cash Equivalents [Line Items] | |||||
Readily determinable fair value of common stock investment | $ 13,100 | $ 13,100 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Liabilities: | ||
Contingent purchase price | $ 0 | $ 14,655 |
Fair Value, Measurements, Recurring | ||
Assets: | ||
Cash equivalents | 12,237 | 12,100 |
Short-term investment | 13,089 | 0 |
Total assets at fair value | 25,326 | 12,100 |
Liabilities: | ||
Contingent purchase price | 18,822 | 19,650 |
Total liabilities at fair value | 18,822 | 19,650 |
Fair Value, Measurements, Recurring | Quoted Prices In Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Cash equivalents | 12,237 | 12,100 |
Short-term investment | 13,089 | 0 |
Total assets at fair value | 25,326 | 12,100 |
Liabilities: | ||
Contingent purchase price | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Short-term investment | 0 | 0 |
Total assets at fair value | 0 | 0 |
Liabilities: | ||
Contingent purchase price | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Cash equivalents | 0 | 0 |
Short-term investment | 0 | 0 |
Total assets at fair value | 0 | 0 |
Liabilities: | ||
Contingent purchase price | 18,822 | 19,650 |
Total liabilities at fair value | $ 18,822 | $ 19,650 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Inputs, Quantitative Information (Details) - Rempex - Event-based milestones $ in Thousands | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Contingent purchase price | $ 18,822 | $ 19,650 |
Probabilities of successes | Significant Unobservable Inputs (Level 3) | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement inputs | 0.46 | 0.71 |
Probabilities of successes | Significant Unobservable Inputs (Level 3) | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement inputs | 0.18 | 0.18 |
Probabilities of successes | Significant Unobservable Inputs (Level 3) | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement inputs | 0.75 | 0.90 |
Discount rate | Significant Unobservable Inputs (Level 3) | Minimum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement inputs | 0.050 | 0.048 |
Discount rate | Significant Unobservable Inputs (Level 3) | Maximum | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31) | ||
Measurement inputs | 0.073 | 0.075 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | Sep. 30, 2018USD ($) |
Ionsys and MDCO-700 | Not discontinued operations, discontinuation and market withdrawal | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Contingent consideration related to discontinued products | $ 175.8 |
Rempex | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Contingent purchase price | 68.7 |
Incline and Annovation | Ionsys and MDCO-700 | Not discontinued operations, discontinuation and market withdrawal | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Contingent consideration related to discontinued products | 86.3 |
Series of Individually Immaterial Business Acquisitions | Ionsys and MDCO-700 | Not discontinued operations, discontinuation and market withdrawal | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Contingent consideration related to discontinued products | $ 89.5 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Contingent Purchase Price (Details) - Contingent Purchase Price Liability - Fair Value, Measurements, Recurring - Significant Unobservable Inputs (Level 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | $ 18,825 | $ 20,300 | $ 19,650 | $ 31,832 |
Payments | (3) | 0 | (570) | 0 |
Fair value adjustments to contingent purchase prices included in net loss | 0 | (1,600) | (258) | (13,132) |
Balance at end of period | $ 18,822 | $ 18,700 | $ 18,822 | $ 18,700 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 866 | $ 1,389 |
Work-in-progress | 0 | 3,608 |
Finished goods | 0 | 562 |
Total | $ 866 | $ 5,559 |
Convertible Senior Notes - Conv
Convertible Senior Notes - Convertible Senior Notes Due 2023 (Narrative) (Details) - Convertible Senior Notes Due 2023 - Senior Notes | 1 Months Ended | 9 Months Ended | |
Jun. 30, 2016USD ($)day$ / shares | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | |||
Principal | $ 402,500,000 | $ 402,500,000 | $ 402,500,000 |
Interest rate | 2.75% | ||
Proceeds from offering | $ 390,800,000 | ||
Trading days | day | 20 | ||
Redemption consecutive trading period | 30 days | ||
Redemption stock price conversion threshold (greater than or equal to) | 130.00% | ||
Consecutive measurement period | 5 days | ||
Percent of trading price (less than) | 98.00% | ||
Consecutive trading days | day | 50 | ||
Conversion ratio | 0.0204198 | ||
Conversion price (USD per share) | $ / shares | $ 48.97 | ||
Redemption trading period | 19 days | ||
Percent of principal amount plus accrued and unpaid interest | 100.00% | ||
Debt default principal amount percentage | 25.00% | ||
Debt instrument, term | 7 years | ||
Carrying amount, equity component | $ 101,000,000 | ||
Net deferred tax liabilities | $ 33,500,000 | ||
Remaining contractual life | 4 years 9 months | ||
Significant Other Observable Inputs (Level 2) | |||
Debt Instrument [Line Items] | |||
Fair value of notes | $ 371,600,000 |
Convertible Senior Notes - Sche
Convertible Senior Notes - Schedule of Debt (Details) - Senior Notes - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2016 |
Convertible Senior Notes Due 2023 | |||
Debt Instrument [Line Items] | |||
Principal | $ 402,500,000 | $ 402,500,000 | $ 402,500,000 |
Less: Debt discount, net | (80,408,000) | (90,552,000) | |
Net carrying amount | 322,092,000 | 311,948,000 | |
Convertible Senior Notes Due 2022 | |||
Debt Instrument [Line Items] | |||
Principal | 399,997,000 | 399,997,000 | |
Less: Debt discount, net | (52,365,000) | (62,747,000) | |
Net carrying amount | $ 347,632,000 | $ 337,250,000 |
Convertible Senior Notes - Sc_2
Convertible Senior Notes - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | ||||
Amortization of debt discount | $ 20,526 | $ 20,325 | ||
Senior Notes | Convertible Senior Notes Due 2023 | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 2,768 | $ 2,767 | 8,302 | 8,293 |
Amortization of debt discount | 3,461 | 3,205 | 10,143 | 9,384 |
Total | $ 6,229 | $ 5,972 | $ 18,445 | $ 17,677 |
Effective interest rate of the liability component | 7.50% | 7.50% | 7.50% | 7.50% |
Senior Notes | Convertible Senior Notes Due 2022 | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 2,500 | $ 2,500 | $ 7,500 | $ 7,500 |
Amortization of debt discount | 3,535 | 3,298 | 10,383 | 9,690 |
Total | $ 6,035 | $ 5,798 | $ 17,883 | $ 17,190 |
Effective interest rate of the liability component | 6.50% | 6.50% | 6.50% | 6.50% |
Senior Notes | Convertible Senior Notes Due 2017 | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 0 | $ 0 | $ 0 | $ 315 |
Amortization of debt discount | 0 | 0 | 0 | 1,251 |
Total | $ 0 | $ 0 | $ 0 | $ 1,566 |
Effective interest rate of the liability component | 0.00% | 0.00% | 0.00% | 6.02% |
Convertible Senior Notes - Capp
Convertible Senior Notes - Capped call transactions (Narrative) (Details) - Call Option - Senior Notes - Convertible Senior Notes Due 2023 - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended |
Jun. 30, 2016 | Sep. 30, 2018 | |
Debt Instrument [Line Items] | ||
Net proceeds used to pay the cost of the capped call transactions | $ 33.9 | |
Cap price (usd per share) | $ 64.68 |
Convertible Senior Notes - Co_2
Convertible Senior Notes - Convertible Senior Notes Due 2022 (Narrative) (Details) - Senior Notes - Convertible Senior Notes Due 2022 $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)day$ / shares | |
Debt Instrument [Line Items] | |
Interest rate | 2.50% |
Proceeds from offering | $ 387.2 |
Trading days | day | 20 |
Redemption consecutive trading period | 30 days |
Redemption stock price conversion threshold (greater than or equal to) | 130.00% |
Consecutive measurement period | 5 days |
Percent of trading price (less than) | 98.00% |
Conversion ratio | 0.0298806 |
Conversion price (USD per share) | $ / shares | $ 33.47 |
Redemption trading period | 19 days |
Percent of principal amount plus accrued and unpaid interest | 100.00% |
Debt default principal amount percentage | 25.00% |
Debt instrument, term | 7 years |
Carrying amount, equity component | $ 88.9 |
Net deferred tax liabilities | $ 31.8 |
Remaining contractual life | 3 years 3 months |
Significant Other Observable Inputs (Level 2) | |
Debt Instrument [Line Items] | |
Fair value of notes | $ 436.5 |
Convertible Senior Notes - Co_3
Convertible Senior Notes - Convertible Senior Notes Due 2017 (Narrative) (Details) - USD ($) | Jun. 01, 2017 | Jun. 30, 2016 | Jun. 30, 2012 | Sep. 30, 2018 | Sep. 30, 2017 |
Debt Instrument [Line Items] | |||||
Repayments of convertible senior notes | $ 0 | $ 55,000,000 | |||
Senior Notes | Convertible Senior Notes Due 2017 | |||||
Debt Instrument [Line Items] | |||||
Principal | $ 275,000,000 | ||||
Interest rate | 1.375% | ||||
Proceeds from offering | $ 266,200,000 | ||||
Repayments of convertible senior notes | $ 55,400,000 | $ 323,200,000 | |||
Aggregate principal amount repurchased | 220,000,000 | ||||
Net cash receipt | $ 12,600,000 | ||||
Debt conversion, converted instrument, shares issued (in shares) | 819,901 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Balance at beginning of period | $ 24,914 | |||
Other comprehensive income before reclassifications | $ (11) | $ 497 | (605) | $ 530 |
Amounts reclassified from accumulated other comprehensive income | 1,183 | 0 | ||
Other comprehensive (loss) income | (11) | 497 | 578 | 530 |
Balance at end of period | (26,564) | (26,564) | ||
Foreign currency translation adjustment | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Balance at beginning of period | (4,594) | (5,439) | (5,183) | (5,479) |
Other comprehensive income before reclassifications | (11) | 487 | (605) | 527 |
Amounts reclassified from accumulated other comprehensive income | 1,183 | 0 | ||
Other comprehensive (loss) income | (11) | 487 | 578 | 527 |
Balance at end of period | (4,605) | (4,952) | (4,605) | (4,952) |
Unrealized loss on available for sale securities | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Balance at beginning of period | 0 | (7) | 0 | 0 |
Other comprehensive income before reclassifications | 0 | 10 | 0 | 3 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | ||
Other comprehensive (loss) income | 0 | 10 | 0 | 3 |
Balance at end of period | 0 | 3 | 0 | 3 |
Total | ||||
Accumulated Other Comprehensive Loss [Roll Forward] | ||||
Balance at beginning of period | (4,594) | (5,446) | (5,183) | (5,479) |
Balance at end of period | $ (4,605) | $ (4,949) | $ (4,605) | $ (4,949) |
Segment and Geographic Inform_3
Segment and Geographic Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Number of operating segments | segment | 1 | ||||
Net revenues | $ (3,300) | $ 7,868 | $ 6,138 | $ 36,194 | |
Percentage of revenue by geographic segments | 100.00% | 100.00% | 100.00% | 100.00% | |
Long-lived assets | $ 546,488 | $ 546,488 | $ 309,679 | ||
Percentage of long-lived assets by geographic segments | 100.00% | 100.00% | 100.00% | ||
United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net revenues | $ (3,213) | $ 6,456 | $ 5,628 | $ 31,426 | |
Percentage of revenue by geographic segments | 97.30% | 82.00% | 91.70% | 86.80% | |
Long-lived assets | $ 540,866 | $ 540,866 | $ 308,843 | ||
Percentage of long-lived assets by geographic segments | 99.00% | 99.00% | 99.70% | ||
Europe | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net revenues | $ (88) | $ 1,208 | $ 234 | $ 4,355 | |
Percentage of revenue by geographic segments | 2.70% | 15.40% | 3.80% | 12.00% | |
Long-lived assets | $ 5,622 | $ 5,622 | $ 836 | ||
Percentage of long-lived assets by geographic segments | 1.00% | 1.00% | 0.30% | ||
Rest of world | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net revenues | $ 1 | $ 204 | $ 276 | $ 413 | |
Percentage of revenue by geographic segments | 0.00% | 2.60% | 4.50% | 1.20% |
Contingencies (Details)
Contingencies (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Biogen Idec matter | |
Loss Contingencies [Line Items] | |
Loss contingency, settlement | $ 5.2 |
Restructuring (Details)
Restructuring (Details) $ in Thousands | Jun. 19, 2017USD ($)position | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)position | Sep. 30, 2017USD ($) |
Restructuring Reserve [Roll Forward] | |||||
Balance as of January 1, 2018 | $ 0 | ||||
Expenses, Net | 12,753 | ||||
Cash | (8,223) | ||||
Noncash | (1,956) | ||||
Balance as of June 30, 2018 | $ 2,574 | 2,574 | |||
Asset impairment charges | $ 5,073 | $ 0 | 5,073 | $ 329,097 | |
Cost of goods sold | |||||
Restructuring Reserve [Roll Forward] | |||||
Expenses, Net | 600 | ||||
Research and development | |||||
Restructuring Reserve [Roll Forward] | |||||
Expenses, Net | 3,600 | ||||
Selling, general and administrative | |||||
Restructuring Reserve [Roll Forward] | |||||
Expenses, Net | $ 8,600 | ||||
Workforce Reductions | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of positions expected to be eliminated | position | 60 | ||||
Workforce Reductions | Minimum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Period of coverage | 6 months | ||||
Workforce Reductions | Maximum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Period of coverage | 1 year | ||||
Ionsys | Not discontinued operations, discontinuation and market withdrawal | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of positions expected to be eliminated | position | 57 | ||||
Restructuring Reserve [Roll Forward] | |||||
Number of positions eliminated in restructuring, percentage of workforce | 15.00% | ||||
Pre-tax restructuring charge | $ 276,900 | ||||
Asset impairment charges | 268,100 | ||||
Severance costs | 5,800 | ||||
Other exit costs | $ 3,000 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) - USD ($) | Jan. 05, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Common stock investment | $ 13,089,000 | $ 0 | ||
Amounts reclassified from accumulated other comprehensive income | 1,183,000 | $ 0 | ||
Infectious Disease Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total sale price | $ 166,400,000 | |||
Consideration received (in shares) | 3,313,702 | |||
Consideration received, market value | $ 54,500,000 | |||
Receivable due in 12 months | 25,000,000 | |||
Receivable due in 18 months | 25,000,000 | |||
Fair value of payments | 45,900,000 | |||
Contingent payments | $ 246,200,000 | |||
Disposition related costs | $ 11,900,000 | |||
Minimum | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Excess cash payments over fair value, amortization period | 12 months | |||
Minimum | Infectious Disease Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Tiered royalty payments, percent of net sales | 5.00% | |||
Maximum | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Excess cash payments over fair value, amortization period | 18 months | |||
Maximum | Infectious Disease Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Tiered royalty payments, percent of net sales | 25.00% | |||
Prepaid Expenses and Other Current Assets | Infectious Disease Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Fair value of payments | $ 23,300,000 | |||
Other Assets | Infectious Disease Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Fair value of payments | $ 22,600,000 | $ 48,700,000 | ||
Melinta | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Common stock investment | $ 13,100,000 |
Discontinued Operations - Key F
Discontinued Operations - Key Financial Results (Details) - Infectious Disease Business - Disposal Group, Disposed of by Sale, Not Discontinued Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Net product revenues | $ 0 | $ 9,003 | $ (107) | $ 23,635 |
Operating expenses: | ||||
Cost of product revenue | 0 | 5,314 | 197 | 12,681 |
Research and development | 24 | 12,761 | 534 | 34,566 |
Selling, general and administrative | (80) | 13,433 | 2,997 | 57,400 |
Total operating expenses | (56) | 31,508 | 3,728 | 104,647 |
Loss from operations | 56 | (22,505) | (3,835) | (81,012) |
Gain from sale of business | 0 | 0 | 168,955 | 0 |
Other income (expense), net | (52) | (452) | 358 | (820) |
Income (loss) from discontinued operations before income taxes | 4 | (22,957) | 165,478 | (81,832) |
Benefit for income taxes | 4,003 | 0 | 55,236 | 2 |
Income (loss) from discontinued operations, net of tax | $ (3,999) | $ (22,957) | $ 110,242 | $ (81,834) |
Discontinued Operations - Major
Discontinued Operations - Major Classes of Assets and Liabilities (Details) - Infectious Disease Business - Disposal Group, Disposed of by Sale, Not Discontinued Operations $ in Thousands | Dec. 31, 2017USD ($) |
Assets: | |
Accounts receivable, net | $ 9,595 |
Inventory | 41,412 |
Other receivables | 2,740 |
Intangibles, net | 282,398 |
Goodwill | 55,057 |
Total assets held for sale | 391,202 |
Liabilities: | |
Accounts payable | 1,127 |
Accrued expenses | 22,945 |
Contingent purchase price | 35,785 |
Deferred revenue | 723 |
Total liabilities held for sale | $ 60,580 |
Discontinued Operations - Depre
Discontinued Operations - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of business | $ 166,383 | $ 0 | ||
Infectious Disease Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Amortization from discontinued operations | 0 | 7,071 | ||
Changes in contingent purchase price | 0 | 3,543 | ||
Gain on sale of business | $ 0 | $ 0 | (168,955) | 0 |
Reserve for excess or obsolete inventory | 0 | (435) | ||
Proceeds from sale of business | 166,383 | 0 | ||
Payments on contingent purchase price | $ 0 | $ (62,618) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Infectious Disease Business - Opex Biopharma, Inc. - USD ($) $ in Millions | Oct. 02, 2018 | Oct. 31, 2018 |
Subsequent Event [Line Items] | ||
Upfront consideration received | $ 2.7 | $ 2.7 |
Contingent consideration | $ 29 | $ 29 |