Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 16, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Emergent BioSolutions Inc. | ||
Entity Central Index Key | 1,367,644 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1.1 | ||
Entity Common Stock, Shares Outstanding | 49,494,612 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 178,292 | $ 271,513 |
Restricted cash | 1,043 | 0 |
Accounts receivable, net | 143,653 | 138,478 |
Inventories | 142,812 | 74,002 |
Income tax receivable, net | 2,432 | 9,996 |
Prepaid expenses and other current assets | 17,157 | 16,229 |
Total current assets | 485,389 | 510,218 |
Property, plant and equipment, net | 407,210 | 376,448 |
Intangible assets, net | 119,597 | 33,865 |
Goodwill | 49,130 | 41,001 |
Deferred tax assets, net | 2,834 | 6,096 |
Other assets | 6,046 | 2,483 |
Total assets | 1,070,206 | 970,111 |
Current liabilities: | ||
Accounts payable | 41,751 | 34,649 |
Accrued expenses and other current liabilities | 4,831 | 6,368 |
Accrued compensation | 37,882 | 34,537 |
Notes payable | 0 | 20,000 |
Contingent consideration, current portion | 2,372 | 3,266 |
Deferred revenue, current portion | 13,232 | 7,036 |
Total current liabilities | 100,068 | 105,856 |
Contingent consideration, net of current portion | 9,902 | 9,919 |
Long-term indebtedness | 13,457 | 248,094 |
Income taxes payable, net of current | 12,500 | 0 |
Deferred revenue, net of current portion | 17,259 | 8,433 |
Other liabilities | 4,675 | 1,604 |
Total liabilities | 157,861 | 373,906 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 15,000,000 shares authorized, 0 shares issued and outstanding at both December 31, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.001 par value; 200,000,000 shares authorized, 50,619,808 shares issued and 49,405,365 shares outstanding at December 31, 2017; 40,996,890 shares issued and 40,574,060 shares outstanding at December 31, 2016 | 50 | 41 |
Treasury stock, at cost, 1,214,443 and 422,830 common shares at December 31, 2017 and December 31, 2016, respectively | (39,497) | (6,420) |
Additional paid-in capital | 618,416 | 352,435 |
Accumulated other comprehensive loss | (3,698) | (4,331) |
Retained earnings | 337,074 | 254,480 |
Total stockholders' equity | 912,345 | 596,205 |
Total liabilities and stockholders' equity | $ 1,070,206 | $ 970,111 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 50,619,808 | 40,996,890 |
Common stock, shares outstanding (in shares) | 49,405,365 | 40,574,060 |
Treasury stock (in shares) | 1,214,443 | 422,830 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Revenues: | ||||
Product sales | $ 421,516 | $ 296,278 | $ 328,969 | |
Contract manufacturing | 68,935 | 49,138 | 42,968 | |
Contracts and grants | 70,422 | 143,366 | 117,394 | |
Total revenues | 560,873 | 488,782 | 489,331 | |
Operating expenses: | ||||
Cost of product sales and contract manufacturing | 195,707 | 131,284 | 107,486 | |
Research and development | 97,384 | 108,290 | 119,186 | |
Selling, general and administrative | 143,497 | 143,686 | 121,145 | |
Income from operations | 124,285 | 105,522 | 141,514 | |
Other income (expense): | ||||
Interest income | 1,753 | 1,053 | 572 | |
Interest expense | (6,590) | (7,617) | (6,523) | |
Other income (expense), net | (815) | 263 | 153 | |
Total other expense, net | (5,652) | (6,301) | (5,798) | |
Income from continuing operations before provision for income taxes | 118,633 | 99,221 | 135,716 | |
Provision for income taxes | 36,039 | 36,697 | 44,300 | |
Net Income from continuing operations | 82,594 | 62,524 | 91,416 | |
Net loss from discontinued operations | 0 | (10,748) | (28,546) | |
Net income | $ 82,594 | $ 51,776 | $ 62,870 | |
Net income (loss) per share - basic: | ||||
Net income per share from continuing operations-basic (in dollars per share) | $ 1.98 | $ 1.56 | $ 2.37 | |
Net loss per share from discontinued operations-basic (in dollars per share) | 0 | (0.27) | (0.74) | |
Net income per share-basic (in dollars per share) | 1.98 | 1.29 | 1.63 | |
Net income (loss) per share - diluted: | ||||
Net income from continuing operations-diluted (in dollars per share) | 1.71 | 1.35 | 2.02 | |
Net loss per share from discontinued operations-diluted (in dollars per share) | 0 | (0.22) | (0.61) | |
Net income per share-diluted (in dollars per share) | [1] | $ 1.71 | $ 1.13 | $ 1.41 |
Weighted-average number of shares - basic (in shares) | 41,816,431 | 40,184,159 | 38,595,435 | |
Weighted-average number of shares - diluted (in shares) | 50,327,937 | 49,335,112 | 47,255,842 | |
[1] | See "Earnings per share" footnote for details on calculation. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Comprehensive Income [Abstract] | |||
Net income | $ 82,594 | $ 51,776 | $ 62,870 |
Foreign currency translations, net of tax | 633 | (1,618) | 295 |
Comprehensive income | $ 83,227 | $ 50,158 | $ 63,165 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 82,594 | $ 51,776 | $ 62,870 |
Adjustments to reconcile to net cash provided by (used in) operating activities: | |||
Stock-based compensation expense | 15,213 | 18,477 | 15,848 |
Depreciation and amortization | 42,572 | 38,229 | 35,335 |
Income taxes | 3,259 | 5,190 | 3,464 |
Change in fair value of contingent obligations | 7,830 | (10,838) | (10,599) |
Impairment of intangible assets (including IPR&D) | 0 | 701 | 9,827 |
Impairment and abandonment of long-lived assets | 1,936 | 5,569 | 1,147 |
Bad debt expense | 0 | 0 | 3,481 |
Excess tax benefits from stock-based compensation | 0 | (10,619) | (11,281) |
Other | 1,011 | 452 | 271 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (4,810) | (22,446) | (64,351) |
Inventories | 6,066 | (9,026) | (11,262) |
Income taxes | 20,067 | (3,424) | (5,492) |
Prepaid expenses and other assets | (3,730) | (2,089) | 2,319 |
Accounts payable | 16,134 | (14,791) | 4,749 |
Accrued expenses and other liabilities | 1,626 | 624 | 45 |
Accrued compensation | 3,349 | 2,236 | 2,680 |
Provision for chargebacks | 0 | 0 | (8) |
Deferred revenue | 15,022 | 4,602 | 3,474 |
Net cash provided by operating activities | 208,139 | 54,623 | 42,517 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (54,828) | (76,257) | (44,812) |
Acquisitions | (195,104) | 0 | (650) |
Net cash used in investing activities | (249,932) | (76,257) | (45,462) |
Cash flows from financing activities: | |||
Proceeds from long-term debt obligations | 0 | 0 | 2,000 |
Issuance of common stock upon exercise of stock options | 19,346 | 17,125 | 25,961 |
Excess tax benefits from stock-based compensation | 0 | 10,619 | 11,281 |
Debt issuance costs | (1,426) | 0 | 0 |
Taxes paid on behalf of employees for equity activity | (4,260) | (1,136) | 1,942 |
Payments of notes payable | (20,000) | 0 | 0 |
Distribution to Aptevo | 0 | (45,000) | 0 |
Contingent consideration payments | (10,941) | (1,385) | (5,693) |
Restricted cash | (1,043) | 0 | 0 |
Purchase of treasury stock | (33,077) | 0 | (100) |
Net cash (used in) provided by financing activities | (51,401) | (19,777) | 35,391 |
Effect of exchange rate changes on cash and cash equivalents | (27) | 129 | (150) |
Net (decrease) increase in cash and cash equivalents | (93,221) | (41,282) | 32,296 |
Cash and cash equivalents at beginning of year | 271,513 | 312,795 | 280,499 |
Cash and cash equivalents at end of year | 178,292 | 271,513 | 312,795 |
Supplemental disclosure of cash flow information: | |||
Cash paid during the year for interest | 8,416 | 8,210 | 7,751 |
Cash paid during the year for income taxes | 11,977 | 10,081 | 28,271 |
Supplemental information on non-cash investing and financing activities: | |||
Purchases of property, plant and equipment unpaid at year end | $ 4,587 | $ 13,459 | $ 4,379 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Thousands | $0.001 Par Value Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2014 | $ 38 | $ 274,222 | $ (6,320) | $ (3,008) | $ 288,269 | $ 553,201 |
Balance (in shares) at Dec. 31, 2014 | 38,129,872 | (420,189) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Employee equity plans activity | $ 2 | 43,749 | 0 | 0 | 43,751 | |
Employee equity plans activity (in shares) | 1,699,536 | |||||
Treasury stock | $ (100) | 0 | (100) | |||
Treasury stock (in shares) | (2,641) | |||||
Net income | 62,870 | 62,870 | ||||
Foreign currency translation, net of tax | 295 | 0 | 295 | |||
Balance at Dec. 31, 2015 | $ 40 | 317,971 | $ (6,420) | (2,713) | 351,139 | 660,017 |
Balance (in shares) at Dec. 31, 2015 | 39,829,408 | (422,830) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Employee equity plans activity | $ 1 | 34,464 | 0 | 0 | 34,465 | |
Employee equity plans activity (in shares) | 1,167,482 | |||||
Separation of Aptevo | (148,435) | (148,435) | ||||
Treasury stock | $ 0 | 0 | 0 | |||
Treasury stock (in shares) | 0 | |||||
Net income | 0 | 51,776 | 51,776 | |||
Foreign currency translation, net of tax | (1,618) | 0 | (1,618) | |||
Balance at Dec. 31, 2016 | $ 41 | 352,435 | $ (6,420) | (4,331) | 254,480 | $ 596,205 |
Balance (in shares) at Dec. 31, 2016 | 40,996,890 | (422,830) | 40,574,060 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Employee equity plans activity | $ 1 | 27,951 | 0 | 0 | $ 27,952 | |
Employee equity plans activity (in shares) | 1,114,830 | |||||
Shares issued to extinguish convertible notes | $ 8 | 238,030 | $ 238,038 | |||
Shares issued to extinguish convertible notes (in shares) | 8,508,088 | 8,508,088 | ||||
Treasury stock | $ (33,077) | 0 | $ (33,077) | |||
Treasury stock (in shares) | (791,613) | (800,000) | ||||
Net income | 0 | 82,594 | $ 82,594 | |||
Foreign currency translation, net of tax | 633 | 0 | 633 | |||
Balance at Dec. 31, 2017 | $ 50 | $ 618,416 | $ (39,497) | $ (3,698) | $ 337,074 | $ 912,345 |
Balance (in shares) at Dec. 31, 2017 | 50,619,808 | (1,214,443) | 49,405,365 |
Consolidated Statement of Chan8
Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Consolidated Statement of Changes in Stockholders' Equity [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Nature of the business and orga
Nature of the business and organization | 12 Months Ended |
Dec. 31, 2017 | |
Nature of the business and organization [Abstract] | |
Nature of the business and organization | 1. Nature of the business and organization Organization and business Emergent BioSolutions Inc. (the "Company" or "Emergent") is a global life sciences company focused on providing specialty products for civilian and military populations that address accidental, intentional and naturally occurring public health threats. Within the category of the Company's specialty products, it is focused on developing, manufacturing and commercializing medical countermeasures ("MCMs"), that address public health and national security threats, which the Company collectively refer to as PHTs. The PHTs that the Company is addressing fall into two categories: Chemical, Biological, Radiological, Nuclear and Explosives ("CBRNE"); and emerging infectious diseases ("EID"). The Company has a portfolio of eight products through which it generates most of its revenue, a fully-integrated portfolio of contract development and manufacturing services and a research and development pipeline of various investigational-stage product candidates. Our MCM products are: § BioThrax ® § ACAM2000 ® § Raxibacumab (Anthrax Monoclonal), the first fully human monoclonal antibody therapeutic licensed by the FDA for the treatment and prophylaxis of inhalational anthrax (acquired from GlaxoSmithKline LLC in October 2017); § Anthrasil ® § BAT® [Botulism Antitoxin Heptavalent (A,B,C,D,E,F,G)-(Equine)], the only heptavalent antibody therapeutic licensed by the FDA and Health Canada for the treatment of botulism; § VIGIV [Vaccinia Immune Globulin Intravenous (Human)], the only therapeutic licensed by the FDA and Health Canada to address certain complications from smallpox vaccination; § RSDL ® § Tro bigard™ (atropine sulfate, obidoxime chloride), of atropine sulfate and obidoxime chloride, as a nerve agent countermeasure. This product is not currently approved or cleared by the FDA or any similar regulatory body, and is only distributed to authorized government buyers for use outside the United States. This product is not distributed in the United States. Aptevo spin-off On August 1, 2016, the Company completed the spin-off of Aptevo Therapeutics Inc. ("Aptevo") and has classified the results of operations of Aptevo as discontinued operations for the years ended December 31, 2016 and 2015. The historical financial statements and footnotes have been revised accordingly. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of significant accounting policies [Abstract] | |
Summary of significant accounting policies | 2. Summary of significant accounting policies Basis of presentation and consolidation The accompanying consolidated financial statements include the accounts of Emergent and its wholly owned and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In anticipation of the spin-off, the Company realigned certain components of its biosciences business to the new Aptevo segment to be consistent with how the Company's chief operating decision maker ("CODM") allocates resources and makes decisions about the operations of the Company. Effective January 1, 2016, the Company changed its segment presentation to reflect this new structure, and recast all prior periods presented to conform to the new presentation. On August 1, 2016, the Company completed the spin-off of Aptevo. As of December 31, 2017, the results of operations and financial position of Aptevo are reflected as discontinued operations for all periods presented through the date of the spin-off. The historical financial statements and footnotes have been revised accordingly. See Note 3. "Discontinued operations" for further details regarding the spin-off. For periods following the spin-off, the Company reports financial results under one operating segment which is also a single reportable segment. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and cash equivalents Cash equivalents are highly liquid investments with a maturity of 90 days or less at the date of purchase and consist of time deposits and investments in money market funds with commercial banks and financial institutions. Also, the Company maintains cash balances with financial institutions in excess of insured limits. The Company does not anticipate any losses with such cash balances. Fair value of measurements The Company measures and records cash equivalents and investment securities considered available-for-sale at fair value in the accompanying financial statements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value include: Level 1 — Observable inputs for identical assets or liabilities such as quoted prices in active markets; Level 2 — Inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3 — Unobservable inputs in which little or no market data exists, which are therefore developed by the Company using estimates and assumptions that reflect those that a market participant would use. The carrying amounts of the Company's short-term financial instruments, which include cash and cash equivalents, accounts receivable and accounts payable, approximate their fair values due to their short maturities. Significant customers and accounts receivable The Company has derived a majority of its revenue from sales of BioThrax under contracts with the U.S. government. The Company's current Centers for Disease Control ("CDC") contract does not necessarily increase the likelihood that it will secure future comparable contracts with the U.S. government. The Company expects that a significant portion of the business that it will seek in the near future, in particular for BioThrax, will be under government contracts that present a number of risks that are not typically present in the commercial contracting process. U.S. government contracts for BioThrax are subject to unilateral termination or modification by the government. The Company may fail to achieve significant sales of BioThrax to customers in addition to the U.S. government, which would harm its growth opportunities. The Company may not be able to sustain or increase profitability. The Company may not be able to manufacture BioThrax consistently in accordance with FDA specifications. Accounts receivable are stated at invoice amounts and consist primarily of amounts due from the U.S. government, as well as amounts due under reimbursement contracts with other government entities and non-government organizations. If necessary, the Company records a provision for doubtful receivables to allow for any amounts which may be unrecoverable. This provision is based upon an analysis of the Company's prior collection experience, customer creditworthiness and current economic trends. Concentrations of credit risk and uncertainties Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company places its cash and cash equivalents with high quality financial institutions. Management believes that the financial risks associated with its cash and cash equivalents are minimal. Because accounts receivable consists primarily of amounts due from the U.S. government for product sales and from government agencies under government grants and development contracts, management does not deem the credit risk to be significant. Inventories Inventories are stated at the lower of cost or net realizable value with cost being determined using a standard cost method, which approximates average cost. Average cost consists primarily of material, labor and manufacturing overhead expenses (including fixed production-overhead costs) and includes the services and products of third party suppliers. The Company analyzes its inventory levels quarterly and writes down, in the applicable period, inventory that has become obsolete, inventory that has a cost basis in excess of its expected net realizable value and inventory in excess of expected customer demand. The Company also writes off, in the applicable period, the costs related to expired inventory. Costs of purchased inventories are recorded using weighted-average costing. The Company determines normal capacity for each production facility and allocates fixed production-overhead costs on that basis. Property, plant and equipment Property, plant and equipment are stated at cost. Depreciation is computed using the straight-line method over the following estimated useful lives: Buildings 31-39 years Building improvements 10-39 years Furniture and equipment 3-15 years Software 3-7 years or product life Leasehold improvements Lesser of the asset life or lease term Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred. The Company capitalizes internal-use software when both (a) the software is internally developed, acquired, or modified solely to meet the entity's internal needs and (b) during the software's development or modification, no substantive plan either exists or is being developed to market the software externally. Capitalization of qualifying internal-use software costs begins when the preliminary project stage is completed, management with the relevant authority, implicitly or explicitly, authorizes and commits to the funding of the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. Income taxes Income taxes are accounted for using the liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and research and development tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. Deferred income tax effects of transactions reported in different periods for financial reporting and income tax return purposes are recognized under the asset and liability method of accounting for income taxes. This method gives consideration to the future tax consequences of the deferred income tax items and immediately recognizes changes in income tax laws in the year of enactment. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the "Tax Reform Act"). Further information on the tax impacts of the Tax Reform Act is included in Note 12 of the Company's consolidated financial statements. The Company's ability to realize deferred tax assets depends upon future taxable income as well as the limitations discussed below. For financial reporting purposes, a deferred tax asset must be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized prior to expiration. The Company considers future taxable income and ongoing tax planning strategies in assessing the need for valuation allowances. In general, if the Company determines that it is more likely than not to realize more than the recorded amounts of net deferred tax assets in the future, the Company will reverse all or a portion of the valuation allowance established against its deferred tax assets, resulting in a decrease to the provision for income taxes in the period in which the determination is made. Likewise, if the Company determines that it is not more likely than not to realize all or part of the net deferred tax asset in the future, the Company will establish a valuation allowance against deferred tax assets, with an offsetting increase to the provision for income taxes, in the period in which the determination is made. Under sections 382 and 383 of the Internal Revenue Code, if an ownership change occurs with respect to a "loss corporation", as defined therein, there are annual limitations on the amount of net operating losses and deductions that are available. The Company believes the use of net operating losses and research and development tax credits acquired in the Trubion acquisition will not be significantly limited. Due to the acquisition of Microscience in 2005 and the Company's initial public offering, the Company believes the use of the operating losses incurred prior to 2005 will be significantly limited. Because tax laws are complex and subject to different interpretations, significant judgment is required. As a result, the Company makes certain estimates and assumptions, in (1) calculating the Company's income tax expense, deferred tax assets and deferred tax liabilities, (2) determining any valuation allowance recorded against deferred tax assets and (3) evaluating the amount of unrecognized tax benefits, as well as the interest and penalties related to such uncertain tax positions. The Company's estimates and assumptions may differ significantly from tax benefits ultimately realized. Revenue recognition The Company recognizes revenues from product sales and contract manufacturing  there is persuasive evidence of an arrangement;  delivery has occurred or title has passed to the Company's customer;  the fee is fixed or determinable; and  collectability is reasonably assured. Under the Company's contracts with the CDC, the Company invoices the CDC and recognizes the related revenue upon acceptance by the government at delivery site, at which time title to the product passes to the CDC. Agreements with multiple components ("deliverables" or "items") are evaluated to determine if the deliverables can be divided into more than one unit of accounting. An item can generally be considered a separate unit of accounting if both of the following criteria are met: (1) the delivered item or items have value to the customer on a standalone basis. The item or items have value on a standalone basis if they are sold separately by any vendor or the customer could resell the delivered item(s) on a standalone basis. In the context of a customer's ability to resell the delivered item(s), this criterion does not require the existence of an observable market for the deliverable(s); and (2) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in control of the Company. Items that cannot be divided into separate units are combined with other units of accounting, as appropriate. Consideration received is allocated among the separate units based on the relative selling price of each deliverable. The Company deems service to have been rendered if no continuing obligation exists on the part of the Company. The Company's contract with the Biomedical Advanced Research and Development Authority ("BARDA") to establish a Center for Innovation in Advanced Development and Manufacturing ("CIADM") is a service arrangement that includes multiple elements. The CIADM contract requires the Company to provide a flexible infrastructure to supply medical countermeasures to the U.S. government over the contract period and includes such items as construction and facility design, workforce development and licensure of a pandemic flu vaccine. Since none of the individual elements by themselves satisfy the purpose of the contract, the Company has concluded that the CIADM contract elements cannot be separated as they do not have stand-alone value to the U.S. government. Therefore, the Company has concluded that there is a single unit of accounting associated with the CIADM contract. The Company recognizes revenue under the CIADM contract on a straight-line basis, based upon its estimate of the total payments to be received under the contract. The Company analyzes the estimated payments to be received on a quarterly basis to determine if an adjustment to revenue is required. Changes in estimates attributed to modifications in the estimate of total payments to be received are recorded prospectively. The Company's BAT contract with BARDA is a service arrangement that includes multiple elements. The deliverables to BARDA include supplying product to the SNS, performing stability testing for the product, achievement of extended product expiry dating, maintenance of horse populations and plasma extraction. The Company has determined that each of the deliverables above represents a separate unit of accounting as they have standalone value to the U.S. government. The Company allocated the value of the contract to the undelivered elements based on best estimate of selling price ("BESP"). BESP methodology for the deliverables, excluding the product sales, was developed using a cost build-up for internal and external costs, plus a specified mark-up. The allocation of value to the product sales was based on the remaining unallocated value. The Company completed the final delivery of the BAT product in 2017. The Company recognizes revenue for: § BAT product sales upon delivery to the SNS; § stability testing based on the required testing schedule of the product; § extended product expiry based on achievement of the extension; § horse maintenance based on a per horse basis; and § plasma collection on a per liter basis. The Company's contracts for VIGIV with the CDC and for Anthrasil with BARDA are service arrangements that include multiple elements. The deliverables to BARDA include to supply product to the SNS, perform stability testing for the product, achievement of extended product expiry dating and plasma extraction. The Company has determined that each of the deliverables above represents separate units of accounting as they have standalone value to the U.S. government. The Company allocated the value of the contract to the undelivered elements based on BESP. BESP methodology for the deliverables, excluding the product sales, was developed using a cost build-up for internal and external costs, plus a specified mark-up. The allocation of value to the product sales was based on the remaining unallocated value. The Company recognizes revenue for: § VIGIV and Anthrasil product sales upon delivery to the CDC; § stability testing based on the required testing schedule of the product; § extended product expiry based on achievement of the extension; and § plasma collection on a per liter basis. The Company's contract for the NuThrax product candidate with BARDA, which was entered into on September 30, 2016 is a service arrangement that includes multiple elements. The deliverables to BARDA are the completion of development for NuThrax and the procurement of product for the SNS. The Company has determined that each of the deliverables above are a separate unit of accounting as they have standalone value to the U.S. government. The Company allocated the value of the contract to the undelivered elements based on best estimate of selling price ("BESP"). BESP methodology for the development deliverable was developed using a cost build-up for internal and external costs, plus a specified mark-up. The Company has determined that the procurement of NuThrax under the BARDA NuThrax Contract is a contingent deliverable, as it is dependent upon successful completion of development; therefore, the Company has excluded this from the allocation of the contract consideration. The Company has allocated $147.5 million to the development services deliverable and will recognize revenue as the services are provided. On March 16, 2017, the Company entered into a contract with BARDA, valued at $100 million, for the delivery of BioThrax to the SNS over a two-year period of performance. In conjunction with the signing of this contract, the Company entered into a modification to its BARDA NuThrax Contract that increases the number of doses of NuThrax to be delivered under the base period from two million to three million doses with a commensurate reduction in dose price for the initial deliveries. The modification also provides for a discount on the sales price for doses to be procured during the option period up to $100 million. As a result of the modification of the BARDA NuThrax Contract, in conjunction with execution of the BARDA BioThrax Contract, the Company has determined that the two agreements are linked under the revenue recognition requirements of the Financial Accounting Standards Board ("FASB") Topic 605, Revenue Recognition. The Company analyzed these agreements and determined that the units of accounting under the linked agreements are: · development services for the NuThrax product candidate under the BARDA NuThrax Contract; and · procurement of BioThrax under the BARDA BioThrax Contract. The Company's allocation of contract consideration for the development services was updated based on the services provided prior to March 17, 2017. The allocation of contract consideration for the BioThrax doses to be sold under the BARDA BioThrax Contract was determined based on similar pricing provided to other customers. The Company's determination of the amount of contract consideration to be allocated to the discounts was based on an undiscounted probability adjusted model, which factored in the expected timing of regulatory approval for the NuThrax product candidate, expected levels of procurement of the NuThrax product candidate upon regulatory approval and the market conditions for these types of medical countermeasures. The Company allocated the contract consideration to the two units of accounting as follows: · $137.1 million was allocated to the development services for the NuThrax product candidate under the BARDA NuThrax Contract; and · $93.6 million was allocated to the procurement of BioThrax under the BARDA BioThrax Contract. The Company deferred a portion of the consideration received for doses delivered under the BARDA BioThrax Contract and the development services for the NuThrax product candidate. The Company will recognize the deferred revenue upon the delivery of NuThrax doses under the BARDA NuThrax Contract, or upon the future extinguishment of the Company's obligation to deliver NuThrax doses to which the discount applies. Revenue associated with non-refundable upfront license fees under arrangements where the license fees and research and development activities cannot be accounted for as separate units of accounting is deferred and recognized as revenue either on a straight-line basis over the Company's continued involvement in the research and development process or based on the proportional performance of the Company's expected future obligation under the contract. Revenues from the achievement of research and development milestones, if deemed substantive, are recognized as revenue when the milestones are achieved, and the milestone payments are due and collectible. If not deemed substantive, the Company recognizes such milestone as revenue on a straight-line basis over the remaining expected term of continued involvement in the research and development process. Milestones are considered substantive if all of the following conditions are met: (1) the milestone is non-refundable, (2) achievement of the milestone was not reasonably assured at the inception of the arrangement, (3) substantive effort is involved to achieve the milestone, and (4) the amount of the milestone appears reasonable in relation to the effort expended. Payments received in advance of work performed are recorded as deferred revenue. The Company generates contracts and grants revenue from cost-plus-fee contracts. Revenues from reimbursable contracts are recognized as costs are incurred, generally based on allowable costs incurred during the period, plus any recognizable earned fee. The Company considers fixed fees under cost-plus-fee contracts to be earned in proportion to the allowable costs incurred in performance of the contract. The Company analyzes costs for contracts and reimbursable grants to ensure reporting of revenues gross versus net is appropriate. For each of the three years in the period ended December 31, 2017, the costs incurred under the contracts and grants approximated the revenue earned. Acquisitions In determining whether an acquisition is a business combination versus an asset acquisition, the accounting guidance requires an entity to first evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If that threshold is met, the set of assets and activities is not a business and therefore treated as an asset acquisition. If it's not met, the entity evaluates whether the set meets the definition of a business. If an acquired asset or asset group does not meet the definition of a business, the transaction is accounted for as an asset acquisition. Otherwise, the acquisition is treated as a business combination. In a business combination, the acquisition method of accounting requires that the assets acquired and liabilities assumed be recorded as of the date of the merger or acquisition at their respective fair values with limited exceptions. Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized at fair value if fair value can reasonably be estimated. If the acquisition date fair value of an asset acquired or liability assumed that arises from a contingency cannot be determined, the asset or liability is recognized if probable and reasonably estimable; if these criteria are not met, no asset or liability is recognized. 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. Accordingly, the Company may be required to value assets at fair value measures that do not reflect the Company's intended use of those assets. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of the acquired business are reflected in the Company's consolidated financial statements after the date of the merger or acquisition. If the Company determines the assets acquired do not meet the definition of a business under the acquisition method of accounting, the transaction will be accounted for as an acquisition of assets rather than a business combination and, therefore, no goodwill will be recorded. The fair values of intangible assets, including acquired in-process research and development ("IPR&D"), are determined utilizing information available at or near the merger or acquisition date based on expectations and assumptions that are deemed reasonable by management. Given the considerable judgment involved in determining fair values, the Company typically obtains assistance from third-party valuation specialists for significant items. Amounts allocated to acquired IPR&D are capitalized and accounted for as indefinite-lived intangible assets. Upon successful completion of each project, the Company will make a separate determination as to the remaining useful life of the asset and begin amortization. The judgments made in determining estimated fair values assigned to assets acquired and liabilities assumed in a business combination, as well as asset lives, can materially affect the Company's results of operations. The fair values of identifiable intangible assets related to current products and product rights are primarily determined by using an "income approach" through which fair value is estimated based on each asset's discounted projected net cash flows. The Company's estimates of market participant net cash flows consider historical and projected pricing, margins and expense levels, the performance of competing products where applicable, relevant industry and therapeutic area growth drivers and factors, current and expected trends in technology and product life cycles, the time and investment that will be required to develop products and technologies, the ability to obtain marketing and regulatory approvals, the ability to manufacture and commercialize the products, the extent and timing of potential new product introductions by the Company's competitors, and the life of each asset's underlying patent, if any. The net cash flows are then probability-adjusted where appropriate to consider the uncertainties associated with the underlying assumptions, as well as the risk profile of the net cash flows utilized in the valuation. The probability-adjusted future net cash flows of each product are then discounted to present value utilizing an appropriate discount rate. The fair values of identifiable intangible assets related to IPR&D are determined using an income approach, through which fair value is estimated based on each asset's probability-adjusted future net cash flows, which reflect the different stages of development of each product and the associated probability of successful completion. The net cash flows are then discounted to present value using an appropriate discount rate. Indefinite-lived intangible assets are tested for impairment annually or whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Intangible assets and long-lived assets The Company assesses intangible assets for impairment on an annual basis or more frequently if indicators of impairment are present. The Company's annual assessment includes a comparison of the fair value of intangible assets to existing carrying value, and recognizes an impairment when the carrying value is greater than the determined fair value. The Company believes that the assumptions used in valuing the intangible assets are reasonable and are based upon its best estimate of likely outcomes of sales and clinical development. The underlying assumptions and estimates used to value these assets are subject to change in the future, and actual results may differ significantly from the assumptions and estimates. The Company has selected October 1 as its annual impairment test date for indefinite-lived intangible assets. The Company assesses the recoverability of its long-lived assets or asset groups for which an indicator of impairment exists by determining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If the Company concludes that the carrying value will not be recovered, the Company measures the amount of such impairment by comparing the fair value to the carrying value of the assets or asset groups. Goodwill The Company assesses the carrying value of goodwill on an annual basis, or whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable, The determination of the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. The estimates and assumptions used in calculating fair value include identifying future cash flows, which requires that the Company makes a number of critical legal, economic, market and business assumptions that reflect best estimates as of the testing date. The Company's assumptions and estimates may differ significantly from actual results, or circumstances could change that would cause the Company to conclude that an impairment now exists or that it previously understated the extent of impairment. The Company selected October 1 as its annual goodwill impairment test date. Contingent Consideration The Company records contingent consideration associated with (a) sales based royalties and (b) development and regulatory milestones at fair value. The fair value model used to calculate this obligation is based on the income approach (a discounted cash flow model) that has been risk adjusted based on the probability of achievement of net sales and achievement of the milestones. The inputs the Company uses for determining the fair value of the contingent consideration associated with sales based royalties and development and regulatory milestones are Level 3 fair value measurements. The Company re-evaluates the fair value on a quarterly basis. Changes in the fair value can result from adjustments to the discount rates and updates in the assumed timing of or achievement of net sales. Any future increase in the fair value of the contingent consideration associated with sales based royalties along with development and regulatory milestones are based on an increased likelihood that the underlying net sales or milestones will be achieved. The associated payment or payments which will become due and payable for sales based royalties associated with products will result in a charge to cost of product sales and contract manufacturing in the period in which the increase is determined. Similarly, any future decrease in the fair value of contingent consideration associated with sales based royalties will result in a reduction in cost of product sales and contract manufacturing. The changes in fair value for potential future sales based royalties associated with product candidates in development will result in a charge to selling, general and administrative expense in the period in which the increase is determined. Similarly, any future decrease in the fair value of contingent consideration associated with potential future sales based royalties for products candidates will result in a reduction in selling, general and administrative expense. The associated payment or payments which will become due and payable for development and regulatory milestones will result in a charge to research and development expense in the period in which the increase is determined. Similarly, any future decrease in the fair value for development and regulatory milestones will result in a reduction in research and development expense. Research and development We expense research and developmen |
Discontinued operations
Discontinued operations | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued operations [Abstract] | |
Discontinued operations | 3. Discontinued operations On August 1, 2016, the Company completed the spin-off of Aptevo through The historical statements of operations of Aptevo have been presented as discontinued operations in the consolidated financial statements and the prior period has been restated. Discontinued operations include results of Aptevo's business except for certain allocated corporate overhead costs and certain costs associated with transition services provided by the Company to Aptevo. These allocated costs remain part of continuing operations. Due to differences between the basis of presentation for discontinued operations and the basis of presentation as a stand-alone company, the financial results of Aptevo included within discontinued operations for the Company may not be indicative of actual financial results of Aptevo. The following table summarizes results from discontinued operations of Aptevo included in the consolidated statements of operations for the year ended December 31, 2016 and 2015: Years ended December 31, (in thousands) 2016 2015 Revenues: Product sales $ 21,183 $ 27,947 Collaborations 187 5,511 Total revenues 21,370 33,458 Operating expense: Cost of product sales 11,556 16,809 Research and development 18,024 34,811 Selling, general and administrative 23,792 27,313 Loss from operations (32,002 ) (45,475 ) Other income (expense), net: (41 ) (472 ) Loss from discontinued operations before benefit from income taxes (32,043 ) (45,947 ) Benefit from income taxes (21,295 ) (17,401 ) Net loss from discontinued operations $ (10,748 ) $ (28,546 ) The following table summarizes the cash flows of Aptevo included in the y ears ended December 31, 2016 and 2015 Years ended December 31, (in thousands) 2016 2015 Net cash used in operating activities $ (10,299 ) $ (12,716 ) Net cash used in investing activities (1,926 ) (1,518 ) Net cash provided by financing activities 7,733 15,012 Net increase (decrease) in cash and cash equivalents $ (4,492 ) $ 778 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions [Abstract] | |
Acquisitions | 4. Acquisitions Acquisition of ACAM2000 business On October 6, 2017, the Company completed the acquisition of the ACAM2000® (Smallpox (Vaccinia) Vaccine, Live) business of Sanofi Pasteur Biologics, LLC ("Sanofi"). This acquisition includes ACAM2000, the only smallpox vaccine licensed by the FDA, a current good manufacturing practices ("cGMP") live viral manufacturing facility and office and warehouse space, both in Canton, Massachusetts, and a cGMP viral fill/finish facility in Rockville, Maryland. With this acquisition, the Company also acquired an existing 10-year contract with the Centers for Disease Control and Prevention ("CDC"), which will expire and be up for renewal or extension in March 2018. This contract had a stated value up to $425 million, with a remaining contract value of up to approximately $160 million as of the acquisition date, for the delivery of ACAM2000 to the SNS and establishing U.S.-based manufacturing of ACAM2000. This acquisition added to the Company's product portfolio and expanded the Company's manufacturing capabilities. At the closing, the Company paid $97.5 million in an upfront payment and $20 million in milestone payments earned as of the closing date tied to the achievement of certain regulatory and manufacturing-related milestones, for a total payment in cash of $117.5 million. The agreement includes an additional milestone payment of up to $7.5 million upon achievement of a regulatory milestone, which was achieved in November 2017. The $7.5 million milestone payment was made during the fourth quarter of 2017. This transaction will be accounted for by the Company under the acquisition method of accounting, with the Company as the acquirer. Under the acquisition method of accounting, the assets and liabilities of the ACAM2000 business will be recorded as of October 6, 2017, the acquisition date, at their respective fair values, and combined with those of the Company. The contingent purchase consideration obligation is based on a regulatory milestone. At October 6, 2017, the contingent purchase consideration obligation related to the regulatory milestone was recorded at a fair value of $2.2 million. The Level 3 fair value of this obligation is based on a present value model of management's assessment of the probability of achievement of the regulatory milestone as of the acquisition date. This assessment is based on inputs that have no observable market. The total purchase price is summarized below: (in thousands) Amount of cash paid to Sanofi $ 117,500 Fair value of contingent purchase consideration 2,200 Total purchase price $ 119,700 The table below summarizes the preliminary allocation of the purchase price based upon estimated fair values of assets acquired and liabilities assumed at October 6, 2017. The allocation is preliminary based upon the finalization of valuation reports. (in thousands) Fair value of tangible assets acquired and liabilities assumed: Inventory $ 74,876 Property, plant and equipment 19,995 Total fair value of tangible assets acquired and liabilities assumed 94,871 Acquired intangible asset 16,700 Goodwill 8,129 Total purchase price $ 119,700 The Company determined the fair value of the intangible asset using the income approach, which is based on the present value of future cash flows. The fair value measurements are based on significant unobservable inputs that are developed by the Company using estimates and assumptions of the respective market and market penetration of the Company's products. The Company determined the fair value of the ACAM2000 intangible asset using the income approach with a present value discount rate of 15.5%, based on the estimated weighted-average cost of capital for substantially similar companies. This is comparable to the estimated internal rate of return for the acquisition and represents the rate that market participants would use to value these intangible assets. The projected cash flows from ACAM2000 intangible asset were based on key assumptions, including: estimates of revenues and operating profits, the life of the potential commercialized product and associated risks, and risks related to the viability of and potential alternative treatments in any future target markets. The Company has determined the ACAM2000 intangible asset will be amortized over 10 years. The Company determined the fair value of the inventory using the probability adjusted comparative sales method, which estimates the expected sales price reduced for all costs expected to be incurred to complete/dispose of the inventory with a profit on those costs. The Company determined the fair value of the property, plant and equipment utilizing either the cost approach or the sales comparison approach. The cost approach is determined by determining replacement cost of the asset and then subtracting any value that has been lost due to economic obsolescence, functional obsolescence, or physical deterioration. The sales comparison approach The Company recorded approximately $8.1 million in goodwill related to the ACAM2000 acquisition, representing the purchase price paid in the acquisition that was in excess of the fair value of the tangible and intangible assets acquired. There is no goodwill for tax purposes. The Company has incurred transaction costs related to the ACAM2000 acquisition of approximately $2.5 million for the year ended December 31, 2017, which has been recorded in selling, general and administrative expenses. The Company has determined the historical results for ACAM2000 were not significant to the Company's results of operations, and as such no proforma disclosures have been presented. Acquisition of Raxibacumab asset On October 2, 2017, the Company completed the acquisition of Raxibacumab, a fully human monoclonal antibody therapeutic product approved by the U.S. Food and Drug Administration ("FDA") for the treatment and prophylaxis of inhalational anthrax, from Human Genome Sciences, Inc. and GlaxoSmithKline LLC (collectively referred to as "GSK"). The all-cash transaction consists of a $76 million upfront payment and up to $20 million in product sale and manufacturing-related milestone payments. None of the milestones have been achieved as of December 31, 2017. The Company has determined that substantially all of the value of Raxibacumab is attributed to the Raxibacumab asset and therefore the Raxibacumab acquisition is considered an asset acquisition. In addition, the Company has capitalized $1.6 million of transaction costs associated with the acquisition. The Company has determined the Raxibacumab asset will be amortized over 10 years. |
Fair value measurements
Fair value measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair value measurements [Abstract] | |
Fair value measurements | 5. Fair value measurements Contingent consideration are liabilities measured at fair value on a recurring basis. For the year ended December 31, 2017, the contingent consideration for ACAM2000 increased by $5.3 million and the remaining $7.5 million regulatory milestone was paid. For the year ended December 31, 2017 and 2016, the contingent consideration obligation associated with the EV-035 series of molecules and the broad spectrum antiviral platform program decreased by $0.2 million and $5.4 million, respectively. The changes are primarily due to the estimated timing and probability of success for certain development and regulatory milestones of the program, which are inputs that have no observable market (Level 3). These changes are classified in the Company's statement of operations as both selling, general and administrative expense and research and development expense. For the years ended December 31, 2017 and 2016, the contingent consideration obligations associated with RSDL increased by $2.7 million and decreased by $5.4 million, respectively. The changes in the fair value of the RSDL contingent consideration obligations are primarily due to the expected amount and timing of future net sales, which are inputs that have no observable market (Level 3). These changes are classified in the Company's statement of operations as cost of product sales and contract manufacturing. The following table is a reconciliation of the beginning and ending balance of the liabilities measured at fair value using significant unobservable inputs (Level 3) during the years ended December 31, 2017 and 2016. (in thousands) Balance at December 31, 2015 $ 25,155 (Income) expense included in earnings (10,857 ) Settlements (1,113 ) Balance at December 31, 2016 $ 13,185 (Income) expense included in earnings 7,830 Settlements (10,941 ) Purchases, sales and issuances 2,200 Balance at December 31, 2017 $ 12,274 Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis. As of December 31, 2017 and 2016, there were no assets or liabilities measured at fair value on a non-recurring basis. |
Accounts receivable
Accounts receivable | 12 Months Ended |
Dec. 31, 2017 | |
Accounts receivable [Abstract] | |
Accounts receivable | 6. Accounts receivable Accounts receivable consist of the following: December 31, (in thousands) 2017 2016 Billed $ 118,918 $ 90,439 Unbilled 24,735 48,039 Total $ 143,653 $ 138,478 As of December 31, 2017 and 2016, the Company's accounts receivable balances were comprised of 89% and 83%, respectively, from the U.S. government. The overall increase in the percentage of accounts receivable attributed to U.S. government was due primarily to the timing of shipments of product and payments received for BioThrax product sales under the Company's contract with the CDC. Unbilled accounts receivable relates to various service contracts for which work has been performed, though invoicing has not yet occurred. Unbilled accounts receivable has decreased by $23.3 million due primarily to the timing of billings under our contract with the U.S. government related to the Company's CIADM program. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventories [Abstract] | |
Inventories | 7. Inventories Inventories consist of the following: December 31, (in thousands) 2017 2016 Raw materials and supplies $ 36,069 $ 30,687 Work-in-process 76,610 19,821 Finished goods 30,133 23,494 Total inventories $ 142,812 $ 74,002 The increase in inventories for the year ended December 31, 2017 was primarily due to the acquisition of ACAM2000 in October 2017. |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, plant and equipment [Abstract] | |
Property, plant and equipment | 8. Property, plant and equipment Property, plant and equipment consist of the following: December 31, (in thousands) 2017 2016 Land and improvements $ 21,843 $ 20,340 Buildings, building improvements and leasehold improvements 160,005 147,130 Furniture and equipment 206,819 190,157 Software 50,829 52,564 Construction-in-progress 100,088 77,813 539,584 488,004 Less: Accumulated depreciation and amortization (132,374 ) (111,556 ) Total property, plant and equipment, net $ 407,210 $ 376,448 For the year ended December 31, 2017 and 2016, construction-in-progress primarily includes costs related to the build out of the Company's CIADM manufacturing facility. Depreciation and amortization expense was $32.2 million, $28.0 million and $23.7 million for the years ended December 31, 2017, 2016, and 2015, respectively. |
Intangible assets and goodwill
Intangible assets and goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Intangible assets and goodwill [Abstract] | |
Intangible assets and goodwill | 9. Intangible assets and goodwill As of October 1, 2017 and 2016, the Company performed a Intangible assets consisted of the following: (in thousands) Total Cost basis Balance at December 31, 2016 $ 57,099 Additions 94,304 Balance at December 31, 2017 $ 151,403 Accumulated amortization Balance at December 31, 2016 $ (23,234 ) Amortization (8,572 ) Balance at December 31, 2017 $ (31,806 ) Net book value at December 31, 2017 $ 119,597 For the years ended December 31, 2017, 2016 and 2015, the Company recorded amortization expense of $8.6 million, $6.9 million and $7.4 million, respectively, for intangible assets, which has been recorded in operating expenses, specifically selling, general and administrative and cost of product sales and contract manufacturing. As of December 31, 2017, the weighted average amortization period remaining for intangible assets is 105 months. Future amortization expense as of December 31, 2017 is as follows: (in thousands) 2018 $ 15,647 2019 15,168 2020 15,087 2021 13,596 2022 and beyond 60,099 Total remaining amortization $ 119,597 The following table is a summary of changes in goodwill by reporting unit: (in thousands) Therapeutics and vaccines Contract manufacturing Devices Total Cost Basis Balance at December 31, 2016 $ 24,349 $ 6,736 $ 9,916 $ 41,001 Additions 8,129 - - 8,129 Balance at December 31, 2017 $ 32,478 $ 6,736 $ 9,916 $ 49,130 |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2017 | |
Long-term debt [Abstract] | |
Long-term debt | 10. Long-term debt 2.875% Convertible senior notes due 2021 On January 29, 2014, the Company issued $250.0 million aggregate principal amount of 2.875% Convertible Senior Notes due 2021 (the "Notes"). The Notes bear interest at a rate of 2.875% per year, payable semi-annually in arrears on January 15 and July 15 of each year. The Notes mature on January 15, 2021, unless earlier purchased by the Company or converted. The original conversion rate is equal to 30.8821 shares of common stock per $1,000 principal amount of notes (which is equivalent to a conversion price of approximately $32.38 per share of common stock). The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. The Company incurred approximately $8.3 million in debt issuance costs associated with the Notes, which has been capitalized on the consolidated balance sheets and is being amortized over seven years. As of August 1, 2016, certain conversion features were triggered due to the completion of the Aptevo spin-off. The conversion rate under the Notes was adjusted in accordance with the terms of the indenture. Effective August 12, 2016, the conversion rate was adjusted to 32.3860 shares of common stock per $1,000 principal amount of notes (which is equivalent to a conversion price of approximately $30.88 per share of common stock). On November 14, 2017, the Company issued a notice of termination of conversion rights for its outstanding Notes, of which $250.0 million was outstanding as of the notice date. In connection with the notice of termination, bondholders were given the option to convert their notes into the Company's stock at a rate of 32.386 per $1,000 of principal outstanding, plus a make-whole of an additional 3.1556 shares per $1,000 principal outstanding, in accordance with the terms of the indenture. The Company was not obligated to pay accrued or unpaid interest on converted notes, and bondholders who did not convert by the deadline of December 28, 2017 would retain their bonds but lose the conversion rights associated with the Notes and be paid interest of 2.875% until the earlier of maturity of the Notes in 2021 or the bonds being called and repaid in full by the Company. Between July 15, 2017 and the notification of termination of conversion rights, the Company accrued interest on the converted Notes of $2.4 million which was recorded as an increase in additional paid-in-capital on the balance sheet. Between November 14, 2017 and December 28, 2017 (the "conversion period"), approximately $239.4 million of bonds were converted into 8.5 million shares of the Company's common stock, inclusive of shares issued as part of the make-whole provision. In addition, the Company recorded a reduction in additional paid-in-capital on the Company's balance sheet of $3.6 million associated with debt issuance costs attributable to the converted notes. After giving effect to the converted bonds, the outstanding principal balance of the Notes as of December 31, 2017 was $10.6 million. Senior secured credit agreement On September 29, 2017, the Company entered into a senior secured credit agreement (the "2017 Credit Agreement") with four lending financial institutions, which replaced the Company's prior senior secured credit agreement (the "2013 Credit Agreement"). The 2017 Credit Agreement provides for a senior secured credit facility of up to $200 million through September 29, 2022. The 2017 Credit Agreement also includes a $100 million accordion feature, which could provide an additional $100 million in revolver or incremental term loans, at the option of the Company, resulting in a potential aggregate commitment of up to $300 million, subject to certain conditions and requirements set forth in the 2017 Credit Agreement. As of December 31, 2017, no amounts were drawn under the 2017 Credit Agreement. The Company's payment obligations under the 2017 Credit Agreement are secured by a lien on substantially all of the Company's assets, including the stock of all the Company's domestic subsidiaries, and the assets of the subsidiary guarantors. Borrowings under the 2017 Credit Agreement will bear interest at a rate per annum equal to (a) a eurocurrency rate plus a margin ranging from 1.50% to 2.50% per annum, depending on the Company's consolidated net leverage ratio or (b) a base rate (which is the highest of the prime rate, the federal funds rate plus 0.50% and a eurocurrency rate for an interest period of one month plus 1%) plus a margin ranging from 0.50% to 1.50%, depending on the Company's consolidated net leverage ratio. The Company is required to make quarterly payments under the 2017 Credit Agreement of accrued and unpaid interest on the outstanding principal balance, based on the above interest rates. In addition, the Company is required to pay commitment fees ranging from 0.25% to 0.40% per annum, depending on the Company's consolidated net leverage ratio, in respect of daily unused commitments under the 2017 Credit Agreement. The 2017 Credit Agreement contains affirmative and negative covenants customary for financings of this type. Negative covenants in the 2017 Credit Agreement, among other things, limit the Company's ability to incur indebtedness and liens; dispose of assets; make investments including loans, advances, guarantees, or acquisitions (other than permitted acquisitions, subject to compliance with the financial covenants and certain other conditions); and enter into certain mergers or consolidation transactions. The 2017 Credit Agreement also contains financial covenants, tested quarterly and in connection with any triggering events under the 2017 Credit Agreement: (1) a minimum consolidated debt service coverage ratio of 2.50 to 1.00, and (2) a maximum consolidated net leverage ratio of 3.50 to 1.00, which may be adjusted to 4.00 to 1.00 for a four-quarter period in connection with a permitted acquisition, subject to the terms and conditions of the 2017 Credit Agreement. Each of the ratios referred to in the foregoing clauses (1) and (2) is calculated on a consolidated basis for each consecutive four fiscal quarter periods. As of December 31, 2017, the Company is compliance with affirmative and negative covenants. The Company entered into a standby letter of credit and guarantee arrangement with a bank in the amount of $1.0 million that is fully collateralized by cash, which is classified as restricted cash in the Company's consolidated balance sheet. |
Stockholders' equity
Stockholders' equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' equity [Abstract] | |
Stockholders' equity | 11. Stockholders' equity Preferred stock The Company is authorized to issue up to 15.0 million shares of preferred stock, $0.001 par value per share ("Preferred Stock"). Any Preferred Stock issued may have dividend rights, voting rights, conversion privileges, redemption characteristics, and sinking fund requirements as approved by the Company's board of directors. Common stock The Company currently has one class of common stock, $0.001 par value per share common stock ("Common Stock"), authorized and outstanding. The Company is authorized to issue up to 200.0 million shares of Common Stock. Holders of Common Stock are entitled to one vote for each share of Common Stock held on all matters, except as may be provided by law. Stock options and restricted stock units As of December 31, 2017, the Company had one equity award plan, the Fourth Amended and Restated Emergent BioSolutions Inc. 2006 Stock Incentive Plan (the "2006 Plan"), which includes both stock options and restricted stock units. In connection with the Separation on August 1, 2016 and in accordance with the employee matters agreement and the Emergent Plans, the Company made certain adjustments to the exercise price and number of equity awards. Continuing Emergent employees with equity awards issued prior to Distribution received an equitable adjustment reflecting a revised exercise price and number of equity awards granted. Continuing Aptevo employees who had been granted Emergent equity awards had their grants canceled and reissued as Aptevo equity awards with an adjusted exercise price. The following is a summary of stock option award activity under the 2006 Plan: 2006 Plan Number of Shares Weighted-Average Exercise Price Aggregate Intrinsic Value Outstanding at December 31, 2016 2,559,331 $ 22.94 $ 25,348,245 Granted 427,821 31.13 Exercised (792,795 ) 19.95 Forfeited (72,952 ) 29.30 Outstanding at December 31, 2017 2,121,405 $ 25.48 $ 44,518,585 Exercisable at December 31, 2017 1,307,330 $ 22.63 $ 31,170,967 Options expected to vest at December 31, 2017 632,954 $ 29.91 $ 10,480,716 The following is a summary of restricted stock unit award activity under the 2006 Plan: Number of Shares Weighted-Average Grant Price Aggregate Intrinsic Value Outstanding at December 31, 2016 875,584 $ 28.94 $ 28,754,179 Granted 480,959 31.49 Vested (423,840 ) 30.52 Forfeited (80,983 ) 29.21 Outstanding at December 31, 2017 851,720 $ 30.84 $ 39,579,428 The weighted average remaining contractual term of options outstanding as of December 31, 2017 and 2016 was 4.0 years and 4.0 years, respectively. The weighted average remaining contractual term of options exercisable as of December 31, 2017 and 2016 was 3.2 years and 3.2 years, respectively. The weighted average grant date fair value of options granted during the years ended December 31, 2017, 2016, and 2015 was $10.53, $9.24 and $8.66, respectively. The total intrinsic value of options exercised during the years ended December 31, 2017, 2016, and 2015 was $13.9 million, $15.6 million and $20.2 million, respectively. The total fair value of awards vested during 2017, 2016 and 2015 was $17.9 million, $16.9 million and $14.4 million, respectively. As of the year ended December 31, 2017, the total compensation cost and weighted average period over which total compensation is expected to be recognized related to unvested equity awards was $17.9 million and 2.0 years, respectively. Stock-based compensation expense was recorded in the following financial statement line items: Year Ended December 31, (in thousands) 2017 2016 2015 Cost of product sales $ 1,076 $ 997 $ 1,183 Research and development 2,526 2,297 2,324 Selling, general and administrative 11,611 14,062 11,234 Continuing operations 15,213 17,356 14,741 Discontinued operations - 1,121 1,107 Total stock-based compensation expense $ 15,213 $ 18,477 $ 15,848 On July 14, 2016, the Company's board of directors authorized management to repurchase, from time to time, up to an aggregate of $50 million of the Company's common stock under a board-approved share repurchase program. The term of the board authorization of the repurchase program is until December 31, 2017. Any repurchased shares will be available for use in connection with the Company's stock plans and for other corporate purposes. During the year ended December 31, 2017, the Company has repurchased 0.8 million shares of common stock for $33.1 million. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income taxes [Abstract] | |
Income taxes | 12. Income taxes On December 22, 2017, the President of the United States signed into law the Tax Reform Act. The legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. Valuation allowances are recorded as appropriate to reduce deferred tax assets to the amount considered likely to be realized. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Reform Act, the Company revalued its ending net deferred tax liabilities in the United States at December 31, 2017 and recognized a provisional $13.4 million tax benefit in the Company's consolidated statement of income for the year ended December 31, 2017. The Tax Reform Act provided for a one-time deemed mandatory repatriation of post-1986 undistributed foreign subsidiary earnings and profits ("E&P") through the year ended December 31, 2017. The Company had an estimated $95.4 million of undistributed foreign E&P subject to the deemed mandatory repatriation and recognized a provisional transition tax of $13.6 million of income tax expense in the Company's consolidated statement of income for the year ended December 31, 2017. The Company expects to pay U.S. federal cash taxes on the deemed mandatory repatriation over eight years. While the Tax Reform Act provides for a territorial tax system, beginning in 2018, it includes two new U.S. tax base erosion provisions, the global intangible low-taxed income ("GILTI") provisions and the base-erosion and anti-abuse tax ("BEAT") provisions. The GILTI provisions require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary's tangible assets. The Company expects that it will be subject to incremental U.S. tax on GILTI income beginning in 2018, due to Company's overall foreign loss position. The Company has elected to account for GILTI tax in the period in which it is incurred, and therefore has not provided any deferred tax impacts of GILTI in its consolidated financial statements for the year ended December 31, 2017. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118") to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. The Company has recognized the provisional tax impacts related to deemed repatriated earnings and the revaluation of deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Reform Act. The Company's estimates are provisional based upon utilization of foreign tax credits and validation of E&P. The accounting is expected to be complete when the 2017 U.S. corporate income tax return is filed in 2018. Significant components of the provisions for income taxes attributable to operations consist of the following: Year Ended December 31, (in thousands) 2017 2016 2015 Current Federal $ 29,441 $ 29,244 $ 38,957 State 2,983 2,331 2,221 International 356 1,002 2,029 Total current 32,780 32,577 43,207 Deferred Federal (6,045 ) 9,979 (119 ) State (592 ) (272 ) (111 ) International 9,896 (5,587 ) 1,323 Total deferred 3,259 4,120 1,093 Total provision for income taxes $ 36,039 $ 36,697 $ 44,300 The Company's net deferred tax asset (liability) consists of the following: December 31, (in thousands) 2017 2016 Federal losses carryforward $ 1,603 $ 4,130 State losses carryforward 17,234 13,682 Research and development carryforward 3,534 3,647 Scientific research and experimental development credit carryforward 16,493 16,594 Stock compensation 5,344 8,389 Foreign deferrals 34,072 58,647 Inventory reserves 1,607 2,273 Other 3,889 5,569 Deferred tax asset 83,776 112,931 Fixed assets (23,121 ) (30,728 ) Intangible assets (2,229 ) (5,882 ) Other (10,451 ) (16,047 ) Deferred tax liability (35,801 ) (52,657 ) Valuation allowance (45,141 ) (54,178 ) Net deferred tax asset $ 2,834 $ 6,096 As of December 31, 2017, the Company has a net U.S. deferred tax liability in the amount of $13.1 million and a foreign net deferred tax asset in the amount of $15.9 million. The Company had a net U.S. deferred tax liability in the amount of $18.3 million and a foreign net deferred tax asset in the amount of $24.4 as of December 31, 2016. As of December 31, 2017, the Company currently has approximately $7.6 million ($1.6 million tax effected) in net operating loss carryforwards along with $3.5 million in research and development tax credit carryforwards for U.S. federal tax purposes that will begin to expire in 2027 and 2024, respectively. The U.S. federal tax carryforwards are recorded with no valuation allowance. The Company has $264.1 million ($17.2 million tax effected) in state net operating loss carryforwards, primarily in Maryland, that will begin to expire in 2019. The U.S. state tax loss carryforwards are recorded with a valuation allowance of $193.5 million ($12.6 million tax effected). The Company has approximately $168.7 million ($32.5 million tax effected) in net operating losses from foreign jurisdictions (excluding Canada) that will have an indefinite life unless the foreign entities have a change in the nature or conduct of the business in the three years following a change in ownership. A valuation allowance in respect to these foreign losses has been recorded in the amount of $32.5 million. During the year the Company has utilized approximately $41.8 million ($11.3 million tax effected) in Canadian loss carryforwards. The Company currently has approximately $16.5 million in Manitoba scientific research and experimental development credit carryforwards that will begin to expire in 2025. The use of any of these net operating losses and research and development tax credit carryforwards may be restricted due to future changes in the Company's ownership. The provision for income taxes differs from the amount of taxes determined by applying the U.S. federal statutory rate to income before the provision for income taxes as a result of the following: Year ended December 31, (in thousands) 2017 2016 2015 US $ 80,690 $ 63,330 $ 117,385 International 37,943 35,891 18,331 Earnings before taxes on income 118,633 99,221 135,716 Federal tax at statutory rates $ 41,522 $ 34,738 $ 47,475 State taxes, net of federal benefit 1,274 529 852 Impact of foreign operations (2,168 ) (9,937 ) (1,640 ) Change in valuation allowance 314 10,458 (950 ) Tax credits (1,918 ) (1,572 ) (2,088 ) Transition tax 13,585 - - Change in U.S. tax rate (13,403 ) - - Stock compensation (3,978 ) - - Other differences (118 ) 1,103 733 Permanent differences 929 1,378 (82 ) Provision for income taxes $ 36,039 $ 36,697 $ 44,300 The effective annual tax rate for the years ended December 31, 2017, 2016, and 2015 was 30%, 37% and 33%, respectively. The effective annual tax rate of 30% in 2017 differs from statutory rate primarily due to the jurisdictional mix of earnings. Due to the impact of the Tax Reform Act enacted on December 22, 2017, the Company recognized a $13.4 million tax benefit as a result of revaluing the U.S. ending net deferred tax liabilities from 35% to the newly enacted U.S. corporate income tax rate of 21%. The tax benefit was fully offset by tax expense of $13.6 million for the transition tax on the deemed mandatory repatriation of undistributed earnings. The increase in the effective annual tax rate in 2016 was primarily related to tax on the sale, within the Company's consolidated group, of assets from Canadian subsidiaries to U.S. subsidiaries in preparation of the spin-off of Aptevo, and a valuation allowance charge recorded in its continuing operations related to Aptevo deferred tax assets prior to the distribution. The Company determined that upon spin-off, the deferred tax assets of Aptevo would be unrealizable. The Company recognizes interest in interest expense and recognizes potential penalties related to unrecognized tax benefits in selling, general and administrative expense. Of the total unrecognized tax benefits recorded at December 31, 2017 and 2016, $0.8 million and $0.5 million, respectively, is classified as a current liability and $1.2 million and $1.3 million, respectively, is classified as a non-current liability on the balance sheet. The table below presents the gross unrecognized tax benefits activity for 2017, 2016 and 2015: (in thousands) Gross unrecognized tax benefits at December 31, 2014 $ 1,248 Increases for tax positions for prior years 150 Decreases for tax positions for prior years - Increases for tax positions for current year 59 Settlements - Lapse of statute of limitations - Gross unrecognized tax benefits at December 31, 2015 1,457 Increases for tax positions for prior years 5 Decreases for tax positions for prior years - Increases for tax positions for current year 299 Settlements - Lapse of statute of limitations - Gross unrecognized tax benefits at December 31, 2016 1,761 Increases for tax positions for prior years - Decreases for tax positions for prior years - Increases for tax positions for current year 531 Settlements (318 ) Lapse of statute of limitations - Gross unrecognized tax benefits at December 31, 2017 $ 1,974 When resolved, substantially all of these reserves would impact the effective tax rate. The Company's federal and state income tax returns for the tax years 2013 to 2016 remain open to examination. The Company's tax returns in the United Kingdom remain open to examination for the tax years 2008 to 2016, and tax returns in Germany remain open indefinitely. The Company's tax returns for Canada remains open to examination for the tax years 2010 to 2016. As of December 31, 2017, the Company's Canadian 2016 Scientific Research and Experimental Development Claim is under audit. As of December 31, 2017, the Company's 2011 and 2012 federal income tax returns that were under audit are now resolved and closed. |
401(k) savings plan
401(k) savings plan | 12 Months Ended |
Dec. 31, 2017 | |
401(k) savings plan [Abstract] | |
401(k) savings plan | 13. 401(k) savings plan The Company has established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. The 401(k) Plan covers substantially all U.S. employees. Under the 401(k) Plan, employees may make elective salary deferrals. The Company currently provides for matching of qualified deferrals up to 50% of the first 6% of the employee's salary. During the years ended December 31, 2017, 2016, and 2015, the Company made matching contributions of approximately $2.7 million, $2.5 million and $2.2 million, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Leases | 14. Leases The Company leases fill/finish, manufacturing, laboratory, warehouse and office facilities, office equipment and vehicles under various operating lease agreements. The Company leases a fill/finish space in Rockville, Maryland under an operating lease that contains no escalation clause, which expires in May 2027. The Company leases office and warehouse space in Baltimore, Maryland under an operating lease that contains a 2.75% escalation clause, which expires in July 2027. The Company leases office and warehouse space in Canton, Massachusetts, under an operating lease that contains a 3.0% escalation clause, which expires in April 2023. The Company leases office space in Washington, D.C. under an operating lease that contains a 2.5% escalation clause, which expires in March 2027. For the years ended December 31, 2017, 2016, and 2015, total lease expense was $1.6 million, $1.4 million and $1.3 million, respectively. Future minimum lease payments under operating lease obligations as of December 31, 2017 were as follows: (in thousands) 2017 $ 1,626 2018 1,391 2019 1,339 2020 1,343 2021 1,346 2022 and beyond 3,685 Total minimum lease payments $ 10,730 |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related party transactions [Abstract] | |
Related party transactions | 15. Related party transactions In November 2015, the Company entered into a consulting arrangement with a member of the Company's Board of Directors, amended in July 2016, to provide assistance in connection with the planned spin-off of Aptevo. The total compensation under the agreement was approximately $0.2 million per year. The consulting agreement terminated on August 1, 2016. The Company entered into an agreement in February 2009 with an entity controlled by family members of the Company's Executive Chairman to sell BioThrax. The agreement was effective as of November 2008 and requires payment based on a percentage of net sales of biodefense products of 17.5% in Saudi Arabia and 15% in Qatar and United Arab Emirates, and reimbursement of certain expenses. No expenses were incurred under this agreement during the years ended December 31, 2017, 2016 and 2015. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings per share [Abstract] | |
Earnings per share | 16. Earnings per share The following table presents the calculation of basic and diluted net income per share: Years ended December 31, (in thousands, except share and per share data) 2017 2016 2015 Numerator: Net income from continuing operations $ 82,594 $ 62,524 $ 91,416 Interest expense, net of tax 2,606 3,255 3,019 Amortization of debt issuance costs, net of tax 681 781 868 Net income, adjusted from continuing operations 85,881 66,560 95,303 Net loss from discontinued operations - (10,748 ) (28,546 ) Net income, adjusted $ 85,881 $ 55,812 $ 66,757 Denominator: Weighted-average number of shares-basic 41,816,431 40,184,159 38,595,435 Dilutive securities-equity awards 1,115,244 1,054,453 939,882 Dilutive securities-convertible debt 7,396,262 8,096,500 7,720,525 Weighted-average number of shares-diluted 50,327,937 49,335,112 47,255,842 Net income per share-basic from continuing operations $ 1.98 $ 1.56 $ 2.37 Net loss per share-basic from discontinued operations - (0.27 ) (0.74 ) Net income per share-basic $ 1.98 $ 1.29 $ 1.63 Net income per share-diluted from continuing operations $ 1.71 $ 1.35 $ 2.02 Net loss per share-diluted from discontinued operations - (0.22 ) (0.61 ) Net income per share-diluted $ 1.71 $ 1.13 $ 1.41 For the year ending December 31, 2017 and 2016, substantially all of the outstanding stock options to purchase shares of common stock were included in the calculation of diluted earnings per share. For the years ending December 31, 2015, outstanding stock options to purchase approximately 1.4 million shares of common stock, respectively, are not considered in the diluted earnings per share calculation because the exercise price of these options is greater than the average per share closing price during the year and their effect would be anti-dilutive. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring [Abstract] | |
Restructuring | 17. Restructuring In August 2016, the Company adopted a plan to restructure and reprioritize the operations of one of our facilities at the Emergent BioDefense Operations Lansing LLC ("EBOL") site due to the Company's large-scale manufacturing facility at EBOL commencing manufacturing operations. Severance and other related costs and asset-related charges are reflected within the Company's consolidated statement of income as a component of selling, general and administrative expense. The Company has completed the EBOL restructuring. The costs of the EBOL restructuring for the year ended December 31, 2017 and recognized to date are detailed below: Incurred in Inception (in thousands) 2017 To Date Termination benefits $ 40 $ 5,286 Abandonment of equipment - 3,749 Other costs - 691 Total $ 40 $ 9,726 During the year ended December 31, 2016, the Company abandoned certain equipment and associated assets at its EBOL facility related to the manufacturing process at Building 12 ("manufacturing process") asset group. During the third quarter of 2016, the Company recorded a charge for the manufacturing process asset group of $3.7 million. The additional expense is classified in the Company's statements of operations as selling, general and administrative expense. The following is a summary of the activity for the liabilities related to the EBOL restructuring: Termination (in thousands) Benefits Balance at December 31, 2016 $ 4,357 Expenses incurred 40 Amount paid (4,387 ) Balance at December 31, 2017 $ 10 |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2017 | |
Segment information [Abstract] | |
Segment information | 18. Segment information On August 6, 2015, the Company announced its plan to separate into two independent publicly-traded companies. In anticipation of the spin-off, the Company realigned certain components of its biosciences business to the new Aptevo segment to be consistent with how the chief operating decision maker ("CODM"), allocates resources and makes decisions about the operations of the Company. Effective January 1, 2016, the Company changed its segment presentation to reflect this new structure, and recast all prior periods presented to conform to the new presentation. On August 1, 2016, the Company completed the spin-off of Aptevo. The results of operations and financial position of Aptevo are reflected as discontinued operations for all periods presented through the date of the spin-off. For financial reporting purposes, in the periods following the spin-off of Aptevo, the Company reports financial information for one reportable segment. This reportable segment engages in business activities for which discrete financial information is provided to and resources are allocated by the CODM. The accounting policies of the reportable segment is the same as those described in the summary of significant accounting policies. For the years ended December 31, 2017, 2016, and 2015, the Company's revenues within the United States comprised 89%, 94% and 96%, respectively, of total revenues. For the years ended December 31, 2017, 2016, and 2015, product revenues from BioThrax to the U.S. government comprised approximately 67%, 80% and 89%, respectively, of total product revenues. As of December 31, 2017, 2016, and 2015, there were no other product sales to an individual customer or for an individual product in excess of 10% of total product sales revenues. For years ended December 31, 2017 and 2016, the Company had long-lived assets outside of the United States of approximately $28.6 million and $28.4 million, respectively, which are primarily located within Canada. |
Quarterly financial data (unaud
Quarterly financial data (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly financial data (unaudited) [Abstract] | |
Quarterly financial data (unaudited) | 19. Quarterly financial data (unaudited) Quarterly financial information for the years ended December 31, 2017 and 2016 is presented in the following tables: Quarter Ended (in thousands, except per share data) March 31, June 30, September 30, December 31, 2017: Revenue $ 116,858 $ 100,772 $ 149,434 $ 193,809 Income from operations 14,910 8,529 47,769 53,077 Net income 10,485 4,616 33,551 33,942 Net income per share-basic $ 0.26 $ 0.11 $ 0.81 $ 0.77 Net income per share-diluted $ 0.23 $ 0.11 $ 0.68 $ 0.67 2016: Revenue $ 102,964 $ 91,241 $ 142,914 $ 151,663 Income (loss) from operations 21,157 (2,042 ) 35,478 50,929 Net income (loss) from continuing operations 11,889 (2,042 ) 20,388 32,289 Net income (loss) from discontinued operations (1) (7,898 ) (8,905 ) 952 5,103 Net income (loss) 3,991 (10,947 ) 21,340 37,392 Net income (loss) per share from continuing operations-basic $ 0.30 $ (0.05 ) $ 0.50 $ 0.80 Net income (loss) per share from discontinued operations-basic (0.20 ) (0.22 ) 0.02 0.13 Net income (loss) per share-basic $ 0.10 $ (0.27 ) $ 0.52 $ 0.93 Net income (loss) per share from continuing operations-diluted $ 0.26 $ (0.05 ) $ 0.43 $ 0.67 Net income (loss) per share from discontinued operations-diluted (0.16 ) (0.22 ) 0.02 0.10 Net income (loss) per share-diluted $ 0.10 $ (0.27 ) $ 0.45 $ 0.77 (1) Reflects a change in estimate attributed to higher pretax income within continuing operations. According to the ordering rules of intraperiod tax allocation, the residual amount of change after determining the effective rate for continuing operations is allocated to discontinued operations. |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2017 | |
Litigation [Abstract] | |
Litigation | 20. Litigation On July 19, 2016, Plaintiff William Sponn, or Sponn, filed a putative class action complaint in the United States District Court for the District of Maryland on behalf of purchasers of the Company's common stock between January 11, 2016 and June 21, 2016, inclusive, or the Class Period, seeking to pursue remedies under the Securities Exchange Act of 1934 against the Company and certain of its senior officers and directors, collectively, the Defendants. The complaint alleges, among other things, that the Company made materially false and misleading statements about the government's demand for BioThrax and expectations that the Company's five-year exclusive procurement contract with HHS would be renewed and omitted certain material facts. Sponn is seeking unspecified damages, including legal costs. On October 25, 2016, the Court added City of Cape Coral Municipal Firefighters' Retirement Plan and City of Sunrise Police Officers' Retirement Plan as plaintiffs and appointed them Lead Plaintiffs and Robins Geller Rudman & Dowd LLP as Lead Counsel. On December 27, 2016, the Plaintiffs filed an amended complaint that cites the same class period, names the same defendants and makes similar allegations to the original complaint. The Company filed a Motion to Dismiss on February 27, 2017. The Plaintiffs filed an opposition brief on April 28, 2017. The Company's Motion to Dismiss was heard and denied on July 6, 2017. The Company filed its answer on July 28, 2017. The parties are currently in the process of exchanging discovery. The Plaintiffs' filed an amended motion for class certification and appointment of Sponn and Geoffrey L. Flagstad as lead plaintiffs on December 20, 2017. A hearing on that motion is set for May 2, 2018. The Defendants believe that the allegations in the complaint are without merit and intend to defend themselves vigorously against those claims. As of the date of this filing, the range of potential loss cannot be determined or estimated. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Schedule II - Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (in thousands) Beginning Balance Charged to costs and expenses Deductions Ending Balance Year Ended December 31, 2017 Inventory allowance $ 3,535 $ 8,846 $ (8,532 ) $ 3,849 Prepaid expenses and other current assets allowance 4,868 466 - 5,334 Year Ended December 31, 2016 Inventory allowance $ 1,637 $ 9,950 $ (8,052 ) $ 3,535 Prepaid expenses and other current assets allowance 1,981 2,887 - 4,868 Year Ended December 31, 2015 Inventory allowance $ 1,314 $ 6,258 $ (5,935 ) $ 1,637 Prepaid expenses and other current assets allowance 1,885 96 - 1,981 |
Summary of significant accoun30
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of significant accounting policies [Abstract] | |
Basis of presentation and consolidation | Basis of presentation and consolidation The accompanying consolidated financial statements include the accounts of Emergent and its wholly owned and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In anticipation of the spin-off, the Company realigned certain components of its biosciences business to the new Aptevo segment to be consistent with how the Company's chief operating decision maker ("CODM") allocates resources and makes decisions about the operations of the Company. Effective January 1, 2016, the Company changed its segment presentation to reflect this new structure, and recast all prior periods presented to conform to the new presentation. On August 1, 2016, the Company completed the spin-off of Aptevo. As of December 31, 2017, the results of operations and financial position of Aptevo are reflected as discontinued operations for all periods presented through the date of the spin-off. The historical financial statements and footnotes have been revised accordingly. See Note 3. "Discontinued operations" for further details regarding the spin-off. For periods following the spin-off, the Company reports financial results under one operating segment which is also a single reportable segment. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and cash equivalents | Cash and cash equivalents Cash equivalents are highly liquid investments with a maturity of 90 days or less at the date of purchase and consist of time deposits and investments in money market funds with commercial banks and financial institutions. Also, the Company maintains cash balances with financial institutions in excess of insured limits. The Company does not anticipate any losses with such cash balances. |
Fair value of measurements | Fair value of measurements The Company measures and records cash equivalents and investment securities considered available-for-sale at fair value in the accompanying financial statements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value include: Level 1 — Observable inputs for identical assets or liabilities such as quoted prices in active markets; Level 2 — Inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3 — Unobservable inputs in which little or no market data exists, which are therefore developed by the Company using estimates and assumptions that reflect those that a market participant would use. The carrying amounts of the Company's short-term financial instruments, which include cash and cash equivalents, accounts receivable and accounts payable, approximate their fair values due to their short maturities. |
Significant customers and accounts receivable | Significant customers and accounts receivable The Company has derived a majority of its revenue from sales of BioThrax under contracts with the U.S. government. The Company's current Centers for Disease Control ("CDC") contract does not necessarily increase the likelihood that it will secure future comparable contracts with the U.S. government. The Company expects that a significant portion of the business that it will seek in the near future, in particular for BioThrax, will be under government contracts that present a number of risks that are not typically present in the commercial contracting process. U.S. government contracts for BioThrax are subject to unilateral termination or modification by the government. The Company may fail to achieve significant sales of BioThrax to customers in addition to the U.S. government, which would harm its growth opportunities. The Company may not be able to sustain or increase profitability. The Company may not be able to manufacture BioThrax consistently in accordance with FDA specifications. Accounts receivable are stated at invoice amounts and consist primarily of amounts due from the U.S. government, as well as amounts due under reimbursement contracts with other government entities and non-government organizations. If necessary, the Company records a provision for doubtful receivables to allow for any amounts which may be unrecoverable. This provision is based upon an analysis of the Company's prior collection experience, customer creditworthiness and current economic trends. |
Concentrations of credit risk and uncertainties | Concentrations of credit risk and uncertainties Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company places its cash and cash equivalents with high quality financial institutions. Management believes that the financial risks associated with its cash and cash equivalents are minimal. Because accounts receivable consists primarily of amounts due from the U.S. government for product sales and from government agencies under government grants and development contracts, management does not deem the credit risk to be significant. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value with cost being determined using a standard cost method, which approximates average cost. Average cost consists primarily of material, labor and manufacturing overhead expenses (including fixed production-overhead costs) and includes the services and products of third party suppliers. The Company analyzes its inventory levels quarterly and writes down, in the applicable period, inventory that has become obsolete, inventory that has a cost basis in excess of its expected net realizable value and inventory in excess of expected customer demand. The Company also writes off, in the applicable period, the costs related to expired inventory. Costs of purchased inventories are recorded using weighted-average costing. The Company determines normal capacity for each production facility and allocates fixed production-overhead costs on that basis. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment are stated at cost. Depreciation is computed using the straight-line method over the following estimated useful lives: Buildings 31-39 years Building improvements 10-39 years Furniture and equipment 3-15 years Software 3-7 years or product life Leasehold improvements Lesser of the asset life or lease term Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred. The Company capitalizes internal-use software when both (a) the software is internally developed, acquired, or modified solely to meet the entity's internal needs and (b) during the software's development or modification, no substantive plan either exists or is being developed to market the software externally. Capitalization of qualifying internal-use software costs begins when the preliminary project stage is completed, management with the relevant authority, implicitly or explicitly, authorizes and commits to the funding of the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. |
Income taxes | Income taxes Income taxes are accounted for using the liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and research and development tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. Deferred income tax effects of transactions reported in different periods for financial reporting and income tax return purposes are recognized under the asset and liability method of accounting for income taxes. This method gives consideration to the future tax consequences of the deferred income tax items and immediately recognizes changes in income tax laws in the year of enactment. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the "Tax Reform Act"). Further information on the tax impacts of the Tax Reform Act is included in Note 12 of the Company's consolidated financial statements. The Company's ability to realize deferred tax assets depends upon future taxable income as well as the limitations discussed below. For financial reporting purposes, a deferred tax asset must be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized prior to expiration. The Company considers future taxable income and ongoing tax planning strategies in assessing the need for valuation allowances. In general, if the Company determines that it is more likely than not to realize more than the recorded amounts of net deferred tax assets in the future, the Company will reverse all or a portion of the valuation allowance established against its deferred tax assets, resulting in a decrease to the provision for income taxes in the period in which the determination is made. Likewise, if the Company determines that it is not more likely than not to realize all or part of the net deferred tax asset in the future, the Company will establish a valuation allowance against deferred tax assets, with an offsetting increase to the provision for income taxes, in the period in which the determination is made. Under sections 382 and 383 of the Internal Revenue Code, if an ownership change occurs with respect to a "loss corporation", as defined therein, there are annual limitations on the amount of net operating losses and deductions that are available. The Company believes the use of net operating losses and research and development tax credits acquired in the Trubion acquisition will not be significantly limited. Due to the acquisition of Microscience in 2005 and the Company's initial public offering, the Company believes the use of the operating losses incurred prior to 2005 will be significantly limited. Because tax laws are complex and subject to different interpretations, significant judgment is required. As a result, the Company makes certain estimates and assumptions, in (1) calculating the Company's income tax expense, deferred tax assets and deferred tax liabilities, (2) determining any valuation allowance recorded against deferred tax assets and (3) evaluating the amount of unrecognized tax benefits, as well as the interest and penalties related to such uncertain tax positions. The Company's estimates and assumptions may differ significantly from tax benefits ultimately realized. |
Revenue recognition | Revenue recognition The Company recognizes revenues from product sales and contract manufacturing  there is persuasive evidence of an arrangement;  delivery has occurred or title has passed to the Company's customer;  the fee is fixed or determinable; and  collectability is reasonably assured. Under the Company's contracts with the CDC, the Company invoices the CDC and recognizes the related revenue upon acceptance by the government at delivery site, at which time title to the product passes to the CDC. Agreements with multiple components ("deliverables" or "items") are evaluated to determine if the deliverables can be divided into more than one unit of accounting. An item can generally be considered a separate unit of accounting if both of the following criteria are met: (1) the delivered item or items have value to the customer on a standalone basis. The item or items have value on a standalone basis if they are sold separately by any vendor or the customer could resell the delivered item(s) on a standalone basis. In the context of a customer's ability to resell the delivered item(s), this criterion does not require the existence of an observable market for the deliverable(s); and (2) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in control of the Company. Items that cannot be divided into separate units are combined with other units of accounting, as appropriate. Consideration received is allocated among the separate units based on the relative selling price of each deliverable. The Company deems service to have been rendered if no continuing obligation exists on the part of the Company. The Company's contract with the Biomedical Advanced Research and Development Authority ("BARDA") to establish a Center for Innovation in Advanced Development and Manufacturing ("CIADM") is a service arrangement that includes multiple elements. The CIADM contract requires the Company to provide a flexible infrastructure to supply medical countermeasures to the U.S. government over the contract period and includes such items as construction and facility design, workforce development and licensure of a pandemic flu vaccine. Since none of the individual elements by themselves satisfy the purpose of the contract, the Company has concluded that the CIADM contract elements cannot be separated as they do not have stand-alone value to the U.S. government. Therefore, the Company has concluded that there is a single unit of accounting associated with the CIADM contract. The Company recognizes revenue under the CIADM contract on a straight-line basis, based upon its estimate of the total payments to be received under the contract. The Company analyzes the estimated payments to be received on a quarterly basis to determine if an adjustment to revenue is required. Changes in estimates attributed to modifications in the estimate of total payments to be received are recorded prospectively. The Company's BAT contract with BARDA is a service arrangement that includes multiple elements. The deliverables to BARDA include supplying product to the SNS, performing stability testing for the product, achievement of extended product expiry dating, maintenance of horse populations and plasma extraction. The Company has determined that each of the deliverables above represents a separate unit of accounting as they have standalone value to the U.S. government. The Company allocated the value of the contract to the undelivered elements based on best estimate of selling price ("BESP"). BESP methodology for the deliverables, excluding the product sales, was developed using a cost build-up for internal and external costs, plus a specified mark-up. The allocation of value to the product sales was based on the remaining unallocated value. The Company completed the final delivery of the BAT product in 2017. The Company recognizes revenue for: § BAT product sales upon delivery to the SNS; § stability testing based on the required testing schedule of the product; § extended product expiry based on achievement of the extension; § horse maintenance based on a per horse basis; and § plasma collection on a per liter basis. The Company's contracts for VIGIV with the CDC and for Anthrasil with BARDA are service arrangements that include multiple elements. The deliverables to BARDA include to supply product to the SNS, perform stability testing for the product, achievement of extended product expiry dating and plasma extraction. The Company has determined that each of the deliverables above represents separate units of accounting as they have standalone value to the U.S. government. The Company allocated the value of the contract to the undelivered elements based on BESP. BESP methodology for the deliverables, excluding the product sales, was developed using a cost build-up for internal and external costs, plus a specified mark-up. The allocation of value to the product sales was based on the remaining unallocated value. The Company recognizes revenue for: § VIGIV and Anthrasil product sales upon delivery to the CDC; § stability testing based on the required testing schedule of the product; § extended product expiry based on achievement of the extension; and § plasma collection on a per liter basis. The Company's contract for the NuThrax product candidate with BARDA, which was entered into on September 30, 2016 is a service arrangement that includes multiple elements. The deliverables to BARDA are the completion of development for NuThrax and the procurement of product for the SNS. The Company has determined that each of the deliverables above are a separate unit of accounting as they have standalone value to the U.S. government. The Company allocated the value of the contract to the undelivered elements based on best estimate of selling price ("BESP"). BESP methodology for the development deliverable was developed using a cost build-up for internal and external costs, plus a specified mark-up. The Company has determined that the procurement of NuThrax under the BARDA NuThrax Contract is a contingent deliverable, as it is dependent upon successful completion of development; therefore, the Company has excluded this from the allocation of the contract consideration. The Company has allocated $147.5 million to the development services deliverable and will recognize revenue as the services are provided. On March 16, 2017, the Company entered into a contract with BARDA, valued at $100 million, for the delivery of BioThrax to the SNS over a two-year period of performance. In conjunction with the signing of this contract, the Company entered into a modification to its BARDA NuThrax Contract that increases the number of doses of NuThrax to be delivered under the base period from two million to three million doses with a commensurate reduction in dose price for the initial deliveries. The modification also provides for a discount on the sales price for doses to be procured during the option period up to $100 million. As a result of the modification of the BARDA NuThrax Contract, in conjunction with execution of the BARDA BioThrax Contract, the Company has determined that the two agreements are linked under the revenue recognition requirements of the Financial Accounting Standards Board ("FASB") Topic 605, Revenue Recognition. The Company analyzed these agreements and determined that the units of accounting under the linked agreements are: · development services for the NuThrax product candidate under the BARDA NuThrax Contract; and · procurement of BioThrax under the BARDA BioThrax Contract. The Company's allocation of contract consideration for the development services was updated based on the services provided prior to March 17, 2017. The allocation of contract consideration for the BioThrax doses to be sold under the BARDA BioThrax Contract was determined based on similar pricing provided to other customers. The Company's determination of the amount of contract consideration to be allocated to the discounts was based on an undiscounted probability adjusted model, which factored in the expected timing of regulatory approval for the NuThrax product candidate, expected levels of procurement of the NuThrax product candidate upon regulatory approval and the market conditions for these types of medical countermeasures. The Company allocated the contract consideration to the two units of accounting as follows: · $137.1 million was allocated to the development services for the NuThrax product candidate under the BARDA NuThrax Contract; and · $93.6 million was allocated to the procurement of BioThrax under the BARDA BioThrax Contract. The Company deferred a portion of the consideration received for doses delivered under the BARDA BioThrax Contract and the development services for the NuThrax product candidate. The Company will recognize the deferred revenue upon the delivery of NuThrax doses under the BARDA NuThrax Contract, or upon the future extinguishment of the Company's obligation to deliver NuThrax doses to which the discount applies. Revenue associated with non-refundable upfront license fees under arrangements where the license fees and research and development activities cannot be accounted for as separate units of accounting is deferred and recognized as revenue either on a straight-line basis over the Company's continued involvement in the research and development process or based on the proportional performance of the Company's expected future obligation under the contract. Revenues from the achievement of research and development milestones, if deemed substantive, are recognized as revenue when the milestones are achieved, and the milestone payments are due and collectible. If not deemed substantive, the Company recognizes such milestone as revenue on a straight-line basis over the remaining expected term of continued involvement in the research and development process. Milestones are considered substantive if all of the following conditions are met: (1) the milestone is non-refundable, (2) achievement of the milestone was not reasonably assured at the inception of the arrangement, (3) substantive effort is involved to achieve the milestone, and (4) the amount of the milestone appears reasonable in relation to the effort expended. Payments received in advance of work performed are recorded as deferred revenue. The Company generates contracts and grants revenue from cost-plus-fee contracts. Revenues from reimbursable contracts are recognized as costs are incurred, generally based on allowable costs incurred during the period, plus any recognizable earned fee. The Company considers fixed fees under cost-plus-fee contracts to be earned in proportion to the allowable costs incurred in performance of the contract. The Company analyzes costs for contracts and reimbursable grants to ensure reporting of revenues gross versus net is appropriate. For each of the three years in the period ended December 31, 2017, the costs incurred under the contracts and grants approximated the revenue earned. |
Acquisitions | Acquisitions In determining whether an acquisition is a business combination versus an asset acquisition, the accounting guidance requires an entity to first evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If that threshold is met, the set of assets and activities is not a business and therefore treated as an asset acquisition. If it's not met, the entity evaluates whether the set meets the definition of a business. If an acquired asset or asset group does not meet the definition of a business, the transaction is accounted for as an asset acquisition. Otherwise, the acquisition is treated as a business combination. In a business combination, the acquisition method of accounting requires that the assets acquired and liabilities assumed be recorded as of the date of the merger or acquisition at their respective fair values with limited exceptions. Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized at fair value if fair value can reasonably be estimated. If the acquisition date fair value of an asset acquired or liability assumed that arises from a contingency cannot be determined, the asset or liability is recognized if probable and reasonably estimable; if these criteria are not met, no asset or liability is recognized. 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. Accordingly, the Company may be required to value assets at fair value measures that do not reflect the Company's intended use of those assets. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of the acquired business are reflected in the Company's consolidated financial statements after the date of the merger or acquisition. If the Company determines the assets acquired do not meet the definition of a business under the acquisition method of accounting, the transaction will be accounted for as an acquisition of assets rather than a business combination and, therefore, no goodwill will be recorded. The fair values of intangible assets, including acquired in-process research and development ("IPR&D"), are determined utilizing information available at or near the merger or acquisition date based on expectations and assumptions that are deemed reasonable by management. Given the considerable judgment involved in determining fair values, the Company typically obtains assistance from third-party valuation specialists for significant items. Amounts allocated to acquired IPR&D are capitalized and accounted for as indefinite-lived intangible assets. Upon successful completion of each project, the Company will make a separate determination as to the remaining useful life of the asset and begin amortization. The judgments made in determining estimated fair values assigned to assets acquired and liabilities assumed in a business combination, as well as asset lives, can materially affect the Company's results of operations. The fair values of identifiable intangible assets related to current products and product rights are primarily determined by using an "income approach" through which fair value is estimated based on each asset's discounted projected net cash flows. The Company's estimates of market participant net cash flows consider historical and projected pricing, margins and expense levels, the performance of competing products where applicable, relevant industry and therapeutic area growth drivers and factors, current and expected trends in technology and product life cycles, the time and investment that will be required to develop products and technologies, the ability to obtain marketing and regulatory approvals, the ability to manufacture and commercialize the products, the extent and timing of potential new product introductions by the Company's competitors, and the life of each asset's underlying patent, if any. The net cash flows are then probability-adjusted where appropriate to consider the uncertainties associated with the underlying assumptions, as well as the risk profile of the net cash flows utilized in the valuation. The probability-adjusted future net cash flows of each product are then discounted to present value utilizing an appropriate discount rate. The fair values of identifiable intangible assets related to IPR&D are determined using an income approach, through which fair value is estimated based on each asset's probability-adjusted future net cash flows, which reflect the different stages of development of each product and the associated probability of successful completion. The net cash flows are then discounted to present value using an appropriate discount rate. Indefinite-lived intangible assets are tested for impairment annually or whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. |
Intangible assets and long-lived assets | Intangible assets and long-lived assets The Company assesses intangible assets for impairment on an annual basis or more frequently if indicators of impairment are present. The Company's annual assessment includes a comparison of the fair value of intangible assets to existing carrying value, and recognizes an impairment when the carrying value is greater than the determined fair value. The Company believes that the assumptions used in valuing the intangible assets are reasonable and are based upon its best estimate of likely outcomes of sales and clinical development. The underlying assumptions and estimates used to value these assets are subject to change in the future, and actual results may differ significantly from the assumptions and estimates. The Company has selected October 1 as its annual impairment test date for indefinite-lived intangible assets. The Company assesses the recoverability of its long-lived assets or asset groups for which an indicator of impairment exists by determining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If the Company concludes that the carrying value will not be recovered, the Company measures the amount of such impairment by comparing the fair value to the carrying value of the assets or asset groups. |
Goodwill | Goodwill The Company assesses the carrying value of goodwill on an annual basis, or whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable, The determination of the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. The estimates and assumptions used in calculating fair value include identifying future cash flows, which requires that the Company makes a number of critical legal, economic, market and business assumptions that reflect best estimates as of the testing date. The Company's assumptions and estimates may differ significantly from actual results, or circumstances could change that would cause the Company to conclude that an impairment now exists or that it previously understated the extent of impairment. The Company selected October 1 as its annual goodwill impairment test date. |
Contingent Consideration | Contingent Consideration The Company records contingent consideration associated with (a) sales based royalties and (b) development and regulatory milestones at fair value. The fair value model used to calculate this obligation is based on the income approach (a discounted cash flow model) that has been risk adjusted based on the probability of achievement of net sales and achievement of the milestones. The inputs the Company uses for determining the fair value of the contingent consideration associated with sales based royalties and development and regulatory milestones are Level 3 fair value measurements. The Company re-evaluates the fair value on a quarterly basis. Changes in the fair value can result from adjustments to the discount rates and updates in the assumed timing of or achievement of net sales. Any future increase in the fair value of the contingent consideration associated with sales based royalties along with development and regulatory milestones are based on an increased likelihood that the underlying net sales or milestones will be achieved. The associated payment or payments which will become due and payable for sales based royalties associated with products will result in a charge to cost of product sales and contract manufacturing in the period in which the increase is determined. Similarly, any future decrease in the fair value of contingent consideration associated with sales based royalties will result in a reduction in cost of product sales and contract manufacturing. The changes in fair value for potential future sales based royalties associated with product candidates in development will result in a charge to selling, general and administrative expense in the period in which the increase is determined. Similarly, any future decrease in the fair value of contingent consideration associated with potential future sales based royalties for products candidates will result in a reduction in selling, general and administrative expense. The associated payment or payments which will become due and payable for development and regulatory milestones will result in a charge to research and development expense in the period in which the increase is determined. Similarly, any future decrease in the fair value for development and regulatory milestones will result in a reduction in research and development expense. |
Research and development | Research and development We expense research and development costs as incurred. Our research and development expenses consist primarily of: § personnel-related expenses; § fees to professional service providers for, among other things, analytical testing, independent monitoring or other administration of our clinical trials and obtaining and evaluating data from our clinical trials and non-clinical studies; § costs of contract manufacturing services for clinical trial material; and § costs of materials used in clinical trials and research and development. In many cases, we plan to seek funding for development activities from external sources and third parties, such as governments and non-governmental organizations, or through collaborative partnerships. We expect our research and development spending will be dependent upon such factors as the results from our clinical trials, the availability of reimbursement of research and development spending, the number of product candidates under development, the size, structure and duration of any clinical programs that we may initiate, the costs associated with manufacturing our product candidates on a large-scale basis for later stage clinical trials, and our ability to use or rely on data generated by government agencies, such as studies involving BioThrax conducted by the CDC. |
Comprehensive income | Comprehensive income Comprehensive income is comprised of net income and other changes in equity that are excluded from net income. The Company includes translation gains and losses incurred when converting its subsidiaries' financial statements from their functional currency to the U.S. dollar in accumulated other comprehensive income. |
Foreign currencies | Foreign currencies Except for the Company's Canadian subsidiaries, the local currency is the functional currency for the Company's foreign subsidiaries and, as such, assets and liabilities are translated into U.S. dollars at year-end exchange rates. Income and expense items are translated at average exchange rates during the year. Translation adjustments resulting from this process are charged or credited to other comprehensive income. The Company's Canadian subsidiaries functional currency is U.S. dollars due primarily to a significant amount of the transactions of the subsidiaries being denominated in U.S. dollars. |
Capitalized interest | Capitalized interest The Company capitalizes interest based on the cost of major ongoing capital projects which have not yet been placed in service. For the years ended December 31, 2017, 2016, and 2015, the Company incurred interest of $7.0 million, $8.3 million and $7.8 million, respectively. Of these amounts, the Company capitalized $2.2 million, $2.2 million and $2.9 million, respectively. |
Earnings per share | Earnings per share The Company calculates basic earnings per share by dividing net income by the weighted average number of shares of common stock outstanding during the period. For the years ended December 31, 2017, 2016, and 2015, the Company calculated diluted earnings per share using the if-converted method by dividing the adjusted net income by the adjusted weighted average number of shares of common stock outstanding during the period. The adjusted net income is adjusted for interest expense and amortization of debt issuance cost, both net of tax, associated with the Company's 2.875% Convertible Senior Notes due 2021 (the "Notes"). The weighted average number of diluted shares is adjusted for the potential dilutive effect of the exercise of stock options and the vesting of restricted stock units along with the assumption of the conversion of the Notes, each at the beginning of the period. During the fourth quarter of 2017, the Company issued a notice of termination of conversion rights related to the Notes and issued 8.5 million shares of common stock due to conversions that occurred in 2017. |
Accounting for stock-based compensation | Accounting for stock-based compensation The Company has one stock-based employee compensation plan, the Fourth Amended and Restated Emergent BioSolutions Inc. 2006 Stock Incentive Plan (the "2006 Plan"), which includes both stock options and restricted stock units. As of December 31, 2017, an aggregate of 18.9 million shares of common stock were authorized for issuance under the 2006 Plan, of which a total of approximately 4.9 million shares of common stock remain available for future awards to be made to plan participants. The exercise price of each option must be not less than 100% of the fair market value of the shares underlying such option on the date of grant. Awards granted under the 2006 Plan have a contractual life of no more than 10 years. The terms and conditions of equity awards (such as price, vesting schedule, term and number of shares) under the 2006 Plan is determined by the compensation committee of the Company's board of directors, which administers the 2006 Plan. Each equity award granted under the 2006 Plan vests as specified in the relevant agreement with the award recipient and no option can be exercised after ten years from the date of grant. The Company determines the fair value of restricted stock units using the closing market price of the Company's common stock on the day prior to the date of grant. The Company utilizes the Black-Scholes valuation model for estimating the fair value of all stock options granted. Set forth below are the assumptions used in valuing the stock options granted and a discussion of the Company's methodology for developing each of the assumptions used: Year Ended December 31, 2017 2016 2015 Expected dividend yield 0% 0% 0% Expected volatility 37-40% 31-33% 34-35% Risk-free interest rate 1.66-1.88% 0.93-1.22% 1.27-1.61% Expected average life of options 4.3 years 4.3 years 4.3 years  Expected dividend yield — the Company does not pay regular dividends on its common stock and does not anticipate paying any dividends in the foreseeable future.  Expected volatility — a measure of the amount by which a financial variable, such as share price, has fluctuated (historical volatility) or is expected to fluctuate (implied volatility) during a period. The Company analyzed its own historical volatility to estimate expected volatility over the same period as the expected average life of the options.  Risk-free interest rate — the range of U.S. Treasury rates with a term that most closely resembles the expected life of the option as of the date on which the option is granted.  Expected average life of options — the period of time that options granted are expected to remain outstanding, based primarily on the Company's expectation of optionee exercise behavior subsequent to vesting of options. |
Recently issued accounting standards | Recently issued accounting standards ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) " Topic 605, Revenue Recognition The Company used a cross functional team to identify and organize its contracts for analysis. The Company has finalized its review of its revenue contract portfolio and made its determination of its revenue streams as well as completed extensive contract specific reviews to determine the impacts of the new standard on its historical and prospective revenue recognition. Because many of the Company's contracts with customers have unique contract terms, the Company reviewed all of its non-standard agreements in order to determine the effect of adoption. As a result, it has determined the BARDA BioThrax Contract and BARDA NuThrax Contract will have a material change in revenue recognition that will likely increase the amount of deferred revenue on the adoption date. The Company is in the process of finalizing its analysis of the CIADM contract but expects that the revenue recognition policy and possibly the cumulative effect could be material. The Company is also finalizing its accounting policy; related income tax effects for these contracts; evaluating costs that may need to be capitalized or expensed; and designing and implementing the necessary changes to processes and controls in order to account for revenue under the new standard. Based on the Company's timeline and planned resources, the Company anticipates completing its implementation in connection with its first quarter 2018 interim financial statements. ASU 2016-02, Leases (Topic 842) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) " ASU No. 2016-09, Compensation - Stock Compensation (Topic 718) In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718) " ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 250): Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 250): Simplifying the Test for Goodwill Impairment (" ASU No. 2017-04") . The standard eliminates the second step in the goodwill impairment test, which requires an entity to determine the implied fair value of the reporting unit's goodwill. Instead, an entity should recognize an impairment loss if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the reporting unit. The standard is effective for annual and interim goodwill impairment tests conducted in fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company does not believe that the new standard will have a material impact on its consolidated financial statements. ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting There are no other recently issued accounting pronouncements that are expected to have a material effect on the Company's financial position, results of operations or cash flows. |
Summary of significant accoun31
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of significant accounting policies [Abstract] | |
Estimated useful lives of property, plant and equipment | Property, plant and equipment are stated at cost. Depreciation is computed using the straight-line method over the following estimated useful lives: Buildings 31-39 years Building improvements 10-39 years Furniture and equipment 3-15 years Software 3-7 years or product life Leasehold improvements Lesser of the asset life or lease term |
Assumptions used in valuing stock options granted | The Company determines the fair value of restricted stock units using the closing market price of the Company's common stock on the day prior to the date of grant. The Company utilizes the Black-Scholes valuation model for estimating the fair value of all stock options granted. Set forth below are the assumptions used in valuing the stock options granted and a discussion of the Company's methodology for developing each of the assumptions used: Year Ended December 31, 2017 2016 2015 Expected dividend yield 0% 0% 0% Expected volatility 37-40% 31-33% 34-35% Risk-free interest rate 1.66-1.88% 0.93-1.22% 1.27-1.61% Expected average life of options 4.3 years 4.3 years 4.3 years |
Discontinued operations (Tables
Discontinued operations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Discontinued operations [Abstract] | |
Summarized results of discontinued operations included in consolidated statements of income | The following table summarizes results from discontinued operations of Aptevo included in the consolidated statements of operations for the year ended December 31, 2016 and 2015: Years ended December 31, (in thousands) 2016 2015 Revenues: Product sales $ 21,183 $ 27,947 Collaborations 187 5,511 Total revenues 21,370 33,458 Operating expense: Cost of product sales 11,556 16,809 Research and development 18,024 34,811 Selling, general and administrative 23,792 27,313 Loss from operations (32,002 ) (45,475 ) Other income (expense), net: (41 ) (472 ) Loss from discontinued operations before benefit from income taxes (32,043 ) (45,947 ) Benefit from income taxes (21,295 ) (17,401 ) Net loss from discontinued operations $ (10,748 ) $ (28,546 ) |
Summary of disposal groups including discontinued operations cash flows | The following table summarizes the cash flows of Aptevo included in the y ears ended December 31, 2016 and 2015 Years ended December 31, (in thousands) 2016 2015 Net cash used in operating activities $ (10,299 ) $ (12,716 ) Net cash used in investing activities (1,926 ) (1,518 ) Net cash provided by financing activities 7,733 15,012 Net increase (decrease) in cash and cash equivalents $ (4,492 ) $ 778 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions [Abstract] | |
Summary of total purchase price | The total purchase price is summarized below: (in thousands) Amount of cash paid to Sanofi $ 117,500 Fair value of contingent purchase consideration 2,200 Total purchase price $ 119,700 |
Allocation of purchase price based upon estimated fair values of assets acquired and liabilities assumed | The table below summarizes the preliminary allocation of the purchase price based upon estimated fair values of assets acquired and liabilities assumed at October 6, 2017. The allocation is preliminary based upon the finalization of valuation reports. (in thousands) Fair value of tangible assets acquired and liabilities assumed: Inventory $ 74,876 Property, plant and equipment 19,995 Total fair value of tangible assets acquired and liabilities assumed 94,871 Acquired intangible asset 16,700 Goodwill 8,129 Total purchase price $ 119,700 |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair value measurements [Abstract] | |
Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) | The following table is a reconciliation of the beginning and ending balance of the liabilities measured at fair value using significant unobservable inputs (Level 3) during the years ended December 31, 2017 and 2016. (in thousands) Balance at December 31, 2015 $ 25,155 (Income) expense included in earnings (10,857 ) Settlements (1,113 ) Balance at December 31, 2016 $ 13,185 (Income) expense included in earnings 7,830 Settlements (10,941 ) Purchases, sales and issuances 2,200 Balance at December 31, 2017 $ 12,274 |
Accounts receivable (Tables)
Accounts receivable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts receivable [Abstract] | |
Accounts receivable | Accounts receivable consist of the following: December 31, (in thousands) 2017 2016 Billed $ 118,918 $ 90,439 Unbilled 24,735 48,039 Total $ 143,653 $ 138,478 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventories [Abstract] | |
Inventories | Inventories consist of the following: December 31, (in thousands) 2017 2016 Raw materials and supplies $ 36,069 $ 30,687 Work-in-process 76,610 19,821 Finished goods 30,133 23,494 Total inventories $ 142,812 $ 74,002 The increase in inventories for the year ended December 31, 2017 was primarily due to the acquisition of ACAM2000 in October 2017. |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, plant and equipment [Abstract] | |
Property, plant and equipment | Property, plant and equipment consist of the following: December 31, (in thousands) 2017 2016 Land and improvements $ 21,843 $ 20,340 Buildings, building improvements and leasehold improvements 160,005 147,130 Furniture and equipment 206,819 190,157 Software 50,829 52,564 Construction-in-progress 100,088 77,813 539,584 488,004 Less: Accumulated depreciation and amortization (132,374 ) (111,556 ) Total property, plant and equipment, net $ 407,210 $ 376,448 |
Intangible assets and goodwill
Intangible assets and goodwill (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Intangible assets and goodwill [Abstract] | |
Intangible Assets | Intangible assets consisted of the following: (in thousands) Total Cost basis Balance at December 31, 2016 $ 57,099 Additions 94,304 Balance at December 31, 2017 $ 151,403 Accumulated amortization Balance at December 31, 2016 $ (23,234 ) Amortization (8,572 ) Balance at December 31, 2017 $ (31,806 ) Net book value at December 31, 2017 $ 119,597 |
Future Amortization Expense | Future amortization expense as of December 31, 2017 is as follows: (in thousands) 2018 $ 15,647 2019 15,168 2020 15,087 2021 13,596 2022 and beyond 60,099 Total remaining amortization $ 119,597 |
Goodwill | The following table is a summary of changes in goodwill by reporting unit: (in thousands) Therapeutics and vaccines Contract manufacturing Devices Total Cost Basis Balance at December 31, 2016 $ 24,349 $ 6,736 $ 9,916 $ 41,001 Additions 8,129 - - 8,129 Balance at December 31, 2017 $ 32,478 $ 6,736 $ 9,916 $ 49,130 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' equity [Abstract] | |
Option award activity | The following is a summary of stock option award activity under the 2006 Plan: 2006 Plan Number of Shares Weighted-Average Exercise Price Aggregate Intrinsic Value Outstanding at December 31, 2016 2,559,331 $ 22.94 $ 25,348,245 Granted 427,821 31.13 Exercised (792,795 ) 19.95 Forfeited (72,952 ) 29.30 Outstanding at December 31, 2017 2,121,405 $ 25.48 $ 44,518,585 Exercisable at December 31, 2017 1,307,330 $ 22.63 $ 31,170,967 Options expected to vest at December 31, 2017 632,954 $ 29.91 $ 10,480,716 |
Restricted stock units activity | The following is a summary of restricted stock unit award activity under the 2006 Plan: Number of Shares Weighted-Average Grant Price Aggregate Intrinsic Value Outstanding at December 31, 2016 875,584 $ 28.94 $ 28,754,179 Granted 480,959 31.49 Vested (423,840 ) 30.52 Forfeited (80,983 ) 29.21 Outstanding at December 31, 2017 851,720 $ 30.84 $ 39,579,428 |
Allocated stock-based compensation expense | Stock-based compensation expense was recorded in the following financial statement line items: Year Ended December 31, (in thousands) 2017 2016 2015 Cost of product sales $ 1,076 $ 997 $ 1,183 Research and development 2,526 2,297 2,324 Selling, general and administrative 11,611 14,062 11,234 Continuing operations 15,213 17,356 14,741 Discontinued operations - 1,121 1,107 Total stock-based compensation expense $ 15,213 $ 18,477 $ 15,848 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income taxes [Abstract] | |
Components of the provision for income taxes attributable to operations | Significant components of the provisions for income taxes attributable to operations consist of the following: Year Ended December 31, (in thousands) 2017 2016 2015 Current Federal $ 29,441 $ 29,244 $ 38,957 State 2,983 2,331 2,221 International 356 1,002 2,029 Total current 32,780 32,577 43,207 Deferred Federal (6,045 ) 9,979 (119 ) State (592 ) (272 ) (111 ) International 9,896 (5,587 ) 1,323 Total deferred 3,259 4,120 1,093 Total provision for income taxes $ 36,039 $ 36,697 $ 44,300 |
Net deferred tax asset | The Company's net deferred tax asset (liability) consists of the following: December 31, (in thousands) 2017 2016 Federal losses carryforward $ 1,603 $ 4,130 State losses carryforward 17,234 13,682 Research and development carryforward 3,534 3,647 Scientific research and experimental development credit carryforward 16,493 16,594 Stock compensation 5,344 8,389 Foreign deferrals 34,072 58,647 Inventory reserves 1,607 2,273 Other 3,889 5,569 Deferred tax asset 83,776 112,931 Fixed assets (23,121 ) (30,728 ) Intangible assets (2,229 ) (5,882 ) Other (10,451 ) (16,047 ) Deferred tax liability (35,801 ) (52,657 ) Valuation allowance (45,141 ) (54,178 ) Net deferred tax asset $ 2,834 $ 6,096 |
Reconciliation of taxes determined by applying U.S. federal statutory rate to loss before provision for income taxes | The provision for income taxes differs from the amount of taxes determined by applying the U.S. federal statutory rate to income before the provision for income taxes as a result of the following: Year ended December 31, (in thousands) 2017 2016 2015 US $ 80,690 $ 63,330 $ 117,385 International 37,943 35,891 18,331 Earnings before taxes on income 118,633 99,221 135,716 Federal tax at statutory rates $ 41,522 $ 34,738 $ 47,475 State taxes, net of federal benefit 1,274 529 852 Impact of foreign operations (2,168 ) (9,937 ) (1,640 ) Change in valuation allowance 314 10,458 (950 ) Tax credits (1,918 ) (1,572 ) (2,088 ) Transition tax 13,585 - - Change in U.S. tax rate (13,403 ) - - Stock compensation (3,978 ) - - Other differences (118 ) 1,103 733 Permanent differences 929 1,378 (82 ) Provision for income taxes $ 36,039 $ 36,697 $ 44,300 |
Gross unrecognized tax benefits activity | The table below presents the gross unrecognized tax benefits activity for 2017, 2016 and 2015: (in thousands) Gross unrecognized tax benefits at December 31, 2014 $ 1,248 Increases for tax positions for prior years 150 Decreases for tax positions for prior years - Increases for tax positions for current year 59 Settlements - Lapse of statute of limitations - Gross unrecognized tax benefits at December 31, 2015 1,457 Increases for tax positions for prior years 5 Decreases for tax positions for prior years - Increases for tax positions for current year 299 Settlements - Lapse of statute of limitations - Gross unrecognized tax benefits at December 31, 2016 1,761 Increases for tax positions for prior years - Decreases for tax positions for prior years - Increases for tax positions for current year 531 Settlements (318 ) Lapse of statute of limitations - Gross unrecognized tax benefits at December 31, 2017 $ 1,974 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Future Minimum Lease Payments under Operating Lease Obligations | Future minimum lease payments under operating lease obligations as of December 31, 2017 were as follows: (in thousands) 2017 $ 1,626 2018 1,391 2019 1,339 2020 1,343 2021 1,346 2022 and beyond 3,685 Total minimum lease payments $ 10,730 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings per share [Abstract] | |
Summary of basic and diluted net income per share | The following table presents the calculation of basic and diluted net income per share: Years ended December 31, (in thousands, except share and per share data) 2017 2016 2015 Numerator: Net income from continuing operations $ 82,594 $ 62,524 $ 91,416 Interest expense, net of tax 2,606 3,255 3,019 Amortization of debt issuance costs, net of tax 681 781 868 Net income, adjusted from continuing operations 85,881 66,560 95,303 Net loss from discontinued operations - (10,748 ) (28,546 ) Net income, adjusted $ 85,881 $ 55,812 $ 66,757 Denominator: Weighted-average number of shares-basic 41,816,431 40,184,159 38,595,435 Dilutive securities-equity awards 1,115,244 1,054,453 939,882 Dilutive securities-convertible debt 7,396,262 8,096,500 7,720,525 Weighted-average number of shares-diluted 50,327,937 49,335,112 47,255,842 Net income per share-basic from continuing operations $ 1.98 $ 1.56 $ 2.37 Net loss per share-basic from discontinued operations - (0.27 ) (0.74 ) Net income per share-basic $ 1.98 $ 1.29 $ 1.63 Net income per share-diluted from continuing operations $ 1.71 $ 1.35 $ 2.02 Net loss per share-diluted from discontinued operations - (0.22 ) (0.61 ) Net income per share-diluted $ 1.71 $ 1.13 $ 1.41 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring [Abstract] | |
Costs of the restructuring | The Company has completed the EBOL restructuring. The costs of the EBOL restructuring for the year ended December 31, 2017 and recognized to date are detailed below: Incurred in Inception (in thousands) 2017 To Date Termination benefits $ 40 $ 5,286 Abandonment of equipment - 3,749 Other costs - 691 Total $ 40 $ 9,726 |
Summary of the activity for liabilities related to EBOL restructuring | The following is a summary of the activity for the liabilities related to the EBOL restructuring: Termination (in thousands) Benefits Balance at December 31, 2016 $ 4,357 Expenses incurred 40 Amount paid (4,387 ) Balance at December 31, 2017 $ 10 |
Quarterly financial data (una44
Quarterly financial data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly financial data (unaudited) [Abstract] | |
Quarterly financial information | Quarterly financial information for the years ended December 31, 2017 and 2016 is presented in the following tables: Quarter Ended (in thousands, except per share data) March 31, June 30, September 30, December 31, 2017: Revenue $ 116,858 $ 100,772 $ 149,434 $ 193,809 Income from operations 14,910 8,529 47,769 53,077 Net income 10,485 4,616 33,551 33,942 Net income per share-basic $ 0.26 $ 0.11 $ 0.81 $ 0.77 Net income per share-diluted $ 0.23 $ 0.11 $ 0.68 $ 0.67 2016: Revenue $ 102,964 $ 91,241 $ 142,914 $ 151,663 Income (loss) from operations 21,157 (2,042 ) 35,478 50,929 Net income (loss) from continuing operations 11,889 (2,042 ) 20,388 32,289 Net income (loss) from discontinued operations (1) (7,898 ) (8,905 ) 952 5,103 Net income (loss) 3,991 (10,947 ) 21,340 37,392 Net income (loss) per share from continuing operations-basic $ 0.30 $ (0.05 ) $ 0.50 $ 0.80 Net income (loss) per share from discontinued operations-basic (0.20 ) (0.22 ) 0.02 0.13 Net income (loss) per share-basic $ 0.10 $ (0.27 ) $ 0.52 $ 0.93 Net income (loss) per share from continuing operations-diluted $ 0.26 $ (0.05 ) $ 0.43 $ 0.67 Net income (loss) per share from discontinued operations-diluted (0.16 ) (0.22 ) 0.02 0.10 Net income (loss) per share-diluted $ 0.10 $ (0.27 ) $ 0.45 $ 0.77 (1) Reflects a change in estimate attributed to higher pretax income within continuing operations. According to the ordering rules of intraperiod tax allocation, the residual amount of change after determining the effective rate for continuing operations is allocated to discontinued operations. |
Nature of the business and or45
Nature of the business and organization (Details) | 12 Months Ended |
Dec. 31, 2017CategoryProduct | |
Nature of the business and organization [Abstract] | |
Number of categories of public health threats | Category | 2 |
Number of revenue generating products | Product | 8 |
Summary of significant accoun46
Summary of significant accounting policies, Part 1 (Details) | 12 Months Ended |
Dec. 31, 2017Segment | |
Basis of presentation and consolidation [Abstract] | |
Number of reportable segments | 1 |
Summary of significant accoun47
Summary of significant accounting policies, Part 2 (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Buildings [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 31 years |
Buildings [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 39 years |
Building Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Building Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 39 years |
Furniture and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Furniture and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 15 years |
Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3-7 years or product life |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | Lesser of the asset life or lease term |
Summary of significant accoun48
Summary of significant accounting policies, Part 3 (Details) - BARDA [Member] Dose in Millions, $ in Millions | Mar. 16, 2017USD ($)Dose | Sep. 30, 2016USD ($) |
BioThrax [Member] | ||
Product Information [Line Items] | ||
Amount of contract | $ 100 | |
Period of performance | 2 years | |
Consideration allocated to procurement | $ 93.6 | |
NuThrax [Member] | ||
Product Information [Line Items] | ||
Consideration allocated to development activities | $ 137.1 | $ 147.5 |
NuThrax [Member] | Minimum [Member] | ||
Product Information [Line Items] | ||
Number of doses to be delivered | Dose | 2 | |
NuThrax [Member] | Maximum [Member] | ||
Product Information [Line Items] | ||
Number of doses to be delivered | Dose | 3 | |
Discount on purchase price for doses to be procured | $ 100 |
Summary of significant accoun49
Summary of significant accounting policies, Part 4 (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Capitalized interest [Abstract] | |||
Interest costs incurred | $ 7 | $ 8.3 | $ 7.8 |
Interest costs capitalized | $ 2.2 | $ 2.2 | $ 2.9 |
Earnings Per Share [Abstract] | |||
Interest rate, stated percentage | 2.875% | ||
Shares issued to extinguish convertible notes | 8,508,088 |
Summary of significant accoun50
Summary of significant accounting policies, Part 5 (Details) shares in Millions | 12 Months Ended | |||
Dec. 31, 2017Planshares | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
2006 Plan [Member] | Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock authorized for issuance under the plan (in shares) | 18.9 | |||
Common stock available for future awards (in shares) | 4.9 | |||
Assumptions used in valuing the stock options granted [Abstract] | ||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Expected average life of options | 4 years 3 months 18 days | 4 years 3 months 18 days | 4 years 3 months 18 days | |
2006 Plan [Member] | Stock Options [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercise price of option as percentage of fair market value at grant date, minimum | 100.00% | |||
Assumptions used in valuing the stock options granted [Abstract] | ||||
Expected volatility | 37.00% | 31.00% | 34.00% | |
Risk-free interest rate | 1.66% | 0.93% | 1.27% | |
2006 Plan [Member] | Stock Options [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contractual life of awards | 10 years | |||
Exercise period of options | 10 years | |||
Assumptions used in valuing the stock options granted [Abstract] | ||||
Expected volatility | 40.00% | 33.00% | 35.00% | |
Risk-free interest rate | 1.88% | 1.22% | 1.61% | |
Emergent Plans [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of stock based employee compensation plans | Plan | 1 |
Summary of significant accoun51
Summary of significant accounting policies, Part 6 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase (decrease) in deferred revenue | $ 15,022 | $ 4,602 | $ 3,474 |
Income tax expense (benefit) | $ 36,039 | $ 36,697 | $ 44,300 |
Accounting Standards Update 2016-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Change to estimated effective annual tax rate | 4.00% | ||
Income tax expense (benefit) | $ (3,300) |
Discontinued operations (Detail
Discontinued operations (Details) - USD ($) $ in Thousands | Aug. 01, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Percentage of outstanding shares distributed | 100.00% | ||
Record date for distribution | Jul. 22, 2016 | ||
Number of shares received (in shares) | 1 | ||
Number of shares held (in shares) | 2 | ||
Number of common stock distributed (in shares) | 20,230,000 | ||
Aptevo [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Unsecured debt | $ 20,000 | ||
Revenues [Abstract] | |||
Product sales | $ 21,183 | $ 27,947 | |
Collaborations | 187 | 5,511 | |
Total revenues | 21,370 | 33,458 | |
Operating expense [Abstract] | |||
Cost of product sales | 11,556 | 16,809 | |
Research and development | 18,024 | 34,811 | |
Selling, general and administrative | 23,792 | 27,313 | |
Loss from operations | (32,002) | (45,475) | |
Other income (expense), net [Abstract] | |||
Other income (expense), net | (41) | (472) | |
Loss from discontinued operations before benefit from income taxes | (32,043) | (45,947) | |
Benefit from income taxes | (21,295) | (17,401) | |
Net loss from discontinued operations | (10,748) | (28,546) | |
Net Cash Provided by (Used in) Discontinued Operations [Abstract] | |||
Net cash used in operating activities | (10,299) | (12,716) | |
Net cash used in investing activities | (1,926) | (1,518) | |
Net cash provided by financing activities | 7,733 | 15,012 | |
Net increase (decrease) in cash and cash equivalents | $ (4,492) | $ 778 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Oct. 06, 2017 | Oct. 02, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair value of tangible assets acquired and liabilities assumed [Abstract] | ||||
Goodwill | $ 49,130 | $ 41,001 | ||
Sanofi [Member] | ||||
Summary of total purchase price [Abstract] | ||||
Amount of cash paid to Sanofi | $ 117,500 | |||
Fair value of contingent purchase consideration | 2,200 | |||
Total purchase price | 119,700 | |||
Fair value of tangible assets acquired and liabilities assumed [Abstract] | ||||
Inventory | 74,876 | |||
Property, plant and equipment | 19,995 | |||
Total fair value of tangible assets acquired and liabilities assumed | 94,871 | |||
Acquired intangible asset | 16,700 | |||
Goodwill | 8,129 | |||
Total purchase price | $ 119,700 | |||
ACAM2000 [Member] | ||||
Business Acquisition [Line Items] | ||||
Term of contract under acquisition | 10 years | |||
Value of contract | $ 425,000 | |||
Amount for deliveries of product to the SNS | 160,000 | |||
Upfront cash payment | 97,500 | |||
Amount of payment for manufacturing related milestones | 20,000 | |||
Amount of payment for regulatory related milestones | $ 7,500 | 7,500 | ||
Fair value of tangible assets acquired and liabilities assumed [Abstract] | ||||
Present value discount rate | 15.50% | |||
Amortization period of intangible asset | 10 years | |||
Transaction costs related to acquisition | $ 2,500 | |||
Raxibacumab [Member] | ||||
Business Acquisition [Line Items] | ||||
Upfront cash payment | $ 76,000 | |||
Amount of payment for manufacturing related milestones | 20,000 | |||
Capitalized transaction costs | $ 1,600 | |||
Fair value of tangible assets acquired and liabilities assumed [Abstract] | ||||
Amortization period of intangible asset | 10 years |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Unobservable Input Reconciliation [Roll Forward] | ||
Balance, beginning of period | $ 13,185 | $ 25,155 |
(Income) expense included in earnings | 7,830 | (10,857) |
Settlements | (10,941) | (1,113) |
Purchases, sales and issuances | 2,200 | |
Balance, end of period | 12,274 | 13,185 |
RSDL [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value adjustment for contingent obligations | 2,700 | (5,400) |
Evolva Holding SA 035 & Unither [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value adjustment for contingent obligations | (200) | $ (5,400) |
ACAM2000 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value adjustment for contingent obligations | 5,300 | |
Amount of payment for regulatory related milestones | $ 7,500 |
Accounts receivable (Details)
Accounts receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net | $ 143,653 | $ 138,478 |
Accounts Receivable [Member] | U.S. Government [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk percentage | 89.00% | 83.00% |
Billed [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net | $ 118,918 | $ 90,439 |
Unbilled [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net | 24,735 | $ 48,039 |
Decrease in unbilled accounts receivable | $ (23,300) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventories [Abstract] | ||
Raw materials and supplies | $ 36,069 | $ 30,687 |
Work-in-process | 76,610 | 19,821 |
Finished goods | 30,133 | 23,494 |
Total inventories | $ 142,812 | $ 74,002 |
Property, plant and equipment57
Property, plant and equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 539,584 | $ 488,004 | |
Less: Accumulated depreciation and amortization | (132,374) | (111,556) | |
Total Property, plant and equipment, net | 407,210 | 376,448 | |
Depreciation and amortization | 32,242 | 28,023 | $ 23,737 |
Land and Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 21,843 | 20,340 | |
Buildings, Building Improvements and Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 160,005 | 147,130 | |
Furniture and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 206,819 | 190,157 | |
Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 50,829 | 52,564 | |
Construction-in-progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 100,088 | $ 77,813 |
Intangible assets and goodwil58
Intangible assets and goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cost Basis [Abstract] | |||
Intangible Assets, Beginning Balance | $ 57,099 | ||
Additions | 94,304 | ||
Intangible Assets, Ending Balance | 151,403 | $ 57,099 | |
Accumulated Amortization [Abstract] | |||
Accumulated Amortization, Beginning Balance | (23,234) | ||
Amortization | 8,572 | 6,893 | $ 7,376 |
Accumulated Amortization, Ending balance | (31,806) | (23,234) | |
Net book value of intangible assets | $ 119,597 | ||
Intangible assets, weighted average useful life | 105 months | ||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||
2,018 | $ 15,647 | ||
2,019 | 15,168 | ||
2,020 | 15,087 | ||
2,021 | 13,596 | ||
2022 and beyond | 60,099 | ||
Net book value of intangible assets | 119,597 | ||
Goodwill, Cost Basis [Abstract] | |||
Goodwill, Beginning Balance | 41,001 | ||
Goodwill, Additions | 8,129 | ||
Goodwill, Ending Balance | 49,130 | 41,001 | |
Therapeutics and Vaccines [Member] | |||
Goodwill, Cost Basis [Abstract] | |||
Goodwill, Beginning Balance | 24,349 | ||
Goodwill, Additions | 8,129 | ||
Goodwill, Ending Balance | 32,478 | 24,349 | |
Contract Manufacturing [Member] | |||
Goodwill, Cost Basis [Abstract] | |||
Goodwill, Beginning Balance | 6,736 | ||
Goodwill, Additions | 0 | ||
Goodwill, Ending Balance | 6,736 | 6,736 | |
Medical Devices [Member] | |||
Goodwill, Cost Basis [Abstract] | |||
Goodwill, Beginning Balance | 9,916 | ||
Goodwill, Additions | 0 | ||
Goodwill, Ending Balance | $ 9,916 | $ 9,916 |
Long-term debt (Details)
Long-term debt (Details) $ / shares in Units, $ in Millions | Nov. 14, 2017USD ($)shares | Aug. 12, 2016shares$ / shares | Dec. 11, 2013 | Dec. 28, 2017USD ($)shares | Jan. 29, 2014USD ($)shares$ / shares | Dec. 31, 2017USD ($)Institution |
Long-Term Debt [Line Items] | ||||||
Interest rate percentage | 2.875% | |||||
Debt instrument amortization period | 7 years | |||||
Letter of credit, outstanding amount | $ 1 | |||||
Eurocurrency [Member] | ||||||
Long-Term Debt [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.00% | |||||
Eurocurrency [Member] | Minimum [Member] | ||||||
Long-Term Debt [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.50% | |||||
Eurocurrency [Member] | Maximum [Member] | ||||||
Long-Term Debt [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 2.50% | |||||
Base Rate [Member] | Minimum [Member] | ||||||
Long-Term Debt [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 0.50% | |||||
Base Rate [Member] | Maximum [Member] | ||||||
Long-Term Debt [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.50% | |||||
Federal Funds Rate [Member] | ||||||
Long-Term Debt [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 0.50% | |||||
Revolving Credit Facility [Member] | ||||||
Long-Term Debt [Line Items] | ||||||
Outstanding credit facility | $ 0 | |||||
BAML Revolving Credit Facility [Member] | ||||||
Long-Term Debt [Line Items] | ||||||
Maturity date | Dec. 11, 2018 | |||||
Credit Agreement [Member] | ||||||
Long-Term Debt [Line Items] | ||||||
Maturity date | Sep. 29, 2022 | |||||
Number of lending institutions | Institution | 4 | |||||
Current borrowing capacity | $ 200 | |||||
Borrowing capacity with accordion feature | 100 | |||||
Maximum borrowing capacity | $ 300 | |||||
Debt covenant, consolidated debt service coverage ratio, minimum | 2.50 | |||||
Debt covenant, leverage ratio, maximum | 3.50 | |||||
Credit Agreement [Member] | Minimum [Member] | ||||||
Long-Term Debt [Line Items] | ||||||
Commitment fee percentage | 0.25% | |||||
Credit Agreement [Member] | Maximum [Member] | ||||||
Long-Term Debt [Line Items] | ||||||
Commitment fee percentage | 0.40% | |||||
Debt covenant, leverage ratio, maximum | 4 | |||||
2.875% Convertible Senior Notes Due 2021 [Member] | ||||||
Long-Term Debt [Line Items] | ||||||
Face amount of debt instrument | $ 250 | $ 239.4 | $ 250 | $ 10.6 | ||
Interest rate percentage | 2.875% | 2.875% | ||||
Maturity date | Jan. 15, 2021 | |||||
Conversion rate of notes per $1,000 principal amount (in shares) | shares | 32.386 | 32.3860 | 8.5 | 30.8821 | ||
Additional conversion rate of notes per $1,000 principal amount (in shares) | shares | 3.1556 | |||||
Accrued interest on converted notes | $ 2.4 | |||||
Conversion price per share (in dollars per share) | $ / shares | $ 30.88 | $ 32.38 | ||||
Debt issuance costs | $ 3.6 | $ 8.3 |
Stockholders' equity, Preferred
Stockholders' equity, Preferred stock and Common stock (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Preferred stock [Abstract] | ||||
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Common stock [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | ||
Common stock, voting rights | 1 |
Stockholders' equity, Stock opt
Stockholders' equity, Stock options and restricted stock units (Details) | 12 Months Ended | |||
Dec. 31, 2017USD ($)Plan$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / shares | Jul. 14, 2016USD ($) | |
Aggregate intrinsic value [Abstract] | ||||
Weighted average period expected to be recognized related to unvested equity awards | 2 years | |||
Compensation cost expected to be recognized related to unvested equity awards | $ 17,900,000 | |||
Authorized amount for the repurchase program | $ 50,000,000 | |||
Repurchased common stock (in shares) | shares | 800,000 | |||
Repurchased common stock | $ 33,077,000 | $ 0 | $ 100,000 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 15,213,000 | 18,477,000 | 15,848,000 | |
Continuing Operations [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 15,213,000 | 17,356,000 | 14,741,000 | |
Discontinued Operations [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 0 | $ 1,121,000 | $ 1,107,000 | |
Stock Options [Member] | ||||
Aggregate intrinsic value [Abstract] | ||||
Weighted average remaining contractual term of options outstanding | 4 years | 4 years | ||
Weighted average remaining contractual term of options exercisable | 3 years 2 months 12 days | 3 years 2 months 12 days | ||
Weighted average grant date fair value of options granted (in dollars per share) | $ / shares | $ 10.53 | $ 9.24 | $ 8.66 | |
Total intrinsic value of options exercised | $ 13,900,000 | $ 15,600,000 | $ 20,200,000 | |
Total fair value of awards vested | $ 17,900,000 | $ 16,900,000 | 14,400,000 | |
2006 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of equity award plans | Plan | 1 | |||
2006 Plan [Member] | Stock Options [Member] | ||||
Options outstanding [Roll Forward] | ||||
Outstanding, beginning of period (in shares) | shares | 2,559,331 | |||
Granted (in shares) | shares | 427,821 | |||
Exercised (in shares) | shares | (792,795) | |||
Forfeited (in shares) | shares | (72,952) | |||
Outstanding, end of period (in shares) | shares | 2,121,405 | 2,559,331 | ||
Exercisable, end of period (in shares) | shares | 1,307,330 | |||
Options expected to vest, end of period (in shares) | shares | 632,954 | |||
Weighted-Average Exercise Price [Roll Forward] | ||||
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 22.94 | |||
Granted (in dollars per share) | $ / shares | 31.13 | |||
Exercised (in dollars per share) | $ / shares | 19.95 | |||
Forfeited (in dollars per share) | $ / shares | 29.30 | |||
Outstanding, end of period (in dollars per share) | $ / shares | 25.48 | $ 22.94 | ||
Exercisable, end of period (in dollars per share) | $ / shares | 22.63 | |||
Options expected to vest, end of period (in dollars per share) | $ / shares | $ 29.91 | |||
Aggregate Intrinsic Value [Abstract] | ||||
Outstanding, beginning of period | $ 25,348,245 | |||
Outstanding, end of period | 44,518,585 | $ 25,348,245 | ||
Exercisable, end of period | 31,170,967 | |||
Options expected to vest, end of period | $ 10,480,716 | |||
2006 Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Restricted stock unit award activity [Roll Forward] | ||||
Outstanding, beginning of period (in shares) | shares | 875,584 | |||
Granted (in shares) | shares | 480,959 | |||
Vested (in shares) | shares | (423,840) | |||
Forfeited (in shares) | shares | (80,983) | |||
Outstanding, end of period (in shares) | shares | 851,720 | 875,584 | ||
Weighted-Average Grant Price [Roll Forward] | ||||
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 28.94 | |||
Granted (in dollars per share) | $ / shares | 31.49 | |||
Vested (in dollars per share) | $ / shares | 30.52 | |||
Forfeited (in dollars per share) | $ / shares | 29.21 | |||
Outstanding, end of period (in dollars per share) | $ / shares | $ 30.84 | $ 28.94 | ||
Aggregate intrinsic value [Abstract] | ||||
Outstanding, beginning of period | $ 28,754,179 | |||
Outstanding, end of period | $ 39,579,428 | $ 28,754,179 | ||
2004 Plan [Member] | Stock Options [Member] | ||||
Options outstanding [Roll Forward] | ||||
Options expected to vest, end of period (in shares) | shares | 0 | |||
Weighted-Average Exercise Price [Roll Forward] | ||||
Options expected to vest, end of period (in dollars per share) | $ / shares | $ 0 | |||
Cost of Product Sales [Member] | Continuing Operations [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 1,076,000 | 997,000 | 1,183,000 | |
Research and Development [Member] | Continuing Operations [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 2,526,000 | 2,297,000 | 2,324,000 | |
Selling, General and Administrative [Member] | Continuing Operations [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 11,611,000 | $ 14,062,000 | $ 11,234,000 |
Income taxes, Components of the
Income taxes, Components of the provisions for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Line Items] | ||||
Federal corporate tax rate | 35.00% | |||
Provisional tax benefit | $ (13,400) | |||
Estimated undistributed foreign E&P | 95,400 | |||
Provisional tax expense | $ 13,600 | |||
U.S. federal cash taxes on deemed mandatory repatriation period | 8 years | |||
Current [Abstract] | ||||
Federal | $ 29,441 | $ 29,244 | $ 38,957 | |
State | 2,983 | 2,331 | 2,221 | |
International | 356 | 1,002 | 2,029 | |
Total current | 32,780 | 32,577 | 43,207 | |
Deferred [Abstract] | ||||
Federal | (6,045) | 9,979 | (119) | |
State | (592) | (272) | (111) | |
International | 9,896 | (5,587) | 1,323 | |
Total deferred | 3,259 | 4,120 | 1,093 | |
Total provision for income taxes | $ 36,039 | $ 36,697 | $ 44,300 | |
Forecast [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Federal corporate tax rate | 21.00% |
Income taxes, Net deferred tax
Income taxes, Net deferred tax asset (liability) and tax credit carryforwards (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Net deferred tax asset (liability) [Abstract] | ||
Federal losses carryforward | $ 1,603 | $ 4,130 |
State losses carryforward | 17,234 | 13,682 |
Research and development carryforward | 3,534 | 3,647 |
Scientific research and experimental development credit carryforward | 16,493 | 16,594 |
Stock compensation | 5,344 | 8,389 |
Foreign deferrals | 34,072 | 58,647 |
Inventory reserves | 1,607 | 2,273 |
Other | 3,889 | 5,569 |
Deferred tax asset | 83,776 | 112,931 |
Fixed assets | (23,121) | (30,728) |
Intangible assets | (2,229) | (5,882) |
Other | (10,451) | (16,047) |
Deferred tax liability | (35,801) | (52,657) |
Valuation allowance | (45,141) | (54,178) |
Net deferred tax (liabilities)/ asset | 2,834 | 6,096 |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, valuation allowance | 45,141 | 54,178 |
Research and Development Tax Credit [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Tax credit carryforward, amount | $ 3,500 | |
Tax credit carryforwards, expiration date | Dec. 31, 2024 | |
Manitoba Scientific Research And Experimental Development [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Tax credit carryforward, amount | $ 16,500 | |
Tax credit carryforwards, expiration date | Dec. 31, 2025 | |
U.S. Federal Tax Authority [Member] | ||
Net deferred tax asset (liability) [Abstract] | ||
Valuation allowance | $ 0 | |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax liabilities, net | (13,100) | (18,300) |
Net operating loss carryforwards | $ 7,600 | |
Operating loss carryforwards, expiration year | Dec. 31, 2027 | |
Deferred tax assets, valuation allowance | $ 0 | |
State and Local Jurisdiction [Member] | ||
Net deferred tax asset (liability) [Abstract] | ||
Valuation allowance | (193,500) | |
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 264,100 | |
Deferred tax assets, valuation allowance | 193,500 | |
Foreign Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, net | 15,900 | $ 24,400 |
Net operating loss carryforwards | $ 168,700 | |
Period of change in the nature or conduct of business following change in ownership | 3 years | |
U.S. Federal Tax Authority - Tax Effected [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 1,600 | |
State and Local Jurisdiction - Tax Effected [Member] | ||
Net deferred tax asset (liability) [Abstract] | ||
Valuation allowance | (12,600) | |
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 17,200 | |
Deferred tax assets, valuation allowance | 12,600 | |
Canadian Federal Gross [Member] | ||
Net deferred tax asset (liability) [Abstract] | ||
Valuation allowance | (41,800) | |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, valuation allowance | 41,800 | |
Canadian Federal Tax Effected [Member] | ||
Net deferred tax asset (liability) [Abstract] | ||
Valuation allowance | (11,300) | |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, valuation allowance | 11,300 | |
Foreign Tax Authority Tax Effected Excluding Canada [Member] | ||
Net deferred tax asset (liability) [Abstract] | ||
Valuation allowance | (32,500) | |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, valuation allowance | 32,500 | |
Foreign Tax Authority Tax Effected [Member] | ||
Net deferred tax asset (liability) [Abstract] | ||
Valuation allowance | (32,500) | |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets, valuation allowance | $ 32,500 |
Income taxes, Reconciliation (D
Income taxes, Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income tax reconciliation [Abstract] | ||||
US | $ 80,690 | $ 63,330 | $ 117,385 | |
International | 37,943 | 35,891 | 18,331 | |
Earnings before taxes on income | 118,633 | 99,221 | 135,716 | |
Federal tax at statutory rates | 41,522 | 34,738 | 47,475 | |
State taxes, net of federal benefit | 1,274 | 529 | 852 | |
Impact of foreign operations | (2,168) | (9,937) | (1,640) | |
Change in valuation allowance | 314 | 10,458 | (950) | |
Tax credits | (1,918) | (1,572) | (2,088) | |
Transition Tax | 13,585 | 0 | 0 | |
Change in U.S. Tax Rate | (13,403) | 0 | 0 | |
Stock Compensation | (3,978) | 0 | 0 | |
Other differences | (118) | 1,103 | 733 | |
Permanent differences | 929 | 1,378 | (82) | |
Total provision for income taxes | $ 36,039 | $ 36,697 | $ 44,300 | |
Income Tax Disclosure [Line Items] | ||||
Effective annual tax rate | 30.00% | 37.00% | 33.00% | |
Provisional tax benefit | $ (13,400) | |||
Provisional tax expense | $ 13,600 | |||
Federal corporate tax rate | 35.00% | |||
Forecast [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Federal corporate tax rate | 21.00% |
Income taxes, Unrecognized tax
Income taxes, Unrecognized tax benefits (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Contingency [Line Items] | |||
Unrecognized tax benefits, current | $ 800,000 | $ 500,000 | |
Unrecognized tax benefits, noncurrent | 1,200,000 | 1,300,000 | |
Gross unrecognized tax benefits activity [Roll Forward] | |||
Gross unrecognized tax benefits, beginning balance | 1,761,000 | 1,457,000 | $ 1,248,000 |
Increases for tax positions for prior years | 0 | 5,000 | 150,000 |
Decreases for tax positions for prior years | 0 | 0 | 0 |
Increases for tax positions for current year | 531,000 | 299,000 | 59,000 |
Settlements | (318,000) | 0 | 0 |
Lapse of statute of limitations | 0 | 0 | 0 |
Gross unrecognized tax benefits, ending balance | $ 1,974,000 | $ 1,761,000 | $ 1,457,000 |
U.S. Federal Tax Authority [Member] | Minimum [Member] | |||
Gross unrecognized tax benefits activity [Roll Forward] | |||
Open tax year | 2,013 | ||
Federal income tax year selected for audit | 2,011 | ||
U.S. Federal Tax Authority [Member] | Maximum [Member] | |||
Gross unrecognized tax benefits activity [Roll Forward] | |||
Open tax year | 2,016 | ||
Federal income tax year selected for audit | 2,012 | ||
United Kingdom Tax Authority [Member] | Minimum [Member] | |||
Gross unrecognized tax benefits activity [Roll Forward] | |||
Open tax year | 2,008 | ||
United Kingdom Tax Authority [Member] | Maximum [Member] | |||
Gross unrecognized tax benefits activity [Roll Forward] | |||
Open tax year | 2,016 | ||
Canada Revenue Agency [Member] | Minimum [Member] | |||
Gross unrecognized tax benefits activity [Roll Forward] | |||
Open tax year | 2,010 | ||
Canada Revenue Agency [Member] | Maximum [Member] | |||
Gross unrecognized tax benefits activity [Roll Forward] | |||
Open tax year | 2,016 |
401(k) savings plan (Details)
401(k) savings plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
401(k) savings plan [Abstract] | |||
Matching of qualified deferrals by employer, maximum | 50.00% | ||
Percentage of employee's gross salary subject to employer's matching contribution | 6.00% | ||
Matching contributions made by employer | $ 2.7 | $ 2.5 | $ 2.2 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Leased Assets [Line Items] | |||
Total lease expense | $ 1,600 | $ 1,400 | $ 1,300 |
Future minimum lease payments under operating lease [Abstract] | |||
2,017 | 1,626 | ||
2,018 | 1,391 | ||
2,019 | 1,339 | ||
2,020 | 1,343 | ||
2,021 | 1,346 | ||
2022 and beyond | 3,685 | ||
Total minimum lease payments | $ 10,730 | ||
Fill/Finish Space - Rockville [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease expiration date | May 31, 2027 | ||
Office and Warehouse Space - Baltimore [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease expiration date | Jul. 31, 2027 | ||
Annual escalation percentage | 2.75% | ||
Office and Warehouse Space - Canton [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease expiration date | Apr. 30, 2023 | ||
Annual escalation percentage | 3.00% | ||
Office Space - Washington, DC [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease expiration date | Mar. 31, 2027 | ||
Annual escalation percentage | 2.50% |
Related party transactions (Det
Related party transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Costs incurred from services rendered under marketing/consulting agreement | $ 0.2 | ||
Expenses incurred under agreement | $ 0 | $ 0 | $ 0 |
Saudi Arabia [Member] | |||
Related Party Transaction [Line Items] | |||
Percentage of net sales of biodefense products subject to payment to related party | 17.50% | ||
Qatar [Member] | |||
Related Party Transaction [Line Items] | |||
Percentage of net sales of biodefense products subject to payment to related party | 15.00% | ||
United Arab Emirates [Member] | |||
Related Party Transaction [Line Items] | |||
Percentage of net sales of biodefense products subject to payment to related party | 15.00% |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||||||
Numerator [Abstract] | ||||||||||||||||||
Net Income from continuing operations | $ 33,942 | $ 33,551 | $ 4,616 | $ 10,485 | $ 32,289 | $ 20,388 | $ (2,042) | $ 11,889 | $ 82,594 | $ 62,524 | $ 91,416 | |||||||
Interest expense, net of tax | 2,606 | 3,255 | 3,019 | |||||||||||||||
Amortization of debt issuance costs, net of tax | 681 | 781 | 868 | |||||||||||||||
Net income, adjusted from continuing operations | 85,881 | 66,560 | 95,303 | |||||||||||||||
Net loss from discontinued operations | $ 5,103 | [1] | $ 952 | [1] | $ (8,905) | [1] | $ (7,898) | [1] | 0 | (10,748) | (28,546) | |||||||
Net income, adjusted | $ 85,881 | $ 55,812 | $ 66,757 | |||||||||||||||
Denominator [Abstract] | ||||||||||||||||||
Weighted-average number of shares-basic (in shares) | 41,816,431 | 40,184,159 | 38,595,435 | |||||||||||||||
Dilutive securities-equity awards (in shares) | 1,115,244 | 1,054,453 | 939,882 | |||||||||||||||
Dilutive securities-convertible debt (in shares) | 7,396,262 | 8,096,500 | 7,720,525 | |||||||||||||||
Weighted-average number of shares-diluted (in shares) | 50,327,937 | 49,335,112 | 47,255,842 | |||||||||||||||
Net income per share from continuing operations-basic (in dollars per share) | $ 0.77 | $ 0.81 | $ 0.11 | $ 0.26 | $ 0.80 | $ 0.50 | $ (0.05) | $ 0.30 | $ 1.98 | $ 1.56 | $ 2.37 | |||||||
Net loss per share from discontinued operations-basic (in dollars per share) | 0.13 | 0.02 | (0.22) | (0.20) | 0 | (0.27) | (0.74) | |||||||||||
Net income per share-basic (in dollars per share) | 0.93 | 0.52 | (0.27) | 0.10 | 1.98 | 1.29 | 1.63 | |||||||||||
Net income per share-diluted from continuing operations (in dollars per share) | $ 0.67 | $ 0.68 | $ 0.11 | $ 0.23 | 0.67 | 0.43 | (0.05) | 0.26 | 1.71 | 1.35 | 2.02 | |||||||
Net loss per share-diluted from discontinued operations (in dollars per share) | 0.10 | 0.02 | (0.22) | (0.16) | 0 | (0.22) | (0.61) | |||||||||||
Net income per share-diluted (in dollars per share) | $ 0.77 | $ 0.45 | $ (0.27) | $ 0.10 | $ 1.71 | [2] | $ 1.13 | [2] | $ 1.41 | [2] | ||||||||
Stock Options [Member] | ||||||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||||||||
Antidilutive shares excluded from calculation (in shares) | 1,400,000 | |||||||||||||||||
[1] | Reflects a change in estimate attributed to higher pretax income within continuing operations. According to the ordering rules of intraperiod tax allocation, the residual amount of change after determining the effective rate for continuing operations is allocated to discontinued operations. | |||||||||||||||||
[2] | See "Earnings per share" footnote for details on calculation. |
Restructuring (Details)
Restructuring (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 16 Months Ended |
Sep. 30, 2016USD ($)Facility | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Summary of activity for liabilities [Roll Forward] | |||
Number of facilities | Facility | 1 | ||
Selling, General and Administrative Expenses [Member] | |||
Summary of activity for liabilities [Roll Forward] | |||
Abandonment of equipment charge | $ 3,700 | ||
EBOL Restructuring Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Incurred costs | $ 40 | $ 9,726 | |
Termination Benefits [Member] | |||
Summary of activity for liabilities [Roll Forward] | |||
Balance, beginning of period | 4,357 | ||
Expenses incurred | 40 | ||
Amount paid | (4,387) | ||
Balance, end of period | 10 | 10 | |
Termination Benefits [Member] | EBOL Restructuring Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Incurred costs | 40 | 5,286 | |
Abandonment of Equipment [Member] | EBOL Restructuring Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Incurred costs | 0 | 3,749 | |
Other Costs [Member] | EBOL Restructuring Plan [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Incurred costs | $ 0 | $ 691 |
Segment information (Details)
Segment information (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017USD ($)Segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Aug. 06, 2015Segment | |
Segment Reporting Information [Line Items] | ||||
Number of independent publicly-traded companies | Segment | 2 | |||
Number of business segments | Segment | 1 | |||
Long-lived assets | $ | $ 1,070,206 | $ 970,111 | ||
Revenue [Member] | United States [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 89.00% | 94.00% | 96.00% | |
Revenue [Member] | Biothrax [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 67.00% | 80.00% | 89.00% | |
Foreign Jurisdictions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Long-lived assets | $ | $ 28,600 | $ 28,400 |
Quarterly financial data (una72
Quarterly financial data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||||||
Quarterly financial data (unaudited) [Abstract] | ||||||||||||||||||
Revenue | $ 193,809 | $ 149,434 | $ 100,772 | $ 116,858 | $ 151,663 | $ 142,914 | $ 91,241 | $ 102,964 | $ 560,873 | $ 488,782 | $ 489,331 | |||||||
Income (loss) from operations | 53,077 | 47,769 | 8,529 | 14,910 | 50,929 | 35,478 | (2,042) | 21,157 | ||||||||||
Net income from continuing operations | $ 33,942 | $ 33,551 | $ 4,616 | $ 10,485 | 32,289 | 20,388 | (2,042) | 11,889 | 82,594 | 62,524 | 91,416 | |||||||
Net loss from discontinued operations | 5,103 | [1] | 952 | [1] | (8,905) | [1] | (7,898) | [1] | $ 0 | $ (10,748) | $ (28,546) | |||||||
Net income (loss) | $ 37,392 | $ 21,340 | $ (10,947) | $ 3,991 | ||||||||||||||
Net income (loss) per share from continuing operations-basic (in dollars per share) | $ 0.77 | $ 0.81 | $ 0.11 | $ 0.26 | $ 0.80 | $ 0.50 | $ (0.05) | $ 0.30 | $ 1.98 | $ 1.56 | $ 2.37 | |||||||
Net loss per share from discontinued operations-basic (in dollars per share) | 0.13 | 0.02 | (0.22) | (0.20) | 0 | (0.27) | (0.74) | |||||||||||
Net income per share-basic (in dollars per share) | 0.93 | 0.52 | (0.27) | 0.10 | 1.98 | 1.29 | 1.63 | |||||||||||
Net income per share from continuing operations-diluted (in dollars per share) | $ 0.67 | $ 0.68 | $ 0.11 | $ 0.23 | 0.67 | 0.43 | (0.05) | 0.26 | 1.71 | 1.35 | 2.02 | |||||||
Net income (loss) per share from discontinued operations-diluted (in dollars per share) | 0.10 | 0.02 | (0.22) | (0.16) | 0 | (0.22) | (0.61) | |||||||||||
Net income per share-diluted (in dollars per share) | $ 0.77 | $ 0.45 | $ (0.27) | $ 0.10 | $ 1.71 | [2] | $ 1.13 | [2] | $ 1.41 | [2] | ||||||||
[1] | Reflects a change in estimate attributed to higher pretax income within continuing operations. According to the ordering rules of intraperiod tax allocation, the residual amount of change after determining the effective rate for continuing operations is allocated to discontinued operations. | |||||||||||||||||
[2] | See "Earnings per share" footnote for details on calculation. |
Litigation (Details)
Litigation (Details) | Jul. 19, 2016 |
Litigation [Abstract] | |
Term of procurement contract | 5 years |
Schedule II - Valuation and Q74
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Inventory Allowance [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | $ 3,535 | $ 1,637 | $ 1,314 |
Charged to costs and expenses | 8,846 | 9,950 | 6,258 |
Deductions | (8,532) | (8,052) | (5,935) |
Ending Balance | 3,849 | 3,535 | 1,637 |
Prepaid Expenses and Other Current Assets Allowance [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | 4,868 | 1,981 | 1,885 |
Charged to costs and expenses | 466 | 2,887 | 96 |
Deductions | 0 | 0 | 0 |
Ending Balance | $ 5,334 | $ 4,868 | $ 1,981 |