Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 01, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Retrophin, Inc. | |
Entity Central Index Key | 1,438,533 | |
Trading Symbol | rtrx | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 41,247,609 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 154,820 | $ 99,394 |
Marketable securities | 323,993 | 201,236 |
Accounts receivable, net | 13,450 | 13,872 |
Inventory, net | 5,129 | 5,351 |
Prepaid expenses and other current assets | 3,456 | 3,112 |
Prepaid taxes | 2,141 | 2,842 |
Total current assets | 502,989 | 325,807 |
Property and equipment, net | 3,323 | 3,230 |
Other assets | 7,393 | 5,556 |
Investment-equity | 15,000 | 0 |
Intangible assets, net | 186,545 | 184,817 |
Goodwill | 936 | 936 |
Total assets | 716,186 | 520,346 |
Current liabilities: | ||
Accounts payable | 9,314 | 18,938 |
Accrued expenses | 43,348 | 36,018 |
Guaranteed minimum royalty | 2,000 | 2,000 |
Other current liabilities | 3,833 | 3,902 |
Business combination-related contingent consideration | 19,000 | 9,100 |
Convertible Debt | 22,377 | 0 |
Derivative financial instruments, warrants | 0 | 15,710 |
Total current liabilities | 99,872 | 85,668 |
Convertible debt | 192,753 | 45,077 |
Other non-current liabilities | 4,885 | 2,472 |
Guaranteed minimum royalty, less current portion | 12,611 | 13,095 |
Business combination-related contingent consideration, less current portion | 87,000 | 80,900 |
Total liabilities | 397,121 | 227,212 |
Stockholders' Equity: | ||
Preferred stock $0.0001 par value; 20,000,000 shares authorized; 0 issued and outstanding as of September 30, 2018 and December 31, 2017 | 0 | 0 |
Common stock $0.0001 par value; 100,000,000 shares authorized; 41,167,942 and 39,373,745 issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 4 | 4 |
Additional paid-in capital | 582,706 | 471,800 |
Accumulated deficit | (262,562) | (177,655) |
Accumulated other comprehensive loss | (1,083) | (1,015) |
Total stockholders' equity | 319,065 | 293,134 |
Total liabilities and stockholders' equity | $ 716,186 | $ 520,346 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock shares issued (in shares) | 41,167,942 | 39,373,745 |
Common stock shares outstanding (in shares) | 41,167,942 | 39,373,745 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Net product sales | $ 40,706 | $ 40,340 | $ 120,475 | $ 112,760 |
Operating expenses: | ||||
Cost of goods sold | 1,133 | 925 | 3,924 | 2,431 |
Research and development | 32,448 | 19,610 | 91,762 | 58,592 |
Selling, general and administrative | 26,107 | 24,852 | 77,699 | 74,683 |
Legal fee settlement | 0 | 0 | 0 | 2,000 |
Change in fair value of contingent consideration | 16,601 | 4,429 | 22,387 | 11,057 |
Restructuring | 0 | 1,132 | (242) | 2,611 |
Total operating expenses | 76,289 | 50,948 | 195,530 | 151,374 |
Operating loss | (35,583) | (10,608) | (75,055) | (38,614) |
Other income (expenses), net: | ||||
Other income (expense), net | (90) | 557 | (372) | 1,065 |
Interest income | 1,147 | 595 | 2,905 | 2,460 |
Interest expense | (2,533) | (660) | (4,848) | (3,315) |
Loss on early extinguishment of debt | (17,042) | 0 | (17,042) | 0 |
Change in fair value of derivative instruments | 0 | (8,901) | 0 | (8,921) |
Total other expense, net | (18,518) | (8,409) | (19,357) | (8,711) |
Loss before income taxes | (54,101) | (19,017) | (94,412) | (47,325) |
Income tax benefit (expense) | (415) | 1,223 | (811) | 5,212 |
Net loss | $ (54,516) | $ (17,794) | $ (95,223) | $ (42,113) |
Net loss per common share: | ||||
Basic and Diluted (in dollars/share) | $ (1.34) | $ (0.46) | $ (2.37) | $ (1.10) |
Weighted average common shares outstanding: | ||||
Basic and Diluted (in shares) | 40,717,440 | 38,654,086 | 40,149,184 | 38,301,893 |
Comprehensive loss: | ||||
Net loss | $ (54,516) | $ (17,794) | $ (95,223) | $ (42,113) |
Foreign currency translation | 5 | (102) | 29 | (361) |
Unrealized gain (loss) on marketable securities | 64 | 83 | (97) | 256 |
Comprehensive loss | $ (54,447) | $ (17,813) | $ (95,291) | $ (42,218) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (95,223) | $ (42,113) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 13,789 | 13,336 |
Deferred income tax benefit | 0 | (7,811) |
Interest income from notes receivable | 0 | (651) |
Non-cash interest expense | 1,115 | 1,353 |
Amortization of premiums on marketable securities | 749 | 972 |
Amortization of debt discount and issuance costs | 980 | 460 |
Provision for Inventory | 1,625 | 252 |
Share based compensation | 15,114 | 21,292 |
Change in fair value of liability classified warrants | 0 | 8,921 |
Change in fair value of contingent consideration | 22,387 | 11,057 |
Payments related to change in fair value of contingent consideration | (6,852) | (885) |
Loss on the extinguishment of debt | 17,042 | 0 |
Unrealized foreign currency transaction gain (loss) | 270 | (1,074) |
Other | (15) | 164 |
Changes in operating assets and liabilities, net of business acquisitions: | ||
Accounts receivable | 1,346 | 4,064 |
Inventory | (1,428) | (319) |
Other current and non-current operating assets | (2,183) | (3,747) |
Accounts payable and accrued expenses | 6,797 | 425 |
Other current and non-current operating liabilities | 3,094 | 2,561 |
Net cash provided by (used in) operating activities | (21,393) | 8,257 |
Cash Flows From Investing Activities: | ||
Purchase of fixed assets | (727) | (1,437) |
Cash paid for intangible assets | (15,108) | (9,632) |
Proceeds from the sale/maturity of marketable securities | 96,166 | 76,826 |
Purchase of marketable securities | (219,820) | (67,552) |
Proceeds from maturity of note receivable | 0 | 47,500 |
Cash paid for investments - equity | (15,000) | 0 |
Net cash provided by (used in) provided by investing activities | (154,489) | 45,705 |
Cash Flows From Financing Activities: | ||
Payment of acquisition-related contingent consideration | (8,842) | (5,006) |
Payment of guaranteed minimum royalty | (1,500) | (1,500) |
Payment of other liability | (750) | (750) |
Proceeds from exercise of warrants | 4,274 | 3,645 |
Proceeds from exercise of stock options | 10,379 | 7,695 |
Proceeds from 2025 convertible senior notes | 276,000 | 0 |
Repayment of 2019 convertible senior notes | (40,203) | 0 |
Payment of debt issuance and financing costs | (8,820) | 0 |
Other financing activities | 800 | 0 |
Net cash provided by financing activities | 231,338 | 4,084 |
Effect of exchange rate changes on cash | (30) | (57) |
Net change in cash and cash equivalents | 55,426 | 57,989 |
Cash and cash equivalents, beginning of year | 99,394 | 41,002 |
Cash and cash equivalents, end of period | $ 154,820 | $ 98,991 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Organization and Description of Business Retrophin, Inc. (“we”, “our”, “us”, “Retrophin” and the “Company”) refers to Retrophin, Inc., a Delaware corporation, as well as our direct and indirect subsidiaries. Retrophin is a biopharmaceutical company headquartered in San Diego, California, focused on identifying, developing and delivering life-changing therapies to people living with rare diseases. We regularly evaluate and, where appropriate, act on opportunities to expand our product pipeline through licenses and acquisitions of products in areas that will serve patients with rare diseases and that we believe offer attractive growth characteristics. The Company is developing the following pipeline products: The Company is developing fosmetpantotenate (RE-024), a novel small molecule, as a potential treatment for pantothenate kinase-associated neurodegeneration (“PKAN”). PKAN is a genetic neurodegenerative disorder that is typically diagnosed in the first decade of life. Consequences of PKAN include dystonia, dysarthria, rigidity, retinal degeneration, and severe digestive problems. There are currently no viable treatment options for patients with PKAN. Fosmetpantotenate is a phosphopantothenate replacement therapy that aims to restore levels of this key substrate in PKAN patients. Sparsentan (RE-021) is an investigational product candidate which acts as both a potent angiotensin receptor blocker (“ARB”), as well as a selective endothelin receptor antagonist (“ERA”), with in vitro selectivity toward endothelin receptor type A. The Company secured a license to sparsentan from Ligand Pharmaceuticals, Inc. and Bristol-Myers Squibb Company (who referred to it as DARA). The Company is developing sparsentan as a treatment for: ▪ Focal segmental glomerulosclerosis ("FSGS") , which is a leading cause of end-stage renal disease and nephrotic syndrome (“NS”). There are no U.S. Food and Drug Administration ("FDA") approved pharmacologic treatments for FSGS and off-label resources are limited to ACE/ARBs, steroids, and immunosuppressant agents, which are effective in only a subset of patients. ▪ Immunoglobulin A nephropathy ("IgAN") , which is characterized by hematuria, proteinuria, and variable rates of progressive renal failure. There is no FDA approved treatment for IgAN. The Company is a party to a joint development agreement with Censa Pharmaceuticals Inc. ("Censa"), a privately held biotechnology company focused on developing therapies for orphan metabolic diseases, to evaluate sepiapterin ("CNSA-001") for the treatment of phenylketonuria ("PKU"). CNSA-001 is an orally bioavailable form of a natural precursor of tetrahydrobiopterin ("BH4") with the potential to provide improved phenylalanine ("Phe") reduction in patients with PKU when compared to BH4. PKU is a rare, genetic metabolic condition in which the body cannot breakdown Phe due to a missing or defective phenylalanine hydroxylase ("PAH") enzyme. High Phe levels can lead to developmental and physical growth delay, executive function impairment, seizures, and microcephaly caused by toxic Phe accumulation in the brain. The Company is party to a three-way Cooperative Research and Development Agreement ("CRADA") with the National Institutes of Health’s National Center for Advancing Translational Sciences and patient advocacy foundation NGLY1.org to collaborate on research efforts aimed at the identification of potential small molecule therapeutics for N-glycanase deficiency ("NGLY1"). NGLY1 is an extremely rare genetic disorder believed to be caused by a deficiency in an enzyme called N-glycanase-1, which is encoded by the gene NGLY1. The condition has been characterized by symptoms such as developmental delays, seizures, complex hyperkinetic movement disorders, diminished reflexes and an inability to produce tears. There are no approved therapeutic options for NGLY1 deficiency, and current therapeutic strategies are limited to symptom management. Liquid ursodeoxycholic acid ("L-UDCA") is a liquid formulation of ursodeoxycholic acid being developed for the treatment of a rare liver disease called primary biliary cholangitis ("PBC"). The Company obtained the rights to L-UDCA in 2016 with the intention of making L-UDCA commercially available to the subset of PBC patients who have difficulty swallowing. The Company sells the following three products: • Chenodal® (chenodiol tablets) is approved in the United States for the treatment of patients suffering from gallstones in whom surgery poses an unacceptable health risk due to disease or advanced age. Chenodal has also been the standard of care for cerebrotendinous xanthomatosis ("CTX") patients for more than three decades and the Company is currently pursuing adding this indication to the label. • Cholbam® (cholic acid capsules) is approved in the United States (approved and marketed in Europe for select indications as Kolbam) for the treatment of bile acid synthesis disorders due to single enzyme defects and is further indicated for adjunctive treatment of patients with peroxisomal disorders. • Thiola® (tiopronin tablets) is approved in the United States for the prevention of cystine (kidney) stone formation in patients with severe homozygous cystinuria. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2017 10-K filed with the SEC on February 27, 2018. The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, the instructions for Form 10-Q and the rules and regulations of the SEC. Accordingly, since they are interim statements, the accompanying condensed consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements, but reflect all adjustments consisting of normal, recurring adjustments, that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of the results that may be expected for any future periods. The December 31, 2017 balance sheet information was derived from the audited financial statements as of that date. Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current period presentation. A summary of the significant accounting policies applied in the preparation of the accompanying condensed consolidated financial statements follows: Principles of Consolidation The unaudited condensed consolidated financial statements represent the consolidation of the accounts of the Company and its subsidiaries in conformity with GAAP. All intercompany accounts and transactions have been eliminated in consolidation. Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification (" ASC"), Topic 606, Revenue from Contracts with Customers, using the full retrospective transition method. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect substantially all the consideration it is entitled to in exchange for the goods or services it transfers to the customer. See Note 3 for further discussion. Research and Development Expenses Research and development expenses are comprised of salaries and bonuses, benefits, non-cash share-based compensation, license fees, costs paid to third-party contractors to perform research, conduct clinical trials and pre/non-clinical trials, develop drug materials, and associated overhead expenses and facilities. We also incur indirect costs that are not allocated to specific programs because such costs benefit multiple development programs and allow us to increase our pharmaceutical development capabilities. These consist of internal shared resources related to the development and maintenance of systems and processes applicable to all of our programs. Clinical Trial Expenses We record expenses in connection with our clinical trials under contracts with contract research organizations (CROs) that support conducting and managing clinical trials. The financial terms and activities of these agreements vary from contract to contract and may result in uneven expense levels. Generally, these agreements set forth activities that drive the recording of expenses such as start-up, initiation activities, enrollment, treatment of patients, or the completion of other clinical trial activities. Expenses related to clinical trials are accrued based on our estimates and/or representations from service providers regarding work performed, including actual level of patient enrollment, completion of patient studies and progress of the clinical trials. Other incidental costs related to patient enrollment or treatment are accrued when reasonably certain. If the amounts we are obligated to pay under our clinical trial agreements are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we adjust our accruals accordingly on a prospective basis. Revisions to our contractual payment obligations are charged to expense in the period in which the facts that give rise to the revision become reasonably certain. We currently have three Phase 3 clinical trials in process that are in varying stages of activity, with ongoing non-clinical support trials. As such, clinical trial expenses will vary depending on the all the factors set forth above and may fluctuate significantly from quarter to quarter. Adoption of New Accounting Standards In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features. These amendments simplify the accounting for certain financial instruments with down round features. The amendments require companies to disregard the down round feature when assessing whether the instrument is indexed to its own stock, for purposes of determining liability or equity classification. See Note 6 for further discussion. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The new guidance dictates that, when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, it should be treated as an acquisition or disposal of an asset. The guidance was adopted as of January 1, 2018. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial position or results of operations upon adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach or a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption are both options for transition. The Company is in the process of identifying and quantifying all leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Topic 326 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. This ASU update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. As of September 30, 2018, the Company held $324.0 million in available for sale debt securities. If adopted as of September 30, 2018, this ASU update would not have a material impact on the Company's financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Product Revenue, Net The Company sells Chenodal and Cholbam (Kolbam), which are aggregated as bile acid products, and Thiola through direct-to-patient distributors. The Company sells its products worldwide, with more than 95% of the revenue generated in North America. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs upon delivery to the customer. Deductions from Revenue Revenues from product sales are recorded at the net sales price, which includes provisions resulting from discounts, rebates and co-pay assistance that is offered to its customers, health care providers, payors and other indirect customers relating to the Company’s sales of its products. These provisions are based on the amounts earned or to be claimed on the related sales and are classified as a reduction of accounts receivable (if the amount is payable to the customer) or as a current liability (if the amount is payable to a party other than a customer). Where appropriate, these reserves take into consideration the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract. If actual results in the future vary from the Company’s provisions, the Company will adjust the provision, which would affect net product revenue and earnings in the period such variances become known. Our historical experience is that such adjustments have been immaterial. Government Rebates: We calculate the rebates that we will be obligated to provide to government programs and deduct these estimated amounts from our gross product sales at the time the revenues are recognized. Allowances for government rebates and discounts are established based on actual payer information, which is reasonably estimated at the time of delivery, and the government-mandated discounts applicable to government-funded programs. Rebate discounts are included in other current liabilities in the accompanying consolidated balance sheets. Commercial Rebates: We calculate the rebates that we incur due to contracts with certain commercial payors and deduct these amounts from our gross product sales at the time the revenues are recognized. Allowances for commercial rebates are established based on actual payer information, which is reasonably estimated at the time of delivery. Rebate discounts are included in other current liabilities in the accompanying consolidated balance sheets. Prompt Pay Discounts: We offer discounts to certain customers for prompt payments. We accrue for the calculated prompt pay discount based on the gross amount of each invoice for those customers at the time of sale. Product Returns: Consistent with industry practice, we offer our customers a limited right to return product purchased directly from the Company, which is principally based upon the product’s expiration date. Generally, shipments are only made upon a patient prescription thus returns are minimal. Co-pay Assistance: We offer a co-pay assistance program, which is intended to provide financial assistance to qualified commercially insured patients with prescription drug co-payments required by payors. The calculation of the accrual for co-pay assistance is based on an identification of claims and the cost per claim associated with product that has been recognized as revenue. The following table summarizes net product revenues for the three and nine months ended September 30, 2018 and 2017 ( in thousands ): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Bile acid products $ 18,052 $ 18,839 $ 55,153 $ 52,662 Thiola 22,654 21,501 65,322 60,098 Total net product revenue $ 40,706 $ 40,340 $ 120,475 $ 112,760 |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | MARKETABLE SECURITIES The Company's marketable securities as of September 30, 2018 and December 31, 2017 were comprised of available-for-sale marketable securities which are carried at fair value, with the unrealized gains and losses reported in accumulated other comprehensive income. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income or expense. Interest and dividends on securities classified as available-for-sale are included in interest income. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income. During the nine months ended September 30, 2018 , investment activity for the Company included $96.2 million in maturities and $219.8 million in purchases, all relating to debt based marketable securities. Marketable securities consisted of the following ( in thousands ): September 30, 2018 December 31, 2017 Marketable Securities: Commercial paper $ 54,611 $ 6,897 Corporate debt securities 266,132 164,297 Securities of government sponsored entities 3,250 30,042 Total marketable securities: $ 323,993 $ 201,236 The following is a summary of short-term marketable securities classified as available-for-sale as of September 30, 2018 ( in thousands ): Remaining Contractual Maturity Amortized Cost Unrealized Gains Unrealized Losses Aggregate Estimated Fair Value Marketable securities: Commercial paper Less than 1 $ 54,649 $ — $ (38 ) $ 54,611 Corporate debt securities Less than 1 138,724 — (521 ) 138,203 Securities of government-sponsored entities Less than 1 3,250 — — 3,250 Total maturity less than 1 year 196,623 — (559 ) 196,064 Corporate debt securities 1 to 2 128,174 4 (249 ) 127,929 Total maturity 1 to 2 years 128,174 4 (249 ) 127,929 Total available-for-sale securities $ 324,797 $ 4 $ (808 ) $ 323,993 The following is a summary of short-term marketable securities classified as available-for-sale as of December 31, 2017 ( in thousands ): Remaining Contractual Maturity (in years) Amortized Cost Unrealized Losses Aggregate Estimated Fair Value Marketable securities: Commercial paper Less than 1 $ 6,911 $ (14 ) $ 6,897 Corporate debt securities Less than 1 86,531 (198 ) 86,333 Securities of government-sponsored entities Less than 1 30,132 (90 ) 30,042 Total maturity less than 1 year 123,574 (302 ) 123,272 Corporate debt securities 1 to 2 78,388 (424 ) 77,964 Total maturity 1 to 2 years 78,388 (424 ) 77,964 Total available-for-sale securities $ 201,962 $ (726 ) $ 201,236 The primary objective of the Company’s investment portfolio is to enhance overall returns while preserving capital and liquidity. The Company’s investment policy limits interest-bearing security investments to certain types of instruments issued by institutions with primarily investment grade credit ratings and places restrictions on maturities and concentration by asset class and issuer. All available for sale securities are held in current assets regardless of contractual maturities exceeding one year, as the Company could sell them within the next twelve months. The Company reviews the available-for-sale investments for other-than-temporary declines in fair value below cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below the cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security, and the intent to sell, or whether the Company will more likely than not be required to sell the security before recovery of its amortized cost basis. The assessment of whether a security is other-than-temporarily impaired could change in the future due to new developments or changes in assumptions related to any particular security. As of September 30, 2018 and December 31, 2017 , the Company believed the cost basis for available-for-sale investments was recoverable in all material respects. |
FUTURE ACQUISITION RIGHT AND JO
FUTURE ACQUISITION RIGHT AND JOINT DEVELOPMENT AGREEMENT | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
FUTURE ACQUISITION RIGHT AND JOINT DEVELOPMENT AGREEMENT | FUTURE ACQUISITION RIGHT AND JOINT DEVELOPMENT AGREEMENT Censa Pharmaceuticals Inc. In December 2017, the Company entered into a Future Acquisition Right and Joint Development Agreement (the “Option Agreement”) with Censa, which became effective in January 2018. The Company has agreed to fund certain development activities of Censa’s CNSA-001 program, in an aggregate amount expected to be approximately $17 million through proof of concept, and has the right, but not the obligation, to acquire Censa (the “Option”) on the terms and subject to the conditions set forth in a separate Agreement and Plan of Merger. In exchange for the Option, the Company paid $10 million , and an additional $5 million upon Censa’s completion of a specified development milestone set forth in the Option Agreement. If the Company exercises the Option, the Company will acquire Censa for $65 million in upfront consideration, subject to certain adjustments, paid as a combination of 20% in cash and 80% in shares of the Company’s common stock, valued at a fixed price of $21.40 per share; provided, however, that Censa may elect on behalf of its equity holders to receive the upfront consideration in 100% cash if the average price per share of the Company’s common stock for the ten trading days ending on the date the Company provides a notice of interest to exercise the Option is less than $19.26 . In addition, if the Company exercises the Option and acquires Censa, the Company would be required to make further cash payments to Censa’s equity holders of up to an aggregate of $25 million if the CNSA-001 program achieves specified development and commercial milestones. The Company determined that Censa is a variable interest entity ("VIE") and concluded that the Company is not the primary beneficiary of the VIE. As such, the Company did not consolidate Censa’s results into its consolidated financial statements. The Company will continue to monitor facts and circumstances for changes that could potentially result in the Company becoming the primary beneficiary. Through September 30, 2018 , the Company has paid Censa $10.0 million as an upfront payment, $15.0 million in development funding, and $5.0 million related to a development milestone. The Company capitalized the upfront and milestone payments, and expensed the development funding paid. The Company is treating the upfront payment and milestone payment, both of which are compensation for the Option, as a cost-method investment with a total carrying value of $15.0 million as of September 30, 2018 . |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Since 2013, the Company has issued five tranches of common stock purchase warrants to secure financing, remediate covenant violations and provide consideration for amendments with respect to a credit facility extinguished in 2015. Historically, the Company accounted for these instruments, which do not have fixed settlement provisions, as derivative instruments in accordance with FASB ASC 815-40, Derivative and Hedging – Contracts in Entity’s Own Equity. This was due to an anti-dilution provision for the warrants that provides for a reduction to the exercise price if the Company issues equity or equity linked instruments in the future at an effective price per share less than the exercise price then in effect for the warrant ("down round provision"). As such, the warrants were re-measured at each balance sheet date based on estimated fair value. Changes in estimated fair value were recorded as non-cash adjustments within other income (expenses), net, in the Company’s accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company recorded a loss on the change in the estimated fair value of warrants of $8.9 million for each of the three and nine months ended September 30, 2017. As of January 1, 2018 the Company early adopted ASU 2017-11, which revised the guidance for instruments with down round provisions. As such the Company treats outstanding warrants as free-standing equity linked instruments that will be recorded to equity in the Consolidated Balance Sheet. The fair value of the derivative liability balance as of December 31, 2017 of $15.7 million was reclassified by means of a cumulative-effect adjustment to equity as of January 1, 2018. The Company calculated the fair value of the warrants using the Black-Scholes Model as of December 31, 2017 , using the following assumptions: December 31, 2017 Fair value of common stock $ 21.07 Remaining life of the warrants (in years) 0.1 - 2.0 years Risk-free interest rate* 1.39 - 1.89% Expected volatility** 33 - 43% Dividend yield — % *The risk-free interest rate is based on the U.S. Treasury security rates for the remaining term of the warrants at the measurement date. **Expected volatility is based on an analysis of the Company’s historical volatility. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Financial Instruments and Fair Value The Company accounts for financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The valuation techniques used to measure the fair value of the Company’s marketable securities and all other financial instruments, all of which have counter-parties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data. Based on the fair value hierarchy, the Company classified marketable securities within Level 2. In estimating the fair value of the Company’s derivative liabilities as of December 31, 2017 , the Company used the Black Scholes Model. Based on the fair value hierarchy, the Company classified the derivative liability within Level 3. The Company adopted ASU 2017-11 as of January 1, 2018 and is no longer required to treat outstanding warrants as derivative liabilities measured at fair value. See Note 6 for further discussion. In estimating the fair value of the Company’s contingent consideration, the Company used the Monte Carlo Simulation model as of September 30, 2018 and a probability-based expected method for royalty payments based on projected revenues as of December 31, 2017 . Based on the fair value hierarchy, the Company classified the fair value measurement of contingent consideration within Level 3. Financial instruments with carrying values approximating fair value include cash and cash equivalents, accounts receivable, and accounts payable, due to their short term nature. As of September 30, 2018 , the estimated fair value of the Company's 4.5% Senior Convertible Notes due 2019 was $38.8 million and the estimated fair value of the Company's 2.5% Convertible Senior Notes due 2025 was $283.4 million , considering factors such as market conditions, prepayment and make-whole provisions, variability in pricing from multiple lenders and the term of the debt. The following table presents the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of September 30, 2018 ( in thousands ): As of September 30, 2018 Total carrying and estimated fair value Quoted prices in active markets Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Marketable securities, available-for-sale 323,993 — 323,993 — Total $ 323,993 $ — $ 323,993 $ — Liabilities: Business combination-related contingent consideration $ 106,000 $ — $ — $ 106,000 Total $ 106,000 $ — $ — $ 106,000 The following table presents the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2017 ( in thousands ): As of December 31, 2017 Total carrying and estimated fair value Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Marketable securities, available-for-sale 201,236 — 201,236 — Total $ 201,236 $ — $ 201,236 $ — Liabilities: Derivative liability related to warrants $ 15,710 $ — $ — $ 15,710 Business combination-related contingent consideration 90,000 — — 90,000 Total $ 105,710 $ — $ — $ 105,710 The following table sets forth a summary of changes in the estimated fair value of the Company's business combination-related contingent consideration for the nine months ended September 30, 2018 ( in thousands ): Fair Value Measurements of Acquisition-Related Contingent Consideration Balance at January 1, 2018 $ 90,000 Increase from revaluation of contingent consideration 22,387 Contractual payments included in accrued liabilities at September 30, 2018 (2,092 ) Contractual payments (4,295 ) Balance at September 30, 2018 $ 106,000 The key assumptions included in the calculations for contingent consideration were the future number of patients in treatment, projected revenues, discount rate, and the timing of payments. The present value of the expected payments considers the time at which the obligations are expected to be settled and a discount rate that reflects the risk associated with the performance payments. During the three and nine months ended September 30, 2018 , the Company incurred charges of $16.6 million and $22.4 million , respectively, in operating expenses on the Condensed Consolidated Statements of Operations and Comprehensive Loss for the revaluation of the contingent consideration liabilities. For the nine months ended September 30, 2018 , $10.0 million , $10.4 million , and $2.0 million of the charges were related to the increase in contingent consideration liabilities for the products Chenodal and Cholbam and product candidate L-UDCA, respectively. In each case, the value increased due to changes in the discount factors, estimated timing of payments, and changes in projections . During the three and nine months ended September 30, 2017 , the Company incurred charges of $4.4 million and $11.1 million , respectively, in operating expenses on the Condensed Consolidated Statement of Operations and Comprehensive Loss for the change in fair value of the contingent consideration liabilities. For the nine months ended September 30, 2017 , $5.0 million , $3.8 million , and $2.3 million of the charges were related to the increase in contingent consideration liabilities for the products Chenodal and Cholbam and product candidate L-UDCA, respectively. In each case, the value increased due to changes in the discount factor, estimated timing of payments and expected payments. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS As of September 30, 2018 , the net book value of amortizable intangible assets was approximately $186.5 million . The following table sets forth amortizable intangible assets as of September 30, 2018 and December 31, 2017 ( in thousands ): September 30, 2018 December 31, 2017 Finite-lived intangible assets $ 250,824 $ 235,863 Less: accumulated amortization (64,279 ) (51,046 ) Net carrying value $ 186,545 $ 184,817 The following table summarizes amortization expense for the three and nine months ended September 30, 2018 and 2017 ( in thousands ): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Research and development $ 292 $ 82 $ 684 $ 244 Selling, general and administrative 4,333 4,424 12,635 12,752 Total amortization expense $ 4,625 $ 4,506 $ 13,319 $ 12,996 |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | CONVERTIBLE NOTES PAYABLE Convertible Senior Notes Due 2025 On September 10, 2018, the Company completed its registered underwritten public offering of $276 million aggregate principal amount of 2.50% Convertible Senior Notes due 2025 ("2025 Notes"), and entered into a base indenture and supplemental indenture agreement ("2025 Indenture") with respect to the 2025 Notes. The 2025 Notes will mature on September 15, 2025 ("Maturity Date”), unless earlier repurchased, redeemed, or converted. The 2025 Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 2.50% , payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2019. The composition of the Company’s 2025 Notes are as follows ( in thousands ): September 30, 2018 December 31, 2017 2.50% convertible senior notes due 2025 $ 276,000 $ — Unamortized debt discount (76,951 ) — Unamortized debt issuance costs (6,296 ) — Total 2025 Notes, net of unamortized debt discount and debt issuance costs $ 192,753 $ — The net proceeds from the issuance of the 2025 Notes were approximately $267.2 million , after deducting commissions and the offering expenses payable by the Company. A portion of the net proceeds from the 2025 Notes were used by the Company to repurchase $23.4 million aggregate principal amount of its then-outstanding 4.5% senior convertible notes due in 2019 in privately-negotiated transactions. Holders may convert their 2025 Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2018 (and only during such calendar quarter), if the last reported sale price per share of the Company’s common stock for each of at least 20 trading days, whether or not consecutive, during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price on the applicable trading day; (2) during the five consecutive business days immediately after any 10 consecutive trading day period (“measurement period”) if the trading price per $1,000 principal amount of 2025 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock; (4) if the Company calls the 2025 Notes for redemption; and (5) at any time from, and including, May 15, 2025 until the close of business on the scheduled trading day immediately before the Maturity Date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, based on the applicable conversion rate. The initial conversion rate for the 2025 Notes is 25.7739 shares of the Company’s common stock per $1,000 principal amount of 2025 Notes, which represents an initial conversion price of approximately $38.80 per share. If a “make-whole fundamental change” (as defined in the 2025 Indenture) occurs, then the company will, in certain circumstances, increase the conversion rate for a specified period of time. The 2025 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after September 15, 2022 and, in the case of any partial redemption, on or before the 40th scheduled trading day before the Maturity Date, at a cash redemption price equal to the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice. If a fundamental change (as defined in the 2025 Indenture) occurs, then, subject to certain exceptions, holders may require the Company to repurchase their 2025 Notes at a cash repurchase price equal to the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. As of September 30, 2018, the 2025 Notes had a market price of $1,027 per $1,000 principal amount. In the event of conversion, holders would forgo all future interest payments, any unpaid accrued interest and the possibility of further stock price appreciation. Upon the receipt of conversion requests, the settlement of the 2025 Notes will be paid pursuant to the terms of the 2025 Indenture. In the event that all of the 2025 Notes are converted, the Company would be required to repay the $276.0 million in principal value and any conversion premium in any combination of cash and shares of its common stock at the Company’s option. In addition, calling the 2025 Notes for redemption will constitute a “make whole fundamental change ”. The 2025 Notes are the Company’s general unsecured obligations that rank senior in right of payment to all of its indebtedness that is expressly subordinated in right of payment to the 2025 Notes, and equal in right of payment to the Company’s unsecured indebtedness. The 2025 Notes are currently classified on the Company’s consolidated balance sheet at September 30, 2018 as long-term debt. Under ASC 470-20, Debt with Conversion and Other Options, an entity must separately account for the liability and equity components of convertible debt instruments (such as the 2025 Notes) that may be settled entirely or partially in cash upon conversion, in a manner that reflects the issuer’s economic interest cost. The liability component of the instrument is valued in a manner that reflects the market interest rate for a similar nonconvertible instrument at the date of issuance. The initial carrying value of the liability component was $198.6 million . The equity component of $77.4 million , representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the 2025 Notes and is recorded in additional paid-in capital on the consolidated balance sheet at the issuance date. That equity component is treated as a discount on the liability component of the 2025 Notes, which is amortized over the seven year term of the 2025 Notes using the effective interest rate method. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The Company allocated the total transaction costs of approximately $8.8 million related to the issuance of the 2025 Notes to the liability and equity components of the 2025 Notes based on their relative values. Transaction costs attributable to the liability component are amortized to interest expense over the seven-year term of the 2025 Notes, and transaction costs attributable to the equity component are netted with the equity component in stockholders’ equity. The effective interest rate on the liability components of the 2025 Notes for the period from the date of issuance through September 30, 2018 was 7.7% . The following table sets forth total interest expense recognized related to the 2025 Notes ( in thousands ): Three and Nine months ended September 30, 2018 2017 Contractual interest expense 383 — Amortization of debt issuance costs 468 — Amortization of debt discount 50 — Total interest expense for the 2025 Notes $ 901 $ — The 2025 Notes do not contain any financial or operating covenants or any restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by the Company. The 2025 Indenture contains customary events of default with respect to the 2025 Notes, including that upon certain events of default, 100% of the principal and accrued and unpaid interest on the 2025 Notes will automatically become due and payable. Senior Convertible Notes Due 2019 On May 29, 2014, the Company entered into a Note Purchase Agreement relating to a private placement by the Company of $46.0 million aggregate principal senior convertible notes due in 2019 (the “2019 Notes”) which are convertible into shares of the Company’s common stock at an initial conversion price of $17.41 per share. The conversion price is subject to customary anti-dilution protection. The 2019 Notes bear interest at a rate of 4.5% per annum, payable semiannually in arrears on May 15 and November 15 of each year. The 2019 Notes mature on May 30, 2019 unless earlier converted or repurchased in accordance with their terms, and there are no contractual payments due prior to that date. In September 2018, the Company used part of the net proceeds from the issuance of the 2025 Notes discussed above to repurchase $23.4 million aggregate principal value of the 2019 Notes in privately-negotiated transactions for approximately $40.2 million in cash. The partial repurchase of the 2019 Notes resulted in a $17.0 million loss on early extinguishment of debt. At September 30, 2018, approximately $22.6 million of principal remained outstanding on the 2019 Notes. The composition of the Company’s 2019 Notes are as follows ( in thousands ): September 30, 2018 December 31, 2017 4.50% senior convertible notes due 2019 $ 22,590 $ 46,000 Unamortized debt discount (200 ) (867 ) Unamortized debt issuance costs (13 ) (56 ) Total 2019 Notes, net of unamortized debt discount and debt issuance costs $ 22,377 $ 45,077 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses at September 30, 2018 and December 31, 2017 consisted of the following ( in thousands ): September 30, 2018 December 31, 2017 Government rebates payable $ 10,377 $ 5,883 Compensation related costs 9,292 7,749 Accrued royalties and contingent consideration 6,332 6,429 Research and development 11,969 6,989 Selling, general and administrative 2,913 3,896 Restructuring expenses — 3,549 Miscellaneous accrued 2,465 1,523 Total accrued expenses $ 43,348 $ 36,018 |
LOSS PER COMMON SHARE
LOSS PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
LOSS PER COMMON SHARE | LOSS PER COMMON SHARE Basic and diluted net loss per common share is calculated by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. The Company’s potentially dilutive shares, which include outstanding stock options, restricted stock units, warrants, and shares issuable upon conversion of the 2019 and 2025 Notes, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. Basic and diluted net loss per share is calculated as follows (net loss amounts are stated in thousands) : Three Months Ended September 30, 2018 2017 Shares Net Loss EPS Shares Net Loss EPS Basic and diluted loss per share 40,717,440 $ (54,516 ) $ (1.34 ) 38,654,086 $ (17,794 ) $ (0.46 ) Nine Months Ended September 30, 2018 2017 Shares Net Loss EPS Shares Net Loss EPS Basic and diluted loss per share 40,149,184 $ (95,223 ) $ (2.37 ) 38,301,893 $ (42,113 ) $ (1.10 ) The following common stock equivalents have been excluded because they were anti-dilutive ( in thousands ): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Restricted stock units 477 145 335 175 Convertible debt 8,411 2,642 8,411 2,642 Options 7,390 7,515 7,202 6,960 Warrants 40 1,159 377 1,159 Total anti-dilutive shares 16,318 11,461 16,325 10,936 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Leases and Sublease Agreements Facilities Annual Base Rent Lease Expiration Comments Occupied Locations Corporate Headquarters San Diego, CA $2.1 million July 2024 Vacated Locations New York, NY $0.5 million November 2018 Sublet through expiration Research Collaboration and Licensing Agreements As part of the Company's research and development efforts, the Company enters into research collaboration and licensing agreements with unrelated companies, scientific collaborators, universities, and consultants. These agreements contain varying terms and provisions which include fees and milestones to be paid by the Company, services to be provided, and ownership rights to certain proprietary technology developed under the agreements. Some of these agreements contain provisions which require the Company to pay royalties, in the event the Company sells or licenses any proprietary products developed under the respective agreements. Legal Proceedings In August 2017, Martin Shkreli, the Company’s former Chief Executive Officer, was convicted on securities fraud charges following investigations by the U.S. Attorney for the Eastern District of New York and the U.S Securities and Exchange Commission. The Company was not a target of these investigations and cooperated with them fully. Mr. Shkreli has appealed his conviction to the United States Court of Appeals for the Second Circuit, and the appeal will likely not be decided until 2019. In connection with the trial and pending appeal proceedings, Mr. Shkreli sought advancement of his legal fees from the Company, and the Company has advanced a total of $5.4 million in legal fees, of which $3.8 million has been reimbursed by its directors’ and officers’ insurance carriers. Pending the outcome of Mr. Shkreli's appeal, the insurance carriers have reserved their rights to assert that certain of the advanced funds pertain to claims excluded from coverage under the relevant insurance policy and are therefore recoverable by the carriers. As a result, the final amount of the reimbursement from the insurance carriers is not currently estimable. In addition, a portion of these and the other legal fees the Company has advanced to Mr. Shkreli will be subject to reimbursement by Mr. Shkreli under Delaware law in the event it is ultimately determined that Mr. Shkreli is not entitled to be indemnified by the Company in these proceedings. In August 2015, the Company filed a lawsuit in federal district court for the Southern District of New York against Mr. Shkreli, asserting that he breached his fiduciary duty of loyalty during his tenure as the Company’s Chief Executive Officer and a member of its Board of Directors. Mr. Shkreli served a demand for JAMS arbitration on Retrophin, claiming that Retrophin had breached his December 2013 employment agreement. In response to Mr. Shkreli’s arbitration demand, the Company asserted counterclaims in the arbitration that are substantially similar to the claims it previously asserted in the federal lawsuit against Mr. Shkreli. The federal Court granted a stay of the federal lawsuit pending a determination by the arbitration panel whether the Company’s counterclaims would be litigated in the arbitration, as the Company is seeking. In April 2016, the arbitration panel granted the parties’ request for a stay of the proceedings pending settlement discussions. Earlier this year, the parties asked the panel to lift the stay . On June 29, 2018, Mr. Shkreli applied to the federal court to enjoin the arbitration panel from hearing the Company’s counterclaims. On July 2, 2018, the federal court denied Mr. Shkreli’s application . Mr. Shkreli at first filed a notice of appeal indicating his intent to appeal the federal court’s decision, but then agreed to voluntarily dismiss the appeal. On September 13, 2018, the Clerk of the United States Court of Appeals for the Second Circuit ordered the appeal dismissed . On October 2, 2018, the arbitration panel determined that Retrophin's counterclaims were arbitrable. On October 5, 2018, Retrophin voluntarily dismissed the federal action without prejudice. Mr. Shkreli's claims and the Company's counterclaims in the arbitration are scheduled to be heard by the arbitration panel in June 2019. In connection with these proceedings, Mr. Shkreli sought advancement of his legal fees from the Company relating to his defense of the Company’s claims against him. The Company has advanced, and expects to continue to advance, certain of these legal fees to Mr. Shkreli. For the three and nine months ended September 30, 2018, the Company recorded and paid zero in expenses under the settlement agreement. For the three and nine months ended September 30, 2017, the Company recorded zero and $2.0 million in expenses, respectively, and paid zero and $3.0 million , respectively, under the settlement agreement. During the nine months ended September 30, 2018 and 2017, $0.6 million and $2.6 million of reimbursements from the Company's directors’ and officers’ insurance carriers were received. Of the total $3.8 million reimbursed by the insurance carriers, $3.2 million is recorded as a liability on the Consolidated Balance Sheet pending the outcome of Mr. Shkreli's appeal. From time to time the Company is involved in legal proceedings arising in the ordinary course of business. On October 23, 2018, Spring Pharmaceuticals, LLC (Spring) filed a lawsuit against the Company, Martin Shkreli, Mission Pharmacal Company and Alamo Pharma Services, Inc. in the United States District Court for the Eastern District of Pennsylvania alleging that the Company violated various federal and state antitrust and unfair competition laws (and that Defendants were unjustly enriched) by implementing a distribution system that prevented Plaintiff from obtaining sufficient samples of Thiola to conduct bioequivalence testing. Spring’s complaint seeks injunctive relief compelling Defendants to sell Thiola to it and damages. The Company intends to vigorously defend against Spring’s claims. The Company is not aware of any other proceedings or claims that could have, individually or in the aggregate, a material adverse effect on its results of operations or financial condition. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
SHARE BASED COMPENSATION | SHARE BASED COMPENSATION Restricted Shares Service and Performance Based Restricted Stock Units The following table summarizes the Company’s restricted stock unit activity during the nine months ended September 30, 2018 : Number of Restricted Stock Units Weighted Average Grant Date Fair Value Unvested December 31, 2017 345,332 $ 20.51 Granted 449,811 25.47 Vested (56,501 ) 20.11 Forfeited/canceled (30,216 ) 24.08 Unvested September 30, 2018 708,426 $ 23.54 At September 30, 2018 , unamortized stock compensation for restricted stock units was $10.6 million , with a weighted-average recognition period of 2.2 years. Performance Based Restricted Stock Units The Company granted 10,000 and 66,500 performance based restricted stock units during the three and nine months ended September 30, 2018 , respectively. Stock Options The following table summarizes stock option activity during the nine months ended September 30, 2018 : Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 7,153,668 $ 17.16 6.95 $ 39,010 Granted 1,242,550 25.60 Exercised (737,648 ) 14.07 Forfeited/canceled (427,587 ) 24.56 Outstanding at September 30, 2018 7,230,983 $ 18.49 7.13 $ 76,529 At September 30, 2018 , unamortized stock compensation for stock options was $32.5 million , with a weighted-average recognition period of 2.8 years . At September 30, 2018 , outstanding options to purchase 4.6 million shares of common stock were exercisable with a weighted-average exercise price per share of $16.72 . Share Based Compensation The following table sets forth total stock-based compensation for the three and nine months ended September 30, 2018 and 2017 ( in thousands ): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Research and development $ 1,603 $ 1,998 $ 4,592 $ 7,113 Selling, general & administrative 3,282 4,962 10,328 14,179 Total $ 4,885 $ 6,960 $ 14,920 $ 21,292 Exercise of Warrants The Company issued 532,830 and 956,887 shares of common stock upon the exercise of outstanding warrants during the three and nine months ended September 30, 2018, respectively, for cash received by the Company in the amount of $2.1 million and $4.3 million , respectively. See Note 6 for changes in warrant accounting. At September 30, 2018 and December 31, 2017 , warrants to purchase 79,167 and 1,159,424 shares of common stock, respectively, were outstanding. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following table summarizes our effective tax rate and income tax benefit (expense) for the three and nine months ended September 30, 2018 and 2017 ( dollars in millions ): Three Months Ended September 30, 2018 2017 Effective tax rate (0.8 )% 6.4 % Income tax benefit (expense) $ (0.4 ) $ 1.2 Nine Months Ended September 30, 2018 2017 Effective tax rate (0.9 )% 11.0 % Income tax benefit (expense) $ (0.8 ) $ 5.2 For the three and six nine ended September 30, 2018, we recognized an income tax expense of $0.4 million and $0.8 million , respectively, representing an effective tax rate of (0.8)% and (0.9)% , respectively. Under GAAP, quarterly effective tax rates may vary significantly depending on the actual operating results in the various tax jurisdictions, and significant transactions, as well as changes in the valuation allowance related to the expected recovery of deferred tax assets. For the three and nine months ended September 30, 2018, when compared to the same periods in 2017, the change in the tax benefit and decrease in the effective income tax rate was primarily attributable to the increase of the U.S. federal valuation allowance in 2018. The difference between the expected statutory federal tax benefit of 21% and the effective tax expense for three and nine months ended September 30, 2018, was primarily attributable to the valuation allowance against our deferred tax assets. At September 30, 2018, we had no unrecognized tax benefits. We did not recognize any interest or penalties related to unrecognized tax benefits during the three and nine months ended September 30, 2018. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act. The Tax Cuts and Jobs Act reduces the US federal corporate tax rate from 35% to 21%, as well as making several other significant changes to the tax law, effective January 1, 2018. Pursuant to the Securities and Exchange Commission Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), given the amount and complexity of the changes in tax law resulting from the Tax Cuts and Jobs Act, the Company has not finalized the accounting for the income tax effects of the Tax Cuts and Jobs Act. This includes the provisional amounts recorded related to the re-measurement of the deferred taxes and the change to our valuation allowance. The impact of the Tax Cuts and Jobs Act may differ from this estimate during the one-year measurement period due to, among other things, further refinement of the Company's calculation, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of the Tax Cuts and Jobs Act. At September 30, 2018, the Company is still analyzing certain aspects of the Tax Cuts and Jobs Act and refining its calculations, which could potentially affect the analysis of the Company’s deferred tax assets and liabilities and its valuation allowance. Any subsequent adjustment is not expected to be material to the Company’s financial position or results of operations. |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventory, net of reserves, consisted of the following at September 30, 2018 and December 31, 2017 ( in thousands ): September 30, 2018 December 31, 2017 Raw materials $ 3,272 $ 3,435 Finished goods 1,857 1,916 Total inventory $ 5,129 $ 5,351 The inventory reserve was $1.3 million and $0.7 million at September 30, 2018 and December 31, 2017 , respectively. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable, net of reserves for prompt pay discounts and doubtful accounts, was $13.5 million and $13.9 million at September 30, 2018 and December 31, 2017 , respectively. The total reserves for both periods were immaterial. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements represent the consolidation of the accounts of the Company and its subsidiaries in conformity with GAAP. All intercompany accounts and transactions have been eliminated in consolidation. |
Adoption of New Accounting Standards and Recently Issued Accounting Pronouncements | Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification (" ASC"), Topic 606, Revenue from Contracts with Customers, using the full retrospective transition method. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect substantially all the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Adoption of New Accounting Standards In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features. These amendments simplify the accounting for certain financial instruments with down round features. The amendments require companies to disregard the down round feature when assessing whether the instrument is indexed to its own stock, for purposes of determining liability or equity classification. See Note 6 for further discussion. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The new guidance dictates that, when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, it should be treated as an acquisition or disposal of an asset. The guidance was adopted as of January 1, 2018. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial position or results of operations upon adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach or a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption are both options for transition. The Company is in the process of identifying and quantifying all leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Topic 326 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. This ASU update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. As of September 30, 2018, the Company held $324.0 million in available for sale debt securities. If adopted as of September 30, 2018, this ASU update would not have a material impact on the Company's financial statements. |
Research and Development Expense | Research and Development Expenses Research and development expenses are comprised of salaries and bonuses, benefits, non-cash share-based compensation, license fees, costs paid to third-party contractors to perform research, conduct clinical trials and pre/non-clinical trials, develop drug materials, and associated overhead expenses and facilities. We also incur indirect costs that are not allocated to specific programs because such costs benefit multiple development programs and allow us to increase our pharmaceutical development capabilities. These consist of internal shared resources related to the development and maintenance of systems and processes applicable to all of our programs. |
Clinical Trial Expenses | Clinical Trial Expenses We record expenses in connection with our clinical trials under contracts with contract research organizations (CROs) that support conducting and managing clinical trials. The financial terms and activities of these agreements vary from contract to contract and may result in uneven expense levels. Generally, these agreements set forth activities that drive the recording of expenses such as start-up, initiation activities, enrollment, treatment of patients, or the completion of other clinical trial activities. Expenses related to clinical trials are accrued based on our estimates and/or representations from service providers regarding work performed, including actual level of patient enrollment, completion of patient studies and progress of the clinical trials. Other incidental costs related to patient enrollment or treatment are accrued when reasonably certain. If the amounts we are obligated to pay under our clinical trial agreements are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we adjust our accruals accordingly on a prospective basis. Revisions to our contractual payment obligations are charged to expense in the period in which the facts that give rise to the revision become reasonably certain. We currently have three Phase 3 clinical trials in process that are in varying stages of activity, with ongoing non-clinical support trials. As such, clinical trial expenses will vary depending on the all the factors set forth above and may fluctuate significantly from quarter to quarter. |
Revenue Recognition | Deductions from Revenue Revenues from product sales are recorded at the net sales price, which includes provisions resulting from discounts, rebates and co-pay assistance that is offered to its customers, health care providers, payors and other indirect customers relating to the Company’s sales of its products. These provisions are based on the amounts earned or to be claimed on the related sales and are classified as a reduction of accounts receivable (if the amount is payable to the customer) or as a current liability (if the amount is payable to a party other than a customer). Where appropriate, these reserves take into consideration the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract. If actual results in the future vary from the Company’s provisions, the Company will adjust the provision, which would affect net product revenue and earnings in the period such variances become known. Our historical experience is that such adjustments have been immaterial. Government Rebates: We calculate the rebates that we will be obligated to provide to government programs and deduct these estimated amounts from our gross product sales at the time the revenues are recognized. Allowances for government rebates and discounts are established based on actual payer information, which is reasonably estimated at the time of delivery, and the government-mandated discounts applicable to government-funded programs. Rebate discounts are included in other current liabilities in the accompanying consolidated balance sheets. Commercial Rebates: We calculate the rebates that we incur due to contracts with certain commercial payors and deduct these amounts from our gross product sales at the time the revenues are recognized. Allowances for commercial rebates are established based on actual payer information, which is reasonably estimated at the time of delivery. Rebate discounts are included in other current liabilities in the accompanying consolidated balance sheets. Prompt Pay Discounts: We offer discounts to certain customers for prompt payments. We accrue for the calculated prompt pay discount based on the gross amount of each invoice for those customers at the time of sale. Product Returns: Consistent with industry practice, we offer our customers a limited right to return product purchased directly from the Company, which is principally based upon the product’s expiration date. Generally, shipments are only made upon a patient prescription thus returns are minimal. Co-pay Assistance: We offer a co-pay assistance program, which is intended to provide financial assistance to qualified commercially insured patients with prescription drug co-payments required by payors. The calculation of the accrual for co-pay assistance is based on an identification of claims and the cost per claim associated with product that has been recognized as revenue. |
Marketable Securities | The primary objective of the Company’s investment portfolio is to enhance overall returns while preserving capital and liquidity. The Company’s investment policy limits interest-bearing security investments to certain types of instruments issued by institutions with primarily investment grade credit ratings and places restrictions on maturities and concentration by asset class and issuer. All available for sale securities are held in current assets regardless of contractual maturities exceeding one year, as the Company could sell them within the next twelve months. The Company reviews the available-for-sale investments for other-than-temporary declines in fair value below cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below the cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security, and the intent to sell, or whether the Company will more likely than not be required to sell the security before recovery of its amortized cost basis. The assessment of whether a security is other-than-temporarily impaired could change in the future due to new developments or changes in assumptions related to any particular security. |
Derivative Financial Instruments | Historically, the Company accounted for these instruments, which do not have fixed settlement provisions, as derivative instruments in accordance with FASB ASC 815-40, Derivative and Hedging – Contracts in Entity’s Own Equity. This was due to an anti-dilution provision for the warrants that provides for a reduction to the exercise price if the Company issues equity or equity linked instruments in the future at an effective price per share less than the exercise price then in effect for the warrant ("down round provision"). As such, the warrants were re-measured at each balance sheet date based on estimated fair value. Changes in estimated fair value were recorded as non-cash adjustments within other income (expenses), net, in the Company’s accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss. |
Fair Value Measurements | Financial Instruments and Fair Value The Company accounts for financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The valuation techniques used to measure the fair value of the Company’s marketable securities and all other financial instruments, all of which have counter-parties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data. Based on the fair value hierarchy, the Company classified marketable securities within Level 2. In estimating the fair value of the Company’s derivative liabilities as of December 31, 2017 , the Company used the Black Scholes Model. Based on the fair value hierarchy, the Company classified the derivative liability within Level 3. The Company adopted ASU 2017-11 as of January 1, 2018 and is no longer required to treat outstanding warrants as derivative liabilities measured at fair value. See Note 6 for further discussion. In estimating the fair value of the Company’s contingent consideration, the Company used the Monte Carlo Simulation model as of September 30, 2018 and a probability-based expected method for royalty payments based on projected revenues as of December 31, 2017 . Based on the fair value hierarchy, the Company classified the fair value measurement of contingent consideration within Level 3. Financial instruments with carrying values approximating fair value include cash and cash equivalents, accounts receivable, and accounts payable, due to their short term nature. |
Loss Per Common Share | Basic and diluted net loss per common share is calculated by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. The Company’s potentially dilutive shares, which include outstanding stock options, restricted stock units, warrants, and shares issuable upon conversion of the 2019 and 2025 Notes, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Net Product Revenue | The following table summarizes net product revenues for the three and nine months ended September 30, 2018 and 2017 ( in thousands ): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Bile acid products $ 18,052 $ 18,839 $ 55,153 $ 52,662 Thiola 22,654 21,501 65,322 60,098 Total net product revenue $ 40,706 $ 40,340 $ 120,475 $ 112,760 |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of marketable securities | Marketable securities consisted of the following ( in thousands ): September 30, 2018 December 31, 2017 Marketable Securities: Commercial paper $ 54,611 $ 6,897 Corporate debt securities 266,132 164,297 Securities of government sponsored entities 3,250 30,042 Total marketable securities: $ 323,993 $ 201,236 |
Debt Securities Available For Sale | The following is a summary of short-term marketable securities classified as available-for-sale as of September 30, 2018 ( in thousands ): Remaining Contractual Maturity Amortized Cost Unrealized Gains Unrealized Losses Aggregate Estimated Fair Value Marketable securities: Commercial paper Less than 1 $ 54,649 $ — $ (38 ) $ 54,611 Corporate debt securities Less than 1 138,724 — (521 ) 138,203 Securities of government-sponsored entities Less than 1 3,250 — — 3,250 Total maturity less than 1 year 196,623 — (559 ) 196,064 Corporate debt securities 1 to 2 128,174 4 (249 ) 127,929 Total maturity 1 to 2 years 128,174 4 (249 ) 127,929 Total available-for-sale securities $ 324,797 $ 4 $ (808 ) $ 323,993 The following is a summary of short-term marketable securities classified as available-for-sale as of December 31, 2017 ( in thousands ): Remaining Contractual Maturity (in years) Amortized Cost Unrealized Losses Aggregate Estimated Fair Value Marketable securities: Commercial paper Less than 1 $ 6,911 $ (14 ) $ 6,897 Corporate debt securities Less than 1 86,531 (198 ) 86,333 Securities of government-sponsored entities Less than 1 30,132 (90 ) 30,042 Total maturity less than 1 year 123,574 (302 ) 123,272 Corporate debt securities 1 to 2 78,388 (424 ) 77,964 Total maturity 1 to 2 years 78,388 (424 ) 77,964 Total available-for-sale securities $ 201,962 $ (726 ) $ 201,236 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of assumptions for valuation of warrants | The Company calculated the fair value of the warrants using the Black-Scholes Model as of December 31, 2017 , using the following assumptions: December 31, 2017 Fair value of common stock $ 21.07 Remaining life of the warrants (in years) 0.1 - 2.0 years Risk-free interest rate* 1.39 - 1.89% Expected volatility** 33 - 43% Dividend yield — % *The risk-free interest rate is based on the U.S. Treasury security rates for the remaining term of the warrants at the measurement date. **Expected volatility is based on an analysis of the Company’s historical volatility. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value on a recurring basis | The following table presents the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of September 30, 2018 ( in thousands ): As of September 30, 2018 Total carrying and estimated fair value Quoted prices in active markets Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Marketable securities, available-for-sale 323,993 — 323,993 — Total $ 323,993 $ — $ 323,993 $ — Liabilities: Business combination-related contingent consideration $ 106,000 $ — $ — $ 106,000 Total $ 106,000 $ — $ — $ 106,000 The following table presents the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2017 ( in thousands ): As of December 31, 2017 Total carrying and estimated fair value Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Marketable securities, available-for-sale 201,236 — 201,236 — Total $ 201,236 $ — $ 201,236 $ — Liabilities: Derivative liability related to warrants $ 15,710 $ — $ — $ 15,710 Business combination-related contingent consideration 90,000 — — 90,000 Total $ 105,710 $ — $ — $ 105,710 |
Schedule of summary of changes in estimated acquisition related contingent consideration | The following table sets forth a summary of changes in the estimated fair value of the Company's business combination-related contingent consideration for the nine months ended September 30, 2018 ( in thousands ): Fair Value Measurements of Acquisition-Related Contingent Consideration Balance at January 1, 2018 $ 90,000 Increase from revaluation of contingent consideration 22,387 Contractual payments included in accrued liabilities at September 30, 2018 (2,092 ) Contractual payments (4,295 ) Balance at September 30, 2018 $ 106,000 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived amortizable intangible assets | The following table sets forth amortizable intangible assets as of September 30, 2018 and December 31, 2017 ( in thousands ): September 30, 2018 December 31, 2017 Finite-lived intangible assets $ 250,824 $ 235,863 Less: accumulated amortization (64,279 ) (51,046 ) Net carrying value $ 186,545 $ 184,817 |
Schedule of amortization expense | The following table summarizes amortization expense for the three and nine months ended September 30, 2018 and 2017 ( in thousands ): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Research and development $ 292 $ 82 $ 684 $ 244 Selling, general and administrative 4,333 4,424 12,635 12,752 Total amortization expense $ 4,625 $ 4,506 $ 13,319 $ 12,996 |
CONVERTIBLE NOTES PAYABLE CONVE
CONVERTIBLE NOTES PAYABLE CONVERTIBLE NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The effective interest rate on the liability components of the 2025 Notes for the period from the date of issuance through September 30, 2018 was 7.7% . The following table sets forth total interest expense recognized related to the 2025 Notes ( in thousands ): Three and Nine months ended September 30, 2018 2017 Contractual interest expense 383 — Amortization of debt issuance costs 468 — Amortization of debt discount 50 — Total interest expense for the 2025 Notes $ 901 $ — The composition of the Company’s 2025 Notes are as follows ( in thousands ): September 30, 2018 December 31, 2017 2.50% convertible senior notes due 2025 $ 276,000 $ — Unamortized debt discount (76,951 ) — Unamortized debt issuance costs (6,296 ) — Total 2025 Notes, net of unamortized debt discount and debt issuance costs $ 192,753 $ — The composition of the Company’s 2019 Notes are as follows ( in thousands ): September 30, 2018 December 31, 2017 4.50% senior convertible notes due 2019 $ 22,590 $ 46,000 Unamortized debt discount (200 ) (867 ) Unamortized debt issuance costs (13 ) (56 ) Total 2019 Notes, net of unamortized debt discount and debt issuance costs $ 22,377 $ 45,077 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses at September 30, 2018 and December 31, 2017 consisted of the following ( in thousands ): September 30, 2018 December 31, 2017 Government rebates payable $ 10,377 $ 5,883 Compensation related costs 9,292 7,749 Accrued royalties and contingent consideration 6,332 6,429 Research and development 11,969 6,989 Selling, general and administrative 2,913 3,896 Restructuring expenses — 3,549 Miscellaneous accrued 2,465 1,523 Total accrued expenses $ 43,348 $ 36,018 |
LOSS PER COMMON SHARE (Tables)
LOSS PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net income (loss) per share | Basic and diluted net loss per share is calculated as follows (net loss amounts are stated in thousands) : Three Months Ended September 30, 2018 2017 Shares Net Loss EPS Shares Net Loss EPS Basic and diluted loss per share 40,717,440 $ (54,516 ) $ (1.34 ) 38,654,086 $ (17,794 ) $ (0.46 ) Nine Months Ended September 30, 2018 2017 Shares Net Loss EPS Shares Net Loss EPS Basic and diluted loss per share 40,149,184 $ (95,223 ) $ (2.37 ) 38,301,893 $ (42,113 ) $ (1.10 ) |
Schedule of common stock options, convertible debt and restricted stock units anti-dilutive | The following common stock equivalents have been excluded because they were anti-dilutive ( in thousands ): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Restricted stock units 477 145 335 175 Convertible debt 8,411 2,642 8,411 2,642 Options 7,390 7,515 7,202 6,960 Warrants 40 1,159 377 1,159 Total anti-dilutive shares 16,318 11,461 16,325 10,936 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of property subject to or available for operating lease | Leases and Sublease Agreements Facilities Annual Base Rent Lease Expiration Comments Occupied Locations Corporate Headquarters San Diego, CA $2.1 million July 2024 Vacated Locations New York, NY $0.5 million November 2018 Sublet through expiration |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of restricted stock activity | The following table summarizes the Company’s restricted stock unit activity during the nine months ended September 30, 2018 : Number of Restricted Stock Units Weighted Average Grant Date Fair Value Unvested December 31, 2017 345,332 $ 20.51 Granted 449,811 25.47 Vested (56,501 ) 20.11 Forfeited/canceled (30,216 ) 24.08 Unvested September 30, 2018 708,426 $ 23.54 |
Schedule of stock option issuances and balances outstanding | The following table summarizes stock option activity during the nine months ended September 30, 2018 : Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 7,153,668 $ 17.16 6.95 $ 39,010 Granted 1,242,550 25.60 Exercised (737,648 ) 14.07 Forfeited/canceled (427,587 ) 24.56 Outstanding at September 30, 2018 7,230,983 $ 18.49 7.13 $ 76,529 |
Schedule of Share based compensation expenses | The following table sets forth total stock-based compensation for the three and nine months ended September 30, 2018 and 2017 ( in thousands ): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Research and development $ 1,603 $ 1,998 $ 4,592 $ 7,113 Selling, general & administrative 3,282 4,962 10,328 14,179 Total $ 4,885 $ 6,960 $ 14,920 $ 21,292 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax (Expense) Benefit | The following table summarizes our effective tax rate and income tax benefit (expense) for the three and nine months ended September 30, 2018 and 2017 ( dollars in millions ): Three Months Ended September 30, 2018 2017 Effective tax rate (0.8 )% 6.4 % Income tax benefit (expense) $ (0.4 ) $ 1.2 Nine Months Ended September 30, 2018 2017 Effective tax rate (0.9 )% 11.0 % Income tax benefit (expense) $ (0.8 ) $ 5.2 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory, net of reserves, consisted of the following at September 30, 2018 and December 31, 2017 ( in thousands ): September 30, 2018 December 31, 2017 Raw materials $ 3,272 $ 3,435 Finished goods 1,857 1,916 Total inventory $ 5,129 $ 5,351 |
DESCRIPTION OF BUSINESS - Narra
DESCRIPTION OF BUSINESS - Narrative (Details) | Sep. 30, 2018product |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of products sold | 3 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Marketable securities | $ 323,993 | $ 201,236 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | $ 40,706 | $ 40,340 | $ 120,475 | $ 112,760 |
Bile acid products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 18,052 | 18,839 | 55,153 | 52,662 |
Thiola | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | $ 22,654 | $ 21,501 | $ 65,322 | $ 60,098 |
Geographic Concentration Risk | Revenue from Contract with Customer | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk, percentage | 95.00% |
MARKETABLE SECURITIES - Additio
MARKETABLE SECURITIES - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | ||
Proceeds from the sale/maturity of marketable securities | $ 96,166 | $ 76,826 |
Purchases of debt based marketable securities | $ 219,820 | $ 67,552 |
MARKETABLE SECURITIES - Marketa
MARKETABLE SECURITIES - Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Marketable securities | $ 323,993 | $ 201,236 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Marketable securities | 54,611 | 6,897 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Marketable securities | 266,132 | 164,297 |
Securities of government sponsored entities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Marketable securities | $ 3,250 | $ 30,042 |
MARKETABLE SECURITIES - Availab
MARKETABLE SECURITIES - Available for Sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost basis, current | $ 196,623 | $ 123,574 |
Debt securities available for sale, unrealized gain, current | 0 | |
Debt securities available for sale unrealized loss, current | (559) | (302) |
Debt securities, available-for-sale, current | 196,064 | 123,272 |
Debt securities, available-for-sale, amortized cost basis, noncurrent | 128,174 | 78,388 |
Debt securities, available for sale unrealized gain, noncurrent | 4 | |
Debt securities available for sale unrealized gain loss, noncurrent | (249) | (424) |
Debt securities, available-for-sale, noncurrent | 127,929 | 77,964 |
Debt securities, available-for-sale, amortized cost | 324,797 | 201,962 |
Debt securities, available for sale, unrealized gains | 4 | |
Debt securities, available-for-sale, unrealized gain (loss) | (808) | (726) |
Aggregate Estimated Fair Value | 323,993 | 201,236 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost basis, current | 54,649 | 6,911 |
Debt securities available for sale, unrealized gain, current | 0 | |
Debt securities available for sale unrealized loss, current | (38) | (14) |
Debt securities, available-for-sale, current | 54,611 | 6,897 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost basis, current | 138,724 | 86,531 |
Debt securities available for sale, unrealized gain, current | 0 | |
Debt securities available for sale unrealized loss, current | (521) | (198) |
Debt securities, available-for-sale, current | 138,203 | 86,333 |
Debt securities, available-for-sale, amortized cost basis, noncurrent | 128,174 | 78,388 |
Debt securities, available for sale unrealized gain, noncurrent | 4 | |
Debt securities available for sale unrealized gain loss, noncurrent | (249) | (424) |
Debt securities, available-for-sale, noncurrent | 127,929 | 77,964 |
Securities of government sponsored entities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost basis, current | 3,250 | 30,132 |
Debt securities available for sale, unrealized gain, current | 0 | |
Debt securities available for sale unrealized loss, current | 0 | (90) |
Debt securities, available-for-sale, current | $ 3,250 | $ 30,042 |
FUTURE ACQUISITION RIGHT AND _2
FUTURE ACQUISITION RIGHT AND JOINT DEVELOPMENT AGREEMENT (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Variable Interest Entity [Line Items] | |||
Business combination, option agreement, purchase price | $ 65,000 | ||
Business combination, option agreement, purchase price, percent transferred in cash | 20.00% | ||
Business combination, option agreement, purchase price, percent transferred by issuance of equity | 80.00% | ||
Business combination, option agreement, share price (in dollars per share) | $ 21.40 | ||
Business combination, option agreement, percent of consideration paid in cash if share price falls below share price threshold | 100.00% | ||
Business combination, option agreement, weighted average ten day share price, which requires all cash payment (in dollars per share) | $ 19.26 | ||
Business combination, option agreement, contingent consideration | $ 25,000 | ||
Investment | $ 15,000 | $ 0 | |
Censa Pharmaceuticals Inc. | CNSA-001 Program | Purchase Provision Terms | |||
Variable Interest Entity [Line Items] | |||
Research and development arrangement, contract to perform for others, compensation earned | 17,000 | ||
Censa Pharmaceuticals Inc. | |||
Variable Interest Entity [Line Items] | |||
Payments for the option to acquire business | 10,000 | 10,000 | |
Censa Pharmaceuticals, Inc, Equity Holders | |||
Variable Interest Entity [Line Items] | |||
Additional required payments for the option to acquire business, successful development milestones | $ 5,000 | 5,000 | |
Additional required payments for the option to acquire business, successful development funding | $ 15,000 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)tranche | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Derivative [Line Items] | |||||
Change in fair value of liability classified warrants | $ 0 | $ 8,901 | $ 0 | $ 8,921 | |
Derivative liability related to warrants | $ 0 | $ 0 | $ 15,710 | ||
Warrant | |||||
Derivative [Line Items] | |||||
Number of tranches | tranche | 5 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Valuation Assumptions (Details) - Warrants | Dec. 31, 2017Year$ / shares |
Derivative [Line Items] | |
Fair value of common stock (in dollars per share) | $ / shares | $ 21.07 |
Remaining life of the warrants (in years) | Minimum | |
Derivative [Line Items] | |
Measurement input | 0.1 |
Remaining life of the warrants (in years) | Maximum | |
Derivative [Line Items] | |
Measurement input | 2 |
Risk-free interest rate | Minimum | |
Derivative [Line Items] | |
Measurement input | 0.0139 |
Risk-free interest rate | Maximum | |
Derivative [Line Items] | |
Measurement input | 0.0189 |
Expected volatility | Minimum | |
Derivative [Line Items] | |
Measurement input | 0.33 |
Expected volatility | Maximum | |
Derivative [Line Items] | |
Measurement input | 0.43 |
Dividend yield | |
Derivative [Line Items] | |
Measurement input | 0 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 10, 2018 | |
Business Acquisition [Line Items] | |||||
Change in fair value of contingent consideration | $ 16,601 | $ 4,429 | $ 22,387 | $ 11,057 | |
Increase from revaluation of contingent consideration | (6,852) | (885) | |||
Product Rights Chenodal | |||||
Business Acquisition [Line Items] | |||||
Increase from revaluation of contingent consideration | 10,000 | 5,000 | |||
Acquired Product Rights Cholbam | |||||
Business Acquisition [Line Items] | |||||
Increase from revaluation of contingent consideration | 10,400 | 3,800 | |||
Acquired Product Rights L-UDCA | |||||
Business Acquisition [Line Items] | |||||
Increase from revaluation of contingent consideration | $ 2,000 | $ 2,300 | |||
Senior Notes | Convertible Notes Due 2019 | |||||
Business Acquisition [Line Items] | |||||
Interest rate percentage | 4.50% | 4.50% | |||
Fair value of convertible debt | $ 38,800 | $ 38,800 | |||
Senior Notes | Senior Notes Due 2025 | |||||
Business Acquisition [Line Items] | |||||
Interest rate percentage | 2.50% | 2.50% | 2.50% | ||
Fair value of convertible debt | $ 283,400 | $ 283,400 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Marketable securities, available-for-sale | $ 323,993 | $ 201,236 |
Liabilities: | ||
Derivative liability related to warrants | 0 | 15,710 |
Recurring basis | ||
Assets: | ||
Marketable securities, available-for-sale | 323,993 | 201,236 |
Total | 323,993 | 201,236 |
Liabilities: | ||
Derivative liability related to warrants | 15,710 | |
Business combination-related contingent consideration | 106,000 | 90,000 |
Total | 106,000 | 105,710 |
Recurring basis | Quoted prices in active markets (Level 1) | ||
Assets: | ||
Marketable securities, available-for-sale | 0 | 0 |
Total | 0 | 0 |
Liabilities: | ||
Derivative liability related to warrants | 0 | |
Business combination-related contingent consideration | 0 | 0 |
Total | 0 | 0 |
Recurring basis | Significant other observable inputs (Level 2) | ||
Assets: | ||
Marketable securities, available-for-sale | 323,993 | 201,236 |
Total | 323,993 | 201,236 |
Liabilities: | ||
Derivative liability related to warrants | 0 | |
Business combination-related contingent consideration | 0 | 0 |
Total | 0 | 0 |
Recurring basis | Significant unobservable inputs (Level 3) | ||
Assets: | ||
Marketable securities, available-for-sale | 0 | 0 |
Total | 0 | 0 |
Liabilities: | ||
Derivative liability related to warrants | 15,710 | |
Business combination-related contingent consideration | 106,000 | 90,000 |
Total | $ 106,000 | $ 105,710 |
FAIR VALUE MEASUREMENTS - Acqui
FAIR VALUE MEASUREMENTS - Acquisition-related Contingent Consideration (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Increase from revaluation of contingent consideration | $ (6,852) | $ (885) |
Recurring basis | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at January 1, 2018 | 90,000 | |
Increase from revaluation of contingent consideration | 22,387 | |
Contractual payments included in accrued liabilities at September 30, 2018 | (2,092) | |
Contractual payments | (4,295) | |
Balance at September 30, 2018 | $ 106,000 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Net book value of amortizable intangible assets | $ 186,545 | $ 184,817 |
INTANGIBLE ASSETS - Amortizable
INTANGIBLE ASSETS - Amortizable Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible assets | $ 250,824 | $ 235,863 |
Less: accumulated amortization | (64,279) | (51,046) |
Net carrying value | $ 186,545 | $ 184,817 |
INTANGIBLE ASSETS - Amortizatio
INTANGIBLE ASSETS - Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense | $ 4,625 | $ 4,506 | $ 13,319 | $ 12,996 |
Research and development | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense | 292 | 82 | 684 | 244 |
Selling, general and administrative | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense | $ 4,333 | $ 4,424 | $ 12,635 | $ 12,752 |
CONVERTIBLE NOTES PAYABLE - Na
CONVERTIBLE NOTES PAYABLE - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018USD ($)day$ / shares | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)day$ / shares | Sep. 30, 2017USD ($) | Sep. 10, 2018USD ($) | Dec. 31, 2017USD ($) | May 29, 2014USD ($)$ / shares | |
Debt Instrument [Line Items] | |||||||
Debt conversion, liability | $ 198,600,000 | $ 198,600,000 | |||||
Debt conversion, equity | 77,400,000 | ||||||
Debt instrument, repurchase amount | 23,400,000 | $ 23,400,000 | |||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||||||
Debt instrument, convertible note, market price | 1,027 | $ 1,027 | |||||
Debt issuance costs, net | $ 8,800,000 | $ 8,800,000 | |||||
Debt instrument, interest rate, effective percentage | 7.70% | 7.70% | |||||
Gain (loss) on extinguishment of debt | $ (17,042,000) | $ 0 | $ (17,042,000) | $ 0 | |||
Long-term debt and capital lease obligations | 22,600,000 | 22,600,000 | |||||
Note Purchase Agreement | Senior convertible notes due 2019 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate percentage | 4.50% | ||||||
Initial conversion price (in dollars per share) | $ / shares | $ 17.41 | ||||||
Credit agreement amount | $ 46,000,000 | ||||||
Senior Notes | Senior Notes Due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, excluding current maturities | $ 276,000,000 | $ 276,000,000 | $ 276,000,000 | ||||
Interest rate percentage | 2.50% | 2.50% | 2.50% | ||||
Proceeds from issuance of debt | $ 267,200,000 | ||||||
Conversion ratio | 0.0258 | ||||||
Initial conversion price (in dollars per share) | $ / shares | $ 38.80 | $ 38.80 | |||||
Debt issuance costs, net | $ 6,296,000 | $ 6,296,000 | $ 0 | ||||
Senior Notes | Convertible Notes Due 2019 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate percentage | 4.50% | 4.50% | |||||
Debt instrument, convertible, threshold trading days | day | 20 | ||||||
Debt instrument, convertible, threshold consecutive trading days | day | 30 | ||||||
Debt instrument, repurchase amount | $ 40,200,000 | $ 40,200,000 | |||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||||||
Debt instrument, convertible, threshold consecutive days measuring period | day | 10 | 10 | |||||
Trading price per principal, percentage | 98.00% | ||||||
Debt issuance costs, net | $ 13,000 | $ 13,000 | $ 56,000 | ||||
Gain (loss) on extinguishment of debt | $ (17,000,000) |
CONVERTIBLE NOTES PAYABLE - Com
CONVERTIBLE NOTES PAYABLE - Composition of Notes (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 10, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | $ (8,800) | ||
Senior Notes | Senior Notes Due 2025 | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 2.50% | 2.50% | |
Long-term Debt, Gross | $ 276,000 | $ 0 | |
Unamortized debt discount | (76,951) | 0 | |
Unamortized debt issuance costs | (6,296) | 0 | |
Long-term Debt | $ 192,753 | 0 | |
Senior Notes | Convertible Notes Due 2019 | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | ||
Long-term Debt, Gross | $ 22,590 | 46,000 | |
Unamortized debt discount | (200) | (867) | |
Unamortized debt issuance costs | (13) | (56) | |
Long-term Debt | $ 22,377 | $ 45,077 |
CONVERTIBLE NOTES PAYABLE - Sch
CONVERTIBLE NOTES PAYABLE - Schedule of Interest Expense (Details) - Senior Notes Due 2025 - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | ||
Interest expense | $ 901 | $ 0 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest expense | 383 | 0 |
Amortization of debt issuance costs | 468 | 0 |
Amortization of debt discount | $ 50 | $ 0 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Government rebates payable | $ 10,377 | $ 5,883 |
Compensation related costs | 9,292 | 7,749 |
Accrued royalties and contingent consideration | 6,332 | 6,429 |
Research and development | 11,969 | 6,989 |
Selling, general and administrative | 2,913 | 3,896 |
Restructuring expenses | 0 | 3,549 |
Miscellaneous accrued | 2,465 | 1,523 |
Total accrued expenses | $ 43,348 | $ 36,018 |
LOSS PER COMMON SHARE - EPS Rec
LOSS PER COMMON SHARE - EPS Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Shares | ||||
Weighted average number of shares outstanding, basic and diluted | 40,717,440 | 38,654,086 | 40,149,184 | 38,301,893 |
Net loss | $ (54,516) | $ (17,794) | $ (95,223) | $ (42,113) |
Basic and Diluted (in dollars/share) | $ (1.34) | $ (0.46) | $ (2.37) | $ (1.10) |
Net Loss | ||||
Weighted average number of shares outstanding, basic and diluted | 40,717,440 | 38,654,086 | 40,149,184 | 38,301,893 |
Net loss | $ (54,516) | $ (17,794) | $ (95,223) | $ (42,113) |
Basic and Diluted (in dollars/share) | $ (1.34) | $ (0.46) | $ (2.37) | $ (1.10) |
LOSS PER COMMON SHARE - Antidil
LOSS PER COMMON SHARE - Antidilutive Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares excluded from the calculation | 16,318 | 11,461 | 16,325 | 10,936 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares excluded from the calculation | 477 | 145 | 335 | 175 |
Convertible debt | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares excluded from the calculation | 8,411 | 2,642 | 8,411 | 2,642 |
Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares excluded from the calculation | 7,390 | 7,515 | 7,202 | 6,960 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares excluded from the calculation | 40 | 1,159 | 377 | 1,159 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Leases and Subleases Commitment (Details) - Lease Agreement $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
San Diego CA | |
Other Commitments [Line Items] | |
Annual Base Rent | $ 2.1 |
New York, NY | |
Other Commitments [Line Items] | |
Annual Base Rent | $ 0.5 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 14 Months Ended | 21 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | |
Commitment And Contingency [Line Items] | ||||||
Legal fees | $ 0 | $ 0 | $ 2,000,000 | |||
Martin Shkreli | ||||||
Commitment And Contingency [Line Items] | ||||||
Contingent future legal fee advance payment | $ 5,400,000 | |||||
Legal fees reimbursed from director and officer insurance carriers | $ 600,000 | 2,600,000 | 3,800,000 | $ 3,800,000 | ||
Payments for legal settlements | $ 0 | $ 3,000,000 | ||||
Retrophin, Inc. v. Shkreli | ||||||
Commitment And Contingency [Line Items] | ||||||
Loss contingency accrual | $ 3,200,000 | $ 3,200,000 | $ 3,200,000 | $ 3,200,000 |
SHARE BASED COMPENSATION - Rest
SHARE BASED COMPENSATION - Restricted Stock Activity (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2018USD ($)$ / sharesshares | |
Restricted stock units | ||
Number of Restricted Stock Units | ||
Beginning Balance (in shares) | 345,332 | |
Granted (in shares) | 449,811 | |
Vested (in shares) | (56,501) | |
Forfeited/canceled (in shares) | (30,216) | |
Ending Balance (in share) | 708,426 | 708,426 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ / shares | $ 20.51 | |
Granted (in dollars per share) | $ / shares | 25.47 | |
Vested (in dollars per share) | $ / shares | 20.11 | |
Forfeited/canceled (in dollars per share) | $ / shares | 24.08 | |
Ending balance (in dollars per share) | $ / shares | $ 23.54 | $ 23.54 |
Unamortized stock compensation expense | $ | $ 10.6 | $ 10.6 |
Weighted-average recognition period (in years) | 2 years 2 months 12 days | |
Performance Shares | ||
Number of Restricted Stock Units | ||
Granted (in shares) | 10,000 | 66,500 |
SHARE BASED COMPENSATION - Stoc
SHARE BASED COMPENSATION - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Weighted Average Exercise Price | ||
Number of shares exercisable (in shares) | 4,600,000 | |
Weighted average exercise price (in dollars per share) | $ 16.72 | |
Stock Options | ||
Shares Underlying Options | ||
Beginning Balance (in shares) | 7,153,668 | |
Granted (in shares) | 1,242,550 | |
Exercised (in shares) | (737,648) | |
Forfeited/canceled (in shares) | (427,587) | |
Ending Balance (in shares) | 7,230,983 | 7,153,668 |
Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 17.16 | |
Granted (in dollars per share) | 25.60 | |
Exercised (in dollars per share) | 14.07 | |
Forfeited/canceled (in dollars per share) | 24.56 | |
Ending balance (in dollars per share) | $ 18.49 | $ 17.16 |
Weighted Average Remaining Contractual Life (years) | 7 years 1 month 17 days | 6 years 11 months 12 days |
Aggregate Intrinsic Value (in thousands) | $ 76,529 | $ 39,010 |
Unamortized stock compensation expense | $ 32,500 | |
Weighted-average recognition period (in years) | 2 years 9 months 18 days |
SHARE BASED COMPENSATION - St_2
SHARE BASED COMPENSATION - Stock based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 4,885 | $ 6,960 | $ 14,920 | $ 21,292 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1,603 | 1,998 | 4,592 | 7,113 |
Selling, general & administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 3,282 | $ 4,962 | $ 10,328 | $ 14,179 |
SHARE BASED COMPENSATION - Exer
SHARE BASED COMPENSATION - Exercise of Warrants (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | |||
Warrants exercised (in shares) | 532,830 | 956,887 | |
Proceeds from warrant exercises | $ 2.1 | $ 4.3 | |
Warrants outstanding (in shares) | 79,167 | 79,167 | 1,159,424 |
INCOME TAXES - Summary of Effec
INCOME TAXES - Summary of Effective Tax Rate and Income Tax Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | (0.80%) | 6.40% | (0.90%) | 11.00% |
Income tax benefit (expense) | $ (415) | $ 1,223 | $ (811) | $ 5,212 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 415,000 | $ (1,223,000) | $ 811,000 | $ (5,212,000) |
Effective income tax rate reconciliation, percent | (0.80%) | 6.40% | (0.90%) | 11.00% |
Unrecognized tax benefits | $ 0 | $ 0 | ||
Unrecognized tax benefits, income tax penalties expense | $ 0 | $ 0 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 3,272 | $ 3,435 |
Finished goods | 1,857 | 1,916 |
Total inventory | 5,129 | 5,351 |
Inventory Reserve | $ 1,300 | $ 700 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Accounts receivable, net of reserves | $ 13,450 | $ 13,872 |