Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | VIVUS INC | |
Entity Central Index Key | 0000881524 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 10,642,713 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 40,113 | $ 30,411 |
Available-for-sale securities | 0 | 80,838 |
Accounts receivable, net | 24,065 | 25,608 |
Inventories | 30,008 | 23,132 |
Prepaid expenses and other current assets | 6,979 | 7,538 |
Total current assets | 101,165 | 167,527 |
Fixed Assets, net | 273 | 341 |
Right-of-use assets | 1,299 | |
Intangible and other non-current assets | 123,366 | 134,279 |
Total assets | 226,103 | 302,147 |
Current liabilities: | ||
Accounts payable | 6,159 | 8,921 |
Accrued and other liabilities | 34,304 | 33,044 |
Deferred revenue | 1,251 | 1,235 |
Current portion of lease liability | 768 | |
Current portion of long-term debt | 184,190 | |
Total current liabilities | 226,672 | 43,200 |
Long-term debt | 58,538 | 294,446 |
Deferred revenue, net of current portion | 3,376 | 4,290 |
Lease liability, net of current portion | 788 | |
Non-current accrued and other liabilities | 234 | |
Total liabilities | 289,374 | 342,170 |
Commitments and contingencies | ||
Stockholders' deficit | ||
Preferred stock; $.001 par value; 5,000 shares authorized; no shares issued and outstanding at September 30, 2019 and December 31, 2018 | 0 | 0 |
Common stock; $.001 par value; 200,000 shares authorized; 10,643 and 10,636 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 11 | 11 |
Additional paid-in capital | 842,185 | 840,751 |
Accumulated other comprehensive income (loss) | (6) | (270) |
Accumulated deficit | (905,461) | (880,515) |
Total stockholders' deficit | (63,271) | (40,023) |
Total liabilities and stockholders' deficit | $ 226,103 | $ 302,147 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000 | 5,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 10,643 | 10,636 |
Common stock, shares outstanding | 10,643 | 10,636 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue: | ||||
Total revenue | $ 17,970 | $ 18,088 | $ 52,506 | $ 44,948 |
Operating expenses: | ||||
Cost of goods sold (excluding amortization) | 3,016 | 3,484 | 11,701 | 9,400 |
Amortization of Intangible Assets | 3,638 | 3,638 | 10,914 | 5,002 |
Sales and Marketing | 4,514 | 3,096 | 13,655 | 10,896 |
General and Administrative | 4,693 | 5,360 | 15,440 | 19,339 |
Research and development | 3,266 | 2,102 | 8,087 | 5,547 |
Total operating expenses | 19,127 | 17,680 | 59,797 | 50,184 |
(Loss) Income from operations | (1,157) | 408 | (7,291) | (5,236) |
Interest expense and other expense, net | 9,911 | 9,595 | 17,661 | 27,162 |
Loss before income taxes | (11,068) | (9,187) | (24,952) | (32,398) |
Provision for income taxes | 4 | 36 | 4 | 52 |
Net loss | $ (11,072) | $ (9,223) | $ (24,956) | $ (32,450) |
Basic and diluted net loss per share: | ||||
Basic and diluted net loss per share (in dollars per share) | $ (1.04) | $ (0.87) | $ (2.35) | $ (3.06) |
Shares used in per share computation: | ||||
Basic and diluted (in shares) | 10,643 | 10,628 | 10,640 | 10,617 |
Net Product Revenue | ||||
Revenue: | ||||
Total revenue | $ 14,849 | $ 16,484 | $ 43,450 | $ 39,366 |
License and Milestone Revenue | ||||
Revenue: | ||||
Total revenue | 2,500 | 2,500 | ||
Supply Revenue | ||||
Revenue: | ||||
Total revenue | 64 | 478 | 3,448 | 3,203 |
Royalty Revenue | ||||
Revenue: | ||||
Total revenue | $ 557 | $ 1,126 | $ 3,108 | $ 2,379 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net loss | $ (11,072) | $ (9,223) | $ (24,956) | $ (32,450) |
Other comprehensive loss: | ||||
Unrealized (loss) gain on securities, net of taxes | (200) | 109 | 271 | 209 |
Translation adjustment | (7) | (7) | 1 | |
Comprehensive loss | $ (11,279) | $ (9,114) | $ (24,692) | $ (32,240) |
Consolidated Statements Of Stoc
Consolidated Statements Of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balances at Dec. 31, 2017 | $ 11 | $ 834,824 | $ (608) | $ (843,565) | $ (9,338) |
Balances (in shares) at Dec. 31, 2017 | 10,603 | ||||
Sale of common stock through employee stock purchase plan | 24 | 24 | |||
Sale of common stock through employee stock purchase plan (in shares) | 5 | ||||
Exercise of common stock options for cash | 78 | 78 | |||
Exercise of common stock options for cash (in shares) | 10 | ||||
Vesting of restricted stock units (in shares) | 10 | ||||
Share-based compensation expense | 2,651 | 2,651 | |||
Warrants issued for acquisition of PANCREAZE | 828 | 828 | |||
Warrants issued in association with the issuance of debt | 1,695 | 1,695 | |||
Net unrealized (loss) gain on securities | 209 | 209 | |||
Net income (loss) | (32,450) | (32,450) | |||
Balances at Sep. 30, 2018 | $ 11 | 840,100 | (399) | (876,015) | (36,303) |
Balances (in shares) at Sep. 30, 2018 | 10,628 | ||||
Balances at Jun. 30, 2018 | $ 11 | 839,405 | (508) | (866,792) | (27,884) |
Balances (in shares) at Jun. 30, 2018 | 10,624 | ||||
Exercise of common stock options for cash | 18 | 18 | |||
Exercise of common stock options for cash (in shares) | 2 | ||||
Vesting of restricted stock units (in shares) | 2 | ||||
Share-based compensation expense | 677 | 677 | |||
Net unrealized (loss) gain on securities | 109 | 109 | |||
Net income (loss) | (9,223) | (9,223) | |||
Balances at Sep. 30, 2018 | $ 11 | 840,100 | (399) | (876,015) | (36,303) |
Balances (in shares) at Sep. 30, 2018 | 10,628 | ||||
Balances at Dec. 31, 2018 | $ 11 | 840,751 | (270) | (880,515) | $ (40,023) |
Balances (in shares) at Dec. 31, 2018 | 10,636 | 10,636 | |||
Sale of common stock through employee stock purchase plan | 16 | $ 16 | |||
Sale of common stock through employee stock purchase plan (in shares) | 6 | ||||
Vesting of restricted stock units (in shares) | 1 | ||||
Share-based compensation expense | 1,418 | 1,418 | |||
Translation adjustment | (7) | (7) | |||
Net unrealized (loss) gain on securities | 271 | 271 | |||
Cumulative effect of accounting change | 10 | 10 | |||
Net income (loss) | (24,956) | (24,956) | |||
Balances at Sep. 30, 2019 | $ 11 | 842,185 | (6) | (905,461) | $ (63,271) |
Balances (in shares) at Sep. 30, 2019 | 10,643 | 10,643 | |||
Balances at Jun. 30, 2019 | $ 11 | 841,702 | 201 | (894,389) | $ (52,475) |
Balances (in shares) at Jun. 30, 2019 | 10,643 | ||||
Share-based compensation expense | 483 | 483 | |||
Translation adjustment | (7) | (7) | |||
Net unrealized (loss) gain on securities | (200) | (200) | |||
Net income (loss) | (11,072) | (11,072) | |||
Balances at Sep. 30, 2019 | $ 11 | $ 842,185 | $ (6) | $ (905,461) | $ (63,271) |
Balances (in shares) at Sep. 30, 2019 | 10,643 | 10,643 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flow - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (24,956) | $ (32,450) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation and amortization | 11,024 | 5,197 |
Amortization of debt issuance costs and discounts | (3,069) | 15,390 |
Amortization of discount or premium on available-for-sale securities | (502) | 638 |
Share-based compensation expense | 1,418 | 2,650 |
Changes in assets and liabilities: | ||
Accounts receivable | 1,543 | (11,438) |
Inventories | (8,065) | (3,276) |
Prepaid expenses and other assets | 789 | (577) |
Accounts payable | (2,762) | (5,589) |
Accrued and other liabilities | 2,401 | 3,698 |
Deferred revenue | (898) | (904) |
Net cash used for operating activities | (23,077) | (26,661) |
Cash flows from investing activities: | ||
Fixed asset purchases | (42) | (34) |
Acquisition of PANCREAZE license | (135,000) | |
Purchases of available-for-sale securities | (16,879) | (7,604) |
Proceeds from maturity of available-for-sale securities | 42,087 | 48,356 |
Proceeds from sales of available-for-sale securities | 56,403 | 61,666 |
Net cash provided for (used for) provided by investing activities | 81,569 | (32,616) |
Cash flows from financing activities: | ||
Net proceeds from debt issuance | 107,991 | |
Repayments of notes payable | (48,649) | (57,187) |
Principal payments of financing leases | (150) | |
Net proceeds from exercise of common stock options | 79 | |
Sale of common stock through employee stock purchase plan | 16 | 24 |
Net cash (used for) provided by financing activities | (48,783) | 50,907 |
Effect of exchange rates on cash and cash equivalents | (7) | |
Net increase (decrease) in cash and cash equivalents | 9,702 | (8,370) |
Cash and cash equivalents and restricted cash: | ||
Beginning of period | 30,411 | 66,392 |
End of period | $ 40,113 | $ 58,022 |
Business and Significant Accoun
Business and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
BASIS OF PRESENTATION | |
Business and Significant Accounting Policies | 1. BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES VIVUS is a specialty pharmaceutical company with three approved therapies (Qsymia®, PANCREAZE® and STENDRA®/SPEDRA™) and one product candidate in clinical development (VI-0106). Qsymia (phentermine and topiramate extended release) is approved by the U.S. Food and Drug Administration (“FDA”) for chronic weight management. In June 2018, the Company acquired the U.S. and Canadian commercial rights for PANCREAZE (pancrelipase), which is indicated for the treatment of exocrine pancreatic insufficiency due to cystic fibrosis or other conditions. STENDRA (avanafil) is approved by FDA for erectile dysfunction (“ED”), and by the European Commission (“EC”) under the trade name SPEDRA, for the treatment of ED. The Company commercializes Qsymia and PANCREAZE in the U.S. through a specialty sales force supported by an internal commercial team. The Company licenses the commercial rights to STENDRA/SPEDRA in the U.S., EU and other countries. VI-0106 (tacrolimus) is in clinical development and is being studied in patients with pulmonary arterial hypertension (“PAH”). When reference is made to the “Company” or “VIVUS” in these footnotes, it refers to the Delaware corporation, or VIVUS, Inc., and, unless the context otherwise requires, its California predecessor, as well as all of its consolidated subsidiaries. Liquidity and Ability to Continue as a Going Concern At September 30, 2019, the Company’s accumulated deficit was approximately $905.5 million and its cash and cash equivalents were $40.1 million. As of September 30, 2019, the Company had a total of $242.7 million in debt, $181.4 million of which is due May 2020. See Note 14 for additional information regarding the Company’s debt. The Company does not currently have sufficient cash and/or credit facilities in place to address the debt due May 2020 and is actively pursuing funding, which may come through public or private debt or equity financings, collaborations or other available financing sources. Such funding may not be available on acceptable terms, or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing stockholders may result. If adequate funds are not available, the Company will not be able to continue its operations at its current level and may be required to relinquish rights to certain of its technologies, product candidates or products that it would otherwise seek to develop on its own. It might also be required to delay, reduce the scope of or eliminate one or more of its commercialization or development programs or obtain funds through collaborations with others that are on unfavorable terms or restructure the Company in other ways that may not be favorable. Even if adequate funds become available, the Company may need to raise additional funds in the near future to finance operations and pursue development and commercial opportunities. The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company’s coming debt maturities as well as its negative cash flow from operations and accumulated deficit raise substantial doubt about its ability to continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. Management has evaluated all events and transactions that occurred after September 30, 2019 through the date these unaudited condensed consolidated financial statements were filed. There were no events or transactions during this period that require recognition or disclosure in these unaudited condensed consolidated financial statements. The condensed consolidated balance sheet data as of December 31, 2018 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 as filed on February 26, 2019 with the Securities and Exchange Commission (“SEC”). Certain amounts have been reclassified to conform to current year presentation. The unaudited condensed consolidated financial statements include the accounts of VIVUS, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Reverse Stock Split On September 10, 2018, the Company effected a one-for-10 reverse stock split of its common stock. As a result of the reverse stock split, every 10 shares of the Company’s pre-reverse split common stock issued and outstanding was combined and converted into one issued and outstanding share of post-reverse split common stock without any change in the par value of the shares. Accordingly, an amount equal to the par value of the decreased shares resulting from the reverse stock split was reclassified from “Common stock” to “Additional paid-in capital.” No fractional shares were issued as a result of the reverse stock split; any fractional shares that would have resulted were rounded up to the nearest whole share. Proportionate voting rights and other rights of stockholders were not affected by the reverse stock split, other than as a result of the rounding up of potential fractional shares. All stock options, warrants and restricted stock units outstanding and common stock reserved for issuance under the Company’s equity incentive plans immediately prior to the reverse stock split were adjusted by dividing the number of affected shares of common stock by 10 and, where applicable, multiplying the exercise price by 10. All share and per share amounts related to common stock, stock options, warrants and restricted stock units have been restated for all periods to give retroactive effect to the reverse stock split. Use of Estimates The preparation of these unaudited condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. On an ongoing basis, the Company evaluates its estimates, including critical accounting policies or estimates related to available-for-sale securities, debt instruments, research and development expenses, income taxes, inventories, revenues, contingencies and litigation and share-based compensation. The Company bases its estimates on historical experience, information received from third parties and on various market specific and other relevant assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ significantly from those estimates under different assumptions or conditions. Significant Accounting Policies There have been no changes to the Company’s significant accounting policies since the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 with the exception of accounting for leases as described below and in Note 12. Recent Accounting Pronouncement Adopted In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842), which modifies the accounting by lessees for all leases with a term greater than 12 months. This standard requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The Company adopted this standard on January 1, 2019 using the modified retrospective transition method, and as a result did not adjust comparative periods. The Company has one large operating lease for its corporate headquarters and several smaller leases, including financing leases for its automobile fleet and copiers. See Note 12. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update 2016-13, Measurement of Credit Losses on Financial Instruments , which requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model, referred to as the current expected credit loss (CECL) model. Under this model, entities will estimate credit losses over the entire contractual term of the instrument. This standard is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company is evaluating the potential impact of this standard, but does not expect it to have a material impact on its consolidated financial statements. In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement , which adds disclosure requirements to Topic 820 for the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This standard is effective for fiscal years beginning after December 31, 2019 and early adoption is permitted. The Company is evaluating the provisions of this guidance, but currently does not expect it to have a material impact on its consolidated financial statements. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
REVENUE INFORMATION | |
Revenue | 2. REVENUES For all revenue transactions, the Company evaluates its contracts with its customers to determine revenue recognition using the following five-step model: 1) 2) 3) 4) 5) Product Revenue Product revenue is recognized at the time of shipment at which time the Company has satisfied its performance obligation. Product revenue is recognized net of consideration paid to the Company’s customers, wholesalers and certified pharmacies. Such consideration is for services rendered by the wholesalers and pharmacies in accordance with the wholesalers and certified pharmacy services network agreements, and includes a fixed rate per prescription shipped and monthly program management and data fees. These services are not deemed sufficiently separable from the customers’ purchase of the product; therefore, they are recorded as a reduction of revenue at the time of revenue recognition. Other product revenue allowances include a reserve for estimated product returns, certain prompt pay discounts and allowances offered to the Company’s customers, program rebates and chargebacks. These product revenue allowances are recognized as a reduction of revenue at the date at which the related revenue is recognized. The Company also offers discount programs to patients. Calculating certain of these items involves estimates and judgments based on sales or invoice data, contractual terms, utilization rates, new information regarding changes in these programs’ regulations and guidelines that would impact the amount of the actual rebates or chargebacks. The Company reviews the adequacy of product revenue allowances on a quarterly basis. Amounts accrued for product revenue allowances are adjusted when trends or significant events indicate that adjustment is appropriate and to reflect actual experience. See Note 9 for product reserve balances. Supply Revenue The Company produces STENDRA/SPEDRA through a contract manufacturing partner and then sells it to the Company’s commercialization partners. The Company is the primary responsible party in the commercial supply arrangements and bears significant risk in the fulfillment of the obligations, including risks associated with manufacturing, regulatory compliance and quality assurance, as well as inventory, financial and credit loss. As such, the Company recognizes supply revenue on a gross basis as the principal party in the arrangements. The Company recognizes supply revenue at the time of shipment and, in the unusual case where the product does not meet contractually-specified product dating criteria at the time of shipment to the partner, the Company records a reserve for estimated product returns. There are no such reserves as of September 30, 2019. License and Milestone Revenue License and milestone revenues related to arrangements, usually license and/or supply agreements, entered into by the Company are recognized by following the five-step process outlined above. The allocation and timing of recognition of such revenue will be determined by that process and the amounts recognized and the timing of that recognition may not exactly follow the wording of the agreement as the amount allocated following the accounting analysis of the agreement may differ and the timing of recognition of a significant performance obligation may predate the contractual date. Royalty Revenue The Company relies on data provided by its collaboration partner in determining its contractually-based royalty revenue. Such data includes accounting estimates and reports for various discounts and allowances, including product returns. The Company records royalty revenues based on the best data available and makes any adjustments to such revenues as such information becomes available. Revenue by Source and Geography Revenue disaggregated by revenue source and by geographic region was as follows (in thousands): Three Months Ended September 30, 2019 2018 U.S. ROW Total U.S. ROW Total Qsymia—Net product revenue $ 9,583 $ — $ 9,583 $ 9,737 $ — $ 9,737 Qsymia—License revenue — 2,500 2,500 — — — PANCREAZE - Net product revenue 5,133 133 5,266 6,747 — 6,747 PANCREAZE - Royalty revenue — — — — 576 576 STENDRA/SPEDRA—Supply revenue — 64 64 — 478 478 STENDRA/SPEDRA—Royalty revenue — 557 557 — 550 550 Total revenue $ 14,716 $ 3,254 (1) $ 17,970 $ 16,484 $ 1,604 (2) $ 18,088 Nine Months Ended September 30, 2019 2018 U.S. ROW Total U.S. ROW Total Qsymia—Net product revenue $ 28,000 $ — $ 28,000 $ 30,503 $ — $ 30,503 Qsymia—License revenue — 2,500 2,500 — — — PANCREAZE - Net product revenue 15,317 133 15,450 8,863 — 8,863 PANCREAZE - Royalty revenue — 1,557 1,557 — 650 650 STENDRA/SPEDRA—Supply revenue — 3,448 3,448 1,071 2,132 3,203 STENDRA/SPEDRA—Royalty revenue — 1,551 1,551 — 1,729 1,729 Total revenue $ 43,317 $ 9,189 (3) $ 52,506 $ 40,437 $ 4,511 (4) $ 44,948 (1) $2.5 million of which was attributable to South Korea, $0.6 million of which was attributable to Germany and $0.1 million of which was attributable to Canada. (2) $1.0 million of which was attributable to Germany and $0.6 million of which was attributable to Canada. (3) $5.0 million of which was attributable to Germany, $1.7 million of which was attributable to Canada, and $2.5 million of which was attributable to South Korea. (4) $3.9 million of which was attributable to Germany and $0.6 million of which was attributable to Canada. Revenue and cost of goods sold by source was as follows (in thousands): Three Months Ended September 30, 2019 2018 Qsymia PANCREAZE STENDRA/ SPEDRA Total Qsymia PANCREAZE STENDRA/ SPEDRA Total Net product revenue $ 9,583 $ 5,266 $ — $ 14,849 $ 9,737 $ 6,747 $ — $ 16,484 License 2,500 — — 2,500 — — — — Supply revenue — — 64 64 — — 478 478 Royalty revenue — — 557 557 — 576 550 1,126 Total revenue $ 12,083 $ 5,266 $ 621 $ 17,970 $ 9,737 $ 7,323 $ 1,028 $ 18,088 Cost of goods sold (excluding amortization) $ 1,484 $ 1,429 $ 103 $ 3,016 $ 953 $ 2,006 $ 525 $ 3,484 Amortization of intangible assets $ 91 $ 3,547 $ — $ 3,638 $ 91 $ 3,547 $ — $ 3,638 Nine Months Ended September 30, 2019 2018 Qsymia PANCREAZE STENDRA/ SPEDRA Total Qsymia PANCREAZE STENDRA/ SPEDRA Total Net product revenue $ 28,000 $ 15,450 $ — $ 43,450 $ 30,503 $ 8,863 $ — $ 39,366 License 2,500 — — 2,500 — — — — Supply revenue — — 3,448 3,448 — — 3,203 3,203 Royalty revenue — 1,557 1,551 3,108 — 650 1,729 2,379 Total revenue $ 30,500 $ 17,007 $ 4,999 $ 52,506 $ 30,503 $ 9,513 $ 4,932 $ 44,948 Cost of goods sold (excluding amortization) $ 3,809 $ 4,659 $ 3,233 $ 11,701 $ 3,648 $ 2,574 $ 3,178 $ 9,400 Amortization of intangible assets $ 272 $ 10,642 $ — $ 10,914 $ 272 $ 4,730 $ — $ 5,002 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
SHARE-BASED COMPENSATION. | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 3. SHARE-BASED COMPENSATION Total share-based compensation expense for all of the Company’s share-based awards was as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Cost of goods sold $ 15 $ 18 $ 42 $ 48 Selling and marketing 71 89 211 263 General and administrative 346 1,010 Research and development 51 155 Total share-based compensation expense $ $ $ $ Share-based compensation expense capitalized as part of the cost of inventory $ 8 $ 4 $ 22 $ 5 |
Cash, Cash Equivalents, And Ava
Cash, Cash Equivalents, And Available-For-Sale Securities | 9 Months Ended |
Sep. 30, 2019 | |
CASH, CASH EQUIVALENTS, AND AVAILABLE-FOR-SALE SECURITIES | |
CASH, CASH EQUIVALENTS, AND AVAILABLE-FOR-SALE SECURITIES | 4. The fair value and the amortized cost of cash, cash equivalents, and available-for-sale securities by major security type are presented in the tables that follow (in thousands). As of September 30, 2019 Gross Gross Amortized Unrealized Unrealized Estimated Cash and cash equivalents Cost Gains Losses Fair Value Cash and money market funds $ 40,113 $ — $ — $ 40,113 As of December 31, 2018 Gross Gross Amortized Unrealized Unrealized Estimated Cash and cash equivalents and available-for-sale securities Cost Gains Losses Fair Value Cash and money market funds $ 30,411 $ — $ — $ 30,411 U.S. Treasury securities 42,261 34 (111) 42,184 Corporate debt securities 38,848 9 (203) 38,654 Total 111,520 43 (314) 111,249 Less amounts classified as cash and cash equivalents (30,411) — — (30,411) Total available-for-sale securities $ 81,109 $ 43 $ (314) $ 80,838 As of September 30, 2019, the Company had no available-for-sale securities. As of December 31, 2018, the Company’s available-for-sale securities were viewed by the Company as available to support current operations, and even those with original maturities in excess of 12 months were classified as current assets. Due to their short-term maturities, the Company believes that the fair value of its bank deposits, accounts payable and accrued expenses approximate their carrying value. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Three levels of inputs, of which the first two are considered observable and the last unobservable, may be used to measure fair value. The three levels are: · Level 1 — Quoted prices in active markets for identical assets or liabilities. · Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table represents the fair value hierarchy for our cash, cash equivalents and available-for-sale securities by major security type (in thousands): As of September 30, 2019 Level 1 Level 2 Level 3 Total Cash and money market funds $ 40,113 $ — $ — $ 40,113 As of December 31, 2018 Level 1 Level 2 Level 3 Total Cash and money market funds $ 30,411 $ — $ — $ 30,411 U.S. Treasury securities 42,184 — — 42,184 Corporate debt securities — 38,654 — 38,654 Total $ 72,595 $ 38,654 $ — $ 111,249 |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2019 | |
ACCOUNTS RECEIVABLE | |
ACCOUNTS RECEIVABLE | 5. Accounts receivable consist of the following (in thousands): Balance as of September 30, December 31, 2019 2018 Qsymia $ 15,887 $ 13,987 PANCREAZE 5,702 10,213 STENDRA/SPEDRA 2,733 1,560 24,322 25,760 Allowance for cash discounts (257) (152) Net $ 24,065 $ 25,608 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
INVENTORIES | |
INVENTORIES | 6. Inventories consist of the following (in thousands): Balance as of September 30, December 31, 2019 2018 Raw materials $ 22,648 $ 17,813 Work-in-process 3,100 1,719 Finished goods 4,260 3,600 Inventories, net $ 30,008 $ 23,132 Raw materials inventories consist primarily of the active pharmaceutical ingredients (“API”) for Qsymia and STENDRA/SPEDRA. Work-in-process and finished goods inventory consist of Qsymia, STENDRA/SPEDRA and PANCREAZE inventory. Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first in, first out method for all inventories, which are valued using a weighted-average cost method calculated for each production batch. The Company periodically evaluates the carrying value of inventory on hand for potential excess amounts over demand using the same lower of cost or net realizable value approach as that used to value the inventory. |
Prepaid Expenses And Other Curr
Prepaid Expenses And Other Current Assets | 9 Months Ended |
Sep. 30, 2019 | |
OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER ASSETS | 7. Prepaid expenses and other current assets consist of the following (in thousands): Balance as of September 30, December 31, 2019 2018 Prepaid sales and marketing expenses $ 1,874 $ 1,525 Prepaid insurance 142 1,451 Taxes receivable 745 779 Other prepaid expenses and assets 4,218 3,783 Total $ 6,979 $ 7,538 These costs have been deferred as prepaid expenses and other current assets on the condensed consolidated balance sheets and will be either (i) charged to expense accordingly when the related prepaid services are rendered to the Company, or (ii) converted to cash when the receivable is collected by the Company. The amounts included in other prepaid expenses and assets consist primarily of prepayments for future services, prepaid interest and interest income receivable. |
Intangible and Other Non-Curren
Intangible and Other Non-Current Assets | 9 Months Ended |
Sep. 30, 2019 | |
NON-CURRENT ASSETS | |
NON-CURRENT ASSETS | 8. Intangible and other non-current assets consist of the following (in thousands): September 30, 2019 December 31, 2018 Cost Accumulated Amortization Net Cost Accumulated Amortization Net PANCREAZE license (1) $ 141,895 $ (18,919) $ 122,976 $ 141,895 $ (8,277) $ 133,618 Janssen patents (2) 3,050 (2,868) 182 3,050 (2,597) 453 Other non-current assets (3) 208 — 208 208 — 208 Total $ 145,153 $ (21,787) $ 123,366 $ 145,153 $ (10,874) $ 134,279 _________________ (1) In June 2018, the Company acquired the rights to license PANCREAZE in the U.S. and Canada, as described further in Note 13. The rights are being amortized over their estimated useful life of 10 years using the straight-line method. (2) In September 2014, the Company acquired certain patents relating to Qsymia from Janssen Pharmaceuticals, approximately $3.1 million of which was recorded as an intangible asset. The patents are being amortized over their estimated useful life of 5.5 years using the straight-line method. (3) Other non-current assets primarily consist of real estate deposits. Amortization of intangible assets was $3.6 million and $3.6 million for the three months ended September 30, 2019 and 2018, respectively, and $10.9 million and $5.0 million for the nine months ended September 30, 2019 and 2018, respectively. Future expected amortization expenses for intangible assets as of September 30, 2019 are as follows (in thousands): 2019 (rest of year) $ 3,638 2020 14,280 2021 14,190 2022 14,190 2023 14,190 Thereafter 62,670 Total $ 123,158 |
Accrued And Other Liabilities
Accrued And Other Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
ACCRUED AND OTHER LIABILITIES | |
ACCRUED AND OTHER LIABILITIES | 9. Accrued and other liabilities consist of the following (in thousands): Balance as of September 30, December 31, 2019 2018 Reserve for product returns (see Note 2) $ 14,679 $ 14,878 Product-related accruals (see Note 2) 6,771 8,272 Accrued manufacturing costs 3,894 4,313 Accrued interest on debt (see Note 14) 3,045 — Accrued employee compensation and benefits 1,916 2,591 Other accrued liabilities 3,999 2,990 Total $ 34,304 $ 33,044 The amounts included in other accrued liabilities consist of obligations primarily related to sales, marketing, research, clinical development, corporate activities, the STENDRA license and royalties. |
Non-Current Accrued And Other L
Non-Current Accrued And Other Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
NON-CURRENT ACCRUED AND OTHER LIABILITIES | |
NON-CURRENT ACCRUED AND OTHER LIABILITIES | 10. NON-CURRENT ACCRUED AND OTHER LIABILITIES Non-current accrued and other liabilities at December 31, 2018 were comprised of deferred rent. See Note 12. |
Deferred Revenue
Deferred Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Change in Contract with Customer, Liability [Abstract] | |
Deferred Revenue from Contract with Customers | 11. Deferred revenue relates to a prepayment for future royalties on sales of SPEDRA. In the three and nine months ended September 30, 2019, the Company recorded $0.3 million and $0.9 million, respectively, of revenues which had been deferred as of December 31, 2018. In the three and nine months ended September 30, 2018, the Company recorded $0.3 million and $0.9 million, respectively, of revenues which had been deferred as of December 31, 2017. These amounts were applied against the prepayment for future royalties. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Lessee Disclosure [Abstract] | |
Lease Disclosure | 12. LEASES The Company adopted Accounting Standards Update 2016-02, Leases (Topic 842) on January 1, 2019 using the modified retrospective transition method, and as a result did not adjust comparative periods. The Company has a large operating lease for its corporate headquarters and several smaller leases, including financing leases for its automobile fleet and copiers. At the time of adoption, the Company recorded the following amounts (in thousands): Right-of-Use Asset Current Portion of Lease Liability Lease Liability, Net of Current Portion Current Portion of Deferred Rent Deferred Rent, Net of Current Portion Accumulated Deficit Operating leases $ 1,201 $ 512 $ 1,017 $ (94) $ (234) $ — Financing leases 329 131 188 — — 10 Total $ 1,530 $ 643 $ 1,205 $ (94) $ (234) $ 10 The Company’s leases have remaining lease terms of from less than 1 year up to 2.1 years, some of which include options to extend the leases for up to 2 years. The components of lease expense were as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2019 Operating lease cost $ 130 $ 391 Finance lease cost: Amortization of right-of-use assets $ 52 $ 156 Interest on lease liabilities 3 8 Total finance lease cost $ 55 $ 164 Supplemental balance sheet information related to leases was as follows: Balance as of September 30, 2019 Right-of-use assets: Operating leases $ 890 Financing leases 409 Total right-of-use assets $ 1,299 Current portion of lease liability: Operating leases $ 553 Financing leases 215 Total current portion of lease liability $ 768 Lease liability, net of current portion Operating leases $ 597 Financing leases 191 Total lease liability, net of current portion $ 788 The weighted average remaining lease term as of September 30, 2019 was 1.9 years for operating leases and 1.9 years for financing leases. The weighted average discount rate as of September 30, 2019 was 7.8% for operating leases and 2.9% for financing leases. Future payments of lease liabilities are as follows: Operating Leases Finance Leases 2019 (rest of year) $ 155 $ 56 2020 610 224 2021 482 117 2022 - 21 Total lease payments 1,247 418 Less imputed interest (97) (12) Total $ 1,150 $ 406 |
License, Commercialization And
License, Commercialization And Supply Agreements | 9 Months Ended |
Sep. 30, 2019 | |
LICENSE, COMMERCIALIZATION AND SUPPLY AGREEMENTS | |
LICENSE, COMMERCIALIZATION AND SUPPLY AGREEMENTS | 13. LICENSE, COMMERCIALIZATION AND SUPPLY AGREEMENTS MTPC In January 2001, the Company entered into an exclusive development, license and clinical trial and commercial supply agreement with Tanabe Seiyaku Co., Ltd., now Mitsubishi Tanabe Pharma Corporation (“MTPC”), for the development and commercialization of avanafil. Under the terms of the agreement, MTPC agreed to grant an exclusive license to the Company for products containing avanafil outside of Japan, North Korea, South Korea, China, Taiwan, Singapore, Indonesia, Malaysia, Thailand, Vietnam and the Philippines. The Company agreed to grant MTPC an exclusive, royalty free license within those countries for oral products that we develop containing avanafil. The MTPC agreement contains a number of milestone payments to be made by us based on various triggering events. The term of the MTPC agreement is based on a country by country and on a product by product basis. In August 2012, the Company entered into an amendment to the agreement with MTPC that permitted the Company to manufacture the API and tablets for STENDRA/SPEDRA by itself or through third parties. In 2015, the Company transferred the manufacturing of the API and tablets for STENDRA/SPEDRA to Sanofi. The Company maintains royalty obligations to MTPC which have been passed through to our commercialization partners. Menarini In July 2013, the Company entered into a license and commercialization agreement (the “Menarini License Agreement”) and a supply agreement (the “Menarini Supply Agreement”) with the Menarini Group through its subsidiary Berlin Chemie AG (“Menarini”). Under the terms of the Menarini License Agreement, Menarini received an exclusive license to commercialize and promote SPEDRA for the treatment of ED in over 40 countries, including the EU Member States, plus Australia and New Zealand. Additionally, the Company transferred to Menarini ownership of the marketing authorization for SPEDRA in the EU for the treatment of ED, which was granted by the EC in June 2013. Under the Menarini License Agreement, the Company has and is entitled to receive milestone payments based on certain net sales targets, plus royalties on SPEDRA sales. Under the terms of the Menarini Supply Agreement, the Company supplied Menarini with SPEDRA drug product until December 31, 2018. Menarini also has the right to manufacture SPEDRA independently, provided that it continues to satisfy certain minimum purchase obligations to the Company. Following the expiration of the Menarini Supply Agreement, Menarini would be responsible for its own supply of SPEDRA. Either party may terminate the Menarini Supply Agreement for the other party’s uncured material breach or bankruptcy, or upon the termination of the Menarini License Agreement. In May 2019, the Company entered into Amendment No. 1 to the License and Commercialization Agreement and Commercial Supply Agreement with Menarini effective as of January 1, 2019, pursuant to which certain amendments were made to the Menarini License Agreement and the Menarini Supply Agreement, which include: (i) under the Menarini License Agreement, Menarini’s exclusive license to commercialize and promote the Company’s drug avanafil for the treatment of erectile dysfunction will be limited to over 40 European countries and will no longer include Australia and New Zealand; (ii) under the Menarini License Agreement, the timing requirements of the product launches by Menarini have been adjusted; (iii) under the Menarini License Agreement, the milestone payments have been adjusted to reflect the removal of Australia and New Zealand and will continue to be non-refundable and non-creditable, with one exception added for certain costs and expenses incurred by Menarini for development work related to an avanafil development opportunity in the Menarini territory (“Menarini Development”); (iv) under the Menarini License Agreement, the royalties on avanafil sales payable by Menarini to the Company will be adjusted to allow Menarini to recoup certain Menarini Development costs and expenses but only as to sales of the Menarini Development product unless the Menarini Development product is commercialized by the Company or its sublicensees outside the Menarini territory; (v) under the Menarini Supply Agreement, the minimum purchase obligations for Menarini will be modified and extended, including the ability of Menarini to satisfy its minimum purchase obligations with the purchase of avanafil active pharmaceutical ingredient (“API”) and the addition of minimum purchase obligations for the calendar years for the extended term; and (vi) under the Menarini Supply Agreement, the term will be extended to December 31, 2023, unless otherwise agreed by the parties in writing. The Company and Menarini have entered into standalone agreements relating to Australia and New Zealand, including a license with royalties and milestone payments and a supply agreement. Sanofi In July 2013, the Company entered into a Commercial Supply Agreement with Sanofi Chimie to manufacture and supply the API for avanafil on an exclusive basis in the United States and other territories and on a semi-exclusive basis in Europe, including the EU Member States, Latin America and other territories. In December 2018, the Company entered into an amendment to the Commercial Supply Agreement with Sanofi Chimie, pursuant to which certain amendments were made to the Commercial Supply Agreement, which include: (i) beginning January 1, 2019, Sanofi Chimie will manufacture and supply API for avanafil on an exclusive basis in all countries where the Company has the right to sell avanafil; (ii) beginning January 1, 2019, the yearly minimum quantities of API that the Company must purchase from Sanofi Chimie will be adjusted, as well as adjustments to the associated pricing and payment terms; and (iii) with the initial five year term of the Commercial Supply Agreement expiring on December 31, 2018, the Company and Sanofi Chimie have agreed to extend the term of the Commercial Supply Agreement until December 31, 2023 unless either party makes a timely election to terminate the agreement and that thereafter the Commercial Supply Agreement will auto-renew for successive one year terms unless either party makes a timely election not to renew. In November 2013, the Company entered into a Manufacturing and Supply Agreement with Sanofi Winthrop Industrie to manufacture and supply the avanafil tablets on an exclusive basis in the United States and other territories and on a semi exclusive basis in Europe, including the EU Member States, Latin America and other territories. The Company has minimum annual purchase commitments under these agreements for at least the initial five-year term. In May 2019, the Company entered into Amendment N°1 to the Manufacturing and Supply Agreement with Sanofi Winthrop Industrie effective as of March 18, 2019, pursuant to which certain amendments were made to the Manufacturing and Supply Agreement, which include: (i) Sanofi Winthrop Industrie will manufacture and supply the tablets for the Company’s drug avanafil on an exclusive basis in all countries where the Company or its sublicensees and/or Menarini have the right to sell avanafil; (ii) the yearly minimum quantities of tablets that the Company must purchase from Sanofi Winthrop Industrie and the price of such tablets will be adjusted; and (iii) with the initial term of the Manufacturing and Supply Agreement expiring on January 16, 2021, the Company and Sanofi Winthrop Industrie have agreed to extend the term of the Manufacturing and Supply Agreement until December 31, 2023 unless either party makes a timely election to terminate the agreement and that thereafter the Manufacturing and Supply Agreement will auto-renew for successive one year terms unless either party makes a timely election not to renew. Metuchen In September 2016, the Company entered into a license and commercialization agreement (the “Metuchen License Agreement”) and a commercial supply agreement (the “Metuchen Supply Agreement”) with Metuchen Pharmaceuticals LLC (“Metuchen”). Under the terms of the Metuchen License Agreement, Metuchen received an exclusive license to develop, commercialize and promote STENDRA in the United States, Canada, South America and India (the “Metuchen Territory”) effective October 1, 2016. The Company and Metuchen have agreed not to develop, commercialize, or in-license any other product that operates as a PDE-5 inhibitor in the Metuchen Territory for a limited time period, subject to certain exceptions. The Metuchen License Agreement will terminate upon the expiration of the last-to-expire payment obligations under the Metuchen License Agreement; upon expiration of the term of the Metuchen License Agreement, the exclusive license granted under the Metuchen License Agreement shall become fully paid-up, royalty-free, perpetual and irrevocable as to the Company but not certain trademark royalties due to MTPC. Metuchen will obtain STENDRA exclusively from the Company for a mutually agreed term pursuant to the Metuchen Supply Agreement. Metuchen may elect to transfer the control of the supply chain for STENDRA for the Metuchen Territory to itself or its designee by assigning to Metuchen the Company’s agreements with the contract manufacturer. For 2016 and each subsequent calendar year during the term of the Metuchen Supply Agreement, if Metuchen fails to purchase an agreed minimum purchase amount of STENDRA from the Company, it will reimburse the Company for the shortfall as it relates to the Company’s out of pocket costs to acquire the API needed to manufacture the agreed upon minimum purchase amount of STENDRA. Upon the termination of the Metuchen Supply Agreement (other than by Metuchen for the Company’s uncured material breach or upon completion of the transfer of the control of the supply chain), Metuchen’s agreed minimum purchase amount of STENDRA from the Company shall accelerate for the entire then current initial term or renewal term, as applicable. The initial term under the Metuchen Supply Agreement will be for a period of five years, with automatic renewal for successive two-year periods unless either party provides a termination notice to the other party at least two years in advance of the expiration of the then current term. On September 30, 2019, Metuchen provided a written notice of termination of the Metuchen Supply Agreement effective September 30, 2021. Alvogen In September 2017, the Company entered into a license and commercialization agreement (the “Alvogen License Agreement”) and a commercial supply agreement (the “Alvogen Supply Agreement”) with Alvogen Malta Operations (ROW) Ltd (“Alvogen”). Under the terms of the Alvogen License Agreement, Alvogen will be solely responsible for obtaining and maintaining regulatory approvals for all sales and marketing activities for Qsymia in South Korea. The Company received an upfront payment of $2.5 million in September 2017, which was recorded in license and milestone revenue in the third quarter of 2017, and $2.5 million in the third quarter of 2019 upon Alvogen receiving marketing authorization. The Company is eligible to receive additional payments upon commercial launch and reaching a sales milestone. Additionally, the Company will receive a royalty on Alvogen’s Qsymia net sales in South Korea. Under the Alvogen Supply Agreement, the Company will supply product to Alvogen on an exclusive basis. PANCREAZE In June 2018, the Company closed on an Asset Purchase Agreement (the “PANCREAZE Purchase Agreement”) with Janssen Pharmaceuticals, Inc. (“Janssen”) pursuant to which the Company acquired the rights to PANCREAZE and PANCREASE MT in the U.S. and Canada and certain existing inventory for a purchase price of $135.0 million in cash. The Company also acquired all of the outstanding shares of Willow Biopharma Inc. (“Willow”). Willow had no significant assets at the time of acquisition. The Company issued fully-exercisable warrants to the former owners of Willow, including John Amos, M. Scott Oehrlein and Kenneth Suh, the Company’s current Chief Executive Officer, former Chief Operations Officer and former President, respectively, for the purchase of 357,000 shares of the Company’s common stock at an exercise price of $3.70 per share and agreed to assume certain of Willow’s liabilities. The amounts paid to the former owners were accounted for as a fee for the acquisition of PANCREAZE. As all the PANCREAZE assets acquired were a part of one product line, the PANCREAZE Purchase Agreement was accounted for as an asset acquisition, with an intangible asset of $141.9 million for the PANCREAZE license recorded on the consolidated balance sheet, which was comprised of the purchase price of $135.0 million, the fair value of the warrants issued of $0.8 million, the value of liabilities assumed of $0.4 million, the value of the Willow liabilities assumed of $1.5 million and accruals for estimated destruction of future unsalable inventory of $6.3 million, less the net value of PANCREAZE inventory acquired of $2.1 million. The fair value of the warrants issued was recorded in additional paid-in capital and was estimated using the Black-Scholes option pricing model, using a term of 7.0 years, an estimated volatility of 61.6%, a risk-free interest rate of 2.91% and an expected dividend yield of 0%. The intangible asset is being amortized over an expected useful life of 10 years, which corresponds with the expiration of certain significant patent rights related to PANCREAZE. In connection with the PANCREAZE Purchase Agreement, the Company and Janssen also entered into transition services agreements pursuant to which Janssen and a Canadian affiliate of Janssen will provide certain transition services to the Company in the U.S. and Canada as the Company transitions to full control over the PANCREAZE supply chain. The Company and Johnson & Johnson Health Care Systems Inc., a New Jersey corporation and an affiliate of Janssen, also entered into a Long-Term Collaboration Agreement pursuant to which they will cooperate in the reporting and certification of pricing and sales data and the payment of rebates and discounts under certain governmental programs. These agreements terminated in the third quarter of 2019. In conjunction with the PANCREAZE Purchase Agreement, Janssen assigned to the Company the Amended and Restated Know-How License and Supply Agreement (the “Nordmark Supply Agreement”) effective as of November 7, 2017 by and between Nordmark Arzneimittel GmbH & Co. KG (“Nordmark”) and Janssen. In order to extend the term of the Nordmark Supply Agreement and ensure a stable and predictable price of the Product, the Company entered into the First Amendment to the Supply Agreement on June 26, 2019 (the “Amended Nordmark Supply Agreement”). Under the Amended Nordmark Supply Agreement: (i) the Company shall purchase certain minimum order quantities at the applicable supply prices for the calendar years under the Amended Nordmark Supply Agreement; (ii) in exchange for Nordmark’s obligations under the Amended Nordmark Supply Agreement, the Company shall pay an annual fee to Nordmark; (iii) Nordmark and the Company have agreed to undertake joint efforts to develop new formulations of PANCREAZE; (iv) the term of the Amended Nordmark Supply Agreement begins on June 26, 2019 and will continue through December 31, 2029, unless earlier terminated and may be renewed for additional five year periods unless earlier terminated; and (v) Nordmark shall have the option to terminate the Amended Nordmark Supply Agreement upon certain circumstances related to the launch date in the United States if the Company assigns any or all of its rights under the Amended Nordmark Supply Agreement to certain parties and/or enters into a transaction or series of transactions resulting in a Change of Control, as defined in the Amended Nordmark Supply Agreement. |
Long-Term Debt and Commitments
Long-Term Debt and Commitments | 9 Months Ended |
Sep. 30, 2019 | |
LONG-TERM DEBT AND COMMITMENTS | |
LONG-TERM DEBT AND COMMITMENTS | 14. LONG-TERM DEBT AND COMMITMENTS The Company’s indebtedness consists of the following (in thousands): Balance as of September 30, December 31, 2019 2018 Convertible senior notes due 2020 $ 181,426 $ 181,426 Unamortized discount and debt issuance costs 2,764 6,358 Convertible senior notes due 2020, net 184,190 187,784 2024 Notes 61,351 110,000 Unamortized premium and debt issuance costs, net (2,813) (3,338) 2024 Notes, net 58,538 106,662 Total debt 242,728 294,446 Less current portion 184,190 — Total long-term debt $ 58,538 $ 294,446 Convertible Senior Notes Due 2020 In May 2013, the Company closed offerings of $250.0 million in 4.5% Convertible Senior Notes due May 2020 (the “Convertible Notes”). The Convertible Notes are governed by an indenture, dated May 2013 between the Company and Deutsche Bank National Trust Company, as trustee. Total net proceeds from the Convertible Notes were approximately $241.8 million. The Convertible Notes are convertible at a conversion rate of $148.58 per share at the option of the holders under certain conditions at any time prior to the close of business on the business day immediately preceding November 1, 2019. On or after November 1, 2019, holders may convert all or any portion of their Convertible Notes at any time at their option at the conversion rate then in effect, regardless of these conditions. Subject to certain limitations, the Company will settle conversions of the Convertible Notes by paying or delivering, as the case may be, cash, shares of its common stock or a combination of cash and shares of our common stock, at the Company’s election. Interest payments are made quarterly. In June 2018, the Company repurchased $60.0 million of face value of the Convertible Notes for $51.0 million in cash plus accrued but unpaid interest using funds received from the issuance of the Company’s 2024 Notes (as defined below.) This transaction was accounted for as a debt modification with the gain applied to the modified debt. In October 2018, the Company repurchased $8.6 million of face value of the Convertible Notes for $7.1 million in cash plus accrued but unpaid interest. This transaction was accounted for as an extinguishment of debt and the gain of $1.4 million was recorded on the statement of operations as a gain on extinguishment of debt. The Convertible Notes mature on May 1, 2020. 2024 Notes In June 2018, the Company entered into an indenture (the “Indenture”) with U.S. Bank National Association as trustee and collateral agent regarding the purchase agreement entered into with affiliates of Athyrium Capital Management (collectively, the “Purchasers”) for the issuance and sale of (i) $110.0 million of 10.375% senior secured notes due 2024 (the “2024 Notes”), (ii) up to an additional $10.0 million of 10.375% 2024 Notes to be issued subsequently at the Company’s option within 12 months of the issue date of the 2024 Notes, subject to certain conditions, and (iii) a warrant for 330,000 shares issued concurrently with the issuance of the 2024 Notes. The 2024 Notes were issued at a purchase price equal to 99% of the principal amount and contain customary representations, warranties, covenants, conditions and indemnities. The Company used the net proceeds from the issuance of the 2024 Notes to pay (i) certain fees, costs and expenses relating to the issuance and sale of the 2024 Notes, (ii) to finance a portion of the acquisition of PANCREAZE and (iii) to repurchase $60.0 million of the Company’s outstanding Convertible Notes from the Purchasers or their affiliates for a purchase price of $51.0 million (plus accrued but unpaid interest to the repurchase date). The fair value of the warrant issued was estimated using the Black-Scholes option pricing model, using a term of 6.0 years, an estimated volatility of 62.7%, a risk-free interest rate of 2.83% and an expected dividend yield of 0%. The Indenture has an effective interest rate of 11.3% and includes customary covenants and events of default, including covenants that, among other things, restrict the incurrence of future indebtedness, the granting of liens, the making of investments, distributions or dividends, and the Company’s ability to merge, consolidate or sell assets, in each case subject to certain exceptions. In addition, the Indenture includes certain financial maintenance covenants related to minimum cash balances and minimum quarterly net revenues related to PANCREAZE. As of June 30, 2019, the Company was not in compliance with a covenant in the Indenture related to PANCREAZE net revenues. The Company subsequently received a waiver from the consenting noteholders with respect to any potential event of default or default that may have resulted from such covenant non-compliance. In September 2019, the Company entered into a second supplemental indenture (the “Second Supplemental Indenture”) which amended the Indenture to (i) revise the compliance dates for minimum quarterly PANCREAZE net sales, (ii) reduce the minimum unrestricted cash equivalents, and (iii) effect the pledge of material intellectual property related to Qsymia® and PANCREAZE®. The Second Supplemental Indenture was entered into in satisfaction of the conditions set forth in the waiver of default obtained in connection with the Indenture. As of September 30, 2019, the Company was in compliance with the covenants in the Indenture as modified by the Second Supplemental Indenture. In September 2019, the Company repurchased $48.6 million aggregate principal amount of the 2024 Notes plus prepayment premiums of an aggregate of $6.4 million. The prepayment premiums were recorded as interest expense. There was no gain or loss on the transaction. Future estimated payments, including interest, on all of the Company’s indebtedness as of September 30, 2019 are as follows (in thousands): 2019 (rest of year) $ 5,673 2020 192,327 2021 20,152 2022 23,034 2023 21,076 Thereafter 9,822 $ 272,084 Cardiovascular Outcomes Trial As a condition of FDA granting approval to commercialize Qsymia in the U.S., the Company agreed to complete certain post-marketing requirements. One requirement was to perform a cardiovascular outcomes trial (“CVOT”) on Qsymia. The cost of a CVOT is estimated to be between $180 million and $220 million incurred over a period of approximately five years. The Company is in dialogue with FDA to determine a pathway to provide FDA with information to support the safety of Qsymia in a more cost-effective manner. To date, the Company has not incurred expenses related to the CVOT. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2019 | |
NET INCOME (LOSS) PER SHARE | |
NET INCOME (LOSS) PER SHARE | 15. NET LOSS PER SHARE The Company computes basic net loss per share applicable to common stockholders based on the weighted average number of common shares outstanding during the applicable period. Diluted net income per share is based on the weighted average number of common and common equivalent shares, which represent shares that may be issued in the future upon the exercise of outstanding stock options or upon a net share settlement of the Company’s Convertible Notes. Common share equivalents are excluded from the computation in periods in which they have an anti-dilutive effect. Stock options for which the price exceeds the average market price over the period have an anti-dilutive effect on net income per share and, accordingly, are excluded from the calculation. The triggering conversion conditions that allow holders of the Convertible Notes to convert have not been met. If such conditions are met and the note holders opt to convert, the Company may choose to pay in cash, common stock, or a combination thereof; however, if this occurs, the Company has the intent and ability to net share settle this debt security; thus the Company uses the treasury stock method for earnings per share purposes. Due to the effect of the capped call instrument purchased in relation to the Convertible Notes, there would be no net shares issued until the market value of the Company’s stock exceeds $200 per share, and thus no impact on diluted net income per share. Further, when there is a net loss, potentially dilutive common equivalent shares are not included in the calculation of net loss per share since their inclusion would be anti-dilutive. As the Company recognized a net loss for each of the three- and nine-month periods ended September 30, 2019 and 2018, all potential common equivalent shares were excluded for these periods as they were anti-dilutive. Awards and options which were not included in the computation of diluted net loss per share because the effect would be anti-dilutive were 2,811,000 and 1,499,000, respectively, for the three months ended September 30, 2019 and 2018 and 2,863,000 and 1,629,000, respectively, for the nine months ended September 30, 2019 and 2018. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
INCOME TAXES | |
INCOME TAXES | 16. INCOME TAXES For the three and nine months ended September 30, 2019, the Company recorded a provision for income taxes of $4,000 and $4,000, respectively. For the three and nine months ended September 30, 2018, the Company recorded a provision for income taxes of $36,000 and $52,000, respectively. The provision for income taxes for each of the periods was primarily comprised of state taxes during the period. The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. The realization of net deferred tax assets is dependent on the Company’s ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets. The Company weighed both positive and negative evidence and determined that there is a continued need for a full valuation allowance on its deferred tax assets in the United States as of September 30, 2019. Should the Company determine that it would be able to realize its remaining deferred tax assets in the foreseeable future, an adjustment to its remaining deferred tax assets would cause a material increase to income in the period such determination is made. As of September 30, 2019, the Company’s unrecognized tax benefits were related to federal and California research and development credits which result in an unrecognized tax benefit balance of $102,000. The Company does not expect to have any other significant changes to unrecognized tax benefits through the end of the fiscal year. Because of the Company’s history of tax losses, certain tax years remain open to tax audit. The Company’s policy is to recognize interest and penalties related to uncertain tax positions (if any) as a component of the income tax provision. On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. Among other changes is an interest expense deduction limitation effective January 1, 2018. For the periods ending September 30, 2019 and 2018, the Company estimated $13.0 million and $8.6 million, respectively, of non-deductible accrued interest expense in the forecasted taxable income calculation. On January 1, 2019, the Company adopted Accounting Standards Update 2016-02, Leases (“ASC 842”). See Note 12. The Company has evaluated the income tax effect from the adoption of ASC 842 and has determined that there is no material impact to the tax provision. The Tax Cuts and Jobs Act also establishes new tax provisions including, but not limited to, (1) creating a new provision designed to tax global intangible low-tax income (“GILTI”); (2) generally eliminating U.S. federal taxes on dividends from foreign subsidiaries; (3) eliminating the corporate alternative minimum tax; (4) creating the base erosion anti-abuse tax; (5) establishing a deduction for foreign derived intangible income; (6) repealing domestic production activity deduction; and (7) establishing new limitations on deductible interest expense and certain executive compensation. The Tax Cuts and Jobs Act has not resulted in a significant impact on the Company’s financial statements. For both of the periods ending September 30, 2019 and 2018, the Company estimated $0 of GILTI inclusion in the taxable income calculation. Due to the Company's limited foreign activity at this time, this did not have a material impact to the tax provision. |
Legal Matters
Legal Matters | 9 Months Ended |
Sep. 30, 2019 | |
LEGAL MATTERS | |
LEGAL MATTERS | 17. LEGAL MATTERS The Company is not aware of any asserted or unasserted claims against it where it believes that an unfavorable resolution would have an adverse material impact on the operations or financial position of the Company . |
Business And Significant Polici
Business And Significant Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
BASIS OF PRESENTATION | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. Management has evaluated all events and transactions that occurred after September 30, 2019 through the date these unaudited condensed consolidated financial statements were filed. There were no events or transactions during this period that require recognition or disclosure in these unaudited condensed consolidated financial statements. The condensed consolidated balance sheet data as of December 31, 2018 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 as filed on February 26, 2019 with the Securities and Exchange Commission (“SEC”). Certain amounts have been reclassified to conform to current year presentation. The unaudited condensed consolidated financial statements include the accounts of VIVUS, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of these unaudited condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. On an ongoing basis, the Company evaluates its estimates, including critical accounting policies or estimates related to available-for-sale securities, debt instruments, research and development expenses, income taxes, inventories, revenues, contingencies and litigation and share-based compensation. The Company bases its estimates on historical experience, information received from third parties and on various market specific and other relevant assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ significantly from those estimates under different assumptions or conditions. |
Recent Accounting Pronouncements Adopted | Recent Accounting Pronouncement Adopted In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842), which modifies the accounting by lessees for all leases with a term greater than 12 months. This standard requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The Company adopted this standard on January 1, 2019 using the modified retrospective transition method, and as a result did not adjust comparative periods. The Company has one large operating lease for its corporate headquarters and several smaller leases, including financing leases for its automobile fleet and copiers. See Note 12. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update 2016-13, Measurement of Credit Losses on Financial Instruments , which requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model, referred to as the current expected credit loss (CECL) model. Under this model, entities will estimate credit losses over the entire contractual term of the instrument. This standard is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company is evaluating the potential impact of this standard, but does not expect it to have a material impact on its consolidated financial statements. In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement , which adds disclosure requirements to Topic 820 for the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This standard is effective for fiscal years beginning after December 31, 2019 and early adoption is permitted. The Company is evaluating the provisions of this guidance, but currently does not expect it to have a material impact on its consolidated financial statements. |
Revenue Recognition | For all revenue transactions, the Company evaluates its contracts with its customers to determine revenue recognition using the following five-step model: 1) 2) 3) 4) 5) Product Revenue Product revenue is recognized at the time of shipment at which time the Company has satisfied its performance obligation. Product revenue is recognized net of consideration paid to the Company’s customers, wholesalers and certified pharmacies. Such consideration is for services rendered by the wholesalers and pharmacies in accordance with the wholesalers and certified pharmacy services network agreements, and includes a fixed rate per prescription shipped and monthly program management and data fees. These services are not deemed sufficiently separable from the customers’ purchase of the product; therefore, they are recorded as a reduction of revenue at the time of revenue recognition. Other product revenue allowances include a reserve for estimated product returns, certain prompt pay discounts and allowances offered to the Company’s customers, program rebates and chargebacks. These product revenue allowances are recognized as a reduction of revenue at the date at which the related revenue is recognized. The Company also offers discount programs to patients. Calculating certain of these items involves estimates and judgments based on sales or invoice data, contractual terms, utilization rates, new information regarding changes in these programs’ regulations and guidelines that would impact the amount of the actual rebates or chargebacks. The Company reviews the adequacy of product revenue allowances on a quarterly basis. Amounts accrued for product revenue allowances are adjusted when trends or significant events indicate that adjustment is appropriate and to reflect actual experience. See Note 9 for product reserve balances. Supply Revenue The Company produces STENDRA/SPEDRA through a contract manufacturing partner and then sells it to the Company’s commercialization partners. The Company is the primary responsible party in the commercial supply arrangements and bears significant risk in the fulfillment of the obligations, including risks associated with manufacturing, regulatory compliance and quality assurance, as well as inventory, financial and credit loss. As such, the Company recognizes supply revenue on a gross basis as the principal party in the arrangements. The Company recognizes supply revenue at the time of shipment and, in the unusual case where the product does not meet contractually-specified product dating criteria at the time of shipment to the partner, the Company records a reserve for estimated product returns. There are no such reserves as of September 30, 2019. License and Milestone Revenue License and milestone revenues related to arrangements, usually license and/or supply agreements, entered into by the Company are recognized by following the five-step process outlined above. The allocation and timing of recognition of such revenue will be determined by that process and the amounts recognized and the timing of that recognition may not exactly follow the wording of the agreement as the amount allocated following the accounting analysis of the agreement may differ and the timing of recognition of a significant performance obligation may predate the contractual date. Royalty Revenue The Company relies on data provided by its collaboration partner in determining its contractually-based royalty revenue. Such data includes accounting estimates and reports for various discounts and allowances, including product returns. The Company records royalty revenues based on the best data available and makes any adjustments to such revenues as such information becomes available. |
Cash, Cash Equivalents and Available-for-Sale Securities | As of September 30, 2019, the Company had no available-for-sale securities. As of December 31, 2018, the Company’s available-for-sale securities were viewed by the Company as available to support current operations, and even those with original maturities in excess of 12 months were classified as current assets. Due to their short-term maturities, the Company believes that the fair value of its bank deposits, accounts payable and accrued expenses approximate their carrying value. |
Inventories | Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first in, first out method for all inventories, which are valued using a weighted-average cost method calculated for each production batch. The Company periodically evaluates the carrying value of inventory on hand for potential excess amounts over demand using the same lower of cost or net realizable value approach as that used to value the inventory |
Income Taxes | The Company’s policy is to recognize interest and penalties related to uncertain tax positions (if any) as a component of the income tax provision. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
REVENUE INFORMATION | |
Schedule of net product revenue by geographic region | Revenue by Source and Geography Revenue disaggregated by revenue source and by geographic region was as follows (in thousands): Three Months Ended September 30, 2019 2018 U.S. ROW Total U.S. ROW Total Qsymia—Net product revenue $ 9,583 $ — $ 9,583 $ 9,737 $ — $ 9,737 Qsymia—License revenue — 2,500 2,500 — — — PANCREAZE - Net product revenue 5,133 133 5,266 6,747 — 6,747 PANCREAZE - Royalty revenue — — — — 576 576 STENDRA/SPEDRA—Supply revenue — 64 64 — 478 478 STENDRA/SPEDRA—Royalty revenue — 557 557 — 550 550 Total revenue $ 14,716 $ 3,254 (1) $ 17,970 $ 16,484 $ 1,604 (2) $ 18,088 Nine Months Ended September 30, 2019 2018 U.S. ROW Total U.S. ROW Total Qsymia—Net product revenue $ 28,000 $ — $ 28,000 $ 30,503 $ — $ 30,503 Qsymia—License revenue — 2,500 2,500 — — — PANCREAZE - Net product revenue 15,317 133 15,450 8,863 — 8,863 PANCREAZE - Royalty revenue — 1,557 1,557 — 650 650 STENDRA/SPEDRA—Supply revenue — 3,448 3,448 1,071 2,132 3,203 STENDRA/SPEDRA—Royalty revenue — 1,551 1,551 — 1,729 1,729 Total revenue $ 43,317 $ 9,189 (3) $ 52,506 $ 40,437 $ 4,511 (4) $ 44,948 (1) $2.5 million of which was attributable to South Korea, $0.6 million of which was attributable to Germany and $0.1 million of which was attributable to Canada. (2) $1.0 million of which was attributable to Germany and $0.6 million of which was attributable to Canada. (3) $5.0 million of which was attributable to Germany, $1.7 million of which was attributable to Canada, and $2.5 million of which was attributable to South Korea. (4) $3.9 million of which was attributable to Germany and $0.6 million of which was attributable to Canada. |
Schedule of Revenue And Cost Of Goods Sold By Source | Revenue and cost of goods sold by source was as follows (in thousands): Three Months Ended September 30, 2019 2018 Qsymia PANCREAZE STENDRA/ SPEDRA Total Qsymia PANCREAZE STENDRA/ SPEDRA Total Net product revenue $ 9,583 $ 5,266 $ — $ 14,849 $ 9,737 $ 6,747 $ — $ 16,484 License 2,500 — — 2,500 — — — — Supply revenue — — 64 64 — — 478 478 Royalty revenue — — 557 557 — 576 550 1,126 Total revenue $ 12,083 $ 5,266 $ 621 $ 17,970 $ 9,737 $ 7,323 $ 1,028 $ 18,088 Cost of goods sold (excluding amortization) $ 1,484 $ 1,429 $ 103 $ 3,016 $ 953 $ 2,006 $ 525 $ 3,484 Amortization of intangible assets $ 91 $ 3,547 $ — $ 3,638 $ 91 $ 3,547 $ — $ 3,638 Nine Months Ended September 30, 2019 2018 Qsymia PANCREAZE STENDRA/ SPEDRA Total Qsymia PANCREAZE STENDRA/ SPEDRA Total Net product revenue $ 28,000 $ 15,450 $ — $ 43,450 $ 30,503 $ 8,863 $ — $ 39,366 License 2,500 — — 2,500 — — — — Supply revenue — — 3,448 3,448 — — 3,203 3,203 Royalty revenue — 1,557 1,551 3,108 — 650 1,729 2,379 Total revenue $ 30,500 $ 17,007 $ 4,999 $ 52,506 $ 30,503 $ 9,513 $ 4,932 $ 44,948 Cost of goods sold (excluding amortization) $ 3,809 $ 4,659 $ 3,233 $ 11,701 $ 3,648 $ 2,574 $ 3,178 $ 9,400 Amortization of intangible assets $ 272 $ 10,642 $ — $ 10,914 $ 272 $ 4,730 $ — $ 5,002 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
SHARE-BASED COMPENSATION. | |
Schedule of share-based compensation expense | Total share-based compensation expense for all of the Company’s share-based awards was as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Cost of goods sold $ 15 $ 18 $ 42 $ 48 Selling and marketing 71 89 211 263 General and administrative 346 1,010 Research and development 51 155 Total share-based compensation expense $ $ $ $ Share-based compensation expense capitalized as part of the cost of inventory $ 8 $ 4 $ 22 $ 5 |
Cash, Cash Equivalents, And A_2
Cash, Cash Equivalents, And Available-For-Sale Securities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
CASH, CASH EQUIVALENTS, AND AVAILABLE-FOR-SALE SECURITIES | |
Schedule of fair value and amortized cost of cash, cash equivalents, and available-for-sale securities by major security type | As of September 30, 2019 Gross Gross Amortized Unrealized Unrealized Estimated Cash and cash equivalents Cost Gains Losses Fair Value Cash and money market funds $ 40,113 $ — $ — $ 40,113 As of December 31, 2018 Gross Gross Amortized Unrealized Unrealized Estimated Cash and cash equivalents and available-for-sale securities Cost Gains Losses Fair Value Cash and money market funds $ 30,411 $ — $ — $ 30,411 U.S. Treasury securities 42,261 34 (111) 42,184 Corporate debt securities 38,848 9 (203) 38,654 Total 111,520 43 (314) 111,249 Less amounts classified as cash and cash equivalents (30,411) — — (30,411) Total available-for-sale securities $ 81,109 $ 43 $ (314) $ 80,838 |
Schedule of Fair Value of Separate Accounts by Major Category of Investment | The following table represents the fair value hierarchy for our cash, cash equivalents and available-for-sale securities by major security type (in thousands): As of September 30, 2019 Level 1 Level 2 Level 3 Total Cash and money market funds $ 40,113 $ — $ — $ 40,113 As of December 31, 2018 Level 1 Level 2 Level 3 Total Cash and money market funds $ 30,411 $ — $ — $ 30,411 U.S. Treasury securities 42,184 — — 42,184 Corporate debt securities — 38,654 — 38,654 Total $ 72,595 $ 38,654 $ — $ 111,249 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
ACCOUNTS RECEIVABLE | |
Schedule of accounts receivable | Accounts receivable consist of the following (in thousands): Balance as of September 30, December 31, 2019 2018 Qsymia $ 15,887 $ 13,987 PANCREAZE 5,702 10,213 STENDRA/SPEDRA 2,733 1,560 24,322 25,760 Allowance for cash discounts (257) (152) Net $ 24,065 $ 25,608 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
INVENTORIES | |
Schedule of inventories | Inventories consist of the following (in thousands): Balance as of September 30, December 31, 2019 2018 Raw materials $ 22,648 $ 17,813 Work-in-process 3,100 1,719 Finished goods 4,260 3,600 Inventories, net $ 30,008 $ 23,132 |
Prepaid Expenses And Other Cu_2
Prepaid Expenses And Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other assets | Prepaid expenses and other current assets consist of the following (in thousands): Balance as of September 30, December 31, 2019 2018 Prepaid sales and marketing expenses $ 1,874 $ 1,525 Prepaid insurance 142 1,451 Taxes receivable 745 779 Other prepaid expenses and assets 4,218 3,783 Total $ 6,979 $ 7,538 |
Intangible and Other Noncurrent
Intangible and Other Noncurrent Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
NON-CURRENT ASSETS | |
Schedule of Finite-Lived Intangible Assets And Other Noncurrent Assets | Intangible and other non-current assets consist of the following (in thousands): September 30, 2019 December 31, 2018 Cost Accumulated Amortization Net Cost Accumulated Amortization Net PANCREAZE license (1) $ 141,895 $ (18,919) $ 122,976 $ 141,895 $ (8,277) $ 133,618 Janssen patents (2) 3,050 (2,868) 182 3,050 (2,597) 453 Other non-current assets (3) 208 — 208 208 — 208 Total $ 145,153 $ (21,787) $ 123,366 $ 145,153 $ (10,874) $ 134,279 _________________ (1) In June 2018, the Company acquired the rights to license PANCREAZE in the U.S. and Canada, as described further in Note 13. The rights are being amortized over their estimated useful life of 10 years using the straight-line method. (2) In September 2014, the Company acquired certain patents relating to Qsymia from Janssen Pharmaceuticals, approximately $3.1 million of which was recorded as an intangible asset. The patents are being amortized over their estimated useful life of 5.5 years using the straight-line method. (3) Other non-current assets primarily consist of real estate deposits. |
Future Expected Amortization Expenses For Intangible Assets | Future expected amortization expenses for intangible assets as of September 30, 2019 are as follows (in thousands): 2019 (rest of year) $ 3,638 2020 14,280 2021 14,190 2022 14,190 2023 14,190 Thereafter 62,670 Total $ 123,158 |
Accrued And Other Liabilities (
Accrued And Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
ACCRUED AND OTHER LIABILITIES | |
Schedule of accrued and other liabilities | Accrued and other liabilities consist of the following (in thousands): Balance as of September 30, December 31, 2019 2018 Reserve for product returns (see Note 2) $ 14,679 $ 14,878 Product-related accruals (see Note 2) 6,771 8,272 Accrued manufacturing costs 3,894 4,313 Accrued interest on debt (see Note 14) 3,045 — Accrued employee compensation and benefits 1,916 2,591 Other accrued liabilities 3,999 2,990 Total $ 34,304 $ 33,044 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Components of Lease Cost | The components of lease expense were as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2019 Operating lease cost $ 130 $ 391 Finance lease cost: Amortization of right-of-use assets $ 52 $ 156 Interest on lease liabilities 3 8 Total finance lease cost $ 55 $ 164 Supplemental balance sheet information related to leases was as follows: Balance as of September 30, 2019 Right-of-use assets: Operating leases $ 890 Financing leases 409 Total right-of-use assets $ 1,299 Current portion of lease liability: Operating leases $ 553 Financing leases 215 Total current portion of lease liability $ 768 Lease liability, net of current portion Operating leases $ 597 Financing leases 191 Total lease liability, net of current portion $ 788 |
Lessee, Operating Leases And Finance Leases Liabilities Maturities | Future payments of lease liabilities are as follows: Operating Leases Finance Leases 2019 (rest of year) $ 155 $ 56 2020 610 224 2021 482 117 2022 - 21 Total lease payments 1,247 418 Less imputed interest (97) (12) Total $ 1,150 $ 406 |
Accounting Standards Update 2016-02 [Member] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | At the time of adoption, the Company recorded the following amounts (in thousands): Right-of-Use Asset Current Portion of Lease Liability Lease Liability, Net of Current Portion Current Portion of Deferred Rent Deferred Rent, Net of Current Portion Accumulated Deficit Operating leases $ 1,201 $ 512 $ 1,017 $ (94) $ (234) $ — Financing leases 329 131 188 — — 10 Total $ 1,530 $ 643 $ 1,205 $ (94) $ (234) $ 10 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
LONG-TERM DEBT AND COMMITMENTS | |
Schedule of debt | The Company’s indebtedness consists of the following (in thousands): Balance as of September 30, December 31, 2019 2018 Convertible senior notes due 2020 $ 181,426 $ 181,426 Unamortized discount and debt issuance costs 2,764 6,358 Convertible senior notes due 2020, net 184,190 187,784 2024 Notes 61,351 110,000 Unamortized premium and debt issuance costs, net (2,813) (3,338) 2024 Notes, net 58,538 106,662 Total debt 242,728 294,446 Less current portion 184,190 — Total long-term debt $ 58,538 $ 294,446 |
Schedule of Maturities of Long-term Debt | Future estimated payments, including interest, on all of the Company’s indebtedness as of September 30, 2019 are as follows (in thousands): 2019 (rest of year) $ 5,673 2020 192,327 2021 20,152 2022 23,034 2023 21,076 Thereafter 9,822 $ 272,084 |
Business And Significant Acco_2
Business And Significant Accounting Policies, Narratives (Details) $ in Thousands | Sep. 10, 2018shares | Sep. 30, 2019USD ($)item | Dec. 31, 2018USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of Approved Federal Drug Administration Therapies | item | 3 | ||
Number of product candidate in active clinical development | item | 1 | ||
Retained Earnings (Accumulated Deficit) | $ (905,461) | $ (880,515) | |
Cash Cash Equivalents and available for sale securities fair value disclosure | 40,100 | ||
Long-term Debt | 242,728 | 294,446 | |
one-for-10 reverse stock split of common stock | 10 | ||
Shares of pre-reserve split common stock issued and outstanding | shares | 10 | ||
Shares of post-reserve split common stock issued and outstanding | shares | 1 | ||
Convertible Senior Notes Due 2020 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Long-term Debt | 184,190 | 187,784 | |
Long-term Debt, Fair Value | $ 181,426 | $ 181,426 | |
Minimum | Accounting Standards Update 2016-02 [Member] | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Lease Term | 12 months |
Revenue, Narratives (Details)
Revenue, Narratives (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Supply agreement | STENDRA/SPEDRA | |
Revenue | |
Reserve for Estimated Product Returns | $ 0 |
Revenue (Revenue By Geography)
Revenue (Revenue By Geography) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Geographic Information | ||||
Total revenue | $ 17,970 | $ 18,088 | $ 52,506 | $ 44,948 |
Qsymia | ||||
Geographic Information | ||||
Total revenue | 12,083 | 9,737 | 30,500 | 30,503 |
PANCREAZE | ||||
Geographic Information | ||||
Total revenue | 5,266 | 7,323 | 17,007 | 9,513 |
STENDRA/SPEDRA | ||||
Geographic Information | ||||
Total revenue | 621 | 1,028 | 4,999 | 4,932 |
U.S. | ||||
Geographic Information | ||||
Total revenue | 14,716 | 16,484 | 43,317 | 40,437 |
ROW | ||||
Geographic Information | ||||
Total revenue | 3,254 | 1,604 | 9,189 | 4,511 |
Germany | ||||
Geographic Information | ||||
Total revenue | 600 | 1,000 | 5,000 | 3,900 |
Canada | ||||
Geographic Information | ||||
Total revenue | 100 | 600 | 1,700 | 600 |
South Korea | ||||
Geographic Information | ||||
Total revenue | 2,500 | 2,500 | ||
Net Product Revenue | ||||
Geographic Information | ||||
Total revenue | 14,849 | 16,484 | 43,450 | 39,366 |
Net Product Revenue | Qsymia | ||||
Geographic Information | ||||
Total revenue | 9,583 | 9,737 | 28,000 | 30,503 |
Net Product Revenue | PANCREAZE | ||||
Geographic Information | ||||
Total revenue | 5,266 | 6,747 | 15,450 | 8,863 |
Net Product Revenue | U.S. | Qsymia | ||||
Geographic Information | ||||
Total revenue | 9,583 | 9,737 | 28,000 | 30,503 |
Net Product Revenue | U.S. | PANCREAZE | ||||
Geographic Information | ||||
Total revenue | 5,133 | 6,747 | 15,317 | 8,863 |
Net Product Revenue | ROW | PANCREAZE | ||||
Geographic Information | ||||
Total revenue | 133 | 133 | ||
Royalty Revenue | ||||
Geographic Information | ||||
Total revenue | 557 | 1,126 | 3,108 | 2,379 |
Royalty Revenue | PANCREAZE | ||||
Geographic Information | ||||
Total revenue | 576 | 1,557 | 650 | |
Royalty Revenue | STENDRA/SPEDRA | ||||
Geographic Information | ||||
Total revenue | 557 | 550 | 1,551 | 1,729 |
Royalty Revenue | ROW | PANCREAZE | ||||
Geographic Information | ||||
Total revenue | 576 | 1,557 | 650 | |
Royalty Revenue | ROW | STENDRA/SPEDRA | ||||
Geographic Information | ||||
Total revenue | 557 | 550 | 1,551 | 1,729 |
Supply Revenue | ||||
Geographic Information | ||||
Total revenue | 64 | 478 | 3,448 | 3,203 |
Supply Revenue | STENDRA/SPEDRA | ||||
Geographic Information | ||||
Total revenue | 64 | 478 | 3,448 | 3,203 |
Supply Revenue | U.S. | STENDRA/SPEDRA | ||||
Geographic Information | ||||
Total revenue | 1,071 | |||
Supply Revenue | ROW | STENDRA/SPEDRA | ||||
Geographic Information | ||||
Total revenue | 64 | $ 478 | 3,448 | $ 2,132 |
License revenue | ||||
Geographic Information | ||||
Total revenue | 2,500 | 2,500 | ||
License revenue | Qsymia | ||||
Geographic Information | ||||
Total revenue | 2,500 | 2,500 | ||
License revenue | ROW | Qsymia | ||||
Geographic Information | ||||
Total revenue | $ 2,500 | $ 2,500 |
Revenue (Revenue and Cost Of Go
Revenue (Revenue and Cost Of Goods Sold By Source) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Geographic Information | ||||
Total revenue | $ 17,970 | $ 18,088 | $ 52,506 | $ 44,948 |
Cost of goods sold (excluding amortization) | 3,016 | 3,484 | 11,701 | 9,400 |
Amortization of Intangible Assets | 3,638 | 3,638 | 10,914 | 5,002 |
Qsymia | ||||
Geographic Information | ||||
Total revenue | 12,083 | 9,737 | 30,500 | 30,503 |
Cost of goods sold (excluding amortization) | 1,484 | 953 | 3,809 | 3,648 |
Amortization of Intangible Assets | 91 | 91 | 272 | 272 |
PANCREAZE | ||||
Geographic Information | ||||
Total revenue | 5,266 | 7,323 | 17,007 | 9,513 |
Cost of goods sold (excluding amortization) | 1,429 | 2,006 | 4,659 | 2,574 |
Amortization of Intangible Assets | 3,547 | 3,547 | 10,642 | 4,730 |
STENDRA/SPEDRA | ||||
Geographic Information | ||||
Total revenue | 621 | 1,028 | 4,999 | 4,932 |
Cost of goods sold (excluding amortization) | 103 | 525 | 3,233 | 3,178 |
Net Product Revenue | ||||
Geographic Information | ||||
Total revenue | 14,849 | 16,484 | 43,450 | 39,366 |
Net Product Revenue | Qsymia | ||||
Geographic Information | ||||
Total revenue | 9,583 | 9,737 | 28,000 | 30,503 |
Net Product Revenue | PANCREAZE | ||||
Geographic Information | ||||
Total revenue | 5,266 | 6,747 | 15,450 | 8,863 |
License revenue | ||||
Geographic Information | ||||
Total revenue | 2,500 | 2,500 | ||
License revenue | Qsymia | ||||
Geographic Information | ||||
Total revenue | 2,500 | 2,500 | ||
Supply Revenue | ||||
Geographic Information | ||||
Total revenue | 64 | 478 | 3,448 | 3,203 |
Supply Revenue | STENDRA/SPEDRA | ||||
Geographic Information | ||||
Total revenue | 64 | 478 | 3,448 | 3,203 |
Royalty Revenue | ||||
Geographic Information | ||||
Total revenue | 557 | 1,126 | 3,108 | 2,379 |
Royalty Revenue | PANCREAZE | ||||
Geographic Information | ||||
Total revenue | 576 | 1,557 | 650 | |
Royalty Revenue | STENDRA/SPEDRA | ||||
Geographic Information | ||||
Total revenue | $ 557 | $ 550 | $ 1,551 | $ 1,729 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
SHARE-BASED COMPENSATION | ||||
Share-based compensation | $ 483 | $ 676 | $ 1,418 | $ 2,650 |
Total share-based compensation cost capitalized as part of cost of inventory | 8 | 4 | 22 | 5 |
Cost of goods sold | ||||
SHARE-BASED COMPENSATION | ||||
Share-based compensation | 15 | 18 | 42 | 48 |
Selling and Marketing | ||||
SHARE-BASED COMPENSATION | ||||
Share-based compensation | 71 | 89 | 211 | 263 |
General and Administrative | ||||
SHARE-BASED COMPENSATION | ||||
Share-based compensation | 346 | 492 | 1,010 | 2,105 |
Research and development | ||||
SHARE-BASED COMPENSATION | ||||
Share-based compensation | $ 51 | $ 77 | $ 155 | $ 234 |
Cash, Cash Equivalents, And A_3
Cash, Cash Equivalents, And Available-For-Sale Securities (Fair Value of Cash, Cash Equivalents, and Available-For-Sale Securities) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Cash and cash equivalents and available-for-sale securities, Amortized Cost | ||||
Cash and Cash Equivalents, at Carrying Value | $ 40,113 | $ 30,411 | $ 58,022 | $ 66,392 |
Available-for-sale securities including cash and cash equivalents, Amortized Cost Total | 111,520 | |||
Less amounts classified as cash equivalents, Amortized Cost | (40,113) | (30,411) | $ (58,022) | $ (66,392) |
Available-for-sale Debt Securities, Amortized Cost Basis, Total | 81,109 | |||
Available-for-sale securities, Gross Unrealized Gains | 43 | |||
Available-for-sale securities, Gross Unrealized Losses | (314) | |||
Debt Securities, Available-for-sale, Current | 0 | 80,838 | ||
Cash and cash equivalents and available-for-sale securities, Estimated Fair Value | ||||
Cash and Cash Equivalents, Fair Value Disclosure | 40,113 | 30,411 | ||
Cash and cash equivalents and available for sale securities, Fair Value Disclosure | 111,249 | |||
Less amounts classified as cash equivalents, Estimated Fair Value | (40,113) | (30,411) | ||
Debt Securities, Available-for-sale, Current | $ 0 | $ 80,838 | ||
Maximum original contractual maturities of available for sale securities | 12 months | 12 months | ||
U.S. Treasury securities | ||||
Cash and cash equivalents and available-for-sale securities, Amortized Cost | ||||
Available-for-sale Debt Securities, Amortized Cost Basis, Total | $ 42,261 | |||
Available-for-sale securities, Gross Unrealized Gains | 34 | |||
Available-for-sale securities, Gross Unrealized Losses | (111) | |||
Debt Securities, Available-for-sale, Current | 42,184 | |||
Cash and cash equivalents and available-for-sale securities, Estimated Fair Value | ||||
Debt Securities, Available-for-sale, Current | 42,184 | |||
Corporate Debt Securities | ||||
Cash and cash equivalents and available-for-sale securities, Amortized Cost | ||||
Available-for-sale Debt Securities, Amortized Cost Basis, Total | 38,848 | |||
Available-for-sale securities, Gross Unrealized Gains | 9 | |||
Available-for-sale securities, Gross Unrealized Losses | (203) | |||
Debt Securities, Available-for-sale, Current | 38,654 | |||
Cash and cash equivalents and available-for-sale securities, Estimated Fair Value | ||||
Debt Securities, Available-for-sale, Current | 38,654 | |||
Cash and money market funds | ||||
Cash and cash equivalents and available-for-sale securities, Amortized Cost | ||||
Cash and Cash Equivalents, at Carrying Value | $ 40,113 | 30,411 | ||
Less amounts classified as cash equivalents, Amortized Cost | (40,113) | (30,411) | ||
Cash and cash equivalents and available-for-sale securities, Estimated Fair Value | ||||
Cash and Cash Equivalents, Fair Value Disclosure | 40,113 | 30,411 | ||
Less amounts classified as cash equivalents, Estimated Fair Value | $ (40,113) | $ (30,411) |
Cash, Cash Equivalents, And A_4
Cash, Cash Equivalents, And Available-For-Sale Securities (Fair Value Hierarchy for Cash Equivalents and Available-For-Sale Securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair value measurements | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 40,113 | $ 30,411 |
Debt Securities, Available-for-sale, Current | 0 | 80,838 |
Cash and cash equivalents and available for sale securities, Fair Value Disclosure | 111,249 | |
U.S. Treasury securities | ||
Fair value measurements | ||
Debt Securities, Available-for-sale, Current | 42,184 | |
Corporate Debt Securities | ||
Fair value measurements | ||
Debt Securities, Available-for-sale, Current | 38,654 | |
Level 1 | ||
Fair value measurements | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 40,113 | 30,411 |
Cash and cash equivalents and available for sale securities, Fair Value Disclosure | 72,595 | |
Level 1 | U.S. Treasury securities | ||
Fair value measurements | ||
Debt Securities, Available-for-sale, Current | 42,184 | |
Level 2 | ||
Fair value measurements | ||
Cash and cash equivalents and available for sale securities, Fair Value Disclosure | 38,654 | |
Level 2 | Corporate Debt Securities | ||
Fair value measurements | ||
Debt Securities, Available-for-sale, Current | $ 38,654 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Accounts Receivable, before Allowance for Credit Loss, Current | $ 24,322 | $ 25,760 |
Accounts receivable, net | 24,065 | 25,608 |
Qsymia | ||
Accounts Receivable, before Allowance for Credit Loss, Current | 15,887 | 13,987 |
Qsymia allowance for cash discounts | (257) | (152) |
PANCREAZE | ||
Accounts Receivable, before Allowance for Credit Loss, Current | 5,702 | 10,213 |
STENDRA/SPEDRA | ||
Accounts Receivable, before Allowance for Credit Loss, Current | $ 2,733 | $ 1,560 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory balances | ||
Raw materials | $ 22,648 | $ 17,813 |
Work in process | 3,100 | 1,719 |
Finished goods | 4,260 | 3,600 |
Total | $ 30,008 | $ 23,132 |
Prepaid Expenses And Other Cu_3
Prepaid Expenses And Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
OTHER CURRENT ASSETS | ||
Prepaid sales and marketing expenses | $ 1,874 | $ 1,525 |
Prepaid insurance | 142 | 1,451 |
Taxes receivable | 745 | 779 |
Other prepaid expenses and assets | 4,218 | 3,783 |
Total | $ 6,979 | $ 7,538 |
Intangible and Other Non Curren
Intangible and Other Non Current Assets (Narratives) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2018 | Sep. 30, 2014 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Accumulated Amortization | $ (21,787) | $ (21,787) | $ (10,874) | ||||
Net intangible assets | 123,158 | 123,158 | |||||
Prepaid Expense Other, Noncurrent | 208 | 208 | 208 | ||||
Other Assets, Noncurrent | 145,153 | 145,153 | 145,153 | ||||
Other Assets, Miscellaneous, Noncurrent | 123,366 | 123,366 | 134,279 | ||||
Amortization of Intangible Assets | 3,638 | $ 3,638 | 10,914 | $ 5,002 | |||
Patents | Janssen | |||||||
Finite-Lived Intangible Assets, Gross | 3,050 | 3,050 | 3,050 | ||||
Accumulated Amortization | (2,868) | (2,868) | (2,597) | ||||
Net intangible assets | 182 | 182 | 453 | ||||
License | PANCREAZE | |||||||
Finite-Lived Intangible Assets, Gross | 141,895 | 141,895 | 141,895 | ||||
Accumulated Amortization | (18,919) | (18,919) | (8,277) | ||||
Net intangible assets | $ 122,976 | $ 122,976 | $ 133,618 | ||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||||
Janssen | Patents | Janssen | |||||||
Finite-Lived Intangible Asset, Useful Life | 5 years 6 months | ||||||
Finite-Lived Patents, Gross | $ 3,100 |
Intangible and Other Non Curr_2
Intangible and Other Non Current Assets (Intangible Future Expected Amortization Expenses) (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Finite-Lived Intangible Assets, Net [Abstract] | |
2019 (rest of year) | $ 3,638 |
2020 | 14,280 |
2021 | 14,190 |
2022 | 14,190 |
2023 | 14,190 |
Thereafter | 62,670 |
Net intangible assets | $ 123,158 |
Accrued And Other Liabilities_2
Accrued And Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
ACCRUED AND OTHER LIABILITIES | ||
Reserve for product returns (See Note 2) | $ 14,679 | $ 14,878 |
Product-related accruals (see Note 2) | 6,771 | 8,272 |
Accrued manufacturing costs | 3,894 | 4,313 |
Accrued interest on debt (see Note 14) | 3,045 | |
Accrued employee compensation and benefits | 1,916 | 2,591 |
Other accrued liabilities | 3,999 | 2,990 |
Total | $ 34,304 | $ 33,044 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
SPEDRA | Royalty Revenue | ||||
DEFERRED REVENUE | ||||
Contract with Customer, Liability, Revenue Recognized | $ 0.3 | $ 0.3 | $ 0.9 | $ 0.9 |
Leases - Schedule of Lease Asse
Leases - Schedule of Lease Assets & Liabilities (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Sep. 30, 2019 |
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Right-of-Use Asset | $ 1,201 | $ 890 |
Finance Lease, Right-of-Use Asset | 329 | 409 |
Right of Use Assets | 1,530 | 1,299 |
Operating Lease, Liability, Current | 512 | 553 |
Finance Lease, Liability, Current | 131 | 215 |
Current portion of lease liability | 643 | 768 |
Operating Lease, Liability, Noncurrent | 1,017 | 597 |
Finance Lease, Liability, Noncurrent | 188 | 191 |
Lease liability, net of current portion | 1,205 | 788 |
Current Portion of Deferred Rent | (94) | |
Deferred Rent, Net of Current Portion | (234) | |
Cumulative effect of accounting change | 10 | $ 10 |
Accounting Standards Update 2016-02 [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Cumulative effect of accounting change | 10 | |
Building [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Current Portion of Deferred Rent | (94) | |
Deferred Rent, Net of Current Portion | $ (234) |
Lease - Narratives (Details)
Lease - Narratives (Details) | Jan. 01, 2019 | Sep. 30, 2019 |
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Weighted Average Remaining Lease Term | 1 year 10 months 24 days | |
Finance Lease, Weighted Average Discount Rate, Percent | 2.90% | |
Finance Lease, Weighted Average Remaining Lease Term | 1 year 10 months 24 days | |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | |
Operating Lease, Weighted Average Discount Rate, Percent | 7.80% | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Weighted Average Remaining Lease Term | 2 years 1 month 6 days | |
Finance Lease, Weighted Average Remaining Lease Term | 2 years 1 month 6 days | |
Options to Extend the Operating Leases | 2 years | |
Options to Extend the Finance Lease | 2 years | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Weighted Average Remaining Lease Term | 1 year | |
Finance Lease, Weighted Average Remaining Lease Term | 1 year |
Leases - Lease Cost and Lease B
Leases - Lease Cost and Lease BS Info (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Jan. 01, 2019 | |
Lessee Lease Description [Abstract] | |||
Operating Lease, Cost | $ 130 | $ 391 | |
Finance Lease, Right-of-Use Asset, Amortization | 52 | 156 | |
Finance Lease, Interest Expense | 3 | 8 | |
Total Finance Lease Cost | 55 | 164 | |
Operating Lease, Right-of-Use Asset | 890 | 890 | $ 1,201 |
Finance Lease, Right-of-Use Asset | 409 | 409 | 329 |
Right of Use Assets | 1,299 | 1,299 | 1,530 |
Operating Lease, Liability, Current | 553 | 553 | 512 |
Finance Lease, Liability, Current | 215 | 215 | 131 |
Current portion of lease liability | 768 | 768 | 643 |
Operating Lease, Liability, Noncurrent | 597 | 597 | 1,017 |
Finance Lease, Liability, Noncurrent | 191 | 191 | 188 |
Lease liability, net of current portion | $ 788 | $ 788 | $ 1,205 |
Leases - Future Payment of Leas
Leases - Future Payment of Lease Liabilities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2019 (rest of year) Operating Lease | $ 155 |
2020 (Operating Lease) | 610 |
2021 (Operating Lease) | 482 |
Total lease payments - Operating Lease | 1,247 |
Less imputed interest - Operating Lease | (97) |
Operating Lease Liabilities | 1,150 |
Finance Lease, Liability, Payment, Due [Abstract] | |
2019 (rest of year) Finance Lease | 56 |
2020 (Finance Lease) | 224 |
2021 (Finance Lease) | 117 |
2022 (Finance Lease) | 21 |
Total lease payments - Finance Lease | 418 |
Less imputed interest - Finance Lease | (12) |
Finance Lease Liability | $ 406 |
License, Commercialization An_2
License, Commercialization And Supply Agreements (Details) $ / shares in Units, $ in Thousands | Jun. 26, 2019 | Dec. 07, 2018 | Oct. 01, 2016 | May 31, 2019country | Jun. 30, 2018USD ($)$ / sharesshares | Nov. 30, 2013 | Jul. 31, 2013country | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) |
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Net revenue | $ 17,970 | $ 18,088 | $ 52,506 | $ 44,948 | ||||||||
Payments to Acquire Businesses, Gross | $ 135,000 | |||||||||||
PANCREAZE | Warrants Issued | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 7 years | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 61.60% | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.91% | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | |||||||||||
License revenue | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Net revenue | 2,500 | 2,500 | ||||||||||
License and Milestone Revenue | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Net revenue | 2,500 | $ 2,500 | ||||||||||
Janssen | PANCREAZE | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Payments to Acquire Businesses, Gross | $ 135,000 | |||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | 400 | |||||||||||
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Accruals For Estimated Destruction Of Future Unsalable Inventory | 6,300 | |||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | $ 2,100 | |||||||||||
Willow Biopharma Member | PANCREAZE | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 357,000 | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 3.70 | |||||||||||
Finite-Lived License Agreements, Gross | $ 141,900 | |||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | 1,500 | |||||||||||
Willow Biopharma Member | PANCREAZE | Warrants Issued | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 800 | |||||||||||
License and commercialization agreement | SPEDRA | Menarini Group | Minimum | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Number of European countries covered under the license agreement | country | 40 | |||||||||||
License and commercialization agreement | PANCREAZE | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | |||||||||||
Amendment No. 1 License and Commercialization and Commercial Supply Agreement Member | SPEDRA | Menarini Group | Minimum | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Number of European countries covered under the license agreement | country | 40 | |||||||||||
Amendment No. 1 to Manufacturing and Supply Agreement Member | Avanafil Tablets | Sanofi Winthrop | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Additional period of auto-renewal | 1 year | |||||||||||
Amended Nordmark Supply Agreement June 26, 2019 member | Janssen | PANCREAZE | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Additional period of auto-renewal | 5 years | |||||||||||
Supply agreement | Alvogen | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Net revenue | $ 2,500 | |||||||||||
Supply agreement | Sanofi Chimie | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Long-term Purchase Commitment, Period | 5 years | |||||||||||
Additional period of auto-renewal | 1 year | |||||||||||
Supply agreement | Avanafil Tablets | Sanofi Winthrop | Minimum | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Long-term Purchase Commitment, Period | 5 years | |||||||||||
Supply agreement | STENDRA/SPEDRA | Metuchen | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Long-term Purchase Commitment, Period | 5 years | |||||||||||
Additional period of auto-renewal | 2 years | |||||||||||
Supply agreement | STENDRA/SPEDRA | Metuchen | Minimum | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Termination notice of license and supply agreement | 2 years | |||||||||||
Supply agreement | License and Milestone Revenue | Alvogen | ||||||||||||
License, Commercialization, and Development Agreements with Third Parties | ||||||||||||
Net revenue | $ 2,500 |
Long-Term Debt (Schedule of Deb
Long-Term Debt (Schedule of Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Long-term debt | ||
Net carrying value | $ 242,728 | $ 294,446 |
Less current portion | 184,190 | |
Long-term debt | 58,538 | 294,446 |
Convertible Senior Notes Due 2020 | ||
Long-term debt | ||
Senior Secured Notes | 181,426 | 181,426 |
Unamortized discount (premium) and debt issuance costs | 2,764 | 6,358 |
Net carrying value | 184,190 | 187,784 |
Senior Secured Notes Due 2024 | ||
Long-term debt | ||
Senior Secured Notes | 61,351 | 110,000 |
Unamortized discount (premium) and debt issuance costs | (2,813) | (3,338) |
Net carrying value | $ 58,538 | $ 106,662 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | May 29, 2013 | Sep. 30, 2019 | Oct. 31, 2018 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | May 31, 2013 |
Long-term debt | |||||||
Repayments of Notes Payable | $ 48,649 | $ 57,187 | |||||
Fda Approval Qsymia Pmr And Cvot Member | |||||||
Long-term debt | |||||||
Contractual Obligation Term | 5 years | ||||||
Post Marketing Expenses, CVOT | $ 0 | ||||||
Minimum | Fda Approval Qsymia Pmr And Cvot Member | |||||||
Long-term debt | |||||||
Contractual Obligation | $ 180,000 | 180,000 | |||||
Maximum | Fda Approval Qsymia Pmr And Cvot Member | |||||||
Long-term debt | |||||||
Contractual Obligation | 220,000 | $ 220,000 | |||||
Convertible Senior Notes Due 2020 | |||||||
Long-term debt | |||||||
Offering amount | $ 250,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | ||||||
Net proceeds from offering | $ 241,800 | ||||||
Conversion price per share (in dollars per share) | $ 148.58 | ||||||
Repurchased Convertible Notes Face Value | $ 8,600 | $ 60,000 | |||||
Cash payment repurchased convertible notes | 7,100 | $ 51,000 | |||||
Gain (Loss) on Extinguishment of Debt | $ 1,400 | ||||||
Senior Secured Note Athyrium Due 2024 | |||||||
Long-term debt | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.375% | ||||||
Senior Notes | $ 110,000 | ||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 330,000 | ||||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 99.00% | ||||||
Long-term Debt, Weighted Average Interest Rate, at Point in Time | 11.30% | ||||||
Senior Secured Note Athyrium Due 2024 | Warrants Issued | Athyrium Capital Management Affiliates Member | |||||||
Long-term debt | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 years | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 62.70% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.83% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | ||||||
Additional Senior Secured Note Athyrium Due 2024 | |||||||
Long-term debt | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.375% | ||||||
Senior Notes | $ 10,000 | ||||||
Debt Instrument, Term | 12 months | ||||||
Senior Secured Notes Due 2024 | |||||||
Long-term debt | |||||||
Repayments of Notes Payable | 48,600 | ||||||
Gain (Loss) on Extinguishment of Debt | 0 | ||||||
Prepayment premiums recorded as interest expense | $ 6,400 |
Long Term Debt (Long Term Debt
Long Term Debt (Long Term Debt Future Amortization) (Details) $ in Thousands | Sep. 30, 2019USD ($) |
LONG-TERM DEBT AND COMMITMENTS | |
2019 (rest of year) | $ 5,673 |
2020 | 192,327 |
2021 | 20,152 |
2022 | 23,034 |
2023 | 21,076 |
Thereafter | 9,822 |
Total | $ 272,084 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net income (loss) per share. | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,811 | 1,499 | 2,863 | 1,629 |
Convertible Senior Notes Due 2020 | Convertible Common Stock | ||||
Net income (loss) per share. | ||||
Net shares issued | 0 | 0 | ||
Minimum stock price to trigger conversion of debt (in dollars per share) | $ 200 | $ 200 | ||
Dilutive Securities impact on diluted net income (in dollars per share) | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
INCOME TAXES | ||||
Income Tax Expense (Benefit) | $ 4 | $ 36 | $ 4 | $ 52 |
Unrecognized Tax Benefits | $ 102 | 102 | ||
Non-deductible Accrued Interest Expense | 13,000 | 8,600 | ||
GILTI inclusion in taxable income calculation | $ 0 | $ 0 |