FORM 10-Q
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British Columbia, Canada
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N/A
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large Accelerated Filer
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◻
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Accelerated Filer
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☒
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Non-Accelerated Filer
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◻ (Do not check if a smaller reporting company)
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Smaller Reporting Company
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◻
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Emerging growth company
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◻
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Page
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March 31, 2017
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December 31, 2016
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Assets
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Current assets:
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Cash and cash equivalents
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$
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84,756
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$
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108,927
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Restricted cash
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240
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390
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Accounts receivable, net
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11,439
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9,339
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Inventories - current
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23,532
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15,718
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Insurance proceeds receivable
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22,000
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22,000
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Prepaid expenses and other current assets
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8,835
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9,762
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Total current assets
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150,802
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166,136
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Inventories - non-current
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45,714
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59,003
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Property and equipment, net
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3,941
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4,159
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Intangible assets, net
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244,093
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250,324
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Other assets
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2,605
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1,160
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Total assets
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$
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447,155
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$
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480,782
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Liabilities and stockholders’ equity
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Current liabilities:
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Accounts payable
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$
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8,738
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$
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17,609
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Accrued liabilities
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34,512
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37,180
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Provision for legal settlement
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63,011
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64,010
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Total current liabilities
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106,261
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118,799
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Long-term liabilities:
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Convertible Notes, net
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233,325
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225,584
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Other liabilities
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631
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612
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Total liabilities
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340,217
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344,995
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Commitments and contingencies (Note 12)
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Stockholders’ equity:
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Common stock, without par value, 100,000 shares authorized at March 31, 2017 and December 31, 2016; 18,558 and 18,530 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively
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551,392
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551,259
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Additional paid-in-capital
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70,602
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69,149
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Accumulated deficit
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(618,223
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(587,208
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Accumulated other comprehensive income
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103,167
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102,587
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Total stockholders’ equity
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106,938
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135,787
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Total liabilities and stockholders’ equity
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$
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447,155
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$
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480,782
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Three Months Ended March 31,
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2017
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2016
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Net revenues
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$
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29,984
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$
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—
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Cost of product sales
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16,445
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—
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Operating expenses
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Selling, general and administrative
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24,451
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5,936
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Research and development
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9,300
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2,990
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Restructuring charges
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1,451
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—
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Total operating expenses
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35,202
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8,926
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Loss from operations
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(21,663
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)
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(8,926
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)
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Interest (expense) income, net
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(9,212
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)
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75
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Fair value loss on investment
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—
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(12,960
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)
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Other income (expense), net
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52
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(77
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Loss before provision for income taxes
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(30,823
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(21,888
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Provision for income taxes
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(139
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(6
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Net loss
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$
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(30,962
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$
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(21,894
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Net loss per common share—basic and diluted
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$
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(1.67
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$
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(2.07
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Weighted-average shares outstanding—basic and diluted
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18,540
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10,565
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Three Months Ended March 31,
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2017
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2016
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Net loss
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$
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(30,962
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$
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(21,894
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Other comprehensive income, net of tax:
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Foreign currency translation
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580
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—
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Other comprehensive income
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580
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—
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Comprehensive loss
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$
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(30,382
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$
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(21,894
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Three Months Ended
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March 31,
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2017
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2016
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Cash used in operating activities
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Net loss
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$
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(30,962
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$
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(21,894
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Adjustments to reconcile net loss to net cash used in operating activities:
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Depreciation
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490
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38
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Amortization of intangible assets
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6,231
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—
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Stock-based compensation
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1,399
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—
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Non-cash interest expense
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7,742
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—
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Unrealized foreign exchange gain
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(72
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(69
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Fair value loss on investment
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—
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12,960
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Deferred income taxes
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(29
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5
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Deferred rent
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10
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—
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Changes in assets and liabilities, excluding the effect of acquisition:
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Accounts receivable
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(2,101
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(79
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Inventories
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5,474
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—
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Prepaid expenses and other assets
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(488
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(114
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Accounts payable
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(8,871
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1,350
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Accrued liabilities
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(3,657
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(1,109
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Net cash used in operating activities
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(24,834
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(8,912
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Cash used in investing activities
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Purchases of property and equipment
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(273
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(69
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Net cash used in investing activities
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(273
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(69
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Cash provided by (used in) financing activities
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Issuance of common shares
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134
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—
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Decrease in restricted cash
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150
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—
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Settlement of Backstop Agreement
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—
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15,000
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Aralez investment
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—
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(45,000
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)
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Net cash provided by (used in) financing activities
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284
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(30,000
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)
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Exchange rate effect on cash
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652
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13
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Net decrease in cash and cash equivalents
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(24,171
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(38,968
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Cash and cash equivalents, beginning of period
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$
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108,927
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$
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141,824
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Cash and cash equivalents, end of period
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$
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84,756
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$
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102,856
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Supplemental disclosures of cash flow information
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Cash paid for interest
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$
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3,250
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$
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—
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Cash paid for taxes
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$
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570
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$
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2
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Three months ended
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(in millions, except for per share information)
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March 31, 2016
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Net revenues
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$
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35.7
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Net loss
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(87.4
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Basic and diluted loss per share
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$
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(8.28
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March 31,
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December 31,
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2017
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2016
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(in thousands)
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Work-in-process
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$
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13,355
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$
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20,219
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Finished goods
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55,891
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54,502
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Total
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69,246
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74,721
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Less: Inventories - current
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(23,532
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(15,718
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Inventories - non-current
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$
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45,714
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$
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59,003
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March 31, 2017
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Gross Carrying Value
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Accumulated Amortization
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Net Carrying Value
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||||||
Developed technology - Juxtapid
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$
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42,300
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$
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(1,312
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$
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40,988
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Developed technology - Myalept
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210,158
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(7,053
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203,105
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Total intangible assets
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$
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252,458
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$
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(8,365
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$
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244,093
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December 31, 2016
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Gross
Carrying Value |
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Accumulated
Amortization |
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Net
Carrying Value |
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Developed technology - Juxtapid
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$
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42,300
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$
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(328
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$
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41,972
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Developed technology - Myalept
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210,158
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(1,806
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)
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208,352
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Total intangible assets
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$
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252,458
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$
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(2,134
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)
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$
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250,324
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Years Ending December 31,
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Amount
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2017 (remaining 9 months)
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$
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18,822
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2018
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25,096
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2019
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25,096
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2020
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25,096
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2021 and thereafter
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149,983
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Total intangible assets subject to amortization
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$
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244,093
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March 31,
2017 |
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December 31,
2016 |
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(in thousands)
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Accrued employee compensation and related costs
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$
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3,918
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$
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7,920
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Accrued sales allowances
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8,235
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7,849
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Other accrued liabilities
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22,359
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21,411
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Total
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$
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34,512
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$
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37,180
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March 31, 2017
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December 31, 2016
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Principal
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$
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324,998
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$
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324,998
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Less: debt discount, net
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(91,673
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)
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(99,414
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)
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Net carrying amount of Convertible Notes
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$
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233,325
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$
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225,584
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Three months ended
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||||||
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March 31, 2017
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March 31, 2016
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Contractual interest expense
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$
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1,625
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$
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—
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Amortization of debt discount
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7,742
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—
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Total
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$
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9,367
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$
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—
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Years Ending December 31,
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Amount
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2017 (9 months remaining)
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$
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3,250
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2018
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6,500
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2019
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331,498
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341,248
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Less amounts representing interest
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(16,250
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)
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Less debt discount, net
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(91,673
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)
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Net carrying amount of Convertible Notes
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$
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233,325
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Restructuring Charges
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(in thousands)
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Restructuring balance at December 31, 2016
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$
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—
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Costs incurred
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1,451
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Cash paid
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(1,616
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)
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Other adjustments
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181
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Restructuring balance at March 31, 2017
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$
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16
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As of March 31,
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2017
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2016
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Stock options
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1,595
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|
86
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Unvested restricted stock units
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930
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|
|
—
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Warrants
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14,515
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—
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Convertible notes
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1,619
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—
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Total
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18,659
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|
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86
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U.S.
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Brazil
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Other Foreign Countries
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Total
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(in thousands)
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Metreleptin
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11,474
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1,227
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1,259
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13,960
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Lomitapide
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10,876
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1,640
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3,508
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16,024
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Total
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$
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22,350
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$
|
2,867
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$
|
4,767
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$
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29,984
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Insurance Proceeds Receivable
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Class action lawsuit insurance proceeds
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$
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22,000
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|
|
|
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Provision for Legal Settlement
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|
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Class action lawsuit settlement
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$
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(22,250
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)
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DOJ and SEC settlement
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(40,761
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)
|
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Total provision for legal settlement
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$
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(63,011
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)
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•
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Metreleptin, a recombinant analog of human leptin, is marketed in the United States ("U.S.") under the brand name MYALEPT (metreleptin) for injection ("MYALEPT"). MYALEPT is approved in the U.S. as an adjunct to diet as replacement therapy to treat the complications of leptin deficiency in patients with congenital or acquired generalized lipodystrophy ("GL"). In December 2016, we submitted a marketing authorization application ("MAA") to the European Medicines Agency ("EMA") to seek approval for metreleptin, under the brand name MYALEPTA, as replacement therapy to treat complications of leptin deficiency in patients with GL and in a subset of patients with partial lipodystrophy ("PL"). We also expect to submit a supplemental biologics licensing application (sBLA) to the U.S. Food and Drug Administration ("FDA") in the first half of 2017, seeking to expand MYALEPT’s indication in the U.S. to the PL subset, subject to concurrence from the FDA that an additional study would not be required before approval. We also plan to file for formal regulatory approvals for metreleptin in GL and, subject to EMA feedback on the PL subset indication, the PL subset throughout 2017 and early 2018 in other key markets, including Brazil and Colombia. We offer metreleptin through expanded access programs in countries where permitted by applicable regulatory authorities and under applicable laws, and generate revenue in certain markets where named patient sales are permitted based on the approval of metreleptin in the U.S. In addition to the PL subset, we plan to use our knowledge of the diverse effects of leptin on various physiologic functions to explore new opportunities for metreleptin as a platform drug to potentially treat patients suffering from a range of low-leptin mediated metabolic diseases. We are evaluating and prioritizing these potential opportunities and plan to provide an update in the summer of 2017.
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•
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Lomitapide is marketed in the U.S. under the brand name JUXTAPID (lomitapide) capsules ("JUXTAPID"). JUXTAPID is approved in the U.S. as an adjunct to a low-fat diet and other lipid-lowering treatments, including low-density lipoprotein ("LDL") apheresis where available, to reduce low-density lipoprotein cholesterol ("LDL-C"), total cholesterol ("TC"), apolipoprotein B ("apo B") and non-high-density lipoprotein cholesterol ("non-HDL-C") in adult patients with homozygous familial hypercholesterolemia ("HoFH"). Lomitapide is approved in the European Union ("EU"), under the brand name LOJUXTA (lomitapide) hard capsules ("LOJUXTA") for the treatment of adult patients with HoFH, as well as in Japan, Canada, and a small number of other countries. In December 2016, Aegerion out-licensed the rights to commercialize LOJUXTA in the EU and certain other jurisdictions to Amryt Pharma plc ("Amryt") and will receive sales milestones and royalties on net sales in those jurisdictions. In December 2016, Aegerion launched JUXTAPID as a treatment for HoFH in Japan, after receiving reimbursement approval. Lomitapide is also sold, on a named patient basis, in Brazil and in a limited number of other countries outside the U.S. where such sales are permitted as a result of the approval of lomitapide in the U.S. or the EU.
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•
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building and maintaining market acceptance for MYALEPT in the U.S. for the treatment of complications of leptin deficiency in GL patients, and supporting named patient sales of metreleptin in GL in Brazil, particularly in light of local economic challenges and ongoing governmental investigations, and other key countries, including France and Turkey, where such sales are permitted as a result of the U.S. approval or under local law;
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•
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preparing for the launch of metreleptin in Europe as a treatment for complications of leptin deficiency in GL patients and a subset of PL, in the event we obtain regulatory, pricing and reimbursement approvals in the EU for metreleptin;
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•
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evaluating the potential for future clinical development of metreleptin in additional indications, including a subset of PL, if we are unable to secure approval of such indication with the current metreleptin clinical data package, as well as potentially other low-leptin mediated metabolic diseases;
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•
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stabilizing sales of JUXTAPID as a treatment for adult HoFH patients in the U.S. despite competition from PCSK9 inhibitor products, among other factors, which have had a significant adverse impact on sales of JUXTAPID, and gaining market acceptance in the other countries where lomitapide is approved and being commercialized, or may in the future receive approval and be commercialized;
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•
|
managing our costs and expenses to better align with our revenues, and strengthening our capital structure, while supporting approved products in a compliant manner;
|
•
|
continuing to support patient access to and reimbursement for our products in the U.S. without significant restrictions, particularly given the availability of PCSK9 inhibitor products in the U.S., which has adversely impacted reimbursement of JUXTAPID, and given the considerable number of JUXTAPID patients in the U.S. who are on Medicare Part D and the significant percentage of such patients who may not be able to afford their out-of-pocket co-payments for our products, given that the only source of financial support for some of the patients may be through patient assistance programs operated by independent charitable 501(c)(3) organizations that may not provide adequate financial assistance;
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•
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implementing the modified JUXTAPID Risk Evaluation Management Strategy ("REMS") program in the U.S., which includes requirements to recertify all prescribers and pharmacies and a new patient counseling and acknowledgment requirement for existing and new patients, by the July 2, 2017 implementation deadline, while working to limit adult HoFH patient attrition from JUXTAPID as a result of such new requirements;
|
•
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supporting the recent launch of JUXTAPID in Japan;
|
•
|
continuing to support sales of lomitapide as a treatment for HoFH in Brazil on a named patient basis, particularly in light of the economic challenges, ongoing government investigations, and ongoing court proceedings reviewing the regulatory framework for named patient sales in Brazil, and in other key countries where named patient sales are permitted, despite the availability of PCSK9 inhibitors on a named patient sales basis in such countries;
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•
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gaining regulatory, pricing and reimbursement approvals to market our products in countries in which the products are not currently approved and/or reimbursed or for new indications, including obtaining approval of the MAA seeking marketing approval of metreleptin in the EU as a treatment for complications of leptin deficiency in GL patients and a subset of PL; seeking approval of metreleptin in the U.S. for a subset of PL based on the existing clinical data package for metreleptin, subject to discussions with the FDA; and seeking approval of metreleptin in Brazil and other key markets as a treatment for complications of leptin deficiency in GL patients, and subject to EMA feedback on the PL subset indication, PL subset patients;
|
•
|
reviewing the clinical and regulatory pathway for zuretinol to determine the optimal development and business strategy for this product candidate and continuing clinical development work on zuretinol;
|
•
|
engaging in possible further development efforts related to our existing products, and assessing, and possibly acquiring, potential new product candidates targeted at rare diseases where we believe we can leverage our infrastructure and expertise;
|
•
|
minimizing the number of patients who are eligible to receive but decide not to commence treatment with our products, or who discontinue treatment, by supporting activities such as patient support programs, to the extent permitted in a particular country;
|
•
|
continuing to embed a culture of compliance, ethics and integrity throughout Novelion and its subsidiaries;
|
•
|
Aegerion reaching a definitive agreement with the DOJ and the SEC with respect to its ongoing investigations in accordance with the terms of the agreements in principle it entered into in May 2016 and managing other ongoing government investigations pertaining to its products;
|
•
|
Aegerion receiving final court approval of its ongoing securities class action in accordance with the terms of the agreement in principle entered into in November 2016; and
|
•
|
defending challenges to the patents or our claims of exclusivity for lomitapide in the U.S., including against potential generic submission with the FDA with respect to lomitapide; and expanding the intellectual property portfolio for our products.
|
•
|
Net revenues were
$30.0 million
for the three months ended March 31, 2017, representing revenue from lomitapide and metreleptin.
|
•
|
Costs of product sales were
$16.4 million
for the three months ended March 31, 2017, representing costs of selling lomitapide and metreleptin.
|
•
|
Selling, general and administrative expenses increased from
$5.9 million
in the three months ended March 31, 2016 to
$24.5 million
in the three months ended March 31, 2017. This increase was primarily due to our recognition of 100% of
|
•
|
Research and development expenses increased from
$3.0 million
in the three months ended March 31, 2016 to
$9.3 million
in the three months ended March 31, 2017. This increase was primarily driven by our recognition of 100% of Aegerion’s financial performance in the three months ended March 31, 2017.
|
•
|
We used
$24.8 million
of net cash from operations for the three months ended March 31, 2017, due largely to a
$31.0 million
net loss, $5.2 million in nonrecurring payments associated with the Merger, and $4.4 million of changes in other working capital, offset by non-cash adjustments of
$15.8 million
. Cash and cash equivalents totaled approximately
$84.8 million
as of March 31, 2017.
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|
%
|
|||||||
Net revenues
|
$
|
29,984
|
|
|
$
|
—
|
|
|
$
|
29,984
|
|
|
nm
|
|
Cost of product sales
|
16,445
|
|
|
—
|
|
|
16,445
|
|
|
nm
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
24,451
|
|
|
5,936
|
|
|
18,515
|
|
|
312
|
%
|
|||
Research and development
|
9,300
|
|
|
2,990
|
|
|
6,310
|
|
|
211
|
%
|
|||
Restructuring charges
|
1,451
|
|
|
—
|
|
|
1,451
|
|
|
nm
|
|
|||
Total operating expenses
|
35,202
|
|
|
8,926
|
|
|
26,276
|
|
|
294
|
%
|
|||
Loss from operations
|
(21,663
|
)
|
|
(8,926
|
)
|
|
(12,737
|
)
|
|
143
|
%
|
|||
Interest (expense) income, net
|
(9,212
|
)
|
|
75
|
|
|
(9,287
|
)
|
|
nm
|
|
|||
Fair value loss on investment
|
—
|
|
|
(12,960
|
)
|
|
12,960
|
|
|
—
|
%
|
|||
Other income (expense), net
|
52
|
|
|
(77
|
)
|
|
129
|
|
|
(168
|
)%
|
|||
Loss before provision for income taxes
|
(30,823
|
)
|
|
(21,888
|
)
|
|
(8,935
|
)
|
|
41
|
%
|
|||
Provision for income taxes
|
(139
|
)
|
|
(6
|
)
|
|
(133
|
)
|
|
nm
|
|
|||
Net loss
|
$
|
(30,962
|
)
|
|
$
|
(21,894
|
)
|
|
$
|
(9,068
|
)
|
|
41
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Lomitapide
|
$
|
16,024
|
|
|
$
|
—
|
|
Metreleptin
|
13,960
|
|
|
—
|
|
||
Total net revenues
|
$
|
29,984
|
|
|
$
|
—
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Net cash provided by/(used in):
|
|
|
|
||||
Operating activities
|
$
|
(24,834
|
)
|
|
$
|
(8,912
|
)
|
Investing activities
|
(273
|
)
|
|
(69
|
)
|
||
Financing activities
|
284
|
|
|
(30,000
|
)
|
||
Effect of exchange rates on cash
|
652
|
|
|
13
|
|
||
Net decrease in cash and cash equivalents
|
$
|
(24,171
|
)
|
|
$
|
(38,968
|
)
|
•
|
A significant increase in the net loss recognized by the Company quarter over quarter.
|
•
|
A negative operating cash flow variance in the three months ended March 31, 2016 of $13.0 million related to a loss recorded based on the mark-to-market adjustment on the Aralez Investment to reflect changes in value from the acquisition date of February 5, 2016 through March 31, 2016.
|
•
|
Negative operating cash flows in the three months ended March 31, 2017 as a result of the Merger. These negative operating cash outflows were offset by non-cash expenses, including non-cash interest expense of
$7.7 million
, the amortization of intangible assets acquired of
$6.2 million
, and stock-based compensation of
$1.4 million
.
|
•
|
Changes in net working capital, which included, in the three months ended March 31, 2017, a decrease in accounts payable of
$8.9 million
and accrued liabilities of
$3.7 million
, and an increase in accounts receivable of
$2.1 million
. This was partially offset by decreases in inventory of
$5.5 million
.
|
•
|
the success of our commercialization efforts and the level of revenues generated from sales of metreleptin and lomitapide in the U.S.;
|
•
|
the level of revenue received from named patient sales of metreleptin and lomitapide in Brazil and other key countries where a mechanism exists to sell the product on a pre-approval basis in such country based on U.S. approval of such products or EU approval of lomitapide, particularly in light of the availability of a PCSK9 inhibitor product in Brazil and the ongoing court proceedings in Brazil reviewing the regulatory framework for named patient sales;
|
•
|
the level of physician, patient and payer acceptance of lomitapide and metreleptin;
|
•
|
our ability to manage our costs and expenses to better align with our revenues and strengthen our capital structure, while supporting approved products in a compliant manner;
|
•
|
the timing and cost of seeking regulatory approvals and conducting potential future clinical development of metreleptin in additional indications, pursuing possible lifecycle management opportunities for metreleptin, and conducting potential development of the zuretinol program, including the timing and cost of securing and supplying drug substance and drug product to support such activities;
|
•
|
gaining regulatory and pricing and reimbursement approvals to market our products in countries in which the products are not currently approved and/or reimbursed, where it makes business sense to seek such approval, without significant restrictions, discounts, caps or other cost containment measures, including regulatory and pricing and reimbursement approval of metreleptin in the EU, in connection with which we filed an MAA in the EMA in December 2016, and regulatory approval of metreleptin in the U.S. for a subset of PL based on the existing clinical data package for metreleptin, subject to discussions with the FDA;
|
•
|
the extent of the negative impact of the availability of PCSK9 inhibitor products on sales of JUXTAPID in the U.S., which, among other factors, have caused a significant number of JUXTAPID patients to discontinue JUXTAPID and switch to a PCSK9 inhibitor product, and significantly decreased the rate at which new HoFH patients start treatment with lomitapide;
|
•
|
the provision of free PCSK9 inhibitor drug to adult HoFH patients by the companies that are commercializing PCSK9 inhibitor products, which such companies may have ceased, but which historically has had a negative impact on the rate at which new patients start treatment with lomitapide and has caused more patients than we expected to discontinue lomitapide and switch their treatment to PCSK9 inhibitor products;
|
•
|
requirements of insurance companies, managed care organizations, other private payers, and government entities that provide reimbursement for medical costs in the U.S. to require that newly diagnosed adult HoFH patients be treated with PCSK9 inhibitor products prior to JUXTAPID, that current JUXTAPID patients switch to PCSK9 inhibitor products, and that patients fail to adequately respond to PCSK9 inhibitor products before providing reimbursement for JUXTAPID at the prices at which we offer JUXTAPID;
|
•
|
the willingness of insurance companies, managed care organizations, other private payers, and government entities that provide reimbursement for medical costs in the U.S. to continue to provide reimbursement for our products at the prices at which we offer our products without imposing any additional major hurdles to access or other significant restrictions or limitations, and the ability and willingness of HoFH and GL patients to pay, or to arrange for payment assistance with respect to, any patient cost-sharing amounts for our products applicable under their insurance coverage, particularly in light of recent reductions in contributions to 501(c)(3) patient organizations by pharmaceutical companies;
|
•
|
the cost of building and maintaining the sales and marketing capabilities necessary for the commercialization of our products for their targeted indications in the market(s) in which each has received regulatory approval and we elect to commercialize such products, to the extent reimbursement and pricing approvals are obtained, and certain other key international markets, if approved;
|
•
|
the timing and costs of future business development opportunities;
|
•
|
the cost of filing, prosecuting and enforcing patent claims, including the cost of defending any challenges to the patents or our claims of exclusivity;
|
•
|
the status of ongoing government investigations and lawsuits, including the disclosure of possible or actual outcomes, including regarding the preliminary agreements in principle that have been reached with the DOJ and the SEC;
|
•
|
the costs of our manufacturing-related activities and the other costs of commercializing our products;
|
•
|
the costs associated with ongoing government investigations and lawsuits, including any damages, settlement amounts, fines or other payments, or implementation of compliance related agreements or consent decrees, that may result from settlements or enforcement actions related to government investigations or whether we are successful in our efforts to defend ourselves in, or to settle on acceptable terms, ongoing or future litigation;
|
•
|
the levels, timing and collection of revenue received from sales of our products in the future;
|
•
|
the timing and costs of satisfying our debt obligations, including interest payments and any amounts due upon the maturity of such debt, including under the Convertible Notes;
|
•
|
the cost of our observational cohort studies and other post-marketing commitments, including to the FDA and in any other countries where our products are ultimately approved; and
|
•
|
the timing and cost of other clinical development activities.
|
•
|
Business combination transactions will continue to be considered and evaluated by senior finance management; and
|
•
|
Management will seek the advice of outside consultants to assist in the design of precise controls to effectively review and approve business combination transactions.
|
4.1*
|
Amended and Restated Supplemental Indenture, by and among Aegerion, the Company, and The Bank of New York Mellon Trust Company, N.A., dated as of May 8, 2017.
|
10.1*
|
Amended and Restated Employment Agreement, by and between Mary Szela and the Company, dated as of May 8, 2017.
|
10.2*
|
Form of Amendment to Employment Agreement (Executives).
|
31.1*
|
Certification of Mary Szela, Chief Executive Officer of the Company, filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
31.2*
|
Certification of Gregory D. Perry, Chief Financial Officer of the Company, filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
32.1**
|
Certification of Mary Szela, Chief Executive Officer of the Company, furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
32.2**
|
Certification of Gregory D. Perry, Chief Financial Officer of the Company, furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.INS*
|
XBRL Instance Document.
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
NOVELION THERAPEUTICS INC.
|
||
|
|
|
(Registrant)
|
|
|
|
|
Date: May 9, 2017
|
|
By:
|
/s/ Mary Szela
|
|
|
|
Mary Szela
|
|
|
|
Chief Executive Officer (principal executive officer) and Director
|
|
|
|
|
Date: May 9, 2017
|
|
By:
|
/s/ Gregory D. Perry
|
|
|
|
Gregory D. Perry
|
|
|
|
Chief Financial and Administrative Officer (principal financial officer)
|
1.
|
Defined Terms:
In the Employment Agreement, references to the “
Agreement
” or the “
Employment Agreement
” (or any other references to the terms and conditions of your employment) will mean the Employment Agreement as modified and supplemented by this Amendment Agreement.
|
2.
|
Change of Control Benefits upon Termination without Cause or with Good Reason:
The definition of “Severance Benefits” in the Aegerion Agreement is amended by adding the underlined provisions as follows:
|
3.
|
Sale Event:
For all purposes under the Employment Agreement and despite Section 7(d) of the Aegerion Agreement, a “
Sale Event
” means (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity; (ii) a merger, reorganization or consolidation pursuant to
|
4.
|
Modified Economic Cutback Following a Sale Event
. The Employment Agreement is amended by adding the following paragraph:
|
5.
|
The capitalized terms in this Amendment Agreement that are not defined herein have the same meaning as in the Employment Agreement. This Amendment Agreement will be effective as of the date this letter is signed by you.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Novelion Therapeutics Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Mary Szela
|
|
Name:
|
Mary Szela
|
Title:
|
Chief Executive Officer (principal executive officer) and Director
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Novelion Therapeutics Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Gregory D. Perry
|
|
Name:
|
Gregory D. Perry
|
Title:
|
Chief Financial and Administrative Officer (principal financial officer)
|
Date: May 9, 2017
|
/s/ Mary Szela
|
|
|
Name:
|
Mary Szela
|
|
Title:
|
Chief Executive Officer (principal executive officer) and Director
|
Date: May 9, 2017
|
/s/ Gregory D. Perry
|
|
|
Name:
|
Gregory D. Perry
|
|
Title:
|
Chief Financial Officer (principal financial officer)
|