|
|
ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
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Delaware
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|
93-0979187
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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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11500 South Eastern Avenue, Suite 240
Henderson, Nevada
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89052
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
|
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¨
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Accelerated filer
|
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ý
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
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¨
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Item
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Page
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PART I. FINANCIAL INFORMATION
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|
Item 1.
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Condensed Consolidated Financial Statements (unaudited):
|
|
|
||
|
||
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||
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||
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||
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Item 2.
|
||
Item 3.
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||
Item 4.
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||
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PART II. OTHER INFORMATION
|
|
Item 1.
|
||
Item 1A.
|
||
Item 6.
|
||
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June 30,
2015 |
|
December 31,
2014 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
142,271
|
|
|
$
|
129,942
|
|
Marketable securities
|
3,308
|
|
|
3,306
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $120 and $120, respectively
|
41,684
|
|
|
70,758
|
|
||
Other receivables
|
8,245
|
|
|
5,489
|
|
||
Inventories
|
8,794
|
|
|
9,200
|
|
||
Prepaid expenses
|
2,688
|
|
|
3,774
|
|
||
Deferred tax assets
|
172
|
|
|
—
|
|
||
Total current assets
|
207,162
|
|
|
222,469
|
|
||
Property and equipment, net of accumulated depreciation
|
1,265
|
|
|
1,405
|
|
||
Intangible assets, net of accumulated amortization
|
207,955
|
|
|
230,100
|
|
||
Goodwill
|
17,995
|
|
|
18,195
|
|
||
Other assets
|
19,952
|
|
|
17,864
|
|
||
Total assets
|
$
|
454,329
|
|
|
$
|
490,033
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and other accrued liabilities
|
$
|
71,823
|
|
|
$
|
84,994
|
|
Accrued payroll and benefits
|
5,777
|
|
|
8,444
|
|
||
Deferred revenue
|
7,087
|
|
|
9,959
|
|
||
Drug development liability
|
573
|
|
|
1,141
|
|
||
Acquisition-related contingent obligations
|
5,243
|
|
|
4,901
|
|
||
Total current liabilities
|
90,503
|
|
|
109,439
|
|
||
Drug development liability, less current portion
|
13,916
|
|
|
14,644
|
|
||
Deferred revenue, less current portion
|
414
|
|
|
—
|
|
||
Acquisition-related contingent obligations, less current portion
|
2,745
|
|
|
2,441
|
|
||
Deferred tax liability
|
6,753
|
|
|
6,569
|
|
||
Other long-term liabilities
|
6,994
|
|
|
6,088
|
|
||
Convertible senior notes
|
98,866
|
|
|
96,298
|
|
||
Total liabilities
|
220,191
|
|
|
235,479
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized:
|
|
|
|
||||
Series B junior participating preferred stock, $0.001 par value; 1,500,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Series E Convertible Voting Preferred Stock, $0.001 par value and $10,000 stated value; 2,000 shares authorized; 20 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively (convertible into 40,000 shares of common stock, with aggregate liquidation value of $240)
|
123
|
|
|
123
|
|
||
Common stock, $0.001 par value; 175,000,000 shares authorized; 67,245,602 and 65,969,699 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively
|
66
|
|
|
66
|
|
||
Additional paid-in capital
|
545,359
|
|
|
538,553
|
|
||
Accumulated other comprehensive loss
|
(165
|
)
|
|
(850
|
)
|
||
Accumulated deficit
|
(311,245
|
)
|
|
(283,338
|
)
|
||
Total stockholders’ equity
|
234,138
|
|
|
254,554
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
454,329
|
|
|
$
|
490,033
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Product sales, net
|
$
|
35,144
|
|
|
$
|
46,855
|
|
|
$
|
73,557
|
|
|
$
|
86,951
|
|
License fees and service revenue
|
9,838
|
|
|
—
|
|
|
10,042
|
|
|
28
|
|
||||
Total revenues
|
$
|
44,982
|
|
|
$
|
46,855
|
|
|
$
|
83,599
|
|
|
$
|
86,979
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of product sales (excludes amortization of intangible assets)
|
5,990
|
|
|
6,156
|
|
|
13,061
|
|
|
12,434
|
|
||||
Selling, general and administrative
|
22,552
|
|
|
25,399
|
|
|
45,886
|
|
|
48,802
|
|
||||
Research and development
|
9,558
|
|
|
11,335
|
|
|
25,409
|
|
|
40,832
|
|
||||
Amortization and impairment of intangible assets
|
6,916
|
|
|
5,361
|
|
|
20,938
|
|
|
10,721
|
|
||||
Total operating costs and expenses
|
45,016
|
|
|
48,251
|
|
|
105,294
|
|
|
112,789
|
|
||||
Loss from operations
|
(34
|
)
|
|
(1,396
|
)
|
|
(21,695
|
)
|
|
(25,810
|
)
|
||||
Other expenses:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(2,258
|
)
|
|
(1,976
|
)
|
|
(4,486
|
)
|
|
(4,043
|
)
|
||||
Change in fair value of contingent consideration related to acquisitions
|
(146
|
)
|
|
(1,005
|
)
|
|
(646
|
)
|
|
(1,729
|
)
|
||||
Other income (expense), net
|
69
|
|
|
(487
|
)
|
|
(966
|
)
|
|
(845
|
)
|
||||
Total other expenses
|
(2,335
|
)
|
|
(3,468
|
)
|
|
(6,098
|
)
|
|
(6,617
|
)
|
||||
Loss before income taxes
|
(2,369
|
)
|
|
(4,864
|
)
|
|
(27,793
|
)
|
|
(32,427
|
)
|
||||
Benefit (provision) for income taxes
|
23
|
|
|
1,301
|
|
|
(115
|
)
|
|
1,223
|
|
||||
Net loss
|
$
|
(2,346
|
)
|
|
$
|
(3,563
|
)
|
|
$
|
(27,908
|
)
|
|
$
|
(31,204
|
)
|
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
|
(0.04
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.49
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
65,466,004
|
|
|
64,609,197
|
|
|
65,167,162
|
|
|
64,119,441
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net loss
|
$
|
(2,346
|
)
|
|
$
|
(3,563
|
)
|
|
$
|
(27,908
|
)
|
|
$
|
(31,204
|
)
|
Other comprehensive (loss) income, net of income tax:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain on available-for-sale securities
|
1,806
|
|
|
741
|
|
|
2,585
|
|
|
1,055
|
|
||||
Adjustment for realized loss on available-for-sale securities, and included in net income
|
—
|
|
|
(279
|
)
|
|
—
|
|
|
(398
|
)
|
||||
Foreign currency translation adjustments
|
106
|
|
|
95
|
|
|
(1,900
|
)
|
|
183
|
|
||||
Other comprehensive income
|
1,912
|
|
|
557
|
|
|
685
|
|
|
840
|
|
||||
Total comprehensive loss
|
$
|
(434
|
)
|
|
$
|
(3,006
|
)
|
|
$
|
(27,223
|
)
|
|
$
|
(30,364
|
)
|
|
Six Months Ended
June 30, |
||||||
|
2015
|
|
2014
|
||||
Cash Flows From Operating Activities:
|
|
|
|
||||
Net loss
|
$
|
(27,908
|
)
|
|
$
|
(31,204
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
14,129
|
|
|
12,179
|
|
||
Stock-based compensation
|
5,990
|
|
|
5,525
|
|
||
Accretion of debt discount to interest expense on 2018 Convertible Notes (Note 11)
|
2,569
|
|
|
2,332
|
|
||
Amortization of deferred financing costs to interest expense on 2018 Convertible Notes (Note 11)
|
327
|
|
|
308
|
|
||
Bad debt (recovery) expense
|
—
|
|
|
(28
|
)
|
||
Impairment of intangible assets (Note 3(f))
|
7,160
|
|
|
—
|
|
||
Unrealized foreign currency exchange loss
|
3,992
|
|
|
606
|
|
||
Research and development expense for the value of stock issued to TopoTarget in connection with milestone achievement
|
—
|
|
|
7,790
|
|
||
Change in fair value of contingent consideration related to acquisitions (Note 9)
|
646
|
|
|
1,729
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
28,966
|
|
|
(7,231
|
)
|
||
Other receivables
|
(2,757
|
)
|
|
(4,263
|
)
|
||
Inventories
|
398
|
|
|
2,638
|
|
||
Prepaid expenses
|
1,139
|
|
|
(197
|
)
|
||
Deferred tax assets
|
(237
|
)
|
|
72
|
|
||
Other assets
|
(2,991
|
)
|
|
(1,873
|
)
|
||
Accounts payable and other accrued obligations
|
(13,052
|
)
|
|
(10,659
|
)
|
||
Accrued payroll and benefits
|
(2,645
|
)
|
|
(1,723
|
)
|
||
Drug development liability
|
(1,296
|
)
|
|
(554
|
)
|
||
Deferred revenue
|
(2,531
|
)
|
|
(123
|
)
|
||
Deferred tax liability
|
184
|
|
|
602
|
|
||
Other long-term liabilities
|
905
|
|
|
(256
|
)
|
||
Net cash provided by (used in) operating activities
|
12,988
|
|
|
(24,330
|
)
|
||
Cash Flows From Investing Activities:
|
|
|
|
||||
Redemption of certificate of deposit
|
—
|
|
|
165
|
|
||
Purchases of property and equipment
|
(212
|
)
|
|
(605
|
)
|
||
Net cash used in investing activities
|
(212
|
)
|
|
(440
|
)
|
||
Cash Flows From Financing Activities:
|
|
|
|
||||
Proceeds from exercise of stock options
|
996
|
|
|
1,339
|
|
||
Proceeds from sale of stock under employee stock purchase plan
|
335
|
|
|
348
|
|
||
Purchase and retirement of restricted stock to satisfy employee tax liability at vesting
|
(515
|
)
|
|
(590
|
)
|
||
Net cash provided by financing activities
|
816
|
|
|
1,097
|
|
||
Effect of exchange rates on cash and equivalents
|
(1,263
|
)
|
|
(228
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
12,329
|
|
|
(23,901
|
)
|
||
Cash and cash equivalents—beginning of period
|
$
|
129,942
|
|
|
$
|
156,306
|
|
Cash and cash equivalents—end of period
|
$
|
142,271
|
|
|
$
|
132,405
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for income taxes
|
$
|
332
|
|
|
$
|
329
|
|
Cash paid for interest
|
$
|
1,650
|
|
|
$
|
1,588
|
|
•
|
FUSILEV
®
injection for patients with advanced metastatic colorectal cancer and to counteract certain effects of methotrexate therapy;
|
•
|
ZEVALIN
®
injection for patients with follicular non-Hodgkin’s lymphoma;
|
•
|
FOLOTYN
®
injection for patients with relapsed or refractory peripheral T-cell lymphoma;
|
•
|
MARQIBO
®
injection for patients with Philadelphia chromosome–negative acute lymphoblastic leukemia; and
|
•
|
BELEODAQ
®
injection for patients with relapsed or refractory peripheral T-cell lymphoma
|
(1)
|
appropriate evidence of a binding arrangement exists with our customer;
|
(2)
|
price is substantially fixed and determinable;
|
(3)
|
collection from our customer is reasonably assured;
|
(4)
|
our customer’s obligation to pay us is not contingent on resale of the product;
|
(5)
|
we do not have significant continued performance obligations to our customer; and
|
(6)
|
we have a reasonable basis to estimate returns.
|
(a)
|
a significant decrease in the market value of an asset;
|
(b)
|
a significant adverse change in the extent or manner in which an asset is used; or
|
(c)
|
an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset.
|
|
|
|
|
|
|
|
|
|
|
Marketable Securities
|
|||||||||||||||||
|
Cost
|
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Estimated
fair Value |
|
Cash and cash
equivalents |
|
Current
|
|
Long
Term |
||||||||||||||
June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bank deposits
|
$
|
65,277
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65,277
|
|
|
$
|
65,277
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market funds
|
76,994
|
|
|
—
|
|
|
—
|
|
|
76,994
|
|
|
76,994
|
|
|
—
|
|
|
—
|
|
|||||||
Bank CDs
|
245
|
|
|
—
|
|
|
—
|
|
|
245
|
|
|
—
|
|
|
245
|
|
|
—
|
|
|||||||
Mutual funds
|
3,063
|
|
|
—
|
|
|
—
|
|
|
3,063
|
|
|
—
|
|
|
3,063
|
|
|
—
|
|
|||||||
Total cash and equivalents and marketable securities
|
$
|
145,579
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
145,579
|
|
|
$
|
142,271
|
|
|
$
|
3,308
|
|
|
$
|
—
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bank deposits
|
$
|
62,997
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62,997
|
|
|
$
|
62,997
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market funds
|
66,945
|
|
|
—
|
|
|
—
|
|
|
66,945
|
|
|
66,945
|
|
|
—
|
|
|
—
|
|
|||||||
Bank CDs
|
244
|
|
|
—
|
|
|
—
|
|
|
244
|
|
|
—
|
|
|
244
|
|
|
—
|
|
|||||||
Mutual funds
|
3,062
|
|
|
—
|
|
|
—
|
|
|
3,062
|
|
|
—
|
|
|
3,062
|
|
|
—
|
|
|||||||
Total cash and equivalents and marketable securities
|
$
|
133,248
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
133,248
|
|
|
$
|
129,942
|
|
|
$
|
3,306
|
|
|
$
|
—
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Computer hardware and software
|
$
|
3,824
|
|
|
$
|
3,616
|
|
Laboratory equipment
|
609
|
|
|
643
|
|
||
Office furniture
|
348
|
|
|
344
|
|
||
Leasehold improvements
|
2,872
|
|
|
2,847
|
|
||
Property and equipment, at cost
|
7,653
|
|
|
7,450
|
|
||
(Less): Accumulated depreciation
|
(6,388
|
)
|
|
(6,045
|
)
|
||
Property and equipment, net of accumulated depreciation
|
$
|
1,265
|
|
|
$
|
1,405
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Raw materials
|
$
|
1,061
|
|
|
$
|
1,507
|
|
Work-in-process*
|
5,216
|
|
|
3,979
|
|
||
Finished goods
|
2,517
|
|
|
3,714
|
|
||
Inventories
|
$
|
8,794
|
|
|
$
|
9,200
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Prepaid operating expenses
|
$
|
2,008
|
|
|
$
|
3,112
|
|
Short term debt issuance costs
|
680
|
|
|
662
|
|
||
Prepaid expenses
|
$
|
2,688
|
|
|
$
|
3,774
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Income tax receivable
|
$
|
1,651
|
|
|
$
|
1,387
|
|
CASI secured promissory note (see Note 10)
|
1,500
|
|
|
—
|
|
||
Insurance receivable
|
365
|
|
|
—
|
|
||
Research and development expenses - reimbursements due
|
4,729
|
|
|
4,102
|
|
||
Other receivables
|
$
|
8,245
|
|
|
$
|
5,489
|
|
|
|
|
June 30, 2015
|
||||||||||||||||||||
|
Historical
Cost |
|
Accumulated
Amortization |
|
Foreign
Currency Translation |
|
Impairment
|
|
Net Amount
|
|
Full
Amortization Period (months) |
|
Remaining
Amortization Period (months) |
||||||||||
MARQIBO IPR&D (NHL indication)
|
$
|
17,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,600
|
|
|
n/a
|
|
n/a
|
EVOMELA IPR&D
|
7,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,700
|
|
|
n/a
|
|
n/a
|
|||||
BELEODAQ distribution rights
|
25,000
|
|
|
(1,875
|
)
|
|
—
|
|
|
—
|
|
|
23,125
|
|
|
160
|
|
148
|
|||||
MARQIBO distribution rights
|
26,900
|
|
|
(6,384
|
)
|
|
—
|
|
|
—
|
|
|
20,516
|
|
|
81
|
|
57
|
|||||
FOLOTYN distribution rights
|
118,400
|
|
|
(24,752
|
)
|
|
—
|
|
|
—
|
|
|
93,648
|
|
|
152
|
|
119
|
|||||
ZEVALIN distribution rights – U.S.
|
41,900
|
|
|
(28,871
|
)
|
|
—
|
|
|
—
|
|
|
13,029
|
|
|
123
|
|
45
|
|||||
ZEVALIN distribution rights – Ex-U.S.
|
23,490
|
|
|
(7,966
|
)
|
|
(4,023
|
)
|
|
—
|
|
|
11,501
|
|
|
96
|
|
57
|
|||||
FUSILEV distribution rights*
|
16,778
|
|
|
(7,912
|
)
|
|
—
|
|
|
(7,160
|
)
|
|
1,706
|
|
|
56
|
|
6
|
|||||
FOLOTYN out-license**
|
27,900
|
|
|
(7,747
|
)
|
|
—
|
|
|
(1,023
|
)
|
|
19,130
|
|
|
110
|
|
85
|
|||||
Total intangible assets
|
$
|
305,668
|
|
|
$
|
(85,507
|
)
|
|
$
|
(4,023
|
)
|
|
$
|
(8,183
|
)
|
|
$
|
207,955
|
|
|
|
|
|
|
|
|
December 31, 2014
|
||||||||||||||||
|
Historical
Cost |
|
Accumulated
Amortization |
|
Foreign
Currency Translation |
|
Impairment
|
|
Net Amount
|
||||||||||
MARQIBO IPR&D (NHL indication)
|
$
|
17,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,600
|
|
EVOMELA IPR&D
|
7,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,700
|
|
|||||
BELEODAQ distribution rights
|
25,000
|
|
|
(937
|
)
|
|
—
|
|
|
—
|
|
|
24,063
|
|
|||||
MARQIBO distribution rights
|
26,900
|
|
|
(4,225
|
)
|
|
—
|
|
|
—
|
|
|
22,675
|
|
|||||
FOLOTYN distribution rights
|
118,400
|
|
|
(20,030
|
)
|
|
—
|
|
|
—
|
|
|
98,370
|
|
|||||
ZEVALIN distribution rights – U.S.
|
41,900
|
|
|
(27,134
|
)
|
|
—
|
|
|
—
|
|
|
14,766
|
|
|||||
ZEVALIN distribution rights – Ex-U.S.
|
23,490
|
|
|
(7,402
|
)
|
|
(2,162
|
)
|
|
—
|
|
|
13,926
|
|
|||||
FUSILEV distribution rights
|
16,778
|
|
|
(6,270
|
)
|
|
—
|
|
|
—
|
|
|
10,508
|
|
|||||
FOLOTYN out-license
|
27,900
|
|
|
(6,385
|
)
|
|
—
|
|
|
(1,023
|
)
|
|
20,492
|
|
|||||
Total intangible assets
|
$
|
305,668
|
|
|
$
|
(72,383
|
)
|
|
$
|
(2,162
|
)
|
|
$
|
(1,023
|
)
|
|
$
|
230,100
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Acquisition of Talon
|
$
|
10,526
|
|
|
$
|
10,526
|
|
Acquisition of ZEVALIN Ex-U.S. distribution rights
|
2,525
|
|
|
2,525
|
|
||
Acquisition of Allos
|
5,346
|
|
|
5,346
|
|
||
Foreign currency exchange translation effects
|
(402
|
)
|
|
(202
|
)
|
||
Goodwill
|
$
|
17,995
|
|
|
$
|
18,195
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Equity securities (see Note 10)*
|
$
|
9,676
|
|
|
$
|
8,501
|
|
Supplies
|
241
|
|
|
234
|
|
||
2018 Convertible Notes issuance costs**
|
1,826
|
|
|
2,171
|
|
||
Executive officer life insurance – cash surrender value
|
8,209
|
|
|
6,958
|
|
||
Other assets
|
$
|
19,952
|
|
|
$
|
17,864
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Trade accounts payable and other accrueds
|
$
|
18,180
|
|
|
$
|
24,571
|
|
Accrued rebates
|
39,502
|
|
|
41,782
|
|
||
Accrued product royalty
|
3,009
|
|
|
5,182
|
|
||
Allowance for returns
|
1,586
|
|
|
1,135
|
|
||
Accrued data and distribution fees
|
2,729
|
|
|
3,952
|
|
||
Accrued GPO administrative fees
|
2,843
|
|
|
3,222
|
|
||
Inventory management fee
|
660
|
|
|
1,110
|
|
||
Allowance for chargebacks
|
3,314
|
|
|
4,040
|
|
||
Accounts payable and other accrueds
|
$
|
71,823
|
|
|
$
|
84,994
|
|
Description
|
Rebates and
Chargebacks |
|
Data and
Distribution, GPO Fees, and Inventory Management Fees |
|
Returns
|
||||||
Balance as of December 31, 2013
|
$
|
33,967
|
|
|
$
|
5,373
|
|
|
$
|
2,900
|
|
Add: provisions (recovery)
|
76,636
|
|
|
21,330
|
|
|
(78
|
)
|
|||
(Less): credits or actual allowances
|
(64,781
|
)
|
|
(18,419
|
)
|
|
(1,687
|
)
|
|||
Balance as of December 31, 2014
|
45,822
|
|
|
8,284
|
|
|
1,135
|
|
|||
Add: provisions
|
38,632
|
|
|
9,636
|
|
|
899
|
|
|||
(Less): credits or actual allowances
|
(41,638
|
)
|
|
(11,688
|
)
|
|
(448
|
)
|
|||
Balance as of June 30, 2015
|
$
|
42,816
|
|
|
$
|
6,232
|
|
|
$
|
1,586
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
CASI out-license (see Note 10)
|
$
|
—
|
|
|
$
|
9,959
|
|
FUSILEV deferred revenue*
|
7,039
|
|
|
—
|
|
||
Dr. Reddy's out-license (see Note 13(b)(iii))
|
462
|
|
|
—
|
|
||
Deferred revenue
|
$
|
7,501
|
|
|
$
|
9,959
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Accrued executive deferred compensation
|
$
|
5,989
|
|
|
$
|
4,694
|
|
Deferred rent (non-current portion)
|
275
|
|
|
364
|
|
||
Business acquisition liability
|
—
|
|
|
300
|
|
||
Other tax liabilities
|
730
|
|
|
730
|
|
||
Other long-term liabilities
|
$
|
6,994
|
|
|
$
|
6,088
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Gross product sales
|
$
|
52,800
|
|
|
$
|
68,329
|
|
|
$
|
115,398
|
|
|
$
|
129,828
|
|
Rebates and chargebacks
|
(13,705
|
)
|
|
(17,772
|
)
|
|
(31,850
|
)
|
|
(34,721
|
)
|
||||
Data, distribution and GPO administrative fees
|
(3,635
|
)
|
|
(4,920
|
)
|
|
(9,205
|
)
|
|
(9,416
|
)
|
||||
Prompt pay discount
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(5
|
)
|
||||
Product returns allowance
|
(315
|
)
|
|
1,220
|
|
|
(785
|
)
|
|
1,265
|
|
||||
Product sales, net
|
$
|
35,144
|
|
|
$
|
46,855
|
|
|
$
|
73,557
|
|
|
$
|
86,951
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||||||
United States
|
$
|
33,676
|
|
|
95.8
|
%
|
|
$
|
44,541
|
|
|
95.1
|
%
|
|
$
|
70,284
|
|
|
95.6
|
%
|
|
$
|
81,998
|
|
|
94.3
|
%
|
International:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Europe (ZEVALIN only)
|
514
|
|
|
1.5
|
%
|
|
796
|
|
|
1.7
|
%
|
|
1,097
|
|
|
1.5
|
%
|
|
1,836
|
|
|
2.1
|
%
|
||||
Asia Pacific (ZEVALIN only)
|
954
|
|
|
2.7
|
%
|
|
1,518
|
|
|
3.2
|
%
|
|
2,176
|
|
|
3.0
|
%
|
|
3,117
|
|
|
3.6
|
%
|
||||
Total international
|
1,468
|
|
|
4.2
|
%
|
|
2,314
|
|
|
4.9
|
%
|
|
3,273
|
|
|
4.4
|
%
|
|
4,953
|
|
|
5.7
|
%
|
||||
Product sales, net
|
$
|
35,144
|
|
|
100.0
|
%
|
|
$
|
46,855
|
|
|
100.0
|
%
|
|
$
|
73,557
|
|
|
100.0
|
%
|
|
$
|
86,951
|
|
|
100.0
|
%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||||||
FUSILEV
|
$
|
14,329
|
|
|
40.8
|
%
|
|
$
|
26,554
|
|
|
56.7
|
%
|
|
$
|
34,496
|
|
|
46.9
|
%
|
|
$
|
48,747
|
|
|
56.1
|
%
|
FOLOTYN
|
12,222
|
|
|
34.8
|
%
|
|
12,597
|
|
|
26.9
|
%
|
|
21,538
|
|
|
29.3
|
%
|
|
22,655
|
|
|
26.1
|
%
|
||||
ZEVALIN
|
4,802
|
|
|
13.7
|
%
|
|
6,336
|
|
|
13.5
|
%
|
|
9,023
|
|
|
12.3
|
%
|
|
12,636
|
|
|
14.5
|
%
|
||||
MARQIBO
|
2,080
|
|
|
5.9
|
%
|
|
1,368
|
|
|
2.9
|
%
|
|
3,974
|
|
|
5.4
|
%
|
|
2,913
|
|
|
3.4
|
%
|
||||
BELEODAQ
|
1,711
|
|
|
4.9
|
%
|
|
—
|
|
|
—
|
%
|
|
4,526
|
|
|
6.2
|
%
|
|
—
|
|
|
—
|
|
||||
Product sales, net
|
$
|
35,144
|
|
|
100.0
|
%
|
|
$
|
46,855
|
|
|
100.0
|
%
|
|
$
|
73,557
|
|
|
100.0
|
%
|
|
$
|
86,951
|
|
|
100.0
|
%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Cost of product sales
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
—
|
|
Research and development
|
419
|
|
|
511
|
|
|
852
|
|
|
955
|
|
||||
Selling, general and administrative
|
3,087
|
|
|
2,163
|
|
|
5,116
|
|
|
4,570
|
|
||||
Total stock-based compensation
|
$
|
3,528
|
|
|
$
|
2,674
|
|
|
$
|
5,990
|
|
|
$
|
5,525
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net loss
|
$
|
(2,346
|
)
|
|
$
|
(3,563
|
)
|
|
$
|
(27,908
|
)
|
|
$
|
(31,204
|
)
|
Weighted average shares – basic and diluted
|
65,466,004
|
|
|
64,609,197
|
|
|
65,167,162
|
|
|
64,119,441
|
|
||||
Net loss per share – basic and diluted
|
$
|
(0.04
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.49
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
2018 Convertible Notes
|
11,401,284
|
|
|
11,401,284
|
|
|
11,401,284
|
|
|
11,401,284
|
|
Common stock options
|
1,383,667
|
|
|
2,076,157
|
|
|
1,465,449
|
|
|
2,300,525
|
|
Restricted stock awards
|
1,544,492
|
|
|
1,021,825
|
|
|
1,544,492
|
|
|
1,021,825
|
|
Common stock warrants
|
30,236
|
|
|
111,601
|
|
|
37,470
|
|
|
129,512
|
|
Preferred stock
|
40,000
|
|
|
40,000
|
|
|
40,000
|
|
|
40,000
|
|
Total
|
14,399,679
|
|
|
14,650,867
|
|
|
14,488,695
|
|
|
14,893,146
|
|
|
June 30, 2015
Fair Value Measurements |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Bank CDs
|
$
|
—
|
|
|
$
|
245
|
|
|
$
|
—
|
|
|
$
|
245
|
|
Money market currency funds
|
—
|
|
|
76,994
|
|
|
—
|
|
|
76,994
|
|
||||
Equity securities
|
9,676
|
|
|
—
|
|
|
—
|
|
|
9,676
|
|
||||
Mutual funds
|
—
|
|
|
3,063
|
|
|
—
|
|
|
3,063
|
|
||||
Deferred compensation investments, including life insurance cash surrender value
|
—
|
|
|
8,209
|
|
|
—
|
|
|
8,209
|
|
||||
|
$
|
9,676
|
|
|
$
|
88,511
|
|
|
$
|
—
|
|
|
$
|
98,187
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred executive compensation liability
|
$
|
—
|
|
|
$
|
5,989
|
|
|
$
|
—
|
|
|
$
|
5,989
|
|
Drug development liability
|
—
|
|
|
—
|
|
|
14,489
|
|
|
14,489
|
|
||||
Ligand Contingent Consideration
|
—
|
|
|
—
|
|
|
5,243
|
|
|
5,243
|
|
||||
Talon CVR
|
—
|
|
|
—
|
|
|
2,683
|
|
|
2,683
|
|
||||
Corixa Liability
|
—
|
|
|
—
|
|
|
62
|
|
|
62
|
|
||||
|
$
|
—
|
|
|
$
|
5,989
|
|
|
$
|
22,477
|
|
|
$
|
28,466
|
|
|
December 31, 2014
Fair Value Measurements |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Bank CDs
|
$
|
—
|
|
|
$
|
244
|
|
|
$
|
—
|
|
|
$
|
244
|
|
Money market currency funds
|
—
|
|
|
66,945
|
|
|
—
|
|
|
66,945
|
|
||||
Equity securities
|
7,191
|
|
|
—
|
|
|
—
|
|
|
7,191
|
|
||||
Mutual funds
|
—
|
|
|
3,062
|
|
|
—
|
|
|
3,062
|
|
||||
Deferred compensation investments, including life insurance cash surrender value
|
—
|
|
|
6,958
|
|
|
—
|
|
|
6,958
|
|
||||
|
$
|
7,191
|
|
|
$
|
77,209
|
|
|
$
|
—
|
|
|
$
|
84,400
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred executive compensation liability
|
$
|
—
|
|
|
$
|
4,694
|
|
|
$
|
—
|
|
|
$
|
4,694
|
|
Deferred development costs
|
—
|
|
|
—
|
|
|
15,785
|
|
|
15,785
|
|
||||
Ligand Contingent Consideration
|
—
|
|
|
—
|
|
|
4,901
|
|
|
4,901
|
|
||||
Talon CVR
|
—
|
|
|
—
|
|
|
2,379
|
|
|
2,379
|
|
||||
Corixa Liability
|
—
|
|
|
—
|
|
|
62
|
|
|
62
|
|
||||
|
$
|
—
|
|
|
$
|
4,694
|
|
|
$
|
23,127
|
|
|
$
|
27,821
|
|
|
Fair Value Measurements of
Unobservable Inputs (Level 3) |
||
Balance at December 31, 2013
|
$
|
26,071
|
|
Transfers in (out) of Level 3
|
—
|
|
|
Deferred development costs
|
(1,957
|
)
|
|
Ligand Contingent Consideration
|
901
|
|
|
Talon CVR
|
(1,950
|
)
|
|
Corixa Liability
|
62
|
|
|
Balance at December 31, 2014
|
23,127
|
|
|
Transfers in (out) of Level 3
|
—
|
|
|
Deferred development costs (see Note 12)
|
(1,296
|
)
|
|
Ligand Contingent Consideration (see Note 9(b))
|
342
|
|
|
Talon CVR (see Note 9(a))
|
304
|
|
|
Corixa Liability (see Note 13(b)(i))
|
—
|
|
|
Balance at June 30, 2015**
|
$
|
22,477
|
|
•
|
$5.0 million
upon the achievement of net sales of MARQIBO in excess of
$30.0 million
in any calendar year
|
•
|
$10.0 million
upon the achievement of net sales of MARQIBO in excess of
$60.0 million
in any calendar year
|
•
|
$25.0 million
upon the achievement of net sales of MARQIBO in excess of
$100.0 million
in any calendar year
|
•
|
$50.0 million
upon the achievement of net sales of MARQIBO in excess of
$200.0 million
in any calendar year
|
•
|
$100.0 million
upon the achievement of net sales of MARQIBO in excess of
$400.0 million
in any calendar year
|
•
|
$5.0 million
upon receipt of marketing authorization from the FDA regarding Menadione Topical Lotion
|
|
|
||
Cash consideration
|
$
|
3,000
|
|
Ligand Contingent Consideration
|
4,700
|
|
|
Total purchase consideration
|
$
|
7,700
|
|
IPR&D EVOMELA rights
|
$
|
7,700
|
|
|
Fair Value of
Ligand Contingent Consideration |
||
December 31, 2014
|
$
|
4,901
|
|
Fair value adjustment for the six months ended June 30, 2015
|
342
|
|
|
June 30, 2015
|
$
|
5,243
|
|
CASI common stock (5.4 million shares)
|
$
|
8,649
|
|
(a)
|
CASI secured promissory note due March 17, 2016, net of fair value discount ($1.5 million face value and 0.5% annual coupon)
|
1,310
|
|
(b)
|
|
Total consideration received, net of fair value discount
|
$
|
9,959
|
|
(c)
|
(a)
|
Value based on the September 17, 2014 closing price of
5.4 million
shares of CASI common stock on the NASDAQ Capital Market of
$1.60
per share. Our current intention is to hold these securities on a long-term basis. Accordingly, we have presented its
$9.7 million
value as of
June 30, 2015
within "other assets" (rather than "marketable securities") on our accompanying Condensed Consolidated Balance Sheets. The change in fair value of these securities is reported within “unrealized gain on available-for-sale securities" on the Condensed Consolidated Statements of Comprehensive Loss.
|
(b)
|
Value estimated using the terms of the
$1.5 million
promissory note, the application of a synthetic debt rating based on CASI’s publicly-available financial information, and the prevailing interest yields on similar public debt securities as of September 17, 2014. The face value of the promissory note as of June 30, 2015 is included within "other receivables" on the accompanying Condensed Consolidated Balance Sheets.
|
(c)
|
Presented within "license fees and service revenue" in the accompanying Condensed Consolidated Statement of Operations for the three and six months ended
June 30, 2015
(see below).
|
Principal amount
|
$
|
120,000
|
|
(Less): Unamortized debt discount (amortized through December 2018)
|
(21,134
|
)
|
|
June 30, 2015
|
$
|
98,866
|
|
Contractual coupon interest expense
|
$
|
1,650
|
|
Amortization of debt issuance costs
|
327
|
|
|
Accretion of debt discount
|
2,569
|
|
|
Total
|
$
|
4,546
|
|
Effective interest rate
|
8.66
|
%
|
|
Drug
Development Liability, Current – FOLOTYN |
|
Drug
Development Liability, Long Term – FOLOTYN |
|
Total Drug
Development Liability – FOLOTYN |
||||||
Balance at December 31, 2014
|
$
|
1,141
|
|
|
$
|
14,644
|
|
|
$
|
15,785
|
|
Transfer from long-term to current in 2015
|
728
|
|
|
(728
|
)
|
|
—
|
|
|||
(Less): Expenses incurred in 2015
|
(1,296
|
)
|
|
—
|
|
|
(1,296
|
)
|
|||
Balance at June 30, 2015
|
$
|
573
|
|
|
$
|
13,916
|
|
|
$
|
14,489
|
|
•
|
our ability to successfully develop, obtain regulatory approval for and market our products;
|
•
|
our ability to continue to grow sales revenue of our marketed products;
|
•
|
risks associated with doing business internationally;
|
•
|
our ability to generate and maintain sufficient cash resources to fund our business;
|
•
|
our ability to enter into strategic alliances with partners for manufacturing, development and commercialization;
|
•
|
efforts of our development partners;
|
•
|
the ability of our manufacturing partners to meet our timelines;
|
•
|
the ability to timely deliver product supplies to our customers;
|
•
|
our ability to identify new product candidates and to successfully integrate those product candidates into our operations;
|
•
|
the timing and/or results of pending or future clinical trials, and our reliance on contract research organizations;
|
•
|
our ability to protect our intellectual property rights;
|
•
|
competition in the marketplace for our drugs;
|
•
|
delay in approval of our products or new indications for our products by the U.S. Food and Drug Administration (“FDA”);
|
•
|
actions by the FDA and other regulatory agencies, including international agencies;
|
•
|
securing positive reimbursement for our products;
|
•
|
the impact of any product liability, or other litigation to which we are, or may become a party;
|
•
|
the impact of legislative or regulatory reform of the healthcare industry and the impact of recently enacted healthcare reform legislation;
|
•
|
the availability and price of acceptable raw materials and components from third-party suppliers, and their ability to meet our demands;
|
•
|
our ability, and that of our suppliers, development partners, and manufacturing partners, to comply with laws, regulations and standards, and the application and interpretation of those laws, regulations and standards, that govern or affect the pharmaceutical and biotechnology industries, the non-compliance with which may delay or prevent the development, manufacturing, regulatory approvals and sale of our products;
|
•
|
defending against claims relating to improper handling, storage or disposal of hazardous chemical, radioactive or biological materials which could be time consuming and expensive;
|
•
|
our ability to maintain the services of our key executives and technical and sales and marketing personnel;
|
•
|
the difficulty in predicting the timing or outcome of product development efforts and regulatory approvals; and
|
•
|
demand and market acceptance for our approved products.
|
•
|
FUSILEV
®
injection for patients with advanced metastatic colorectal cancer and to counteract certain side effects of methotrexate therapy;
|
•
|
ZEVALIN
®
injection for patients with follicular non-Hodgkin’s lymphoma;
|
•
|
FOLOTYN
®
injection for patients with relapsed or refractory peripheral T-cell lymphoma;
|
•
|
MARQIBO
®
injection for patients with relapsed Philadelphia chromosome–negative acute lymphoblastic leukemia; and
|
•
|
BELEODAQ
®
injection for patients with relapsed or refractory peripheral T-cell lymphoma
|
•
|
Maximize the revenue potential of our five currently-marketed drugs for the treatment of cancer.
|
•
|
Develop and commercialize drugs for the treatment of cancer within our pipeline.
|
•
|
Expand our pipeline of development-stage and commercial-stage drugs, while also pursuing out-licensing opportunities.
|
•
|
Company Overview
|
•
|
Cancer Background and Market Size
|
•
|
Product Portfolio
|
•
|
Manufacturing
|
•
|
Sales and Marketing
|
•
|
Customers
|
•
|
Competition
|
•
|
Research and Development
|
•
|
In February 2015, we executed an in-license with Hanmi Pharmaceutical Co., Ltd for POZIOTINIB, a pan-HER inhibitor in Phase 2 clinical trials, for an upfront payment and future regulatory and sales-dependent milestone payments. POZIOTINIB has shown single agent activity in the treatment of various cancer types, including breast, gastric, colorectal and lung cancers. Under the terms of this agreement, we received the exclusive rights to commercialize this drug globally, excluding Korea and China.
|
•
|
In December 2014, we filed our new drug application ("NDA") with the FDA for EVOMELA. The FDA has assigned a Prescription Drug User Fee Act (PDUFA) action date (i.e., notice of EVOMELA approval decision) of October 23, 2015. If we obtain FDA approval, we plan to commercialize EVOMELA shortly thereafter.
|
•
|
Revenue recognition
|
•
|
Inventories – lower of cost or market
|
•
|
Fair value of acquired assets and assumed liabilities
|
•
|
Goodwill and intangible assets – impairment evaluations
|
•
|
Income taxes
|
•
|
Stock-based compensation
|
•
|
Litigation accruals
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||||||
|
|
($ in thousands)
|
|
($ in thousands)
|
||||||||||||||||||||||||
Total revenues
|
|
$
|
44,982
|
|
|
100.0
|
%
|
|
$
|
46,855
|
|
|
100.0
|
%
|
|
$
|
83,599
|
|
|
100.0
|
%
|
|
$
|
86,979
|
|
|
100.0
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of product sales (excludes amortization of intangible assets)
|
|
5,990
|
|
|
13.3
|
%
|
|
6,156
|
|
|
13.1
|
%
|
|
13,061
|
|
|
15.6
|
%
|
|
12,434
|
|
|
14.3
|
%
|
||||
Selling, general and administrative
|
|
22,552
|
|
|
50.1
|
%
|
|
25,399
|
|
|
54.2
|
%
|
|
45,886
|
|
|
54.9
|
%
|
|
48,802
|
|
|
56.1
|
%
|
||||
Research and development
|
|
9,558
|
|
|
21.2
|
%
|
|
11,335
|
|
|
24.2
|
%
|
|
25,409
|
|
|
30.4
|
%
|
|
40,832
|
|
|
46.9
|
%
|
||||
Amortization and impairment of intangible assets
|
|
6,916
|
|
|
15.4
|
%
|
|
5,361
|
|
|
11.4
|
%
|
|
20,938
|
|
|
25.0
|
%
|
|
10,721
|
|
|
12.3
|
%
|
||||
Total operating costs and expenses
|
|
45,016
|
|
|
100.1
|
%
|
|
48,251
|
|
|
103.0
|
%
|
|
105,294
|
|
|
126.0
|
%
|
|
112,789
|
|
|
129.7
|
%
|
||||
Loss from operations
|
|
(34
|
)
|
|
(0.1
|
)%
|
|
(1,396
|
)
|
|
(3.0
|
)%
|
|
(21,695
|
)
|
|
(26.0
|
)%
|
|
(25,810
|
)
|
|
(29.7
|
)%
|
||||
Interest expense, net
|
|
(2,258
|
)
|
|
(5.0
|
)%
|
|
(1,976
|
)
|
|
(4.2
|
)%
|
|
(4,486
|
)
|
|
(5.4
|
)%
|
|
(4,043
|
)
|
|
(4.6
|
)%
|
||||
Change in fair value of contingent consideration related to acquisitions
|
|
(146
|
)
|
|
(0.3
|
)%
|
|
(1,005
|
)
|
|
(2.1
|
)%
|
|
(646
|
)
|
|
(0.8
|
)%
|
|
(1,729
|
)
|
|
(2.0
|
)%
|
||||
Other income (expense), net
|
|
69
|
|
|
0.2
|
%
|
|
(487
|
)
|
|
(1.0
|
)%
|
|
(966
|
)
|
|
(1.2
|
)%
|
|
(845
|
)
|
|
(1.0
|
)%
|
||||
Loss before income taxes
|
|
(2,369
|
)
|
|
(5.3
|
)%
|
|
(4,864
|
)
|
|
(10.4
|
)%
|
|
(27,793
|
)
|
|
(33.2
|
)%
|
|
(32,427
|
)
|
|
(37.3
|
)%
|
||||
Benefit (provision) for income taxes
|
|
23
|
|
|
0.1
|
%
|
|
1,301
|
|
|
2.8
|
%
|
|
(115
|
)
|
|
(0.1
|
)%
|
|
1,223
|
|
|
1.4
|
%
|
||||
Net loss
|
|
$
|
(2,346
|
)
|
|
(5.2
|
)%
|
|
$
|
(3,563
|
)
|
|
(7.6
|
)%
|
|
$
|
(27,908
|
)
|
|
(33.4
|
)%
|
|
$
|
(31,204
|
)
|
|
(35.9
|
)%
|
|
|
Three months ended June 30,
|
|
|
|
|
|||||||||
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|||||||
|
|
($ in millions)
|
|
|
|
|
|||||||||
Product sales, net:
|
|
|
|
|
|
|
|
|
|||||||
FUSILEV
|
|
$
|
14.3
|
|
|
$
|
26.6
|
|
|
$
|
(12.3
|
)
|
|
(46.2
|
)%
|
FOLOTYN
|
|
12.2
|
|
|
12.6
|
|
|
(0.4
|
)
|
|
(3.2
|
)%
|
|||
ZEVALIN
|
|
4.8
|
|
|
6.3
|
|
|
(1.5
|
)
|
|
(23.8
|
)%
|
|||
MARQIBO
|
|
2.1
|
|
|
1.4
|
|
|
0.7
|
|
|
50.0
|
%
|
|||
BELEODAQ
|
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|
—
|
%
|
|||
|
|
$
|
35.1
|
|
|
$
|
46.9
|
|
|
$
|
(11.8
|
)
|
|
(25.2
|
)%
|
License fees and service revenue
|
|
9.8
|
|
|
—
|
|
|
9.8
|
|
|
—
|
%
|
|||
Total revenues
|
|
$
|
44.9
|
|
|
$
|
46.9
|
|
|
$
|
(2.0
|
)
|
|
(4.3
|
)%
|
|
|
Three months ended June 30,
|
|
|
|
|
|||||||||
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|||||||
|
|
($ in millions)
|
|
|
|
|
|||||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of product sales (excludes amortization of intangible assets)
|
|
$
|
6.0
|
|
|
$
|
6.2
|
|
|
$
|
(0.2
|
)
|
|
(3.2
|
)%
|
Selling, general and administrative
|
|
22.5
|
|
|
25.4
|
|
|
(2.9
|
)
|
|
(11.4
|
)%
|
|||
Research and development
|
|
9.6
|
|
|
11.3
|
|
|
(1.7
|
)
|
|
(15.0
|
)%
|
|||
Amortization and impairment of intangible assets
|
|
6.9
|
|
|
5.4
|
|
|
1.5
|
|
|
27.8
|
%
|
|||
Total operating costs and expenses
|
|
$
|
45.0
|
|
|
$
|
48.3
|
|
|
$
|
(3.3
|
)
|
|
(6.8
|
)%
|
|
|
Three months ended June 30,
|
|
|
|
|
|||||||||
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|||||||
|
|
($ in millions)
|
|
|
|
|
|||||||||
Total other expenses
|
|
$
|
(2.3
|
)
|
|
$
|
(3.5
|
)
|
|
$
|
1.2
|
|
|
34.3
|
%
|
|
|
Three months ended June 30,
|
|
|
|
|
|||||||||
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|||||||
|
|
($ in millions)
|
|
|
|
|
|||||||||
Benefit for income taxes
|
|
$
|
—
|
|
|
$
|
1.3
|
|
|
$
|
(1.3
|
)
|
|
(100.0
|
)%
|
|
|
Six months ended June 30,
|
|
|
|
|
|||||||||
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|||||||
|
|
($ in millions)
|
|
|
|
|
|||||||||
Product sales, net:
|
|
|
|
|
|
|
|
|
|||||||
FUSILEV
|
|
$
|
34.5
|
|
|
$
|
48.7
|
|
|
$
|
(14.2
|
)
|
|
(29.2
|
)%
|
FOLOTYN
|
|
21.5
|
|
|
22.7
|
|
|
(1.2
|
)
|
|
(5.3
|
)%
|
|||
ZEVALIN
|
|
9.0
|
|
|
12.7
|
|
|
(3.7
|
)
|
|
(29.1
|
)%
|
|||
MARQIBO
|
|
4.0
|
|
|
2.9
|
|
|
1.1
|
|
|
37.9
|
%
|
|||
BELEODAQ
|
|
4.5
|
|
|
—
|
|
|
4.5
|
|
|
—
|
%
|
|||
|
|
$
|
73.5
|
|
|
$
|
87.0
|
|
|
$
|
(13.5
|
)
|
|
(15.5
|
)%
|
License fees and service revenue
|
|
10.0
|
|
|
—
|
|
|
10.0
|
|
|
—
|
%
|
|||
Total revenues
|
|
$
|
83.5
|
|
|
$
|
87.0
|
|
|
$
|
(3.5
|
)
|
|
(4.0
|
)%
|
|
|
Six months ended June 30,
|
|
|
|
|
|||||||||
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|||||||
|
|
($ in millions)
|
|
|
|
|
|||||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of product sales (excludes amortization of intangible assets)
|
|
$
|
13.1
|
|
|
$
|
12.4
|
|
|
$
|
0.7
|
|
|
5.6
|
%
|
Selling, general and administrative
|
|
45.9
|
|
|
48.8
|
|
|
(2.9
|
)
|
|
(5.9
|
)%
|
|||
Research and development
|
|
25.4
|
|
|
40.8
|
|
|
(15.4
|
)
|
|
(37.7
|
)%
|
|||
Amortization and impairment of intangible assets
|
|
20.9
|
|
|
10.7
|
|
|
10.2
|
|
|
95.3
|
%
|
|||
Total operating costs and expenses
|
|
$
|
105.3
|
|
|
$
|
112.8
|
|
|
$
|
(7.5
|
)
|
|
(6.6
|
)%
|
|
|
Six months ended June 30,
|
|
|
|
|
|||||||||
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|||||||
|
|
($ in millions)
|
|
|
|
|
|||||||||
Total other expenses
|
|
$
|
(6.1
|
)
|
|
$
|
(6.6
|
)
|
|
$
|
0.5
|
|
|
7.6
|
%
|
|
|
Six months ended June 30,
|
|
|
|
|
|||||||||
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|||||||
|
|
($ in millions)
|
|
|
|
|
|||||||||
(Provision) benefit for income taxes
|
|
$
|
(0.1
|
)
|
|
$
|
1.2
|
|
|
$
|
(1.3
|
)
|
|
(108.3
|
)%
|
|
June 30, 2015
|
|
December 31, 2014
|
|
June 30, 2014
|
||||||
|
(in thousands, except financial metrics data)
|
||||||||||
Cash and cash equivalents
|
$
|
142,271
|
|
|
$
|
129,942
|
|
|
$
|
132,405
|
|
Marketable securities
|
$
|
3,308
|
|
|
$
|
3,306
|
|
|
$
|
3,306
|
|
Accounts receivable, net
|
$
|
41,684
|
|
|
$
|
70,758
|
|
|
$
|
56,742
|
|
Total current assets
|
$
|
207,162
|
|
|
$
|
222,469
|
|
|
$
|
220,133
|
|
Total current liabilities
|
$
|
90,503
|
|
|
$
|
109,439
|
|
|
$
|
77,479
|
|
Working capital surplus (a)
|
$
|
116,659
|
|
|
$
|
113,030
|
|
|
$
|
142,654
|
|
Days sales outstanding (“DSO”) (b)
|
84
|
|
|
126
|
|
|
110
|
|
|||
Current ratio (c)
|
2.3
|
|
|
2.0
|
|
|
2.9
|
|
(a)
|
Total current assets at period end
minus
total current liabilities at period end.
|
(b)
|
Net accounts receivable at period end
divided by
net revenue for the respective quarter
multiplie
d by the number of days in the quarter.
|
(c)
|
Total current assets at period end
divided by
total current liabilities at period end.
|
•
|
the need for additional capital to fund future development programs;
|
•
|
the need for additional capital to fund strategic acquisitions;
|
•
|
the need for additional capital to fund licensing arrangements;
|
•
|
our requirement for additional information technology infrastructure and systems; and
|
•
|
adverse outcomes from potential litigation and the cost to defend such litigation.
|
|
|
|
|
|
SPECTRUM PHARMACEUTICALS, INC.
|
||
|
|
|
|
Date: August 07, 2015
|
By:
|
|
/s/ Kurt A. Gustafson
|
|
|
|
Kurt A. Gustafson
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Authorized Signatory and Principal Financial and Accounting Officer)
|
|
|
ALLOS THERAPEUTICS, INC.
|
|
|
|
By:
|
|
/s/ Abraham N. Oler
|
Name:
|
|
Abraham N. Oler
|
Title:
|
|
President
|
|
|
MUNDIPHARMA INTERNATIONAL CORPORATION LIMITED
|
|
|
|
By:
|
|
/s/ Douglas Docherty
|
Name:
|
|
Douglas Docherty
|
Title:
|
|
General Manager
|
|
|
"COMPANY"
|
|
|
SPECTRUM PHARMACEUTICALS, INC., a Delaware corporation
|
|
|
|
By:
|
|
/s/ Kurt A. Gustafson
|
Name:
|
|
Kurt A. Gustafson
|
Title:
|
|
Executive Vice President and Chief Financial Officer
|
|
|
"EMPLOYEE"
|
|
|
|
By:
|
|
/s/ Joseph W. Turgeon
|
Name:
|
|
Joseph W. Turgeon
|
Title:
|
|
President and Chief Operating Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Spectrum Pharmaceuticals, 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 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 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 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.
|
August 07, 2015
|
/s/ Rajesh C. Shrotriya
|
|
Rajesh C. Shrotriya, MD
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Spectrum Pharmaceuticals, 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 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 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 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.
|
August 07, 2015
|
/s/ Kurt A. Gustafson
|
|
Kurt A. Gustafson
|
|
Executive Vice President and Chief Financial Officer
|
Date:
|
August 07, 2015
|
By:
|
|
/s/ Rajesh C. Shrotriya
|
|
|
Name:
|
|
Rajesh C. Shrotriya, MD
|
|
|
Title:
|
|
Chairman and Chief Executive Officer
|
Date:
|
August 07, 2015
|
By:
|
|
/s/ Kurt A. Gustafson
|
|
|
Name:
|
|
Kurt Gustafson
|
|
|
Title:
|
|
Executive Vice President and Chief Financial Officer
|