☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31, 2016
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Impax Laboratories, Inc.
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(Exact name of registrant as specified in its charter)
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Delaware
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65-0403311
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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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30831 Huntwood Avenue, Hayward, CA
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94544
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered:
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Common Stock, par value $0.01 per share
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The NASDAQ Stock Market LLC
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Large accelerated filer ☒
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☐
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Forward-Looking Statements
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PART I.
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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PART II.
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III.
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV.
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Item 15.
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Exhibits and Financial Statement Schedules
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SIGNATURES
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EXHIBIT INDEX
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•
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136 ANDAs approved by the U.S. Food and Drug Administration (“FDA”), including four tentatively approved (i.e., satisfying substantive FDA requirements but remaining subject to statutory restrictions). In addition, we have rights to market and/or share in profits to 16 approved ANDAs held by our third party alliance partners. The approved ANDAs (including those held by our partners) include generic versions of brand name pharmaceuticals such as Adderall XR®, Lofibra®, Opana ER® (NDA 021610), Pulmicort Respules® and Solaraze®.
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•
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25
applications pending at the FDA that represent approximately $14 billion in
2016
U.S. product sales.
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•
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A number of products in various stages of development for which applications have not yet been filed.
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•
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the
“Impax Generics sales channel"
for sales of generic prescription products we sell directly to wholesalers, large retail drug chains, and others;
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•
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the
“Private Label sales channel"
for generic pharmaceutical over-the-counter (“OTC”) and prescription products we sell to unrelated third party customers who in-turn sell the product to third parties under their own label;
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•
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the
“Rx Partner sales channel"
for generic prescription products sold through unrelated third-party pharmaceutical entities under their own label pursuant to alliance agreements; and
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•
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the
“OTC Partner sales channel"
for sales of generic pharmaceutical OTC products sold through unrelated third-party pharmaceutical entities under their own label pursuant to alliance agreements.
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Product
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Generic of
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Aspirin/Dipyridamole ER Capsules 25/200 mg
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Aggrenox®
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Colesevelam Tablets 625 mg
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Welchol®
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Dutasteride/Tamsulosin Capsules 0.5 mg/0.4 mg
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Jalyn®
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Ezetimbe/Simvastatin Tablets 10/10 mg, 10/20mg, 10/40 mg, 10/80 mg
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Vytorin®
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Fentanyl Buccal Tablet 100, 200, 400, 600, 800 mcg
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Fentora®
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Methylphenidate HCl ER Tablets 18, 27, 36, 54 mg
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Concerta®
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Mixed Amphetamine Salts ER Capsules 5, 10, 15, 20, 25, 30 mg
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Adderall XR®
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Oxycodone ER Tablets (new formulation) 10, 15, 20, 30, 40, 60, 80 mg
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Oxycontin®
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Oxymorphone ER Tablets version 5, 7.5, 10, 15, 20, 30 and 40 mg (new formulation)
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Opana® ER
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Risedronate Sodium DR Tablets 35 mg
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Atelvia®
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Sevelamer Carbonate Tablets 800 mg
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Renvela®
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Teriflunomide Tablets 14 mg
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Aubagio®
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Year Ended December 31,
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|||||||||||||||||||
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2016
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2015
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2014
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|||||||||||||||
(in thousands)
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|||||||||||||||
Gross Revenue and % Gross Revenue
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|||||||||
Rx Partner
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$
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14,339
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1
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%
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$
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9,307
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1
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%
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$
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14,114
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1
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%
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OTC Partner
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$
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225
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*
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$
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1,744
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1
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%
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$
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1,319
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1
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%
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•
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the ability to introduce generic versions of products promptly after a patent expires;
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•
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price;
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•
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product quality;
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•
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customer service (including maintenance of inventories for timely delivery); and
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•
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the ability to identify and market niche products.
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Year Ended December 31, 2016
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Impax
Generics |
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Impax Specialty
Pharma |
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Total
Impax |
||||||
Clinical study expenses
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$
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11.1
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$
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2.4
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$
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13.5
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Personnel expenses
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25.0
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10.8
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35.8
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|||
Experimental materials
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6.1
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—
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6.1
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Outside services
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7.1
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3.3
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10.4
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|||
Facility expenses
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3.7
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0.5
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4.2
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Legal expenses
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0.1
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0.2
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0.3
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Other
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9.1
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1.1
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10.2
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Total
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$
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62.2
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$
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18.3
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$
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80.5
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Year Ended December 31, 2015
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Impax
Generics |
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Impax
Specialty Pharma |
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Total
Impax |
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Clinical study expenses
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$
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4.6
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$
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0.8
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$
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5.4
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Personnel expenses
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28.6
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10.0
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38.6
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Experimental materials
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4.3
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—
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4.3
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Outside services
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5.8
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4.5
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10.3
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|||
Facility expenses
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4.2
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0.4
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4.6
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Legal expenses
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0.4
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0.2
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0.6
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Other
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4.6
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2.2
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6.8
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Total
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$
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52.5
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$
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18.1
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$
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70.6
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Year Ended December 31, 2014
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Impax
Generics |
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Impax
Specialty Pharma |
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Total
Impax |
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Clinical study expenses
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$
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10.2
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$
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7.6
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$
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17.8
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Personnel expenses
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17.1
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|
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17.7
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|
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34.8
|
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|||
Experimental materials
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5.0
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|
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0.7
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5.7
|
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|||
Outside services
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2.7
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|
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4.9
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|
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7.6
|
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|||
Facility expenses
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2.7
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|
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1.1
|
|
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3.8
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|||
Legal expenses
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0.3
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|
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0.5
|
|
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0.8
|
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|||
Other
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2.9
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5.2
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|
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8.1
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|||
Total
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$
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40.9
|
|
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$
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37.7
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|
$
|
78.6
|
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•
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Laboratory and clinical tests;
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•
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Submission of an Investigational New Drug (“IND”) application, which must become effective before clinical studies may begin;
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•
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Adequate and well-controlled human clinical studies to establish the safety and efficacy of the proposed product for its intended use;
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•
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Submission of a NDA containing the results of the preclinical tests and clinical studies establishing the safety and efficacy of the proposed product for its intended use, as well as extensive data addressing such matters such as manufacturing and quality assurance;
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•
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Scale-up to commercial manufacturing; and
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•
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FDA approval of a NDA.
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•
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proprietary processes or delivery systems;
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•
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greater resources in the area of research and development and marketing;
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•
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larger or more efficient production capabilities;
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•
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more expertise in a particular therapeutic area;
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•
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more expertise in preclinical testing and human clinical trials;
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•
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more experience in obtaining required regulatory approvals, including FDA approval;
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•
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more products; or
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•
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more experience in developing new drugs and financial resources, particularly with regard to brand manufacturers.
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•
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obtain FDA approval of our products;
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•
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successfully launch and market new products;
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•
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prevail in patent infringement litigation in which we are involved;
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•
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continue to generate or obtain sufficient capital on acceptable terms to fund our operations; and
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•
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comply with the many complex governmental regulations that deal with virtually every aspect of our business activities.
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•
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incur additional debt, guarantee other obligations or grant liens on our assets;
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•
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make certain loans or investments;
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•
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undertake certain acquisitions, mergers or consolidations, or dispose of assets;
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•
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make optional payments or modify certain debt instruments;
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•
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pay dividends or other payments on our capital stock, enter into arrangements that restrict our and our restricted subsidiaries’ ability to pay dividends or grant liens; or
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•
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engage in certain transactions with our affiliates.
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•
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increasing our vulnerability to adverse economic and industry conditions;
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•
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limiting our ability to obtain additional financing;
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•
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requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, thereby reducing the amount of our cash flow available for other purposes;
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•
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limiting our flexibility in planning for, or reacting to, changes in our business;
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•
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dilution experienced by our existing stockholders as a result of the conversion of the convertible notes into shares of common stock; and
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•
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placing us at a possible competitive disadvantage with less leveraged competitors and competitors that may have better access to capital resources.
|
•
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the availability of alternative products from our competitors;
|
•
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the prices of our products relative to those of our competitors;
|
•
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the timing of our market entry;
|
•
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the ability to market our products effectively at the retail level;
|
•
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the perception of patients and the healthcare community, including third-party payers, regarding the safety, efficacy and benefits of our drug products compared to those of competing products; and
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•
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the acceptance of our products by government and private formularies.
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•
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delays in patient enrollment, and variability in the number and types of patients available for clinical trials;
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•
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regulators or institutional review boards may not allow us to commence or continue a clinical trial;
|
•
|
our inability, or the inability of our partners, to manufacture or obtain from third parties materials sufficient to complete our clinical trials;
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•
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delays or failure in reaching agreement on acceptable clinical trial contracts or clinical trial protocols with prospective clinical trial sites;
|
•
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risks associated with trial design, which may result in a failure of the trial to show statistically significant results even if the product candidate is effective;
|
•
|
difficulty in maintaining contact with patients after treatment commences, resulting in incomplete data;
|
•
|
poor effectiveness of product candidates during clinical trials;
|
•
|
safety issues, including adverse events associated with product candidates;
|
•
|
the failure of patients to complete clinical trials due to adverse side effects, dissatisfaction with the product candidate, or other reasons;
|
•
|
governmental or regulatory delays or changes in regulatory requirements, policy and guidelines; and
|
•
|
varying interpretation of data by the FDA or foreign regulatory authorities.
|
•
|
greater possibility for disruption due to transportation or communication problems;
|
•
|
the relative instability of some foreign governments and economies;
|
•
|
interim price volatility based on labor unrest, materials or equipment shortages, export duties, restrictions on the transfer of funds, or fluctuations in currency exchange rates; and
|
•
|
uncertainty regarding recourse to a dependable legal system for the enforcement of contracts and other rights.
|
•
|
suspend or debar the contractor from doing business with the government or a specific government agency;
|
•
|
terminate existing contracts, in whole or in part, for any reason or no reason;
|
•
|
reduce the scope and value of contracts;
|
•
|
change certain terms and conditions in contracts;
|
•
|
claim rights to products, including intellectual property, developed under the contract;
|
•
|
take actions that result in a longer development timeline than expected;
|
•
|
direct the course of a development program in a manner not chosen by the government contractor;
|
•
|
audit and object to the contractor’s contract-related costs and fees, including allocated indirect costs; and
|
•
|
control and potentially prohibit the export of the contractor’s products.
|
•
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any of our future processes or products will be patentable;
|
•
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our processes or products will not infringe upon the patents of third parties; or
|
•
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we will have the resources to defend against charges of patent infringement by third parties or to protect our own rights against infringement by third parties.
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Location
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Owned
|
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Leased
|
|
Total
|
|
Function
|
|||
Hayward, CA
|
|
35,000
|
|
|
—
|
|
|
35,000
|
|
|
Research & development
|
Hayward, CA
|
|
50,000
|
|
|
—
|
|
|
50,000
|
|
|
Manufacturing
|
Hayward, CA
|
|
19,000
|
|
|
—
|
|
|
19,000
|
|
|
Administration & lab
|
Hayward, CA
|
|
50,400
|
|
|
—
|
|
|
50,400
|
|
|
Warehouse
|
Hayward, CA
|
|
13,300
|
|
|
—
|
|
|
13,300
|
|
|
Manufacturing support
|
Hayward, CA
|
|
—
|
|
|
76,180
|
|
|
76,180
|
|
|
Warehouse & lab
|
Hayward, CA
|
|
—
|
|
|
45,000
|
|
|
45,000
|
|
|
Corporate offices
|
Hayward, CA
|
|
—
|
|
|
88,677
|
|
|
88,677
|
|
|
Manufacturing & lab
|
California Properties
|
|
167,700
|
|
|
209,857
|
|
|
377,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Fort Washington, PA
|
|
—
|
|
|
46,000
|
|
|
46,000
|
|
|
Administration
|
Horsham, PA
|
|
—
|
|
|
6,341
|
|
|
6,341
|
|
|
Administration
|
Pennsylvania Properties
|
|
—
|
|
|
52,341
|
|
|
52,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Middlesex, NJ
|
|
—
|
|
|
37,500
|
|
|
37,500
|
|
|
Manufacturing
|
Middlesex, NJ
|
|
—
|
|
|
18,593
|
|
|
18,593
|
|
|
Packaging
|
Middlesex, NJ
|
|
—
|
|
|
20,651
|
|
|
20,651
|
|
|
Research & development
|
Middlesex, NJ
|
|
—
|
|
|
32,516
|
|
|
32,516
|
|
|
Administration
|
Bridgewater, NJ
|
|
—
|
|
|
32,806
|
|
|
32,806
|
|
|
Administration
|
New Jersey Properties
|
|
—
|
|
|
142,066
|
|
|
142,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Taiwan
|
|
397,917
|
|
|
—
|
|
|
397,917
|
|
|
Manufacturing *
|
Totals
|
|
565,617
|
|
|
404,264
|
|
|
969,881
|
|
|
|
|
Price Range
per Share |
||||||
|
High
|
|
Low
|
||||
Year Ended December 31, 2016
|
|
|
|
||||
First Quarter
|
$
|
43.16
|
|
|
$
|
29.66
|
|
Second Quarter
|
$
|
37.20
|
|
|
$
|
27.62
|
|
Third Quarter
|
$
|
32.20
|
|
|
$
|
20.97
|
|
Fourth Quarter
|
$
|
24.47
|
|
|
$
|
12.28
|
|
|
|
|
|
||||
Year Ended December 31, 2015
|
|
|
|
||||
First Quarter
|
$
|
47.70
|
|
|
$
|
29.76
|
|
Second Quarter
|
$
|
52.10
|
|
|
$
|
42.25
|
|
Third Quarter
|
$
|
51.42
|
|
|
$
|
31.85
|
|
Fourth Quarter
|
$
|
45.00
|
|
|
$
|
31.83
|
|
Period
|
|
Total Number of
Shares (or Units) Purchased(1) |
|
Average Price
Paid Per Share (or Unit) |
|
Total
Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |
|
Maximum Number
(or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
|||||
October 1, 2016 to October 31, 2016
|
|
120,385
|
|
|
$
|
21.64
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
November 1, 2016 to November 30, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||
December 1, 2016 to December 31, 2016
|
|
56,020
|
|
|
$
|
25.96
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
|
176,405
|
|
|
$
|
23.01
|
|
|
—
|
|
|
—
|
|
(1)
|
Represents shares of our common stock that were repurchased to settle employee tax withholding obligations upon the vesting of shares of restricted stock and/or exercise of stock options pursuant to the terms of our Third Amended and Restated 2002 Equity Incentive Plan (the “2002 Plan”).
|
|
|
Number of
Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |
|
Weighted Average
Exercise Price of Outstanding Options, Warrants and Rights |
|
Number of
Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities reflected in Column (a)) |
|
||||
Plan Category
|
|
(a)
|
|
(b)
|
|
(c)
|
|
||||
Equity compensation plans approved by security holders
|
|
2,234,331
|
|
(1)
|
$
|
22.67
|
|
|
1,688,034
|
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
51,638
|
|
(2)
|
|
Total:
|
|
2,234,331
|
|
|
$
|
22.67
|
|
|
1,739,672
|
|
|
(1)
|
Represents options issued pursuant to the 2002 Plan and the Impax Laboratories, Inc. 1999 Equity Incentive Plan.
|
(2)
|
Represents 51,638 shares of common stock available for future issuance under the Impax Laboratories, Inc. 2001 Non-Qualified Employee Stock Purchase Plan.
|
(In thousands, except per share data)
|
Years Ended December 31,
|
||||||||||||||||||
Statements of Operations Data:
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Total revenues
|
$
|
824,429
|
|
|
$
|
860,469
|
|
|
$
|
596,049
|
|
|
$
|
511,502
|
|
|
$
|
581,692
|
|
Research and development
|
80,466
|
|
|
70,622
|
|
|
78,642
|
|
|
68,854
|
|
|
81,320
|
|
|||||
Total operating expenses
|
343,080
|
|
|
282,836
|
|
|
223,837
|
|
|
205,687
|
|
|
199,562
|
|
|||||
(Loss) income from operations
|
(494,182
|
)
|
|
69,568
|
|
|
88,816
|
|
|
(6,387
|
)
|
|
82,992
|
|
|||||
Net (loss) income
|
(472,031
|
)
|
|
38,997
|
|
|
57,353
|
|
|
101,259
|
|
|
55,873
|
|
|||||
Net (loss) income per share — basic
|
$
|
(6.63
|
)
|
|
$
|
0.56
|
|
|
$
|
0.84
|
|
|
$
|
1.51
|
|
|
$
|
0.85
|
|
Net (loss) income per share — diluted
|
$
|
(6.63
|
)
|
|
$
|
0.54
|
|
|
$
|
0.81
|
|
|
$
|
1.47
|
|
|
$
|
0.82
|
|
(In thousands)
|
As of December 31,
|
||||||||||||||||||
Balance Sheet Data:
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Cash, cash equivalents and short-term investments
|
$
|
180,133
|
|
|
$
|
340,351
|
|
|
$
|
414,856
|
|
|
$
|
413,133
|
|
|
$
|
298,918
|
|
Working capital
|
309,817
|
|
|
495,312
|
|
|
516,927
|
|
|
505,852
|
|
|
400,248
|
|
|||||
Total assets
|
1,823,018
|
|
|
1,922,487
|
|
|
1,079,197
|
|
|
996,923
|
|
|
863,970
|
|
|||||
Long-term debt
|
813,545
|
|
|
424,595
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total liabilities
|
1,199,044
|
|
|
860,078
|
|
|
191,320
|
|
|
186,720
|
|
|
172,867
|
|
|||||
Retained earnings
|
98,192
|
|
|
570,223
|
|
|
531,226
|
|
|
473,873
|
|
|
372,614
|
|
|||||
Total stockholders’ equity
|
623,974
|
|
|
1,062,409
|
|
|
887,877
|
|
|
810,203
|
|
|
691,103
|
|
•
|
the
“Impax Generics sales channel”
for sales of generic prescription products we sell directly to wholesalers, large retail drug chains, and others;
|
•
|
the
“Private Label Product sales channel”
for generic pharmaceutical over-the-counter and prescription products we sell to unrelated third-party customers who in-turn sell the product to third parties under their own label;
|
•
|
the
“Rx Partner sales channel”
for generic prescription products sold through unrelated third-party pharmaceutical entities under their own label pursuant to alliance agreements; and
|
•
|
the
“OTC Partner sales channel”
for sales of generic pharmaceutical over-the-counter products sold through unrelated third-party pharmaceutical entities under their own label pursuant to alliance agreements.
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Chargeback reserve
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
102,630
|
|
|
$
|
43,125
|
|
|
$
|
37,066
|
|
Acquired balances
|
—
|
|
|
24,532
|
|
|
—
|
|
|||
Provision recorded during the period
|
1,014,108
|
|
|
833,157
|
|
|
487,377
|
|
|||
Credits issued during the period
|
(962,052
|
)
|
|
(798,184
|
)
|
|
(481,318
|
)
|
|||
Ending balance
|
$
|
154,686
|
|
|
$
|
102,630
|
|
|
$
|
43,125
|
|
Provision as a percent of gross product sales
|
36
|
%
|
|
34
|
%
|
|
35
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Rebate reserve
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
265,229
|
|
|
$
|
88,812
|
|
|
$
|
88,449
|
|
Acquired balances
|
—
|
|
|
75,447
|
|
|
—
|
|
|||
Provision recorded during the period
|
752,613
|
|
|
571,642
|
|
|
260,747
|
|
|||
Credits issued during the period
|
(733,211
|
)
|
|
(470,672
|
)
|
|
(260,384
|
)
|
|||
Ending balance
|
$
|
284,631
|
|
|
$
|
265,229
|
|
|
$
|
88,812
|
|
Provision as a percent of gross product sales
|
27
|
%
|
|
23
|
%
|
|
19
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Returns reserve
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
48,950
|
|
|
$
|
27,174
|
|
|
$
|
28,089
|
|
Acquired balances
|
—
|
|
|
11,364
|
|
|
—
|
|
|||
Provision related to sales recorded in the period
|
52,383
|
|
|
43,967
|
|
|
12,016
|
|
|||
Credits issued during the period
|
(28,445
|
)
|
|
(33,555
|
)
|
|
(12,931
|
)
|
|||
Ending balance
|
$
|
72,888
|
|
|
$
|
48,950
|
|
|
$
|
27,174
|
|
Provision as a percent of gross product sales
|
1.9
|
%
|
|
2.0
|
%
|
|
1.0
|
%
|
|
Year Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
|
2016
|
|
2015
|
|
Dollars
|
|
Percentage
|
|||||||
Total revenues
|
$
|
824,429
|
|
|
$
|
860,469
|
|
|
$
|
(36,040
|
)
|
|
(4
|
)%
|
Gross (loss) profit
|
(151,102
|
)
|
|
352,404
|
|
|
(503,506
|
)
|
|
*
|
|
|||
(Loss) income from operations
|
(494,182
|
)
|
|
69,568
|
|
|
(563,750
|
)
|
|
*
|
|
|||
(Loss) income before income taxes
|
(576,325
|
)
|
|
59,368
|
|
|
(635,693
|
)
|
|
*
|
|
|||
(Benefit from) provision for income taxes
|
(104,294
|
)
|
|
20,371
|
|
|
(124,665
|
)
|
|
*
|
|
|||
Net (loss) income
|
$
|
(472,031
|
)
|
|
$
|
38,997
|
|
|
$
|
(511,028
|
)
|
|
*
|
|
|
Year Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
|
2016
|
|
2015
|
|
Dollars
|
|
Percentage
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Impax Generics sales, net
|
$
|
591,744
|
|
|
$
|
699,844
|
|
|
$
|
(108,100
|
)
|
|
(15
|
)%
|
Rx Partner
|
14,339
|
|
|
9,307
|
|
|
5,032
|
|
|
54
|
%
|
|||
Other Revenues
|
237
|
|
|
1,781
|
|
|
(1,544
|
)
|
|
(87
|
)%
|
|||
Total revenues
|
606,320
|
|
|
710,932
|
|
|
(104,612
|
)
|
|
(15
|
)%
|
|||
Cost of revenues
|
417,316
|
|
|
442,742
|
|
|
(25,426
|
)
|
|
(6
|
)%
|
|||
Cost of revenues impairment charges
|
464,319
|
|
|
7,303
|
|
|
457,016
|
|
|
*
|
|
|||
Gross (loss) profit
|
(275,315
|
)
|
|
260,887
|
|
|
(536,202
|
)
|
|
*
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
20,508
|
|
|
29,641
|
|
|
(9,133
|
)
|
|
(31
|
)%
|
|||
Research and development
|
61,980
|
|
|
52,478
|
|
|
9,502
|
|
|
18
|
%
|
|||
In-process research and development impairment charges
|
27,765
|
|
|
6,360
|
|
|
21,405
|
|
|
*
|
|
|||
Patent litigation expense
|
829
|
|
|
2,942
|
|
|
(2,113
|
)
|
|
(72
|
)%
|
|||
Total operating expenses
|
111,082
|
|
|
91,421
|
|
|
19,661
|
|
|
22
|
%
|
|||
(Loss) income from operations
|
$
|
(386,397
|
)
|
|
$
|
169,466
|
|
|
$
|
(555,863
|
)
|
|
*
|
|
|
Year Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
|
2016
|
|
2015
|
|
Dollars
|
|
Percentage
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Impax Specialty Pharma sales, net
|
$
|
218,109
|
|
|
$
|
145,226
|
|
|
$
|
72,883
|
|
|
50
|
%
|
Other Revenues
|
—
|
|
|
4,311
|
|
|
(4,311
|
)
|
|
*
|
|
|||
Total revenues
|
218,109
|
|
|
149,537
|
|
|
68,572
|
|
|
46
|
%
|
|||
Cost of revenues
|
69,583
|
|
|
58,020
|
|
|
11,563
|
|
|
20
|
%
|
|||
Cost of revenues impairment charges
|
24,313
|
|
|
—
|
|
|
24,313
|
|
|
*
|
|
|||
Gross profit
|
124,213
|
|
|
91,517
|
|
|
32,696
|
|
|
36
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
61,448
|
|
|
52,427
|
|
|
9,021
|
|
|
17
|
%
|
|||
Research and development
|
18,486
|
|
|
18,144
|
|
|
342
|
|
|
2
|
%
|
|||
In-process research and development impairment charges
|
25,200
|
|
|
—
|
|
|
25,200
|
|
|
*
|
|
|||
Patent litigation expense
|
6,990
|
|
|
1,625
|
|
|
5,365
|
|
|
*
|
|
|||
Total operating expenses
|
112,124
|
|
|
72,196
|
|
|
39,928
|
|
|
55
|
%
|
|||
Income from operations
|
$
|
12,089
|
|
|
$
|
19,321
|
|
|
$
|
(7,232
|
)
|
|
(37
|
)%
|
|
Year Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
|
2016
|
|
2015
|
|
Dollars
|
|
Percentage
|
|||||||
General and administrative expenses
|
$
|
119,874
|
|
|
$
|
119,219
|
|
|
$
|
655
|
|
|
1
|
%
|
Unallocated corporate expenses
|
(119,874
|
)
|
|
(119,219
|
)
|
|
(655
|
)
|
|
1
|
%
|
|||
Interest expense
|
(41,441
|
)
|
|
(27,268
|
)
|
|
(14,173
|
)
|
|
52
|
%
|
|||
Interest income
|
1,022
|
|
|
1,042
|
|
|
(20
|
)
|
|
(2
|
)%
|
|||
Reserve for Turing receivable
|
(40,312
|
)
|
|
—
|
|
|
(40,312
|
)
|
|
*
|
|
|||
Gain on sale of asset
|
—
|
|
|
45,574
|
|
|
(45,574
|
)
|
|
*
|
|
|||
Loss on debt extinguishment
|
—
|
|
|
(16,903
|
)
|
|
16,903
|
|
|
*
|
|
|||
Net change in fair value of derivatives
|
—
|
|
|
(13,000
|
)
|
|
13,000
|
|
|
*
|
|
|||
Other (expense) income, net
|
(1,412
|
)
|
|
355
|
|
|
(1,767
|
)
|
|
*
|
|
|||
Loss before income taxes
|
(202,017
|
)
|
|
(129,419
|
)
|
|
(72,598
|
)
|
|
56
|
%
|
|||
(Benefit from) provision for income taxes
|
$
|
(104,294
|
)
|
|
$
|
20,371
|
|
|
$
|
(124,665
|
)
|
|
*
|
|
|
Year Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
|
2015
|
|
2014
|
|
Dollars
|
|
Percentage
|
|||||||
Total revenues
|
$
|
860,469
|
|
|
$
|
596,049
|
|
|
$
|
264,420
|
|
|
44
|
%
|
Gross profit
|
352,404
|
|
|
312,653
|
|
|
39,751
|
|
|
13
|
%
|
|||
Income from operations
|
69,568
|
|
|
88,816
|
|
|
(19,248
|
)
|
|
(22
|
)%
|
|||
Income before income taxes
|
59,368
|
|
|
90,559
|
|
|
(31,191
|
)
|
|
(34
|
)%
|
|||
Provision for income taxes
|
20,371
|
|
|
33,206
|
|
|
(12,835
|
)
|
|
(39
|
)%
|
|||
Net income
|
$
|
38,997
|
|
|
$
|
57,353
|
|
|
$
|
(18,356
|
)
|
|
(32
|
)%
|
|
Year Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
|
2015
|
|
2014
|
|
Dollars
|
|
Percentage
|
|||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Impax Generics sales, net
|
$
|
699,844
|
|
|
$
|
528,512
|
|
|
$
|
171,332
|
|
|
32
|
%
|
Rx Partner
|
9,307
|
|
|
14,114
|
|
|
(4,807
|
)
|
|
(34
|
)%
|
|||
Other Revenues
|
1,781
|
|
|
6,456
|
|
|
(4,675
|
)
|
|
(72
|
)%
|
|||
Total revenues
|
710,932
|
|
|
549,082
|
|
|
161,850
|
|
|
29
|
%
|
|||
Cost of revenues
|
450,045
|
|
|
260,459
|
|
|
189,586
|
|
|
73
|
%
|
|||
Gross profit
|
260,887
|
|
|
288,623
|
|
|
(27,736
|
)
|
|
(10
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
29,641
|
|
|
17,144
|
|
|
12,497
|
|
|
73
|
%
|
|||
Research and development
|
58,838
|
|
|
40,927
|
|
|
17,911
|
|
|
44
|
%
|
|||
Patent litigation
|
2,942
|
|
|
5,333
|
|
|
(2,391
|
)
|
|
(45
|
)%
|
|||
Total operating expenses
|
91,421
|
|
|
63,404
|
|
|
28,017
|
|
|
44
|
%
|
|||
Income from operations
|
$
|
169,466
|
|
|
$
|
225,219
|
|
|
$
|
(55,753
|
)
|
|
(25
|
)%
|
|
Year Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
|
2015
|
|
2014
|
|
Dollars
|
|
Percentage
|
|||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Impax Product sales, net
|
$
|
145,226
|
|
|
$
|
45,938
|
|
|
$
|
99,288
|
|
|
*
|
|
Other Revenues
|
4,311
|
|
|
1,029
|
|
|
3,282
|
|
|
*
|
|
|||
Total revenue
|
149,537
|
|
|
46,967
|
|
|
102,570
|
|
|
*
|
|
|||
Cost of revenues
|
58,020
|
|
|
22,937
|
|
|
35,083
|
|
|
*
|
|
|||
Gross profit
|
91,517
|
|
|
24,030
|
|
|
67,487
|
|
|
*
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
52,427
|
|
|
43,307
|
|
|
9,120
|
|
|
21
|
%
|
|||
Research and development
|
18,144
|
|
|
37,715
|
|
|
(19,571
|
)
|
|
(52
|
)%
|
|||
Patent litigation
|
1,625
|
|
|
472
|
|
|
1,153
|
|
|
*
|
|
|||
Total operating expenses
|
72,196
|
|
|
81,494
|
|
|
(9,298
|
)
|
|
(11
|
)%
|
|||
Income (loss) from operations
|
$
|
19,321
|
|
|
$
|
(57,464
|
)
|
|
$
|
76,785
|
|
|
*
|
|
|
Year Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
|
2015
|
|
2014
|
|
Dollars
|
|
Percentage
|
|||||||
General and administrative expenses
|
$
|
119,219
|
|
|
$
|
78,939
|
|
|
$
|
40,280
|
|
|
51
|
%
|
Unallocated corporate expenses
|
(119,219
|
)
|
|
(78,939
|
)
|
|
(40,280
|
)
|
|
(51
|
)%
|
|||
Interest expense
|
(27,268
|
)
|
|
(43
|
)
|
|
(27,225
|
)
|
|
*
|
|
|||
Interest income
|
1,042
|
|
|
1,473
|
|
|
(431
|
)
|
|
(29
|
)%
|
|||
Gain on sale of asset
|
45,574
|
|
|
—
|
|
|
45,574
|
|
|
*
|
|
|||
Loss on debt extinguishment
|
(16,903
|
)
|
|
—
|
|
|
(16,903
|
)
|
|
*
|
|
|||
Net change in fair value of derivatives
|
(13,000
|
)
|
|
—
|
|
|
(13,000
|
)
|
|
*
|
|
|||
Other income, net
|
355
|
|
|
313
|
|
|
42
|
|
|
13
|
%
|
|||
Loss before income taxes
|
(129,419
|
)
|
|
(77,196
|
)
|
|
(52,223
|
)
|
|
(68
|
)%
|
|||
Provision for income taxes
|
$
|
20,371
|
|
|
$
|
33,206
|
|
|
$
|
(12,835
|
)
|
|
(39
|
)%
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less
Than 1 Year |
|
1-3
Years |
|
3-5
Years |
|
More
Than 5 Years |
||||||||||
Open Purchase Order Commitments
|
$
|
129,116
|
|
|
$
|
129,116
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating Leases (a)
|
30,191
|
|
|
5,439
|
|
|
9,152
|
|
|
4,326
|
|
|
11,274
|
|
|||||
Construction Contracts (b)
|
122
|
|
|
122
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total (c)
|
$
|
159,429
|
|
|
$
|
134,677
|
|
|
$
|
9,152
|
|
|
$
|
4,326
|
|
|
$
|
11,274
|
|
(a)
|
We lease office, warehouse, and laboratory facilities under non-cancelable operating leases with expiration dates through December 2027. We also lease certain equipment under various non-cancelable operating leases with various expiration dates through October 2021.
|
(b)
|
Construction contracts are related to ongoing expansion activities at our manufacturing facility in Taiwan.
|
(c)
|
Liabilities for uncertain tax positions FASB ASC Topic 740, Sub-topic 10, were excluded as we are not able to make a reasonably reliable estimate of the amount and period of related future payments. As of
December 31, 2016
, we had a $4.6 million provision for uncertain tax positions.
|
(i)
|
If during any calendar quarter commencing after the quarter ending September 30, 2015 (and only during such calendar quarter) the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than 130% of the conversion price on each applicable trading day; or
|
(ii)
|
If during the five business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 of principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last report sale price of our common stock and the conversion rate on each such trading day; or
|
(iii)
|
Upon the occurrence of corporate events specified in the Indenture.
|
Exhibit No.
|
Description of Document
|
|
|
2.1
|
Stock Purchase Agreement, dated as of October 8, 2014, by and among the Company, Tower Holdings, Inc. (“Tower”), Lineage Therapeutics Inc. (“Lineage”), Roundtable Healthcare Partners II, L.P., Roundtable Healthcare Investors II, L.P., the other stockholders of Tower and Lineage, the holders of options to purchase shares of Tower common stock and options to purchase shares of Lineage common stock, the holders of warrants to acquire shares of Tower common stock and warrants to acquire shares of Lineage common stock and, solely with respect to Section 8.3, Roundtable Healthcare Management II, LLC. †(1)
|
|
|
3.1.1
|
Certificate of Amendment of the Restated Certificate of Incorporation of the Company dated as of December 9, 2015.(2)
|
|
|
3.1.2
|
Restated Certificate of Incorporation of the Company dated as of August 30, 2004.(3)
|
|
|
3.1.3
|
Certificate of Designation of Series A Junior Participating Preferred Stock, as filed with the Secretary of State of Delaware on January 21, 2009.(4)
|
|
|
3.2.1
|
Amendment No. 7 to Amended and Restated Bylaws of the Company, effective as of December 19, 2016.
|
|
|
3.2.2
|
Amendment No. 6 to Amended and Restated Bylaws of the Company, effective as of November 23, 2016.
|
|
|
3.2.3
|
Amendment No. 5 to Amended and Restated Bylaws of the Company, effective as of August 19, 2016.
|
|
|
3.2.4
|
Amendment No. 4 to Amended and Restated Bylaws of the Company, effective as of May 17, 2016.
|
|
|
3.2.5
|
Amendment No. 3 to Amended and Restated Bylaws of the Company, effective as of October 7, 2015.
|
|
|
3.2.6
|
Amendment No. 2 to Amended and Restated Bylaws of the Company, effective as of July 7, 2015.
|
|
|
3.2.7
|
Amendment No. 1 to Amended and Restated Bylaws of the Company, effective as of March 24, 2015.
|
|
|
3.2.8
|
Amended and Restated Bylaws of the Company, effective as of May 14, 2014.
|
|
|
4.1
|
Specimen of Common Stock Certificate.(5)
|
|
|
4.2
|
Preferred Stock Rights Agreement, dated as of January 20, 2009, by and between the Company and StockTrans, Inc., as Rights Agent.(4)
|
|
|
4.3
|
Indenture, dated as of June 30, 2015, between the Company, and Wilmington Trust, National Association, as trustee.(6)
|
|
|
10.1
|
Letter Agreement, dated as of June 25, 2015, between RBC Capital Markets LLC and the Company regarding the Base Warrants.(6)
|
|
|
10.2
|
Letter Agreement, dated as of June 25, 2015 between RBC Capital Markets LLC and the Company regarding the Base Call Option Transaction.(6)
|
|
|
10.3
|
Letter Agreement, dated as of June 26, 2015, between RBC Capital Markets LLC and the Company regarding the Additional Warrants.(6)
|
|
|
10.4
|
Letter Agreement, dated as of June 26, 2015, between RBC Capital Markets LLC and the Company regarding the Additional Call Option Transaction.(6)
|
|
|
10.5
|
Credit Agreement, dated as of August 4, 2015, by and among the Company, the lenders party thereto from time to time and Royal Bank of Canada, as administrative agent and collateral agent.(7)
|
|
|
10.6
|
Restatement Agreement, dated as of August 3, 2016, by and the Company, the guarantors party thereto, Royal Bank of Canada, as administrative agent, and the lenders party thereto.(8)
|
|
|
10.7.1
|
First Amendment, dated as of May 31, 2016, to the Distribution, License, Development and Supply Agreement by and between AstraZeneca UK Limited and the Company dated as of January 31, 2012.**(8)
|
|
|
10.7.2
|
Distribution, License, Development and Supply Agreement, dated as of January 31, 2012, between the Company and AstraZeneca UK Limited.**(9)
|
|
|
10.8.1
|
Asset Purchase Agreement, dated as of June 20, 2016, between Teva Pharmaceutical Industries Ltd. and the Company. †**(10)
|
|
|
10.8.2
|
Amendment No. 1 dated as of June 30, 2016 to the Asset Purchase Agreement between Teva Pharmaceutical Industries Ltd. and the Company dated as of June 20, 2016.(8)
|
|
|
10.9.1
|
Asset Purchase Agreement, dated as of June 20, 2016, by and among Actavis Elizabeth LLC, Actavis Group PTC Ehf., Actavis Holdco US, Inc., Actavis LLC, Actavis Mid Atlantic LLC, Actavis Pharma, Inc., Actavis South Atlantic LLC, Andrx LLC, Breath Ltd., The Rugby Group, Inc., Watson Laboratories, Inc. and the Company. †**(10)
|
|
|
10.9.2
|
Amendment No. 1 dated as of June 30, 2016 to the Asset Purchase Agreement by and among Actavis Elizabeth LLC, Actavis Group PTC Ehf., Actavis Holdco US, Inc., Actavis LLC, Actavis Mid Atlantic LLC, Actavis Pharma, Inc., Actavis South Atlantic LLC, Andrx LLC, Breath Ltd., The Rugby Group, Inc., Watson Laboratories, Inc. and the Company dated as of June 20, 2016. **(10)
|
|
|
10.10.1
|
Supply Agreement, dated as of June 20, 2016, between Teva Pharmaceutical Industries Ltd. and the Company.**(10)
|
|
|
10.10.2
|
Amendment No. 1, dated as of June 30, 2016, to the Supply Agreement between Teva Pharmaceutical Industries Ltd. and the Company dated as of June 20, 2016.**(10)
|
|
|
10.11.1
|
Supply Agreement, dated as of June 20, 2016, by and among Actavis Elizabeth LLC, Actavis Group PTC Ehf., Actavis Holdco US, Inc., Actavis LLC, Actavis Mid Atlantic LLC, Actavis Pharma, Inc., Actavis South Atlantic LLC, Andrx LLC, Breath Ltd., The Rugby Group, Inc., Watson Laboratories, Inc. and the Company.**(10)
|
|
|
10.11.2
|
Amendment No. 1, dated as of June 30, 2016, to the Supply Agreement by and among Actavis Elizabeth LLC, Actavis Group PTC Ehf., Actavis Holdco US, Inc., Actavis LLC, Actavis Mid Atlantic LLC, Actavis Pharma, Inc., Actavis South Atlantic LLC, Andrx LLC, Breath Ltd., The Rugby Group, Inc., Watson Laboratories, Inc. and the Company dated as of June 20, 2016.**(10)
|
|
|
10.12
|
Amended and Restated License and Distribution Agreement, dated as of February 7, 2013, between the Company and Shire LLC.**(11)
|
|
|
10.13.1
|
Impax Laboratories, Inc. 1999 Equity Incentive Plan.*(12)
|
|
|
10.13.2
|
Form of Stock Option Grant under the Impax Laboratories, Inc. 1999 Equity Incentive Plan.*(12)
|
|
|
10.14
|
Impax Laboratories, Inc. 2001 Non-Qualified Employee Stock Purchase Plan.*(5)
|
|
|
10.15.1
|
Impax Laboratories, Inc. Third Amended and Restated 2002 Equity Incentive Plan.*(13)
|
|
|
10.15.2
|
Form of Stock Option Agreement under the Impax Laboratories, Inc. Third Amended and Restated 2002 Equity Incentive Plan.*(14)
|
|
|
10.15.3
|
Form of Restricted Stock (Stock Bonus) Agreement under the Impax Laboratories, Inc. Third Amended and Restated 2002 Equity Incentive Plan.*(15)
|
|
|
10.16.1
|
Impax Laboratories, Inc. Executive Non-Qualified Deferred Compensation Plan, amended and restated effective January 1, 2008.*(16)
|
|
|
10.16.2
|
Amendment to Impax Laboratories, Inc. Executive Non-Qualified Deferred Compensation Plan, effective as of January 1, 2009.* (16)
|
|
|
10.17.1
|
Employment Agreement, dated as of January 1, 2010, between the Company and Charles V. Hildenbrand.*(17)
|
|
|
10.17.2
|
Confidential Separation and Release Agreement, dated as of July 5, 2011, between the Company and Charles V. Hildenbrand.*(18)
|
|
|
10.18.1
|
Employment Agreement, dated as of January 1, 2010, between the Company and Arthur A. Koch, Jr.*(17)
|
|
|
10.18.2
|
General Release and Waiver, effective as of July 17, 2012, between the Company and Arthur A. Koch, Jr.* (19)
|
|
|
10.19
|
Letter Agreement between J. Kevin Buchi, dated as of December 19, 2016, between the Company and J. Kevin Buchi.*
|
|
|
10.20.1
|
Employment Agreement, dated as of April 21, 2014, by and between the Company and G. Frederick Wilkinson.*(20)
|
|
|
10.20.2
|
General Release and Waiver, dated as of December 19, 2016, by and between the Company and G. Frederick Wilkinson.*
|
|
|
10.21.1
|
Employment Agreement, dated as of January 1, 2010, between the Company and Michael J. Nestor.*(17)
|
|
|
10.21.2
|
Amendment, dated as of April 1, 2014, to the Employment Agreement, dated as of January 1, 2014, between the Company and Michael Nestor.*(21)
|
|
|
10.22
|
Employment Agreement, dated as of July 14, 2016, between the Company and Douglas S. Boothe.*(8)
|
|
|
10.23.1
|
Offer of Employment Letter, dated as of March 17, 2011, between the Company and Mark A. Schlossberg.*(22)
|
|
|
10.23.2
|
Employment Agreement, dated as of May 2, 2011, between the Company and Mark A. Schlossberg.*(22)
|
|
|
10.23.3
|
Amendment, dated as of April 1, 2014, to the Employment Agreement, dated as of May 2, 2011, between the Company and Mark A. Schlossberg.*(21)
|
|
|
10.24.1
|
Employment Agreement, dated as of December 12, 2012, between the Company and Bryan M. Reasons.*(23)
|
|
|
10.24.2
|
Amendment, dated as of April 1, 2014, to the Employment Agreement, dated as of December 12, 2012 between the Company and Bryan M. Reasons.*(21)
|
|
|
10.25.1
|
Employment Agreement, dated as of November 28, 2011, by and between the Company and Jeffrey Nornhold.*(24)
|
|
|
10.25.2
|
Amendment, dated as of April 1, 2014, to the Employment Agreement, dated as of November 28, 2011, by and between the Company and Jeffrey Nornhold.*(24)
|
|
|
10.25.3
|
Letter Agreement, dated as of April 1, 2014, between the Company and Jeffrey Nornhold.*(24)
|
|
|
11.1
|
Statement re computation of per share earnings (incorporated by reference to Note 15 to the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K).
|
|
|
21.1
|
Subsidiaries of the registrant.
|
|
|
23.1
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
31.1
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.2
|
Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101
|
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2016 and 2015, (ii) Consolidated Statements of Operations for each of the three years in the period ended December 31, 2016, (iii) Consolidated Statements of Comprehensive (Loss) Income for each of the three years in the period ended December 31, 2016, (iv) Consolidated Statements of Changes in Stockholders’ Equity for each of the three years in the period ended December 31, 2016, (v) Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2016 and (vi) Notes to Consolidated Financial Statements for each of the three years in the period ended December 31, 2016.
|
*
|
Management contract, compensatory plan or arrangement.
|
**
|
Confidential treatment granted for certain portions of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which portions are omitted and filed separately with the SEC.
|
†
|
Schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a supplemental copy of any omitted schedule to the SEC upon request.
|
(1)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on October 10, 2014.
|
(2)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 9, 2015.
|
(3)
|
Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form 10 filed on December 23, 2008.
|
(4)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 22, 2009.
|
(5)
|
Incorporated by reference to the Company’s Registration Statement on Form 10 filed on October 10, 2008.
|
(6)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 30, 2015.
|
(7)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on August 5, 2015.
|
(8)
|
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016.
|
(9)
|
Incorporated by reference to the Company’s Current Report on Form 8-K/A filed on April 2, 2012.
|
(10)
|
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2016 filed on January 6, 2017.
|
(11)
|
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013.
|
(12)
|
Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.
|
(13)
|
Incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A (File No. 001-34263) filed on April 14, 2016.
|
(14)
|
Incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-8 (File No. 333-189360) filed on June 14, 2013.
|
(15)
|
Incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 (File No. 333-189360) filed on June 14, 2013.
|
(16)
|
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.
|
(17)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 14, 2010.
|
(18)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on July 11, 2011.
|
(19)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on July 18, 2012.
|
(20)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on April 24, 2014.
|
(21)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on April 2, 2014.
|
(22)
|
Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.
|
(23)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 13, 2012.
|
(24)
|
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.
|
Consolidated Statements of Operations for the years ended December 31, 2016, 2015, and 2014
|
|
Consolidated Statements of Comprehensive
(Loss) Income for the years ended December 31, 2016, 2015, and 2014
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
180,133
|
|
|
$
|
340,351
|
|
Accounts receivable, net
|
257,368
|
|
|
324,451
|
|
||
Inventory, net
|
175,230
|
|
|
125,582
|
|
||
Prepaid expenses and other current assets
|
18,410
|
|
|
31,689
|
|
||
Total current assets
|
631,141
|
|
|
822,073
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
233,372
|
|
|
214,156
|
|
||
Intangible assets, net
|
620,466
|
|
|
602,020
|
|
||
Goodwill
|
207,329
|
|
|
210,166
|
|
||
Deferred income taxes, net
|
69,866
|
|
|
315
|
|
||
Other non-current assets
|
60,844
|
|
|
73,757
|
|
||
Total assets
|
$
|
1,823,018
|
|
|
$
|
1,922,487
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
58,952
|
|
|
$
|
56,325
|
|
Accrued expenses
|
231,011
|
|
|
204,711
|
|
||
Accrued profit sharing and royalty expenses
|
13,642
|
|
|
65,725
|
|
||
Current portion of long-term debt, net
|
17,719
|
|
|
—
|
|
||
Total current liabilities
|
321,324
|
|
|
326,761
|
|
||
|
|
|
|
||||
Long-term debt, net
|
813,545
|
|
|
424,595
|
|
||
Deferred income taxes
|
—
|
|
|
72,770
|
|
||
Other non-current liabilities
|
64,175
|
|
|
35,952
|
|
||
Total liabilities
|
1,199,044
|
|
|
860,078
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 21)
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value; 2,000,000 shares authorized; No shares issued or outstanding at December 31, 2016 and 2015
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 150,000,000 shares authorized; 73,948,340 issued and 73,704,611 outstanding shares at December 31, 2016; 72,926,205 issued and 72,682,476 outstanding shares at December 31, 2015
|
739
|
|
|
729
|
|
||
Treasury stock at cost: 243,729 shares at December 31, 2016 and 2015
|
(2,157
|
)
|
|
(2,157
|
)
|
||
Additional paid-in capital
|
535,056
|
|
|
504,077
|
|
||
Retained earnings
|
98,192
|
|
|
570,223
|
|
||
Accumulated other comprehensive loss
|
(7,856
|
)
|
|
(10,463
|
)
|
||
Total stockholders’ equity
|
623,974
|
|
|
1,062,409
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,823,018
|
|
|
$
|
1,922,487
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Impax Generics, net
|
$
|
606,320
|
|
|
$
|
710,932
|
|
|
$
|
549,082
|
|
Impax Specialty Pharma, net
|
218,109
|
|
|
149,537
|
|
|
46,967
|
|
|||
Total revenues
|
824,429
|
|
|
860,469
|
|
|
596,049
|
|
|||
Cost of revenues
|
486,899
|
|
|
500,762
|
|
|
280,520
|
|
|||
Cost of revenues impairment charges
|
488,632
|
|
|
7,303
|
|
|
2,876
|
|
|||
Gross (loss) profit
|
(151,102
|
)
|
|
352,404
|
|
|
312,653
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
201,830
|
|
|
201,287
|
|
|
139,390
|
|
|||
Research and development
|
80,466
|
|
|
70,622
|
|
|
78,642
|
|
|||
In-process research and development impairment charges
|
52,965
|
|
|
6,360
|
|
|
—
|
|
|||
Patent litigation
|
7,819
|
|
|
4,567
|
|
|
5,805
|
|
|||
Total operating expenses
|
343,080
|
|
|
282,836
|
|
|
223,837
|
|
|||
(Loss) income from operations
|
(494,182
|
)
|
|
69,568
|
|
|
88,816
|
|
|||
|
|
|
|
|
|
||||||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(41,441
|
)
|
|
(27,268
|
)
|
|
(43
|
)
|
|||
Interest income
|
1,022
|
|
|
1,042
|
|
|
1,473
|
|
|||
Reserve for Turing receivable
|
(40,312
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on sale of asset
|
—
|
|
|
45,574
|
|
|
—
|
|
|||
Loss on debt extinguishment
|
—
|
|
|
(16,903
|
)
|
|
—
|
|
|||
Net change in fair value of derivatives
|
—
|
|
|
(13,000
|
)
|
|
—
|
|
|||
Other, net
|
(1,412
|
)
|
|
355
|
|
|
313
|
|
|||
(Loss) income before income taxes
|
(576,325
|
)
|
|
59,368
|
|
|
90,559
|
|
|||
(Benefit from) provision for income taxes
|
(104,294
|
)
|
|
20,371
|
|
|
33,206
|
|
|||
Net (loss) income
|
$
|
(472,031
|
)
|
|
$
|
38,997
|
|
|
$
|
57,353
|
|
|
|
|
|
|
|
||||||
Net (loss) income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(6.63
|
)
|
|
$
|
0.56
|
|
|
$
|
0.84
|
|
Diluted
|
$
|
(6.63
|
)
|
|
$
|
0.54
|
|
|
$
|
0.81
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
71,147,397
|
|
|
69,640,417
|
|
|
68,185,552
|
|
|||
Diluted
|
71,147,397
|
|
|
72,027,344
|
|
|
70,530,349
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net (loss) income
|
$
|
(472,031
|
)
|
|
$
|
38,997
|
|
|
$
|
57,353
|
|
Other comprehensive (loss) income component:
|
|
|
|
|
|
||||||
Currency translation adjustments
|
2,607
|
|
|
(4,454
|
)
|
|
(7,149
|
)
|
|||
Comprehensive (loss) income
|
$
|
(469,424
|
)
|
|
$
|
34,543
|
|
|
$
|
50,204
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|||||||||||||
|
Common Stock
|
|
|
|
Additional
|
|
|
|
Other
|
|
|
|||||||||||||||
|
Number of
Shares |
|
Par
Value |
|
Treasury
Stock |
|
Paid-in
Capital |
|
Retained
Earnings |
|
Comprehensive
Income (Loss) |
|
Total
|
|||||||||||||
Balance, December 31, 2013
|
69,684
|
|
|
$
|
699
|
|
|
$
|
(2,157
|
)
|
|
$
|
336,648
|
|
|
$
|
473,873
|
|
|
$
|
1,140
|
|
|
$
|
810,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,353
|
|
|
—
|
|
|
57,353
|
|
||||||
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,149
|
)
|
|
(7,149
|
)
|
||||||
Exercises of stock options, issuances of restricted stock and sales of common stock under ESPP
|
1,544
|
|
|
15
|
|
|
—
|
|
|
3,255
|
|
|
—
|
|
|
—
|
|
|
3,270
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
20,883
|
|
|
—
|
|
|
—
|
|
|
20,883
|
|
||||||
Tax benefit related to exercises of stock options and vestings of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
3,317
|
|
|
—
|
|
|
—
|
|
|
3,317
|
|
||||||
Balance, December 31, 2014
|
71,228
|
|
|
$
|
714
|
|
|
$
|
(2,157
|
)
|
|
$
|
364,103
|
|
|
$
|
531,226
|
|
|
$
|
(6,009
|
)
|
|
$
|
887,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,997
|
|
|
—
|
|
|
38,997
|
|
||||||
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,454
|
)
|
|
(4,454
|
)
|
||||||
Exercises of stock options, issuances of restricted stock and sales of common stock under ESPP
|
1,698
|
|
|
15
|
|
|
—
|
|
|
(3,533
|
)
|
|
—
|
|
|
—
|
|
|
(3,518
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
28,613
|
|
|
—
|
|
|
—
|
|
|
28,613
|
|
||||||
Sale of warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
88,320
|
|
|
—
|
|
|
—
|
|
|
88,320
|
|
||||||
Reclassification of derivatives to equity, net of related taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
21,038
|
|
|
—
|
|
|
—
|
|
|
21,038
|
|
||||||
Tax benefit related to exercises of stock options and vestings of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
5,536
|
|
|
—
|
|
|
—
|
|
|
5,536
|
|
||||||
Balance, December 31, 2015
|
72,926
|
|
|
$
|
729
|
|
|
$
|
(2,157
|
)
|
|
$
|
504,077
|
|
|
$
|
570,223
|
|
|
$
|
(10,463
|
)
|
|
$
|
1,062,409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(472,031
|
)
|
|
—
|
|
|
(472,031
|
)
|
||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,607
|
|
|
2,607
|
|
||||||
Exercises of stock options, issuances of restricted stock and sales of common stock under ESPP
|
1,022
|
|
|
10
|
|
|
—
|
|
|
(612
|
)
|
|
—
|
|
|
—
|
|
|
(602
|
)
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
32,180
|
|
|
—
|
|
|
—
|
|
|
32,180
|
|
||||||
Tax expense related to exercises of stock options and vestings of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(589
|
)
|
|
—
|
|
|
—
|
|
|
(589
|
)
|
||||||
Balance, December 31, 2016
|
73,948
|
|
|
$
|
739
|
|
|
$
|
(2,157
|
)
|
|
$
|
535,056
|
|
|
$
|
98,192
|
|
|
$
|
(7,856
|
)
|
|
$
|
623,974
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(472,031
|
)
|
|
$
|
38,997
|
|
|
$
|
57,353
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
88,348
|
|
|
68,637
|
|
|
34,026
|
|
|||
Non-cash interest expense
|
22,845
|
|
|
11,230
|
|
|
—
|
|
|||
Share-based compensation expense
|
32,180
|
|
|
28,613
|
|
|
20,883
|
|
|||
Tax expense (benefit) from employees’ exercises of stock options and vestings of restricted stock awards
|
589
|
|
|
(5,536
|
)
|
|
(3,317
|
)
|
|||
Deferred income taxes, net and uncertain tax positions
|
(127,405
|
)
|
|
(29,558
|
)
|
|
(11,810
|
)
|
|||
Intangible asset impairment charges
|
541,597
|
|
|
13,664
|
|
|
2,876
|
|
|||
Accrued profit sharing and royalty expenses, net of payments
|
(52,083
|
)
|
|
44,306
|
|
|
3,786
|
|
|||
Reserve for Turing receivable
|
40,312
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale of asset
|
—
|
|
|
(45,574
|
)
|
|
—
|
|
|||
Loss on debt extinguishment
|
—
|
|
|
16,903
|
|
|
—
|
|
|||
Net change in fair value of derivatives
|
—
|
|
|
13,000
|
|
|
—
|
|
|||
Recognition of deferred revenue
|
—
|
|
|
(4,310
|
)
|
|
(3,939
|
)
|
|||
Other
|
2,678
|
|
|
(81
|
)
|
|
1,226
|
|
|||
Changes in certain assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
26,771
|
|
|
(121,110
|
)
|
|
(33,497
|
)
|
|||
Inventory
|
(45,561
|
)
|
|
(14,035
|
)
|
|
(16,338
|
)
|
|||
Prepaid expenses and other assets
|
(573
|
)
|
|
9,330
|
|
|
(9,952
|
)
|
|||
Accounts payable and accrued expenses
|
14,292
|
|
|
48,106
|
|
|
(8,980
|
)
|
|||
Other liabilities
|
2,638
|
|
|
(656
|
)
|
|
500
|
|
|||
Net cash provided by operating activities
|
74,597
|
|
|
71,926
|
|
|
32,817
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Payment for business acquisition (prior year net of cash acquired)
|
(585,800
|
)
|
|
(691,348
|
)
|
|
—
|
|
|||
Purchases of property, plant and equipment
|
(49,402
|
)
|
|
(25,199
|
)
|
|
(29,913
|
)
|
|||
Proceeds from sales of property, plant and equipment
|
1,360
|
|
|
—
|
|
|
—
|
|
|||
Payments for licensing agreements
|
(3,500
|
)
|
|
(5,850
|
)
|
|
(13,000
|
)
|
|||
Investment in cash surrender value of insurance
|
(4,750
|
)
|
|
(4,750
|
)
|
|
(3,000
|
)
|
|||
Proceeds from repayment of Tolmar loan
|
15,000
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of intangible assets
|
—
|
|
|
59,546
|
|
|
—
|
|
|||
Maturities of short-term investments
|
—
|
|
|
200,064
|
|
|
395,404
|
|
|||
Purchases of short-term investments
|
—
|
|
|
—
|
|
|
(366,092
|
)
|
|||
Net cash used in investing activities
|
(627,092
|
)
|
|
(467,537
|
)
|
|
(16,601
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from sale of convertible notes
|
—
|
|
|
600,000
|
|
|
—
|
|
|||
Proceeds from issuance of term loan
|
400,000
|
|
|
435,000
|
|
|
—
|
|
|||
Repayment of term loan
|
(5,000
|
)
|
|
(435,000
|
)
|
|
—
|
|
|||
Payment of deferred financing fees
|
(11,867
|
)
|
|
(36,941
|
)
|
|
—
|
|
|||
Purchase of bond hedge derivative asset
|
—
|
|
|
(147,000
|
)
|
|
—
|
|
|||
Proceeds from sale of warrants
|
—
|
|
|
88,320
|
|
|
—
|
|
Tax (expense) benefit from employees’ exercises of stock options and vestings of restricted stock awards
|
(589
|
)
|
|
5,536
|
|
|
3,317
|
|
|||
Proceeds from exercises of stock options and ESPP
|
9,239
|
|
|
11,472
|
|
|
11,097
|
|
|||
Net cash provided by financing activities
|
391,783
|
|
|
521,387
|
|
|
14,414
|
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
494
|
|
|
(298
|
)
|
|
(369
|
)
|
|||
|
|
|
|
|
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(160,218
|
)
|
|
125,478
|
|
|
30,261
|
|
|||
Cash and cash equivalents, beginning of year
|
340,351
|
|
|
214,873
|
|
|
184,612
|
|
|||
Cash and cash equivalents, end of year
|
$
|
180,133
|
|
|
$
|
340,351
|
|
|
$
|
214,873
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
18,139
|
|
|
$
|
15,365
|
|
|
$
|
17
|
|
Cash paid for income taxes, net
|
$
|
23,053
|
|
|
$
|
43,223
|
|
|
$
|
72,174
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of non-cash investing activity:
|
|
|
|
|
|
||||||
Fair value of contingent consideration issued in business acquisition
|
$
|
30,100
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Estimated Fair Value
|
||
Purchase price per the APAs
|
$
|
575,800
|
|
Upfront payment pursuant to Termination Agreement
|
10,000
|
|
|
Total cash consideration
|
585,800
|
|
|
Fair value of contingent consideration pursuant to Termination Agreement (1)
|
30,100
|
|
|
Total consideration transferred
|
$
|
615,900
|
|
|
Estimated Fair Value
|
||
Intangible assets
|
$
|
613,032
|
|
Inventory - raw materials
|
2,868
|
|
|
Total assets acquired
|
$
|
615,900
|
|
|
Estimated Fair Value
|
|
Weighted-Average Estimated Useful Life
|
||
Marketed product rights
|
$
|
455,529
|
|
|
19 years
|
Acquired IPR&D product rights (1)
|
157,503
|
|
|
n/a
|
|
Total intangible assets
|
$
|
613,032
|
|
|
|
|
|
Years Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Total revenues
|
|
$
|
927,593
|
|
|
$
|
1,025,598
|
|
Net (loss) income
|
|
(450,190
|
)
|
|
70,057
|
|
•
|
Adjustments to selling, general and administrative expense related to transaction costs directly attributable to the transaction include the elimination of
$3.1 million
of charges in the pro forma results for the year ended December 31, 2016 which have been included in the pro forma results for the year ended December 31, 2015.
|
Accounts receivable (1)
|
$
|
56,851
|
|
Inventory
|
31,259
|
|
|
Income tax receivable and other prepaid expenses
|
2,407
|
|
|
Property, plant and equipment
|
27,540
|
|
|
Intangible assets
|
632,600
|
|
|
Intangible assets held for sale
|
4,000
|
|
|
Goodwill
|
179,755
|
|
|
Deferred income taxes
|
37,041
|
|
|
Other non-current assets
|
3,844
|
|
|
Total assets acquired
|
975,297
|
|
|
|
|
||
Current liabilities
|
67,584
|
|
|
Deferred tax liabilities
|
210,005
|
|
|
Other non-current liabilities
|
6,360
|
|
|
Total liabilities assumed
|
283,949
|
|
|
|
|
||
Cash paid, net of cash acquired
|
$
|
691,348
|
|
(1)
|
The accounts receivable acquired in the Tower Acquisition had a fair value of
$56.9 million
, including an allowance for doubtful accounts of
$9.0 million
, which represented the Company’s best estimate on March 9, 2015 (the closing date of the transaction) of the contractual cash flows not expected to be collected by the acquired companies.
|
|
Estimated Fair
Value |
|
Weighted-Average
Estimated Useful Life (years) |
||
Marketed product rights
|
$
|
381,100
|
|
|
13
|
Royalty rights
|
80,800
|
|
|
12
|
|
Acquired IPR&D product rights
|
170,700
|
|
|
n/a
|
|
Total intangible assets
|
$
|
632,600
|
|
|
|
|
Year Ended December 31, 2015
|
|
Year Ended December 31, 2014
|
||||
Total revenues
|
$
|
892,906
|
|
|
$
|
819,838
|
|
Net income
|
$
|
54,285
|
|
|
$
|
30,838
|
|
•
|
Adjustments to amortization expense related to identifiable intangible assets acquired;
|
•
|
Adjustments to depreciation expense related to property, plant and equipment acquired;
|
•
|
Adjustments to interest expense to reflect the long-term debt held by Tower and Lineage paid out and eliminated at the closing and the Company's Senior Secured Credit Facilities (described in “Note 13. Debt”);
|
•
|
Adjustments to cost of revenues related to the fair value adjustments in inventory sold, including elimination of
$6.1 million
for the year ended December 31, 2015 and additional costs of approximately
$6.1 million
for the year ended December 31, 2014;
|
•
|
Adjustments to selling, general and administrative expense related to severance and retention costs of
$3.4 million
incurred as part of the transaction. These costs were eliminated in the pro forma results for the year ended December 31, 2015 and included in the pro forma results for the year ended December 31, 2014;
|
•
|
Adjustments to selling, general and administrative expense related to transaction costs directly attributable to the transaction include the elimination of
$12.2 million
of charges in the pro forma results for the year ended December 31, 2015 which have been included in the pro forma results for the year ended December 31, 2014; and
|
•
|
Adjustments to reflect the elimination of
$2.3 million
in commitment fees related to the Company's
$435.0 million
term loan with Barclays Bank PLC (described in "Note 13. Debt") that were incurred during the year ended December 31, 2015 and were included in the pro forma results for the year ended December 31, 2014.
|
Percent of Total Accounts Receivable
|
2016
|
|
2015
|
|
2014
|
|||
Customer #1
|
36.2
|
%
|
|
52.4
|
%
|
|
36.9
|
%
|
Customer #2
|
35.6
|
%
|
|
24.8
|
%
|
|
28.2
|
%
|
Customer #3
|
20.5
|
%
|
|
14.4
|
%
|
|
19.6
|
%
|
Customer #4
|
1.7
|
%
|
|
0.7
|
%
|
|
0.6
|
%
|
Customer #5
|
0.7
|
%
|
|
0.1
|
%
|
|
1.6
|
%
|
Customer #6
|
0.5
|
%
|
|
1.0
|
%
|
|
1.8
|
%
|
Customer #7
|
0.5
|
%
|
|
0.6
|
%
|
|
1.7
|
%
|
Customer #8
|
0.3
|
%
|
|
0.5
|
%
|
|
1.7
|
%
|
Total
|
96.0
|
%
|
|
94.5
|
%
|
|
92.1
|
%
|
Top five largest customers
|
94.7
|
%
|
|
93.3
|
%
|
|
88.2
|
%
|
Percent of Gross Revenues
|
2016
|
|
2015
|
|
2014
|
|||
Customer #1
|
40.1
|
%
|
|
45.6
|
%
|
|
36.0
|
%
|
Customer #2
|
28.4
|
%
|
|
21.7
|
%
|
|
20.7
|
%
|
Customer #3
|
20.1
|
%
|
|
18.8
|
%
|
|
19.3
|
%
|
Customer #4
|
1.2
|
%
|
|
1.1
|
%
|
|
1.8
|
%
|
Customer #5
|
1.1
|
%
|
|
1.4
|
%
|
|
2.5
|
%
|
Customer #6
|
0.4
|
%
|
|
0.4
|
%
|
|
1.9
|
%
|
Total
|
91.3
|
%
|
|
89.0
|
%
|
|
82.2
|
%
|
Top five largest customers
|
90.9
|
%
|
|
88.6
|
%
|
|
80.4
|
%
|
•
|
the delivered item has value to the customer on a stand-alone basis; and
|
•
|
if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor.
|
•
|
the milestone is commensurate with either: (1) the performance required to achieve the milestone, or (2) the enhancement of the value of the delivered items resulting from the performance required to achieve the milestone;
|
•
|
the milestone relates solely to past performance; and
|
•
|
the milestone payment is reasonable relative to all of the deliverables and payment terms within the agreement.
|
•
|
Chargebacks
|
•
|
Rebates and Administrative Fees
|
•
|
Distribution Service Fees
|
•
|
Returns
|
•
|
Shelf-Stock Adjustments
|
•
|
Cash Discounts
|
•
|
Medicaid and Other U.S. Government Pricing Programs
|
•
|
Rx Partner and OTC Partner
|
•
|
Research Partner
|
•
|
Level 1
- Inputs are quoted prices for identical instruments in active markets.
|
•
|
Level 2
- Inputs are quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-derived valuations whose inputs are observable or whose significant value drivers are observable.
|
•
|
Level 3
- Inputs are unobservable and reflect the Company's own assumptions, based on the best information available, including the Company's own data.
|
|
As of December 31, 2016
|
||||||||||||||||||
|
|
|
|
|
Fair Value Measurement Based on
|
||||||||||||||
|
Carrying
Amount |
|
Fair Value
|
|
Quoted Prices in Active Markets
(Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant Unobservable
Inputs (Level 3) |
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Deferred Compensation Plan assets
(1)
|
$
|
37,382
|
|
|
$
|
37,382
|
|
|
$
|
—
|
|
|
$
|
37,382
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Term Loan Facility due August 2021, current portion
(2)
|
$
|
20,000
|
|
|
$
|
20,000
|
|
|
$
|
—
|
|
|
$
|
20,000
|
|
|
$
|
—
|
|
Term Loan Facility due August 2021, long-term portion
(2)
|
$
|
375,000
|
|
|
$
|
375,000
|
|
|
$
|
—
|
|
|
$
|
375,000
|
|
|
$
|
—
|
|
2% Convertible Senior Notes due June 2022
(3)
|
$
|
600,000
|
|
|
$
|
469,800
|
|
|
$
|
469,800
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred Compensation Plan liabilities
(1)
|
$
|
28,582
|
|
|
$
|
28,582
|
|
|
$
|
—
|
|
|
$
|
28,582
|
|
|
$
|
—
|
|
Contingent consideration
(4)
|
$
|
31,048
|
|
|
$
|
31,048
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,048
|
|
|
As of December 31, 2015
|
||||||||||||||||||
|
|
|
|
|
Fair Value Measurement Based on
|
||||||||||||||
|
Carrying
Amount |
|
Fair Value
|
|
Quoted Prices in Active Markets
(Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant Unobservable
Inputs (Level 3) |
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Deferred Compensation Plan assets
(1)
|
$
|
30,726
|
|
|
$
|
30,726
|
|
|
$
|
—
|
|
|
$
|
30,726
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
2% Convertible Senior Notes due June 2022
(3)
|
$
|
600,000
|
|
|
$
|
602,250
|
|
|
$
|
602,250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred Compensation Plan liabilities
(1)
|
$
|
25,581
|
|
|
$
|
25,581
|
|
|
$
|
—
|
|
|
$
|
25,581
|
|
|
$
|
—
|
|
(1)
|
The Deferred Compensation Plan liabilities are non-current liabilities recorded at the value of the amount owed to the plan participants, with changes in value recognized as compensation expense in the Company’s consolidated statements of operations. The calculation of the Deferred Compensation Plan obligation is derived from observable market data by reference to hypothetical investments selected by the participants and is included in the line item captioned “Other non-current liabilities” on the Company’s consolidated balance sheets. The Company invests participant contributions in corporate-owned life insurance (“COLI”) policies, for which the cash surrender value is included in the line item captioned “Other non-current assets” on the Company’s consolidated balance sheets.
|
(2)
|
The difference between the amount shown as the carrying value in the above tables and the amount shown on the Company’s consolidated balance sheets as of
December 31, 2016
and
2015
represents the unaccreted discount related to deferred debt issuance costs.
|
(3)
|
The difference between the amount shown as the carrying value in the above tables and the amount shown on the Company’s consolidated balance sheets at
December 31, 2016
and
2015
represents the unaccreted discounts related to deferred debt issuance costs and bifurcation of the conversion feature of the notes.
|
(4)
|
The contingent consideration liability is a non-current liability representing future consideration potentially payable to Teva upon the achievement of specified commercialization events related to methylphenidate hydrochloride in accordance with the Termination Agreement related to the Teva Transaction as described in "Note 2. Business Acquisitions." A discounted cash flow valuation model was used to value the contingent consideration. The valuation is based on significant unobservable inputs, including the probability and timing of successful product launch and the expected number of competitors at the time of launch and the launch anniversary date. The Company conducts a quarterly review of the underlying inputs and assumptions and significant changes in unobservable inputs could result in material changes to the contingent consideration liability. Changes in the value of the contingent consideration liability are included in "Other income (expense)" on the Company's consolidated statements of operations. A 5% increase or decrease in the probability of successful product launch would cause the fair value of the contingent consideration to both increase and decrease by
$1.6 million
, respectively. An increase or decrease in the number of competitors at the date of the product launch or the first anniversary would cause the fair value of the contingent consideration to decrease by
$13.4 million
and increase by
$5.1 million
, respectively. The maximum aggregate amount in contingent consideration payments the Company could be expected to make to Teva in accordance with the Termination Agreement related to methylphenidate hydrochloride is
$40.0 million
.
|
|
As of December 31,
2015 |
|
Completion of Teva Transaction
August 3,
2016
|
|
Change in
Fair Value Included
in Earnings (1)
|
|
As of December 31,
2016 |
Contingent consideration
|
—
|
|
$30,100
|
|
$948
|
|
$31,048
|
(1)
|
Earnings effect is included in Other, net in Other income (expense) in the Company's consolidated statement of operations.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Gross accounts receivable
(1)
|
$
|
780,865
|
|
|
$
|
738,730
|
|
Less: Rebate reserve
|
(277,800
|
)
|
|
(265,229
|
)
|
||
Less: Chargeback reserve
|
(154,686
|
)
|
|
(102,630
|
)
|
||
Less: Distribution services reserve
|
(18,318
|
)
|
|
(12,576
|
)
|
||
Less: Discount reserve
|
(17,957
|
)
|
|
(18,657
|
)
|
||
Less: Uncollectible accounts reserve
(2)
|
(54,736
|
)
|
|
(15,187
|
)
|
||
Accounts receivable, net
|
$
|
257,368
|
|
|
$
|
324,451
|
|
|
Years Ended December 31,
|
||||||||||
Rebate reserve
|
2016
|
|
2015
|
|
2014
|
||||||
Beginning balance
|
$
|
265,229
|
|
|
$
|
88,812
|
|
|
$
|
88,449
|
|
Acquired balances
|
—
|
|
|
75,447
|
|
|
—
|
|
|||
Provision recorded during the period for Impax Generics rebates
|
740,758
|
|
|
571,642
|
|
|
260,747
|
|
|||
Credits issued during the period for Impax Generics rebates
|
(728,187
|
)
|
|
(470,672
|
)
|
|
(260,384
|
)
|
|||
Ending balance
|
$
|
277,800
|
|
|
$
|
265,229
|
|
|
$
|
88,812
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Chargeback reserve
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
102,630
|
|
|
$
|
43,125
|
|
|
$
|
37,066
|
|
Acquired balances
|
—
|
|
|
24,532
|
|
|
—
|
|
|||
Provision recorded during the period
|
1,014,108
|
|
|
833,157
|
|
|
487,377
|
|
|||
Credits issued during the period
|
(962,052
|
)
|
|
(798,184
|
)
|
|
(481,318
|
)
|
|||
Ending balance
|
$
|
154,686
|
|
|
$
|
102,630
|
|
|
$
|
43,125
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Raw materials
|
$
|
53,808
|
|
|
$
|
52,366
|
|
Work in-process
|
3,280
|
|
|
4,417
|
|
||
Finished goods
|
130,879
|
|
|
82,311
|
|
||
Total inventory
|
187,967
|
|
|
139,094
|
|
||
Less: Non-current inventory
|
12,737
|
|
|
13,512
|
|
||
Total inventory-current
|
$
|
175,230
|
|
|
$
|
125,582
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Land
|
$
|
5,603
|
|
|
$
|
5,773
|
|
Buildings and improvements
|
174,303
|
|
|
165,322
|
|
||
Equipment
|
143,818
|
|
|
135,998
|
|
||
Office furniture and equipment
|
15,767
|
|
|
14,548
|
|
||
Construction-in-progress
|
50,191
|
|
|
25,659
|
|
||
Property, plant and equipment, gross
|
389,682
|
|
|
347,300
|
|
||
Less: Accumulated depreciation
|
(156,310
|
)
|
|
(133,144
|
)
|
||
Property, plant and equipment, net
|
$
|
233,372
|
|
|
$
|
214,156
|
|
December 31, 2016
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Intangible Assets, Net
|
||||||
Amortized intangible assets:
|
|
|
|
|
|
||||||
Marketed product rights
|
$
|
524,733
|
|
|
$
|
(139,245
|
)
|
|
$
|
385,488
|
|
Royalties
|
339
|
|
|
(339
|
)
|
|
—
|
|
|||
|
525,072
|
|
|
(139,584
|
)
|
|
385,488
|
|
|||
Non-amortized intangible assets:
|
|
|
|
|
|
||||||
Acquired IPR&D product rights
|
232,576
|
|
|
—
|
|
|
232,576
|
|
|||
Acquired future royalty rights
|
2,402
|
|
|
—
|
|
|
2,402
|
|
|||
|
234,978
|
|
|
—
|
|
|
234,978
|
|
|||
Total intangible assets
|
$
|
760,050
|
|
|
$
|
(139,584
|
)
|
|
$
|
620,466
|
|
December 31, 2015
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Intangible Assets, Net
|
||||||
Amortized intangible assets:
|
|
|
|
|
|
||||||
Marketed product rights
|
$
|
458,675
|
|
|
$
|
(82,906
|
)
|
|
$
|
375,769
|
|
Royalties
|
2,200
|
|
|
(189
|
)
|
|
2,011
|
|
|||
|
460,875
|
|
|
(83,095
|
)
|
|
377,780
|
|
|||
Non-amortized intangible assets:
|
|
|
|
|
|
||||||
Acquired IPR&D product rights
|
145,640
|
|
|
—
|
|
|
145,640
|
|
|||
Acquired future royalty rights
|
78,600
|
|
|
—
|
|
|
78,600
|
|
|||
|
224,240
|
|
|
—
|
|
|
224,240
|
|
|||
Total intangible assets
|
$
|
685,115
|
|
|
$
|
(83,095
|
)
|
|
$
|
602,020
|
|
For the years ending December 31,
|
Amortization
Expense |
||
2017
|
$
|
66,651
|
|
2018
|
69,718
|
|
|
2019
|
61,808
|
|
|
2020
|
48,555
|
|
|
2021
|
34,880
|
|
|
Thereafter
|
103,876
|
|
|
Total
|
$
|
385,488
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Payroll-related expenses
|
$
|
37,986
|
|
|
$
|
37,419
|
|
Product returns
|
72,888
|
|
|
48,950
|
|
||
Accrued shelf stock
|
7,032
|
|
|
6,619
|
|
||
Government rebates
(1)
|
72,063
|
|
|
91,717
|
|
||
Legal and professional fees
|
8,395
|
|
|
5,929
|
|
||
Income taxes payable
|
—
|
|
|
830
|
|
||
Physician detailing sales force fees
|
—
|
|
|
1,132
|
|
||
Interest payable
|
544
|
|
|
500
|
|
||
Estimated Teva and Allergan chargebacks and rebates
(2)
|
14,813
|
|
|
—
|
|
||
Other
|
17,290
|
|
|
11,615
|
|
||
Total accrued expenses
|
$
|
231,011
|
|
|
$
|
204,711
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Returns reserve
|
|
|
|
|
|
||||||
Beginning balance
|
$
|
48,950
|
|
|
$
|
27,174
|
|
|
$
|
28,089
|
|
Acquired balances
|
—
|
|
|
11,364
|
|
|
—
|
|
|||
Provision related to sales recorded in the period
|
52,383
|
|
|
43,967
|
|
|
12,016
|
|
|||
Credits issued during the period
|
(28,445
|
)
|
|
(33,555
|
)
|
|
(12,931
|
)
|
|||
Ending balance
|
$
|
72,888
|
|
|
$
|
48,950
|
|
|
$
|
27,174
|
|
(i)
|
If during any calendar quarter commencing after the quarter ending September 30, 2015 (and only during such calendar quarter) the last reported sale price of the Company’s common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than
130%
of the conversion price on each applicable trading day; or
|
(ii)
|
If during the
five
business day period after any
10
consecutive trading day period (the “measurement period”) in which the trading price per
$1,000
of principal amount of Notes for each trading day of the measurement period was less than
98%
of the product of the last report sale price of the Company’s common stock and the conversion rate on each such trading day; or
|
(iii)
|
Upon the occurrence of corporate events specified in the Indenture.
|
Shares issued
|
73,948
|
|
Stock options outstanding
(1)
|
2,234
|
|
Conversion of Notes payable
(2)
|
9,471
|
|
Warrants outstanding (see below)
|
9,471
|
|
Total shares of common stock issued and reserved for issuance
|
95,124
|
|
|
Years Ended December 31,
|
|
||||||||||||
|
2016
|
|
|
2015
|
|
|
2014
|
|
||||||
Basic (Loss) Earnings Per Common Share:
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(472,031
|
)
|
|
|
$
|
38,997
|
|
|
|
$
|
57,353
|
|
|
Weighted-average common shares outstanding
|
71,147
|
|
|
|
69,640
|
|
|
|
68,186
|
|
|
|||
Basic (loss) earnings per share
|
$
|
(6.63
|
)
|
|
|
$
|
0.56
|
|
|
|
$
|
0.84
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted (Loss) Earnings Per Common Share:
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(472,031
|
)
|
|
|
$
|
38,997
|
|
|
|
$
|
57,353
|
|
|
Add-back of interest expense on outstanding convertible notes payable, net of tax
|
—
|
|
(1)
|
|
—
|
|
(2)
|
|
—
|
|
(3)
|
|||
Adjusted net (loss) income
|
$
|
(472,031
|
)
|
|
|
$
|
38,997
|
|
|
|
$
|
57,353
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
|
71,147
|
|
|
|
69,640
|
|
|
|
68,186
|
|
|
|||
Weighted-average incremental shares related to assumed exercise of warrants and stock options, vesting of non-vested shares and ESPP share issuance
|
—
|
|
(4)
|
|
2,387
|
|
(5)
|
|
2,344
|
|
|
|||
Weighted-average incremental shares assuming conversion of outstanding notes payable
|
—
|
|
(1)
|
|
—
|
|
(2)
|
|
—
|
|
(3)
|
|||
Diluted weighted-average common shares outstanding
|
71,147
|
|
(4)
|
|
72,027
|
|
(6)
|
|
70,530
|
|
(7)
|
|||
Diluted net (loss) income per share
|
$
|
(6.63
|
)
|
|
|
$
|
0.54
|
|
|
|
$
|
0.81
|
|
|
(1)
|
For the year ended
December 31, 2016
, the Company incurred a net loss, which cannot be diluted, so basic and diluted loss per common share were the same. Accordingly, there were no numerator or denominator adjustments related to the Company's outstanding Notes.
|
(2)
|
The numerator and denominator adjustments related to the Company’s convertible notes payable were excluded from the computation because the add-back of interest expense, net of tax, to the numerator had a greater effect on the quotient than the inclusion of the incremental shares assuming conversion of the convertible notes payable in the denominator, resulting in anti-dilution.
|
(3)
|
Not applicable to the period presented.
|
(4)
|
For the year ended
December 31, 2016
, the Company incurred a net loss, which cannot be diluted, so basic and diluted loss per common share were the same. As of
December 31, 2016
, shares issuable but not included in the Company's calculation of diluted EPS, which could potentially dilute future earnings, included
9.47 million
warrants outstanding,
9.47 million
shares for conversion of outstanding Notes payable,
2.2 million
stock options outstanding and
2.2 million
non-vested restricted stock awards.
|
(5)
|
As of
December 31, 2015
, the approximately
9.47 million
warrants outstanding have been excluded from the denominator of the diluted EPS computation under the treasury stock method because the exercise price of the warrants exceeds the average market price of the Company’s common stock for the period, so inclusion in the calculation would be anti-dilutive.
|
(6)
|
As of
December 31, 2015
, shares issuable but not included in the Company’s calculation of diluted EPS, which could potentially dilute future earnings, included
9.47 million
for warrants outstanding,
9.47 million
shares for conversion of outstanding Notes payable,
1.7 million
stock options outstanding and
1.5 million
non-vested restricted stock awards.
|
(7)
|
For the year ended
December 31, 2014
, the Company excluded
0.9 million
stock options from the computation of diluted net income per common share as the effect of these options would have been anti-dilutive.
|
Stock Options
|
Number of Shares
Under Option |
|
Weighted-
Average Exercise Price per Share |
|||
Outstanding at December 31, 2013
|
3,770,905
|
|
|
$
|
14.01
|
|
Options granted
|
386,600
|
|
|
25.27
|
|
|
Options exercised
|
(778,112
|
)
|
|
13.76
|
|
|
Options forfeited
|
(337,213
|
)
|
|
20.48
|
|
|
Outstanding at December 31, 2014
|
3,042,180
|
|
|
$
|
14.78
|
|
Options granted
|
406,950
|
|
|
41.27
|
|
|
Options exercised
|
(1,042,198
|
)
|
|
9.87
|
|
|
Options forfeited
|
(1,561
|
)
|
|
16.70
|
|
|
Outstanding at December 31, 2015
|
2,405,371
|
|
|
$
|
21.39
|
|
Options granted
|
572,625
|
|
|
12.27
|
|
|
Options exercised
|
(477,910
|
)
|
|
19.09
|
|
|
Options forfeited
|
(265,755
|
)
|
|
35.88
|
|
|
Outstanding at December 31, 2016
|
2,234,331
|
|
|
$
|
22.67
|
|
Options exercisable at December 31, 2016
|
1,536,879
|
|
|
$
|
18.71
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Volatility (range)
|
38.1%
|
-
|
40.3%
|
|
39.9%
|
-
|
40.1%
|
|
40.1%
|
-
|
41.7%
|
Volatility (weighted average)
|
38.3%
|
|
40.0%
|
|
40.2%
|
||||||
Risk-free interest rate (range)
|
1.2%
|
-
|
1.9%
|
|
0.8%
|
-
|
1.8%
|
|
0.6%
|
-
|
1.9%
|
Risk-free interest rate (weighted average)
|
1.4%
|
|
1.7%
|
|
1.8%
|
||||||
Dividend yield
|
—%
|
|
—%
|
|
—%
|
||||||
Weighted-average expected life (years)
|
6.14
|
|
6.18
|
|
6.07
|
||||||
Weighted average grant date fair value
|
$12.27
|
|
$17.08
|
|
$10.45
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Manufacturing expenses
|
$
|
6,364
|
|
|
$
|
4,479
|
|
|
$
|
2,494
|
|
Research and development
|
5,697
|
|
|
5,996
|
|
|
5,072
|
|
|||
Selling, general and administrative
|
20,119
|
|
|
18,138
|
|
|
13,317
|
|
|||
Total
|
$
|
32,180
|
|
|
$
|
28,613
|
|
|
$
|
20,883
|
|
Type of Cost
|
Amount Expected to be Incurred
|
||
Employee retention and severance payments
|
$
|
13.4
|
|
Technical transfer of products
|
11.2
|
|
|
Asset impairment and accelerated depreciation charges
|
18.0
|
|
|
Facilities lease terminations and asset retirement obligations
|
1.0
|
|
|
Legal and professional fees
|
0.3
|
|
|
Total estimated restructuring charges
|
$
|
43.9
|
|
|
|
Balance as of
|
|
Expensed/
|
|
Cash
|
|
Non-Cash
|
|
Balance as of
|
||||||||||
|
|
December 31, 2015
|
|
Accrued Expense
|
|
Payments
|
|
Items
|
|
December 31, 2016
|
||||||||||
Employee retention and severance payments
|
|
$
|
—
|
|
|
$
|
6,636
|
|
|
$
|
(691
|
)
|
|
$
|
—
|
|
|
$
|
5,945
|
|
Technical transfer of products
|
|
—
|
|
|
6,573
|
|
|
(6,573
|
)
|
|
—
|
|
|
—
|
|
|||||
Asset impairment and accelerated depreciation charges
|
|
—
|
|
|
13,678
|
|
|
—
|
|
|
(13,678
|
)
|
|
—
|
|
|||||
Facilities lease terminations and asset retirement obligations
|
|
—
|
|
|
209
|
|
|
—
|
|
|
—
|
|
|
209
|
|
|||||
Legal and professional fees
|
|
—
|
|
|
12
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
—
|
|
|
$
|
27,108
|
|
|
$
|
(7,276
|
)
|
|
$
|
(13,678
|
)
|
|
$
|
6,154
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal taxes
|
$
|
21,386
|
|
|
$
|
48,078
|
|
|
$
|
42,635
|
|
State taxes
|
266
|
|
|
2,286
|
|
|
2,467
|
|
|||
Foreign taxes
|
1,377
|
|
|
(442
|
)
|
|
832
|
|
|||
Total current tax expense
|
23,029
|
|
|
49,922
|
|
|
45,934
|
|
|||
|
|
|
|
|
|
||||||
Deferred:
|
|
|
|
|
|
||||||
Federal taxes
|
$
|
(133,387
|
)
|
|
$
|
(23,605
|
)
|
|
$
|
(9,039
|
)
|
State taxes
|
5,502
|
|
|
(5,733
|
)
|
|
(3,597
|
)
|
|||
Foreign taxes
|
562
|
|
|
(213
|
)
|
|
(92
|
)
|
|||
Total deferred tax (benefit) expense
|
(127,323
|
)
|
|
(29,551
|
)
|
|
(12,728
|
)
|
|||
|
|
|
|
|
|
||||||
(Benefit from) provision for income taxes
|
$
|
(104,294
|
)
|
|
$
|
20,371
|
|
|
$
|
33,206
|
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
(Loss) income before income taxes
|
$
|
(576,325
|
)
|
|
|
|
|
$
|
59,368
|
|
|
|
|
$
|
90,559
|
|
|
|
||
Tax (benefit) provision at the federal statutory rate
|
(201,714
|
)
|
|
35.0
|
%
|
|
20,779
|
|
|
35.0
|
%
|
|
31,696
|
|
|
35.0
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Increase (decrease) in tax rate resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tax rate differential and permanent items on foreign income
|
186
|
|
|
—
|
%
|
|
412
|
|
|
0.7
|
%
|
|
2,285
|
|
|
2.5
|
%
|
|||
State income taxes, net of federal benefit
|
(7,394
|
)
|
|
1.3
|
%
|
|
365
|
|
|
0.6
|
%
|
|
887
|
|
|
1.0
|
%
|
|||
State research and development credits
|
(1,767
|
)
|
|
0.3
|
%
|
|
(2,357
|
)
|
|
(4.0
|
)%
|
|
(2,133
|
)
|
|
(2.4
|
)%
|
|||
Federal research and development credits
|
(2,213
|
)
|
|
0.4
|
%
|
|
(2,672
|
)
|
|
(4.5
|
)%
|
|
(2,401
|
)
|
|
(2.6
|
)%
|
|||
Share-based compensation
|
1,768
|
|
|
(0.3
|
)%
|
|
968
|
|
|
1.6
|
%
|
|
189
|
|
|
0.2
|
%
|
|||
Executive compensation
|
(761
|
)
|
|
0.1
|
%
|
|
3,140
|
|
|
5.3
|
%
|
|
1,552
|
|
|
1.7
|
%
|
|||
Domestic manufacturing deduction
|
(1,286
|
)
|
|
0.2
|
%
|
|
(1,422
|
)
|
|
(2.4
|
)%
|
|
(679
|
)
|
|
(0.7
|
)%
|
|||
Other permanent book/tax differences
|
(258
|
)
|
|
—
|
%
|
|
2,003
|
|
|
3.4
|
%
|
|
170
|
|
|
0.2
|
%
|
|||
Provision for uncertain tax positions
|
337
|
|
|
—
|
%
|
|
184
|
|
|
0.3
|
%
|
|
952
|
|
|
1.1
|
%
|
|||
Revision of prior years’ estimates
|
(792
|
)
|
|
0.1
|
%
|
|
859
|
|
|
1.5
|
%
|
|
664
|
|
|
0.7
|
%
|
|||
Taiwan Rural Area Investment Tax Credit
|
—
|
|
|
—
|
%
|
|
(2,134
|
)
|
|
(3.6
|
)%
|
|
—
|
|
|
—
|
%
|
|||
Other, net
|
842
|
|
|
(0.1
|
)%
|
|
246
|
|
|
0.4
|
%
|
|
24
|
|
|
—
|
%
|
|||
Valuation allowance
|
108,758
|
|
|
(18.9
|
)%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
(Benefit from) provision for income taxes
|
$
|
(104,294
|
)
|
|
18.1
|
%
|
|
$
|
20,371
|
|
|
34.3
|
%
|
|
$
|
33,206
|
|
|
36.7
|
%
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Accrued expenses
|
$
|
114,825
|
|
|
$
|
83,414
|
|
Inventory reserves
|
15,873
|
|
|
9,585
|
|
||
Net operating loss carryforwards
|
2,302
|
|
|
38
|
|
||
Depreciation and amortization
|
651
|
|
|
362
|
|
||
Acquired product rights and intangibles
|
128,401
|
|
|
20,912
|
|
||
Capitalized legal fees
|
10,231
|
|
|
7,352
|
|
||
Credit carryforwards
|
8,453
|
|
|
6,149
|
|
||
Share based compensation expense
|
6,371
|
|
|
5,471
|
|
||
Other
|
525
|
|
|
389
|
|
||
Deferred tax assets
|
$
|
287,632
|
|
|
$
|
133,672
|
|
Deferred tax liabilities:
|
|
|
|
||||
Tax depreciation and amortization in excess of book amounts
|
$
|
5,428
|
|
|
$
|
7,367
|
|
Acquired product rights and intangibles
|
95,517
|
|
|
188,018
|
|
||
Deferred manufacturing costs
|
64
|
|
|
65
|
|
||
Derivative
|
6,192
|
|
|
8,894
|
|
||
Other
|
1,807
|
|
|
1,783
|
|
||
Deferred tax liabilities
|
$
|
109,008
|
|
|
$
|
206,127
|
|
|
|
|
|
||||
Deferred tax assets (liabilities), net
|
$
|
178,624
|
|
|
$
|
(72,455
|
)
|
Valuation allowance
|
(108,758
|
)
|
|
—
|
|
||
Deferred tax assets (liabilities), net after valuation allowance
|
$
|
69,866
|
|
|
$
|
(72,455
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Unrecognized tax benefits beginning of year
|
$
|
5,680
|
|
|
$
|
6,517
|
|
|
$
|
5,292
|
|
Gross change for current year positions
|
549
|
|
|
1,079
|
|
|
1,089
|
|
|||
Gross change for prior period positions
|
1,318
|
|
|
(673
|
)
|
|
310
|
|
|||
Gross change due to Tower Acquisition
|
—
|
|
|
1,037
|
|
|
—
|
|
|||
Decrease due to settlements and payments
|
(1,122
|
)
|
|
(2,280
|
)
|
|
(174
|
)
|
|||
Unrecognized tax benefits end of year
|
$
|
6,425
|
|
|
$
|
5,680
|
|
|
$
|
6,517
|
|
•
|
Designation of a development candidate
. Following the designation of a development candidate, generally, IND-enabling animal studies for a new development candidate take
12
to
18
months to complete.
|
•
|
Initiation of a Phase I clinical trial
. Generally, Phase I clinical trials take
one
to
two
years to complete.
|
•
|
Initiation or completion of a Phase II clinical trial
. Generally, Phase II clinical trials take
one
to
three
years to complete.
|
•
|
Initiation or completion of a Phase III clinical trial
. Generally, Phase III clinical trials take
two
to
four
years to complete.
|
•
|
Completion of a bioequivalence study
. Generally, bioequivalence studies take
three
months to
one
year to complete.
|
•
|
Filing or acceptance of regulatory applications for marketing approval such as a New Drug Application in the United States or Marketing Authorization Application in Europe
. Generally, it takes
six
to
12
months to prepare and submit regulatory filings and
two
months for a regulatory filing to be accepted for substantive review.
|
•
|
Marketing approval in a major market, such as the United States or Europe
. Generally it takes
one
to
three
years after an application is submitted to obtain approval from the applicable regulatory agency.
|
•
|
Marketing approval in a major market, such as the United States or Europe for a new indication of an already-approved product
. Generally it takes
one
to
three
years after an application for a new indication is submitted to obtain approval from the applicable regulatory agency.
|
•
|
First commercial sale in a particular market
,
such as in the United States or Europe
.
|
•
|
Product sales in excess of a pre-specified threshold
,
such as annual sales exceeding
$100 million
. The amount of time to achieve this type of milestone depends on several factors including but not limited to the dollar amount of the threshold, the pricing of the product and the pace at which customers begin using the product.
|
(1)
|
Research & Development Services.
Revenue from the remaining
$8.0 million
of contingent milestone payments, will be recognized using the Milestone Method of accounting. Revenue recognized under the Joint Development Agreement is included in “Note 24. Supplementary Financial Information,” in the line item captioned “Other Revenues.”
|
(2)
|
Royalty Fees Earned — Valeant’s Sale of Advanced Form Solodyn® (Brand) Product.
Under the Joint Development Agreement, the Company granted Valeant a license for the advanced form of the Solodyn® product, with the Company receiving royalty fee income under such license for a period ending
eight
years after the first commercial sale of the advanced form Solodyn® product. Commercial sales of the new Solodyn® product, if any, are expected to commence upon FDA approval of Valeant’s NDA. The royalty fee income, if any, from the new Solodyn® product, will be recognized by the Company as current period revenue when earned.
|
(3)
|
Accounting for Sales of the Company’s
Four
Generic Dermatology Products.
Upon FDA approval of the Company’s ANDA for each of the
four
generic products covered by the Joint Development Agreement, the Company will have the right (but not the obligation) to begin manufacture and sale of its
four
generic dermatology products. The Company sells its manufactured generic products to all Impax Generics division customers in the ordinary course of business through its Impax Generics Product sales channel. The Company accounts for the sale, if any, of the generic products covered by the Joint Development Agreement as current period revenue according to the Company’s revenue recognition policy applicable to its Impax Generics products. To the extent the Company sells any of the
four
generic dermatology products covered by the Joint Development Agreement, the Company pays Valeant a gross profit share, with such profit share payments accounted for as a current period cost of revenues in the consolidated statement of operations
.
|
Years ending December 31,
|
|
||
2017
|
$
|
5,439
|
|
2018
|
5,470
|
|
|
2019
|
3,682
|
|
|
2020
|
2,270
|
|
|
2021
|
2,056
|
|
|
Thereafter
|
11,274
|
|
|
Total minimum lease payments
|
$
|
30,191
|
|
Year Ended December 31, 2016
|
Impax
Generics |
|
Impax
Specialty Pharma |
|
Corporate
and Other |
|
Total
Company |
||||||||
Revenues, net
|
$
|
606,320
|
|
|
$
|
218,109
|
|
|
$
|
—
|
|
|
$
|
824,429
|
|
Cost of revenues
|
417,316
|
|
|
69,583
|
|
|
—
|
|
|
486,899
|
|
||||
Cost of revenues impairment charges
|
464,319
|
|
|
24,313
|
|
|
—
|
|
|
$
|
488,632
|
|
|||
Selling, general and administrative
|
20,508
|
|
|
61,448
|
|
|
119,874
|
|
|
$
|
201,830
|
|
|||
Research and development
|
61,980
|
|
|
18,486
|
|
|
—
|
|
|
80,466
|
|
||||
In-process research and development impairment charges
|
27,765
|
|
|
25,200
|
|
|
—
|
|
|
$
|
52,965
|
|
|||
Patent litigation
|
829
|
|
|
6,990
|
|
|
—
|
|
|
7,819
|
|
||||
(Loss) income before income taxes
|
$
|
(386,397
|
)
|
|
$
|
12,089
|
|
|
$
|
(202,017
|
)
|
|
$
|
(576,325
|
)
|
Year Ended December 31, 2015
|
Impax
Generics |
|
Impax
Specialty Pharma |
|
Corporate
and Other |
|
Total
Company |
||||||||
Revenues, net
|
$
|
710,932
|
|
|
$
|
149,537
|
|
|
$
|
—
|
|
|
$
|
860,469
|
|
Cost of revenues
|
442,742
|
|
|
58,020
|
|
|
—
|
|
|
500,762
|
|
||||
Cost of revenues impairment charges
|
7,303
|
|
|
—
|
|
|
—
|
|
|
7,303
|
|
||||
Selling, general and administrative
|
29,641
|
|
|
52,427
|
|
|
119,219
|
|
|
$
|
201,287
|
|
|||
Research and development
|
52,478
|
|
|
18,144
|
|
|
—
|
|
|
70,622
|
|
||||
In-process research and development impairment charges
|
6,360
|
|
|
—
|
|
|
—
|
|
|
6,360
|
|
||||
Patent litigation
|
2,942
|
|
|
1,625
|
|
|
—
|
|
|
4,567
|
|
||||
Income (loss) before income taxes
|
$
|
169,466
|
|
|
$
|
19,321
|
|
|
$
|
(129,419
|
)
|
|
$
|
59,368
|
|
Year Ended December 31, 2014
|
Impax
Impax Generics |
|
Impax
Specialty Pharma |
|
Corporate
and Other |
|
Total
Company |
||||||||
Revenues, net
|
$
|
549,082
|
|
|
$
|
46,967
|
|
|
$
|
—
|
|
|
$
|
596,049
|
|
Cost of revenues
|
257,583
|
|
|
22,937
|
|
|
—
|
|
|
280,520
|
|
||||
Cost of revenues impairment charges
|
2,876
|
|
|
—
|
|
|
—
|
|
|
2,876
|
|
||||
Selling, general and administrative
|
17,144
|
|
|
43,307
|
|
|
78,939
|
|
|
$
|
139,390
|
|
|||
Research and development
|
40,927
|
|
|
37,715
|
|
|
—
|
|
|
78,642
|
|
||||
Patent litigation
|
5,333
|
|
|
472
|
|
|
—
|
|
|
5,805
|
|
||||
Income (loss) before income taxes
|
$
|
225,219
|
|
|
$
|
(57,464
|
)
|
|
$
|
(77,196
|
)
|
|
$
|
90,559
|
|
Segment
|
|
Product Family
|
|
2016
|
|
||||
|
|
|
|
$
|
%
|
|
|||
Impax Generics
|
|
Epinephrine Auto-Injector family (generic Adrenaclick®)
|
|
$
|
91,572
|
|
11
|
%
|
(1)
|
Impax Specialty Pharma
|
|
Rytary® Family
|
|
$
|
73,833
|
|
9
|
%
|
(2)
|
Impax Generics
|
|
Oxymorphone HCI ER family
|
|
$
|
72,661
|
|
9
|
%
|
(3)
|
Impax Generics
|
|
Diclofenac Sodium Gel family (generic Solaraze®)
|
|
$
|
69,035
|
|
8
|
%
|
(4)
|
Impax Generics
|
|
Fenofibrate family
|
|
$
|
64,001
|
|
8
|
%
|
(5)
|
Segment
|
|
Product Family
|
|
2015
|
|
||||
|
|
|
|
$
|
%
|
|
|||
Impax Generics
|
|
Diclofenac Sodium Gel family (generic Solaraze®)
|
|
$
|
148,610
|
|
17
|
%
|
(4)
|
Impax Generics
|
|
Amphetamine Salts ER (CII) family (generic Adderall®)
|
|
$
|
106,252
|
|
12
|
%
|
(6)
|
Impax Generics
|
|
Fenofibrate family
|
|
$
|
93,458
|
|
11
|
%
|
(5)
|
Impax Generics
|
|
Metaxalone family (generic Skelaxin)
|
|
$
|
69,876
|
|
8
|
%
|
(7)
|
Impax Generics
|
|
Oxymorphone HCI ER family
|
|
$
|
59,175
|
|
7
|
%
|
(3)
|
Segment
|
|
Product Family
|
|
2014
|
|
||||
|
|
|
|
$
|
%
|
|
|||
Impax Generics
|
|
Amphetamine Salts ER (CII) family (generic Adderall®)
|
|
$
|
115,411
|
|
19
|
%
|
(6)
|
Impax Generics
|
|
Fenofibrate family
|
|
$
|
111,550
|
|
19
|
%
|
(5)
|
Impax Generics
|
|
Sevelamer Carbonate family (generic Renvela®)
|
|
$
|
81,976
|
|
14
|
%
|
(8)
|
Impax Generics
|
|
Oxymorphone HCI ER family
|
|
$
|
65,323
|
|
11
|
%
|
(3)
|
Impax Generics
|
|
Digoxin family (generic Lanoxin)
|
|
$
|
49,702
|
|
8
|
%
|
(9)
|
|
|
2016 Quarters Ended
|
||||||||||||||
(in thousands, except share and per share amounts)
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Impax Generics sales, gross
|
|
$
|
611,281
|
|
|
$
|
531,226
|
|
|
$
|
651,372
|
|
|
$
|
687,462
|
|
Less:
|
|
|
|
|
|
|
|
|
||||||||
Chargebacks
|
|
217,354
|
|
|
197,864
|
|
|
254,681
|
|
|
310,961
|
|
||||
Rebates
|
|
185,476
|
|
|
178,097
|
|
|
163,340
|
|
|
193,838
|
|
||||
Product returns
|
|
11,913
|
|
|
10,237
|
|
|
16,151
|
|
|
7,920
|
|
||||
Other credits
|
|
29,354
|
|
|
25,075
|
|
|
48,607
|
|
|
38,729
|
|
||||
Impax Generics sales, net
|
|
167,184
|
|
|
119,953
|
|
|
168,593
|
|
|
136,014
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Rx Partner
|
|
2,835
|
|
|
1,669
|
|
|
6,672
|
|
|
3,163
|
|
||||
Other Revenues
|
|
60
|
|
|
73
|
|
|
55
|
|
|
49
|
|
||||
Impax Generics revenues, net
|
|
170,079
|
|
|
121,695
|
|
|
175,320
|
|
|
139,226
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Impax Specialty Pharma sales, gross
|
|
82,073
|
|
|
81,254
|
|
|
77,841
|
|
|
108,149
|
|
||||
Less:
|
|
|
|
|
|
|
|
|
||||||||
Chargebacks
|
|
6,111
|
|
|
8,826
|
|
|
5,439
|
|
|
15,253
|
|
||||
Rebates
|
|
2,853
|
|
|
2,430
|
|
|
3,556
|
|
|
3,016
|
|
||||
Product returns
|
|
1,508
|
|
|
1,279
|
|
|
574
|
|
|
2,802
|
|
||||
Other credits
|
|
16,172
|
|
|
17,824
|
|
|
15,683
|
|
|
27,854
|
|
||||
Impax Specialty Pharma sales, net
|
|
55,429
|
|
|
50,895
|
|
|
52,589
|
|
|
59,224
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other Revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
||||
Impax Specialty Pharma revenues, net
|
|
55,429
|
|
|
50,895
|
|
|
52,589
|
|
|
59,196
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
|
225,508
|
|
|
172,590
|
|
|
227,909
|
|
|
198,422
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Gross profit (loss)
|
|
102,590
|
|
|
72,984
|
|
|
(165,426
|
)
|
|
(161,250
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
|
$
|
(10,408
|
)
|
|
$
|
(2,701
|
)
|
|
$
|
(179,337
|
)
|
|
$
|
(279,585
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.15
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(2.51
|
)
|
|
$
|
(3.91
|
)
|
Diluted
|
|
$
|
(0.15
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(2.51
|
)
|
|
$
|
(3.91
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
70,665,394
|
|
|
71,100,123
|
|
|
71,331,247
|
|
|
71,487,071
|
|
||||
Diluted
|
|
70,665,394
|
|
|
71,100,123
|
|
|
71,331,247
|
|
|
71,487,071
|
|
|
|
2015 Quarters Ended
|
||||||||||||||
(in thousands, except share and per share amounts)
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Impax Generics sales, gross
|
|
$
|
355,321
|
|
|
$
|
572,079
|
|
|
$
|
565,261
|
|
|
$
|
705,574
|
|
Less:
|
|
|
|
|
|
|
|
|
||||||||
Chargebacks
|
|
126,607
|
|
|
228,977
|
|
|
212,588
|
|
|
239,920
|
|
||||
Rebates
|
|
83,130
|
|
|
140,340
|
|
|
141,646
|
|
|
200,721
|
|
||||
Product returns
|
|
6,427
|
|
|
7,528
|
|
|
6,276
|
|
|
8,888
|
|
||||
Other credits
|
|
13,198
|
|
|
23,961
|
|
|
26,295
|
|
|
31,889
|
|
||||
Impax Generics sales, net
|
|
125,959
|
|
|
171,273
|
|
|
178,456
|
|
|
224,156
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Rx Partner
|
|
2,239
|
|
|
2,579
|
|
|
1,957
|
|
|
2,532
|
|
||||
Other Revenues
|
|
543
|
|
|
827
|
|
|
253
|
|
|
158
|
|
||||
Impax Generics revenues, net
|
|
128,741
|
|
|
174,679
|
|
|
180,666
|
|
|
226,846
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Impax Specialty Pharma sales, gross
|
|
29,219
|
|
|
65,269
|
|
|
69,286
|
|
|
86,274
|
|
||||
Less:
|
|
|
|
|
|
|
|
|
||||||||
Chargebacks
|
|
5,561
|
|
|
4,452
|
|
|
5,893
|
|
|
9,159
|
|
||||
Rebates
|
|
1,418
|
|
|
1,318
|
|
|
1,078
|
|
|
1,991
|
|
||||
Product returns
|
|
2,620
|
|
|
6,763
|
|
|
2,824
|
|
|
2,641
|
|
||||
Other credits
|
|
5,492
|
|
|
13,461
|
|
|
19,285
|
|
|
20,866
|
|
||||
Impax Specialty Pharma sales, net
|
|
14,128
|
|
|
39,275
|
|
|
40,206
|
|
|
51,617
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other Revenues
|
|
227
|
|
|
228
|
|
|
227
|
|
|
3,629
|
|
||||
Impax Specialty Pharma revenues, net
|
|
14,355
|
|
|
39,503
|
|
|
40,433
|
|
|
55,246
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
|
143,096
|
|
|
214,182
|
|
|
221,099
|
|
|
282,092
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
|
59,234
|
|
|
84,851
|
|
|
93,549
|
|
|
114,770
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income
|
|
$
|
(6,333
|
)
|
|
$
|
(1,852
|
)
|
|
$
|
35,755
|
|
|
$
|
11,427
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.09
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.51
|
|
|
$
|
0.16
|
|
Diluted
|
|
$
|
(0.09
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.49
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
68,967,875
|
|
|
69,338,789
|
|
|
69,820,348
|
|
|
70,416,757
|
|
||||
Diluted
|
|
68,967,875
|
|
|
69,338,789
|
|
|
72,777,746
|
|
|
72,041,760
|
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
|||||||||
Description
|
|
Balance at
Beginning of Period |
|
Charge to
Costs and Expenses |
|
Charge to
Other Accounts |
|
Deductions
|
|
Balance at
End of Period |
|||||||
For the Year Ended December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Reserve for bad debts
|
|
$
|
539
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
$
|
515
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
For the Year Ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Reserve for bad debts
|
|
$
|
515
|
|
|
5,122
|
|
|
9,550
|
|
*
|
—
|
|
|
$
|
15,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
For the Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Reserve for bad debts
|
|
$
|
15,187
|
|
|
41,213
|
|
|
—
|
|
|
(1,664
|
)
|
|
$
|
54,736
|
|
|
IMPAX LABORATORIES, INC.
|
|
|
|
|
|
|
|
By:
|
/s/ J. Kevin Buchi
|
|
|
Name:
|
J. Kevin Buchi
|
|
|
Title:
|
Interim President and
|
|
|
|
Chief Executive Officer
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ J. Kevin Buchi
|
|
Interim President, Chief Executive Officer
|
|
March 1, 2017
|
J. Kevin Buchi
|
|
(Principal Executive Officer) and Director
|
|
|
|
|
|
|
|
/s/ Bryan M. Reasons
|
|
Senior Vice President, Finance and
|
|
March 1, 2017
|
Bryan M. Reasons
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer and
|
|
|
|
|
Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Robert L. Burr
|
|
Chairman of the Board
|
|
March 1, 2017
|
Robert L. Burr
|
|
|
|
|
|
|
|
|
|
/s/ Leslie Z. Benet, Ph.D.
|
|
Director
|
|
March 1, 2017
|
Leslie Z. Benet, Ph.D.
|
|
|
|
|
|
|
|
|
|
/s/ Richard Bierly
|
|
Director
|
|
March 1, 2017
|
Richard Bierly
|
|
|
|
|
|
|
|
|
|
/s/ Allen Chao, Ph.D.
|
|
Director
|
|
March 1, 2017
|
Allen Chao, Ph.D.
|
|
|
|
|
|
|
|
|
|
/s/ Mary K. Pendergast
|
|
Director
|
|
March 1, 2017
|
Mary K. Pendergast
|
|
|
|
|
|
|
|
|
|
/s/ Peter R. Terreri
|
|
Director
|
|
March 1, 2017
|
Peter R. Terreri
|
|
|
|
|
|
|
|
|
|
/s/ Janet S. Vergis
|
|
Director
|
|
March 1, 2017
|
Janet S. Vergis
|
|
|
|
|
Exhibit No.
|
Description of Document
|
|
|
2.1
|
Stock Purchase Agreement, dated as of October 8, 2014, by and among the Company, Tower Holdings, Inc. (“Tower”), Lineage Therapeutics Inc. (“Lineage”), Roundtable Healthcare Partners II, L.P., Roundtable Healthcare Investors II, L.P., the other stockholders of Tower and Lineage, the holders of options to purchase shares of Tower common stock and options to purchase shares of Lineage common stock, the holders of warrants to acquire shares of Tower common stock and warrants to acquire shares of Lineage common stock and, solely with respect to Section 8.3, Roundtable Healthcare Management II, LLC. †(1)
|
|
|
3.1.1
|
Certificate of Amendment of the Restated Certificate of Incorporation of the Company dated as of December 9, 2015.(2)
|
|
|
3.1.2
|
Restated Certificate of Incorporation of the Company dated as of August 30, 2004.(3)
|
|
|
3.1.3
|
Certificate of Designation of Series A Junior Participating Preferred Stock, as filed with the Secretary of State of Delaware on January 21, 2009.(4)
|
|
|
3.2.1
|
Amendment No. 7 to Amended and Restated Bylaws of the Company, effective as of December 19, 2016.
|
|
|
3.2.2
|
Amendment No. 6 to Amended and Restated Bylaws of the Company, effective as of November 23, 2016.
|
|
|
3.2.3
|
Amendment No. 5 to Amended and Restated Bylaws of the Company, effective as of August 19, 2016.
|
|
|
3.2.4
|
Amendment No. 4 to Amended and Restated Bylaws of the Company, effective as of May 17, 2016.
|
|
|
3.2.5
|
Amendment No. 3 to Amended and Restated Bylaws of the Company, effective as of October 7, 2015.
|
|
|
3.2.6
|
Amendment No. 2 to Amended and Restated Bylaws of the Company, effective as of July 7, 2015.
|
|
|
3.2.7
|
Amendment No. 1 to Amended and Restated Bylaws of the Company, effective as of March 24, 2015.
|
|
|
3.2.8
|
Amended and Restated Bylaws of the Company, effective as of May 14, 2014.
|
|
|
4.1
|
Specimen of Common Stock Certificate.(5)
|
|
|
4.2
|
Preferred Stock Rights Agreement, dated as of January 20, 2009, by and between the Company and StockTrans, Inc., as Rights Agent.(4)
|
|
|
4.3
|
Indenture, dated as of June 30, 2015, between the Company, and Wilmington Trust, National Association, as trustee.(6)
|
|
|
10.1
|
Letter Agreement, dated as of June 25, 2015, between RBC Capital Markets LLC and the Company regarding the Base Warrants.(6)
|
|
|
10.2
|
Letter Agreement, dated as of June 25, 2015 between RBC Capital Markets LLC and the Company regarding the Base Call Option Transaction.(6)
|
|
|
10.3
|
Letter Agreement, dated as of June 26, 2015, between RBC Capital Markets LLC and the Company regarding the Additional Warrants.(6)
|
|
|
10.4
|
Letter Agreement, dated as of June 26, 2015, between RBC Capital Markets LLC and the Company regarding the Additional Call Option Transaction.(6)
|
|
|
10.5
|
Credit Agreement, dated as of August 4, 2015, by and among the Company, the lenders party thereto from time to time and Royal Bank of Canada, as administrative agent and collateral agent.(7)
|
|
|
10.6
|
Restatement Agreement, dated as of August 3, 2016, by and the Company, the guarantors party thereto, Royal Bank of Canada, as administrative agent, and the lenders party thereto.(8)
|
|
|
10.7.1
|
First Amendment, dated as of May 31, 2016, to the Distribution, License, Development and Supply Agreement by and between AstraZeneca UK Limited and the Company dated as of January 31, 2012.**(8)
|
|
|
10.7.2
|
Distribution, License, Development and Supply Agreement, dated as of January 31, 2012, between the Company and AstraZeneca UK Limited.**(9)
|
|
|
10.8.1
|
Asset Purchase Agreement, dated as of June 20, 2016, between Teva Pharmaceutical Industries Ltd. and the Company. †**(10)
|
|
|
10.8.2
|
Amendment No. 1 dated as of June 30, 2016 to the Asset Purchase Agreement between Teva Pharmaceutical Industries Ltd. and the Company dated as of June 20, 2016.(8)
|
|
|
10.9.1
|
Asset Purchase Agreement, dated as of June 20, 2016, by and among Actavis Elizabeth LLC, Actavis Group PTC Ehf., Actavis Holdco US, Inc., Actavis LLC, Actavis Mid Atlantic LLC, Actavis Pharma, Inc., Actavis South Atlantic LLC, Andrx LLC, Breath Ltd., The Rugby Group, Inc., Watson Laboratories, Inc. and the Company. †**(10)
|
|
|
10.9.2
|
Amendment No. 1 dated as of June 30, 2016 to the Asset Purchase Agreement by and among Actavis Elizabeth LLC, Actavis Group PTC Ehf., Actavis Holdco US, Inc., Actavis LLC, Actavis Mid Atlantic LLC, Actavis Pharma, Inc., Actavis South Atlantic LLC, Andrx LLC, Breath Ltd., The Rugby Group, Inc., Watson Laboratories, Inc. and the Company dated as of June 20, 2016. **(10)
|
|
|
10.10.1
|
Supply Agreement, dated as of June 20, 2016, between Teva Pharmaceutical Industries Ltd. and the Company.**(10)
|
|
|
10.10.2
|
Amendment No. 1, dated as of June 30, 2016, to the Supply Agreement between Teva Pharmaceutical Industries Ltd. and the Company dated as of June 20, 2016.**(10)
|
|
|
10.11.1
|
Supply Agreement, dated as of June 20, 2016, by and among Actavis Elizabeth LLC, Actavis Group PTC Ehf., Actavis Holdco US, Inc., Actavis LLC, Actavis Mid Atlantic LLC, Actavis Pharma, Inc., Actavis South Atlantic LLC, Andrx LLC, Breath Ltd., The Rugby Group, Inc., Watson Laboratories, Inc. and the Company.**(10)
|
|
|
10.11.2
|
Amendment No. 1, dated as of June 30, 2016, to the Supply Agreement by and among Actavis Elizabeth LLC, Actavis Group PTC Ehf., Actavis Holdco US, Inc., Actavis LLC, Actavis Mid Atlantic LLC, Actavis Pharma, Inc., Actavis South Atlantic LLC, Andrx LLC, Breath Ltd., The Rugby Group, Inc., Watson Laboratories, Inc. and the Company dated as of June 20, 2016.**(10)
|
|
|
10.12
|
Amended and Restated License and Distribution Agreement, dated as of February 7, 2013, between the Company and Shire LLC.**(11)
|
|
|
10.13.1
|
Impax Laboratories, Inc. 1999 Equity Incentive Plan.*(12)
|
|
|
10.13.2
|
Form of Stock Option Grant under the Impax Laboratories, Inc. 1999 Equity Incentive Plan.*(12)
|
|
|
10.14
|
Impax Laboratories, Inc. 2001 Non-Qualified Employee Stock Purchase Plan.*(5)
|
|
|
10.15.1
|
Impax Laboratories, Inc. Third Amended and Restated 2002 Equity Incentive Plan.*(13)
|
|
|
10.15.2
|
Form of Stock Option Agreement under the Impax Laboratories, Inc. Third Amended and Restated 2002 Equity Incentive Plan.*(14)
|
|
|
10.15.3
|
Form of Restricted Stock (Stock Bonus) Agreement under the Impax Laboratories, Inc. Third Amended and Restated 2002 Equity Incentive Plan.*(15)
|
|
|
10.16.1
|
Impax Laboratories, Inc. Executive Non-Qualified Deferred Compensation Plan, amended and restated effective January 1, 2008.*(16)
|
|
|
10.16.2
|
Amendment to Impax Laboratories, Inc. Executive Non-Qualified Deferred Compensation Plan, effective as of January 1, 2009.* (16)
|
|
|
10.17.1
|
Employment Agreement, dated as of January 1, 2010, between the Company and Charles V. Hildenbrand.*(17)
|
|
|
10.17.2
|
Confidential Separation and Release Agreement, dated as of July 5, 2011, between the Company and Charles V. Hildenbrand.*(18)
|
|
|
10.18.1
|
Employment Agreement, dated as of January 1, 2010, between the Company and Arthur A. Koch, Jr.*(17)
|
|
|
10.18.2
|
General Release and Waiver, effective as of July 17, 2012, between the Company and Arthur A. Koch, Jr.* (19)
|
|
|
10.19
|
Letter Agreement between J. Kevin Buchi, dated as of December 19, 2016, between the Company and J. Kevin Buchi.*
|
|
|
10.20.1
|
Employment Agreement, dated as of April 21, 2014, by and between the Company and G. Frederick Wilkinson.*(20)
|
|
|
10.20.2
|
General Release and Waiver, dated as of December 19, 2016, by and between the Company and G. Frederick Wilkinson.*
|
|
|
10.21.1
|
Employment Agreement, dated as of January 1, 2010, between the Company and Michael J. Nestor.*(17)
|
|
|
10.21.2
|
Amendment, dated as of April 1, 2014, to the Employment Agreement, dated as of January 1, 2014, between the Company and Michael Nestor.*(21)
|
|
|
10.22
|
Employment Agreement, dated as of July 14, 2016, between the Company and Douglas S. Boothe.*(8)
|
|
|
10.23.1
|
Offer of Employment Letter, dated as of March 17, 2011, between the Company and Mark A. Schlossberg.*(22)
|
|
|
10.23.2
|
Employment Agreement, dated as of May 2, 2011, between the Company and Mark A. Schlossberg.*(22)
|
|
|
10.23.3
|
Amendment, dated as of April 1, 2014, to the Employment Agreement, dated as of May 2, 2011, between the Company and Mark A. Schlossberg.*(21)
|
|
|
10.24.1
|
Employment Agreement, dated as of December 12, 2012, between the Company and Bryan M. Reasons.*(23)
|
|
|
10.24.2
|
Amendment, dated as of April 1, 2014, to the Employment Agreement, dated as of December 12, 2012 between the Company and Bryan M. Reasons.*(21)
|
|
|
10.25.1
|
Employment Agreement, dated as of November 28, 2011, by and between the Company and Jeffrey Nornhold.*(24)
|
|
|
10.25.2
|
Amendment, dated as of April 1, 2014, to the Employment Agreement, dated as of November 28, 2011, by and between the Company and Jeffrey Nornhold.*(24)
|
|
|
10.25.3
|
Letter Agreement, dated as of April 1, 2014, between the Company and Jeffrey Nornhold.*(24)
|
|
|
11.1
|
Statement re computation of per share earnings (incorporated by reference to Note 15 to the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K).
|
|
|
21.1
|
Subsidiaries of the registrant.
|
|
|
23.1
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
31.1
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.2
|
Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101
|
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2016 and 2015, (ii) Consolidated Statements of Operations for each of the three years in the period ended December 31, 2016, (iii) Consolidated Statements of Comprehensive (Loss) Income for each of the three years in the period ended December 31, 2016, (iv) Consolidated Statements of Changes in Stockholders’ Equity for each of the three years in the period ended December 31, 2016, (v) Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2016 and (vi) Notes to Consolidated Financial Statements for each of the three years in the period ended December 31, 2016.
|
*
|
Management contract, compensatory plan or arrangement.
|
**
|
Confidential treatment granted for certain portions of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which portions are omitted and filed separately with the SEC.
|
†
|
Schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a supplemental copy of any omitted schedule to the SEC upon request.
|
(1)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on October 10, 2014.
|
(2)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 9, 2015.
|
(3)
|
Incorporated by reference to Amendment No. 5 to the Company’s Registration Statement on Form 10 filed on December 23, 2008.
|
(4)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 22, 2009.
|
(5)
|
Incorporated by reference to the Company’s Registration Statement on Form 10 filed on October 10, 2008.
|
(6)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 30, 2015.
|
(7)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on August 5, 2015.
|
(8)
|
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016.
|
(9)
|
Incorporated by reference to the Company’s Current Report on Form 8-K/A filed on April 2, 2012.
|
(10)
|
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2016 filed on January 6, 2017.
|
(11)
|
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013.
|
(12)
|
Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.
|
(13)
|
Incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A (File No. 001-34263) filed on April 14, 2016.
|
(14)
|
Incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-8 (File No. 333-189360) filed on June 14, 2013.
|
(15)
|
Incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8 (File No. 333-189360) filed on June 14, 2013.
|
(16)
|
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.
|
(17)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 14, 2010.
|
(18)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on July 11, 2011.
|
(19)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on July 18, 2012.
|
(20)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on April 24, 2014.
|
(21)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on April 2, 2014.
|
(22)
|
Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.
|
(23)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 13, 2012.
|
(24)
|
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.
|
1.
|
Section 14 of Article III shall be amended and restated in its entirety to read as follows:
|
1.
|
Section 14 of Article III shall be amended and restated in its entirety to read as follows:
|
1.
|
Section 14 of Article III shall be amended and restated in its entirety to read as follows:
|
1.
|
Section 14 of Article III shall be amended and restated in its entirety to read as follows:
|
1.
|
Section 14 of Article III shall be amended and restated in its entirety to read as follows:
|
1.
|
Section 14 of Article III shall be amended and restated in its entirety to read as follows:
|
1.
|
Section 5 of Article II shall be amended and restated in its entirety to read as follows:
|
2.
|
Section 6 of Article II shall be amended and restated in its entirety to read as follows:
|
d.
|
Benefits
|
Dated: December 19, 2016
|
|
|
|
/s/ G. Frederick Wilkinson
|
|
|
|
|
G. Frederick Wilkinson
|
|
|
|
||
Dated: December 19, 2016
|
|
|
|
/s/ Robert L. Burr
|
|
|
|
|
Robert L. Burr
Chairman of the Board of Directors
|
|
|
|
|
Impax Laboratories, Inc.
|
Name of Subsidiary
|
Jurisdiction of Incorporation or Organization
|
Ownership
|
|
|
|
Amedra Pharmaceuticals LLC
|
Delaware
|
100%
|
|
|
|
CorePharma, LLC
|
New Jersey
|
100%
|
|
|
|
Impax Holdings LLC
|
Delaware
|
100%
|
|
|
|
Impax International Holdings, Inc.
|
Delaware
|
100%
|
|
|
|
Impax Laboratories Ireland Limited
|
Ireland
|
100%
|
|
|
|
Impax Laboratories (Netherlands) B.V.
|
Netherlands
|
100%
|
|
|
|
Impax Laboratories (Netherlands) C.V.
|
Netherlands
|
100%
|
|
|
|
Impax Laboratories (Taiwan) Inc.
|
Taiwan, Republic of China
|
100%
|
|
|
|
Impax Laboratories USA, LLC
|
California
|
100%
|
|
|
|
Lineage Therapeutics Inc.
|
Delaware
|
100%
|
|
|
|
Mountain, LLC
|
Delaware
|
100%
|
|
|
|
Prohealth Biotech, Inc.
|
Taiwan, Republic of China
|
57.54%
|
|
|
|
ThoRx Laboratories, Inc.
|
California
|
100%
|
|
|
|
Tower Holdings, Inc.
|
Delaware
|
100%
|
|
|
|
Trail Services, Inc.
|
Delaware
|
100%
|
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K for the fiscal year ended
December 31, 2016
of Impax Laboratories, 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 (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 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.
|
March 1, 2017
|
By:
|
/s/ J. Kevin Buchi
|
|
|
J. Kevin Buchi
|
|
|
Interim President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K for the fiscal year ended
December 31, 2016
of Impax Laboratories, 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 (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 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.
|
March 1, 2017
|
By:
|
/s/ Bryan M. Reasons
|
|
|
Bryan M. Reasons
|
|
|
Senior Vice President, Finance and
Chief Financial Officer
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
March 1, 2017
|
By:
|
/s/ J. Kevin Buchi
|
|
|
J. Kevin Buchi
|
|
|
Interim President and Chief Executive Officer
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
March 1, 2017
|
By:
|
/s/ Bryan M. Reasons
|
|
|
Bryan M. Reasons
|
|
|
Senior Vice President, Finance and
Chief Financial Officer
|