☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
June 30, 2017
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
|
Impax Laboratories, Inc.
|
||
(Exact name of registrant as specified in its charter)
|
||
Delaware
|
|
65-0403311
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
30831 Huntwood Avenue, Hayward, CA
|
|
94544
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
(510) 240-6000
|
|
|
(Registrant’s telephone number, including area code)
|
|
Not Applicable
|
||
(Former name, former address and former fiscal year, if changed since last report)
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer (Do not check if a smaller reporting company)
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
PART I - FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements.
|
|
- Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016
|
||
- Consolidated Statements of Operations for the three and six months ended June 30, 2017 and 2016
|
||
- Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2017 and 2016
|
||
- Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016
|
||
- Notes to Interim Consolidated Financial Statements
|
||
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
|
Item 4.
|
Controls and Procedures.
|
|
|
|
|
PART II - OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings.
|
|
Item 1A.
|
Risk Factors.
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
|
Item 3.
|
Defaults Upon Senior Securities.
|
|
Item 4.
|
Mine Safety Disclosures.
|
|
Item 5.
|
Other Information.
|
|
Item 6.
|
Exhibits.
|
|
|
|
|
SIGNATURES
|
|
|
|
|
|
EXHIBIT INDEX
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
171,396
|
|
|
$
|
180,133
|
|
Accounts receivable, net
|
219,735
|
|
|
257,368
|
|
||
Inventory, net
|
200,410
|
|
|
175,230
|
|
||
Prepaid expenses and other current assets
|
36,936
|
|
|
18,410
|
|
||
Total current assets
|
628,477
|
|
|
631,141
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
232,480
|
|
|
233,372
|
|
||
Intangible assets, net
|
540,655
|
|
|
620,466
|
|
||
Goodwill
|
207,329
|
|
|
207,329
|
|
||
Deferred income taxes, net
|
35,825
|
|
|
69,866
|
|
||
Other non-current assets
|
56,342
|
|
|
60,844
|
|
||
Total assets
|
$
|
1,701,108
|
|
|
$
|
1,823,018
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
56,594
|
|
|
$
|
58,952
|
|
Accrued expenses
|
266,084
|
|
|
244,653
|
|
||
Current portion of contingent consideration
|
18,746
|
|
|
—
|
|
||
Current portion of long-term debt, net
|
17,824
|
|
|
17,719
|
|
||
Total current liabilities
|
359,248
|
|
|
321,324
|
|
||
|
|
|
|
||||
Long-term debt, net
|
766,460
|
|
|
813,545
|
|
||
Deferred income taxes
|
1,355
|
|
|
—
|
|
||
Other non-current liabilities
|
48,608
|
|
|
64,175
|
|
||
Total liabilities
|
1,175,671
|
|
|
1,199,044
|
|
||
|
|
|
|
||||
Commitments and contingencies (Notes 19 and 20)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value, 2,000,000 shares authorized; No shares issued or outstanding at June 30, 2017 and December 31, 2016
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 150,000,000 shares authorized; 74,594,725 issued and 74,350,996 outstanding shares at June 30, 2017; 73,948,340 issued and 73,704,611 outstanding shares at December 31, 2016
|
746
|
|
|
739
|
|
||
Treasury stock at cost: 243,729 shares at June 30, 2017 and December 31, 2016
|
(2,157
|
)
|
|
(2,157
|
)
|
||
Additional paid-in capital
|
548,283
|
|
|
535,056
|
|
||
(Accumulated deficit) retained earnings
|
(22,007
|
)
|
|
98,192
|
|
||
Accumulated other comprehensive income (loss)
|
572
|
|
|
(7,856
|
)
|
||
Total stockholders’ equity
|
525,437
|
|
|
623,974
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,701,108
|
|
|
$
|
1,823,018
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Impax Generics, net
|
$
|
150,889
|
|
|
$
|
121,695
|
|
|
$
|
285,036
|
|
|
$
|
291,774
|
|
Impax Specialty Pharma, net
|
51,193
|
|
|
50,895
|
|
|
101,449
|
|
|
106,324
|
|
||||
Total revenues
|
202,082
|
|
|
172,590
|
|
|
386,485
|
|
|
398,098
|
|
||||
Cost of revenues
|
129,676
|
|
|
98,061
|
|
|
249,908
|
|
|
220,979
|
|
||||
Cost of revenues impairment charges
|
—
|
|
|
1,545
|
|
|
39,280
|
|
|
1,545
|
|
||||
Gross profit
|
72,406
|
|
|
72,984
|
|
|
97,297
|
|
|
175,574
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
51,615
|
|
|
44,908
|
|
|
98,670
|
|
|
89,206
|
|
||||
Research and development
|
26,847
|
|
|
20,800
|
|
|
49,336
|
|
|
39,822
|
|
||||
In-process research and development impairment charges
|
—
|
|
|
946
|
|
|
6,079
|
|
|
946
|
|
||||
Patent litigation
|
1,170
|
|
|
1,929
|
|
|
2,242
|
|
|
3,248
|
|
||||
Total operating expenses
|
79,632
|
|
|
68,583
|
|
|
156,327
|
|
|
133,222
|
|
||||
(Loss) income from operations
|
(7,226
|
)
|
|
4,401
|
|
|
(59,030
|
)
|
|
42,352
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(13,369
|
)
|
|
(8,454
|
)
|
|
(26,749
|
)
|
|
(16,785
|
)
|
||||
Interest income
|
155
|
|
|
340
|
|
|
309
|
|
|
673
|
|
||||
Reserve for Turing receivable
|
(2,353
|
)
|
|
—
|
|
|
(2,670
|
)
|
|
(48,043
|
)
|
||||
Gain on sale of intangible assets
|
11,850
|
|
|
—
|
|
|
11,850
|
|
|
—
|
|
||||
Loss on debt extinguishment
|
—
|
|
|
—
|
|
|
(1,215
|
)
|
|
—
|
|
||||
Other, net
|
(9,994
|
)
|
|
(237
|
)
|
|
(10,962
|
)
|
|
359
|
|
||||
Loss before income taxes
|
(20,937
|
)
|
|
(3,950
|
)
|
|
(88,467
|
)
|
|
(21,444
|
)
|
||||
(Benefit from) provision for income taxes
|
(520
|
)
|
|
(1,249
|
)
|
|
30,381
|
|
|
(8,335
|
)
|
||||
Net loss
|
$
|
(20,417
|
)
|
|
$
|
(2,701
|
)
|
|
$
|
(118,848
|
)
|
|
$
|
(13,109
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.28
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(1.66
|
)
|
|
$
|
(0.18
|
)
|
Diluted
|
$
|
(0.28
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(1.66
|
)
|
|
$
|
(0.18
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
71,803,920
|
|
|
71,100,123
|
|
|
71,699,775
|
|
|
70,882,759
|
|
||||
Diluted
|
71,803,920
|
|
|
71,100,123
|
|
|
71,699,775
|
|
|
70,882,759
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss
|
$
|
(20,417
|
)
|
|
$
|
(2,701
|
)
|
|
$
|
(118,848
|
)
|
|
$
|
(13,109
|
)
|
Other comprehensive loss component:
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustment
|
(227
|
)
|
|
(70
|
)
|
|
8,428
|
|
|
2,973
|
|
||||
Comprehensive loss
|
$
|
(20,644
|
)
|
|
$
|
(2,771
|
)
|
|
$
|
(110,420
|
)
|
|
$
|
(10,136
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(118,848
|
)
|
|
$
|
(13,109
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
53,964
|
|
|
36,419
|
|
||
Non-cash interest expense
|
12,742
|
|
|
10,714
|
|
||
Share-based compensation expense
|
13,182
|
|
|
15,662
|
|
||
Deferred income taxes, net and uncertain tax positions
|
35,437
|
|
|
(21,294
|
)
|
||
Intangible asset impairment charges
|
45,359
|
|
|
2,491
|
|
||
Reserve for Turing receivable
|
2,670
|
|
|
48,043
|
|
||
Gain on sale of intangible assets
|
(11,850
|
)
|
|
—
|
|
||
Loss on debt extinguishment
|
1,215
|
|
|
—
|
|
||
Other
|
1,663
|
|
|
(144
|
)
|
||
Changes in certain assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
34,963
|
|
|
38,954
|
|
||
Inventory
|
(23,109
|
)
|
|
(24,288
|
)
|
||
Prepaid expenses and other assets
|
(12,967
|
)
|
|
(5,185
|
)
|
||
Accounts payable and accrued expenses
|
21,359
|
|
|
(61,166
|
)
|
||
Other liabilities
|
2,411
|
|
|
1,489
|
|
||
Net cash provided by operating activities
|
58,191
|
|
|
28,586
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(18,993
|
)
|
|
(20,512
|
)
|
||
Proceeds from sales of property, plant and equipment
|
350
|
|
|
1,346
|
|
||
Proceeds from sale of intangible assets
|
11,850
|
|
|
—
|
|
||
Proceeds from cash surrender value of life insurance policy
|
529
|
|
|
—
|
|
||
Payments for licensing agreements
|
—
|
|
|
(3,500
|
)
|
||
Proceeds from repayment of Tolmar loan
|
—
|
|
|
15,000
|
|
||
Net cash used in investing activities
|
(6,264
|
)
|
|
(7,666
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Repayment of term loan
|
(60,000
|
)
|
|
—
|
|
||
Payment of deferred financing fees
|
(818
|
)
|
|
—
|
|
||
Payment of withholding taxes related to restricted stock awards
|
(1,889
|
)
|
|
(4,263
|
)
|
||
Proceeds from exercises of stock options and ESPP
|
591
|
|
|
9,178
|
|
||
Net cash (used in) provided by financing activities
|
(62,116
|
)
|
|
4,915
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
1,452
|
|
|
660
|
|
||
|
|
|
|
||||
Net (decrease) increase in cash and cash equivalents
|
(8,737
|
)
|
|
26,495
|
|
||
Cash and cash equivalents, beginning of period
|
180,133
|
|
|
340,351
|
|
||
Cash and cash equivalents, end of period
|
$
|
171,396
|
|
|
$
|
366,846
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
13,788
|
|
|
$
|
6,012
|
|
Cash paid for income taxes
|
4,309
|
|
|
22,449
|
|
|
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
|
|
|
|
|
|
Three Months Ended June 30, 2016
|
|
Six Months Ended June 30, 2016
|
||||
Total revenues
|
|
$
|
216,803
|
|
|
$
|
486,524
|
|
Net income
|
|
8,778
|
|
|
9,832
|
|
•
|
Adjustments to selling, general and administrative expense related to transaction costs directly attributable to the transaction including the elimination of
$1.2 million
in the pro forma results for both the three and six months ended
June 30, 2016
.
|
•
|
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 June 30, 2017
|
||||||||||||||||||
|
|
|
|
|
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 asset
(1)
|
$
|
35,950
|
|
|
$
|
35,950
|
|
|
$
|
—
|
|
|
$
|
35,950
|
|
|
$
|
—
|
|
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)
|
$
|
315,000
|
|
|
$
|
315,000
|
|
|
$
|
—
|
|
|
$
|
315,000
|
|
|
$
|
—
|
|
2% Convertible Senior Notes due June 2022
(3)
|
$
|
600,000
|
|
|
$
|
513,000
|
|
|
$
|
513,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred Compensation Plan liabilities
(1)
|
$
|
30,993
|
|
|
$
|
30,993
|
|
|
$
|
—
|
|
|
$
|
30,993
|
|
|
$
|
—
|
|
Contingent consideration, current portion
(4)
|
$
|
18,746
|
|
|
$
|
18,746
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,746
|
|
Contingent consideration, long-term portion
(4)
|
$
|
13,044
|
|
|
$
|
13,044
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,044
|
|
|
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 asset
(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, long-term portion
(4)
|
$
|
31,048
|
|
|
$
|
31,048
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,048
|
|
(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 items 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 at
June 30, 2017
and
December 31, 2016
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
June 30, 2017
and
December 31, 2016
represents the unaccreted discounts related to deferred debt issuance costs and bifurcation of the conversion feature of the notes.
|
(4)
|
The contingent consideration liability represents 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 Acquisition." 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
$1.7 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
$13.7 million
and increase by
$5.2 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, 2016 |
|
Change in
Fair Value Included in Earnings (1) |
|
As of
June 30, 2017 |
||||||
Total contingent consideration
|
$
|
31,048
|
|
|
$
|
742
|
|
|
$
|
31,790
|
|
(1)
|
Earnings effect is included in Other, net in Other income (expense) in the Company's consolidated statement of operations.
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Gross accounts receivable
(1)
|
$
|
575,671
|
|
|
$
|
794,173
|
|
Less: Rebate reserve
|
(170,240
|
)
|
|
(293,816
|
)
|
||
Less: Chargeback reserve
|
(113,881
|
)
|
|
(151,978
|
)
|
||
Less: Distribution services reserve
|
(11,143
|
)
|
|
(18,318
|
)
|
||
Less: Discount reserve
|
(15,046
|
)
|
|
(17,957
|
)
|
||
Less: Uncollectible accounts reserve
(2)
|
(45,626
|
)
|
|
(54,736
|
)
|
||
Accounts receivable, net
|
$
|
219,735
|
|
|
$
|
257,368
|
|
|
Six Months Ended
|
|
Year Ended
|
||||
Rebate reserve
|
June 30, 2017
|
|
December 31, 2016
|
||||
Beginning balance
|
$
|
293,816
|
|
|
$
|
265,229
|
|
Provision recorded during the period
|
335,190
|
|
|
756,774
|
|
||
Credits issued during the period
|
(458,766
|
)
|
|
(728,187
|
)
|
||
Ending balance
|
$
|
170,240
|
|
|
$
|
293,816
|
|
|
Six Months Ended
|
|
Year Ended
|
||||
Chargeback reserve
|
June 30, 2017
|
|
December 31, 2016
|
||||
Beginning balance
|
$
|
151,978
|
|
|
$
|
102,630
|
|
Provision recorded during the period
|
603,631
|
|
|
1,011,400
|
|
||
Credits issued during the period
|
(641,728
|
)
|
|
(962,052
|
)
|
||
Ending balance
|
$
|
113,881
|
|
|
$
|
151,978
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Raw materials
|
$
|
74,782
|
|
|
$
|
53,808
|
|
Work in process
|
8,768
|
|
|
3,280
|
|
||
Finished goods
|
128,927
|
|
|
130,879
|
|
||
Total inventory
|
212,477
|
|
|
187,967
|
|
||
Less: Non-current inventory
|
12,067
|
|
|
12,737
|
|
||
Total inventory - current
|
$
|
200,410
|
|
|
$
|
175,230
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Land
|
$
|
3,500
|
|
|
$
|
5,603
|
|
Buildings and improvements
|
178,706
|
|
|
174,303
|
|
||
Equipment
|
149,136
|
|
|
143,818
|
|
||
Office furniture and equipment
|
15,694
|
|
|
15,767
|
|
||
Construction-in-progress
|
59,201
|
|
|
50,191
|
|
||
Property, plant and equipment, gross
|
406,237
|
|
|
389,682
|
|
||
Less: Accumulated depreciation
|
(173,757
|
)
|
|
(156,310
|
)
|
||
Property, plant and equipment, net
|
$
|
232,480
|
|
|
$
|
233,372
|
|
June 30, 2017
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Intangible Assets, Net
|
||||||
Amortized intangible assets:
|
|
|
|
|
|
||||||
Marketed product rights
|
$
|
486,140
|
|
|
$
|
(171,622
|
)
|
|
$
|
314,518
|
|
Royalties
|
339
|
|
|
(339
|
)
|
|
—
|
|
|||
|
486,479
|
|
|
(171,961
|
)
|
|
314,518
|
|
|||
Non-amortized intangible assets:
|
|
|
|
|
|
||||||
Acquired IPR&D product rights
|
225,002
|
|
|
—
|
|
|
225,002
|
|
|||
Acquired future royalty rights
|
1,135
|
|
|
—
|
|
|
1,135
|
|
|||
|
226,137
|
|
|
—
|
|
|
226,137
|
|
|||
Total intangible assets
|
$
|
712,616
|
|
|
$
|
(171,961
|
)
|
|
$
|
540,655
|
|
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
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Payroll-related expenses
|
$
|
36,856
|
|
|
$
|
37,986
|
|
Product returns
|
82,593
|
|
|
72,888
|
|
||
Accrued shelf stock
|
7,010
|
|
|
7,032
|
|
||
Government rebates
(1)
|
80,020
|
|
|
72,063
|
|
||
Legal and professional fees
|
12,805
|
|
|
8,395
|
|
||
Income taxes payable
|
3,158
|
|
|
—
|
|
||
Interest payable
|
500
|
|
|
544
|
|
||
Estimated Teva and Allergan chargebacks and rebates
(2)
|
13,277
|
|
|
14,813
|
|
||
Accrued profit sharing and royalty expenses
|
9,704
|
|
|
13,642
|
|
||
Other
|
20,161
|
|
|
17,290
|
|
||
Total accrued expenses
|
$
|
266,084
|
|
|
$
|
244,653
|
|
|
Six Months Ended
|
|
Year Ended
|
||||
Returns reserve
|
June 30, 2017
|
|
December 31, 2016
|
||||
Beginning balance
|
$
|
72,888
|
|
|
$
|
48,950
|
|
Provision related to sales recorded in the period
|
28,203
|
|
|
52,383
|
|
||
Credits issued during the period
|
(18,498
|
)
|
|
(28,445
|
)
|
||
Ending balance
|
$
|
82,593
|
|
|
$
|
72,888
|
|
(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
|
74,595
|
|
Stock options outstanding
(1)
|
3,409
|
|
Conversion of Notes payable
(2)
|
9,471
|
|
Warrants outstanding (see below)
|
9,471
|
|
Total shares of common stock issued and reserved for issuance
|
96,946
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
||||||||||||||
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||||||
Basic Loss Per Common Share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(20,417
|
)
|
|
|
$
|
(2,701
|
)
|
|
|
$
|
(118,848
|
)
|
|
|
$
|
(13,109
|
)
|
|
Weighted-average common shares outstanding
|
71,804
|
|
|
|
71,100
|
|
|
|
71,700
|
|
|
|
70,883
|
|
|
||||
Basic loss per share
|
$
|
(0.28
|
)
|
|
|
$
|
(0.04
|
)
|
|
|
$
|
(1.66
|
)
|
|
|
$
|
(0.18
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted Loss Per Common Share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(20,417
|
)
|
|
|
$
|
(2,701
|
)
|
|
|
$
|
(118,848
|
)
|
|
|
$
|
(13,109
|
)
|
|
Add-back of interest expense on outstanding convertible notes payable, net of tax
|
—
|
|
(1)
|
|
—
|
|
(1)
|
|
—
|
|
(1)
|
|
—
|
|
(1)
|
||||
Adjusted net loss
|
$
|
(20,417
|
)
|
|
|
$
|
(2,701
|
)
|
|
|
$
|
(118,848
|
)
|
|
|
$
|
(13,109
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
71,804
|
|
|
|
71,100
|
|
|
|
71,700
|
|
|
|
70,883
|
|
|
||||
Weighted-average incremental shares related to assumed exercise of warrants and stock options, vesting of non-vested shares and ESPP share issuance
|
—
|
|
(2)
|
|
—
|
|
(3)
|
|
—
|
|
(2)
|
|
—
|
|
(3)
|
||||
Weighted-average incremental shares assuming conversion of outstanding notes payable
|
—
|
|
(1)
|
|
—
|
|
(1)
|
|
—
|
|
(1)
|
|
—
|
|
(1)
|
||||
Diluted weighted-average common shares outstanding
|
71,804
|
|
(2)
|
|
71,100
|
|
(3)
|
|
71,700
|
|
(2)
|
|
70,883
|
|
(3)
|
||||
Diluted net loss per share
|
$
|
(0.28
|
)
|
|
|
$
|
(0.04
|
)
|
|
|
$
|
(1.66
|
)
|
|
|
$
|
(0.18
|
)
|
|
(1)
|
For the three and six month periods ended
June 30, 2017
and
June 30, 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)
|
For the three and six month periods ended
June 30, 2017
, the Company incurred a net loss, which cannot be diluted, so basic and diluted loss per common share were the same. As of
June 30, 2017
, shares issuable but not included in the Company's calculation of diluted EPS, which could potentially dilute future earnings, include
9.47 million
warrants outstanding,
9.47 million
shares for conversion of outstanding Notes payable,
3.41 million
stock options outstanding and
2.52 million
non-vested restricted stock awards.
|
(3)
|
For the three and six month periods ended
June 30, 2016
, the Company incurred a net loss, which cannot be diluted, so basic and diluted loss per common share were the same. As of
June 30, 2016
, shares issuable but not included in the Company's calculation of diluted EPS, which could potentially dilute future earnings, include
9.47 million
warrants outstanding,
9.47 million
shares for conversion of outstanding Notes payable,
2.45 million
stock options outstanding and
2.63 million
non-vested restricted stock awards.
|
Stock Options
|
Number of
Shares Under Option |
|
Weighted-
Average Exercise Price per Share |
|||
Outstanding at December 31, 2016
|
2,234,331
|
|
|
$
|
22.67
|
|
Options granted
|
1,198,726
|
|
|
5.93
|
|
|
Options exercised
|
(20,805
|
)
|
|
8.64
|
|
|
Options forfeited
|
(3,308
|
)
|
|
10.93
|
|
|
Outstanding at June 30, 2017
|
3,408,944
|
|
|
$
|
16.83
|
|
Options exercisable at June 30, 2017
|
1,839,747
|
|
|
$
|
20.65
|
|
Restricted Stock Awards
|
Number of
Restricted Stock Awards |
|
Weighted-
Average Grant Date Fair Value |
|||
Non-vested at December 31, 2016
|
2,160,127
|
|
|
$
|
34.02
|
|
Granted
|
956,547
|
|
|
13.72
|
|
|
Vested
|
(364,929
|
)
|
|
33.03
|
|
|
Forfeited
|
(227,073
|
)
|
|
34.97
|
|
|
Non-vested at June 30, 2017
|
2,524,672
|
|
|
$
|
26.39
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Cost of revenues
|
$
|
1,202
|
|
|
$
|
1,880
|
|
|
$
|
2,786
|
|
|
$
|
3,248
|
|
Selling, general and administrative
|
3,563
|
|
|
4,898
|
|
|
7,513
|
|
|
9,467
|
|
||||
Research and development
|
1,460
|
|
|
1,607
|
|
|
2,883
|
|
|
2,947
|
|
||||
Total
|
$
|
6,225
|
|
|
$
|
8,385
|
|
|
$
|
13,182
|
|
|
$
|
15,662
|
|
•
|
Consolidating all of Generic R&D, U.S. manufacturing and packing operations to its Hayward, California facility;
|
•
|
Continuing the previously announced closure of the Middlesex, New Jersey manufacturing site, which will now include the closure of the Middlesex Generic R&D site as further discussed below under "Middlesex, New Jersey Manufacturing and Packaging Operations" and "Middlesex, New Jersey Generic R&D";
|
•
|
Reorganizing certain functions including quality, engineering and supply chain operations as further described below under "Technical Operations Reduction-in-Force";
|
•
|
Reviewing strategic alternatives for the Company’s Taiwan facility, including a sale of the facility or, in the alternative, a closure of the facility as further described below under "Sale or Closure of Taiwan Facility" and above in "Note 9. Property, Plant and Equipment;" and
|
•
|
Rationalizing the generic portfolio to eliminate low-value products and streamline operations such as the Company's divestment of
29
ANDAs and
one
NDA for approved non-strategic generic products, the vast majority of which were not marketed, and all acquired as part of the Tower Acquisition, as described above under "Note 10. Intangible Assets and Goodwill."
|
Type of Cost
|
Amount Expected to be Incurred
|
||
Employee retention and severance payments
|
$
|
14.1
|
|
Technical transfer of products
|
11.2
|
|
|
Asset impairment and accelerated depreciation charges
|
20.9
|
|
|
Facilities lease terminations and asset retirement obligations
|
1.9
|
|
|
Legal and professional fees
|
0.2
|
|
|
Total estimated restructuring charges
|
$
|
48.3
|
|
|
|
Balance as of
|
|
Expensed/
|
|
|
|
|
|
Balance as of
|
||||||||||
|
|
December 31, 2016
|
|
Accrued Expense
|
|
Cash Payments
|
|
Non-Cash Items
|
|
June 30, 2017
|
||||||||||
Employee retention and severance payments
|
|
$
|
5,945
|
|
|
$
|
3,596
|
|
|
$
|
(2,617
|
)
|
|
$
|
—
|
|
|
$
|
6,924
|
|
Technical transfer of products
|
|
—
|
|
|
1,982
|
|
|
(1,682
|
)
|
|
(300
|
)
|
|
—
|
|
|||||
Asset impairment and accelerated depreciation charges
|
|
—
|
|
|
3,556
|
|
|
—
|
|
|
(3,556
|
)
|
|
—
|
|
|||||
Facilities lease terminations and asset retirement obligations
|
|
209
|
|
|
245
|
|
|
—
|
|
|
—
|
|
|
454
|
|
|||||
Legal and professional fees
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
6,154
|
|
|
$
|
9,379
|
|
|
$
|
(4,299
|
)
|
|
$
|
(3,856
|
)
|
|
$
|
7,378
|
|
•
|
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
$100.0 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.
|
Three Months Ended June 30, 2017
|
Impax
Generics |
|
Impax
Specialty Pharma |
|
Corporate
and Other |
|
Total
Company |
||||||||
Revenues, net
|
$
|
150,889
|
|
|
$
|
51,193
|
|
|
$
|
—
|
|
|
$
|
202,082
|
|
Cost of revenues
|
108,901
|
|
|
20,775
|
|
|
—
|
|
|
129,676
|
|
||||
Selling, general and administrative
|
8,034
|
|
|
16,814
|
|
|
26,767
|
|
|
51,615
|
|
||||
Research and development
|
20,995
|
|
|
5,852
|
|
|
—
|
|
|
26,847
|
|
||||
Patent litigation expense
|
319
|
|
|
851
|
|
|
—
|
|
|
1,170
|
|
||||
Income (loss) before income taxes
|
$
|
12,640
|
|
|
$
|
6,901
|
|
|
$
|
(40,478
|
)
|
|
$
|
(20,937
|
)
|
Three Months Ended June 30, 2016
|
Impax
Generics |
|
Impax
Specialty Pharma |
|
Corporate
and Other |
|
Total
Company |
||||||||
Revenues, net
|
$
|
121,695
|
|
|
$
|
50,895
|
|
|
$
|
—
|
|
|
$
|
172,590
|
|
Cost of revenues
|
82,794
|
|
|
15,267
|
|
|
—
|
|
|
98,061
|
|
||||
Cost of revenues impairment charges
|
1,545
|
|
|
—
|
|
|
—
|
|
|
1,545
|
|
||||
Selling, general and administrative
|
1,565
|
|
|
16,133
|
|
|
27,210
|
|
|
44,908
|
|
||||
Research and development
|
16,143
|
|
|
4,657
|
|
|
—
|
|
|
20,800
|
|
||||
In-process research and development impairment charges
|
946
|
|
|
—
|
|
|
—
|
|
|
946
|
|
||||
Patent litigation expense
|
155
|
|
|
1,774
|
|
|
—
|
|
|
1,929
|
|
||||
Income (loss) before income taxes
|
$
|
18,547
|
|
|
$
|
13,064
|
|
|
$
|
(35,561
|
)
|
|
$
|
(3,950
|
)
|
Six Months Ended June 30, 2017
|
Impax
Generics |
|
Impax
Specialty Pharma |
|
Corporate
and Other |
|
Total
Company |
||||||||
Revenues, net
|
$
|
285,036
|
|
|
$
|
101,449
|
|
|
$
|
—
|
|
|
$
|
386,485
|
|
Cost of revenues
|
212,236
|
|
|
37,672
|
|
|
—
|
|
|
249,908
|
|
||||
Cost of revenues impairment charges
|
39,280
|
|
|
—
|
|
|
—
|
|
|
39,280
|
|
||||
Selling, general and administrative
|
14,502
|
|
|
33,144
|
|
|
51,024
|
|
|
98,670
|
|
||||
Research and development
|
38,391
|
|
|
10,945
|
|
|
—
|
|
|
49,336
|
|
||||
In-process research and development impairment charges
|
6,079
|
|
|
—
|
|
|
—
|
|
|
6,079
|
|
||||
Patent litigation expense
|
687
|
|
|
1,555
|
|
|
—
|
|
|
2,242
|
|
||||
(Loss) income before income taxes
|
$
|
(26,139
|
)
|
|
$
|
18,133
|
|
|
$
|
(80,461
|
)
|
|
$
|
(88,467
|
)
|
Six Months Ended June 30, 2016
|
Impax
Generics |
|
Impax
Specialty Pharma |
|
Corporate
and Other |
|
Total
Company |
||||||||
Revenues, net
|
$
|
291,774
|
|
|
$
|
106,324
|
|
|
$
|
—
|
|
|
$
|
398,098
|
|
Cost of revenues
|
192,916
|
|
|
28,063
|
|
|
—
|
|
|
220,979
|
|
||||
Cost of revenues impairment charges
|
1,545
|
|
|
—
|
|
|
—
|
|
|
1,545
|
|
||||
Selling, general and administrative
|
6,339
|
|
|
29,951
|
|
|
52,916
|
|
|
89,206
|
|
||||
Research and development
|
30,738
|
|
|
9,084
|
|
|
—
|
|
|
39,822
|
|
||||
In-process research and development impairment charges
|
946
|
|
|
—
|
|
|
—
|
|
|
946
|
|
||||
Patent litigation expense
|
269
|
|
|
2,979
|
|
|
—
|
|
|
3,248
|
|
||||
Income (loss) before income taxes
|
$
|
59,021
|
|
|
$
|
36,247
|
|
|
$
|
(116,712
|
)
|
|
$
|
(21,444
|
)
|
Segment
|
|
Product Family
|
|
Three Months Ended June 30, 2017
|
|
||||
|
|
|
|
$
|
%
|
|
|||
Impax Generics
|
|
Epinephrine Auto-Injector family (generic Adrenaclick®)
|
|
$
|
29,769
|
|
15
|
%
|
(1)
|
Impax Specialty Pharma
|
|
Rytary® family
|
|
$
|
21,922
|
|
11
|
%
|
(2)
|
Impax Generics
|
|
Oxymorphone HCI ER family
|
|
$
|
17,286
|
|
9
|
%
|
(3)
|
Impax Generics
|
|
Budesonide family
|
|
$
|
15,202
|
|
8
|
%
|
(4)
|
Impax Specialty Pharma
|
|
Zomig® family
|
|
$
|
12,325
|
|
6
|
%
|
(5)
|
Segment
|
|
Product Family
|
|
Three Months Ended June 30, 2016
|
|
||||
|
|
|
|
$
|
%
|
|
|||
Impax Generics
|
|
Epinephrine Auto-Injector family (generic Adrenaclick®)
|
|
$
|
26,840
|
|
16
|
%
|
(1)
|
Impax Specialty Pharma
|
|
Albenza® family
|
|
$
|
18,275
|
|
11
|
%
|
(6)
|
Impax Generics
|
|
Fenofibrate family
|
|
$
|
18,198
|
|
11
|
%
|
(7)
|
Impax Specialty Pharma
|
|
Rytary® family
|
|
$
|
17,297
|
|
10
|
%
|
(2)
|
Impax Generics
|
|
Oxymorphone HCI ER family
|
|
$
|
16,624
|
|
10
|
%
|
(3)
|
Segment
|
|
Product Family
|
|
Six Months Ended June 30, 2017
|
|
||||
|
|
|
|
$
|
%
|
|
|||
Impax Generics
|
|
Epinephrine Auto-Injector family (generic Adrenaclick®)
|
|
$
|
50,090
|
|
13
|
%
|
(1)
|
Impax Specialty Pharma
|
|
Rytary® family
|
|
$
|
41,827
|
|
11
|
%
|
(2)
|
Impax Generics
|
|
Oxymorphone HCI ER family
|
|
$
|
36,225
|
|
9
|
%
|
(3)
|
Impax Generics
|
|
Budesonide family
|
|
$
|
31,030
|
|
8
|
%
|
(4)
|
Impax Specialty Pharma
|
|
Zomig® family
|
|
$
|
22,182
|
|
6
|
%
|
(5)
|
Segment
|
|
Product Family
|
|
Six Months Ended June 30, 2016
|
|
||||
|
|
|
|
$
|
%
|
|
|||
Impax Generics
|
|
Diclofenac Sodium Gel family (generic Solaraze®)
|
|
$
|
55,425
|
|
14
|
%
|
(8)
|
Impax Generics
|
|
Epinephrine Auto-Injector family (generic Adrenaclick®)
|
|
$
|
38,271
|
|
10
|
%
|
(1)
|
Impax Generics
|
|
Fenofibrate family
|
|
$
|
35,950
|
|
9
|
%
|
(7)
|
Impax Generics
|
|
Amphetamine Salts ER (CII) family (generic Adderall®)
|
|
$
|
32,738
|
|
8
|
%
|
(9)
|
Impax Specialty Pharma
|
|
Rytary® family
|
|
$
|
32,223
|
|
8
|
%
|
(2)
|
|
|
2017 Quarters Ended
|
||||||
(in thousands, except share and per share amounts)
|
|
March 31
|
|
June 30
|
||||
Revenue:
|
|
|
|
|
||||
Impax Generics, gross
|
|
$
|
635,897
|
|
|
$
|
663,167
|
|
Less:
|
|
|
|
|
||||
Chargebacks
|
|
298,744
|
|
|
286,092
|
|
||
Rebates
|
|
164,792
|
|
|
170,398
|
|
||
Product Returns
|
|
9,733
|
|
|
15,210
|
|
||
Other credits
|
|
28,481
|
|
|
40,578
|
|
||
Impax Generics, net
|
|
134,147
|
|
|
150,889
|
|
||
|
|
|
|
|
||||
Impax Specialty Pharma, gross
|
|
84,133
|
|
|
84,238
|
|
||
Less:
|
|
|
|
|
||||
Chargebacks
|
|
9,828
|
|
|
8,967
|
|
||
Rebates
|
|
4,483
|
|
|
4,682
|
|
||
Product Returns
|
|
1,844
|
|
|
1,416
|
|
||
Other credits
|
|
17,722
|
|
|
17,980
|
|
||
Impax Specialty Pharma, net
|
|
50,256
|
|
|
51,193
|
|
||
|
|
|
|
|
||||
Total revenues
|
|
184,403
|
|
|
202,082
|
|
||
|
|
|
|
|
||||
Gross profit
|
|
24,891
|
|
|
72,406
|
|
||
|
|
|
|
|
|
|||
Net loss
|
|
$
|
(98,431
|
)
|
|
$
|
(20,417
|
)
|
|
|
|
|
|
||||
Net loss per common share:
|
|
|
|
|
||||
Basic
|
|
$
|
(1.37
|
)
|
|
$
|
(0.28
|
)
|
Diluted
|
|
$
|
(1.37
|
)
|
|
$
|
(0.28
|
)
|
|
|
|
|
|
||||
Weighted-average common shares outstanding:
|
|
|
|
|
||||
Basic
|
|
71,594,472
|
|
|
71,803,920
|
|
||
Diluted
|
|
71,594,472
|
|
|
71,803,920
|
|
|
|
2016 Quarters Ended
|
||||||
(in thousands, except share and per share amounts)
|
|
March 31
|
|
June 30
|
||||
Revenue:
|
|
|
|
|
||||
Impax Generics, gross
|
|
$
|
614,176
|
|
|
$
|
532,968
|
|
Less:
|
|
|
|
|
||||
Chargebacks
|
|
217,354
|
|
|
197,864
|
|
||
Rebates
|
|
185,476
|
|
|
178,097
|
|
||
Product Returns
|
|
11,913
|
|
|
10,237
|
|
||
Other credits
|
|
29,354
|
|
|
25,075
|
|
||
Impax Generics, net
|
|
170,079
|
|
|
121,695
|
|
||
|
|
|
|
|
||||
Impax Specialty Pharma, gross
|
|
82,073
|
|
|
81,254
|
|
||
Less:
|
|
|
|
|
||||
Chargebacks
|
|
6,111
|
|
|
8,826
|
|
||
Rebates
|
|
2,853
|
|
|
2,430
|
|
||
Product Returns
|
|
1,508
|
|
|
1,279
|
|
||
Other credits
|
|
16,172
|
|
|
17,824
|
|
||
Impax Specialty Pharma, net
|
|
55,429
|
|
|
50,895
|
|
||
|
|
|
|
|
||||
Total revenues
|
|
225,508
|
|
|
172,590
|
|
||
|
|
|
|
|
||||
Gross profit
|
|
102,590
|
|
|
72,984
|
|
||
|
|
|
|
|
||||
Net loss
|
|
$
|
(10,408
|
)
|
|
$
|
(2,701
|
)
|
|
|
|
|
|
||||
Net loss per common share:
|
|
|
|
|
||||
Basic
|
|
$
|
(0.15
|
)
|
|
$
|
(0.04
|
)
|
Diluted
|
|
$
|
(0.15
|
)
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
||||
Weighted-average common shares outstanding:
|
|
|
|
|
||||
Basic
|
|
70,665,394
|
|
|
71,100,123
|
|
||
Diluted
|
|
70,665,394
|
|
|
71,100,123
|
|
•
|
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.
|
|
Six Months Ended
|
|
Year Ended
|
||||
|
June 30, 2017
|
|
December 31, 2016
|
||||
Chargeback reserve
|
|
|
|
||||
Beginning balance
|
$
|
151,978
|
|
|
$
|
102,630
|
|
Provision recorded during the period
|
603,631
|
|
|
1,011,400
|
|
||
Credits issued during the period
|
(641,728
|
)
|
|
(962,052
|
)
|
||
Ending balance
|
$
|
113,881
|
|
|
$
|
151,978
|
|
Provision as a percent of gross product sales
|
41
|
%
|
|
36
|
%
|
|
Six Months Ended
|
|
Year Ended
|
||||
|
June 30, 2017
|
|
December 31, 2016
|
||||
Rebate reserve
|
|
|
|
||||
Beginning balance
|
$
|
300,647
|
|
|
$
|
265,229
|
|
Provision recorded during the period
|
344,355
|
|
|
768,629
|
|
||
Credits issued during the period
|
(466,920
|
)
|
|
(733,211
|
)
|
||
Ending balance
|
$
|
178,082
|
|
|
$
|
300,647
|
|
Provision as a percent of gross product sales
|
23
|
%
|
|
27
|
%
|
|
Six Months Ended
|
|
Year Ended
|
||||
|
June 30, 2017
|
|
December 31, 2016
|
||||
Returns reserve
|
|
|
|
||||
Beginning balance
|
$
|
72,888
|
|
|
$
|
48,950
|
|
Provision related to sales recorded in the period
|
28,203
|
|
|
52,383
|
|
||
Credits issued during the period
|
(18,498
|
)
|
|
(28,445
|
)
|
||
Ending balance
|
$
|
82,593
|
|
|
$
|
72,888
|
|
Provision as a percent of gross product sales
|
1.9
|
%
|
|
1.8
|
%
|
|
Three Months Ended June 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
Dollars
|
|
Percentage
|
|||||||
Total revenues
|
$
|
202,082
|
|
|
$
|
172,590
|
|
|
$
|
29,492
|
|
|
17
|
%
|
Gross profit
|
72,406
|
|
|
72,984
|
|
|
(578
|
)
|
|
(1
|
)%
|
|||
(Loss) income from operations
|
(7,226
|
)
|
|
4,401
|
|
|
(11,627
|
)
|
|
*
|
|
|||
Loss before income taxes
|
(20,937
|
)
|
|
(3,950
|
)
|
|
(16,987
|
)
|
|
*
|
|
|||
Benefit from income taxes
|
(520
|
)
|
|
(1,249
|
)
|
|
729
|
|
|
(58
|
)%
|
|||
Net loss
|
$
|
(20,417
|
)
|
|
$
|
(2,701
|
)
|
|
$
|
(17,716
|
)
|
|
*
|
|
|
Three Months Ended June 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
Dollars
|
|
Percentage
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Impax Generics, net
|
$
|
150,889
|
|
|
$
|
121,695
|
|
|
$
|
29,194
|
|
|
24
|
%
|
Cost of revenues
|
108,901
|
|
|
82,794
|
|
|
26,107
|
|
|
32
|
%
|
|||
Cost of revenues impairment charges
|
—
|
|
|
1,545
|
|
|
(1,545
|
)
|
|
*
|
|
|||
Gross profit
|
41,988
|
|
|
37,356
|
|
|
4,632
|
|
|
12
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
8,034
|
|
|
1,565
|
|
|
6,469
|
|
|
*
|
|
|||
Research and development
|
20,995
|
|
|
16,143
|
|
|
4,852
|
|
|
30
|
%
|
|||
In-process research and development
impairment charges |
—
|
|
|
946
|
|
|
(946
|
)
|
|
*
|
|
|||
Patent litigation expense
|
319
|
|
|
155
|
|
|
164
|
|
|
*
|
|
|||
Total operating expenses
|
29,348
|
|
|
18,809
|
|
|
10,539
|
|
|
56
|
%
|
|||
Income from operations
|
$
|
12,640
|
|
|
$
|
18,547
|
|
|
$
|
(5,907
|
)
|
|
(32
|
)%
|
|
Three Months Ended June 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
Dollars
|
|
Percentage
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Rytary®, net
|
$
|
21,922
|
|
|
$
|
17,297
|
|
|
$
|
4,625
|
|
|
27
|
%
|
Zomig®, net
|
12,325
|
|
|
13,256
|
|
|
(931
|
)
|
|
(7
|
)%
|
|||
All other Specialty Pharma Products, net
|
16,946
|
|
|
20,342
|
|
|
(3,396
|
)
|
|
(17
|
)%
|
|||
Total revenues
|
51,193
|
|
|
50,895
|
|
|
298
|
|
|
1
|
%
|
|||
Cost of revenues
|
20,775
|
|
|
15,267
|
|
|
5,508
|
|
|
36
|
%
|
|||
Gross profit
|
30,418
|
|
|
35,628
|
|
|
(5,210
|
)
|
|
(15
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
16,814
|
|
|
16,133
|
|
|
681
|
|
|
4
|
%
|
|||
Research and development
|
5,852
|
|
|
4,657
|
|
|
1,195
|
|
|
26
|
%
|
|||
Patent litigation expense
|
851
|
|
|
1,774
|
|
|
(923
|
)
|
|
(52
|
)%
|
|||
Total operating expenses
|
23,517
|
|
|
22,564
|
|
|
953
|
|
|
4
|
%
|
|||
Income from operations
|
$
|
6,901
|
|
|
$
|
13,064
|
|
|
$
|
(6,163
|
)
|
|
(47
|
)%
|
|
Three Months Ended June 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
Dollars
|
|
Percentage
|
|||||||
General and administrative expenses
|
$
|
26,767
|
|
|
$
|
27,210
|
|
|
$
|
(443
|
)
|
|
(2
|
)%
|
Unallocated corporate expenses
|
(26,767
|
)
|
|
(27,210
|
)
|
|
443
|
|
|
(2
|
)%
|
|||
Interest expense
|
(13,369
|
)
|
|
(8,454
|
)
|
|
(4,915
|
)
|
|
58
|
%
|
|||
Interest income
|
155
|
|
|
340
|
|
|
(185
|
)
|
|
(54
|
)%
|
|||
Reserve for Turing receivable
|
(2,353
|
)
|
|
—
|
|
|
(2,353
|
)
|
|
*
|
|
|||
Gain on sale of intangible assets
|
11,850
|
|
|
—
|
|
|
11,850
|
|
|
*
|
|
|||
Other expense, net
|
(9,994
|
)
|
|
(237
|
)
|
|
(9,757
|
)
|
|
*
|
|
|||
Loss before income taxes
|
(40,478
|
)
|
|
(35,561
|
)
|
|
(4,917
|
)
|
|
14
|
%
|
|||
Benefit from income taxes
|
$
|
(520
|
)
|
|
$
|
(1,249
|
)
|
|
$
|
729
|
|
|
(58
|
)%
|
|
Six Months Ended June 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
Dollars
|
|
Percentage
|
|||||||
Total revenues
|
$
|
386,485
|
|
|
$
|
398,098
|
|
|
$
|
(11,613
|
)
|
|
(3
|
)%
|
Gross profit
|
97,297
|
|
|
175,574
|
|
|
(78,277
|
)
|
|
(45
|
)%
|
|||
(Loss) income from operations
|
(59,030
|
)
|
|
42,352
|
|
|
(101,382
|
)
|
|
*
|
|
|||
Loss before income taxes
|
(88,467
|
)
|
|
(21,444
|
)
|
|
(67,023
|
)
|
|
*
|
|
|||
Provision for (benefit from) income taxes
|
30,381
|
|
|
(8,335
|
)
|
|
38,716
|
|
|
*
|
|
|||
Net loss
|
$
|
(118,848
|
)
|
|
$
|
(13,109
|
)
|
|
$
|
(105,739
|
)
|
|
*
|
|
|
Six Months Ended June 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
Dollars
|
|
Percentage
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Impax Generics, net
|
$
|
285,036
|
|
|
$
|
291,774
|
|
|
$
|
(6,738
|
)
|
|
(2
|
)%
|
Cost of revenues
|
212,236
|
|
|
192,916
|
|
|
19,320
|
|
|
10
|
%
|
|||
Cost of revenues impairment charges
|
39,280
|
|
|
1,545
|
|
|
37,735
|
|
|
*
|
|
|||
Gross profit
|
33,520
|
|
|
97,313
|
|
|
(63,793
|
)
|
|
(66
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
14,502
|
|
|
6,339
|
|
|
8,163
|
|
|
*
|
|
|||
Research and development
|
38,391
|
|
|
30,738
|
|
|
7,653
|
|
|
25
|
%
|
|||
In-process research and development
impairment charges |
6,079
|
|
|
946
|
|
|
5,133
|
|
|
*
|
|
|||
Patent litigation expense
|
687
|
|
|
269
|
|
|
418
|
|
|
*
|
|
|||
Total operating expenses
|
59,659
|
|
|
38,292
|
|
|
21,367
|
|
|
56
|
%
|
|||
(Loss) income from operations
|
$
|
(26,139
|
)
|
|
$
|
59,021
|
|
|
$
|
(85,160
|
)
|
|
*
|
|
|
Six Months Ended June 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
Dollars
|
|
Percentage
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|||||||
Rytary®, net
|
$
|
41,827
|
|
|
$
|
32,223
|
|
|
$
|
9,604
|
|
|
30
|
%
|
Zomig®, net
|
22,182
|
|
|
24,706
|
|
|
(2,524
|
)
|
|
(10
|
)%
|
|||
All other Specialty Pharma Products, net
|
37,440
|
|
|
49,395
|
|
|
(11,955
|
)
|
|
(24
|
)%
|
|||
Total revenues
|
101,449
|
|
|
106,324
|
|
|
(4,875
|
)
|
|
(5
|
)%
|
|||
Cost of revenues
|
37,672
|
|
|
28,063
|
|
|
9,609
|
|
|
34
|
%
|
|||
Gross profit
|
63,777
|
|
|
78,261
|
|
|
(14,484
|
)
|
|
(19
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative
|
33,144
|
|
|
29,951
|
|
|
3,193
|
|
|
11
|
%
|
|||
Research and development
|
10,945
|
|
|
9,084
|
|
|
1,861
|
|
|
20
|
%
|
|||
Patent litigation expense
|
1,555
|
|
|
2,979
|
|
|
(1,424
|
)
|
|
(48
|
)%
|
|||
Total operating expenses
|
45,644
|
|
|
42,014
|
|
|
3,630
|
|
|
9
|
%
|
|||
Income from operations
|
$
|
18,133
|
|
|
$
|
36,247
|
|
|
$
|
(18,114
|
)
|
|
(50
|
)%
|
|
Six Months Ended June 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
2017
|
|
2016
|
|
Dollars
|
|
Percentage
|
|||||||
General and administrative expenses
|
$
|
51,024
|
|
|
$
|
52,916
|
|
|
$
|
(1,892
|
)
|
|
(4
|
)%
|
Unallocated corporate expenses
|
(51,024
|
)
|
|
(52,916
|
)
|
|
1,892
|
|
|
(4
|
)%
|
|||
Interest expense
|
(26,749
|
)
|
|
(16,785
|
)
|
|
(9,964
|
)
|
|
59
|
%
|
|||
Interest income
|
309
|
|
|
673
|
|
|
(364
|
)
|
|
(54
|
)%
|
|||
Reserve for Turing receivable
|
(2,670
|
)
|
|
(48,043
|
)
|
|
45,373
|
|
|
(94
|
)%
|
|||
Gain on sale of intangible assets
|
11,850
|
|
|
—
|
|
|
11,850
|
|
|
*
|
|
|||
Loss on debt extinguishment
|
(1,215
|
)
|
|
—
|
|
|
(1,215
|
)
|
|
*
|
|
|||
Other (expense) income, net
|
(10,962
|
)
|
|
359
|
|
|
(11,321
|
)
|
|
*
|
|
|||
Loss before income taxes
|
(80,461
|
)
|
|
(116,712
|
)
|
|
36,251
|
|
|
(31
|
)%
|
|||
Provision for (benefit from) income taxes
|
$
|
30,381
|
|
|
$
|
(8,335
|
)
|
|
$
|
38,716
|
|
|
*
|
|
(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.
|
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
|
|||
April 1, 2017 to April 30, 2017
|
|
87,887
|
|
|
$12.21
|
|
—
|
|
|
—
|
|
May 1, 2017 to May 31, 2017
|
|
18,449
|
|
|
$17.25
|
|
—
|
|
|
—
|
|
June 1, 2017 to June 30, 2017
|
|
3,337
|
|
|
$15.73
|
|
—
|
|
|
—
|
|
(1)
|
Represents shares of our common stock that we accepted during the indicated periods as a tax withholding from certain of our employees in connection with the vesting of shares of restricted stock pursuant to the terms of our 2002 Plan.
|
Exhibit No.
|
|
Description of Document
|
|
Form of Stock Option Agreement under the Company’s Fourth Amended and Restated 2002 Equity Incentive Plan*†
|
|
|
|
|
|
Form of Restricted Stock (Stock Bonus) Award Agreement under the Company’s Fourth Amended and Restated 2002 Equity Incentive Plan*†
|
|
|
|
|
|
Statement re computation of per share earnings (incorporated by reference to Note. 14 in the Notes to Interim Consolidated Financial Statements in this Quarterly Report on Form 10-Q).
|
|
|
|
|
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
|
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.*
|
|
|
|
|
|
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.*
|
|
|
|
|
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016, (ii) Consolidated Statements of Operations for each of the three and six months ended June 30, 2017 and 2016, (iii) Consolidated Statements of Comprehensive Loss for each of the three and six months ended June 30, 2017 and 2016, (iv) Consolidated Statements of Cash Flows for each of the six months ended June 30, 2017 and 2016 and (v) Notes to Interim Consolidated Financial Statements.*
|
Date: August 9, 2017
|
|
Impax Laboratories, Inc.
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By:
|
/s/ Paul M. Bisaro
|
|
|
Paul M. Bisaro
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
|
|
By:
|
/s/ Bryan M. Reasons
|
|
|
Bryan M. Reasons
|
|
|
Chief Financial Officer and
Senior Vice President, Finance
(Principal Financial and Accounting Officer)
|
Exhibit No.
|
|
Description of Document
|
|
Form of Stock Option Agreement under the Company’s Fourth Amended and Restated 2002 Equity Incentive Plan*†
|
|
|
|
|
|
Form of Restricted Stock (Stock Bonus) Award Agreement under the Company’s Fourth Amended and Restated 2002 Equity Incentive Plan*†
|
|
|
|
|
|
Statement re computation of per share earnings (incorporated by reference to Note. 14 in the Notes to Interim Consolidated Financial Statements in this Quarterly Report on Form 10-Q).
|
|
|
|
|
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
|
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.*
|
|
|
|
|
|
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.*
|
|
|
|
|
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016, (ii) Consolidated Statements of Operations for each of the three and six months ended June 30, 2017 and 2016, (iii) Consolidated Statements of Comprehensive Loss for each of the three and six months ended June 30, 2017 and 2016, (iv) Consolidated Statements of Cash Flows for each of the six months ended June 30, 2017 and 2016 and (v) Notes to Interim Consolidated Financial Statements.*
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 2017
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.
|
August 9, 2017
|
By:
|
/s/ Paul M. Bisaro
|
|
|
Paul M. Bisaro
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 2017
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.
|
August 9, 2017
|
By:
|
/s/ Bryan M. Reasons
|
|
|
Bryan M. Reasons
|
|
|
Chief Financial Officer and Senior Vice President,
Finance
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) 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.
|
August 9, 2017
|
By:
|
/s/ Paul M. Bisaro
|
|
|
Paul M. Bisaro
|
|
|
President and Chief Executive Officer
|
|
|
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) 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.
|
August 9, 2017
|
By:
|
/s/ Bryan M. Reasons
|
|
|
Bryan M. Reasons
|
|
|
Chief Financial Officer and Senior Vice President, Finance
|