|
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
|
94‑3229046
(I.R.S. Employer
Identification No.)
|
100 South Saunders Road, Suite 300, Lake Forest, Illinois
(Address of Principal Executive Offices)
|
60045
(Zip Code)
|
Title of each class:
|
|
Trading Symbol(s):
|
|
Name of each exchange on which registered:
|
Common Stock, $0.0001 par value
|
|
ASRT
|
|
The Nasdaq Stock Market LLC
|
Large accelerated filer ¨
|
Accelerated filer ý
|
Non‑accelerated filer ¨
|
Smaller reporting company ¨ Emerging growth company ¨
|
|
|
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
||
|
||
|
|
•
|
our ability to successfully pursue business development, strategic partnerships, and investment opportunities to build and grow for the future;
|
•
|
the commercial success and market acceptance of our products;
|
•
|
the outcome of our opioid-related investigations, our opioid-related litigation brought by state and local governmental entities and private parties, and our insurance, antitrust and other litigation, and the costs and expenses associated therewith;
|
•
|
any additional patent infringement or other litigation, investigation or proceeding that may be instituted related to us or any of our products, product candidates or products we may acquire;
|
•
|
our ability to generate sufficient cash flow from our business to make payments on our indebtedness, our ability to restructure or refinance our indebtedness and our compliance with the terms and conditions of the agreements governing our indebtedness;
|
•
|
our common stock remaining in compliance with Nasdaq’s minimum closing bid requirement of at least $1.00 per share, and the resulting rights of holders of our Convertible Notes to require us to repurchase their notes if our common stock ceases to be listed on the Nasdaq Global Select Market (or certain other U.S. stock exchanges specified in the agreements governing our indebtedness);
|
•
|
our and our collaborative partners’ compliance or non-compliance with legal and regulatory requirements related to the development or promotion of pharmaceutical products in the U.S.;
|
•
|
our plans to acquire, in-license or co-promote other products, and/or acquire companies;
|
•
|
the timing and results of our and our collaborative partners’ research and development efforts including clinical studies relating to our and our collaborative partners’ product candidates
|
•
|
our ability to raise additional capital, if necessary;
|
•
|
our ability to successfully develop and execute our sales and marketing strategies;
|
•
|
variations in revenues obtained from commercialization and collaborative agreements, including contingent milestone payments, royalties, license fees and other contract revenues, including non-recurring revenues, and the accounting treatment with respect thereto;
|
•
|
our collaborative partners’ compliance or non-compliance with obligations under our collaboration agreements; and
|
•
|
our ability to attract and retain key executive leadership.
|
•
|
On December 4, 2017, the Company announced a commercialization agreement with Collegium Pharmaceutical, Inc. (Collegium), pursuant to which the Company granted Collegium the right to commercialize the NUCYNTA franchise of products in the U.S. (the Commercialization Agreement). Pursuant to the Commercialization Agreement, Collegium assumed all commercialization responsibilities for the NUCYNTA franchise effective January 9, 2018, including sales and marketing, and the Company received royalty on all NUCYNTA revenues based on certain net sales thresholds.
|
•
|
On August 13, 2019, the Company entered into separate, privately negotiated exchange agreements (the Exchange Agreements) with a limited number of holders of Assertio’s 2.50% Convertible Notes due 2021 (the 2021 Notes). Pursuant to the Exchange Agreements, Assertio exchanged approximately $200 million aggregate principal amount of Exchanged Notes for a combination of (a) its new 5.00% Convertible Senior Notes due August 15, 2024 (the 2024 Notes), (b) a cash payment plus accrued but unpaid interest on the Exchanged Notes, and (c) an agreed number of shares of Assertio’s common stock.
|
•
|
On December 12, 2019, the Company announced it entered into an agreement with Golf Acquiror LLC, an affiliate to Alvogen, Inc. (Alvogen), a global privately held pharmaceutical company, under which Alvogen acquired and assumed all responsibilities associated with the product Gralise® (gabapentin). Under the terms of the agreement, Alvogen is expected to pay Assertio a total value of $127.5 million. This included $75.0 million in cash at closing on January 10, 2020, and the balance payable as 75% of Alvogen’s first $70.0 million of Gralise net sales after the closing. Alvogen also paid the Company for certain inventories relating to Gralise.
|
•
|
On February 6, 2020, the Company announced it entered into a definitive agreement with Collegium pursuant to which Collegium acquired the NUCYNTA franchise of products from the Company, and assumed certain contracts, liabilities and obligations of the Company relating to the NUCYNTA products, including those related to manufacturing and supply, post-market commitments and clinical development costs. Under the terms of the agreement, Collegium paid Assertio $375.0 million in cash at closing on February 13, 2020, less royalties paid to the Company in 2020. Collegium also paid the Company for certain inventories relating to the products.
|
•
|
On February 13, 2020, the Company repaid in full its outstanding aggregate principal amount of senior secured notes (Senior Notes) pursuant to a Note Purchase Agreement dated March 12, 2015 (Note Purchase Agreement) and all subsequent amendments to the Note Purchase Agreement.
|
•
|
On February 19, 2020, the Company announced it entered into separate, privately negotiated agreements with a limited number of holders of the Company’s 2021 Notes and 2024 Notes to repurchase approximately $188.0 million aggregate principal amount of the outstanding 2021 Notes and 2024 Notes.
|
|
|
Year ended December 31,
|
||||
|
|
2019
|
|
2018
|
|
2017
|
Gralise
|
|
$63.1
|
|
$58.1
|
|
$77.0
|
CAMBIA
|
|
$32.5
|
|
$35.8
|
|
$31.6
|
Zipsor
|
|
$12.5
|
|
$16.4
|
|
$16.7
|
NUCYNTA ER and NUCYNTA
|
|
|
|
|
|
|
Product Sales (1)
|
|
$0.9
|
|
$18.9
|
|
$239.5
|
Commercialization Agreement (2)
|
|
$118.6
|
|
$155.7
|
|
$0
|
Lazanda (3)
|
|
$(0.2)
|
|
$0.8
|
|
$15.0
|
(1)
|
NUCYNTA ER and NUCYNTA product sales reflect our sales between January 1, 2017 and January 8, 2018, prior to the Commercialization Agreement with Collegium. See “Item 8. Financial Statements and Supplementary Data - Note 2. Revenue” for additional information. Subsequent to January 8, 2018, we continue to recognize sales reserve estimate adjustments related to sales recognized for NUCYNTA products in prior periods.
|
(2)
|
NUCYNTA ER and NUCYNTA royalties from Collegium reflect royalties earned and inventory sold pursuant to the Commercialization Agreement after January 8, 2018. Variable royalty revenue became effective for sales beginning January 1, 2019, as recognition of such royalties are constrained by the sales-based royalty exception related to intellectual property. Other components of net revenue from the Commercialization Agreement include the amortization of revenue from contract liabilities arising from the warrants and prepayments received, amortization of the contract asset, and variable consideration revenue for reimbursement of certain shared costs. See “Item 8. Financial Statements and Supplementary Data - Note 2. Revenue” for additional information.
|
(3)
|
In November 2017, we entered into agreements with Slán Medicinal Holdings Limited and certain of its affiliates (Slán) pursuant to which Slán acquired our rights to Lazanda. Lazanda nasal spray is an intranasal fentanyl drug used to manage breakthrough pain in adults (18 years of age and older) who are already routinely taking other opioid pain medicines around‑the‑clock for cancer pain. We acquired Lazanda in July 2013 from Archimedes Pharma US Inc. and its affiliated companies. We continue to recognize sales reserve estimate adjustments related to sales recognized for Lazanda in prior periods.
|
|
Consolidated Revenue
|
|
Accounts Receivable related to product shipments
|
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||
McKesson Corporation
|
16
|
%
|
|
14
|
%
|
|
36
|
%
|
|
46
|
%
|
|
28
|
%
|
|
41
|
%
|
AmerisourceBergen Corporation
|
12
|
%
|
|
13
|
%
|
|
27
|
%
|
|
17
|
%
|
|
28
|
%
|
|
27
|
%
|
Cardinal Health
|
10
|
%
|
|
11
|
%
|
|
26
|
%
|
|
25
|
%
|
|
32
|
%
|
|
23
|
%
|
Collegium
|
52
|
%
|
|
55
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
All others
|
10
|
%
|
|
7
|
%
|
|
11
|
%
|
|
12
|
%
|
|
12
|
%
|
|
9
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Product
|
|
U.S. Patent Nos. (Exp. Dates)
|
NUCYNTA® ER (1)
|
|
8,536,130 (September 22, 2028)(2)(3)
|
|
|
7,994,364 (June 27, 2025)(2)(3)
|
|
|
RE39593 (August 5, 2022)(2)(3)
|
NUCYNTA® (1)
|
|
7,994,364 (June 27, 2025)(2)
|
|
|
RE39593 (August 5, 2022)(2)
|
Gralise® (4)
|
|
7,438,927 (February 26, 2024)
|
|
|
7,731,989 (October 25, 2022)
|
|
|
8,192,756 (October 25, 2022)
|
|
|
8,252,332 (October 25, 2022)
|
|
|
8,333,992 (October 25, 2022)
|
|
|
6,723,340 (October 25, 2021)
|
|
|
6,488,962 (June 20, 2020)
|
Zipsor® (5)
|
|
7,662,858 (February 24, 2029)
|
|
|
7,884,095 (February 24, 2029)
|
|
|
7,939,518 (February 24, 2029)
|
|
|
8,110,606 (February 24, 2029)
|
|
|
8,623,920 (February 24, 2029)
|
|
|
6,287,594 (January 15, 2019)
|
|
|
9,561,200 (February 24, 2029)
|
CAMBIA® (6)
|
|
7,759,394 (June 16, 2026)(2)
|
|
|
8,097,651 (June 16, 2026)(2)
|
|
|
8,927,604 (June 16, 2026) (2)
|
|
|
9,827,197 (June 16, 2026)
|
|
|
|
(1) Effective as of February 13, 2020, we divested the NUCYNTA patents to Collegium.
(2) Subject to six‑month pediatric patent term extension beyond scheduled expiration date.
(3) Patent rights were exclusively in‑licensed by us until transferred to Collegium on February 13, 2020.
(4) Effective as of January 10, 2020, we divested the Gralise patents to Alvogen.
(5) Certain parties who have entered into settlement agreements with us will be able to market generic versions of Zipsor starting in 2022.
(6) Certain parties who have entered into settlement agreements with us will be able to market generic versions of CAMBIA starting in 2023.
|
•
|
In Phase 1, we conduct clinical trials with a small number of subjects to determine a drug’s early safety profile and its pharmacokinetic pattern.
|
•
|
In Phase 2, we conduct limited clinical trials with groups of patients afflicted with a specific disease in order to determine preliminary efficacy, optimal dosages and further evidence of safety.
|
•
|
In Phase 3, we conduct large‑scale, multi‑center, comparative trials with patients afflicted with a target disease in order to provide enough data to statistically evaluate the efficacy and safety of the product candidate, as required by the FDA.
|
•
|
develop and execute our sales and marketing strategies for our products and Gralise;
|
•
|
achieve, maintain and grow market acceptance of, and demand for, our products and Gralise;
|
•
|
obtain and maintain adequate coverage, reimbursement and pricing from managed care, government and other third-party payers;
|
•
|
maintain, manage or scale the necessary sales, marketing, manufacturing, managed markets and other capabilities and infrastructure that are required to successfully integrate and commercialize our products and Gralise;
|
•
|
obtain adequate supply of our products and Gralise;
|
•
|
maintain and extend intellectual property protection for our products and Gralise; and
|
•
|
comply with applicable legal and regulatory requirements.
|
•
|
any parallel development by a commercialization or collaborative partner of competitive technologies or products;
|
•
|
arrangements with commercialization or collaborative partners that limit or preclude us from developing products or technologies;
|
•
|
premature termination of a commercialization or collaboration agreement or the inability to renegotiate existing agreements on favorable terms; or
|
•
|
failure by a commercialization or collaborative partner to devote sufficient resources to the development and commercial sales of products using our current and potential future products and technologies.
|
•
|
government health administration authorities;
|
•
|
private health insurers;
|
•
|
health maintenance organizations;
|
•
|
managed care organizations;
|
•
|
pharmacy benefit management companies; and
|
•
|
other healthcare-related organizations.
|
•
|
negative or inconclusive results;
|
•
|
patient enrollment rates;
|
•
|
patient noncompliance with the protocol;
|
•
|
adverse medical events or side effects among patients during the clinical trials;
|
•
|
any findings resulting from FDA inspections of clinical operations;
|
•
|
failure to meet FDA preferred or recommended clinical trial design, end points or statistical power;
|
•
|
failure to comply with good clinical practices;
|
•
|
failure of third-party clinical trial vendors to comply with applicable regulatory laws and regulations;
|
•
|
compliance with applicable laws and regulations;
|
•
|
inability of third-party clinical trial vendors to satisfactorily perform their contractual obligations, comply with applicable laws and regulations or meet deadlines;
|
•
|
delays or failures in obtaining clinical materials or manufacturing sufficient quantities of the product candidate for use in clinical trials;
|
•
|
delays or failures in recruiting qualified patients to participate in clinical trials; and
|
•
|
actual or perceived lack of efficacy or safety of the product candidate.
|
•
|
market acceptance;
|
•
|
a cost-effective commercial-scale production; and
|
•
|
reimbursement under private or governmental health plans.
|
•
|
adversely affect our business, financial condition and results of operations;
|
•
|
result in reputational harm and reduced market acceptance and demand for our products;
|
•
|
harm our ability and our commercial partners’ ability to market our products;
|
•
|
cause us to incur significant liabilities, costs and expenses; and
|
•
|
cause our senior management to be distracted from execution of our business strategy.
|
•
|
we may be unable to maintain product liability insurance on acceptable terms;
|
•
|
we may be unable to obtain product liability insurance for future trials;
|
•
|
we may be unable to obtain product liability insurance for future products; or
|
•
|
our insurance may not provide adequate protection against potential liabilities (including pending and future claims relating to opioid litigation), or may provide no protection at all.
|
•
|
make it more difficult for us to meet our payment and other obligations under the Convertible Notes or our other indebtedness;
|
•
|
result in other events of default under our Convertible Notes or our other indebtedness, which events of default could result in all of our debt becoming immediately due and payable;
|
•
|
make us more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
|
•
|
limit our ability to borrow additional amounts for working capital and other general corporate purposes, including funding possible acquisitions of, or investments in, new and complementary businesses, products and technologies, which is a key element of our corporate strategy;
|
•
|
subject us to the risk of increased sensitivity to interest rate increases on our indebtedness with variable interest rates;
|
•
|
require 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, including working capital, clinical trials, research and development, business development activities, capital expenditures and other general corporate purposes;
|
•
|
prevent us from raising funds necessary to repurchase the Convertible Notes in the event we are required to do so following a “fundamental change,” as specified in the indentures governing the Convertible Notes, or to settle conversions of the Convertible Notes in cash;
|
•
|
result in dilution to our existing shareholders as a result of the conversion of the Convertible Notes into shares of common stock;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and our industry; and
|
•
|
put us at a disadvantage compared to our competitors who have less debt.
|
•
|
minimize the disruption and distraction of our management and other employees, including our sales force, in connection with the integration of any acquired business, product or technology;
|
•
|
maintain and increase sales of our existing products;
|
•
|
establish or manage the transition of the manufacture and supply of any acquired product, including the necessary active pharmaceutical ingredients, excipients and components;
|
•
|
identify and add the necessary sales, marketing, manufacturing, regulatory and other related personnel, capabilities and infrastructure that are required to successfully integrate any acquired business, product or technology;
|
•
|
manage the transition and migration of all commercial, financial, legal, clinical, regulatory and other pertinent information relating to any acquired business, product or technology;
|
•
|
comply with legal, regulatory and contractual requirements applicable to any acquired business, product or technology;
|
•
|
obtain and maintain adequate coverage, reimbursement and pricing from managed care, government and other third-party payers with respect to any acquired product; and
|
•
|
maintain and extend intellectual property protection for any acquired product or technology.
|
•
|
the degree of commercial success and market acceptance of Gralise, CAMBIA and Zipsor;
|
•
|
the outcome of our opioid-related investigations, our opioid-related litigation brought by state and local governmental entities and private parties, and our insurance, antitrust and other litigation, and the costs and expenses associated therewith;
|
•
|
filings and other regulatory or governmental actions, investigations or proceedings related to our products and product candidates and those of our commercialization and collaborative partners;
|
•
|
developments concerning proprietary rights, including patents, infringement allegations, inter partes review proceedings and litigation matters;
|
•
|
legal and regulatory developments in the U.S.;
|
•
|
actions taken by industry stakeholders affecting the market for our products;
|
•
|
our ability to generate sufficient cash flow from our business to make payments on our indebtedness;
|
•
|
our and our commercialization and collaborative partners’ compliance or noncompliance with legal and regulatory requirements and with obligations under our collaborative agreements;
|
•
|
our ability to successfully develop and execute our sales and marketing strategies;
|
•
|
our plans to acquire, in-license or co-promote other products or compounds or acquire or combine with other companies, and our degree of success in realizing the intended advantages of, and mitigating any risks associated with, any such transaction;
|
•
|
adverse events related to our products, or product candidates, including recalls;
|
•
|
interruptions of manufacturing or supply, or other manufacture or supply difficulties;
|
•
|
variations in revenues obtained from commercialization and collaborative agreements, including contingent milestone payments, royalties, license fees and other contract revenues, including nonrecurring revenues, and the accounting treatment with respect thereto;
|
•
|
adverse events or circumstances related to our peer companies or our industry or the markets for our products;
|
•
|
adoption of new technologies by us or our competitors;
|
•
|
our compliance with the terms and conditions of the agreements governing our indebtedness;
|
•
|
decisions by collaborative partners to proceed or not to proceed with subsequent phases of a collaboration or program;
|
•
|
our ability to generate additional revenues from our intellectual property rights;
|
•
|
sales of large blocks of our common stock or the dilutive effect of our Convertible Notes; and
|
•
|
variations in our operating results, earnings per share, cash flows from operating activities, deferred revenue, and other financial metrics and non-financial metrics, and how those results are measured, presented and compare to our financial and operating projections and analyst expectations.
|
•
|
responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, disrupting our operations and diverting the attention of management and our employees;
|
•
|
perceived uncertainties as to our future direction may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel, business partners, customers and others important to our success, any of which could negatively affect our business and our results of operations and financial condition; and
|
•
|
if nominees advanced by activist shareholders are elected or appointed to our Board of Directors with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plans or to realize
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2018
|
|
12/31/2019
|
||||||||||||
Assertio Therapeutics, Inc.
|
$
|
100
|
|
|
$
|
113
|
|
|
$
|
112
|
|
|
$
|
50
|
|
|
$
|
22
|
|
|
$
|
8
|
|
Nasdaq Composite Index
|
$
|
100
|
|
|
$
|
106
|
|
|
$
|
114
|
|
|
$
|
146
|
|
|
$
|
140
|
|
|
$
|
189
|
|
Nasdaq Pharmaceutical Index
|
$
|
100
|
|
|
$
|
102
|
|
|
$
|
90
|
|
|
$
|
102
|
|
|
$
|
107
|
|
|
$
|
123
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales, net
|
|
$
|
108,806
|
|
|
$
|
129,966
|
|
|
$
|
379,880
|
|
|
$
|
455,066
|
|
|
$
|
341,750
|
|
Commercialization Agreement and other revenue (1)
|
|
118,614
|
|
|
155,743
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Royalties and milestones
|
|
2,084
|
|
|
26,061
|
|
|
844
|
|
|
831
|
|
|
985
|
|
|||||
Total revenues
|
|
229,504
|
|
|
311,770
|
|
|
380,724
|
|
|
455,897
|
|
|
342,735
|
|
|||||
Total costs and expenses (2)
|
|
423,932
|
|
|
268,111
|
|
|
422,904
|
|
|
431,388
|
|
|
393,135
|
|
|||||
(Loss) income from operations
|
|
(194,428
|
)
|
|
43,659
|
|
|
(42,180
|
)
|
|
24,509
|
|
|
(50,400
|
)
|
|||||
Net (loss) income before income taxes
|
|
(222,484
|
)
|
|
37,975
|
|
|
(103,925
|
)
|
|
(64,502
|
)
|
|
(123,237
|
)
|
|||||
Income tax benefit (expense)
|
|
5,283
|
|
|
(1,067
|
)
|
|
1,429
|
|
|
(24,218
|
)
|
|
47,499
|
|
|||||
Net (loss) income
|
|
$
|
(217,201
|
)
|
|
$
|
36,908
|
|
|
$
|
(102,496
|
)
|
|
$
|
(88,720
|
)
|
|
$
|
(75,738
|
)
|
Basic net (loss) income per share
|
|
$
|
(3.07
|
)
|
|
$
|
0.58
|
|
|
$
|
(1.63
|
)
|
|
$
|
(1.45
|
)
|
|
$
|
(1.26
|
)
|
Diluted net (loss) income per share
|
|
$
|
(3.07
|
)
|
|
$
|
0.57
|
|
|
$
|
(1.63
|
)
|
|
$
|
(1.45
|
)
|
|
$
|
(1.26
|
)
|
Shares used in computing basic net (loss) income per share
|
|
70,716
|
|
|
63,794
|
|
|
62,702
|
|
|
61,297
|
|
|
60,117
|
|
|||||
Shares used in computing diluted net (loss) income per share
|
|
70,716
|
|
|
64,208
|
|
|
62,702
|
|
|
61,297
|
|
|
60,117
|
|
|
|
December 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and short term investments (3)
|
|
$
|
42,107
|
|
|
$
|
110,949
|
|
|
$
|
128,089
|
|
|
$
|
177,420
|
|
|
$
|
209,768
|
|
Total assets
|
|
527,170
|
|
|
932,866
|
|
|
1,038,617
|
|
|
1,225,337
|
|
|
1,357,249
|
|
|||||
Total current liabilities (4)
|
|
184,553
|
|
|
246,036
|
|
|
310,580
|
|
|
227,242
|
|
|
219,632
|
|
|||||
Contingent consideration liability, non-current
|
|
168
|
|
|
1,038
|
|
|
1,457
|
|
|
10,247
|
|
|
11,653
|
|
|||||
Senior Notes (3)
|
|
76,443
|
|
|
158,309
|
|
|
274,720
|
|
|
466,051
|
|
|
563,012
|
|
|||||
Convertible Notes (5)
|
|
194,815
|
|
|
287,798
|
|
|
269,510
|
|
|
252,725
|
|
|
237,313
|
|
|||||
Other long-term liabilities
|
|
13,233
|
|
|
19,350
|
|
|
12,842
|
|
|
18,284
|
|
|
10,584
|
|
|||||
Accumulated (deficit) earnings
|
|
(399,801
|
)
|
|
(182,600
|
)
|
|
(219,508
|
)
|
|
(116,744
|
)
|
|
(28,024
|
)
|
|||||
Total shareholders’ equity
|
|
57,958
|
|
|
220,335
|
|
|
169,508
|
|
|
250,788
|
|
|
315,055
|
|
(1)
|
Effective January 8, 2018, the Company entered into a Commercialization Agreement to sub-license NUCYNTA, which resulted in income from variable royalty revenues, net revenue from the amortization of certain contract assets and liabilities, and variable consideration revenue for the reimbursement of certain shared costs.
|
(2)
|
At December 31, 2019 the Company recognized an impairment loss of $189.8 million on its NUCYNTA intangible.
|
(3)
|
The Company made principal payments of $120.0 million and $82.5 million in 2019 and 2018, respectively. The Company prepaid $114.4 million and $105.0 million of its Senior Notes, including prepayment premiums of $4.4 million and $5.0 million in 2017 and 2016, respectively.
|
(4)
|
The increase in current liabilities as of December 31, 2017, is primarily due to the reclassification of principal payments due on our Senior Notes in 2018.
|
(5)
|
In August 2019 the Company exchanged $200.0 million aggregate principal amount of the Convertible Senior Notes due March 1, 2021 for a combination of (a) its new $120.0 million aggregate principal amount of 5.00% Convertible Senior Notes due August 15, 2024, (b) an aggregate cash payment of $30.0 million, and (c) an aggregate of 15.8 million shares of the Company’s common stock.
|
|
|
Contract Sales
Discounts (1)(2)
|
|
Product Returns (2)
|
|
Cash
Discounts (2)
|
|
Total
|
||||||||
Balance at December 31, 2016
|
|
$
|
107,927
|
|
|
$
|
23,609
|
|
|
$
|
2,110
|
|
|
$
|
133,646
|
|
Revenue Allowances:
|
|
|
|
|
|
|
|
|
||||||||
Provision related to current period sales
|
|
325,489
|
|
|
13,555
|
|
|
14,858
|
|
|
353,902
|
|
||||
Changes in estimates related to sales made in prior years
|
|
1,483
|
|
|
7,875
|
|
|
—
|
|
|
9,358
|
|
||||
Payments and credits related to sales made in current period
|
|
(224,002
|
)
|
|
—
|
|
|
(13,358
|
)
|
|
(237,360
|
)
|
||||
Payments and credits related to sales made in prior periods
|
|
(104,751
|
)
|
|
(15,357
|
)
|
|
(2,110
|
)
|
|
(122,218
|
)
|
||||
Balance at December 31, 2017
|
|
$
|
106,146
|
|
|
$
|
29,682
|
|
|
$
|
1,500
|
|
|
$
|
137,328
|
|
Revenue Allowances:
|
|
|
|
|
|
|
|
|
||||||||
Provision related to current period sales
|
|
123,623
|
|
|
5,716
|
|
|
5,024
|
|
|
134,363
|
|
||||
Changes in estimates related to sales made in prior years
|
|
(19,210
|
)
|
|
7,327
|
|
|
—
|
|
|
(11,883
|
)
|
||||
Payments and credits related to sales made in current period
|
|
(75,380
|
)
|
|
—
|
|
|
(4,605
|
)
|
|
(79,985
|
)
|
||||
Payments and credits related to sales made in prior periods
|
|
(86,936
|
)
|
|
(14,986
|
)
|
|
(1,500
|
)
|
|
(103,422
|
)
|
||||
Balance at December 31, 2018
|
|
$
|
48,243
|
|
|
$
|
27,739
|
|
|
$
|
419
|
|
|
$
|
76,401
|
|
Revenue Allowances:
|
|
|
|
|
|
|
|
|
||||||||
Provision related to current period sales
|
|
148,907
|
|
|
19,380
|
|
|
5,396
|
|
|
173,683
|
|
||||
Changes in estimates related to sales made in prior years
|
|
(2,561
|
)
|
|
(7,861
|
)
|
|
—
|
|
|
(10,422
|
)
|
||||
Payments and credits related to sales made in current period
|
|
(109,181
|
)
|
|
—
|
|
|
(4,155
|
)
|
|
(113,336
|
)
|
||||
Payments and credits related to sales made in prior periods
|
|
(45,682
|
)
|
|
(20,042
|
)
|
|
(419
|
)
|
|
(66,143
|
)
|
||||
Balance at December 31, 2019
|
|
$
|
39,726
|
|
|
$
|
19,216
|
|
|
$
|
1,241
|
|
|
$
|
60,183
|
|
(1)
|
Includes wholesaler and pharmacy discounts, patient support programs, managed care rebates, and government chargebacks and rebates.
|
(2)
|
In November 2017, we divested the rights to Lazanda to Slán. In January 2018, we entered into an agreement which granted commercialization rights of NUCYNTA to Collegium. We continue to recognize sales reserve estimate adjustments related to sales recognized for Lazanda and NUCYNTA in prior periods.
|
|
|
Year ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Product sales, net:
|
|
|
|
|
||||
Gralise
|
|
$
|
63,124
|
|
|
$
|
58,077
|
|
CAMBIA
|
|
32,453
|
|
|
35,803
|
|
||
Zipsor
|
|
12,498
|
|
|
16,387
|
|
||
Total neurology product sales, net
|
|
108,075
|
|
|
110,267
|
|
||
NUCYNTA products(1)
|
|
927
|
|
|
18,944
|
|
||
Lazanda(2)
|
|
(196
|
)
|
|
755
|
|
||
Total product sales, net
|
|
108,806
|
|
|
129,966
|
|
||
Commercialization agreement:
|
|
|
|
|
||||
Commercialization rights and facilitation services, net
|
|
118,614
|
|
|
100,038
|
|
||
Revenue from transfer of inventory
|
|
—
|
|
|
55,705
|
|
||
Royalties and milestone revenue
|
|
2,084
|
|
|
26,061
|
|
||
Total revenues
|
|
$
|
229,504
|
|
|
$
|
311,770
|
|
(1)
|
NUCYNTA product sales for the year ended December 31, 2018 reflect our sales of NUCYNTA between January 1 and January 8, 2018. During the year ended December 31, 2018, in connection with the Collegium transaction, we recognized revenue of $12.5 million related to the release of NUCYNTA sales reserves which were primarily recorded in the fourth quarter of 2017, as financial responsibility for those reserves transferred to Collegium upon closing of the Commercialization Agreement. Subsequent to January 8, 2018 we continue to recognize sales reserve estimate adjustments related to sales recognized for NUCYNTA in prior periods.
|
(2)
|
We divested Lazanda in November 2017. We continue to recognize sales reserve estimate adjustments related to sales recognized for Lazanda in prior periods.
|
|
|
Year ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Royalty revenue
|
|
$
|
118,636
|
|
|
$
|
100,038
|
|
Contract liability amortization (1)
|
|
2,791
|
|
|
—
|
|
||
Contract asset amortization, net
|
|
(3,596
|
)
|
|
—
|
|
||
Expense reimbursement
|
|
783
|
|
|
—
|
|
||
Inventory transfer
|
|
—
|
|
|
55,705
|
|
||
Total commercialization revenue
|
|
$
|
118,614
|
|
|
$
|
155,743
|
|
|
|
Year ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Amortization of intangible assets—NUCYNTA
|
|
$
|
94,301
|
|
|
$
|
94,301
|
|
Amortization of intangible assets—CAMBIA
|
|
5,136
|
|
|
5,136
|
|
||
Amortization of intangible assets—Zipsor
|
|
2,337
|
|
|
2,337
|
|
||
Total amortization of intangible assets
|
|
$
|
101,774
|
|
|
$
|
101,774
|
|
|
|
Year ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Interest expense
|
|
$
|
(58,389
|
)
|
|
$
|
(68,881
|
)
|
Litigation settlement
|
|
—
|
|
|
62,000
|
|
||
Gain on debt extinguishment
|
|
26,385
|
|
|
—
|
|
||
Interest and other income
|
|
3,103
|
|
|
1,197
|
|
||
Change in fair value of Collegium warrants
|
|
845
|
|
|
—
|
|
||
Total other expense
|
|
$
|
(28,056
|
)
|
|
$
|
(5,684
|
)
|
|
|
Year ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Interest payable on Senior Notes
|
|
$
|
25,559
|
|
|
$
|
38,242
|
|
Interest payable on Convertible Notes
|
|
8,958
|
|
|
8,624
|
|
||
Amortization of debt discounts and issuance costs relating to Senior Notes and Convertible Notes
|
|
23,764
|
|
|
21,877
|
|
||
Changes in fair value of contingent consideration
|
|
113
|
|
|
124
|
|
||
Other
|
|
(5
|
)
|
|
14
|
|
||
Total interest expense
|
|
$
|
58,389
|
|
|
$
|
68,881
|
|
•
|
acquisitions or licenses of complementary businesses, products, technologies or companies;
|
•
|
sales of our marketed products;
|
•
|
expenditures related to our commercialization of our products;
|
•
|
milestone and royalty revenue we receive under our collaborative development arrangements;
|
•
|
interest and principal payments on our current and future indebtedness;
|
•
|
financial terms of definitive license agreements or other commercial agreements we may enter into; and
|
•
|
changes in the focus and direction of our business strategy and/or research and development programs.
|
|
|
Year ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Net cash provided by operating activities
|
|
$
|
90,475
|
|
|
$
|
72,497
|
|
Net cash (used in) provided by investing activities
|
|
(1,481
|
)
|
|
(7,082
|
)
|
||
Net cash used in financing activities
|
|
(157,836
|
)
|
|
(81,350
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(68,842
|
)
|
|
$
|
(15,935
|
)
|
|
|
|
|
|
|
|
|
More than
|
|
|
||||||||||
|
|
1 Year
|
|
2 - 3 Years
|
|
4 - 5 Years
|
|
5 Years
|
|
Total
|
||||||||||
Senior Notes—principal(1)
|
|
$
|
80,000
|
|
|
$
|
82,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
162,500
|
|
Senior Notes—interest(1)
|
|
13,922
|
|
|
2,244
|
|
|
—
|
|
|
—
|
|
|
16,166
|
|
|||||
2.50% Convertible Notes due 2021—principal(1)
|
|
—
|
|
|
145,000
|
|
|
—
|
|
|
—
|
|
|
145,000
|
|
|||||
2.50% Convertible Notes due 2021—interest(1)
|
|
3,625
|
|
|
3,625
|
|
|
—
|
|
|
—
|
|
|
7,250
|
|
|||||
5.00% Convertible Notes due 2024—principal(1)
|
|
—
|
|
|
—
|
|
|
120,000
|
|
|
—
|
|
|
120,000
|
|
|||||
5.00% Convertible Notes due 2024—interest(1)
|
|
6,250
|
|
|
12,000
|
|
|
12,000
|
|
|
—
|
|
|
30,250
|
|
|||||
Operating leases(2)
|
|
2,431
|
|
|
4,511
|
|
|
632
|
|
|
—
|
|
|
7,574
|
|
|||||
Purchase commitments(3)
|
|
5,966
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,966
|
|
|||||
Total
|
|
$
|
112,194
|
|
|
$
|
249,880
|
|
|
$
|
132,632
|
|
|
$
|
—
|
|
|
$
|
494,706
|
|
(1)
|
In connection with the divestiture of Gralise and NUCYNTA, we collected approximately $450.0 million in upfront consideration and used proceeds to repay the outstanding principal of $162.5 million of Senior Notes as of February 13, 2020 and repurchase $102.5 million and $85.5 million of 2021 Notes and 2024 Notes, respectively, on February 19, 2020. This table reflects the remaining interest and principal due on our Senior Notes, 2021 Notes, and 2024 Notes as of December 31, 2019.
|
(2)
|
Amounts represent payments under non‑cancelable operating leases including office space and sales fleet vehicles. In 2018, we relocated our corporate headquarters from Newark, California to Lake Forest, Illinois and subsequently entered into two subleases which, together, account for the entirety of the Newark facility.
|
(3)
|
As of December 31, 2019, we had non‑cancelable purchase orders and minimum purchase obligations of approximately $3.6 million under our manufacturing agreements. Additionally, we had non‑cancelable purchase orders related to consulting services of approximately $2.4 million. The amounts disclosed only represent non-cancelable purchase orders. Actual purchases are expected to exceed these amounts.
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
42,107
|
|
|
$
|
110,949
|
|
Accounts receivable, net
|
42,744
|
|
|
37,211
|
|
||
Inventories, net
|
3,412
|
|
|
3,396
|
|
||
Prepaid and other current assets
|
15,688
|
|
|
56,551
|
|
||
Total current assets
|
103,951
|
|
|
208,107
|
|
||
Property and equipment, net
|
3,497
|
|
|
13,064
|
|
||
Intangible assets, net
|
400,535
|
|
|
692,099
|
|
||
Investments
|
13,064
|
|
|
11,784
|
|
||
Other long-term assets
|
6,123
|
|
|
7,812
|
|
||
Total assets
|
$
|
527,170
|
|
|
$
|
932,866
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
16,193
|
|
|
$
|
6,138
|
|
Accrued rebates, returns and discounts
|
58,943
|
|
|
75,759
|
|
||
Accrued liabilities
|
18,948
|
|
|
31,361
|
|
||
Current portion of Senior Notes
|
80,000
|
|
|
120,000
|
|
||
Interest payable
|
8,375
|
|
|
11,645
|
|
||
Other current liabilities
|
2,094
|
|
|
1,133
|
|
||
Total current liabilities
|
184,553
|
|
|
246,036
|
|
||
Contingent consideration liability
|
168
|
|
|
1,038
|
|
||
Senior Notes
|
76,443
|
|
|
158,309
|
|
||
Convertible Notes
|
194,815
|
|
|
287,798
|
|
||
Other long-term liabilities
|
13,233
|
|
|
19,350
|
|
||
Total liabilities
|
469,212
|
|
|
712,531
|
|
||
Commitments and contingencies
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Common stock, $0.0001 par value, 200,000,000 shares authorized; 80,888,134 and 64,185,224 shares issued and outstanding at December 31, 2019 and
December 31, 2018, respectively |
8
|
|
|
6
|
|
||
Additional paid-in capital
|
457,751
|
|
|
402,934
|
|
||
Accumulated deficit
|
(399,801
|
)
|
|
(182,600
|
)
|
||
Accumulated other comprehensive loss
|
—
|
|
|
(5
|
)
|
||
Total shareholders’ equity
|
57,958
|
|
|
220,335
|
|
||
Total liabilities and shareholders' equity
|
$
|
527,170
|
|
|
$
|
932,866
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Product sales, net
|
$
|
108,806
|
|
|
$
|
129,966
|
|
|
$
|
379,880
|
|
Commercialization agreement, net
|
118,614
|
|
|
155,743
|
|
|
—
|
|
|||
Royalties and milestones
|
2,084
|
|
|
26,061
|
|
|
844
|
|
|||
Total revenues
|
229,504
|
|
|
311,770
|
|
|
380,724
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of sales (excluding amortization of intangible assets)
|
9,505
|
|
|
18,476
|
|
|
72,598
|
|
|||
Research and development expenses
|
10,106
|
|
|
8,042
|
|
|
13,718
|
|
|||
Acquired in-process research and development
|
—
|
|
|
—
|
|
|
24,900
|
|
|||
Selling, general and administrative expenses
|
108,866
|
|
|
119,218
|
|
|
195,696
|
|
|||
Amortization of intangible assets
|
101,774
|
|
|
101,774
|
|
|
102,745
|
|
|||
Loss on impairment of intangible asset
|
189,790
|
|
|
—
|
|
|
—
|
|
|||
Restructuring charges
|
3,891
|
|
|
20,601
|
|
|
13,247
|
|
|||
Total costs and expenses
|
423,932
|
|
|
268,111
|
|
|
422,904
|
|
|||
(Loss) income from operations
|
(194,428
|
)
|
|
43,659
|
|
|
(42,180
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Litigation settlement
|
—
|
|
|
62,000
|
|
|
—
|
|
|||
Gain on debt extinguishment
|
26,385
|
|
|
—
|
|
|
—
|
|
|||
Other income, net
|
3,948
|
|
|
1,197
|
|
|
681
|
|
|||
Interest expense
|
(58,389
|
)
|
|
(68,881
|
)
|
|
(73,552
|
)
|
|||
Gain on divestiture of Lazanda
|
—
|
|
|
—
|
|
|
17,064
|
|
|||
Loss on prepayment of Senior Notes
|
—
|
|
|
—
|
|
|
(5,938
|
)
|
|||
Total other expense
|
(28,056
|
)
|
|
(5,684
|
)
|
|
(61,745
|
)
|
|||
Net (loss) income before income taxes
|
(222,484
|
)
|
|
37,975
|
|
|
(103,925
|
)
|
|||
Income tax benefit (expense)
|
5,283
|
|
|
(1,067
|
)
|
|
1,429
|
|
|||
Net (loss) income
|
$
|
(217,201
|
)
|
|
$
|
36,908
|
|
|
$
|
(102,496
|
)
|
Other comprehensive income:
|
|
|
|
|
|
||||||
Unrealized gain on available-for-sale securities, net of tax
|
—
|
|
|
—
|
|
|
14
|
|
|||
Comprehensive (loss) income
|
$
|
(217,201
|
)
|
|
$
|
36,908
|
|
|
$
|
(102,482
|
)
|
Basic net (loss) income per share
|
$
|
(3.07
|
)
|
|
$
|
0.58
|
|
|
$
|
(1.63
|
)
|
Diluted net (loss) income per share
|
$
|
(3.07
|
)
|
|
$
|
0.57
|
|
|
$
|
(1.63
|
)
|
Shares used in computing basic net (loss) income per share
|
70,716
|
|
|
63,794
|
|
|
62,702
|
|
|||
Shares used in computing diluted net (loss) income per share
|
70,716
|
|
|
64,208
|
|
|
62,702
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Earnings
(Deficit)
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Shareholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balances at December 31, 2016
|
61,966
|
|
|
$
|
6
|
|
|
$
|
367,545
|
|
|
$
|
(116,744
|
)
|
|
$
|
(19
|
)
|
|
$
|
250,788
|
|
Issuance of common stock upon exercise of options
|
1,001
|
|
|
—
|
|
|
6,979
|
|
|
—
|
|
|
—
|
|
|
6,979
|
|
|||||
Issuance of common stock under employee stock purchase plan
|
262
|
|
|
—
|
|
|
1,960
|
|
|
—
|
|
|
—
|
|
|
1,960
|
|
|||||
Issuance of common stock in conjunction with vesting of restricted stock units
|
171
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
13,016
|
|
|
—
|
|
|
—
|
|
|
13,016
|
|
|||||
Cumulative effect adjustment from adoption of ASU No. 2016-09
|
—
|
|
|
—
|
|
|
268
|
|
|
(268
|
)
|
|
—
|
|
|
—
|
|
|||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
(753
|
)
|
|
—
|
|
|
—
|
|
|
(753
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(102,496
|
)
|
|
—
|
|
|
(102,496
|
)
|
|||||
Unrealized gain on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
|||||
Balances at December 31, 2017
|
63,400
|
|
|
$
|
6
|
|
|
$
|
389,015
|
|
|
$
|
(219,508
|
)
|
|
$
|
(5
|
)
|
|
$
|
169,508
|
|
Issuance of common stock upon exercise of options
|
278
|
|
|
—
|
|
|
1,493
|
|
|
—
|
|
|
—
|
|
|
1,493
|
|
|||||
Issuance of common stock under employee stock purchase plan
|
107
|
|
|
—
|
|
|
527
|
|
|
—
|
|
|
—
|
|
|
527
|
|
|||||
Issuance of common stock in conjunction with vesting of restricted stock units
|
400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
12,585
|
|
|
—
|
|
|
—
|
|
|
12,585
|
|
|||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
(686
|
)
|
|
—
|
|
|
—
|
|
|
(686
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
36,908
|
|
|
—
|
|
|
36,908
|
|
|||||
Balances at December 31, 2018
|
64,185
|
|
|
$
|
6
|
|
|
$
|
402,934
|
|
|
$
|
(182,600
|
)
|
|
$
|
(5
|
)
|
|
$
|
220,335
|
|
Issuance of common stock upon exercise of options
|
14
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Issuance of common stock under employee stock purchase plan
|
169
|
|
|
—
|
|
|
226
|
|
|
—
|
|
|
—
|
|
|
226
|
|
|||||
Issuance of common stock in conjunction with vesting of restricted stock units
|
703
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock in conjunction with the Convertible Note Exchange
|
15,817
|
|
|
2
|
|
|
25,305
|
|
|
—
|
|
|
—
|
|
|
25,307
|
|
|||||
Reacquisition of equity component of 2021 Notes, net of tax loss of $1,445
|
—
|
|
|
—
|
|
|
(4,763
|
)
|
|
—
|
|
|
—
|
|
|
(4,763
|
)
|
|||||
Equity component of issued 2024 Notes, net of tax benefit of $7,212
|
—
|
|
|
—
|
|
|
23,999
|
|
|
—
|
|
|
—
|
|
|
23,999
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
10,596
|
|
|
—
|
|
|
—
|
|
|
10,596
|
|
|||||
Shares withheld for payment of employee's withholding tax liability
|
—
|
|
|
—
|
|
|
(571
|
)
|
|
—
|
|
|
—
|
|
|
(571
|
)
|
|||||
Unrealized gain on available-for-sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(217,201
|
)
|
|
—
|
|
|
(217,201
|
)
|
|||||
Balances at December 31, 2019
|
80,888
|
|
|
$
|
8
|
|
|
$
|
457,751
|
|
|
$
|
(399,801
|
)
|
|
$
|
—
|
|
|
$
|
57,958
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(217,201
|
)
|
|
$
|
36,908
|
|
|
$
|
(102,496
|
)
|
Adjustments for non-cash items:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
102,946
|
|
|
106,426
|
|
|
105,502
|
|
|||
Accretion of debt discount and debt issuance costs
|
23,764
|
|
|
21,877
|
|
|
19,415
|
|
|||
Provisions for inventory and other assets
|
5,304
|
|
|
598
|
|
|
2,673
|
|
|||
Loss on impairment of intangible assets
|
189,790
|
|
|
—
|
|
|
—
|
|
|||
Loss (gain) on disposal of equipment
|
10,076
|
|
|
669
|
|
|
(271
|
)
|
|||
Stock-based compensation
|
10,596
|
|
|
12,585
|
|
|
13,016
|
|
|||
Intraperiod tax allocations
|
(5,767
|
)
|
|
—
|
|
|
—
|
|
|||
(Gain) loss on debt extinguishment and prepayment
|
(26,385
|
)
|
|
—
|
|
|
5,938
|
|
|||
Recurring fair value measurement of assets and liabilities
|
(1,715
|
)
|
|
(391
|
)
|
|
(8,024
|
)
|
|||
Gain on divestiture of Lazanda
|
—
|
|
|
—
|
|
|
(17,064
|
)
|
|||
Acquired in-process research and development
|
—
|
|
|
—
|
|
|
24,900
|
|
|||
Other
|
(327
|
)
|
|
1,023
|
|
|
240
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(5,533
|
)
|
|
35,271
|
|
|
30,107
|
|
|||
Inventories
|
(316
|
)
|
|
9,048
|
|
|
(1,873
|
)
|
|||
Prepaid and other assets
|
40,769
|
|
|
(56,136
|
)
|
|
(5,114
|
)
|
|||
Accounts payable and other accrued liabilities
|
(15,146
|
)
|
|
(33,610
|
)
|
|
(6,436
|
)
|
|||
Accrued rebates, returns and discounts
|
(16,816
|
)
|
|
(60,069
|
)
|
|
4,292
|
|
|||
Interest payable
|
(3,270
|
)
|
|
(1,576
|
)
|
|
(2,705
|
)
|
|||
Income taxes payable
|
(294
|
)
|
|
(126
|
)
|
|
67
|
|
|||
Net cash provided by operating activities
|
90,475
|
|
|
72,497
|
|
|
62,167
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(1,481
|
)
|
|
(5,507
|
)
|
|
(666
|
)
|
|||
Investment in convertible instrument
|
—
|
|
|
(3,000
|
)
|
|
—
|
|
|||
Proceeds from disposal of property and equipment
|
—
|
|
|
145
|
|
|
280
|
|
|||
Purchases of marketable securities
|
(12,065
|
)
|
|
—
|
|
|
(8,277
|
)
|
|||
Proceeds from sale of other assets
|
—
|
|
|
80
|
|
|
66,557
|
|
|||
Maturities of marketable securities
|
4,209
|
|
|
—
|
|
|
—
|
|
|||
Sales of marketable securities
|
7,856
|
|
|
1,200
|
|
|
—
|
|
|||
Net cash (used in) provided by investing activities
|
(1,481
|
)
|
|
(7,082
|
)
|
|
57,894
|
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Payment of contingent consideration liability
|
—
|
|
|
(184
|
)
|
|
(1,673
|
)
|
|||
Repayment of Senior Notes
|
(120,000
|
)
|
|
(82,500
|
)
|
|
(110,000
|
)
|
|||
Fees for early repayment and modifications of Senior Notes
|
—
|
|
|
—
|
|
|
(7,400
|
)
|
|||
Fees for modification of Senior Notes
|
(3,249
|
)
|
|
—
|
|
|
—
|
|
|||
Payments in connection with debt extinguishment
|
(30,000
|
)
|
|
—
|
|
|
—
|
|
|||
Convertible notes issuance costs
|
(4,268
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of common stock
|
251
|
|
|
2,020
|
|
|
8,940
|
|
|||
Shares withheld for payment of employee's withholding tax liability
|
(570
|
)
|
|
(686
|
)
|
|
(753
|
)
|
|||
Net cash used in financing activities
|
(157,836
|
)
|
|
(81,350
|
)
|
|
(110,886
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(68,842
|
)
|
|
(15,935
|
)
|
|
9,175
|
|
|||
Cash and cash equivalents at beginning of year
|
110,949
|
|
|
126,884
|
|
|
117,709
|
|
|||
Cash and cash equivalents at end of period
|
$
|
42,107
|
|
|
$
|
110,949
|
|
|
$
|
126,884
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
||||||
Net cash paid (received) for income taxes
|
$
|
4,401
|
|
|
$
|
6,472
|
|
|
$
|
121
|
|
Cash paid for interest
|
$
|
37,788
|
|
|
$
|
48,440
|
|
|
$
|
55,542
|
|
Non-cash consideration for in-process research and development
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,900
|
|
Accrued research and development
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,000
|
|
Capital expenditures incurred but not yet paid
|
$
|
500
|
|
|
$
|
212
|
|
|
$
|
—
|
|
|
Consolidated revenue
|
|
Accounts Receivable related to product sales
|
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||
McKesson Corporation
|
16
|
%
|
|
14
|
%
|
|
36
|
%
|
|
46
|
%
|
|
28
|
%
|
|
41
|
%
|
AmerisourceBergen Corporation
|
12
|
%
|
|
13
|
%
|
|
27
|
%
|
|
17
|
%
|
|
28
|
%
|
|
27
|
%
|
Cardinal Health
|
10
|
%
|
|
11
|
%
|
|
26
|
%
|
|
25
|
%
|
|
32
|
%
|
|
23
|
%
|
Collegium
|
52
|
%
|
|
55
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
All others
|
10
|
%
|
|
7
|
%
|
|
11
|
%
|
|
12
|
%
|
|
12
|
%
|
|
9
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Year ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Product sales, net:
|
|
|
|
|
|
|
||||||
Gralise
|
|
$
|
63,124
|
|
|
$
|
58,077
|
|
|
$
|
77,034
|
|
CAMBIA
|
|
32,453
|
|
|
35,803
|
|
|
31,597
|
|
|||
Zipsor
|
|
12,498
|
|
|
16,387
|
|
|
16,700
|
|
|||
Total neurology product sales, net
|
|
108,075
|
|
|
110,267
|
|
|
125,331
|
|
|||
NUCYNTA products
|
|
927
|
|
|
18,944
|
|
|
239,539
|
|
|||
Lazanda
|
|
(196
|
)
|
|
755
|
|
|
15,010
|
|
|||
Total product sales, net
|
|
108,806
|
|
|
129,966
|
|
|
379,880
|
|
|||
Commercialization agreement:
|
|
|
|
|
|
|
||||||
Commercialization rights and facilitation services, net
|
|
118,614
|
|
|
100,038
|
|
|
—
|
|
|||
Revenue from transfer of inventory
|
|
—
|
|
|
55,705
|
|
|
—
|
|
|||
Royalties and milestone revenue
|
|
2,084
|
|
|
26,061
|
|
|
844
|
|
|||
Total revenues
|
|
$
|
229,504
|
|
|
$
|
311,770
|
|
|
$
|
380,724
|
|
|
Balance as of
|
|
|
|
|
|
Balance as of
|
||||||||
|
December 31, 2018
|
|
Additions
|
|
Deductions
|
|
December 31, 2019
|
||||||||
Contract assets:
|
|
|
|
|
|
|
|
|
|
|
|||||
Contract asset - CAMBIA Canada
|
$
|
—
|
|
|
$
|
300
|
|
|
$
|
(300
|
)
|
|
$
|
—
|
|
Contract asset - Collegium, net
|
2,416
|
|
|
783
|
|
|
(1,303
|
)
|
|
1,896
|
|
||||
|
$
|
2,416
|
|
|
$
|
1,083
|
|
|
$
|
(1,603
|
)
|
|
$
|
1,896
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Receivables related to product sales, net
|
$
|
38,353
|
|
|
$
|
23,078
|
|
Receivables from Collegium
|
4,104
|
|
|
14,011
|
|
||
Other
|
287
|
|
|
122
|
|
||
Total accounts receivable, net
|
$
|
42,744
|
|
|
$
|
37,211
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Raw materials
|
$
|
1,065
|
|
|
$
|
1,376
|
|
Work-in-process
|
426
|
|
|
732
|
|
||
Finished goods
|
1,921
|
|
|
1,288
|
|
||
Total
|
$
|
3,412
|
|
|
$
|
3,396
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Furniture and office equipment
|
$
|
2,557
|
|
|
$
|
2,237
|
|
Machinery and equipment
|
2,731
|
|
|
11,391
|
|
||
Laboratory equipment
|
221
|
|
|
351
|
|
||
Leasehold improvements
|
9,858
|
|
|
9,858
|
|
||
|
15,367
|
|
|
23,837
|
|
||
Less: Accumulated depreciation and amortization
|
(11,870
|
)
|
|
(10,773
|
)
|
||
Property and equipment, net
|
$
|
3,497
|
|
|
$
|
13,064
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||
Product rights
|
|
Remaining
Useful Life
(In years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Impairment
|
|
Net Book
Value
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book
Value
|
||||||||||||||
NUCYNTA
|
|
6.0
|
|
$
|
1,019,978
|
|
|
$
|
(455,192
|
)
|
|
$
|
(189,790
|
)
|
|
$
|
374,996
|
|
|
$
|
1,019,978
|
|
|
$
|
(360,891
|
)
|
|
$
|
659,087
|
|
CAMBIA
|
|
4.0
|
|
51,360
|
|
|
(31,027
|
)
|
|
—
|
|
|
20,333
|
|
|
51,360
|
|
|
(25,891
|
)
|
|
25,469
|
|
|||||||
Zipsor
|
|
2.2
|
|
27,250
|
|
|
(22,044
|
)
|
|
—
|
|
|
5,206
|
|
|
27,250
|
|
|
(19,707
|
)
|
|
7,543
|
|
|||||||
|
|
|
|
$
|
1,098,588
|
|
|
$
|
(508,263
|
)
|
|
(189,790
|
)
|
|
$
|
400,535
|
|
|
$
|
1,098,588
|
|
|
$
|
(406,489
|
)
|
|
$
|
692,099
|
|
Year Ending December 31,
|
|
Estimated
Amortization
Expense
|
||
2020
|
|
$
|
13,400
|
|
2021
|
|
7,473
|
|
|
2022
|
|
5,668
|
|
|
2023
|
|
4,925
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
31,466
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Accrued compensation
|
$
|
6,188
|
|
|
$
|
5,475
|
|
Accrued royalties
|
887
|
|
|
2,773
|
|
||
Accrued restructuring and one-time termination costs
|
3,763
|
|
|
1,578
|
|
||
Other accrued liabilities
|
8,110
|
|
|
21,535
|
|
||
Total accrued liabilities
|
$
|
18,948
|
|
|
$
|
31,361
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Principal amount of the Senior Notes
|
$
|
162,500
|
|
|
$
|
282,500
|
|
Unamortized debt discount balance
|
(4,035
|
)
|
|
(2,541
|
)
|
||
Unamortized debt issuance costs
|
(2,022
|
)
|
|
(1,650
|
)
|
||
Total Senior Notes
|
$
|
156,443
|
|
|
$
|
278,309
|
|
|
December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Contractual interest expense
|
$
|
25,559
|
|
|
$
|
38,242
|
|
|
$
|
44,212
|
|
Amortization of debt discount and debt issuance costs
|
5,783
|
|
|
3,589
|
|
|
2,631
|
|
|||
Total interest expense
|
$
|
31,342
|
|
|
$
|
41,831
|
|
|
$
|
46,843
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Principal amount of the 2021 Notes
|
$
|
145,000
|
|
|
$
|
345,000
|
|
Unamortized discount of the liability component
|
(14,963
|
)
|
|
(54,521
|
)
|
||
Unamortized debt issuance costs
|
(725
|
)
|
|
(2,681
|
)
|
||
Total 2021 Notes
|
$
|
129,312
|
|
|
$
|
287,798
|
|
|
|
December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Stated coupon interest
|
|
$
|
6,708
|
|
|
$
|
8,624
|
|
|
$
|
8,625
|
|
Amortization of debt discount and debt issuance costs
|
|
15,398
|
|
|
18,288
|
|
|
16,784
|
|
|||
Total interest expense 2021 Notes
|
|
$
|
22,106
|
|
|
$
|
26,912
|
|
|
$
|
25,409
|
|
|
December 31,
|
||
|
2019
|
||
Principal amount of the 2024 Notes
|
$
|
120,000
|
|
Unamortized discount of the liability component
|
(51,701
|
)
|
|
Unamortized debt issuance costs
|
(2,796
|
)
|
|
Total 2024 Notes
|
$
|
65,503
|
|
|
December 31,
|
||
|
2019
|
||
Stated coupon interest
|
$
|
2,250
|
|
Amortization of debt discount and debt issuance costs
|
2,583
|
|
|
Total interest expense 2024 Notes
|
$
|
4,833
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Employee compensation costs
|
$
|
3,891
|
|
|
$
|
16,852
|
|
|
$
|
13,247
|
|
Fixed Asset disposals and accelerated depreciation of leasehold improvements
|
—
|
|
|
3,511
|
|
|
—
|
|
|||
Other exit costs
|
—
|
|
|
238
|
|
|
—
|
|
|||
Total restructuring costs
|
$
|
3,891
|
|
|
$
|
20,601
|
|
|
$
|
13,247
|
|
|
Employee separation costs
|
|
Other exit costs
|
|
Total
|
||||||
Net accruals
|
13,247
|
|
|
—
|
|
|
13,247
|
|
|||
Non-cash additions/(reductions)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash paid
|
(3,764
|
)
|
|
—
|
|
|
(3,764
|
)
|
|||
Balance at December 31, 2017
|
$
|
9,483
|
|
|
$
|
—
|
|
|
$
|
9,483
|
|
Net accruals
|
16,852
|
|
|
3,749
|
|
|
20,601
|
|
|||
Non-cash additions/(reductions)
|
(2,146
|
)
|
|
(3,511
|
)
|
|
(5,657
|
)
|
|||
Cash paid
|
(22,611
|
)
|
|
(238
|
)
|
|
(22,849
|
)
|
|||
Balance at December 31, 2018
|
$
|
1,578
|
|
|
$
|
—
|
|
|
$
|
1,578
|
|
Net accruals
|
$
|
3,891
|
|
|
$
|
—
|
|
|
$
|
3,891
|
|
Non-cash additions/(reductions)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash paid
|
$
|
(1,706
|
)
|
|
$
|
—
|
|
|
$
|
(1,706
|
)
|
Balance at December 31, 2019
|
$
|
3,763
|
|
|
$
|
—
|
|
|
$
|
3,763
|
|
|
|
Year ended
December 31, 2019
|
||
|
|
|||
Cash paid for amounts included in measurement of liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
2,446
|
|
|
Financial Statement Classification
|
|
December 31,
2019
|
||
Assets
|
|
|
|
||
Operating lease right-of-use assets
|
Other long-term assets
|
|
$
|
2,776
|
|
Liabilities
|
|
|
|
||
Current operating lease liabilities
|
Other current liabilities
|
|
$
|
2,094
|
|
Noncurrent operating lease liabilities
|
Other long term liabilities
|
|
4,820
|
|
|
Total lease liabilities
|
|
|
$
|
6,914
|
|
|
|
Operating Leases
|
||
2020
|
|
$
|
2,431
|
|
2021
|
|
2,323
|
|
|
2022
|
|
2,188
|
|
|
Thereafter
|
|
632
|
|
|
Total lease payments
|
|
$
|
7,574
|
|
Less: Interest
|
|
660
|
|
|
Present value of lease liabilities
|
|
$
|
6,914
|
|
|
|
Lease Payments
|
||
2019
|
|
$
|
2,624
|
|
2020
|
|
2,526
|
|
|
2021
|
|
2,322
|
|
|
2022
|
|
2,188
|
|
|
2023
|
|
632
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
10,292
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of sales
|
$
|
106
|
|
|
$
|
30
|
|
|
$
|
98
|
|
Research and development expenses
|
693
|
|
|
446
|
|
|
710
|
|
|||
Selling, general and administrative expenses
|
9,797
|
|
|
9,963
|
|
|
12,157
|
|
|||
Restructuring charges
|
—
|
|
|
2,146
|
|
|
51
|
|
|||
Total
|
$
|
10,596
|
|
|
$
|
12,585
|
|
|
$
|
13,016
|
|
|
|
2018
|
|
2017
|
Employee and Director Stock Options
|
|
|
|
|
Risk-free interest rate
|
|
2.17%
|
|
1.65 - 1.93%
|
Expected option term (in years)
|
|
4.34
|
|
4.24 - 4.30
|
Expected stock price volatility
|
|
61.94%
|
|
51.67 - 59.59%
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average Remaining Contractual Term (years) |
|
Aggregate
Intrinsic Value (in thousands) |
|||||
Options outstanding at December 31, 2018
|
1,169,412
|
|
|
$
|
7.57
|
|
|
|
|
|
||
Options granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Options exercised
|
(13,691
|
)
|
|
1.83
|
|
|
|
|
|
|||
Options forfeited
|
—
|
|
|
—
|
|
|
|
|
|
|||
Options expired
|
(810,515
|
)
|
|
—
|
|
|
|
|
|
|||
Options outstanding at December 31, 2019
|
345,206
|
|
|
$
|
7.29
|
|
|
2.58
|
|
$
|
—
|
|
Options vested and expected to vest at December 31, 2019
|
345,206
|
|
|
$
|
7.29
|
|
|
2.58
|
|
$
|
—
|
|
Options exercisable at December 31, 2019
|
345,206
|
|
|
$
|
7.29
|
|
|
2.58
|
|
$
|
—
|
|
|
Number of
Shares |
|
Weighted
Average
Exercise
Price
|
|
Weighted-
Average Remaining Contractual Term (years) |
|
Aggregate
Intrinsic Value (in thousands) |
|||||
Options outstanding at December 31, 2018
|
1,461,469
|
|
|
$
|
12.90
|
|
|
|
|
|
||
Options granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Options exercised
|
—
|
|
|
—
|
|
|
|
|
|
|||
Options forfeited
|
(102,669
|
)
|
|
13.86
|
|
|
|
|
|
|||
Options expired
|
(180,755
|
)
|
|
14.01
|
|
|
|
|
|
|||
Options outstanding at December 31, 2019
|
1,178,045
|
|
|
$
|
12.64
|
|
|
6.15
|
|
$
|
—
|
|
Options vested and expected to vest at December 31, 2019
|
1,178,045
|
|
|
$
|
12.64
|
|
|
6.15
|
|
$
|
—
|
|
Options exercisable at December 31, 2019
|
892,730
|
|
|
$
|
13.50
|
|
|
5.77
|
|
$
|
—
|
|
|
Number of
Shares
|
|
Weighted
Average
Grant Date
Fair
Value
Per Share
|
|
Weighted
Average
Remaining
Contractual
Term
(in years)
|
|||
Non-vested restricted stock units at December 31, 2018
|
1,938,788
|
|
|
$
|
6.94
|
|
|
|
Granted
|
2,750,408
|
|
|
3.84
|
|
|
|
|
Vested
|
(873,784
|
)
|
|
8.08
|
|
|
|
|
Forfeited
|
(878,697
|
)
|
|
5.40
|
|
|
|
|
Non-vested restricted stock units at December 31, 2019
|
2,936,715
|
|
|
$
|
4.64
|
|
|
1.05
|
|
Number of
Shares |
|
Weighted
Average Grant Date Fair Value Per Share |
|
Weighted
Average Remaining Contractual Term (in years) |
|
Aggregate
Intrinsic Value (in thousands) |
|||||
Non-vested performance-based restricted stock units at December 31, 2018
|
374,824
|
|
|
$
|
10.14
|
|
|
|
|
|
||
Granted
|
643,266
|
|
|
6.87
|
|
|
|
|
||||
Vested
|
—
|
|
|
—
|
|
|
|
|
|
|||
Forfeited
|
(34,247
|
)
|
|
6.87
|
|
|
|
|
||||
Non-vested performance-based restricted stock units at December 31, 2019
|
983,843
|
|
|
$
|
8.11
|
|
|
1.71
|
|
$
|
1,230
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Basic net income (loss) per share
|
|
|
|
|
|
|
||||||
Net (loss) income
|
|
$
|
(217,201
|
)
|
|
$
|
36,908
|
|
|
$
|
(102,496
|
)
|
Weighted average common shares outstanding
|
|
70,716
|
|
|
63,794
|
|
|
62,702
|
|
|||
Basic net (loss) income per share
|
|
$
|
(3.07
|
)
|
|
$
|
0.58
|
|
|
$
|
(1.63
|
)
|
|
|
|
|
|
|
|
||||||
Diluted net income (loss) per share
|
|
|
|
|
|
|
||||||
Net (loss) income
|
|
$
|
(217,201
|
)
|
|
$
|
36,908
|
|
|
$
|
(102,496
|
)
|
Weighted average common shares outstanding
|
|
70,716
|
|
|
63,794
|
|
|
62,702
|
|
|||
Add: effect of dilutive securities
|
|
—
|
|
|
414
|
|
|
—
|
|
|||
Denominator for diluted income (loss) per share
|
|
70,716
|
|
|
64,208
|
|
|
62,702
|
|
|||
Diluted net (loss) income per share
|
|
$
|
(3.07
|
)
|
|
$
|
0.57
|
|
|
$
|
(1.63
|
)
|
|
|
Year ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
2.5% Convertible Notes due 2021
|
|
13,895
|
|
|
17,931
|
|
|
17,931
|
|
5.0% Convertible Notes due 2024
|
|
14,895
|
|
|
—
|
|
|
—
|
|
Stock options and equivalents
|
|
6,486
|
|
|
3,701
|
|
|
5,618
|
|
Total potentially dilutive common shares
|
|
35,276
|
|
|
21,632
|
|
|
23,549
|
|
•
|
Level 1: Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
•
|
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
December 31, 2019
|
|
Financial Statement Classification
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Collegium warrants
|
|
Investments
|
|
$
|
—
|
|
|
$
|
9,629
|
|
|
$
|
—
|
|
|
$
|
9,629
|
|
Total
|
|
|
|
$
|
—
|
|
|
$
|
9,629
|
|
|
$
|
—
|
|
|
$
|
9,629
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
|
Contingent consideration liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
168
|
|
|
$
|
168
|
|
Total
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
168
|
|
|
$
|
168
|
|
December 31, 2018
|
|
Financial Statement Classification
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
Cash and cash equivalents
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
Commercial paper
|
|
Cash and cash equivalents
|
|
—
|
|
|
14,028
|
|
|
—
|
|
|
14,028
|
|
||||
Agency bond
|
|
Cash and cash equivalents
|
|
—
|
|
|
1,250
|
|
|
—
|
|
|
1,250
|
|
||||
Collegium warrants
|
|
Investments
|
|
—
|
|
|
8,784
|
|
|
—
|
|
|
8,784
|
|
||||
Total
|
|
|
|
$
|
11
|
|
|
$
|
24,062
|
|
|
$
|
—
|
|
|
$
|
24,073
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
|
Contingent consideration liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,038
|
|
|
$
|
1,038
|
|
Total
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,038
|
|
|
$
|
1,038
|
|
|
December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Fair value, beginning of the period
|
$
|
1,038
|
|
|
$
|
1,613
|
|
|
$
|
14,825
|
|
Changes in fair value recorded in interest expense
|
113
|
|
|
124
|
|
|
1,079
|
|
|||
Changes in fair value recorded in selling, general and administrative expenses
|
(983
|
)
|
|
(515
|
)
|
|
(7,708
|
)
|
|||
Royalties and milestone paid
|
—
|
|
|
(184
|
)
|
|
(3,068
|
)
|
|||
Divestiture of Lazanda
|
—
|
|
|
—
|
|
|
(3,515
|
)
|
|||
Total
|
$
|
168
|
|
|
$
|
1,038
|
|
|
$
|
1,613
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(1,231
|
)
|
|
$
|
896
|
|
|
$
|
384
|
|
State
|
1,715
|
|
|
171
|
|
|
(1,813
|
)
|
|||
Total current taxes
|
$
|
484
|
|
|
$
|
1,067
|
|
|
$
|
(1,429
|
)
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
(5,767
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total deferred taxes
|
(5,767
|
)
|
|
—
|
|
|
—
|
|
|||
Total (benefit) provision for income taxes
|
$
|
(5,283
|
)
|
|
$
|
1,067
|
|
|
$
|
(1,429
|
)
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Tax at federal statutory rate
|
$
|
(46,722
|
)
|
|
$
|
7,975
|
|
|
$
|
(36,374
|
)
|
State tax, net of federal benefit
|
(3,845
|
)
|
|
3,280
|
|
|
(3,395
|
)
|
|||
Research credit
|
(138
|
)
|
|
(41
|
)
|
|
(41
|
)
|
|||
Stock based compensation
|
2,038
|
|
|
1,259
|
|
|
159
|
|
|||
Non-deductible meals and entertainment
|
129
|
|
|
223
|
|
|
973
|
|
|||
Non-deductible other expense
|
5,837
|
|
|
308
|
|
|
6,508
|
|
|||
Change in valuation allowance
|
48,943
|
|
|
(12,321
|
)
|
|
4,792
|
|
|||
Uncertain tax provisions
|
(5,758
|
)
|
|
384
|
|
|
(1,611
|
)
|
|||
Intraperiod tax allocations
|
(5,767
|
)
|
|
—
|
|
|
—
|
|
|||
Tax rate changes
|
—
|
|
|
—
|
|
|
27,560
|
|
|||
Total tax (benefit) expense
|
$
|
(5,283
|
)
|
|
$
|
1,067
|
|
|
$
|
(1,429
|
)
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating losses
|
$
|
5,885
|
|
|
$
|
6,618
|
|
Tax credit carryforwards
|
1,411
|
|
|
1,096
|
|
||
Intangibles
|
82,582
|
|
|
33,604
|
|
||
Stock-based compensation
|
1,907
|
|
|
2,286
|
|
||
Operating lease liabilities
|
1,577
|
|
|
|
|||
Reserves and other accruals not currently deductible
|
10,447
|
|
|
10,706
|
|
||
Total deferred tax assets
|
103,809
|
|
|
54,310
|
|
||
Valuation allowance for deferred tax assets
|
(90,820
|
)
|
|
(41,905
|
)
|
||
|
$
|
12,989
|
|
|
$
|
12,405
|
|
Deferred tax liabilities:
|
|
|
|
|
|
||
Convertible debt
|
$
|
(12,247
|
)
|
|
$
|
(12,213
|
)
|
Fixed Assets
|
(109
|
)
|
|
(192
|
)
|
||
Operating lease right-of-use assets
|
(633
|
)
|
|
—
|
|
||
Net deferred tax asset (liability)
|
$
|
—
|
|
|
$
|
—
|
|
Unrecognized tax benefits—January 1, 2017
|
$
|
14,687
|
|
Increases related to current year tax positions
|
3,423
|
|
|
Changes in prior year tax positions
|
(30
|
)
|
|
Decreases related to lapse of statutes
|
(936
|
)
|
|
Unrecognized tax benefits—December 31, 2017
|
17,144
|
|
|
Increases related to current year tax positions
|
611
|
|
|
Changes in prior year tax positions
|
(1,623
|
)
|
|
Decreases related to lapse of statutes
|
(68
|
)
|
|
Unrecognized tax benefits—December 31, 2018
|
16,064
|
|
|
Increases related to current year tax positions
|
212
|
|
|
Changes in prior year tax positions
|
(232
|
)
|
|
Decreases related to lapse of statutes
|
(12,011
|
)
|
|
Unrecognized tax benefits—December 31, 2019
|
$
|
4,033
|
|
|
|
2019 Quarter Ended
|
||||||||||||||
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
Product sales
|
|
$
|
26,450
|
|
|
$
|
25,937
|
|
|
$
|
27,502
|
|
|
$
|
28,917
|
|
Total revenues
|
|
57,929
|
|
|
57,203
|
|
|
55,147
|
|
|
59,225
|
|
||||
Income (loss) from operations (1)
|
|
3,072
|
|
|
3,618
|
|
|
(10,133
|
)
|
|
(190,985
|
)
|
||||
Net (loss) income
|
|
(14,301
|
)
|
|
(13,605
|
)
|
|
3,331
|
|
|
(192,626
|
)
|
||||
Basic net (loss) income per share
|
|
$
|
(0.22
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
0.05
|
|
|
$
|
(2.65
|
)
|
Diluted net (loss) income per share
|
|
$
|
(0.22
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
0.05
|
|
|
$
|
(2.65
|
)
|
|
|
2018 Quarter Ended
|
||||||||||||||
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
Product sales
|
|
$
|
44,354
|
|
|
$
|
26,838
|
|
|
$
|
29,435
|
|
|
$
|
29,339
|
|
Total revenues
|
|
128,404
|
|
|
63,274
|
|
|
77,493
|
|
|
42,599
|
|
||||
Income (loss) from operations
|
|
51,338
|
|
|
(4,225
|
)
|
|
9,628
|
|
|
(13,082
|
)
|
||||
Net income (loss)
|
|
33,824
|
|
|
(21,048
|
)
|
|
48,270
|
|
|
(24,138
|
)
|
||||
Basic net income (loss) per share
|
|
$
|
0.53
|
|
|
$
|
(0.33
|
)
|
|
$
|
0.76
|
|
|
$
|
(0.38
|
)
|
Diluted net income (loss) per share
|
|
$
|
0.48
|
|
|
$
|
(0.33
|
)
|
|
$
|
0.65
|
|
|
$
|
(0.38
|
)
|
|
|
|
|
Additions
|
|
|
|
|
||||||||
Description
|
|
Balance at
Beginning of
Year
|
|
Charged as a
Reduction to
Revenue
|
|
Deductions(1)
|
|
Balance at
End of
Year (2)
|
||||||||
Sales & return allowances, discounts, chargebacks and rebates:
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2019
|
|
$
|
76,401
|
|
|
$
|
163,261
|
|
|
$
|
(179,479
|
)
|
|
$
|
60,183
|
|
Year ended December 31, 2018
|
|
$
|
137,328
|
|
|
$
|
122,481
|
|
|
$
|
(183,408
|
)
|
|
$
|
76,401
|
|
Year ended December 31, 2017
|
|
$
|
133,646
|
|
|
$
|
363,260
|
|
|
$
|
(359,578
|
)
|
|
$
|
137,328
|
|
Description
|
|
Balance at
Beginning of
Year
|
|
Additions
|
|
Deductions
|
|
Balance at
End of
Year
|
||||||||
Deferred tax asset valuation allowance:
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2019 (3)
|
|
$
|
41,905
|
|
|
$
|
48,915
|
|
|
$
|
—
|
|
|
$
|
90,820
|
|
December 31, 2018 (4)
|
|
$
|
54,224
|
|
|
$
|
—
|
|
|
$
|
(12,319
|
)
|
|
$
|
41,905
|
|
December 31, 2017 (5)
|
|
$
|
45,206
|
|
|
$
|
9,018
|
|
|
$
|
—
|
|
|
$
|
54,224
|
|
(1)
|
Deductions to sales discounts and allowances relate to discounts or allowances actually taken or paid.
|
(2)
|
Balance includes allowances for cash discounts for prompt payment recognized in Accounts Receivable, net on the Company’s consolidated balance sheet.
|
(3)
|
The Company recorded a valuation allowance of $9.0 million during 2017.
|
(4)
|
The Company reversed a valuation allowance of $12.3 million during 2018.
|
(5)
|
The Company recorded a valuation allowance of $48.9 million during 2019.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
|
(1)
|
Financial Statements
|
(2)
|
Financial Statement Schedules
|
Exhibit Number
|
Description of Document
|
|
2.1
|
|
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
3.4
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
4.5
|
|
|
10.1*
|
|
|
10.2*
|
|
|
10.3*
|
|
|
10.4*
|
|
10.5*
|
|
|
10.6*
|
|
|
10.7*
|
|
|
10.8*
|
|
|
10.9*
|
|
|
10.10*
|
|
|
10.11*
|
|
|
10.12*
|
|
|
10.13*
|
|
|
10.14*
|
|
|
10.15*
|
|
|
†10.16
|
|
|
†10.17
|
|
|
10.18
|
|
|
†10.19
|
|
|
†10.20
|
|
†10.21
|
|
|
†10.22
|
|
|
†10.23
|
|
|
†10.24
|
|
|
10.25
|
|
|
†10.26
|
|
|
†10.27
|
|
|
10.28
|
|
|
10.29
|
|
|
10.30
|
|
|
†10.31
|
|
|
†10.32
|
|
|
†10.33
|
|
|
10.34
|
|
|
10.35
|
|
10.36
|
|
|
10.37
|
|
|
10.38
|
|
|
10.39
|
|
|
10.40
|
|
|
10.41
|
|
|
10.42
|
|
|
10.43
|
|
|
†10.44
|
|
|
10.45
|
|
|
10.46
|
|
|
10.47
|
|
|
21.1
|
|
|
23.1
|
|
|
24.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1**
|
|
|
32.2**
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
Assertio Therapeutics, Inc.
|
|
|
|
|
|
Date:
|
March 10, 2020
|
By
|
/s/ Arthur J. Higgins
|
|
|
|
Arthur J. Higgins
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
/s/ ARTHUR J. HIGGINS
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
March 10, 2020
|
Arthur J. Higgins
|
|
||
|
|
|
|
/s/ DANIEL A. PEISERT
|
|
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|
March 10, 2020
|
Daniel A. Peisert
|
|
||
|
|
|
|
/s/ JAMES P. FOGARTY
|
|
Chairman of the Board of Directors
|
March 10, 2020
|
James P. Fogarty
|
|
||
|
|
|
|
/s/ KAREN A. DAWES
|
|
Director
|
March 10, 2020
|
Karen A. Dawes
|
|
||
|
|
|
|
/s/ JAMES J. GALEOTA, JR.
|
|
Director
|
March 10, 2020
|
James J. Galeota, Jr.
|
|
||
|
|
|
|
/s/ HEATHER L. MASON
|
|
Director
|
March 10, 2020
|
Heather L. Mason
|
|
||
|
|
|
|
/s/ WILLIAM T. MCKEE
|
|
Director
|
March 10, 2020
|
William T. McKee
|
|
||
|
|
|
|
/s/ PETER D. STAPLE
|
|
Director
|
March 10, 2020
|
Peter D. Staple
|
|
|
|
|
|
|
|
/s/ JAMES L. TYREE
|
|
Director
|
March 10, 2020
|
James L. Tyree
|
|
|
|
|
|
|
|
/s/ DAVID E. WHEADON
|
|
Director
|
March 10, 2020
|
David E. Wheadon
|
|
|
|
|
|
|
|
1)
|
Registration Statements (Forms S-3 No. 333-53486, No. 333-66688, No. 333-86542, No. 333-104956, No. 333-197433 and No. 333-223420) and related Prospectuses of Assertio Therapeutics, Inc.,
|
2)
|
Registration Statements (Forms S-8 No. 333-116697, No. 333-145291, No. 333-156538, No. 333-167015, No. 333-181710, No. 333-196263, No. 333-211642, No. 333-211643, No. 333-224924, No. 333-228290 and No. 333-231366) pertaining to the 2004 Equity Incentive Plan, the Second and Amended and Restated 2004 Employee Stock Purchase Plan, the Amended and Restated 2014 Omnibus Incentive Plan and the Inducement Award Program of Assertio Therapeutics, Inc.
|
1.
|
I have reviewed this Annual Report on Form 10-K of Assertio Therapeutics, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers 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.
|
Date: March 10, 2020
|
By:
|
/s/ Arthur J. Higgins
|
|
|
Arthur J. Higgins
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of Assertio Therapeutics, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers 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.
|
Date: March 10, 2020
|
By:
|
/s/ Daniel A. Peisert
|
|
|
Daniel A. Peisert
|
|
|
Senior Vice President and Chief Financial Officer
(Principal Financial 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.
|
Date: March 10, 2020
|
|
/s/ Arthur J. Higgins
|
|
|
Arthur J. Higgins
|
|
|
President and Chief Executive Officer
(Principal 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.
|
Date: March 10, 2020
|
|
/s/ Daniel A. Peisert
|
|
|
Daniel A. Peisert
|
|
|
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|