Ireland
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000-28508
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98-1341933
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
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¨
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Accelerated filer
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þ
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Non-accelerated
|
¨
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Smaller reporting company
|
¨
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(Do not check if a smaller reporting company)
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Emerging growth company
|
¨
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|
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Page #
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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•
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due to a decrease in our available liquid assets, our business strategy has been refocused and is now substantially dependent upon a single product, FT218;
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•
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our recent restructuring plan may not be as effective as we anticipate and may have unintended negative impacts;
|
•
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further restructuring actions, if needed, may require third-party consents (including consents under the indenture governing our convertible debt) and such consents may not be granted; and
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•
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the Chapter 11 bankruptcy filing by our subsidiary Avadel Specialty Pharmaceuticals LLC may have unexpected adverse results.
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•
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our three products Bloxiverz®, Vazculep® and Akovaz®, which are not patent protected, and have a small number of customers, currently produce substantially all of our revenues, and could face further competition resulting in a further loss of market share and/or forcing us to further reduce our prices for those products;
|
•
|
our current “unapproved marketed drug” (UMD) product candidate, AV001, could fail to achieve FDA approval; or we could fail to develop future potential UMD product candidates, or competitors could develop such products and market such products with FDA approval before us;
|
•
|
we could experience failure or further delay in completing the Phase III clinical trial for FT218, and if the FDA ultimately approves such product, the approval may not include any period of market exclusivity;
|
•
|
we may not have sufficient cash or the ability to raise sufficient cash to service our $143.75 million Exchangeable Senior Notes due 2023, including cash necessary to repay such Notes at maturity, to settle exchanges of such Notes in cash or to repurchase such Notes as required following a “fundamental change” event described in the indenture governing such Notes;
|
•
|
we depend on one or a limited number of third parties to manufacture certain of our products and to provide certain raw materials used in our products;
|
•
|
our competitors may develop and market technologies or products that are more effective or safer than ours, or obtain regulatory approval and market such technologies or products before we do;
|
•
|
we face challenges in protecting intellectual property underlying our products and drug delivery technologies; and
|
•
|
we depend on key personnel to execute our business plan.
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|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||
Product sales
|
|
$
|
14,229
|
|
|
$
|
19,826
|
|
|
$
|
48,220
|
|
|
$
|
82,103
|
|
License revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
246
|
|
||||
Total revenues
|
|
14,229
|
|
|
19,826
|
|
|
48,220
|
|
|
82,349
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of products
|
|
2,823
|
|
|
3,120
|
|
|
9,711
|
|
|
13,224
|
|
||||
Research and development expenses
|
|
7,539
|
|
|
11,402
|
|
|
25,160
|
|
|
33,243
|
|
||||
Selling, general and administrative expenses
|
|
5,316
|
|
|
24,829
|
|
|
22,520
|
|
|
77,159
|
|
||||
Intangible asset amortization
|
|
205
|
|
|
1,620
|
|
|
610
|
|
|
4,996
|
|
||||
Changes in fair value of related party contingent consideration
|
|
627
|
|
|
(7,115
|
)
|
|
2,384
|
|
|
(17,036
|
)
|
||||
Restructuring costs
|
|
1,866
|
|
|
65
|
|
|
4,600
|
|
|
268
|
|
||||
Total operating expenses
|
|
18,376
|
|
|
33,921
|
|
|
64,985
|
|
|
111,854
|
|
||||
Operating loss
|
|
(4,147
|
)
|
|
(14,095
|
)
|
|
(16,765
|
)
|
|
(29,505
|
)
|
||||
Investment and other income, net
|
|
781
|
|
|
208
|
|
|
2,548
|
|
|
845
|
|
||||
Interest expense
|
|
(3,125
|
)
|
|
(3,000
|
)
|
|
(9,293
|
)
|
|
(7,577
|
)
|
||||
Loss on deconsolidation of subsidiary
|
|
—
|
|
|
—
|
|
|
(2,840
|
)
|
|
—
|
|
||||
Other (expense) income - changes in fair value of related party payable
|
|
(139
|
)
|
|
425
|
|
|
(496
|
)
|
|
1,432
|
|
||||
Loss before income taxes
|
|
(6,630
|
)
|
|
(16,462
|
)
|
|
(26,846
|
)
|
|
(34,805
|
)
|
||||
Income tax provision (benefit)
|
|
2,234
|
|
|
(691
|
)
|
|
3,641
|
|
|
(3,360
|
)
|
||||
Net loss
|
|
$
|
(8,864
|
)
|
|
$
|
(15,771
|
)
|
|
$
|
(30,487
|
)
|
|
$
|
(31,445
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share - basic
|
|
$
|
(0.24
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.82
|
)
|
|
$
|
(0.84
|
)
|
Net loss per share - diluted
|
|
(0.24
|
)
|
|
(0.43
|
)
|
|
(0.82
|
)
|
|
(0.84
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding - basic
|
|
37,436
|
|
|
36,904
|
|
|
37,382
|
|
|
37,410
|
|
||||
Weighted average number of shares outstanding - diluted
|
|
37,436
|
|
|
36,904
|
|
|
37,382
|
|
|
37,410
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
|
$
|
(8,864
|
)
|
|
$
|
(15,771
|
)
|
|
$
|
(30,487
|
)
|
|
$
|
(31,445
|
)
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation gain (loss)
|
|
(210
|
)
|
|
(60
|
)
|
|
(309
|
)
|
|
(293
|
)
|
||||
Net other comprehensive income (loss), net of ($5), ($18), ($46) and ($88) tax, respectively
|
|
86
|
|
|
68
|
|
|
753
|
|
|
(92
|
)
|
||||
Total other comprehensive income (loss), net of tax
|
|
(124
|
)
|
|
8
|
|
|
444
|
|
|
(385
|
)
|
||||
Total comprehensive loss
|
|
$
|
(8,988
|
)
|
|
$
|
(15,763
|
)
|
|
$
|
(30,043
|
)
|
|
$
|
(31,830
|
)
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
12,867
|
|
|
$
|
9,325
|
|
Marketable securities
|
|
59,587
|
|
|
90,590
|
|
||
Accounts receivable
|
|
8,725
|
|
|
11,330
|
|
||
Inventories
|
|
2,260
|
|
|
4,770
|
|
||
Prepaid expenses and other current assets
|
|
5,163
|
|
|
8,836
|
|
||
Total current assets
|
|
88,602
|
|
|
124,851
|
|
||
Property and equipment, net
|
|
770
|
|
|
1,911
|
|
||
Operating lease right-of-use assets
|
|
4,385
|
|
|
—
|
|
||
Goodwill
|
|
18,491
|
|
|
18,491
|
|
||
Intangible assets, net
|
|
1,019
|
|
|
1,629
|
|
||
Research and development tax credit receivable
|
|
7,694
|
|
|
7,272
|
|
||
Other non-current assets
|
|
34,927
|
|
|
36,146
|
|
||
Total assets
|
|
$
|
155,888
|
|
|
$
|
190,300
|
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Current portion of long-term debt
|
|
$
|
35
|
|
|
$
|
106
|
|
Current portion of long-term related party payable
|
|
7,588
|
|
|
9,439
|
|
||
Current portion of operating lease liability
|
|
1,596
|
|
|
—
|
|
||
Accounts payable
|
|
3,538
|
|
|
3,503
|
|
||
Accrued expenses
|
|
17,017
|
|
|
21,695
|
|
||
Other current liabilities
|
|
1,989
|
|
|
3,640
|
|
||
Total current liabilities
|
|
31,763
|
|
|
38,383
|
|
||
Long-term debt, less current portion
|
|
120,132
|
|
|
115,734
|
|
||
Long-term related party payable, less current portion
|
|
14,118
|
|
|
19,401
|
|
||
Long-term operating lease liability
|
|
2,866
|
|
|
—
|
|
||
Other non-current liabilities
|
|
13,972
|
|
|
14,002
|
|
||
Total liabilities
|
|
182,851
|
|
|
187,520
|
|
||
|
|
|
|
|
||||
Shareholders’ (deficit) equity:
|
|
|
|
|
|
|
||
Preferred shares, nominal value of $0.01 per share; 50,000 shares authorized; none issued or outstanding at September 30, 2019 and December 31, 2018, respectively
|
|
—
|
|
|
—
|
|
||
Ordinary shares, nominal value of $0.01 per share; 500,000 shares authorized; 42,857 issued and 37,450 outstanding at September 30, 2019 and 42,720 issued and 37,313 outstanding at December 31, 2018
|
|
428
|
|
|
427
|
|
||
Treasury shares, at cost, 5,407 shares held at September 30, 2019 and December 31, 2018, respectively
|
|
(49,998
|
)
|
|
(49,998
|
)
|
||
Additional paid-in capital
|
|
434,055
|
|
|
433,756
|
|
||
Accumulated deficit
|
|
(388,476
|
)
|
|
(357,989
|
)
|
||
Accumulated other comprehensive loss
|
|
(22,972
|
)
|
|
(23,416
|
)
|
||
Total shareholders’ (deficit) equity
|
|
(26,963
|
)
|
|
2,780
|
|
||
Total liabilities and shareholders’ (deficit) equity
|
|
$
|
155,888
|
|
|
$
|
190,300
|
|
|
|
Ordinary shares
|
|
Additional
|
|
Accumulated
|
|
Accumulated
other
comprehensive
|
|
Treasury shares
|
|
Total
shareholders’
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
paid-in capital
|
|
deficit
|
|
(loss) income
|
|
Shares
|
|
Amount
|
|
(deficit) equity
|
||||||||||||||
Balance, December 31, 2018
|
|
42,720
|
|
|
$
|
427
|
|
|
$
|
433,756
|
|
|
$
|
(357,989
|
)
|
|
$
|
(23,416
|
)
|
|
5,407
|
|
|
$
|
(49,998
|
)
|
|
$
|
2,780
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,018
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,018
|
)
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
213
|
|
|
—
|
|
|
—
|
|
|
213
|
|
||||||
Vesting of restricted shares
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Employee share purchase plan share issuance
|
|
42
|
|
|
—
|
|
|
92
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92
|
|
||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
351
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
351
|
|
||||||
Balance, March 31, 2019
|
|
42,763
|
|
|
$
|
427
|
|
|
$
|
434,199
|
|
|
$
|
(371,007
|
)
|
|
$
|
(23,203
|
)
|
|
5,407
|
|
|
$
|
(49,998
|
)
|
|
$
|
(9,582
|
)
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,605
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,605
|
)
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
355
|
|
|
—
|
|
|
—
|
|
|
355
|
|
||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55
|
|
||||||
Balance, June 30, 2019
|
|
42,763
|
|
|
$
|
427
|
|
|
$
|
434,254
|
|
|
$
|
(379,612
|
)
|
|
$
|
(22,848
|
)
|
|
5,407
|
|
|
$
|
(49,998
|
)
|
|
$
|
(17,777
|
)
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,864
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,864
|
)
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124
|
)
|
|
—
|
|
|
—
|
|
|
(124
|
)
|
||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
(229
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(229
|
)
|
||||||
Vesting of restricted shares
|
|
82
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Employee share purchase plan share issuance
|
|
12
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||||
Balance, September 30, 2019
|
|
42,857
|
|
|
$
|
428
|
|
|
$
|
434,055
|
|
|
$
|
(388,476
|
)
|
|
$
|
(22,972
|
)
|
|
5,407
|
|
|
$
|
(49,998
|
)
|
|
$
|
(26,963
|
)
|
|
|
Ordinary shares
|
|
Additional
|
|
Accumulated
|
|
Accumulated
other
comprehensive
|
|
Treasury shares
|
|
Total
shareholders’
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
paid-in capital
|
|
deficit
|
|
(loss) income
|
|
Shares
|
|
Amount
|
|
equity
|
||||||||||||||
Balance, December 31, 2017
|
|
41,463
|
|
|
$
|
414
|
|
|
$
|
393,478
|
|
|
$
|
(262,685
|
)
|
|
$
|
(23,266
|
)
|
|
2,117
|
|
|
$
|
(22,361
|
)
|
|
$
|
85,580
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,236
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,236
|
)
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(404
|
)
|
|
—
|
|
|
—
|
|
|
(404
|
)
|
||||||
Exercise of warrants
|
|
603
|
|
|
6
|
|
|
2,905
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,911
|
|
||||||
Expiration of warrants
|
|
—
|
|
|
—
|
|
|
2,167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,167
|
|
||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
2,134
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,134
|
|
||||||
Equity component of 2023 Notes
|
|
—
|
|
|
—
|
|
|
26,699
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,699
|
|
||||||
Share repurchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,307
|
|
|
(20,212
|
)
|
|
(20,212
|
)
|
||||||
Balance, March 31, 2018
|
|
42,066
|
|
|
$
|
420
|
|
|
$
|
427,383
|
|
|
$
|
(274,921
|
)
|
|
$
|
(23,670
|
)
|
|
4,424
|
|
|
$
|
(42,573
|
)
|
|
$
|
86,639
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,438
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,438
|
)
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||
Exercise of stock options
|
|
82
|
|
|
1
|
|
|
534
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
535
|
|
||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
2,224
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,224
|
|
||||||
Share repurchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
983
|
|
|
(7,425
|
)
|
|
(7,425
|
)
|
||||||
Balance, June 30, 2018
|
|
42,148
|
|
|
$
|
421
|
|
|
$
|
430,141
|
|
|
$
|
(278,359
|
)
|
|
$
|
(23,659
|
)
|
|
5,407
|
|
|
$
|
(49,998
|
)
|
|
$
|
78,546
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,771
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,771
|
)
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
2,832
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,832
|
|
||||||
Vesting of restricted shares
|
|
247
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Employee share purchase plan share issuance
|
|
24
|
|
|
—
|
|
|
127
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127
|
|
||||||
Balance, September 30, 2018
|
|
42,419
|
|
|
$
|
424
|
|
|
$
|
433,097
|
|
|
$
|
(294,130
|
)
|
|
$
|
(23,651
|
)
|
|
5,407
|
|
|
$
|
(49,998
|
)
|
|
$
|
65,742
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(30,487
|
)
|
|
$
|
(31,445
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
1,690
|
|
|
5,625
|
|
||
Loss on disposal of property and equipment
|
|
478
|
|
|
—
|
|
||
Amortization of premiums on marketable securities
|
|
(275
|
)
|
|
2,889
|
|
||
Remeasurement of related party acquisition-related contingent consideration
|
|
2,384
|
|
|
(17,036
|
)
|
||
Remeasurement of related party financing-related contingent consideration
|
|
496
|
|
|
(1,432
|
)
|
||
Amortization of debt discount and debt issuance costs
|
|
4,424
|
|
|
3,402
|
|
||
Change in deferred tax and income tax deferred charge
|
|
1,333
|
|
|
(4,675
|
)
|
||
Stock-based compensation expense
|
|
177
|
|
|
7,190
|
|
||
Loss on deconsolidation of subsidiary
|
|
1,750
|
|
|
—
|
|
||
Other adjustments
|
|
(392
|
)
|
|
117
|
|
||
Net changes in assets and liabilities
|
|
|
|
|
|
|
||
Accounts receivable
|
|
2,026
|
|
|
5,059
|
|
||
Inventories
|
|
2,465
|
|
|
(548
|
)
|
||
Prepaid expenses and other current assets
|
|
(1,859
|
)
|
|
2,194
|
|
||
Research and development tax credit receivable
|
|
(749
|
)
|
|
(1,350
|
)
|
||
Accounts payable & other current liabilities
|
|
259
|
|
|
4,312
|
|
||
Accrued expenses
|
|
(2,379
|
)
|
|
(11,660
|
)
|
||
Earn-out payments for related party contingent consideration in excess of acquisition-date fair value
|
|
(8,640
|
)
|
|
(16,254
|
)
|
||
Royalty payments for related party payable in excess of original fair value
|
|
(1,374
|
)
|
|
(2,362
|
)
|
||
Other assets and liabilities
|
|
(1,399
|
)
|
|
(2,216
|
)
|
||
Net cash used in operating activities
|
|
(30,072
|
)
|
|
(58,190
|
)
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Purchases of property and equipment
|
|
(29
|
)
|
|
(167
|
)
|
||
Proceeds from the disposal of property and equipment
|
|
154
|
|
|
—
|
|
||
Purchase of intangible asset
|
|
—
|
|
|
(20,000
|
)
|
||
Proceeds from sales of marketable securities
|
|
57,242
|
|
|
308,015
|
|
||
Purchases of marketable securities
|
|
(23,814
|
)
|
|
(341,036
|
)
|
||
Net cash provided by (used in) investing activities
|
|
33,553
|
|
|
(53,188
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Earn-out payments for related party contingent consideration
|
|
—
|
|
|
(645
|
)
|
||
Proceeds from debt issuance
|
|
—
|
|
|
143,750
|
|
||
Payments for debt issuance costs
|
|
—
|
|
|
(6,190
|
)
|
||
Share repurchases
|
|
—
|
|
|
(27,637
|
)
|
||
Proceeds from issuance of ordinary shares and warrants
|
|
123
|
|
|
3,488
|
|
||
Other financing activities, net
|
|
(109
|
)
|
|
(31
|
)
|
||
Net cash provided by financing activities
|
|
14
|
|
|
112,735
|
|
||
|
|
|
|
|
||||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
|
47
|
|
|
(84
|
)
|
||
|
|
|
|
|
||||
Net change in cash and cash equivalents
|
|
3,542
|
|
|
1,273
|
|
||
Cash and cash equivalents at January 1,
|
|
9,325
|
|
|
16,564
|
|
||
Cash and cash equivalents at September 30,
|
|
$
|
12,867
|
|
|
$
|
17,837
|
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
||||
Interest paid
|
|
$
|
6,469
|
|
|
$
|
3,359
|
|
Income taxes paid
|
|
$
|
140
|
|
|
$
|
413
|
|
•
|
Akovaz® (ephedrine sulfate injection, USP), an alpha- and beta-adrenergic agonist and a norepinephrine-releasing agent that is indicated for the treatment of clinically important hypotension occurring in the setting of anesthesia.
|
•
|
Bloxiverz® (neostigmine methylsulfate injection), a cholinesterase inhibitor, is indicated for the reversal of the effects of non-depolarizing neuromuscular blocking agents (NMBAs) after surgery.
|
•
|
Vazculep® (phenylephrine hydrochloride injection), an alpha-1 adrenergic receptor agonist indicated for the treatment of clinically important hypotension resulting primarily from vasodilation in the setting of anesthesia.
|
•
|
Income approach, which is based on the present value of a future stream of net cash flows.
|
•
|
Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities.
|
•
|
Level 1 - Quoted prices for identical assets or liabilities in active markets.
|
•
|
Level 2 - Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means.
|
•
|
Level 3 - Unobservable inputs that reflect estimates and assumptions.
|
|
|
As of September 30, 2019
|
|
As of December 31, 2018
|
||||||||||||||||||||
Fair Value Measurements:
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marketable securities (see Note 6)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity securities
|
|
$
|
4,176
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,145
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market and mutual funds
|
|
44,091
|
|
|
—
|
|
|
—
|
|
|
52,996
|
|
|
—
|
|
|
—
|
|
||||||
Corporate bonds
|
|
—
|
|
|
4,258
|
|
|
—
|
|
|
—
|
|
|
6,339
|
|
|
—
|
|
||||||
Government securities - U.S.
|
|
—
|
|
|
5,344
|
|
|
—
|
|
|
—
|
|
|
12,701
|
|
|
—
|
|
||||||
Other fixed-income securities
|
|
—
|
|
|
1,718
|
|
|
—
|
|
|
—
|
|
|
9,409
|
|
|
—
|
|
||||||
Total assets
|
|
$
|
48,267
|
|
|
$
|
11,320
|
|
|
$
|
—
|
|
|
$
|
62,141
|
|
|
$
|
28,449
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Related party payable (see Note 10)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,706
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,840
|
|
Total liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,706
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,840
|
|
|
|
September 30, 2019
|
||||||||||||||
Marketable Securities:
|
|
Adjusted Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
|
$
|
4,200
|
|
|
$
|
—
|
|
|
$
|
(24
|
)
|
|
$
|
4,176
|
|
Money market and mutual funds
|
|
43,306
|
|
|
785
|
|
|
—
|
|
|
44,091
|
|
||||
Corporate bonds
|
|
4,190
|
|
|
69
|
|
|
(1
|
)
|
|
4,258
|
|
||||
Government securities - U.S.
|
|
5,217
|
|
|
129
|
|
|
(2
|
)
|
|
5,344
|
|
||||
Other fixed-income securities
|
|
1,693
|
|
|
26
|
|
|
(1
|
)
|
|
1,718
|
|
||||
Total
|
|
$
|
58,606
|
|
|
$
|
1,009
|
|
|
$
|
(28
|
)
|
|
$
|
59,587
|
|
|
|
December 31, 2018
|
||||||||||||||
Marketable Securities:
|
|
Adjusted Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
|
$
|
10,101
|
|
|
$
|
—
|
|
|
$
|
(956
|
)
|
|
$
|
9,145
|
|
Money market and mutual funds
|
|
52,733
|
|
|
316
|
|
|
(53
|
)
|
|
52,996
|
|
||||
Corporate bonds
|
|
6,411
|
|
|
7
|
|
|
(79
|
)
|
|
6,339
|
|
||||
Government securities - U.S.
|
|
12,714
|
|
|
66
|
|
|
(79
|
)
|
|
12,701
|
|
||||
Other fixed-income securities
|
|
9,400
|
|
|
22
|
|
|
(13
|
)
|
|
9,409
|
|
||||
Total
|
|
$
|
91,359
|
|
|
$
|
411
|
|
|
$
|
(1,180
|
)
|
|
$
|
90,590
|
|
|
|
Maturities
|
||||||||||||||||||
Marketable Debt Securities:
|
|
Less than 1 Year
|
|
1-5 Years
|
|
5-10 Years
|
|
Greater than 10 Years
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate bonds
|
|
$
|
556
|
|
|
$
|
3,360
|
|
|
$
|
342
|
|
|
$
|
—
|
|
|
$
|
4,258
|
|
Government securities - U.S.
|
|
—
|
|
|
4,600
|
|
|
—
|
|
|
744
|
|
|
5,344
|
|
|||||
Other fixed-income securities
|
|
49
|
|
|
1,669
|
|
|
—
|
|
|
—
|
|
|
1,718
|
|
|||||
Total
|
|
$
|
605
|
|
|
$
|
9,629
|
|
|
$
|
342
|
|
|
$
|
744
|
|
|
$
|
11,320
|
|
Inventory:
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Finished goods
|
|
$
|
1,883
|
|
|
$
|
4,270
|
|
Raw materials
|
|
377
|
|
|
500
|
|
||
Total
|
|
$
|
2,260
|
|
|
$
|
4,770
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||
Goodwill and Intangible Assets:
|
|
Gross
Value
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|
Gross
Value
|
|
Accumulated
Amortization
|
|
Impairment
|
|
Net Carrying
Amount
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Acquired developed technology - Noctiva
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
73,111
|
|
|
$
|
(7,024
|
)
|
|
$
|
(66,087
|
)
|
|
$
|
—
|
|
Acquired developed technology - Vazculep
|
|
12,061
|
|
|
(11,042
|
)
|
|
1,019
|
|
|
12,061
|
|
|
(10,432
|
)
|
|
—
|
|
|
1,629
|
|
|||||||
Total amortizable intangible assets
|
|
$
|
12,061
|
|
|
$
|
(11,042
|
)
|
|
$
|
1,019
|
|
|
$
|
85,172
|
|
|
$
|
(17,456
|
)
|
|
$
|
(66,087
|
)
|
|
$
|
1,629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Unamortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
|
$
|
18,491
|
|
|
$
|
—
|
|
|
$
|
18,491
|
|
|
$
|
18,491
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,491
|
|
Total unamortizable intangible assets
|
|
$
|
18,491
|
|
|
$
|
—
|
|
|
$
|
18,491
|
|
|
$
|
18,491
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,491
|
|
Estimated Annual Amortization Expense:
|
|
Amount
|
||
|
|
|
||
2019
|
|
$
|
815
|
|
2020
|
|
814
|
|
|
2021
|
|
—
|
|
|
2022
|
|
—
|
|
|
2023
|
|
—
|
|
Lease cost:
|
|
Three months ended September 30, 2019
|
|
Nine months ended September 30, 2019
|
||||
|
|
|
|
|
||||
Operating lease costs (1)
|
|
$
|
411
|
|
|
$
|
1,150
|
|
Sublease income (2)
|
|
82
|
|
|
187
|
|
||
Total lease cost
|
|
$
|
329
|
|
|
$
|
963
|
|
Maturities:
|
|
Operating Leases
|
||
|
|
|
||
Remaining three months of 2019
|
|
$
|
1,117
|
|
2020
|
|
879
|
|
|
2021
|
|
670
|
|
|
2022
|
|
678
|
|
|
2023
|
|
690
|
|
|
Thereafter
|
|
941
|
|
|
Total lease payments
|
|
4,975
|
|
|
Less: interest
|
|
513
|
|
|
Present value of lease liabilities
|
|
$
|
4,462
|
|
Lease Commitment:
|
|
Operating Leases
|
||
|
|
|
||
2019
|
|
$
|
1,191
|
|
2020
|
|
1,208
|
|
|
2021
|
|
1,008
|
|
|
2022
|
|
767
|
|
|
2023
|
|
695
|
|
|
Thereafter
|
|
967
|
|
|
Total minimum lease payments
|
|
$
|
5,836
|
|
|
|
|
Activity during the Nine Months Ended
September 30, 2019
|
|
|
||||||||||||||
|
|
|
|
|
Changes in Fair Value of Related Party Payable
|
|
|
||||||||||||
Long-Term Related Party Payable:
|
Balance,
December 31, 2018
|
|
Payments to
Related Parties
|
|
Operating Expense
|
|
Other
Expense
|
|
Balance, September 30, 2019
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisition-related contingent consideration:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earn-out payments - Éclat Pharmaceuticals (a)
|
$
|
25,615
|
|
|
$
|
(8,640
|
)
|
|
$
|
2,384
|
|
|
$
|
—
|
|
|
$
|
19,359
|
|
Financing-related:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Royalty agreement - Deerfield (b)
|
2,184
|
|
|
(930
|
)
|
|
—
|
|
|
330
|
|
|
1,584
|
|
|||||
Royalty agreement - Broadfin (c)
|
1,041
|
|
|
(444
|
)
|
|
—
|
|
|
166
|
|
|
763
|
|
|||||
Total related party payable
|
28,840
|
|
|
$
|
(10,014
|
)
|
|
$
|
2,384
|
|
|
$
|
496
|
|
|
21,706
|
|
||
Less: current portion
|
(9,439
|
)
|
|
|
|
|
|
|
|
|
|
|
(7,588
|
)
|
|||||
Total long-term related party payable
|
$
|
19,401
|
|
|
|
|
|
|
|
|
|
|
|
$
|
14,118
|
|
|
|
|
Activity during the Three Months Ended
September 30, 2019
|
|
|
||||||||||||||
|
|
|
|
|
Changes in Fair Value of Related Party Payable
|
|
|
||||||||||||
Long-Term Related Party Payable:
|
Balance,
June 30, 2019
|
|
Payments to
Related Parties
|
|
Operating Expense
|
|
Other
Expense
|
|
Balance, September 30, 2019
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisition-related contingent consideration:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earn-out payments - Éclat Pharmaceuticals (a)
|
$
|
21,582
|
|
|
$
|
(2,850
|
)
|
|
$
|
627
|
|
|
$
|
—
|
|
|
$
|
19,359
|
|
Financing-related:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Royalty agreement - Deerfield (b)
|
1,799
|
|
|
(309
|
)
|
|
—
|
|
|
94
|
|
|
1,584
|
|
|||||
Royalty agreement - Broadfin (c)
|
866
|
|
|
(148
|
)
|
|
—
|
|
|
45
|
|
|
763
|
|
|||||
Total related party payable
|
24,247
|
|
|
$
|
(3,307
|
)
|
|
$
|
627
|
|
|
$
|
139
|
|
|
21,706
|
|
||
Less: current portion
|
(8,264
|
)
|
|
|
|
|
|
|
|
|
|
|
(7,588
|
)
|
|||||
Total long-term related party payable
|
$
|
15,983
|
|
|
|
|
|
|
|
|
|
|
|
$
|
14,118
|
|
(b)
|
As part of a February 2013 debt financing transaction conducted with Deerfield, the Company received cash of $2,600 in exchange for entering into a royalty agreement whereby the Company shall pay quarterly a 1.75% royalty on the net sales of certain Éclat products until December 31, 2024. In connection with such debt financing transaction, the Company granted Deerfield a security interest in the product registration rights of the Eclat products.
|
(c)
|
As part of a December 2013 debt financing transaction conducted with Broadfin Healthcare Master Fund, a related party and current shareholder, the Company received cash of $2,200 in exchange for entering into a royalty agreement whereby the Company shall pay quarterly a 0.834% royalty on the net sales of certain Éclat products until December 31, 2024.
|
Related Party Payable Rollforward:
|
|
Balance
|
||
|
|
|
||
Balance, December 31, 2017
|
|
$
|
98,925
|
|
Payments of related party payable
|
|
(19,261
|
)
|
|
Fair value adjustments (1)
|
|
(18,468
|
)
|
|
Expiration of warrants
|
|
(2,167
|
)
|
|
Disposition of the pediatric assets
|
|
(20,337
|
)
|
|
Balance, September 30, 2018
|
|
$
|
38,692
|
|
|
|
|
||
Balance, December 31, 2018
|
|
$
|
28,840
|
|
Payments of related party payable
|
|
(10,014
|
)
|
|
Fair value adjustments (1)
|
|
2,880
|
|
|
Balance, September 30, 2019
|
|
$
|
21,706
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Principal amount of 4.50% exchangeable senior notes due 2023
|
|
$
|
143,750
|
|
|
$
|
143,750
|
|
Less: debt discount and issuance costs, net
|
|
(23,618
|
)
|
|
(28,059
|
)
|
||
Net carrying amount of liability component
|
|
120,132
|
|
|
115,691
|
|
||
Other debt
|
|
35
|
|
|
149
|
|
||
Subtotal
|
|
120,167
|
|
|
115,840
|
|
||
Less: current maturities
|
|
(35
|
)
|
|
(106
|
)
|
||
Long-term debt
|
|
$
|
120,132
|
|
|
$
|
115,734
|
|
|
|
|
|
|
||||
Equity component:
|
|
|
|
|
||||
Equity component of exchangeable notes, net of issuance costs
|
|
$
|
(26,699
|
)
|
|
$
|
(26,699
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Loss Before Income Taxes:
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Ireland
|
|
$
|
(14,302
|
)
|
|
$
|
(18,314
|
)
|
|
$
|
(36,625
|
)
|
|
$
|
(34,203
|
)
|
United States
|
|
5,952
|
|
|
1,773
|
|
|
12,309
|
|
|
(1,043
|
)
|
||||
France
|
|
1,720
|
|
|
79
|
|
|
(2,530
|
)
|
|
441
|
|
||||
Total loss before income taxes
|
|
$
|
(6,630
|
)
|
|
$
|
(16,462
|
)
|
|
$
|
(26,846
|
)
|
|
$
|
(34,805
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Income Tax Rate Reconciliation:
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Statutory tax rate
|
|
12.5
|
%
|
|
12.5
|
%
|
|
12.5
|
%
|
|
12.5
|
%
|
||||
International tax rates differential
|
|
(4.3
|
)%
|
|
7.0
|
%
|
|
4.1
|
%
|
|
6.9
|
%
|
||||
Change in valuation allowance
|
|
(31.1
|
)%
|
|
(18.3
|
)%
|
|
(27.0
|
)%
|
|
(14.9
|
)%
|
||||
Change in fair value of nondeductible contingent consideration
|
|
4.1
|
%
|
|
8.7
|
%
|
|
(0.1
|
)%
|
|
9.9
|
%
|
||||
Nondeductible stock-based compensation
|
|
—
|
%
|
|
(3.5
|
)%
|
|
(0.2
|
)%
|
|
(2.6
|
)%
|
||||
Unrecognized tax benefits
|
|
(8.8
|
)%
|
|
(3.5
|
)%
|
|
(3.3
|
)%
|
|
(3.1
|
)%
|
||||
State and local income taxes, net of federal
|
|
(0.2
|
)%
|
|
0.1
|
%
|
|
(0.2
|
)%
|
|
0.2
|
%
|
||||
Nondeductible interest expense
|
|
(4.5
|
)%
|
|
—
|
%
|
|
(2.6
|
)%
|
|
—
|
%
|
||||
Other
|
|
(1.3
|
)%
|
|
1.2
|
%
|
|
3.1
|
%
|
|
0.8
|
%
|
||||
Effective income tax rate
|
|
(33.6
|
)%
|
|
4.2
|
%
|
|
(13.7
|
)%
|
|
9.7
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax benefit - at statutory tax rate
|
|
$
|
(829
|
)
|
|
$
|
(2,058
|
)
|
|
$
|
(3,355
|
)
|
|
$
|
(4,351
|
)
|
International tax rates differential
|
|
283
|
|
|
(1,153
|
)
|
|
(1,108
|
)
|
|
(2,394
|
)
|
||||
Change in valuation allowance
|
|
2,059
|
|
|
3,007
|
|
|
7,242
|
|
|
5,188
|
|
||||
Change in fair value of nondeductible contingent consideration
|
|
(270
|
)
|
|
(1,431
|
)
|
|
33
|
|
|
(3,436
|
)
|
||||
Nondeductible stock-based compensation
|
|
1
|
|
|
578
|
|
|
50
|
|
|
914
|
|
||||
Unrecognized tax benefits
|
|
581
|
|
|
578
|
|
|
873
|
|
|
1,086
|
|
||||
State and local income taxes, net of federal
|
|
14
|
|
|
(13
|
)
|
|
41
|
|
|
(70
|
)
|
||||
Nondeductible interest expense
|
|
299
|
|
|
—
|
|
|
709
|
|
|
—
|
|
||||
Other
|
|
96
|
|
|
(199
|
)
|
|
(844
|
)
|
|
(297
|
)
|
||||
Income tax provision (benefit) - at effective income tax rate
|
|
$
|
2,234
|
|
|
$
|
(691
|
)
|
|
$
|
3,641
|
|
|
$
|
(3,360
|
)
|
Prepaid Expenses and Other Current Assets:
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Valued-added tax recoverable
|
|
$
|
807
|
|
|
$
|
1,378
|
|
Prepaid and other expenses
|
|
2,757
|
|
|
2,145
|
|
||
Guarantee from Armistice (see Note 14)
|
|
560
|
|
|
534
|
|
||
Income tax receivable
|
|
594
|
|
|
921
|
|
||
Research and development tax credit receivable
|
|
270
|
|
|
283
|
|
||
Short-term deposit
|
|
—
|
|
|
3,350
|
|
||
Other
|
|
175
|
|
|
225
|
|
||
Total
|
|
$
|
5,163
|
|
|
$
|
8,836
|
|
Other Non-Current Assets:
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Deferred tax assets, net
|
|
$
|
21,636
|
|
|
$
|
23,029
|
|
Long-term deposits
|
|
1,477
|
|
|
1,477
|
|
||
Guarantee from Armistice (see Note 14)
|
|
5,271
|
|
|
5,697
|
|
||
Right of use assets at contract manufacturing organizations
|
|
6,494
|
|
|
5,894
|
|
||
Other
|
|
49
|
|
|
49
|
|
||
Total
|
|
$
|
34,927
|
|
|
$
|
36,146
|
|
Accrued Expenses
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Accrued compensation
|
|
$
|
2,322
|
|
|
$
|
3,971
|
|
Accrued social charges
|
|
482
|
|
|
1,009
|
|
||
Accrued restructuring (see Note 15)
|
|
1,737
|
|
|
879
|
|
||
Customer allowances
|
|
6,244
|
|
|
6,541
|
|
||
Accrued contract research organization charges
|
|
3,389
|
|
|
1,000
|
|
||
Accrued contract manufacturing organization costs
|
|
1,284
|
|
|
2,028
|
|
||
Accrued contract sales organization and marketing costs
|
|
—
|
|
|
3,469
|
|
||
Other
|
|
1,559
|
|
|
2,798
|
|
||
Total
|
|
$
|
17,017
|
|
|
$
|
21,695
|
|
Other Non-Current Liabilities:
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
Provision for retirement indemnity
|
|
$
|
—
|
|
|
$
|
1,024
|
|
Customer allowances
|
|
923
|
|
|
1,352
|
|
||
Unrecognized tax benefits
|
|
7,717
|
|
|
5,315
|
|
||
Guarantee to Deerfield (see Note 14)
|
|
5,289
|
|
|
5,717
|
|
||
Other
|
|
43
|
|
|
594
|
|
||
Total
|
|
$
|
13,972
|
|
|
$
|
14,002
|
|
•
|
Avadel Ireland will provide Cerecor with four product formulations utilizing Avadel Ireland’s LiquiTime™ technology, and will complete pilot bioequivalence studies for such product formulations within 18 months;
|
•
|
Cerecor will reimburse Avadel Ireland for development costs of the four LiquiTime™ products in excess of $1,000 in the aggregate;
|
•
|
Upon transfer of the four product formulations, Cerecor will assume all remaining development costs and responsibilities for the product development, clinical studies, NDA applications and associated filing fees; and
|
•
|
Upon regulatory approval and commercial launch of any LiquiTime™ products, Cerecor will pay Avadel Ireland quarterly royalties based on a percentage of net sales of any such products in the mid-single digit range.
|
2019 French Restructuring Obligation:
|
|
2019
|
||
|
|
|
||
Balance of restructuring accrual at January 1,
|
|
$
|
—
|
|
Charges for employee severance, benefits and other costs
|
|
2,774
|
|
|
Payments
|
|
(1,837
|
)
|
|
Foreign currency impact
|
|
(42
|
)
|
|
Balance of restructuring accrual at September 30,
|
|
$
|
895
|
|
2019 Corporate Restructuring Obligation:
|
|
2019
|
||
|
|
|
||
Balance of restructuring accrual at January 1,
|
|
$
|
—
|
|
Charges for employee severance, benefits and other costs
|
|
2,966
|
|
|
Payments
|
|
(2,113
|
)
|
|
Balance of restructuring accrual at September 30,
|
|
$
|
853
|
|
2017 French Restructuring Obligation:
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Balance of restructuring accrual at January 1,
|
|
$
|
879
|
|
|
$
|
1,000
|
|
Charges for employee severance, benefits and other
|
|
(168
|
)
|
|
268
|
|
||
Payments
|
|
(663
|
)
|
|
(668
|
)
|
||
Foreign currency impact
|
|
(10
|
)
|
|
(19
|
)
|
||
Balance of restructuring accrual at September 30,
|
|
$
|
38
|
|
|
$
|
581
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Net Loss Per Share:
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
|
$
|
(8,864
|
)
|
|
$
|
(15,771
|
)
|
|
$
|
(30,487
|
)
|
|
$
|
(31,445
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic shares
|
|
37,436
|
|
|
36,904
|
|
|
37,382
|
|
|
37,410
|
|
||||
Effect of dilutive securities—employee and director equity awards outstanding and 2023 Notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted shares
|
|
37,436
|
|
|
36,904
|
|
|
37,382
|
|
|
37,410
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share - basic
|
|
$
|
(0.24
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.82
|
)
|
|
$
|
(0.84
|
)
|
Net loss per share - diluted
|
|
$
|
(0.24
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.82
|
)
|
|
$
|
(0.84
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Accumulated Other Comprehensive Loss:
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment:
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
(23,720
|
)
|
|
$
|
(23,435
|
)
|
|
$
|
(23,621
|
)
|
|
$
|
(23,202
|
)
|
Net other comprehensive loss
|
|
(210
|
)
|
|
(60
|
)
|
|
(309
|
)
|
|
(293
|
)
|
||||
Balance at September 30,
|
|
$
|
(23,930
|
)
|
|
$
|
(23,495
|
)
|
|
$
|
(23,930
|
)
|
|
$
|
(23,495
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on marketable debt securities, net
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
872
|
|
|
$
|
(224
|
)
|
|
$
|
205
|
|
|
$
|
(64
|
)
|
Net other comprehensive income (loss), net of ($5), ($18), ($46) and ($88) tax, respectively
|
|
86
|
|
|
68
|
|
|
753
|
|
|
(92
|
)
|
||||
Balance at September 30,
|
|
$
|
958
|
|
|
$
|
(156
|
)
|
|
$
|
958
|
|
|
$
|
(156
|
)
|
Accumulated other comprehensive loss at September 30,
|
|
$
|
(22,972
|
)
|
|
$
|
(23,651
|
)
|
|
$
|
(22,972
|
)
|
|
$
|
(23,651
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Revenues by Product:
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Bloxiverz
|
|
$
|
1,466
|
|
|
$
|
3,656
|
|
|
$
|
6,392
|
|
|
$
|
16,691
|
|
Vazculep
|
|
8,786
|
|
|
8,759
|
|
|
27,669
|
|
|
33,097
|
|
||||
Akovaz
|
|
4,208
|
|
|
5,991
|
|
|
13,946
|
|
|
28,083
|
|
||||
Other
|
|
(231
|
)
|
|
1,420
|
|
|
213
|
|
|
4,232
|
|
||||
Total product sales
|
|
14,229
|
|
|
19,826
|
|
|
48,220
|
|
|
82,103
|
|
||||
License revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
246
|
|
||||
Total revenues
|
|
$
|
14,229
|
|
|
$
|
19,826
|
|
|
$
|
48,220
|
|
|
$
|
82,349
|
|
Purchase Commitments:
|
|
Balance
|
||
|
|
|
||
2019
|
|
$
|
7,194
|
|
2020
|
|
1,320
|
|
|
2021
|
|
1,320
|
|
|
2022
|
|
1,320
|
|
|
2023
|
|
220
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
11,374
|
|
•
|
Akovaz® (ephedrine sulfate injection, USP), an alpha- and beta-adrenergic agonist and a norepinephrine-releasing agent that is indicated for the treatment of clinically important hypotension occurring in the setting of anesthesia.
|
•
|
Bloxiverz® (neostigmine methylsulfate injection), a cholinesterase inhibitor, is indicated for the reversal of the effects of non-depolarizing neuromuscular blocking agents (NMBAs) after surgery.
|
•
|
Vazculep® (phenylephrine hydrochloride injection), an alpha-1 adrenergic receptor agonist indicated for the treatment of clinically important hypotension resulting primarily from vasodilation in the setting of anesthesia.
|
•
|
Healthcare and Regulatory Reform: Various health care reform laws in the U.S. may impact our ability to successfully commercialize our products and technologies. The success of our commercialization efforts may depend on the extent to which the government health administration authorities, the health insurance funds in the E.U. Member States, private health insurers and other third-party payers in the U.S. will reimburse consumers for the cost of healthcare products and services.
|
•
|
Competition and Technological Change: Competition in the pharmaceutical and biotechnology industry continues to be intense and is expected to increase. We compete with academic laboratories, research institutions, universities, joint ventures, and other pharmaceutical and biotechnology companies, including other companies developing niche branded or generic specialty pharmaceutical products or drug delivery platforms. Furthermore, major technological changes can happen quickly in the pharmaceutical and biotechnology industries. Such rapid technological change, or the development by our competitors of technologically improved or differentiated products, could render our drug delivery platforms obsolete or noncompetitive.
|
•
|
Pricing Environment for Pharmaceuticals: The pricing environment continues to be in the political spotlight in the U.S. As a result, the need to obtain and maintain appropriate pricing for our products may become more challenging due to, among other things, the attention being paid to healthcare cost containment and other austerity measures in the U.S. and worldwide.
|
•
|
Generics Playing a Larger Role in Healthcare: Generic pharmaceutical products will continue to play a large role in the U.S. healthcare system. Specifically, we have seen, or likely will see, additional generic competition to our current and future products and we continue to expect generic competition in the future.
|
•
|
Access to and Cost of Capital: The process of raising capital and associated cost of such capital for a company of our financial profile can be difficult and potentially expensive. If the need were to arise to raise additional capital, access to that capital may be difficult and/or expensive and, as a result, could create liquidity challenges for the Company.
|
•
|
Net Loss from Operations in 2019: In part because we expect sales of our hospital products to significantly decline from 2018’s levels and we will incur substantial expenses to further the clinical development of FT218, we likely will incur a net loss in 2019 the amount of which is not known to us at this time.
|
•
|
Revenue was $14,229 and $48,220 for the three and nine months ended September 30, 2019, respectively, compared to $19,826 and $82,349 in the same periods last year, respectively. This year over year decrease was primarily the result of increased competition driving lower prices as noted above in our discussion of Key Business Trends and Highlights. We experienced price and unit volume declines across all our hospital products due to additional competition.
|
•
|
Operating loss was $4,147 and $16,765 for the three and nine months ended September 30, 2019, respectively, compared to operating loss of $14,095 and $29,505 and for the same periods last year, respectively. The decrease in operating loss for the three months ended September 30, 2019 was largely driven by lower selling, general and administrative (SG&A) expenses of $19,513 driven by the exit of Noctiva, partially offset by higher expense related to the changes in fair value of related party contingent consideration of $7,742 and lower gross margin of $5,300. The primary reasons for the decrease in operating loss for the nine months ended September 30, 2019 were (i) a $54,639 decline in SG&A expense and (ii) a $8,083 decline in research and development expense, partially offset by (iii) a $30,616 decline in gross margin (i.e., total revenues minus cost of products) and (iv) a $19,420 increase in expense related to the changes in fair value of related party contingent consideration.
|
•
|
Net loss was $8,864 and $30,487 for the three and nine months ended September 30, 2019, respectively, compared to net loss of $15,771 and $31,445 in the same periods last year, respectively. Included in the net loss during the nine months ended September 30, 2019 was a loss on the deconsolidation of Avadel Specialty Pharmaceuticals, LLC (“Specialty Pharma”) of $2,840. As a result of Avadel Specialty Pharmaceuticals, LLC bankruptcy filing on February 6, 2019, the Company concluded that it no longer controls the operations of this subsidiary and accordingly deconsolidated this subsidiary.
|
•
|
Diluted net loss per share was $0.24 and $0.82 for the three and nine months ended September 30, 2019, respectively, compared to diluted net loss per share of $0.43 and $0.84 in the same period last year, respectively.
|
•
|
Cash and marketable securities decreased $27,461 to $72,454 at September 30, 2019, from $99,915 at December 31, 2018. This decrease was largely driven from $30,072 use of cash in operations.
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
Three Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Comparative Statements of Loss
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Product sales
|
|
$
|
14,229
|
|
|
$
|
19,826
|
|
|
$
|
(5,597
|
)
|
|
(28.2
|
)%
|
Total revenues
|
|
14,229
|
|
|
19,826
|
|
|
(5,597
|
)
|
|
(28.2
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Cost of products
|
|
2,823
|
|
|
3,120
|
|
|
(297
|
)
|
|
(9.5
|
)%
|
|||
Research and development expenses
|
|
7,539
|
|
|
11,402
|
|
|
(3,863
|
)
|
|
(33.9
|
)%
|
|||
Selling, general and administrative expenses
|
|
5,316
|
|
|
24,829
|
|
|
(19,513
|
)
|
|
(78.6
|
)%
|
|||
Intangible asset amortization
|
|
205
|
|
|
1,620
|
|
|
(1,415
|
)
|
|
(87.3
|
)%
|
|||
Changes in fair value of related party contingent consideration
|
|
627
|
|
|
(7,115
|
)
|
|
7,742
|
|
|
108.8
|
%
|
|||
Restructuring costs
|
|
1,866
|
|
|
65
|
|
|
1,801
|
|
|
2,770.8
|
%
|
|||
Total operating expenses
|
|
18,376
|
|
|
33,921
|
|
|
(15,545
|
)
|
|
(45.8
|
)%
|
|||
Operating loss
|
|
(4,147
|
)
|
|
(14,095
|
)
|
|
9,948
|
|
|
70.6
|
%
|
|||
Investment and other income, net
|
|
781
|
|
|
208
|
|
|
573
|
|
|
275.5
|
%
|
|||
Interest expense
|
|
(3,125
|
)
|
|
(3,000
|
)
|
|
(125
|
)
|
|
(4.2
|
)%
|
|||
Other (expense) income - changes in fair value of related party payable
|
|
(139
|
)
|
|
425
|
|
|
(564
|
)
|
|
(132.7
|
)%
|
|||
Loss before income taxes
|
|
(6,630
|
)
|
|
(16,462
|
)
|
|
9,832
|
|
|
59.7
|
%
|
|||
Income tax provision (benefit)
|
|
2,234
|
|
|
(691
|
)
|
|
2,925
|
|
|
423.3
|
%
|
|||
Net loss
|
|
$
|
(8,864
|
)
|
|
$
|
(15,771
|
)
|
|
$
|
6,907
|
|
|
43.8
|
%
|
Net loss per share - diluted
|
|
$
|
(0.24
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
0.19
|
|
|
44.2
|
%
|
|
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Comparative Statements of Loss
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Product sales
|
|
$
|
48,220
|
|
|
$
|
82,103
|
|
|
$
|
(33,883
|
)
|
|
(41.3
|
)%
|
License revenue
|
|
—
|
|
|
246
|
|
|
(246
|
)
|
|
(100.0
|
)%
|
|||
Total revenues
|
|
48,220
|
|
|
82,349
|
|
|
(34,129
|
)
|
|
(41.4
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of products
|
|
9,711
|
|
|
13,224
|
|
|
(3,513
|
)
|
|
(26.6
|
)%
|
|||
Research and development expenses
|
|
25,160
|
|
|
33,243
|
|
|
(8,083
|
)
|
|
(24.3
|
)%
|
|||
Selling, general and administrative expenses
|
|
22,520
|
|
|
77,159
|
|
|
(54,639
|
)
|
|
(70.8
|
)%
|
|||
Intangible asset amortization
|
|
610
|
|
|
4,996
|
|
|
(4,386
|
)
|
|
(87.8
|
)%
|
|||
Changes in fair value of related party contingent consideration
|
|
2,384
|
|
|
(17,036
|
)
|
|
19,420
|
|
|
114.0
|
%
|
|||
Restructuring costs
|
|
4,600
|
|
|
268
|
|
|
4,332
|
|
|
1,616.4
|
%
|
|||
Total operating expenses
|
|
64,985
|
|
|
111,854
|
|
|
(46,869
|
)
|
|
(41.9
|
)%
|
|||
Operating loss
|
|
(16,765
|
)
|
|
(29,505
|
)
|
|
12,740
|
|
|
43.2
|
%
|
|||
Investment and other income, net
|
|
2,548
|
|
|
845
|
|
|
1,703
|
|
|
201.5
|
%
|
|||
Interest expense
|
|
(9,293
|
)
|
|
(7,577
|
)
|
|
(1,716
|
)
|
|
(22.6
|
)%
|
|||
Loss on deconsolidation of subsidiary
|
|
(2,840
|
)
|
|
—
|
|
|
(2,840
|
)
|
|
n/a
|
|
|||
Other (expense) income - changes in fair value of related party payable
|
|
(496
|
)
|
|
1,432
|
|
|
(1,928
|
)
|
|
(134.6
|
)%
|
|||
Loss before income taxes
|
|
(26,846
|
)
|
|
(34,805
|
)
|
|
7,959
|
|
|
22.9
|
%
|
|||
Income tax provision (benefit)
|
|
3,641
|
|
|
(3,360
|
)
|
|
7,001
|
|
|
208.4
|
%
|
|||
Net loss
|
|
$
|
(30,487
|
)
|
|
$
|
(31,445
|
)
|
|
$
|
958
|
|
|
3.0
|
%
|
Net loss per share - diluted
|
|
$
|
(0.82
|
)
|
|
$
|
(0.84
|
)
|
|
$
|
0.02
|
|
|
2.4
|
%
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
Three Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Revenues:
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Bloxiverz
|
|
$
|
1,466
|
|
|
$
|
3,656
|
|
|
$
|
(2,190
|
)
|
|
(59.9
|
)%
|
Vazculep
|
|
8,786
|
|
|
8,759
|
|
|
27
|
|
|
0.3
|
%
|
|||
Akovaz
|
|
4,208
|
|
|
5,991
|
|
|
(1,783
|
)
|
|
(29.8
|
)%
|
|||
Other
|
|
(231
|
)
|
|
1,420
|
|
|
(1,651
|
)
|
|
(116.3
|
)%
|
|||
Product sales
|
|
14,229
|
|
|
19,826
|
|
|
(5,597
|
)
|
|
(28.2
|
)%
|
|||
License revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
n/a
|
|
|||
Total revenues
|
|
$
|
14,229
|
|
|
$
|
19,826
|
|
|
$
|
(5,597
|
)
|
|
(28.2
|
)%
|
|
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Revenues:
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Bloxiverz
|
|
$
|
6,392
|
|
|
$
|
16,691
|
|
|
$
|
(10,299
|
)
|
|
(61.7
|
)%
|
Vazculep
|
|
27,669
|
|
|
33,097
|
|
|
(5,428
|
)
|
|
(16.4
|
)%
|
|||
Akovaz
|
|
13,946
|
|
|
28,083
|
|
|
(14,137
|
)
|
|
(50.3
|
)%
|
|||
Other
|
|
213
|
|
|
4,232
|
|
|
(4,019
|
)
|
|
(95.0
|
)%
|
|||
Product sales
|
|
48,220
|
|
|
82,103
|
|
|
(33,883
|
)
|
|
(41.3
|
)%
|
|||
License revenue
|
|
—
|
|
|
246
|
|
|
(246
|
)
|
|
(100.0
|
)%
|
|||
Total revenues
|
|
$
|
48,220
|
|
|
$
|
82,349
|
|
|
$
|
(34,129
|
)
|
|
(41.4
|
)%
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
Three Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Cost of Products:
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Cost of products
|
|
$
|
2,823
|
|
|
$
|
3,120
|
|
|
$
|
(297
|
)
|
|
(9.5
|
)%
|
Percentage of total revenues
|
|
19.8
|
%
|
|
15.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Cost of Products:
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Cost of products
|
|
$
|
9,711
|
|
|
$
|
13,224
|
|
|
$
|
(3,513
|
)
|
|
(26.6
|
)%
|
Percentage of total revenues
|
|
20.1
|
%
|
|
16.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
Three Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Research and Development Expenses:
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Research and development expenses
|
|
$
|
7,539
|
|
|
$
|
11,402
|
|
|
$
|
(3,863
|
)
|
|
(33.9
|
)%
|
Percentage of total revenues
|
|
53.0
|
%
|
|
57.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Research and Development Expenses:
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Research and development expenses
|
|
$
|
25,160
|
|
|
$
|
33,243
|
|
|
$
|
(8,083
|
)
|
|
(24.3
|
)%
|
Percentage of total revenues
|
|
52.2
|
%
|
|
40.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
Three Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Selling, General and Administrative Expenses:
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative expenses
|
|
$
|
5,316
|
|
|
$
|
24,829
|
|
|
$
|
(19,513
|
)
|
|
(78.6
|
)%
|
Percentage of total revenues
|
|
37.4
|
%
|
|
125.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Selling, General and Administrative Expenses:
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative expenses
|
|
$
|
22,520
|
|
|
$
|
77,159
|
|
|
$
|
(54,639
|
)
|
|
(70.8
|
)%
|
Percentage of total revenues
|
|
46.7
|
%
|
|
93.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
Three Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Intangibles Asset Amortization:
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Intangible asset amortization
|
|
$
|
205
|
|
|
$
|
1,620
|
|
|
$
|
(1,415
|
)
|
|
(87.3
|
)%
|
Percentage of total revenues
|
|
1.4
|
%
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Intangibles Asset Amortization:
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Intangible asset amortization
|
|
$
|
610
|
|
|
$
|
4,996
|
|
|
$
|
(4,386
|
)
|
|
(87.8
|
)%
|
Percentage of total revenues
|
|
1.3
|
%
|
|
6.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Changes in Fair Value of Related Party Contingent Consideration:
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Changes in fair value of related party contingent consideration
|
|
$
|
2,384
|
|
|
$
|
(17,036
|
)
|
|
$
|
19,420
|
|
|
114.0
|
%
|
Percentage of total revenues
|
|
4.9
|
%
|
|
(20.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
Three Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Restructuring Costs
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Restructuring costs
|
|
$
|
1,866
|
|
|
$
|
65
|
|
|
$
|
1,801
|
|
|
2,770.8
|
%
|
Percentage of total revenues
|
|
13.1
|
%
|
|
0.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Restructuring Costs
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Restructuring costs
|
|
$
|
4,600
|
|
|
$
|
268
|
|
|
$
|
4,332
|
|
|
1,616.4
|
%
|
Percentage of total revenues
|
|
9.5
|
%
|
|
0.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
Three Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Investment and Other Income, net
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Investment and other income, net
|
|
$
|
781
|
|
|
$
|
208
|
|
|
$
|
573
|
|
|
275.5
|
%
|
Percentage of total revenues
|
|
5.5
|
%
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Investment and Other Income, net
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Investment and other income, net
|
|
$
|
2,548
|
|
|
$
|
845
|
|
|
$
|
1,703
|
|
|
201.5
|
%
|
Percentage of total revenues
|
|
5.3
|
%
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
Three Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Interest Expense
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
$
|
3,125
|
|
|
$
|
3,000
|
|
|
$
|
125
|
|
|
4.2
|
%
|
Percentage of total revenues
|
|
22.0
|
%
|
|
15.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Interest Expense
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
$
|
9,293
|
|
|
$
|
7,577
|
|
|
$
|
1,716
|
|
|
22.6
|
%
|
Percentage of total revenues
|
|
19.3
|
%
|
|
9.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
||||||||||
|
|
|
2019 vs. 2018
|
|||||||||||
Loss on Deconsolidation of Subsidiary
|
|
2019
|
|
2018
|
|
$
|
|
%
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Loss on deconsolidation of subsidiary
|
|
$
|
(2,840
|
)
|
|
$
|
—
|
|
|
$
|
(2,840
|
)
|
|
n/a
|
Percentage of total revenues
|
|
(5.9
|
)%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
Three Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Other (Expense) Income - Changes in Fair Value of Related Party Payable
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Other (expense) income - changes in fair value of related party payable
|
|
$
|
(139
|
)
|
|
$
|
425
|
|
|
$
|
(564
|
)
|
|
(132.7
|
)%
|
Percentage of total revenues
|
|
(1.0
|
)%
|
|
2.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Other (Expense) Income - Changes in Fair Value of Related Party Payable
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Other (expense) income - changes in fair value of related party payable
|
|
$
|
(496
|
)
|
|
$
|
1,432
|
|
|
$
|
(1,928
|
)
|
|
(134.6
|
)%
|
Percentage of total revenues
|
|
(1.0
|
)%
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
Three Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Income Tax Provision (Benefit):
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Income tax provision (benefit)
|
|
$
|
2,234
|
|
|
$
|
(691
|
)
|
|
$
|
2,925
|
|
|
423.3
|
%
|
Percentage of loss before income taxes
|
|
33.7
|
%
|
|
(4.2
|
)%
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Statutory tax rate
|
|
12.5
|
%
|
|
12.5
|
%
|
||
International tax rates differential
|
|
(4.3
|
)%
|
|
7.0
|
%
|
||
Change in valuation allowance
|
|
(31.1
|
)%
|
|
(18.3
|
)%
|
||
Change in fair value of nondeductible contingent consideration
|
|
4.1
|
%
|
|
8.7
|
%
|
||
Nondeductible stock-based compensation
|
|
—
|
%
|
|
(3.5
|
)%
|
||
Unrecognized tax benefits
|
|
(8.8
|
)%
|
|
(3.5
|
)%
|
||
State and local income taxes, net of federal
|
|
(0.2
|
)%
|
|
0.1
|
%
|
||
Nondeductible interest expense
|
|
(4.5
|
)%
|
|
—
|
%
|
||
Other
|
|
(1.3
|
)%
|
|
1.2
|
%
|
||
Effective income tax rate
|
|
(33.6
|
)%
|
|
4.2
|
%
|
||
|
|
|
|
|
||||
Income tax benefit - at statutory tax rate
|
|
$
|
(829
|
)
|
|
$
|
(2,058
|
)
|
International tax rates differential
|
|
283
|
|
|
(1,153
|
)
|
||
Change in valuation allowance
|
|
2,059
|
|
|
3,007
|
|
||
Change in fair value of nondeductible contingent consideration
|
|
(270
|
)
|
|
(1,431
|
)
|
||
Nondeductible stock-based compensation
|
|
1
|
|
|
578
|
|
||
Unrecognized tax benefits
|
|
581
|
|
|
578
|
|
||
State and local income taxes, net of federal
|
|
14
|
|
|
(13
|
)
|
||
Nondeductible interest expense
|
|
299
|
|
|
—
|
|
||
Other
|
|
96
|
|
|
(199
|
)
|
||
Income tax provision (benefit) - at effective income tax rate
|
|
$
|
2,234
|
|
|
$
|
(691
|
)
|
|
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Income Tax Provision (Benefit):
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Income tax provision (benefit)
|
|
$
|
3,641
|
|
|
$
|
(3,360
|
)
|
|
$
|
7,001
|
|
|
208.4
|
%
|
Percentage of loss before income taxes
|
|
13.6
|
%
|
|
(9.7
|
)%
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Statutory tax rate
|
|
12.5
|
%
|
|
12.5
|
%
|
||
International tax rates differential
|
|
4.1
|
%
|
|
6.9
|
%
|
||
Change in valuation allowance
|
|
(27.0
|
)%
|
|
(14.9
|
)%
|
||
Change in fair value of nondeductible contingent consideration
|
|
(0.1
|
)%
|
|
9.9
|
%
|
||
Nondeductible stock-based compensation
|
|
(0.2
|
)%
|
|
(2.6
|
)%
|
||
Unrecognized tax benefits
|
|
(3.3
|
)%
|
|
(3.1
|
)%
|
||
State and local income taxes, net of federal
|
|
(0.2
|
)%
|
|
0.2
|
%
|
||
Nondeductible interest expense
|
|
(2.6
|
)%
|
|
—
|
%
|
||
Other
|
|
3.1
|
%
|
|
0.8
|
%
|
||
Effective income tax rate
|
|
(13.7
|
)%
|
|
9.7
|
%
|
||
|
|
|
|
|
||||
Income tax benefit - at statutory tax rate
|
|
$
|
(3,355
|
)
|
|
$
|
(4,351
|
)
|
International tax rates differential
|
|
(1,108
|
)
|
|
(2,394
|
)
|
||
Change in valuation allowance
|
|
7,242
|
|
|
5,188
|
|
||
Change in fair value of nondeductible contingent consideration
|
|
33
|
|
|
(3,436
|
)
|
||
Nondeductible stock-based compensation
|
|
50
|
|
|
914
|
|
||
Unrecognized tax benefits
|
|
873
|
|
|
1,086
|
|
||
State and local income taxes, net of federal
|
|
41
|
|
|
(70
|
)
|
||
Nondeductible interest expense
|
|
709
|
|
|
—
|
|
||
Other
|
|
(844
|
)
|
|
(297
|
)
|
||
Income tax provision (benefit) - at effective income tax rate
|
|
$
|
3,641
|
|
|
$
|
(3,360
|
)
|
|
|
|
|
|
|
Nine Months Ended
|
|||||||||
|
|
Nine Months Ended September 30,
|
|
Increase / (Decrease)
|
|||||||||||
|
|
|
2019 vs. 2018
|
||||||||||||
Net cash provided by (used in):
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Operating activities
|
|
$
|
(30,072
|
)
|
|
$
|
(58,190
|
)
|
|
$
|
28,118
|
|
|
48.3
|
%
|
Investing activities
|
|
33,553
|
|
|
(53,188
|
)
|
|
86,741
|
|
|
163.1
|
%
|
|||
Financing activities
|
|
14
|
|
|
112,735
|
|
|
(112,721
|
)
|
|
(100.0
|
)%
|
Purchase Commitments:
|
|
Balance
|
||
|
|
|
||
2019
|
|
$
|
7,194
|
|
2020
|
|
1,320
|
|
|
2021
|
|
1,320
|
|
|
2022
|
|
1,320
|
|
|
2023
|
|
220
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
11,374
|
|
ITEM 1.
|
LEGAL PROCEEDINGS.
|
Exhibit No.
|
|
Description
|
|
|
|
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 Label Linkbase Document
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
AVADEL PHARMACEUTICALS PLC
|
|
|
(Registrant)
|
|
|
|
|
Date: November 12, 2019
|
By:
|
/s/ Michael F. Kanan
|
|
|
Michael F. Kanan
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(Duly Authorized Officer and Principal Financial and Accounting Officer)
|
Date: November 12, 2019
|
/s/ Gregory J. Divis
|
|
Gregory J. Divis
|
|
Chief Executive Officer
|
Date: November 12, 2019
|
/s/ Michael F. Kanan
|
|
Michael F. Kanan
|
|
Senior Vice President and Chief Financial Officer
|
Date: November 12, 2019
|
/s/ Gregory J. Divis
|
|
Gregory J. Divis
|
|
Chief Executive Officer
|
Date: November 12, 2019
|
/s/ Michael F. Kanan
|
|
Michael F. Kanan
|
|
Senior Vice President and Chief Financial Officer
|